Mark,
How will we know when the "overshoot of despair" has arrived? Why may it be "this time next year"?
Cheers
Morning WillG,
It may take longer than 12 months.
As i first mentioned, i am invested in shares and cash.
Been involved in the sharemarket for 24 years.
Am not a daytrader.
Learnt a few valuable and hard lessons along the way.
As previously mentioned i have never bought an IP and don't profess to know all the ins and outs of the property market.
What i call an "Overshoot of Despair" is when Unemployment rises to significant levels whereby many people are forced to lower their standard of living significantly. Mortgagee Auctions and Forced Sales will be rampant IMO.
Both commercial and private bankruptcies will increase exponentially.
It might take alot more than 12 months for the Credit Crunch to completely unfold. We are very much dependent on China. Just read somewhere that they are introducing a stimulus package of $586 Billion to help fight the effects of a Global meltdown. Will it be enough?
The meltdown is gathering pace and we are only at the early stages.
There is still the biggest problem to face. The Derivatives market.
This still has not been addressed. Governments throwing money left right and centre to help prop up the economies of the world is only a band aid treatment and will not fix this mess, but rather, it will prolong it and with a greater negative impact
If you were to look at the stockmarket, you will see a fair few companies whereby their shareprice does not reflect their true value. In a number of instances the shareprice is lower than their cash backing not including the rest of their assets. Some would argue that they have been oversold and therefore have reached the bottom. However, sentiment says they have a lot further to fall because no one is prepared to pay the asking price.
At some future point in time i would expect the same scenario to play out within the property market. It might take a lot longer for the property market
to unwind. But the telling signs are starting to emerge. Brisbane seems to be leading the field. Sunshine Coast needs a reality check.
Someone here mentioned that they were either a builder or a developer.
Can't remember which. I think they scoffed at my notion that house prices need to come down to 3.5 - 4.0 times the single average income. His argument was that it costs that much to build a house. Maybe he is right.
Therefore, he will be out of a job as will many others in the building industry.
Sorry about the doom and gloom.
However, that is how i see it and am prepared to be patient.
When i think the time is right i will be more than happy to step into buying a home again. Funny enough, i already know the area i will be buying into.
Sunshine Coast.
Cheers markcoinoz