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

To: GraceZ who wrote (234145)	12/23/2009 6:39:23 PM
From: SouthFloridaGuy	Read Replies (2) \| Respond to of 306849

Grace, I think there is a difference between the Nasdaq and housing. New Supply - a known variable for housing has been massively constrained due to previous overbuilding, economy and credit contraction. Likewise, demand has been depressed due to economy and credit. Household formation though less elastic and we are not building enough homes right now to make up for the increases in household. Not a problem so long as existing inventory is high - but watch out once it disappears...this is the same dynamic that happens in commodities markets (one of the markets where I actively trade). Corporations on the other hand have the ability to dilute shareholders almost at will as we have seen in Japan for instance. I like the market capitalization tool better, personally. Also, housing works in distinct cycles. The factors you mentioned led to unprecedented declines in prices. Certainly in the Phoenix's and Cape Coral's of the world, it will take at least a decade to recoup the losses. In the last cycle, aggregate pricing was back to the highs by 1992 even though some areas took 10 more years to come back. Maybe 4 years is a bit provactive, I agree, but it will be a helluva lot faster than people think in America's globalized cities and "NEVER" in a fiat regime is a strong word... Either way unless you're a blogging bear with a vested interest, it's funny how the converstation has changed from "how low will it go" to "how long will it take to recoup the losses..."