Short analysis; there’s a massive undertow of supply that won’t go away for many years at best.

You nailed it.

Also, WRT demographic influences, you have to look at the macro picture.

You can have massive unemployment when the Baby Boomers are still working, largely due to normal economic cycles within the larger Boomer cycle. The employment situation might actually improve once the Boomers begin to retire in larger numbers. So far, only the leading edge is just now entering retirement.

The stock market is NOT cheap (look at it over decades or centuries, not just a few years).

Housing is NOT cheap (see comment about the stock market)

Also, Boomers were in their peak buying years in the early 70s through the beginning of this decade. They will probably be net sellers from this point forward, and many of them have plenty of equity. They can easily sell and make enough money to relocate to a cheaper location and live fairly comfortably in retirement.

I’ve spent a lot of time studying demographic influences, and concur whole-heartedly with Rob Dawg. Personally, I think we are at the beginning of a multi-decade deflationary environment as Baby Boomers retire and try to sell off their assets (stocks, bonds, real estate) to pay for their retirement.

Isn’t it amazing how all of the analyses done with age demographics as the primary driver have proven to be remarkably wrong?

Just a list of some of the economic maladies currently affecting us that could not exist b/c of aging baby boomers:

*Unemployment (not possible as there were not enough young workers to replace the baby boomers)
*Low Stock prices (not possible cause baby boomers were savers)
*Falling home prices (not possible as boomers would be nuying multiple properties around the country with their inheritances)

Do not trust any analyses with age demographics as the primary driver. I am not sayign it could not be correct, just look really carefully.

Inventory at the end of previous year
NOD-foreclosures
Mortgage underwriting criteria
Unemployment rate

Are you expecting similar performance to 2004?

I think it is a “sellers market” now cause the market is in a surplus now. If the median was a market clearing price there would not be a surplus. If you sell at the current price even though a surplus exists you have captured more value than the buyer.

If I had owned a place for several years and had equity, I wouldn’t sell now either, even knowing that prices could fall some more, since I would be thinking about how high they used to be and thinking that in a couple years, things will be better.

98 listings for NCCin 2009 vs 104 in 2004

Supply looks like it is dwindling. What happened in early 2004 when supply was similar?

Short analysis; there’s a massive undertow of supply that won’t go away for many years at best.

What numbers look the same?

The motivators that Jim mentioned in an earlier post are still there. Unless things have changed Californians typically move often. Except for my neighborhood that is. Tons of old folks with lots of equity here.