Possible timeline for next 7 years' real estate market

来源: miat42 于 2007-11-14 15:57:05 [] [博客] [旧帖] [给我悄悄话] 阅读数 : (2446 bytes)

1) First stage: From 2006 to 2007, builders got hammered first. Massive investers or flippers dumped their signed contracts and walked away, their deposit got forfeited by the builders. But builders got a huge inventory of fully finished new houses with no buyers. It has taken them a full year to try to liquidate them. This process is now more than half-way done. It may take until early 2008 to fully liquidate them, completing the process. That means if you want to get the best deals from new home builders, next 6 to 8 months may be your last chance. Once builders are done liquidating the inventories, a few builders may get bankrupted, majority will scale back from building any new houses. They only dig dirt when they have a sales contract. If they don't have to build new houses, they can delay and avoid liabilities. The crisis for them may be over by end of 2008, at least on the inventory front.

2) Like cultslate said, Subprime reset may culminate till end of 2008, therefore, foreclosures, REOs and short sales may continue to worsen till early 2009. By that time, in individual locations, 50-60% off 2005 price may be common for REO properties. But will investors go to pick these bargains at that time? Some will do, but I don't think the majority will do. Investors are human's too. They get spooked real hard by that time. Therefore, 2009 may be the best year to find true bargains without much competition. I hope investors will have jobs by then to act on them, rather than spending time on writing resumes.

3) After 2009, I don't think the market will recover quickly. The market by then will have already affected the whole pricing structure, knocking down the price by 20-30% from today's level depending on which market is concerned. The true recovery may not happen until 2013. However, all the subprime related mess like foreclosures, bank REOs or short sales may become history. Don't think you may get the best price from bank at that time, banks will have taken care of all their troubles, few discounts may be left. You might have to buy the market price, not REO price.

4) If market starts to recover by 2013, it's a full 7 year painful journey. But if that's the case, then it's a very normal housing boom->bust->boom cycle. I've seen it last time. This is just my speculation, not even a prediction. So, don't blame me if it doesn't happen like that :-)

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• oh, man,that is too long to wait. -pediatrician2- ♂ 给 pediatrician2 发送悄悄话 pediatrician2 的博客首页 (275 bytes) () 11/14/2007 postreply 16:10:11

• No, I don't think it's best case, just normal case -miat42- ♂ 给 miat42 发送悄悄话 miat42 的博客首页 (538 bytes) () 11/14/2007 postreply 16:15:52

• 回复：No, I don't think it's best case, just normal case -pediatrician2- ♂ 给 pediatrician2 发送悄悄话 pediatrician2 的博客首页 (344 bytes) () 11/14/2007 postreply 16:20:13

• the only "innovation" I can think of in the next -pediatrician2- ♂ 给 pediatrician2 发送悄悄话 pediatrician2 的博客首页 (219 bytes) () 11/14/2007 postreply 16:23:57

• See, how different we think! No. construction is not -miat42- ♂ 给 miat42 发送悄悄话 miat42 的博客首页 (255 bytes) () 11/14/2007 postreply 16:30:41

• Innovation can't be printed out from thin air. -Aceofspades- ♀ 给 Aceofspades 发送悄悄话 (141 bytes) () 11/14/2007 postreply 16:36:18

• No problem because America has its VC structure -miat42- ♂ 给 miat42 发送悄悄话 miat42 的博客首页 (700 bytes) () 11/14/2007 postreply 16:41:52

• We will need tons of luck to just have depression like Japan -Aceofspades- ♀ 给 Aceofspades 发送悄悄话 (195 bytes) () 11/14/2007 postreply 16:33:06

• Sorry, I don't see that happening. You too pessimistic:-) -miat42- ♂ 给 miat42 发送悄悄话 miat42 的博客首页 (0 bytes) () 11/14/2007 postreply 16:36:30

• Sometimes I hate to be bearish, -Aceofspades- ♀ 给 Aceofspades 发送悄悄话 (162 bytes) () 11/14/2007 postreply 16:42:55

• hehe, we still have china, man! One of them will work. -pediatrician2- ♂ 给 pediatrician2 发送悄悄话 pediatrician2 的博客首页 (86 bytes) () 11/14/2007 postreply 16:44:23

• In fact, both US and China will prosper but today -miat42- ♂ 给 miat42 发送悄悄话 miat42 的博客首页 (379 bytes) () 11/14/2007 postreply 16:50:51

• But I suspect you are too bearish this time :-) -miat42- ♂ 给 miat42 发送悄悄话 miat42 的博客首页 (69 bytes) () 11/14/2007 postreply 16:45:04

• Several candidates for new innovation: -miat42- ♂ 给 miat42 发送悄悄话 miat42 的博客首页 (588 bytes) () 11/14/2007 postreply 16:28:35

• 回复：Several candidates for new innovation: -pediatrician2- ♂ 给 pediatrician2 发送悄悄话 pediatrician2 的博客首页 (552 bytes) () 11/14/2007 postreply 16:40:04

• hopefully, some companies will find near-cure drug -pediatrician2- ♂ 给 pediatrician2 发送悄悄话 pediatrician2 的博客首页 (115 bytes) () 11/14/2007 postreply 16:50:59

• You know what? The longer the bio bubble doesn't come -miat42- ♂ 给 miat42 发送悄悄话 miat42 的博客首页 (389 bytes) () 11/14/2007 postreply 16:53:58

• are u sure this statement? -山高月小- ♂ 给 山高月小 发送悄悄话 山高月小 的博客首页 (185 bytes) () 11/14/2007 postreply 19:05:33

• 耐心等 :-) -芦苇葱葱- ♀ 给 芦苇葱葱 发送悄悄话 芦苇葱葱 的博客首页 (0 bytes) () 11/14/2007 postreply 16:21:01

• 有道理，还要看具体地区 -笨企鹅- ♀ 给 笨企鹅 发送悄悄话 笨企鹅 的博客首页 (0 bytes) () 11/14/2007 postreply 16:31:13

• Good analysis over all -freewilly- ♂ 给 freewilly 发送悄悄话 (558 bytes) () 11/14/2007 postreply 17:22:40

• Do you know why some builders may reduce price to build? -miat42- ♂ 给 miat42 发送悄悄话 miat42 的博客首页 (985 bytes) () 11/14/2007 postreply 17:53:21

• As you said before, you are too pessimistic. :) -山高月小- ♂ 给 山高月小 发送悄悄话 山高月小 的博客首页 (0 bytes) () 11/14/2007 postreply 19:01:37

• My measure of optimism/pessimism maybe different from yours :-) -miat42- ♂ 给 miat42 发送悄悄话 miat42 的博客首页 (0 bytes) () 11/15/2007 postreply 06:34:12

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