[olecapt]

Originally Posted by tony soprano

I thought this article did a reasonable job of presenting both the bearish and bullish case for the Vegas housing market. As you read it, I'm sure you'll recognize many of the same points that have been made in this thread, from both sides of the debate.

False Bottoms - Or When the Tail Wags the Dog

Love it. The guy almost perfectlly paraphrases my views...and Tony likes it...

And it reflects only one side of the discussions here...mine.

It is certainly true that the worsening economy could drag us further down and make this bottom a false one.

But we are already in a "worse" economy. How much worse does it have to get to crater housing? One whole lot I would think. We are at record sales levels with stable prices at 11.3% unemployment.

I would think that to crater housing we need one of the doomsday scenarios. Ultra inflation and a full depression.

Now we may "bounce along the bottom" as MGM described it today...but that won't crater the housing market.

And we could be here a while...

Interesting times.

[tony soprano]

Originally Posted by olecapt

Love it. The guy almost perfectlly paraphrases my views...and Tony likes it...

And it reflects only one side of the discussions here...mine.

It is certainly true that the worsening economy could drag us further down and make this bottom a false one.

Interesting interpretation. I never gave an opinion if I liked or disliked the contents of his article. I said it did a reasonable job of presenting both sides of the debate. He suggests the possibility, if not the likelihood, of a false bottom. He just doesn't think the erosion of prices would be as precipitous as those that Vegas has already endured. Unfortunately, you didn't have the same insight as the author when you were crooning about the market bottoming in 2008. In case you haven't noticed, that was a false bottom.

The only other capt. I can think of that may have put more of his customers underwater than you, manned the helm of the RMS Titanic.

[olecapt]

Originally Posted by tony soprano

Interesting interpretation. I never gave an opinion if I liked or disliked the contents of his article. I said it did a reasonable job of presenting both sides of the debate. He suggests the possibility, if not the likelihood, of a false bottom. He just doesn't think the erosion of prices would be as precipitous as those that Vegas has already endured. Unfortunately, you didn't have the same insight as the author when you were crooning about the market bottoming in 2008. In case you haven't noticed, that was a false bottom.

The only other capt. I can think of that may have put more of his customers underwater than you, manned the helm of the RMS Titanic.

Sorry the guy and I agree to almost the last gnit. I think my methodology better than his but not by a lot. And he may not have the same access. But we do agree about the fundamentals.

I made it quite clear that we had reached a bottom but that I could not tell where we went next. Among other reasons because we could sit here a long time. And the overall environment could change. I even made the point in an interchange with you that it could be a bottom that, in time, leads to another bottom. As I remember you scoffed.

Your false and incorrect interpretation of a 2008 comment grows old. The 2008 comment was in the context of where the market was going and does not suggest buy and, if you are dumb enough to believe it did, you should not allowed out on the streets alone.

I enjoy having you on my side of the discussion. Won't last though.

Interesting times....and strange bedfellows...

[tony soprano]

Originally Posted by olecapt

Sorry the guy and I agree to almost the last gnit. I think my methodology better than his but not by a lot. And he may not have the same access. But we do agree about the fundamentals.

The difference in opinion is readily identified. Please follow along -

Originally Posted by The guy that understands what a false bottom is

Although I do not think that we will see declines that come anywhere close to the plummeting prices of a year ago, I do believe that rising unemployment and the continuing credit crunch may prompt home prices to begin another, more gradual, downward slide.

Then there's you -

Originally Posted by The guy that calls a bottom every single time prices remain flat for a month

But we are already in a "worse" economy. How much worse does it have to get to crater housing? One whole lot I would think. We are at record sales levels with stable prices at 11.3% unemployment.

I would think that to crater housing we need one of the doomsday scenarios. Ultra inflation and a full depression.

He doesn't think it's going to take ultra-inflation or a full depression to spur lower prices. That's your theory. Further, he never remotely suggests that prices may crater. He specifically says "a gradual, downward slide". I'm sorry these subtleties are lost on you.

I made it quite clear that we had reached a bottom but that I could not tell where we went next. Among other reasons because we could sit here a long time. And the overall environment could change. I even made the point in an interchange with you that it could be a bottom that, in time, leads to another bottom. As I remember you scoffed.

And I'm going to scoff again. If housing prices "bottom", and then subsequently fall another 15% -20%, then obviously the first pause wasn't the bottom. Please go back to the linked article I provided and familiarize yourself with the premise of a false bottom. I'm sure everyone that acted on your market direction guesses in 2008 feels real good about catching that bottom.

Your false and incorrect interpretation of a 2008 comment grows old. The 2008 comment was in the context of where the market was going and does not suggest buy and, if you are dumb enough to believe it did, you should not allowed out on the streets alone.

I'll let the readers decide what your intent was by telling someone they were "gambling" to wait for further price corrections or that "time is running out". I quote your ramblings in their entirety. They are not taken out of context. As I've said before, I encourage anyone thinking about acting on your advice to check your past guidance. It's horrid.

Interesting times....and strange bedfellows...

Present trends can not be maintained, something's got to give, prices are stablilizing, time is running out, etc.

[olecapt]

Originally Posted by tony soprano;9785716The difference in opinion is readily identified. Please follow along - Then there's you - He doesn't think it's going to take ultra-inflation or a full depression to spur lower prices. That's your theory. Further, he never remotely suggests that prices may [I

crater[/i]. He specifically says "a gradual, downward slide". I'm sorry these subtleties are lost on you.

Well he and I do disagree a little. There is no soft mechanism that is going to lead to a slow drop. He really does not say much but, to the extent he suggests a slow degradation we disagree. If things go way south the bottom could fall out. But this is much too strong a market for gradual price decrease.

And I'm going to scoff again. If housing prices "bottom", and then subsequently fall another 15% -20%, then obviously the first pause wasn't the bottom. Please go back to the linked article I provided and familiarize yourself with the premise of a false bottom.

Now you are with me and not with your source. 15% or 20% is a substantial down. And that requires a big problem. If you think your guy said that you should read it again...and again.

I'm sure everyone that acted on your market direction guesses in 2008 feels real good about catching that bottom.I'll let the readers decide what your intent was by telling someone they were "gambling" to wait for further price corrections or that "time is running out".

The post you quote is

Don't know how this is all going to work out but the market is changing and real fast. I will hazard a guess that if you want a real buy the timing is now or pretty soon. Nothing like a price increase or even stability with a significant year over year volume increase to start the up cycle.

I have no idea where "gambling" comes from.

That is an accurate picture of the market as it lay. It had no buy recommendation but suggested watching for price stability or an uptick. Which would have been a stronger indicator to buy. It is enthusiastic but correct in its time frame. It of course was not correct as the world unfolded. Then again you have problems remembering what your source said a few hours later.

I quote your ramblings in their entirety. They are not taken out of context. As I've said before, I encourage anyone thinking about acting on your advice to check your past guidance. It's horrid.Present trends can not be maintained, something's got to give, prices are stablilizing, time is running out, etc.

No you don't. You take them out of context. You saimply don't understand context.

[tony soprano]

Originally Posted by olecapt

Well he and I do disagree a little. There is no soft mechanism that is going to lead to a slow drop. He really does not say much but, to the extent he suggests a slow degradation we disagree. If things go way south the bottom could fall out. But this is much too strong a market for gradual price decrease.

Here's your problem - you have an enormous credibility gap. After chanting about stabilizing prices, time running out, lower inventory, for over two years, who in their right mind would stake money on your scenario. vs. the author of the linked article? Thankfully, I didn't.

Now you are with me and not with your source. 15% or 20% is a substantial down. And that requires a big problem. If you think your guy said that you should read it again...and again.

You miss the forest for the trees. I used 15%-20% as an arbitrary example. Use whatever additional price correction you want. The point you missed is the absurdity of statements such as -

Originally Posted by olecapt

I even made the point in an interchange with you that it could be a bottom that, in time, leads to another bottom.

A bottom that leads to another bottom. That's pure genius. Again, if prices "bottom" and then subsequently fall again, you weren't really at the bottom were you? I'm surprised that I have to belabor this point with you. After watching prices fall by another 40% - 50% since suggesting the bottom was here last year, I would think the false bottom concept would be rather easily grasped by you.

I have no idea where "gambling" comes from.

I do. You couldn't find your post because you were searching for "gambling". Here's the context. I'd rather like that everyone know the exact context.

Originally Posted by SpedF22

Actually, sluggish movement in this market segment is what I am counting on. Resale prices haven't really fallen much in 89138, and I think it is mostly because the few REPOs that exist aren't moving either. Hopefully prices will correct in this zip in the next few months because right now its like a game of chicken. Buyers are waiting on the sidelines, and sellers won't budge on asking price. As a result, supply is plentiful and demand is scarce. However, I think if prices correct even 10%, there will be a tidal wave of sales in this zip. There are definitely buyers out there, but they are much smarter I believe than they were in the run-up of 2004-5. In fact, I'm counting on smarter buyers too. Otherwise, we still won't get the cathartic cleansing required to get prices back in line with income levels.

The OP notes that supply is plentiful with little demand. He suggests that once prices crack, it will be the catalyst for heavy selling. You tell him its an interesting gamble and then followup with your trademarked "little time left, prices appear to be stabilizing, volume is up, inventory is down." And you close with the all time classic "Buyers fear missing the bottom..."

Please note, that exchange above is over 16 months old. I can only hope that SpedF22 ignored your input and followed his game plan.

It of course was not correct as the world unfolded.

That's a mild understatement. But you are correct this time right? This time it really is the bottom? Or, is it the bottom before another bottom?

No you don't. You take them out of context. You saimply don't understand context.

The context is there for everyone to see. A potential buyer that thought it prudent to wait on the sidelines. And a realtor that suggests it's a gamble to do so, there's little time left, prices are stabilizing, yada, yada, yada.

[RCCCB]

US Foreclosures Continue Shattering Records: RealtyTrac

Article - WSJ.com

[RCCCB]

U.S. Foreclosure Filings Hit Record 1.5 Million in First Half

U.S. Foreclosure Filings Hit Record 1.5 Million in First Half - Bloomberg.com

[ClarkGrisowld]

It's not a false bottom because there was never any support other than "trend" lines to suggest as such. There was absolutely no macro or even local micro data that suggested the risk was anything other than to the downside. You can talk about local factors contributing to outperformance on a relative basis (which also would have been wrong), but the simple fact is ships rise and fall with the tides. And through most of 2008, the tide was falling mightily.

I got into this debate a little over a year ago. The first thing I realized was OC was referring to the "bottom" in terms of volume, rather than price as every investor and buyer would (and indeed most market commentators). So that was the perspective from the realtor - volume matters, price not so much.

To be fair, I predicted a bottom in early '09 (ouch, no, I called LAST August). So I, too, was wrong (to be fair to myself, I underestimated the recession and its end, otherwise my logic was sound). However, I was told I was very wrong, and when I countered there was no catalyst to support alternative opinions, we then went on a few page tangent about the definition of a catalyst.

So on my second swing, I've called August as the bottom. I think the economy has stablized and the market is forecasting recovery (Citi recently said they felt the recession is over). With the local micro indicators, that would suggest we are at a bottom.

All that said, some good points brought up here about an uptick in defaults with more people losing their jobs and others nearing the end of unemployment benefits. I kind of felt unemployment was more or less peaking in early '09, tack on 6 months and that's where I come up with August. However, an excellent point about the tax rebate spurring first time home buyers which may very well be currently propping up volumes and prices. I believe that was to expire in Nov or the end of the year, but sounds like Congress is pushing through an even more aggressive plan doubling the rebate to $15k and expanding the program.

Interesting times? Not so much. We'll go lower if the economy takes a turn for the worse, but I'm attaching a very low probability to that at the moment. Nor do I see the economy taking off any time soon, so the prudent decision would be to wait since, if this is the bottom, we were probably muddle along here for some time.

The truly interesting times are maybe 12-18 months out when we see what happens with inflation and how on the ball the Fed is to take away the punch bowl. You can almost guarantee a new bubble in some asset class (or more) is going to form. I'm racking my brain to figure out where the next bubble is, and I'm thinking energy, possibly alternative energy, and perhaps e-commerce (although the former two reached highly speculative levels, but maybe short of bubble status).

[tony soprano]

Originally Posted by ClarkGrisowld

It's not a false bottom because there was never any support other than "trend" lines to suggest as such. There was absolutely no macro or even local micro data that suggested the risk was anything other than to the downside. You can talk about local factors contributing to outperformance on a relative basis (which also would have been wrong), but the simple fact is ships rise and fall with the tides. And through most of 2008, the tide was falling mightily.

I don't disagree. There was a month in 2008 where the SFR median price actually ticked upwards, before it resumed the steady march downward. I refer to that as a false bottom soley to illustrate that a pause, or even an uptick, does not necessarily mean the bottom has been put in.

I got into this debate a little over a year ago. The first thing I realized was OC was referring to the "bottom" in terms of volume, rather than price as every investor and buyer would (and indeed most market commentators). So that was the perspective from the realtor - volume matters, price not so much.

LOL. I read that entire exchange. However, he's routinely suggested that prices were bottoming as well. When he says "buyers fear missing the bottom", that's not referring to volume.

To be fair, I predicted a bottom in early '09 (ouch, no, I called LAST August). So I, too, was wrong (to be fair to myself, I underestimated the recession and its end, otherwise my logic was sound). However, I was told I was very wrong, and when I countered there was no catalyst to support alternative opinions, we then went on a few page tangent about the definition of a catalyst.

You are far from the exception. There are literally dozens of post going back to 2007 where people make the case for a substantial housing correction. Their posts are then followed by his telling them how they got their facts all wrong; there is no price correction, all real estate is local, prices have stabilized, inventory is down, blah, blah, blah. It's funny, his tone in those early posts when telling people they were wrong was dismissive and patronizing. He's still telling people they got it all wrong, but the posts are much less surly. A change brought about I suspect from a steady diet of crow over the last two years.

So on my second swing, I've called August as the bottom. I think the economy has stablized and the market is forecasting recovery (Citi recently said they felt the recession is over). With the local micro indicators, that would suggest we are at a bottom.

All that said, some good points brought up here about an uptick in defaults with more people losing their jobs and others nearing the end of unemployment benefits. I kind of felt unemployment was more or less peaking in early '09, tack on 6 months and that's where I come up with August. However, an excellent point about the tax rebate spurring first time home buyers which may very well be currently propping up volumes and prices. I believe that was to expire in Nov or the end of the year, but sounds like Congress is pushing through an even more aggressive plan doubling the rebate to $15k and expanding the program.

Interesting times? Not so much. We'll go lower if the economy takes a turn for the worse, but I'm attaching a very low probability to that at the moment. Nor do I see the economy taking off any time soon, so the prudent decision would be to wait since, if this is the bottom, we were probably muddle along here for some time.

Yep, Citi, Goldman, Intel - they've all said the worst is behind us. Time will tell. Just today, the Fed projected that unemployment is going to go over 10% this year, and will likely stay above 9.5% for all of 2010. It remains to be seen what madness Congress will enact to resuscitate the housing market.

The truly interesting times are maybe 12-18 months out when we see what happens with inflation and how on the ball the Fed is to take away the punch bowl. You can almost guarantee a new bubble in some asset class (or more) is going to form. I'm racking my brain to figure out where the next bubble is, and I'm thinking energy, possibly alternative energy, and perhaps e-commerce (although the former two reached highly speculative levels, but maybe short of bubble status).

Yes, lots of speculative $$ chasing alternative energy plays. I've been short FSLR off and on for awhile. I knew after INTC beat their numbers yesterday that today was going to be a big up day for tech, so I covered FSLR at the market open. I think FSLR will offer another short opportunity in the future but I'm not going to stand in front of the train right here.