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Originally Posted by Professor Shays  You said, "We were holding out for a while, early on people were saying that the markets would recover as quickly as they crashed, but now that seems unlikely." People who said that simply ignored history. Crashes historically continue until homes become affordable. We still are not there yet and unfortunately, due to an overall economic collapse, it is gong to be a year or two before we come anywhere near the bottom. Once we reach the bottom, history tells us that things remain flat for quite a while. I've been telling anyone willing to listen since 2005 that we won't reach bottom, based upon history, until around 2011, and we will remain at bottom for 4 to 5 years after that.
Good news is on occasion former students will contact me and say how right I appear to have been in my analysis. It really wasn't a difficult call I tell them. It was simply looking at fundamentals and applying the economic principles associated with supply and demand.
Daniel |
Daniel... I think you mentioned at some point that you're located in Sacramento area. We own two investment properties that we are currently trying to modify in Sacramento area. From what I have seen prices there have experienced a decline of 50% to 60%. Sales have picked up in the last year and inventories have decreased. Do you think prices in Sacramento area are going to keep falling until 2011? If that is the case they will be down possibly 90%? Even now with current mortgage rates, with what the prices currently are, mortgage payment can be less in some areas then rent for compatible property.