How Long Do You Think It Will Be?

[George Hatch]

You keep using boom and recovery as if either of those terms as you're using them means anything to anyone other than yourself. They don't. The only way that distinction would work would be if you were benchmarking everything off of the 2005 pricing as if that was somehow typical. There is either increase or decrease.

Except that Schiller defines the term "bubble" as price increases that exceed the long term trend by at least two standard deviations. In other words, if the average of peak prices only gets +15% over the trend then an upleg wouldn't become a bubble until it surpassed +30% above the long term trend. Simply being a bit overvalued doesn't merit calling out a bubble.


This current upleg could have ended 2 years ago without ever coming close to the 2005 peak had there been reason for the market to do that. The fact that it WAS higher in 2005 doesn't mean anything by itself other than it was higher in 2005.

 

[Joe Flacco]

You keep using boom and recovery as if either of those terms as you're using them means anything to anyone other than yourself. They don't. The only way that distinction would work would be if you were benchmarking everything off of the 2005 pricing as if that was somehow typical. There is either increase or decrease. This current upleg could have ended 2 years ago without ever coming close to the 2005 peak had there been reason for the market to do that. The fact that it WAS higher in 2005 doesn't mean anything by itself other than it was higher in 2005.

Anybody with experience in price chart analysis knows what I am talking about. After a correction like that there is a lot of overhead supply. All the of the distressed sales and sales of people waiting to get back to a certain price level to sell. Higher than the prior peak means that market has worked through all of that. That is what is going on in the market as it moves back to highs. Working through all those sellers, some who are distressed. I am not making stuff up.

 

[Joe Flacco]

The "long term trend" is 6% per year though. Based on that, the financial crisis over-corrected the trend and we are now lagging the "long term trend."

Edit:



1965 - 2015 was 5.49% per year




1915 - 2015 was 4.61% per year





1990 - 2018 is 3.53% per year

 

[Mr Rex]

Step outside your comfort zone of your market area that is hardly representative of the whole. You can not be so naive as to see the failure in your short sited myopic view of "trends" based on a Mr Magoo examination of the market.

 

[Joe Flacco]

BTW I only use the term "BOOM" because that is what you were calling what is going on in your area. I never used "boom" or "booming" until you started describing your market as "booming" since 2013. So what I am trying to explain to you is that that is not a "boom".

 

[Joe Flacco]

Step outside your comfort zone of your market area that is hardly representative of the whole. You can not be so naive as to see the failure in your short sited myopic view of "trends" based on a Mr Magoo examination of the market.

What it seems like to me is that your personal circumstances are not improving with everybody else in your market. Probably.

I don't know where you are located but Charlotte area is now moving on from financial crisis. Almost time to stop talking about it.

 

[Mr Rex]

I am far away from the Charlotte market FWIW. But you should check your ready made conclusions about the Charlotte market with a few forumites familiar with the area. Carnivore, USPAP Compliant, and Chad Hampton come to mind in a new york minute and I don't see their experiences matching your exuberence.

 

[Renee Healion]

This commercial break brought to you by S&P Case-Schiller, now Corelogic S&P Case-Schiller. Back to our regular programming...

 

[George Hatch]

The long term trendline was doing one thing prior to 2001. You can see that there was *some* spread at both the high and low side of these cycles, but it wasn't real extreme. Until you get to the 2002-2007 period, which dwarfed the others in terms of scale.

 

[Joe Flacco]

View attachment 35580 View attachment 35580 View attachment 35581

You can't draw a straight line like that on that chart because of compounding / time value of money. You need a log chart.