Double Dipping

[Kristian Peter]

Over the last 3 months, the volume of offers has been extraordinarily low, here in Southern California (like 4 offers this week on 51 active properties in the MLS, and all properties are REOs that are priced to sell in the first 30 days). Everyone has been clamoring that "it's the expiration of the tax credit", and there are no other buyer incentives. Well, that may be the case, but now the summer (buying season) is officially coming to an end, and available properties on the market are increasing steadily...

Are you ready for the next Dip, which is going to be BIG... What are your thoughts on how much value will be lost in your area during the next 12 months?

[Don Konipol]

In the long run market forces always win. The problem is that sometimes the long run is longer than your life!

Artificial stimulus,tax credits etc work only for a limited period of time. Like any addict, they require greater and greater stimulation to keep from crashing. At some point the Government stops the deficit spending, if not you end up with Zimbabwe.

The last time artificial stimulus was not used in a major world economy was the 1980s. The stimulus has been growing geometrically, it has now gotten to truly huge proportions. Back in the 1970s we used to talk of a "soft landing". Don't count on it. I'd love to buy a straddle on economic instability; I don't know if we are in for huge inflation or huge deflation, but hold on to your seats (wallets)!