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Senior Member
Posts: 2,228
Reply with quote  #1 
So, here is your latest shot of Bruce Norris news (all of 3 weeks old).

Bruce now thinks that in this cycle we will skip Quadrants 2 and 3 (or power through them quickly without serious price damage) and start building on current price in Quadrant 4.  Once we do this, he predicts prices will go up, albeit slowly.
We will get to Quadrant 1 where prices are flat.  We usually get to Q2 and prices go down.
But he thinks that we will move quickly through Q3 (or skip it altogether) and then start building on a peak price of 590K in another Quadrant 4.  So, basically, we are going to start at the peak in another Peak 4 and start (slowly) building on it.

He also says that Lenders have made deals to keep homeowners in place and that they have also have started going into the business of renting them out (rather than have them hit the market as an REO).  They are more typically pursuing a deed in lieu and then renting out the house.  (They were not allowed to do rentals during the crash--but are now).  How high are we headed?----a trip to the moon on gossamer wings??!!!

This will support those who are optimistic about the current market.

He does make statements about why the Florida market is more desireable than  California, but nothing about a timing model for Florida.

Anyone feeling superfrothy?  Blue light special time.   A realty cycle without (essentially) price damage---that is truly novel.

Bruce also states in earlier interview that you only have to look at one chart to know when the crash will come.

Anyone care to guess which factor?  


Senior Member
Posts: 58
Reply with quote  #2 

From the Four Phases of the Real Estate Cycle the price in Quadrant 4 should go up or go down?


Senior Member
Posts: 2,228
Reply with quote  #3 
You can hear what he says at the end of the Think Realty audio. But I think there is a real question at this point-----is the market even following his cycles model at this point?  Of course he will complain about interference with the free market that have sidelined his model---and there is truth to that.  He has said that he doesn't see how there will be a price crash, hence skipping cycles 2 and 3, because of low inventory, low foreclosures, low REOs, no building, etc.  Lenders aren't even processing REOs at this point, according to him---they get a deed in lieu and in most cases just rent it out.  I think their plan is to discourage any kind of dramatic movement in the market and it appears they have no intention of solving the low inventory and other problems.

Also price increases (or price decreases) have been smaller in magnitude in most areas.    I suppose it's better than the cryptocurrency market which seems to have absolutely no rhyme or reason.  I think what Bruce would say at this point is that relying on predictions about significant price increases would probably constitute speculation.  It seems like prices are going to meander---but no serious crash either.  The one sector he has said that has topped out is multifamily---and that isnt even the asset class on which his model was (primarily) based.  I think what he is saying is that except for what predictions he has made in the above audio---beyond that we can't predict with any certainty.  We're kind of off the reservation----I  think any further price increases must be somewhat more modest since this can't go on forever----but for the short term I don't think there is any certain prediction.  Look at it this way---this is not the kind of market that Bruce's model was supposed to deal with---the normal market forces.  What we are doing now is unprecedented, so who really knows?
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