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Prices are going to go back to about the early 2005 price range. We are all most there, and that is where they will stay for a while.
Interest rates are going DOWN, or moving sideways, not up, or not up very much. Normal home buyers and LONG term investors will jump back in as soon as data shows a 6 month sideways movement in prices.
Puna is beyond underpriced. I tell everyone I know about HPP 1 acre lots for $50k-$75k! I'm waiting for this correction to bottom out, and I hope to pick up another lot. The prices in Puna are just like having a real estate time machine, going back to 1990 real estate prices.
Buyers have about 5 more years to get in the best areas of Puna, then, no more $250-$450k homes. Speculators (house flippers) make up about 20% of the market. That accounts for the 20% drop in price. They got out starting around Sept. of 2005. By 2008, this will all be shaken out, and the prices will slowly start climbing until prices increase about 25-35%, maybe by 2012, or about $150k on top of CURRENT prices. At that point, those who bought just before the 20% dip and now find themself underwater in their mortages, will be able to sell and break even. If they hold on, say for 10 years, they will be happy. Long term investors know this. It will be a long time before prices soar again like 2002-2005. If we have another major terror attack, the fed may lower interest rates, (not as much as after 911, which is one of reasons the real estate boom began) and the market may heat up a bit more. Every new store, business, traffic light, curb, sidewalk, P.O. Box, Starbucks, all of it, builds the value of the Puna area to new comers looking for all the crap they left behind, and in a sad way, to the value of real estate.
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Buzz: How do you know how many holes are in my bowling ball? Maybe its a 5 pin bowling ball and I am a Canuck, or a lawn bowling and I am English or bocce ball an I am Italian? Is the first answer always correct? Look within young jedi... All things in time. Soon many will be against the "wall of worry" or sliding down the "slope of hope". Maybe read J. Galbraith "The Great Crash, 1929" or listen to Studs Terkel interviews on the great depression, in there it becomes apparent that everything seemed to happen so slowly it was hard to fathom what was going on.
Andrew: I feel fine, never better. Remember where the sun always shines there is usually a desert. Never, never mix drinks; scotch, bourbon or whisky should only be tempered with the finest water or served neat.
HaoleBoy: As I gaze into my ASU Jim Brock signed baseball... I see, I see Padres going all the way and also... its cloudy but De.. De..Detroit but alas it grows unclear.... no more.
Aaron: I didnt say it wouldnt hurt? It will hurt like hell. If the weather man says a hurricane is coming on Labor Day, you shouldn't keep roasting weinners at the seashore. Do people get hurt in hurricanes and economic hard times? Well, yeah. Do we blame the weather man and the economist? If we do thats just silly. I am sorry if I am your "Cassandra".
Rob L: As for the boomers. During the great depression at most 25% of the work force was unemployed for at least 6 months, now the other 75% wasn't jumping back into the market at historical lows, they were hording their dimes. Are all the boomers going to go away? No, but the impact will be greatly curtailed. I am sorry but I don't see the boomers saving the day.
Radioguy: I would wage a beer that we will be looking at 2000 maybe 1997 prices, housing and credit bust usually take a good deal of time to sort out though? Japan has had close to zero interest for how long and how has their economy recovered? How will the average home buyer get back in when wages to home values are so out of whack? I forgot we will keep importing boomers... Flippers make of 20%, ok I agree. Economics teaches that volume, cost and demand rarely move in sync. Its in generally volume of houses for sale not the median prices that shows where the line is trending. Try looking at this place: http://thehousingbubbleblog.com Its an ok site, no porn. I don't trust the beloved fed will be able to push the string all the way to the consumer loving zero%, just look at the early eighties the fed wanted to lower rates and the banks weren't going for it. Paul Volcker where are you when we need you???
Wow I never thought I would be so popular. If you would like more of my sermon send me a dollar with your name and address on it and I will deposit it directly.
Jared
An to quote our beloved econmist John Galbraith: "Meetings are a great trap. Soon you find yourself trying to get agreement and then the people who disagree come to think they have a right to be persuaded. However, they are indispensable when you don't want to do anything."
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Detroit? They won't get past the Mets. Your credibility is on the line now.
Will the Raiders be able to score again this season?
Send me a bill for any applicaple charges. 
Aloha
Richwhiteboy
A man is happy so long as he chooses to be happy and nothing can stop him. Alexander Solzhenitsyn
“Sometimes the truth hurts. And sometimes it feels real good.”
- Henry Rollins
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I love it when the complex future can be spelled out in bite size morsels. Jared I you have a convincing proverb one that a lot of people are buying into. I'm not but I wish you well. I love it when I hear forecast about the future. One of the all time greats was nuclear industry as a clean, cheap, safe or reliable energy source. Or the Soviets as were going to take over the world. We all bought into it at one time or another. Some times they are just about selling people a way to react now.
Making market per dictions in a down turn is easy just like 20/20 visions. Forecasting when is going to turn now that is of course a little more difficult. My brother has been predicting the a housing market collapse for about 16 years right after he lost $70,000 on the market collapse in 1990 San Francisco. That same house today or rather 6 months ago was selling at $975,000 where in 1990 it was at $235,000. Maybe today it's at $850,000
I'm buying into the BI because in 5 years this is where I will be living. If the down turn last about three years I'm forecasting it right.
Keith
"In the land of the blind the guy with one eye is a consultant"
Keith
Keith
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Just like sports, we see a competition happening here: it's the "bubbleheads" (Rabi's term) versus the "bubble debunkers" (my term). As I see it, the debunkers can never win because there's no defining moment when "the bubble didn't burst" (unless you put a timeframe on it, of course). Our bubblehead foes can always say, "it's going to happen any day now". And if it does, they get to gloat and tell everyone how much smarter they are than the rest of us. (Isn't being the smartest guy on the forum what this is all about?) So listen up, debunkers: arguing with the bubbleheads is a lot like arguing with your wife: you can NEVER win so just go with the flow 
Okay, now to the more important topic of sports. I am predicting that the Cubs are NOT going to the World Series this year - but definitely they'll win it all next year...which also means the apocolypse is right around the corner. So, to tie together these seemingly unrelated topics, here's my humble advice: go out and get that 3-year ARM loan and buy that big, beautiful house of your dreams that you can't afford. Why worry? You'll never have to pay it back.
Go Cubs!
Aloha
Tim
Other people can talk about how to expand the destiny of mankind. I just want to talk about how to fix a motorcycle. I think that what I have to say has more lasting value.”
Robert Pirsig
Tim
A superior man is modest in his speech, but exceeds in his actions--Confucius
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A REAL Cubs fan wouldn't give up on them yet for this season. They're only 19 games behind! 
I find sports prognosticating about as accurate (and interesting) as real estate/ economy predictions.
Jared, what's your ball say about the Cubbies?
Aloha
Richwhiteboy
A man is happy so long as he chooses to be happy and nothing can stop him. Alexander Solzhenitsyn
“Sometimes the truth hurts. And sometimes it feels real good.”
- Henry Rollins
Posts: 1,168
Threads: 39
Joined: Jun 2005
I was going to counter that the Cubs are mathematically eliminated, but upon further reflection, even this stark reality is not enough to stop a true Cub fan from believing. So damn the math! "The little furry mammal from the Windy City will capture the flag of nations, and the gods will not be pleased that we violated the laws of math, and fire will rain down upon all of us. Only the bubble debunkers will be saved. So repent now bubbleheads, before...it's...too...late!"
Look it up, it's all spelled out clearly in the Bible...or on the internet somewhere. Either way, it must be true! Thanks for setting me straight, haoleboy.
BTW, what's the over-under in Vegas on the bubble bursting this year?
Aloha
Tim
Other people can talk about how to expand the destiny of mankind. I just want to talk about how to fix a motorcycle. I think that what I have to say has more lasting value.”
Robert Pirsig
Tim
A superior man is modest in his speech, but exceeds in his actions--Confucius
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Haoleboy - Dodgers all the way....
You can take the girl out of LA but not the Dodger fan outta the girl!
Catherine Dumond
Blue Water Project Management
808 217-7578
http://bluewaterpm.125mb.com/index.html
"We help make building your dream home a reality"
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The Cubbies are never a good bet, I think it will be another 5-10 years before we see a strong showing for the Cubs (look for a strong coaching and foundational change soon). I have hit with 2x with the Angels, 1x with the Dbacks, and most recently with the Bos Soxs (fluke) with pre-season bets in Vegas. The Jim Brock ball isnt always right on but it gets close.
Other bets that have paid off for me were: 2000 tech bubble (both rise and fall), shorting Enron, 9/11 (this time fall and rise).
I placed my bet one the housing bubble when I sold my home in June 2005. I believe Summer 2005 will be seen as the top national. I will rent until housing values come back in line. I may be wrong, I maybe right and you can win if you don't play.
The fed blew up the tech bubble from the early 90s real estate bursting bubble and todays housing and credit bubble from the tech bubbble bursting in 2000.
Jared
"In economics, the majority is always wrong."
John Kenneth Galbraith
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PUNAFISH:
You are my new hero........
Because of you,I now believe that my beloved Sonics will win it all this coming season AND stay in Seattle.
Oklahoma city sonics sounds sooo wrong...
Erik
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