Real Estate Overview

It has been my belief that for sometime there would be a housing slowdown. Now, three years later we are seeing stories in the Los Angeles Times to the New Yorker. This downturn has taken many years longer than my original prediction. Trends seems to extend longer than most people believe as we all rely on regressing to the mean or the normal curve. The risk that might not be seen by most hedge funds (many of whom are buying our sub-par mortgages) and shorting the hombuilder stocks may not play out the way they intended. The market seems to throw us may curve balls, many of which we don't even know existed. We try to hedge out all the know risks but it is the ones we don't see that would really have an impact on us. This can now be exhibited by Long Term Capital and now Amarath. This list really goes on. We should all remember that long term rates are still very attractive to this downturn in Real Estate is mainly due to psychology. People tend follow the heard which is usually the reason for substantial losses in all financial markets. David Rosenberg from Merrill Lynch has an excellent piece on where we stand today in Real Estate today. Good luck to all.