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stop_bailouts wrote:

"Denial" means believing something when all the evidence points to it being untrue. Believing that prices will fall next year is not denial, as the evidence clearly shows that prices WILL fall. Six months is not enough time to make your conclusion. You forget that the 1989 crash took 5 years to hit bottom, and 10 years before prices got back to where they were at the peak. And this crash utterly dwarfs that one. We're only 2 years into it.

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You are basing your conclusions on historical anecdotal evidence that does not apply in the newly formed paradigm shifts that have been brought on by the public private investment partnerships.  You are assuming that the rules of the past have not changed, when we went through the much needed rescue of the financial firms in New York rules were changed.  These rules adjusted the the platforms on which real estate valuations will be determined.  The determination of the valuations is no longer based upon market theories that existed prior to the new administration and the shifting of the economic base of the country to the private public partnerships.  With these new partnerships assets are calculated on a transvaluation basis, using regress and progressive assimilation analysis.  This analysis determines the value of the asset, not the market.

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stop_bailouts wrote:

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Jazzman wrote:

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Good question. If prices hold steady for six months then it's going to look a bit like the game is up, so yes, you have to re-evaluate whether the life style warrants the higher premium. The problem is that so many have heightened expectations of continued falling prices, that denial is likely to be as endemic as it is for potential sellers whose homes have lost value.

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I think that's a poor analogy. The homeowners who deny that their home has lost value have absolutely nothing on which to base their belief. But believing that the market will again fall in value is a reasonable conclusion to make based on the evidence.

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And just in case you think I'm siding with bears, I believe you are correct in your assessment that in all probability the downturn will be at least as long as previous less severe ones. Putting aside silly semantics, I actually think a healthy dose of buyer denial is a good thing because it acts as an important counterweight to seller denial, and that is really the point I was trying to make. 

But for the record, denial means stating something as untrue, and is not neceassarily qualified by refutation of fact. You can be in denial about being overweight, yet the scales tell a different story. This was a question that was asked of many buyers on another forum, who agreed that as prices declined, their expectations of getting an even better deal increased the longer they waited. I am one of them. I don't think I am in denial, but then maybe I'm not the best person to judge that. A good first question to ask someone you suspect on being in denial is "Are you in denial?" "NO!" Of course not.

"who agreed that as prices declined, their expectations of getting an even better deal increased the longer they waited"

ridiculous! So in other words if you wait indefinitely houses will one day be free?

or houses 15 years from now will be cheaper than houses five years from now? 

how long is too long? 

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Jazzman wrote:

Putting aside silly semantics...

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Really? You think it's silly semantics? A poll was taken, during which time the value of most people's homes had dropped. Yet most people believed that the value of their home had risen or stayed the same. That is what I call denial. On the other hand, unemployment is projected to go past 10%; wages have gone down; and underemployment is rampant. It is a known fact that mortgage defaults have risen, yet foreclosures have decreased. Bank officials have said that they are deliberately waiting on foreclosures. This is all very strong evidence that the recent small housing rally is not going to continue. So to believe that prices may drop next year could not reasonably be called "denial" by any definition.

So no, this is certainly not a mere difference in semantics, and absolutely is not a "silly" distinction.

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Contractor wrote:
If prices remain steady for the next 6 months will you lower your expectations and buy something you can afford, or will you continue to wait for the market to fall?  How long are you willing to wait before buying?  Or will you move to another less expensive place to live?

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Depends if we stay in Southern California or not.  I'm fed up with the way of life here anyway...regardless of the housing market.  

If we move from here, we'll never buy here.  If we stay, probably another year or so when the **bleep** really hits the fan.

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Jazzman wrote:
LOL! You can't win here can you. Say something that is perceived as being vaguely bullish and you get lombasted by one side, tip the scales in the other direction, and the bears get upset. There's no pleasing some people. Let's keep the debate as intelligent, balanced and impartial as possible, and leave nitpicking to members of Congress.

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If you form an opinion that is contrary to the evidence, then you are in denial. If you form an opinion that is based on solid evidence, then you are not in denial. That is a fundamental difference. How is that "nitpicking"?

I am not disagreeing with you because you were "vaguely bullish", I am disagreeing with your characterization of those who believe prices will fall next year as being "in denial". It is incorrect to characterize a person as being in denial when that person's opinion is in fact based on solid evidence. I object to the characterization that those who ignore the evidence and only believe what they want, are somehow the flip side of a coin to those who study the evidence and reach an informed conclusion. These are NOT two sides of a coin, but are in fact absolutely different philosophies.

If you have evidence to counter the evidence I have posted, then by all means share it with us, but don't just throw out vague charges like "unintelligent" "not impartial" or "nitpicking". If you want an intelligent and balanced discussion, then give us something intelligent and balanced.

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Contractor wrote:

I hate to be in a position where I find myself agreeing with So Cal No. 1 Realtor, but right now things have changed so much there is evidence to say we are at the bottom, while rationally thinking things must go down at the same time.

 

Rational Thought: I would never have dreamed the govt. would prop up the current system and reward the wreckless and foolish speculation that has occurred over the past few years.

 

Fact: The govt. has rewarded those with inadequate down payments who over bought homes they could not afford.

 

Rational Thought:  The large number of inventory held by banks combined with future foreclosures means there will be a tremendous glut of houses on the market within the next two years.

 

Fact:  The govt. appears to be doing everything possible to support current housing prices.

 

Clearly, the govt. is trying to support prices at an elevated price level, and econ 101 tells most people there is no way in the world things can continue to be propped up and a further market bottom must be just around the corner.  So I guess the question is whether govt. intervention can overcome market forces.  I think the answer is no, but it just may be that they can drag this thing out long enough to where prices don't fall all that much, and things just slow down for the foreseeable future. 

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When in doubt, always go with the most logical solution......in this case it's the reduction in prices.

Government is not the knight in shining armour.  They cannot sustain these actions because there are simply not enough funds to go around.   It's that simple.