Panda's Bottom Call...

irvinehomeowner

irvinehomeowner

Well-known member
Panda created an interesting list of 10 market predictions over at Economy and Finance in the Gold thread:

http://www.talkirvine.com/index.cgi?board=economy&action=display&thread=121&page=5#4379

But #6 caught my attention (emphasis added by me):

6. The current rebound of the S&P/Case-Schiller Index is short-lived. The Schiller Index will drop more than 15% in 2010, below 120. Residential real estate faces tremendous pressure due to growing ARM resets from 2010 to 2012. The real estate crash spreads into commercial properties, and large scale commercial development projects fail left and right next year, like fireworks in the sky. The worst news is that both the residential and commercial real estate markets will look to take at least a decade or two to recover, thanks to Wall St.'s financial engineering for over a decade. As for the Irvine real estate market, my best guess for the bottom will be in May of 2011, where we will see prices at May 2003 levels (ppsf at $280 and index of 150).
Click to expand...
Now I'm not sure if that's wishful thinking but I think that $280psf is still high fundamentally. It's foreseeable to see a sub 2000sft resale going for around $550k and a little harder to imagine a 2500sft SFR selling for $700k (considering the 2010 collection has them all priced at $800k+).

But on the other hand, it looks low for more hard-headed areas like Quail Hill (I can't imagine Tapestries going for below $800k or even Siennas at $850k). I guess it will depend on what kind of SFR, location and age.

But even at those "bargain" prices... don't you still think that's high? Esp if interest rates are back up to 7-8% which Panda has also predicted.

I still think the Mayan prediction of the end of the world on December 21, 2012 is just as good as anyone else's predictions of other things... especially the stubborn Irvine real estate market.

EDIT: Fixed the link. And Panda didn't really create the list, he copied someone else's and modified it a little.
 
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