Although I am personally gradually gravitating from the bears to the bulls, there are still tons of reasons to be on the bearish side and very few on the bullish one.

On the bearish side are high and increasing unemployment, growing rate of consumer saving, increasing volume of foreclosures, incoming higher-end mortgage resets, higher personal delinquencies. All these are signs of continuing deleveraging process on the consumer side. 

On the bullish side are reduced prices, the officially announced end of recession, and  the fact that the RE market has been jolted out of the near-death comatose experience by the the government's unprecedented intervention. The recent S&P Case-Shiller index shows that there has been a simultaneous all-national uptick in RE  sales and prices in the US (so much for the realtors' mantra that all RE markets are local). This price reversal coinsided with government's announcement of its bailout programs, proving again that the government can do wonders with its unlimited ability to create money out of a thin air. It can put out the national fire, for example, by throwing loads of fuel into it...  

But the simultaneity of recent RE price changes across major markets also proves that the US RE market is still completely on the life support from the government. Think of all ongoing artificial incentives to the banking sector and individual consumers, including such things as FHA loans with their 5% rates that dominate 90% of the mortgage market. This is really big! 

But what will happen to the RE markets when that support eventually ends? And it surely will end, due to the exorbitant national debt, huge deficit, scary prospects of inflation and weakening dollar. What happens after the biggest player on the market exhausts itself? Will the future inflation take care of the falling prices?? Or will RE price deflation dominate the market for years and decades, like in Japan??  

These are the key questions, in my opinion. And nobody discusses them. Any ideas?

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Andrei_K wrote:

 

But what will happen to the RE markets when that support eventually ends? And it surely will end, due to the exorbitant national debt, huge deficit, scary prospects of inflation and weakening dollar. What happens after the biggest player on the market exhausts itself? Will the future inflation take care of the falling prices?? Or will RE price deflation dominate the market for years and decades, like in Japan??  

 

These are the key questions, in my opinion. And nobody discusses them. Any ideas?

Another key reason for the tone of the forums is the frustration on the part of buyers and wanna-be-buyers and wanna-be-sellers.

Buyers where the price is affordable but being outbid or blocked from winning the bid

Wanna-be-buyers where the price hasn't come down to what they are willing to pay

Wanna-be-sellers that want to sell the home for more than can be sold for

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PABuyer wrote:

I think one of the reasons that, as Matt says, "the tone of these forums has gotten out of hand," is that the extremely unclear housing market picture creates a huge divergence of opinions about the state of the market.  On occassion, these disagreements devolve into unconstructive arguments.

 

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From the very beginning of my activity on the forum there have been several posters who once in a while complain how "disgruntled buyers" hijacked the forum, and lamented on how nice it was in the old days when (my guess is) discussion was only about technicalities of buying/selling a house. While I understand that some people don't want these topic to be discussed, this is a forum - by definition a public place - and that noone can direct the topics of discussion. In addition, I think the threads on RE trends add lot of substance to the forum. Recently this morphed into some posts below the level of a civilized discussion, some of which in my book qualify for at least a temporary ban, but I support Redfin's administrators' way of getting things in order. Let's try again from the start.

"Buyers where the price is affordable but being outbid or blocked from winning the bid"

All these 'bids' being undocumented and unobserved allow for easy manipulation. 

We call it "conflict of interest" and "lack of internal controls" which only benefits the

unscrupulous middleman.  Without proper controls only the worst of people comes

out.    And we have seen plenty of that happen! 

Easy lax lending and manipulation of appraisals was the other part of the broken

process, which is only now being fixed.  

The process of bidding needs drastic changes for greater transparency

for the benefit of the buyer and lending institution who has provided funds at risk. 

Oddly enough those who did overbid during the 'boom' were the same ones who

are now unable to pay for their mortgages.  Perhaps they should have been more

carefull.  

"From the very beginning of my activity on the forum there have been several posters who once in a while complain how "disgruntled buyers" hijacked the forum,"

California has too many realtors with vested interest in keeping prices high which earn them that 6% golden egg which fuels their easy standard of living.  Unfortunately their gains has been a detriment to our local economy with prices raising and employers moving jobs elsewhere to keep costs in line.

Their self-interest vs. our interest... a hell of a tug of war, if there was one.  Remove their vested interest

only benefits the markets.  Allow the market to have an equal playing field would benefit you and create stability in prices and reduce risks.   Something they are unwilling to give in to.  

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prost wrote:
regarding the frustrations, I can speak for myself and it may be the same for other (perhaps not all) "frustrated" buyers - the greatest frustration I have is not that the prices in the areas I want to buy are not at the level I think they should be - there actually are deals that are not very far, although the market values are not there yet. If you believe what I believe, you believe that the prices will come down and there is really no room for frustration there. The greatest frustration I have is listening to (or rather, reading) in my opinion maliciously placed faulty and false arguments exposed many times for what led us in the housing bubble in the first place. I know those cannot be banned, and I don't want them to be banned, instead I just want to be able to, once the arguments have been discussed, to openly talk about the motives behind them. That's what I thought the purpose of a forum is.

 

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I can only speak for myself, but my biggest frustration is that prices have not come down as expected.  Any frustrations with Redfin forum posts don't move the dial in comparison.

I have seen very few of what I would consider malicious posts advocating the merits of buying now, at least in this forum.  Depending on your personal beliefs/assumptions, it can always be a good or bad time to buy.  Consider the oft-mentioned NY Times rent v buy calculator (http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html).  You can be as scientific as you want with the inputs, but in most cases, the merits of buying vs renting will boil down to your personal expectation for housing price increases.  The sensitivity of that input is huge, and a change of just 1% can change the outcome from "never buy" to a 5-yr breakeven.  I don't think it's malicious if a realtor or homeowner has a rosier expectation for increases compared to a renter/prospective buyer, it's just human nature.  I think it's fine to talk about assumptions, but questioning motives is a slippery slope to more ad hominem attacks.

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PABuyer wrote: You can be as scientific as you want with the inputs, but in most cases, the merits of buying vs renting will boil down to your personal expectation for housing price increases.  The sensitivity of that input is huge, and a change of just 1% can change the outcome from "never buy" to a 5-yr breakeven.  I don't think it's malicious if a realtor or homeowner has a rosier expectation for increases compared to a renter/prospective buyer, it's just human nature.  I think it's fine to talk about assumptions, but questioning motives is a slippery slope to more ad hominem attacks.

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I disagree on sensitivity, or it couldd be what is happening in my area, but it is of course possible that other areas are different. The house prices in my area are such that I would have to put order of $150K for downpayment (a source of aditional income in case of rent) and another 60% of my current rent towards mortgage for a comparable house (or to be fair, just slightly more updated). When I was running the numbers, it would take a very unreasonable (8% or so) house appreciation per year to break even after the loan term if I remember well. I have a hard time believing the situation is very different in other areas without full price corrections, but - you tell me how it looks in Palo Alto or other areas you're looking at.

I think that questioning and discussing motives is precisely the most interesting and important piece of discussions we have. I'm not saying everyone bullish about houses is a RE agent - there are lots of people who have interest in RE without being RE professionals, and on top of that, lots of potential buyers keep the mindset from the bubble and still view houses as investment vehicles. However if someone comes again and again with the same phony argument ("they don't make any more land", for example) I think asking why would someone make such claim is much more useful than explaining for 5th time why is it wrong. True, it may look like a personal attack to someone, but it's not. 

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TomP wrote:

"From the very beginning of my activity on the forum there have been several posters who once in a while complain how "disgruntled buyers" hijacked the forum,"

 

California has too many realtors with vested interest in keeping prices high which earn them that 6% golden egg which fuels their easy standard of living.  Unfortunately their gains has been a detriment to our local economy with prices raising and employers moving jobs elsewhere to keep costs in line.

 

Their self-interest vs. our interest... a hell of a tug of war, if there was one.  Remove their vested interest

only benefits the markets.  Allow the market to have an equal playing field would benefit you and create stability in prices and reduce risks.   Something they are unwilling to give in to.  

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Do you believe that there is a realm of possibility that some folks can make a real estate decision without the input / financial advice of an RE agent?   and simply use an agent to complete the transaction?

Just as the quote:  "beware of the man with nothing to lose" ....  RE agents have nothing to lose in the transaction.  

RE agents should never act as Sales people.  They are not selling anything.  The need to provide a service.  A service to protect their client.