REI-wise for me...Am sitting tight and not intending to do anything unless and until an absolute steal is to be had, as in 50% and preferably lower discounts. I have a feeling steals won't be terribly uncommon - even in San Antonio - w/in 6-9 months. Pete, what say you?
I don't know if anyone here has read [b]Never Cry Wolf[/b] but I will be acting like the wolves in the story and only going after the seriously ill elk. Forget chasing the healthy elk (non-motivated sellers), I'll be going after the 40-50 cents on the dollar elk that NEED TO SELL their home. In a boom market that doesn't really exist and motivated sellers looking to sell can still get top dollar for their homes. In the coming years if someone isn't completely motivated and willing to GET RID OF THEIR PROBLEM no ifs ands or buts I'm not even looking. I think what's going to be in store for us is not a buyers market but something much worse for the sellers, it is going to look like an all out salvage yard.
Foreclosures are currently up 500% in many places now, if not more. I see 5-6 (maybe more) times as many in '08 compared to '07.
I’m predicting a DOW correction of 2000+ points over the next few months.
I’m predicting the weaker 50% of home builders will fold, the remaining 50% of builders will seriously downsize or slowdown just to keep the place running until things correct themselves.
I don’t see the bottom until mid to late 2009 at best. With 4 times as many ARMs adjusting in 2008 we won’t start seeing the biggest default numbers and foreclosures until at least early '09, then the REAL discounts won’t even be fully in place until the lenders have held those REOs at least another 6 months. With things as they are they will be moderately desperate when they first take possession but I’ll bet they don’t really get desperate and mark things down until at least 6 months later. Of course every time another home ends up as an REO and every time that REO gets discounted the entire market gets adjusted down even futher due to increased supply and lower comps caused by the reductions futher spiraling things. Couple all of this with increased intrest rates slowing things down even further and reducing affordability prices will dip even more. Think about it, we should probably see what at least 2 points+ higher on interest rates just to begin absorbing losses…you think that isn’t going to impact prices? Higher interest = higher payments so those buyers have to buy ever smaller homes or the homes have to sell for less. With interest rates going up do you see a flood of buyers buying? Hell no, the ones that are in homes they can afford now (not talking about the ones forced to move because they can’t afford it) are sitting tight with their current loans in the high 5’s low 6’s. Plus with lenders tightening their practices how many people are now unable to qualify? Hell most that could qualify for a $250k house last year couldn’t get a doublewide with a cosigner now. This is going to ripple BIGTIME across everything.
401ks and pension plans- Going to see a big hit, I forsee a lot of folks that won’t be able to retire on schedule.
Interest rates on everything including car loans, credit cards, mortgages, etc will probably go up.
Banks that wrote a lot of risky loans will fold.
A lot more hedge funds will fold, I think what we’ve seen is the tip of the iceburg.
As money dries up spending will slow, this is going to cause retailer stocks to drop and retailers will reduce payroll to get through it. All of the now even broker Walmart, etc employees will certainly be spending even less and probably will start collecting more state/federal aid such as foodstamps. Of course this is going to cause budget problems for state governments, etc. These people will also probably end up defaulting on many of their obligations that were previously being paid on time, obviously more turmoil for banks. And of course now that there is more money going out to state aid there will also be less coming in thanks to reduced spending causing less income to be made on sales tax.
And all the while the dollar is weakening, that can’t be helping ANY of this.
Oh and lets not forget China, how much business do we do with them? What’s going to happen when that house of cards falls? As our economy gets weaker so does theirs and vice versa, ouch.
I’m very close to bailing on my apartment, ignoring all of my debts, etc and just moving to goddamn Idaho and living in the hills off the land until this all blows over. This is going to be UGLY. Not ugly like a little ugly, ugly like that girl in your highschool that guys literally RAN from.