Is this the bottom?

[rose-colored-coolaid]

10/02/2008 is officially not the bottom.

[rose-colored-coolaid]

So, I haven't weighed in on this for three months, because during the Christmas not-shopping season I was unsure whether or not the bottom had been reached.

Well, recent developments make it clear that Jan 30th, 2009 is indeed not the bottom of this crazy-legged all-out real estate implosion. In fact, it's beginning to look like decimation in the traditional Roman army manner is the only possible solution; literally destroy 1 out of every 10 homes.

Just to review -

1) Tens of thousands of local layoffs were announced in the last two weeks.
2) New sales are the lowest on record
3) In fact, the majority of "most dismal" records (fewest sales, worst nationwide declines, unemployment change, etc) are quoted in the following manner: X showed its worst numbers in the 37 years that the measurement has been tracked. In other words, when you see a headline that something is the worst it's been in 20 or 30 or more years, read the byline and it's probably actually been longer than the news even quotes. A rare case where MSM is using the less hysterical headline.
4) Record price drops, and accelerating
5) Terrible Christmas for retail
6) Talk to someone, anyone, and ask them how they feel about the economy, their job, or just stuff in general. 10-to-1 they are somewhere between concerned and terrified.

[barista]

Jim cramer just announced June 30th as the housing bottom on CNBC. Mark the calendars!!!

[Markor]

What year?

[sniglet]

Actually, I am expecting there to be a significant rally in most assets (stocks, commodities, real-estate, etc) around mid-year (give or take a couple months). No market ever moves in a straight line, not even those of the bear variety.

My best guess (for that is all these short-term timing predictions are), is that we will see asset prices fall significantly through most of February, and hit new 52 week lows in virtually all asset classes. However, once we've hit this "bottom", we will likely rally for a good 3 to 5 months, with a MASSIVE correction (the Dow could rise 50% off it's bottom. However, towards year end I suspect all these gains will be given up, and then some. Nevertheless, I fully expect to see some people calling a bottom during this rally.

[Markor]

I'll keep your predictions in mind. I doubt it on houses, but who knows? I say Seattle-area houses see no significant rally all year.

[wreckingbull]

A bear market is like a shark, it must keep moving to stay alive. I agree with sniglet on this. The asset class of real estate may not jitter as much as other classes, but this will not be a straight line to the bottom.

[sniglet]

It's possiblle that our local economy might not follow the broader nation in the big rally I see happening mid-year. We've been out of synch with the country for the last few years (only now starting to see real pain in real-estate, for example). Thus, it is possible that we could see things get worse in the Puget Sound even as they appear to improve elsewhere.

But this is just an idea I am toying with. Maybe we have finally caught up with the rest of the country and are now in the same phase. Still, it's something to think about...

[Markor]

My thinking is that prices for the few houses that are selling on the Eastside (at least) are generally at least 10% higher than realistic market prices (the prices at which the whole market would be brisk), so a rally this year is unlikely. That 10% would have to be absorbed first.

[Scotsman]

I'm thinking we rally in the next month or so on media hype and false hopes, then are back in decline by summer. All the international news is at least as bad as our national economy, and there really isn't any sense that things are turning around. The TARP 1 and 2 are seen as failures, the big bailout is seen as a pork bill, earnings are down, etc. While it's true most bear markets are pretty choppy on the way down, there's no rule that says we have to have a big intermediate rally every time. Sometimes a turd just sinks to the bottom.

[rose-colored-coolaid]

[ira s]

My current best guess is that the housing bottom will occur sometime between September of '09 and July '10, but we will wallow around the bottom for a couple of years after that.

[rose-colored-coolaid]

[Markor]

There was a line of job-seekers snaking around the football stadium, and few employers there. Sniglet's 80% off is looking more accurate every day.

[rose-colored-coolaid]