It's a good article in general and he's getting warm, but misses the point a bit here. Whether or not housing is at "bottom" or not is completely irrelevant to the overall picture. It doesn't matter whether we hit "bottom" 2 years from now or if we did already hit bottom last month.
What the old housing "bottom" myth portends is that housing will eventually hit "bottom," or the lowest pricing point, then everyone will begin buying real estate again and all is well.
The reason why this myth is being perpetrated is because too many talking heads and "analysts" have spent too much time out of touch in northeastern financial circles. They're actually ignorant enough to believe real property is anything like a stock or similar financial instrument, where it hits "bottom" then everyone jumps in and makes all kinds of money.
Even if real estate hits "bottom," there will still be a huge segement of homeowners whose homes have also hit "bottom" and who won't be able to sell their homes for a sufficient price, therefore unable to buy another home - taking advantage of the "bottom." Any Realtor will tell you the existing homeowners who are re-locating or moving up are a huge part of the market.
Another huge part of the previous market that can't/won't buy, will be deadbeats who can't qualify and non-deadbeats unable to qualify for loans because of now stricter lending standards and higher interest rates. That's not only true for homeowners, but of the previous investor class as well. Many can't return to the market, even if they wanted to. many don't want to.
Even if we went back to pre-2006 conditions, when everyone and grandma was qualifying for loans and selling their existing homes for top dollar (an impossible scenario only used here as a an i.e), and even if not a single new home were built, it would take YEARS to get through all of the existing inventory we have now. I forget what the figure is, but vacant homes in the U.S. number in the millions. Even under the best conditions imaginable, it take awhile.
From a historic perspective, if you own real estate, the value generally would rise somewhere around 5% per year. If that hold true, even if we all jumped into home buying after the fabled "bottom," real estate always has and always will be a long-term investment that requires care and maintenence. We not all going to jump in an start realizing riches.
I guess what I'm saying with this long post that nobody will likely read is; who cares if we hit "bottom?" We still won't have anyone to buy all of the massive amounts of inventory those that do will wait years to realize any gain. Heck it took about a decade to get past the late 80s slump that began around the time of the S&L thing - and that was far more mild.
So contrary to what the Wall St. yackers are pushing, the "bottom" myth is just that, a myth. A substantial RE recovery is not happening any time soon.
Let me just add, this bottom - whenever it occurs - coincides with the urge for us baby-boomers to downsize and realize the gains we have made with our real estate. Bleak.
Yup. You see that myth in Vegas. Every gambler who gets down thinks that her luck will change if she just hangs in there...that what went down will come back up.
Nope. What goes down can flatline. Home prices might stay down for decades once they find a bottom, just as many a gambler can be broke for years after finding out that the casino will take all of her money.