Do you think a market crash of this magnitude has the ability to ever fully recover?

...yes or no..and why?

  • January 25 2009 - Mobile
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Answers (11)

Not in our lifetime.... 2000 Nasdaq  5,000... 9 years later 30 cents on the dollar.. Jan 1990 NIKKEI  37,000+  today... 8,062...   Leave Great Granny in our wake.  our generation will not see it. GM from 50 years ago???? nope... Many people think they can look back in time and predict.. they belong in a circus.. has DETROIT RE ever recovered??  CLEVELAND???  No No No...  We simply do not make the wages to come close to supporting the values associated with the middle of the road homes.  Good luck to all betting that way, but I will not plan my future with "appreciation" in the formula. If and when I purchase RE.  it will be about paying the debt off to own free-n-clear rental property.. not the excess leverage we are unwinding from and my industry will not tolerate that activity again in my career.
  • January 27 2009
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jo,

I was not looking for you or any sale person to tell me I am going to be okay but thanks...I think?

I was getting poeple to chime what thier take on this market as far as long term affect.
  • January 27 2009
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Profile picture for klarek the realist
"Seriously, this market is an opportunity,  There are so many more safeguards in place now, than there was 80 years ago. "

This market is an opportunity to get your financial ass handed to you, to be indebted for 30 years to a piece of crap house that will never regain its value.

Yes, we're not as bad off as we were during the great depression.  Yet.  Moments like this  - knife catching - is where we lure in the few remaining suckers into the feeding frenzy.  See who else we can get to f*ck over their financial future.
  • January 26 2009
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Hi Walty,

Do you not agree that we rebounded from 1929?  Of course, I wasn't around, but my 91 year old mother was!  BTW - I was a very late in life child!

Seriously, this market is an opportunity,  There are so many more safeguards in place now, than there was 80 years ago. We might feel a pinch, but those guys had the stuffing knocked out of them.  My parents still educated 6 of us, bought a fine home (that appreciated 200 percent), took vacations, celebrated holidays....come on - we're going to be okay!!
  • January 26 2009
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Profile picture for Bette Defarm
I see this crash as akin to the  The Dutch Tulip Bubble of 1637

So no, I don't see it fully recovering or even partly for a very, very long time.

  • January 26 2009
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Profile picture for klarek the realist
just to echo what reobserver said: yes, they will again reach peak market prices, but not adjusted for inflation.  and it might take two decades.  srsly
  • January 26 2009
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Profile picture for reobserver
When adjusted for inflation and buying/selling costs, IMO housing in general will never come back to at or above the peak bubble prices. 

That is a concept that I am finding very difficult to explain to my friend right now who is planning on building a new house to sell.  Believe it or not. 
  • January 26 2009
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Walty,

for me...the ability to take its original forum.


I'm not sure what you meant by above statement in regards to defining "recover".

Either way.  I would say that the downward trend we are on is that we are on our road to recovery.  In many ways the bubble was so extraordinary that it took the RE market to places it shouldn't be.  The drop IMO is taking RE back to a much more realistic price point.  For my area I think once we hit 2001-2002 pricing we will see stabalization.

Appreciation will be more in line with inflation. 

"Recovery"... in Hilo I think it will really depend on the product and the individuals.  We have entire micro-markets that were purchased by people who are not from Hawaii (the Island), with the thought that the East side of Hawaii was undervalued (compared to the rest of Hawaii (State) markets).  While that might have been true to a point, these markets are now very overvalued.  Because the Buyer's (for the most part) who came in were cash strong, they seem to have the ability to hold.  Will their properties return to the values that the believe their properties hold?  IMO. No, but because these Owners have holding power, it will be interesting to see how they adjust to the market, or will they just hold for 20 years until they find someone to pay their price.
  • January 26 2009
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define recover?

for me...the ability to take its original forum.

I think it will be very hard for it to ever do that. this mess will be talked about for ever. it will never ever go away. i think we will see the market stabilize to an extent but this will change the way most people invest forever.
  • January 26 2009
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Profile picture for jal74
Walty, Define recover?

Look at past asset bubbles bursting for comparison.  Nasdaq peaked in Feb 2000 at 5,000, today its still under 1600.  Nikkei index and real estate in Japan peaked in 1988/89 - 20 years later and they are still no where in site of that peak.

So, will real estate stop going down at some point, yes is the answer, however, if you expect that price levels in general will hit 2005 values anytime soon?  Then i beg to differ.  Based on past performance of popping of asset bubbles it will be decades before most areas see 2005 pricing again.

Regards
  • January 25 2009
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I would put it this way ... a full recovery is more likely then was the likelihood of property values continuing to skyrocket like they had been doing for years.  We needed this correction, and I hope the powers that be are smart enough to put the right protections in-place (and preventions in place, too, i.e. 100% financing) to avoid this happening again.  Home ownership is a privilege, not a right.
  • January 25 2009
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