Some day, I'll see a study that wasn't commissioned by people with a vested interest in the stability of the housing market.
To me, it's pretty damn obvious what is happening, here. The market is fundamentally overvalued by at least 30%, and all sensible people know it.
However, there are a lot of people desperate to own a house who are waiting for the downturn before buying, and a lot of people waiting to sell at the peak. When the downturn looks like happening, the market will be temporarily bouyed by the trade between these two groups. I suspect this is happening at the moment, and causing the confusingly mixed signals.
But that trade can't last forever. Soon, we'll run out of cautious people wanting to sell high at the first sign of trouble, and people willing to buy almost immediately that prices seem to be dropping. My suspicion is that once there is a clear downward trend, there will be a large rush of panic selling, and very few buyers because they know they can buy more cheaply the longer they wait.
Then the bottom will drop out of the market.
That all seems clear to me. The only thing that dents my confidence in my own assessment is the number of supposed experts who appear to disagree. Hmm.
Well, I want to upgrade to a larger house, and I'm not buying just yet. If everyone else followed suit, we'd soon have cheaper houses. Spread the meme!
Indeed. I said "at least 30%" in an attempt to pick an uncontroversial figure that everyone would agree upon, yet would still indicate the magnitude of the problem.
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Most amused by the sidebar.
Date: 2003-07-21 01:34 am (UTC)If you'll forgive a little cut-n-pastage.
(no subject)
Date: 2003-07-21 05:08 am (UTC)To me, it's pretty damn obvious what is happening, here. The market is fundamentally overvalued by at least 30%, and all sensible people know it.
However, there are a lot of people desperate to own a house who are waiting for the downturn before buying, and a lot of people waiting to sell at the peak. When the downturn looks like happening, the market will be temporarily bouyed by the trade between these two groups. I suspect this is happening at the moment, and causing the confusingly mixed signals.
But that trade can't last forever. Soon, we'll run out of cautious people wanting to sell high at the first sign of trouble, and people willing to buy almost immediately that prices seem to be dropping. My suspicion is that once there is a clear downward trend, there will be a large rush of panic selling, and very few buyers because they know they can buy more cheaply the longer they wait.
Then the bottom will drop out of the market.
That all seems clear to me. The only thing that dents my confidence in my own assessment is the number of supposed experts who appear to disagree. Hmm.
Well, I want to upgrade to a larger house, and I'm not buying just yet. If everyone else followed suit, we'd soon have cheaper houses. Spread the meme!
(no subject)
Date: 2003-07-21 01:33 pm (UTC)(no subject)
Date: 2003-07-21 02:41 pm (UTC)the number of supposed experts who appear to disagree
Date: 2003-07-21 01:46 pm (UTC)(no subject)
Date: 2003-07-21 06:11 am (UTC)(no subject)
Date: 2003-07-21 06:19 am (UTC)(no subject)
Date: 2003-07-21 08:42 am (UTC)What do you think dn/dt is? My guess is about -2 per year.