Quote from kiwi_trader:
LMAO.
My calculus was a long time ago but I think you might have forgotten yours. In fact lets stop being pretentious here: you don't need calculus for this shit.
If it was decreasing at 200k per month (line is down) and now its decreasing at 60k per month then ... duh, the line is up??? ... no, sorry, the line is still down. So the curve's downward slope has decreased, but its not up. And there is no mathematical requirement for it to stop going down before the rate of sales reaches zero.
There is an old saying amongst experienced forecasters: "never confuse an S-curve with an exponential." Should we now include, never confuse "down more slowly" with "up"
You doom and gloomers kill me. You think trees grow to the sky and roots grow to the center of the earth. OK, check out the attached spreadsheet to see what I'm saying. I never really needed graphs, but some folks do. This is the same national sales data previously posted in graphical format vs. time. Throw a ball into the air, and the rate that it moves toward the sky decreases until at some point, it reverses itself. There are factors at play, like gravity, that will (and are) changing the direction of the sales data. Its not an "if" but a when. Employment is up, sales are up, factory orders are up, and mortgage rates are still low...these things all act as the gravity that can and apparently are reversing the direction. Working people buy houses, and working people don't need to sell at a loss, they can stay where they are. Increasing demand with decreasing supply.
I can already hear the doom and gloomers saying this so...Yes, there is that supposedly ominous "ARMS will reset next year" issue, but the few people I know with ARMS are aware of the situation and are electing to stay in what they are until the last minute since their payment is still low. If I was in an ARM, that is exactly what I would do. I would keep saving money on my payment until the last possible instant...and apply that savings to the closing costs of a new fixed rate loan. As long as rates stay low (or appear to be staying low), there isn't really much incentive for those people to refinance until they have to. Doom and Gloomers like to count the ARMS on the bank's books, but they should be trying to figure out what percentage of those ARMS will actually default. Consumers are just being economically rational. If you really believe that all of the ARMS resetting will be a huge factor, you should invest in a business that makes money when the ARMS do reset.
Sales going to zero? Huh? Maybe in a nuclear war.
OK, you wait until the trend is fully established and prices are back up to 2005 levels before you buy houses. That level of comfort will ensure that you don't make much money at all. As for me, I buy low, sell high, let the tenants pay them off and enjoy ever increasing rents and huge tax deductions. I know that the time to buy houses is the first moment that they will pay for themselves. And then be the first one in so you get the good stuff. Rents are rising, and prices aren't dropping like they used to be. You want to catch that ball right before it reverses, not after it hits you on the head...
SM