Is this the bottom?

[Charles Dean]

[deejayoh]

[jon]

When the federal government collects taxes and spends the money, it is equivalent to destroying the money coming in and then paying for the spending by printing new money. The stimulus bill is going to decrease the amount of money destroyed and increase the amount of money printed. It's pretty clear that Congress doesn't really care what happens to the money as long as it enters the system quickly.

An 80% drop in real estate would require that the purchasing power of each dollar would greatly increase. There is huge amount of dollars currently parked in money funds that funded the deficit spending up until now. The talk now is of the Fed buying treasuries. This all means they won't be taking dollars out of the economy and will just be printing government checks that are backed by newly printed dollar bills.

And now the FM's are lowering the standards for refinancing, which is the same as what led to the bubble in the first place.

It's clear they are going to stop at nothing to stop the fall in housing prices. The dollar will just be the next casualty.

[The Tim]

Good news everyone!



Looks like she's basing the call on a single week's worth of stats? I imagine the $15,000 tax credit for homebuyers is .

I won't be surprised if the tax credit trick manages to create a 3-6 month false bottom, but in the end I think it will just slow the approach to the inevitable final bottom.

[sniglet]

[rose-colored-coolaid]

[deejayoh]

[The Tim]

[SeattleMoose]

Bottom?

Seattle price drops are ~1.5 years "behind" places like CA and FL.

We have a long way to go yet.....a very long way.

[WestSideBilly]

I think the eastside flops thread would pretty quickly dispel her 20% off peak statement. Lots of 25-30% haircuts off the 2007/2008 sale price and they're not moving.

[Alan]

The media attention is a very good thing for lower prices. Now more sellers will being asking 20% below peak pricing and buyers will start looking for 30% off deals.

[davidlosh@davidlosh.com]

The bottom call was a publicity stunt orchestrated over a period of days.

I happened to see the set up when Tim Kane of Legacy Escrow made the bold move of posting an excerpt from Christopher Warren's "how it is possible" memo. I wish you would post it here on the Seattle Bubble.

[jillayne]

Well, I had 55 students in my class today including a handful of higher level real estate brokers and NONE of them believe we're anywhere near the bottom.

About five or six, it could have been more, agents said they're starting to see short sales and foreclosures creep into the 700K to million dollar price ranges.

[sniglet]

The key signal I am looking for to indicate we have reached a bottom is a full 24 months of NO deterioration in the median prices. I expect to see some false bottoms along the way to the finale. There is no need to rush to buy once we do hit bottom, since prices will drag along for years before there is any sizeable bounce. Patience is the order of the day.

As far as what factors will finally lead to a turn: I would say that when we reach a point where the percentage of home-owners with no equity has returned to historical norms is when things will turn around.

[jillayne]

Another class today. 40 agents, south end. Had agents from all over King County and even from Olympia. Everyone agreed that conditions are deteriorating rapidly and there's been a notable uptick in the percentage of NEW listings coming on the MLS each day that are distressed: Short sales or REOs.

We are a long ways away from hitting bottom.