Sorry I cannot, because I cannot possibly predict how much longer stupid people will be given money by stupid lenders. I will admit that I am wrong when fundamentals have caught up with prices (without prices going back down). Particularly the price/rent multiple.

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No I can't. Sure I have predictions related to timelines, but I would never place any certainties on them. But I am very confident that real prices will drop to those levels. And if I am right, do we need timelines? No. We have all the information needed to make a decision. An investor would be better off waiting as long as it takes as well.

If you want my guess for a time line, sure. Since the collapse has already started, I am no longer taking random guesses at it like I have in the past. It is still just a guess, but I have some confidence in it.

1. We have already peaked (GV SFH benchmark April 2008(.

2. We will see 5% nominal peak to trough by the fall.

3. We will see 10% nominal peak to trough by the spring.

4. We will see 25% nominal peak to trough by the following spring (2010).

5. We will see 45% nominal peak to trough by the foloowing spring (2011).

There you have it, a 28 month path to RE oblivion.

Of course, those are total guesses. The only thing I am certain of is the return to 2003 real prices.

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You know that a correction will cause much greater than 1.5% higher unemployment, right?

If the estimate of 1/6th of new jobs in construction is true, then what of the remaining percentage is

- mortgage brokering

- real estate sales

- furniture sales

- electritical

- harley dealers

I personally know a bunch of people my age (~30 years) that are in construction or real estate. Probably a good 20-30%, of my camping buddies are in to that field. And all of them own at least one home.

My prediction is this, one year from now, unemployment will be on the rise due to housing sales tanking and prices beginning their downfall, and you will come back here and point to the job losses as the reason, rather than a consequence, for the downturn.

I predict that my prediction will be 100% true (+/- 2%) within the next two years.

Oh, and I also predict it applies to other "educated bulls" such as Muir and Pastrick.

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Pick a nominal decrease and pick a timeline. Also, pick a nominal increase where you will admit you were wrong along with the associated timeline.

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So, if it breaks 15%, I will have been wrong.

I will talk to you then. Probably 12 to 18 months away, but one never knows.

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I will further add that a correction of greater than 10% will only occur due to an external factor (e.g. higher interest rates > 1.5%, higher unemployment ~ + 2%, or a recession)

As far as the upside, if prices appreciate more than 10% to 15% in the next two years, then I will have been wrong.

And what is your number on both on the upside and downside?

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Ummm no. A Ferrari is not a home.

Of course lenders don't give out free money. Of course inflation influences the Prime Rate.

None of this affects anything that I have stated.

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Holy Macro #2. Your "think" is to reality as lipstick is to a pig. This is worse than debating global warming/religion/etc etc. Pointless. Dave, at what level of peak to trough depreciation will you concede that you were wrong in your interpretation of the situation? Can we nail you down to a number? Because that is the only way this debate will end. Would 20% be enough?

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