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Is a Real Estate Downturn Coming?
An SI Board Since May 2001
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91 26 0
Emcee:  SpongeBrain Type:  Unmoderated
One could think there are many factors that could contribute to a decline in American real estate prices:
* Nesteggs took a beating in the past year. (Sell the house? Put off buying a house?)
* Layoffs across many sectors, including dotcom firms closing up shop altogether.
* Spiking oil and energy prices (home heating bills up 50%!!)
* Absence of stock returns to supplement annual income.
* Income of fixed income retirees plummetting as CD's mature and current interest rates much lower.

With these factors in place, I have been predicting a real estate correction since the summer of 2000.
However, this has not panned out as I expected. I did read somewhere that it took about 2 years after Japan's Nikkei crash for the real estate market to finally start its descent. Perhaps I am just a bit premature with my predictions?

Though sellers may not be experiencing the multiple bidding frenzy of the past, it still seems that prices have hardly corrected.
Will they? Can they? etc, etc...

It does seem like we've finally started a correction in commercial real estate, namely in CA, where many dotcoms have evaporated.
siliconvalley.com
latimes.com
www0.mercurycenter.com

But it also seems like a single family house can be a serious money pit in the midst of a recession.
When a family is facing a layoff, all of a sudden all the associtated costs of maintaining a home seem much more intimidating.
Landscaping, heating, property taxes, mortgage, etc... This can become unmanageable, no ?

But unless people actually leave the country (or go homeless), doesn't real estate seems somewhat a zero sum game. If they sell, where do these people go in an extreme scenario? Do they rent? Buy a smaller, more affordable place?
Do people sell (or forclose) their houses and rent smaller apartments?
Would that make apt. rents increase?
Or do people start living in more cramped (and cost efficient) conditions (ie: sharing an apt) while riding out the storm?
Or do the simply leave expensive metro areas and head for $100k houses in Alabama?
Or move the family back to their parents house in the midwest?

I'd like to hear people thoughts, opinions, experiences, and anecdotal evidence on this topic.
Perhaps anecdotes related from the early 90's real estate correction? Or is it a case of "it's different this time" ?
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91 I wouldn't try to argue there wasn't a bubble (the exact boundaries ofTimF-2/13/2008
90The argument seems to be: If there was a bubble, and the bubble has burst, then Jack Be Quick-2/13/2008
89Was there a Housing Bubble? marginalrevolution.comTimF-2/13/2008
88Most of the world's people have no concept of private property, as it has evTadsamillionaire-3/16/2002
87The downturn is here. The recent numbers are skewed, The actual closings are Tadsamillionaire-2/22/2002
86This is the greatest company you will ever see... canadianrockport.comMR_KASH-2/14/2002
85You'll give more of your privacy to your boss. Yes, we know: The bigger surTadsamillionaire-1/29/2002
84No!dave rose-12/5/2001
83Five years is a long time. Hardly anybody expects the downturn to last that longNandu-12/4/2001
82have you heard of anyone buying with that purpose in mind (to lease back to the jonathan romanowsky-12/4/2001
81Why not option the current price of the home, or do a reverse mortgage at currenTadsamillionaire-12/4/2001
80<<<There is a 3rd obvious one... sell. I can't see getting this onedave rose-12/3/2001
79This is a great post... I've been wanting to do the same out here in the bayjonathan romanowsky-12/3/2001
78Anybody: How can I hedge the price of my home. I live in a suburban area northdave rose-12/3/2001
77LOL. My insurance co has great plans for my future employment -g- I hear the IMmaceng2-11/30/2001
76The realestate market is down in AZ. Hey Pearly, great Beer comment. TimTadsamillionaire-11/30/2001
75TOL. I think they're closing on average price of $ 500,000. biz.yahoo.comLes H-7/25/2001
74Do you know which of the homebuilders are most exposed to the medium-high and hiGofer-7/23/2001
73Stock market's slide pinches sales of pricey homes usatoday.com High-end SpongeBrain-7/23/2001
72SB re <i> More Americans cashing in their home equity </i> On thmaceng2-7/6/2001
71Judy Rose: More Americans cashing in their home equity freep.com Judy Rose: MSpongeBrain-7/6/2001
70Luxury home sales plummet in Bay Area Buyers put off purchases as they expect prSpongeBrain-7/6/2001
69Your downturn hasnt begun...These things can lag by years.SpongeBrain-7/5/2001
68At least Houston Tx is doing excellent. We went through the down turn and I havSmart_Money-7/5/2001
67Sublease Space Surges Onto Market in Manhattan nytoday.com BY JOHN HOLUSHA 07/SpongeBrain-7/4/2001
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