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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Live2Sail who wrote (138303)	8/1/2008 1:02:29 AM
From: Jim McMannis	Respond to of 306849

Some Real Talk on Housing what a bottom to the housing market will actually look like seekingalpha.com Another month, another round of negative housing data, and the pattern has become so repetitive that it's hard to think of anything original to say about it. However in the wake of last month's round of "housing bottom" predictions and in recognition of the current round, let's briefly discuss what a bottom to the housing market will actually look like. The first thing to recognize is that the housing market is merely correcting itself after a period where it was inflated into a bubble by a combination of poor lending standards/practices, over-speculation, over-leveraged and/or under qualified buyers, etc. Now that these "bad actors" have been removed from the market, prices are declining back to where they would be if the housing bubble hadn't occurred. Once we understand that the housing market is going through a post-bubble correction, we can see that we shouldn't be looking for a bottom as much we should be looking for pricing stability. We also know that pricing stability cannot happen until the housing market has given up nearly all the gains of the housing boom era. At the moment (per Marketwatch) it appears that we've only turned back the clock to 2004, and have bit of a ways to go before anyone can make any credible claims of housing having reached a bottom. The other factor to consider is inventory