the meltdown to date has been much milder than I thought it would be

[Spartacus]

My inner doomer was quite insistent 1 year ago -

unlike Itulip, I thought the bust would be pretty bad.

biblical wailing & gnashing of teeth bad.

And on occasion it did look that way - the first that I thought the collapse had started was the news of entire new subdivisions around Phoenix standing empty.

No go so far. But who knows -it may yet happen.

[jk]

Re: the meltdown to date has been much milder than I thought it would be

during last june's sell-off a number of commentators i follow, for one-bill fleckenstein, were saying that we were getting a preview of what was coming in sept-oct. of course, it didn't work out that way. then the february sell-off this year led to similar comments. i've been waiting for what seems like a very long time, and i'm having some doubts.

[Spartacus]

Re: the meltdown to date has been much milder than I thought it would be

between you and me we can make an 8 handed economist.

during last june's sell-off a number of commentators i follow, for one-bill fleckenstein, were saying that we were getting a preview of what was coming in sept-oct. of course, it didn't work out that way. then the february sell-off this year led to similar comments. i've been waiting for what seems like a very long time, and i'm having some doubts.

[Sapiens]

Re: the meltdown to date has been much milder than I thought it would be

My inner doomer was quite insistent 1 year ago -

unlike Itulip, I thought the bust would be pretty bad.

biblical wailing & gnashing of teeth bad.

And on occasion it did look that way - the first that I thought the collapse had started was the news of entire new subdivisions around Phoenix standing empty.

No go so far. But who knows -it may yet happen.

Economic recessions are pretty orderly unless the population is going hungry. Right now most Americans have easy access to food, so no chaos on the streets. However, if you should drive around your town you will notice the many businesses that are going out of business or have gone out of business.

[lb]

Re: the meltdown to date has been much milder than I thought it would be

When they run out of "hot" markets to point at, and they will, that is when it will get really bad.

[zoog]

Re: the meltdown to date has been much milder than I thought it would be

...news of entire new subdivisions around Phoenix standing empty.

This is somewhat anecdotal, but here in Portland (and Seattle) housing prices are still going up, whether you believe the local MLS, the Case/Shiller index, or the quarterly OFHEO. I expect this to change soon, and I don't want to overstate the significance of these two cities, but... IMO a housing-based recession is not really going to kick in until all major markets are going down.

[c1ue]

Re: the meltdown to date has been much milder than I thought it would be

From what I see here in the Bay Area - those near or below the median wage ($70K/household) are suffering mightily.

However, there are still a number of households in the $150K to $250K salary range.

These households are still buying - however - I fail to see how any purchases made by these individuals of $1M+ houses will turn out positively.

While the cost of the mortgage is more or less financially supportable, the negative wealth effect should these purchases fall in value will be considerable.

IMO, the likelihood of house prices continuing to rise without any low end base (Minsky "plankton") is zero.

This is compounded by the fact that these $1M properties are by and large very poor in quality - completely unlike LA where there are sufficiently large numbers of neighborhoods and house types - which combined with various states of upkeep - can yield "lifetime" homes.

Very few properties in the Bay Area which are for sale would fall into this category in the $1M range plus a decent school.

Thank you Proposition 13.