Who Needs Experts, Read A Blog!
It's funny to see "experts" kick around theories on the housing bubble that this blog and it's readers have addressed for months. Reuters, "Mark Zandi, chief economist for Economy.com, said it won't be buyers who will disappear. Instead, he believes disgruntled sellers will bring the market to a halt." Heard it.
"People will start pulling their homes off the market if they think they can't sell it at a 'fair price,' which is now perceived to be a very high price." They did that in Sydney, Aust. for a few months, and then prices plummetted.
"The first piece of data where you get a sense of that is not home sales. It's mortgage applications. If applications fall, particularly in periods where interest rates rise, a housing freeze is likely to arrive." We've already covered that; apps are falling with rates falling and regular readers will remember apps have been down since 2003.
"Van Davis keeps an eye on inventory, measured in the amount of time it would take to sell the current number of homes available, to gauge the market." This blog has posted on the many reasons sellers are holding back. And speaking of inventory, how about the vacant 10% of rentals? The high percentage held by speculators? We won't split hairs on a Friday. Wouldn't be prudent!