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This is like trying to buy tech stocks in Summer 2000. When the likes of JDSU dropped from $100 to $50 everyone was screaming bottom and bargain. Little did they know that in another 2 years JDSU would be trading at $1. Don't let the 1:8 reverse stock split fool you, this stock is still only a $2 stock.

The optimist will tell you had you bought at $1 you'd be up 100%. True, but how many people ever buy at the exact bottom? Granted a 99% decline (like JDSU) in real estate is ridiculous but a 50-60% decline, especially in markets that saw 100% price increases, would not be all that difficult to fathom.

Those banking that this housing decline is in the 8th or 9th inning are trying to catch a falling safe and you know what they say about trying to catch a falling safe...you get crushed.

Thanks guys.

I know there are some eternal optimists and isolated pockets of strength in the real estate market but it sounds like it could take a longer before we really know the extent of the problems if lenders are not foreclosing on properties they normally would due to lack of manpower, reworking bad loans, whatever.

BTW Merrill Lynch took another huge hit due to the subprime mess after previously writing down assets. They wrote it down a few weeks ago saying it was bad, and then again saying it was really really bad and that they had no idea how bad it really was/is.

The same could be said from the other side of the fence.

There are just as many (IMO even more) media talking heads saying the subprime mess is overblown and ignoring poor housing numbers that keep coming out month after month, day after day.

How many car salesman have you ever heard saying it's a bad time to buy a car?

How many stockbrokers have you ever heard saying it's a bad time to buy stocks?

And how many real estate agents have you heard saying it's a bad time to buy real estate?

Sales people that make a living on commission have an agenda and that is to sell no matter what the economic circumstances are. Ever hear these lines?

...you should buy based on your life circumstances and not what the market is doing.

...if you buy it now you can live in it and enjoy the home vs. having to rent.

...real estate always appreciates in the long term so if you hold it it will go up.

There will be a time to buy but it may not be for years to come. Hindsight is always 20/20 and we won't know when the bottom is until it's already behind us. We all want to buy at the bottom but the reality is most of us never will.

In the stock market they say a stock can go a lot higher than you think it can and conversely it can go a lot lower than you think it can as well. Real estate has experienced the first extreme, now we're about to see the latter extreme.

I read that over $50B in ARMs are resetting this month (October 2007). How long does it take for those that are unable to pay due to the higher mortgage payments to be foreclosed on?

Say the ARMs resets in October, home owners try and make a payment or two and realize it's a lost cause, they skip a few payments, lenders begin foreclosure, would it take about 6-8 months, maybe longer, for home owners affected by October resets to actually lose their homes?

The effects of this $50B in ARMs may not be known until Summer/Fall 2008?