Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
Please post your weekend topic suggestions here. Any ideas are welcome, so be creative!
Posted By: Ben Jones @ 5:34 am
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holy crap!! did anyone see CNN this am? the automatic millionaire was on there and is going across the nation to “help renters become homeowners” and he had the same spiel as his book - renters never get rich!!!! so for weekend topic we should discuss how insane this advice really is!!!!!
CNN and all big media are incredibly lame. They are dinosaurs and I eagerly anticipate their profits getting squeazed. Big media will continue to have viewers, but they will be the unsophisticated types that desire sensationalist, empty entertainment.
I look forward to the age of new media.
Speaking of media hits, NPR had a segment this morning about bubbleworld. Specifically, they were talking about the rise in foreclosures. They used a hairdresser who makes $20,000 a year (before taxes) as an example. She bought a house in Atlanta in 2004 and is now in foreclosure. She never could afford the payment. The ‘expert’ they interviewed thought predatory lending was the cause of the rise in foreclosures. While there is truth to that, he denied that buyers should share some of the blame.
How can buyers not be to blame? I’m so tired of this victim society. Sometimes I wish I could play the stupid victim role ~ they seem to catch all the breaks. It’s just not in my character. Plain and simple they are ultimately the ones to blame.
Predatory lending is unethical, evil, and should be stopped. However at the end of the day, the buyer isn’t FORCED to sign away his/her life for a mortgage. That is their final decision. So that’s who’s to blame - IMO.
I agree with you 100%. Predatory lending exists because there is demand, there must be someone out there asking for it, thus created.
These so called victims were always be victims and never get ahead in life. I know quite a few who always blame others for their misfortunes.
You are absolutely correct on matter.
I agree. Buyers are ultimately the ones that made the bad decision to buy. While the Federal Reserve, Fannie Mae, builders, realtors, and local municipalities have their roles in this debacle and bear some responsibility for it, if they offer me a big box of candy that doesn’t mean I have to make myself sick by eating it.
Stupid is as stupid does…
Forrest Gump’s Mama
Yep….I sent a link to Ben earlier this week about this very topic. AOL Real Estate is running an article from CNN Money about a “Tycoon In The Making”.
The story follows a single mother who started buying property in 1987 in Norwalk, CA and she’s bought several since that one. It looks like one of those “you can do it, too!” articles.
I hope he ropes in tons of fools and gets them to buy! Law of the jungle. For every loser(foreclosure) there is a winner. The smart ones buying at rock bottom(most people on this blog).
I second that NurseLiz and raise you - how about we put aside our snark and devote a thread to the best advice we can give new homeowners (especially ones facing debt) on how to minimize the damage as the market declines?
If you really can’t afford the place minimize your downside by cutting your price until it sells, then tighten your belt and pay down the debt you’ve accrued because of it.
Take your lumps early and learn from it.
Not much else you can say really.
Local radio station has a real estate guru on the air waves on Thursday, plus he appears on a nightly tv program. He was beside himself promoing a new mortgage product to keep the high priced real estate going. Next week he is going to talk about the 40 year mortgage. Yesterday he announced that they just released the 50 year I/O loan and he had the owner of CMG Mortgage on promoting his home ownership accelerator mortgage. His cohort suggested that 40,45,50 year mortgages make sense because people will be living to be 100. When is the madness going to stop? If this keeps going homeowners will be paying more for houses and their monthly tax bill will be higher than their monthly P/I payment.
..cohort suggested that 40,45,50 year mortgages make
sense because people will be living to be 100.
A’w cmon. LIfe begins at 90!
The impact of “exotic” mortgages has already been priced into the market. The introduction of 500 or 10,000 year mortgages won’t make a difference at this point. As ridiculous as it sounds, a 500 year mortgage is actually marginally more conservative than an I/O load and significantly more conservative than an option-ARM.
Why? An interest only loan has no amortization schedule. It’s an “infinite” year mortgage. With an option ARM, you are not even paying the interest due. The interest due accounts for the bulk of the payment in the early years and is calculated the same way regardless of the mortgage type. Unfortunately, the market is being set by people who only care about the amount of their monthly payment today (i.e. just I’ll just refinance into a new I/O or option ARM in a year or two).
It seems like the only thing that is going to protect people from themselves making stupid home purchasing decisions is for the interest rate to just keep going up and up. Once all this “creative financing” is gone, house prices will drop in a click. I really hope it does! Bring it on
I agree. This is going to get interesting. I think we will see a “positive feedback loop” in lending. As housing cools, defaults will increase, banks will get burned, lending standards will tighten, this will cause housing to cool further, defaults will increase…and so on.
Loose lending only works when price appreciation acts as a safety net for mortgage holders in over their heads. In a down market, the funny money will go away.
As owning a house becomes less affordable and the cost of living rises, offshore outsourcing will increase at a more rapid pace.
How about you create a podcast so I don’t have to listen to the crap on the radio in the morning?
1.1990 and 2006
how fast and how far will we fall ?
2.and why is UK steady on after 20 months of “crash”
I second that… why hasn’t the decline in the UK been more brutal… and what are the (dis)similarities with the North American housing market.
Since some of the lenders are going to be pushing 50 year notes now , need discussions on the madness of this .
Now that Real Estate people are coming to the conclusion that they have a excess inventory market for 2006 , need feedback on what they are advising their clients ,( sellers and buyers ).
foreign direct investment? i see a lot of non-native names followed by “et al” on the RE tax assessments for the bigger spec condos in NOVA (Arl, Alex, FFx Cty) plus these bldgs are pretty dark at night. as int’l banks tighten, what level of add’l inventory should we expect?
I think a good topic would be on intrest rates. Long term rates are finally starting to rise. Many are proably going to blame this for the RE slow down.
Predictions of where long term rates are headed (including time frame).
Fed predictions and short term rates would also be intresting to go over.
And to tie it all together…The yeild curve and if it will stay inverted, correct it self, or stay the same.
I agree about interest rates. How do the ARMs and 30-year rates affect the percentage of price that homes need to drop now, to make them as affordable as last year at this time, for example. I think late last summer the ARM speculators were priced out, and this year the long-term folks who want to simply buy a primary residence are going to find it much more expensive. Not to mention the ARM folks who were told they could “just refi”. Argh.
I just am shaking my head at the complete inaffordability factor this year. (This week, specifically, with rates at a 3-year high).
The big unknown, that gets very little play, is how what happens in the international capital markets will affect interest rates in the U.S. The emergence of China and India, and the efforts of other nations to move away from trading in dollars could have incredible ramifications for interest rates in the U.S. For example; lets assume that a growing segment of the world economy begins to trade primarily in another currency; let’s say the Euro. The demand for dollars will decline, the relative value of dollars against other currencies will fall, and that will put tremendous upward pressure on our government to raise interest rates to finance our existing debt and overspending. After all, the U.S. will be forced to “sweeten the pot” to maintain capital flowing into our markets. And we all know what increases in interest rates will mean for a housing market that is already tipping.
how about something on i/o,arms, and downpayments? There was a story in the OC Register here a while back about how it was like an avg 20% down for first mortgages, even with 90% arms/ios, everything would be ok cause there was a buffer. Couple weeks later, different article on the ‘real’ avg down being like 3%, cause people were taking out 2nds to get the 1st.
How about some hard-core entertainment? NOT THAT KIND! Some personal observations and stories by readers, like HerdChemist had on another thread this morning. Sellers in my area are getting kind of desperate also.
Arnold (I’ll be back) Schwarzenegger is stoking “infrastructure bonds” issue, but the housing crash as well as higher interest rates will likely cast a large shadow this coming November. Anyone here think the voters will buy into it?
If voters have smartened up since Arnold has been in office, hopefully he won’t be driving his Hummer around here anymore. I’d rather he just go make another action film, or something. He should find another hobby.
predictions on municipal bond defaults?
Educational & Informative topic. Comparison of rent vs. owning costs for a SFH in your neighborhood.
The 10 year bond, now at 4.77, where does everyone think it’s going (how high)
How about a list of everyone’s favorite site for doing research on real estate? Through this site I have found zillow and domania - but I’m sure that there are other great sites out there that I don’t know about.
individual county govt’s online RE tax assessment webpages. priceless resource, and the ones i frequent only have a one month lag on RE transactions. some feature a little blurb about the FOIA, i wonder if NAR lobbyists looked into having these pages closed down to suppress real info.
I vote for realestatedecline.com
Tons of news and links!
How about “Smart Investments in a Post Bubble Economy”?
I think we’ve all seen enough evidence that the end is near and that its effects on the overall eceonomy may equal some of our most dire predictions, but how does the savvy bubble watcher preserve wealth in this environment? Savings rates barely meet that of inflation, stocks have been stumbling over the last year, and even gold has apparently plateaued. If we’re agreed that real estate is a bad investment–at least in the short term–then what is a good investment?
Home Sweet Cash Cow How our houses are financing our lives
I know. I read that this morning and was completely disgusted. Then I decided maybe I should just move away from the Bay Area because it’s obvious that people here have gone insane.
What I find strange about that article is that it was written by someone whose “beat” is real estate and, theoretically, should know better. There doesn’t seem to be one iota of concern about what could happen if the market turns (or, hell, if it just goes flat and the “bank” is no longer open). And all the stuff about how she’s glad her mother was able to pursue painting, travel to Europe, etc., rather than work and save will be very comforting to her children when they are saddled with huge student loans and absolutely no inheritance. This article is a real sign of the times. Sort of like that ad in the late nineties about the tow-truck driver who “owned an island.”
dont forget the smug bartender who bought the peanut company…
I posted a couple weeks ago on one thread about about an open house and discussion with a “desperate flipper” in Phoenix area.
How ’bout having other post their similar experiences just to get an idea of the level of concern/fear/panic that is starting to set-in the flipper mentality?
Why does BOJ tightening make bonds and gold drop and stocks go up? A drop in gold prices would normally reflect a drop in inflation concerns, while a drop in bonds normally reflects an increase in inflation worries. Why the stock market should take off like a rocket in the face of increasingly higher fixed income returns (which makes bonds relatively more attractive compared to stocks) is a deep mystery, especially in the case of the interest-rate-sensitive homebuilders…
what do you think the will happen now that so many people are starting to complain about higher property taxes?
Well, probably see more things like Prop 13 in CA and Florida’s Save Our Homes as a kneejerk reaction, both of which end up creating a whole other set of problems.
I recently discovered this site, so you may have already talked about it. I want to know how much of the economy would be affected by how big a collapse. A few months ago, I got out of all my rental properties. As of last week, I sold my own home and am becoming a renter for a bit. But, I’m not sure what’s going to happen to the stock, bond, and commodity markets, so I have almost $1.8M sitting in bank CDs.
I’m sure there must be something smarter to do…
Everyone is SO greedy. No one can stand keeping their money in cash. Isn’t that a sign of what’s to come?
Why is not wanting to keep your money in cash greedy? A traditional, conservative plan of investment is not greedy. Flipping properties and expecting huge returns is greedy. Investing in dot.coms and expecting to quit your job and surf for life is greedy. Looking to diversify out of a vehicle that returns equivalent to inflation, at best, is not greedy.
I really hope you were being sarcastic, but I expect you weren’t.
To be honest, I don’t mind being considered greedy–I do like to maximize return and consider myself “smart money”. I don’t always win, but I like to figure out what the next trend is, get in early, then if things start to seem irrational, get out. I invested in dotcoms from NSCP in ~95 till early 1999. Once people started acting irrationally, I liquidated all my holdings and stayed in cash.
The past few years I’ve flipped some properties. Once it became popular, I decided to get out. I started selling last June and extracated myself completely by Dec. But, looking at how bad things could get, I decided to sell my own house too and rent for awhile.
Individual investors are already moving to stocks and metals, so it may be too late. I’m not old enough to have been a part of the last RE crash, so I don’t have a good sense of where to put my money while it unwinds. But I’m planning to spend the weekend reading BusinessWeek from the ’80s to see.
[Besides, leaving money in cash is dumb. Capitalism relies on people making choices to allocate capital efficiently. If it can be most efficiently be used to dig metals, I'm there. If it can be used more effectively to build alternative energy, I'll do that. Giving it to a bank that won't even be making loans is inefficient.]
make sure that 1.8M is deposited in at least 19 different FDIC insured institutions…
People have posted here several times about a reputable website that grades banks on their strength. IIRC Farmers and Merchants is very good, WaMu is very bad…
Jim M. You beat to posting that article from the dSF Chronicle. I also had the ‘unbelievable’ reaction. Any other comments from fellow bloggers are welcome. That article shows the whole mentality of most people have changed from being debt averse to debt=wealth. This will not end well. I also just got a copy of Jim Talbotts new book, “Sell Now” as his follow-up to the “Coming Real Estate Crash”. So far,good read. Would recommend it. I got it from Amazon.com - new copy for $5.
I used to like David Bach when he was teaching stuff that actually made sense (eg., save regularly, don’t spend more than you earn, automate your savings so you don’t miss the money, stay out of debt). I guess he has tossed that aside to support a greedy industry. Not good.
The sheeple are buying into this fantasy that housing only goes up due to their greed and afraid of being left behind. The predatory lenders should all be executed (and totured) for what they have done. But people really do have to accept responsibility for their own stupid actions. I don’t think it takes an accounting genius to figure out someone making $20,000 per year shouldn’t be putting themselves on the hook for a $400,000 mortgage. A 5 yr old could figure that out. No sympathy for the hairdresser. Is debtor’s prison coming back?
What’s in store for land prices out in the country? Are alll the good deals forever gone?
3/9/2006 12:15 AM
Hot real estate prices extend to rural land
By Sue Kirchhoff, USA TODAY
WASHINGTON — The fastest-growing commodity in Florida farm country last year? Land values, which jumped 50% to 88%, depending on the area.
By Jimmy May, Bloomsburg Press Enterprise via AP
While not quite as dramatic, a similar story has been playing out across the country. Rural real estate prices soared 11% to an average of $1,510 per acre from Jan. 1, 2004, to Jan. 1, 2005. That’s the fastest annual increase since 1981 and the biggest on record in dollar terms, according to the U.S. Department of Agriculture (USDA).
RISING FARM PRICES
State 2005 avg. land value (in dollars per acre) Pct. change from 2004
Alabama $2,050 10.2%
Arizona $1,750 9.4%
Arkansas $1,820 10.3%
California $4,160 9.5%
Colorado $845 9.0%
Connecticut $10,800 5.9%
Delaware $8,400 40.0%
Florida $3,700 19.4%
Georgia $2,590 10.2%
Idaho $1,480 8.8%
Illinois $2,900 11.1%
Indiana $3,050 10.1%
Iowa $2,490 13.2%
Kansas $800 11.9%
Kentucky $2,200 10.0%
Louisiana $1,680 6.3%
Maine $1,950 5.4%
Maryland $7,900 38.6%
Massachusetts $10,500 6.1%
Michigan $3,150 7.9%
Minnesota $2,030 12.8%
Mississippi $1,580 6.8%
Missouri $1,740 10.1%
Montana $445 8.5%
Nebraska $910 10.3%
Nevada $550 10.0%
New Hampshire $3,450 6.2%
New Jersey $10,300 5.6%
New Mexico $290 9.4%
New York $1,880 5.6%
North Carolina $3,570 8.2%
North Dakota $500 9.9%
Ohio $3,180 8.5%
Oklahoma $805 8.1%
Oregon $1,350 8.0%
Pennsylvania $4,000 9.6%
Rhode Island $11,200 9.8%
South Carolina $2,330 8.4%
South Dakota $570 14.0%
Tennessee $2,700 8.0%
Texas $925 8.2%
Utah $1,230 7.0%
Vermont $2,300 7.0%
Virginia $3,900 21.9%
Washington $1,650 7.8%
West Virginia $1,600 6.7%
Wisconsin $2,850 14.0%
Wyoming $350 11.1%
Source: Department of Agriculture’s National Agricultural Statistics Service
More recent data from Iowa State University show prices in Iowa rose nearly 11% in 2005. In Texas, the median rural land price rose 15% in 2005. State and USDA estimates differ because of sampling times and techniques but show similar trends.
“Those … are whopping increases,” says Charles Gilliland of the Texas A&M Real Estate Center. “Everybody is waiting for it to level off.”
The escalation is the steepest since the response to the fat years of the 1970s, when world food prices soared and Agriculture secretary Earl Butz exhorted farmers to get bigger or get out. Many expanded, only to face a crisis in the mid-’80s when the good times ended. Land values sank 27% from 1982 to 1987.
Different from last land rush
While the current price run-up is not without risk, economists and real estate agents call it much different than the previous land rush. Purchases are not as highly leveraged. Farm income has been at record or near-record levels in the past several years, but land sales are not driven solely, or even mainly in many areas, by farm expansion.
A majority of buyers in some regions are real estate developers, individuals who want to convert a ranch or farm to a recreational purpose, such as hunting or fishing, or those who see land as a good investment given low interest rates. Farmland that could be immediately developed sold for a big premium in 2005 — more than $6,050 an acre, according to USDA.
“This is a starkly different episode,” says Mark Drabenstott, director of the Kansas City Federal Reserve Bank’s Center for the Study of Rural America. “We’ve seen considerable off-farm investors interested in farmland, in part a lingering result of the (low) stock market performance of recent years.”
James Vine of San Antonio’s Vine and Associates, an appraisal and consulting firm, doesn’t see the value of many properties fluctuating with changes in the farm economy, noting that 40% to 50% of the sales he’s recently seen are cash transactions.
“This recreational deal has taken over the rural land market, except in markets where there is no romance or row crop agriculture still makes sense,” says Vine, noting a recent Texas drought “didn’t impact the prices of real estate. It kept going up.”
Unlike homeowners taking out loans against the rapidly rising value of their houses in the past few years, farmers aren’t borrowing as heavily against their land.
“Farm income to farmland values have been improving over the past two years, because farm income has been so high,” says John Anderlik of the Federal Deposit Insurance Corp., an expert on rural lending. “Bubble-like factors have been declining.”
Sales fueled by tax law
Still, as the Kansas City Fed noted in a recent publication, the price increases are “raising the eyebrows” of lenders and producers. The record housing market, which has helped propel land sales, may be slowing. In a large swath of the Midwest, the value of the land is tied at least partly to federal crop supports. Anderlik notes that farm subsidies, accounting for about a third of net farm income since 1997, are under attack, in world trade talks and from Congress.
Many sales have been fueled by a federal tax provision called a 1031 exchange that allows an owner to sell an income, business or investment property, replace it with like-kind property and defer capital gains taxes.
Growers near urban areas have been selling to developers, then purchasing more-isolated properties, artificially escalating prices in outlying areas. An August study by the Illinois Society of Professional Farm Managers and Rural Appraisers found more than half of recent sales used the 1031 provision.
Zbynek Zidlicky, a former corn and soybean producer, sold his 78-acre farm near Oswego, Ill., to a developer several years ago. Using the 1031 provision, he then bought four properties out of the area.
“A lot of people do 1031 exchanges, so that filters down and increases the price on other properties,” Zidlicky said, adding the price in some areas has doubled since he bought.
John Reynolds, a professor who conducts the annual farmland value survey for the University of Florida, says the 1031 provisions have helped push land price inflation in that state northward from fast-growing urban counties.
“The income stream from agriculture just can’t support these prices,” Reynolds says.
For many growers, particularly older farmers, it makes sense to sell while prices are at peaks. But the price run-up has made it hard for some younger growers to buy land.
The American Farmland Trust, which seeks to preserve farmland, notes that in 1999 the national average cost for agricultural conservation easement programs — voluntary, binding agreements that limit land uses or prevent future development — was $1,519 per acre. In 2004, it was $2,899 per acre.
High prices also make it tougher to keep protected land in the hands of farmers, says Jennifer Dempsey of American Farmland Trust. “Someone could come in and say, ‘Here’s 50 acres that are protected,’ and they can make it their private estate.”
Appraisers and real estate agents expect prices to slow but haven’t seen a lot of firm evidence of it yet.
“It’s not going to burst at all. In fact, I continue to see a strong rural real estate market for years to come,” says Ray Brownfield, a real estate broker at John Greene Land Co. in Illinois. “It may not be as aggressive as it was because interest rates are starting to climb.”
Vine says he’s seen some softening in the volume of sales but says that may be because it’s getting harder to find enough land. That’s echoed by Florida’s Reynolds, who now works as an appraiser at a Florida firm called Natural Resource Planning Services.
“Our firm also has a brokerage division, and we simply can’t find enough land,” Reynolds says.
hows JOE looking these days…not so good
I agree with the “estate” notion simply because we did it last year. 1031′d out of a rental we had for 16yrs into a 90 acre waterfront property. It was already in a conservation easement otherwise no way we could have afforded it. Future summer retirement home - current cool playground (hunting, etc.) with a nice old stone rental on it.
OK, here’s another topic: Data Holes — whether real estate data providers are holding back information that would show market declines, or if they are releasing it, are spinning the data to confuse readers.
My two candidates are NYSAR, for holding back their figures and now REBNY, which issued a fancy press release about how much prices went up in 2005, but do not include data for each quarter in their press release site- last quarter I see in their list of press releases is for 3rdQ 2005, which, oddly, indicated median co-op prices went down (tho condos went up) - and can’t see 4Q to determine whether they went down again.
Well, they would certainly have a motive to candy coat things.
I wonder whether the number of listings at Realtor.com is accurate. They have dropped below last summer’s levels here in Portland, ME and have dropped rather dramatically in just the past week. Of course to artificially depress listings would mean some listed homes not being advertised. I suppose they could equitably rotate missing listings so as not to be noticed by sellers. Or perhaps they could even advise sellers not to go on Realtor.com, as it lower inventory will benefit them.
Somehow seems implausible, but would like to hear any thoughts on this.
Is Spykeeboi around? He/she needs to close the bold tags.
tried once, will try again…
It’s the strong tag.
Please explain why these HBs’ stock prices all jump and flatten out on news which should be detrimental to the fundamentals which support them? And why the DJIA has exactly the same shape? Something is rotten in the state of New York…
For a weekend topic, I would love to hear if there are any long time renters here who have only just recently been approached by realtors for the first time.
We have been renting in this area for 11 years, and just this year for the first time, a realtor has left a calendar and business card on our doorstep.
We have a message on our phone answering machine saying that phone calls from salesmen, market researchers, and politicians are not welcome, so we get a long of hangup calls. I have no way of tracking if they are from realtors or not.
i was getting cold calls about 6 months ago, not so many now. i tell them to call me back in 2 years - “call back in 2 years?” “yeah, call back in 2 years.”
bearmaster - get yourself on the donotcall list
We are on the donotcall list, but that still doesn’t some from trying to contact us.
? how has your biz changed ?
the trades I sell to think it’s weather etc. wierd can’t they see the RE stall- I’m getting slow signals already selling to the service trades
At what point does the fire sale begin on all these empty homes (e.g., 14K+ in PHX)?
At what point do the fires start :(?
Better be very careful about being upside-down in your mortgage and having your house burn down.
“It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a
revolution before tomorrow morning. Henry Ford.-
Really it is the key .
Ben I read the blog every day, Thanstou.
A topic could be number of ARM holders who are or have become apathetic to economics and how fast they learn during a reset, if at all.
Note to self:
If your expressing yourself with @#$%! - then your too close and probably frustrated - take a breather.
When a person is called names - attacking the messenger - it does no good to use $%#$!
Frickin’ is a cuss word, an insult mostoften, there is no mistake for what is really meant, same with @word
If it feels necessary to use those symbols, words and expressions, step back, take a breather and ask yourself whats got you so worked up. An insult or a message or the person (and yeah, sometimes it is dealing with idoits, but who becomes the idiot when the idiot remains calm?). It is always *always* easier to express disgust etc…, so instead, take the more difficult road of - hit the issue - stick with the facks Jack.
As to some other bloggers complaining about the apathetic people of our times. Thank goodness for the apathetic! Just think how much worse things could be if all the apathetic people got off their butts and bought homes with neg am no doc IOs when Greenspan told ‘em to…AND/OR, buy now, prolonging the inevitable crash.
These are the same types of apathetic butts that sat during The Revolutionary War and did not assist the Royal Loyal Colonist who supported the English Crown - allowing a rag tag bunch of misfits to win the war against an overtaxing Superpower.
All Hail Apathy and The Apathetic!!!
Alias - using an alias is great because your not going to get your employer in the spotlight for YOUR private thoughts. An employer in the spotlight often gets an itchy-trigger-firing-finger.
SOoooo… not all of us can afford to express our thoughts freely without repercussions so great,… well,… we aint postin’ about this without an ailias cause it aint worth pissin’ off the boss - eh.
Brainstorming works best if the ideas are front and center, not the names of the speakers.
Besides, why not enjoy the mystery? It is just fun.
“All Hail Apathy and The Apathetic!!!”
The world is not shaped by the apathetic; in fact, apathy has always dined at energetic’s table. Maybe you should stay with Newsweek.
I’d like to see a topic on purchasing a plot (or plots) of land to build a house. I’ve never been able to stand the cookie cutter homes in south OC and we’d like to buy a lot in either an older town with less restrictive design requirements or maybe in Trabuco or Santiago Canyon.
In Southern California and nationwide, what does the housing bubble mean for land prices? I would think they would drop faster and farther than existing homes, but I don’t know.
OK, for the most stubborn-minded, does anyone think continuing to invest in RE makes sense? Right now I still have a rehab project to complete, but I’m quite open minded about picking up a few more rentals next year as the market deflates.
(However, I will be very selective, and just pluck off a few key long-term holds in good areas, or near light rail stations in my metro.)
I think I’d like a topic about Sources.
It occured to me yesterday that the media thinks the only Real Estate sources they can use for news articles are those people who have a vested interest in Real Estate.
What are these people going to say, when asked about the bubble?
So- my question- for all of us on the board and Ben- is…
‘How Do We Help The Local & National Media Find Sources For News Stories Who Do Not Have Vested Interests In Real Estate?’
I suggest Ben as a source- but are there others?
I got a magazine sized solicitation from Countrywide looking for investors for loans I believe. I still see banner ads asking, “Do you know how much money is locked up in your home?” Before it was hidden and you solved a puzzle to acquire the equity. Now it is being held hostage and you need to bust it out like a prisoner.
“Before it was hidden and you solved a puzzle to acquire the equity. Now it is being held hostage and you need to bust it out like a prisoner.”
These lending sharks are not stupid. It’s times like these when you have to rip-out an extra thick chunk because feeding times like these only happen once in a lifetime.
I would like to see data on San Diego’s last housing downturn regarding how the average home prices declined by year. I am interested in making predictions on the upccoming downturn regarding average home prices per year in regards to the “bottom”.
As a rookie blogger, I am not sure how I may have messed this up…but ON THE SUBJECT OF INTEREST RATES- the impact of international capital markets on the U.S. housing market is often overlooked. With the emergence of China and India as capital magnets, and the increasing efforts of other nations to trade in “Non-dollar based assets” (e.g. the Euro) the pressure on our government to raise interest rates to maintain a capital flow into economy will continue to increase. Also, any international economic contraction or recession will put additional upward pressure on what we must pay to get international funds to service our debt. Think about the implications for our teetering housing market now!
Here is a nice article which explains how the housing bubble collapse will help Wall Street bears turn stears into hamburger meat over the next couple of years…
Here is a consumer stock which seems to provide a case in point. Unless my eyesight is not working, it is currently crashing straight down to hard ground from its all-time high:
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