There Are Those Who Are Forever Blowing Bubbles
Readers suggested a topic on winners and losers. “All this talk of people being rich because their primary residence has increased in value (a 2x increase in house value and a dollar will get you a cup of coffee), got me to thinking: Just who exactly are/were the actual winners and losers of the housing bubble? What were the actual impacts on individuals’ net worth outside of primary residence?”
Losers:
1) Seniors with savings. 500K in savings would yield 25K with 5% interest. Now it yields maybe a one to two thousand dollars. Ouch.
2) Pre-bubble property owners net result was higher property taxes.
3) First time buyers saddled with heavier debt loads as a result of higher prices.
4) The taxpayer, bailing out the bad decisions of lenders and debtors.
5) People who lost their houses to foreclosures or forced into short sales.
6) Flippers who didn’t get out before the music stopped (prices plateaued).
Winners:
1) Flippers who did get out before the music stopped.
2) People who moved to a lower priced locale.
3) Financial company executives who saw record bonuses before and during the financial crisis.
4) Realtors.
5) Loan originators.
6) The Fed, which got a lot more power, despite being asleep at the switch.
Others options for the winners/losers categories?”
A reply, “I’d lump mortgage brokers in with realtors, although I woudn’t say that they were in general winners. Many of them made some major income during the bubble, but how many saved any of it and/or are still have an income?”
The San Francisco Business Times. “The Bay Area housing market is on fire — and we’re about to get burned. The median home price in the Bay Area ballooned by 43 percent during the past year to $620,000 in June, up from $435,000 a year ago, according to ZipRealty. The Bay Area leads the nation in year-over-year growth, followed by Sacramento with 41 percent, Los Angeles with 31 percent, Las Vegas with 30 percent and San Diego with 25 percent. But, what do rising home prices really mean? I asked economist Christopher Thornberg of Beacon Economics, who is best known for rightly predicting the 2008 mortgage crisis (even though no one agreed with him).”
“In the short term, rising home prices are good for people who were underwater, meaning they owe more than their house is worth, because their homes will go up in value and their mortgage won’t seem as horrible. Employment is up in the Bay Area giving people courage to buy and pay for homes. But, in the long term, rising home prices chop away at affordability, which can be detrimental to the entire economy.”
“For all the talk of regulations pushing employers out of California, the more likely culprit is housing prices. ‘You go very quickly from market that is enjoying the welcome, positive impacts for existing homeowners to employers saying ‘Holy cow, I can’t pay my workers enough money for them to afford to live here,’ Thornberg said.”
From Latina Lista. “When I was growing up, relatives talked incessantly about retirement, which generally meant going to live with a daughter and her family. When social security kicked in some older relatives became more independent especially those who had bought a home and paid it off. They could rent out a room or two to a close friend.”
“The ideal, however, was to own one or two houses that could be rented out. That was the Mexicans’ Individual Retirement Account (IRA) only better because they did not have to pay an agent or be at the whim of the stock market. The best part of it was that the houses were paid for by the rents.”
“The lessons I learned from my relatives kept me alive during the summers after I became a school teacher. I would save $200 and every summer buy a fixer-upper, which I would sell later to finance the following summer’s venture and pay the household expenses for my family. If I would have kept this up, I could have wound up with ten to 20 houses. They were cheap at the time – cost $8,000 to $10,000 – no money down. However, priorities are set by your values. I gave the houses away in a divorce settlement, and turned to more productive pursuits.”
“I thought that I would die young; I didn’t like being a peasant landlord; and I expected my children to have the same opportunities that I had. The times changed, and today it is the exception rather than the rule that someone can buy a house, let alone two or three houses, and expect to live off the rents.”
“The FHA and the GI Bill made houses more accessible, but they also inflated prices. There was a slight rise in housing costs during the 1950s, with a correction during the 60s and 70s. By the 1980s, a boom again made buying that extra home more difficult. In the LA area, prices came down briefly only to jump up again in the latter part of the decade. In the 90s, the patron saint of the working class — William Jefferson Clinton — ended the regulatory acts of the 30s, and that ended ability of the housing market to correct itself, making the housing bubbles of the first decade of the 21st Century inevitable.”
“When the Depression of 2008 came about I looked for a silver lining. I hoped that prices of homes would come tumbling down, and maybe my relatives’ grandchildren could walk away from the inflated prices they had to pay for their homes during the decade of the bubbles. Many had paid $450,000 for homes in marginal neighborhoods, which seemed a bit excessive – especially when the value of that home fell to $275,000. There was no way my relatives could keep making those house payments, or much less buy an extra home for retirement.”
“What finally burst my bubble though was the rise of the hedge funds, which are today for all intents and purposes in control of government. I recently read a series of articles in a community newspaper called Tribuno del Pueblo on the takeover of the family housing market by the super rich. It wrote that this was organized by the largest bankers and hedge-fund operators, who have seized control of Fannie and Freddie Mae, grabbing half the nation’s mortgages and some 200,000 homes. Rounding off the collusion between the speculators and government, the Obama administration is selling off tax liens to the former super-rich.”
“It is a new age and there is no room for the peasant landlord of my father’s times. We don’t have the capital to compete. Recently a friend was trying to buy his first home. He followed the newspaper ads hoping to buy a foreclosure. The brokers refused his multiple bids on foreclosed residential homes. They tried to sell him ‘for sale’ homes that had already been bid up above the asking price. Probing around he learned that the broker had reserved the foreclosed house for a local politician whom he represented at auction.”
“Well, there are those who are forever blowing bubbles. They are dreaming for the days that they could buy a home as an investment for old age and then pass it on to their children or grandchildren. But the truth is that those are only dreams, and today we are living the nightmare.”
Ben, you forgot two of the most important categories of “losers” IMO and those are (1) Students (in general) and (2) Future Generations
I’m sure you understand the very close, cause-effect relationship between the housing bubble and aftermath and student loans.. from states gambling their financial futures on RE tax revenue only to have to cut back on college subsidies … to mom and dad getting over-extended in housing and forcing their kids to take out bigger loans.. to colleges and universities having to overpay for top teaching talent due to the high cost of housing, it all fell on students.. let alone the absurd USG programs that have served to actually increase the cost of college for most.. Students are a huge loser in all of this..
the next generation are losers because the Boomers have sucked much of the future wealth and labor for themselves while leaving a huge pile of debt in their paths..
I don’t know if this post made it or not.. can’t see it.. apologies if I posted twice..
Ben, you forgot two of the most important categories of “losers” IMO and those are (1) Students (in general) and (2) Future Generations
I’m sure you understand the very close, cause-effect relationship between the housing bubble and aftermath and student loans.. from states gambling their financial futures on RE tax revenue only to have to cut back on college subsidies … to mom and dad getting over-extended in housing and forcing their kids to take out bigger loans.. to colleges and universities having to overpay for top teaching talent due to the high cost of housing, it all fell on students.. let alone the absurd USG programs that have served to actually increase the cost of college for most.. Students are a huge loser in all of this..
the next generation are losers because the Boomers have sucked much of the future wealth and labor for themselves while leaving a huge pile of debt in their paths..
Or to sum up
Bigger and bigger government is just great
And can solve all problems
“William Jefferson Clinton — ended the regulatory acts of the 30s, and that ended ability of the housing market to correct itself, making the housing bubbles of the first decade of the 21st Century inevitable.”
“…the Obama administration is selling off tax liens to the former super-rich.”
The democrats are to blame according to the author… Republicans like Greenspan have nothing to do with it.
A good propagandist never misses a chance to turn a catastrophe into an opportunity to push their venom on the masses.
Yeah, she sounds like a real Republican shill trolling the Latina Lista. I actually read her as meaning something like this “look all these guys who claim to be a friend of the working man are just tools of the rich, same as the Repubs, Clinton, Obama, whoever. Open your eyes, retirement is coming and no one is looking out for you.”
Thanks for posting this Ben, it’s an interesting perspective to read.
Ben Bernanke is well-known to be a Republican — a point apparently lost on Retardicans.
Why doesn’t Obama get rid of him then? Then he could turn the
economy around. Ha,ha,ha.!
Obama is too busy playing golf.
Politics breeds strange bedfellows.
Obama’s owned the economy for almost 5 years. But it’s still the Republicans’ fault. Yet everything that happened starting at 12:01pm on Jan 21, 2001 was the immediate responsibility of Bush.
Obama’s owned the economy for almost 5 years.
“Owned”? That is just dumb on many levels. Here’s just one:
1. It assumes a single president can undue the damage that 30 years of trickle down BS, tax cuts for the rich and growing wealth inequality has inflicted upon the US economy.
“Bigger and bigger government is just great”
Yep. 1 + 1 = 10, just like it always has!
Of course y’all realized my maths were carried out in base 2, right?
1 + 1 = 10
10 + 10 = 100
100 + 100 = 1000
1000 + 1000 = 10000
Etc etc etc…
“What finally burst my bubble though was the rise of the hedge funds, which are today for all intents and purposes in control of government. I recently read a series of articles in a community newspaper called Tribuno del Pueblo on the takeover of the family housing market by the super rich. It wrote that this was organized by the largest bankers and hedge-fund operators, who have seized control of Fannie and Freddie Mae, grabbing half the nation’s mortgages and some 200,000 homes. Rounding off the collusion between the speculators and government, the Obama administration is selling off tax liens to the former super-rich.”
This sounds reminiscent of the ‘public-private partnership (PPP)’ which predated the collapse of Britain’s South Sea Bubble. I expect the ultimate collapse of the U.S. Housing Bubble to appear no less spectacular when viewed through the lens of history’s rear-view mirror.
And BTW, in case any of you ever make it through Indianapolis, I highly recommend the museum at the Indy 500 Motor Speedway. They house winning Indy cars from 1911 to most recent. The display for the 1911 car suggests the driver may have invented the rear-view mirror, which was quite timely, as the Fed was established just two years later, in 1913.
That “Latina Lista” article was a good read.
The author’s mention of hedge funds, IMHO, emphasizes an important point:
When a small time operator buys in order to rent out he is interested in paying the lowest price possible. The lower the price he pays the greater the rate of return he gets on his rents.
But when a hedge fund buys (or anyone else that is using OPM) the incentive is to pay ever-increasing prices because the ever-increasing prices is translated into ever-increasing values for the comps. And if these comps are owned by the hedge fund then the hedge fund managers get to demonstrate to their invesors that the fund is ever-increasing in value.
Remember, the hedge fund usually gets two percent for handling the fund and twenty percent of the fund’s gain. The gain is easy to get: Simply bid up prices higher and higher. And if the prices are bid up higher and higher the value of the fund also goes up higher and higher, and this higher and higher phenom acts to attract more money into the fund.
So it’s an easy win for the fund managers, and safe too in that the money they are using to do all this buying belongs to somebody else.
Oh, and there’s a matter of the situation with banks.
If the economies of, say, Barstow and Victorville are both in the mud because of what has happened to housing prices and hedge funds decide to descend on Victorville, but not Barstow, then Victorville gets saved and Barstow does not.
Which also means the banks in Victorville get saved and the banks in Barstow do not. So if you were running a hedgie then you get a big say in who gets saved and who does not.
You get a big win if you decide to buy into a Victorville bank because you are in great position to save the bank, and the best part of all this is you are saving the bank by using somebody else’s money.
This all works, this saving of Victorville, because prices (and thus values) of houses are decided at the margin.
A hedge fund does not have to buy up ALL the houses in an area to make the values of all the houses go up, it only has to buy up the ones that are offered for sale.
Buy up all the houses that are offered for sale at high prices and - presto! - the values of all the comps go right up as well. Convince the banks to hold off on dumping their inventory of houses into the market so as to keep prices up and - presto! - the value of the mortages are also kept up.
The hedgie wins and the bank wins.
If any of this was tried with stocks then the SEC would step in. But there is nobody to step in regarding real estate and there won’t be anybody to step in as long as rising prices of real estate are considered by the PTB to be in the national interest.
“But there is nobody to step in regarding real estate…”
Au contraire. The Fed stepped in TO AID AND ABET THE REAL ESTATE BUBBLE REFLATION EFFORT!
“But when a hedge fund buys (or anyone else that is using OPM) the incentive is to pay ever-increasing prices because the ever-increasing prices is translated into ever-increasing values for the comps. And if these comps are owned by the hedge fund then the hedge fund managers get to demonstrate to their invesors that the fund is ever-increasing in value.”
There is also the presumption that they will be able to cash out at the top before the next crash.
But even if they don’t cash out before the next crash they still get to extract some hefty fees as the ride up progresses.
I agree Combo. I think the fund managers know full well that their investors will be left holding the bag. Who cares? The manager will still have made a mint in the meanwhile, just off that 2%. What is 2% of a billion? My calculator returns $20,000,000. How many managers get to split the 2% commish on the $10 billion being invested by Blackstone right now?
“I think the fund managers know full well that their investors will be left holding the bag. Who cares?”
That right there is the beauty of using OPM for your foolish investments. When it crashes, you keep the fees they paid and they enjoy the losses.
I have no doubt the bag is file of chit, and they (Hedgies) will not be holding it when the fan stops. Hedgies snatched up a bunch of homes in the Tampa Region. Guess what? They paid too much, they’re asking too much, and many of these homes still sit there vacant.
I was starting to freak out again in the past few months, but things seem to have settled down. That latina article is a good red, but it’s too alarming. The housing market is too big for them to corner. JMHO
They can’t buy everything, right?
Listings like this make me feel better:
http://www.zillow.com/homedetails/13584-Binglewood-Ave-Seminole-FL-33776/47213951_zpid/
Blackstone was in the news last with a lending program to “help” other investors do what they have done. It sounds like a sucker round-up to provide their investors with a little liquidity.
Exactly, and it’s so fake. I expect at the first pause, when investors want access to their “gains”, that it will unwind in a spectacular fashion. Can you imagine what the market will be for these thousands of bid up, so called rental properties? We think of those investors as the super wealthy, and some are, but most of the money comes from your pension fund. (if you have one) What a perfect storm we have brewing in this.
“Many had paid $450,000 for homes in marginal neighborhoods, which seemed a bit excessive – especially when the value of that home fell to $275,000. There was no way my relatives could keep making those house payments”
The working class likes to play “heads I win, tails you lose” just as much as the wealthy 0.01% banking class. Gambling with other people’s money, rationalization and self-delusion pervade the culture from top to bottom and the smell of ethical rot rises over a once great empire.
Exactly. Why did none of his relatives buy one of those $275,000 houses? How come they only wanted to buy them when they were overpriced?
I bet some did. Some bought low, some bought middle and some bought high. Usually because we know people of different ages who were at different life points. We probably all have relatives or friends in different areas of this spectrum, but the ones we maybe hear about and remember the most are the big winners and the big losers.
When I think of housing during the bubble, I think of friends who are 200K plus underwater and this one friend who was maybe the last guy out the door in late 2006 or early 2007 that took a 400K house in a decent area, put in 100k of upgrades and sold for 1 million and,oved on. He was super lucky, some were super unlucky.
But all the while con job realtors, the whole REIC and most of the media were saying BUY NOW OR BE PRICED OUT FOREVER.
“The Bay Area housing market is on fire — and we’re about to get burned.”
This time is different, as the recent experience of 2006-2008 has trained MSM writers to recognize the signs of an impending crash.
“I asked economist Christopher Thornberg of Beacon Economics, who is best known for rightly predicting the 2008 mortgage crisis (even though no one agreed with him).”
The guy with the loudest MSM megaphone seems to always get the credit for this kind of thing.
“But, in the long term, rising home prices chop away at affordability, which can be detrimental to the entire economy.”
Good for Thornberg for pointing out the obvious fact that ever-rising home prices represent a decrease, not an increase, in affordability. It really seems like this should be too obvious to bother mentioning this, but after so much REIC propaganda to convince greater fools otherwise, it is nice to see the simple truth stare you in the face in plain English.
The winners:
1) People who own more than 1 home
2) People moving into a smaller (less costly home)
The losers:
1) Everyone else
Yes, Realtors and MTG brokers are “kind of” winners, but, frankly, it’s not all that obvious that higher prices really make much difference to their bottom lines. I’d argue that, long term, they don’t (because there will be fewer transactions).
The winners when house prices go up are a tiny proportion of the population (although MANY more people think they are winners; those who have a house worth 2X what they paid for it. They aren’t winners if they don’t sell and downsize. Otherwise they just have a higher tax bill and other associated costs). Perhaps 5% of the population are winners when house prices increase. The other 95% loses.
BTW, this is kind of the case with any inflation. Whoever owns a surplus of the good inflated wins (for example, if you own an oil field). Whoever is a consumer of that good (those who need to buy gas) lose. Owning a single home is like having a full tank of gas. You own the good, but not a surplus of it (you can’t sell it to other people without buying more for yourself). Owing 100 homes is like having an oil field, now you’ve got a surplus that you can sell to others and not have to replace for your own needs.
15) People whose home values shot up and were approaching downsizing time and could sell and move to smaller digs in the same area.
16). Anyone who inherited property from older relatives who died during the bubble but bought way back in the day
I think #1 of the Winners should be property developers. I think these guys run a lot of towns and are so entrenched with the local politicians whose palms they grease one way or another. I would guess it is that way in Phx and surrounding environs what with all the developing going on now and in the last 15 years.
From my very limited experience, these are the guys in the back rooms making the deals with the local politicos. It’s all about real estate development in the town.
House inspectors were sure driving nice fancy new trucks during the housing bubble.
7.) Bob Toll
Winners:
Those who diversified within their net worth and rebalance every year. Try to get as much dividend-paying stocks, ETFs, and stock funds in tax deferred plans. Outside those plans try to go for low dividend growth stocks. The other assets of course should be precious metals in physical form in your own possesion, savings bonds, T-bills, and municipal bonds.
Key word: REBALANCE.
“Those who diversified within their net worth and rebalance every year.”
That seems quite orthogonal to the effects of bubble reflation.
Key word: REBALANCE. or REDISTRIBUTE
I “won” in Spring 2007 by selling my home I bought in 1997 for $200K more than I paid, (correctly as it turned out) felt I had my finger on the pulse of the bubble thanks to this blog and Of Two Minds….discounted the asking price by $10K and had a buyer in a week since the pop seemed imminent…
However since then ran into what Latina Lisa described when I tried to buy again in 2011, bid full price or slightly above on several 3/2 houses and was ignored in every case as I was competing with speculators and flippers offering 100% cash, gave up after a year and am continuing to rent more or less happily….may try to buy again after Bubble 2.0 pops
(FWIW am in northern Calif. wine country, and was trying to buy w/ 20% down and a preapproved conventional oan…by contrast in 1997 was able to buy w/ zero down and a VA/GI Bill loan)
I’m bummed you didn’t get a house in 2011.
Winner.
I purchased a rental home in Long Beach CA for $305 in the summer of 1996 sold it for $795 in 2009. My friends said I should have done a 1031 exchange to avoid the capital gains. I said why would I sell high and then buy high.
I paid the tax and sat on the money and purchased a 4plex foreclosure that was once for sale for $800,000 for $258,000. A townhome foreclosure in Rancho Mirage for $70,000 once valued at $300,000. A short sale pool home in Rancho Mirage valued at $625,000 for $271,000.
I’m no genius , just lucky with the timing. I’m also glad I paid the capital gains and not reinvested. I would have been screwed.
So you doubled down on not just one junk depreciating asset but many?
Sucker.
Huh? Lucky? More like lucky you didn’t loose more because it had to have been worth 1.2 million in 2006. Why didn’t you sell sooner?
One of the winners - Lawyers
That’s a conspiracy theory and a half. Does the author intend to demoralize us, so we resign ourselves to victimhood and hopelessness? Are we supposed to give up on our financial futures and just buy a house now at an unaffordable price before we’re priced out forever? After all, if the hedge funds and the big banks and the two most recent Democratic Presidents (but not Republicans) are in on the scheme, then we stand no chance. They will inflate house prices till Kingdom come, regardless of the fact that we have seen crashes before, and lord knows we will see crashes again.
The bigger they are, the harder they fall. It happened in the South Sea Bubble of 1720, and it is destined to happen with the U.S. Housing Bubble of 2007-2027 as well.
The one California Realtor™ with whom I have ever had an intelligent conversation just made his annual rounds. He is a partner in a local realty firm. If homes were selling like hotcakes in our area, I doubt that he would spend his Saturday afternoon pounding the pavement and trying to drum up business door-to-door; that said, I greatly respect anyone who makes such an intense personal effort, especially if they respect the reasons we aren’t interested in buying.
I explained to him the difference between net-worth buyers (me, for instance) and how-much-a-month buyers. I told him that with the current low-rate environment, he would have more luck pursuing how-much-a-month buyers, as anyone with a clue who has a concern about the long-run networth implications of home ownership would obviously be hesitant to buy at the point when the Fed is about to take away the QE3 punchbowl. I also explained to him the connection of the FOMC debate on QE3 continuation and recent hints the FOMC might soon end QE3 to the recent spike in mortgage rates, and the connection of rising mortgage rates to falling home purchase demand. He seemed genuinely interested, and he was obviously hearing it from me for the very first time.
He indicated that he wasn’t seeing any drop in demand. If I had felt like continuing the conversation, I could have pointed out that an artificial (financially-engineered) supply shortage can mask a low level of demand, but I could tell he was eager to continue making his rounds of the neighborhood, and he was fully convinced by then that we were not in the market. I did offer him the hope that perhaps some day my kids will consider buying homes.
I just had lunch with a friend who bought a small investment property in Northern California last year for $200,000. She wanted to refi so had it appraised. The new and improved appraised value? $312,000. In one year. The appraiser told her if she put it on the market it would go for much more.
I’m not sure I can even afford a box under the freeway here in Northern California and I’ve got a good job, money in the bank, and great credit.
I’m not sure I can even afford a box under the freeway here in Northern California and I’ve got a good job, money in the bank, and great credit.
Great description, Nancy.
Parts of California are breathtakingly beautiful, but I just don’t get how the California housing market makes sense when someone with a good job, money in the bank, and great credit can’t afford a middle class home.
It is worse than that at the moment…I had the good job, cash and great credit two years ago and COULD afford a modest home where I live in Santa Rosa, CA. (older 3/2 houses were listing for about $250K then in 2011) but could not get an offer even considered with 20% down and a preapproved loan…none of that mattered a bit when competing with cash….am now waiting for Bubble 2.0 to pop and for the speculators and flippers to end their feeding frenzy
“Parts of California are breathtakingly beautiful, but I just don’t get how the California housing market makes sense when someone with a good job, money in the bank, and great credit can’t afford a middle class home.”
The rules are rigged in favor of those who got here first and bought houses, and designed to screw the newcomers: ‘We got ours, now screw the rest of yous.’
There are pockets of places left in California where buying a home is worthwhile. But the price to get in the door is not in the middle class budget at all.
Funny how in the zip 92691 typical houses are around $500,000 yet the average AGI is in the high $60,000s. WTF?
I hope to go back to 1099 in a few years and hang out in Irvine area or Silly-cone valley, save $60k per year or more in SEP IRA, then move to just across stateline in northern Nevada when I start my distributions on my 401ks and Roths.
Prop 13: People who are already in are set (as their property taxes go up very little);
54% homeownership rate: When combined with Prop 13, only the top few percent of renters become buyers; and
Lack of development: There is a structural supply shortage that causes prices to swing wildly.
“Supply shortage?”
With 4.4 MILLION excess empty and defaulted houses in CA, there’s no need to worry about a shortage.
Economist Warns We’re Unable to See the Coming Economic Collapse
Terence Burnham: I believe the stock market is about to have a devastating decline. To make a concrete prediction, we will see Dow 5,000 before we see Dow 20,000.
http://www.pbs.org/newshour/rundown/2013/07/ben-bernanke-as-easter-bunny-why-the-fed-cant-prevent-the-coming-crash.html
“To make a concrete prediction, we will see Dow 5,000 before we see Dow 20,000.”
I frankly don’t see why the Fed wouldn’t intervene to prop up the Dow before it dropped down to 5,000. Isn’t propping up stock prices part of their mandate?
I think so PB. Stocks up. But they are overdue for a big correction. My 401k average annual gain the last 54 months is 15.9%. Gold already corrected, so if it falls again, it won’t be by the significant % that stocks will suffer. Then QE4 starts. I see 2009 to 2011 repeating again in QE4 with gold outperforming stocks.
“Gold already corrected, so if it falls again, it won’t be by the significant % that stocks will suffer.”
Likewise for Treasury bonds.
Look for both Treasurys and gold to rocket up when the next stock market crash occurs — just like they did on Black Monday (October 19, 1987).
Yeah gold started 1987 at $400 and ended at $480.
Incidentally, it is interesting to look at a chart of gold from 1995 to 1999. It was fairly flat at $400 to January 1996. Then it slowly drifted downward.
But that period from 1996 to 1999 was the dot.com boom. Everyone thought gold was dead and got on the dot.com bandwagon. “This time it’s different” applied. Stocks will go up forever. Most people had that mentality. That is why people dumped gold. The smart money sold stocks in 1999 and bought gold with the proceeds. I had not much money back then.
You Can’t Get There From Here – Straining to Regain Real Estate’s Promised Land
“The mind is its own place, and in itself can make a heaven of hell, a hell of heaven..”
― John Milton, Paradise Lost
Now that interest rates are rising, the real estate market cheerleaders are at it again with a new meme:”interest rates are still lower now then when they were in 2005-2006″
http://smaulgld.com/you-cant-get-there-from-here-straining-to-regain-real-estates-promised-land/
Sometimes not being a player is winning enough.
Marriage?
Here in ATL there is big money buying up at the courthouse auctions.
Went head to head w a representative of such a firm. The guy bid me up 40k from the opening bid.
We were not buying it to cash flow, we were buying our home to live.
He got all pissed like it was theirs and I should just back off.
He had the nerve to ask the law firm representative to make sure I had certified funds. What an a$$hole.
In the end, we got the house. I paid about 20k more than I wanted but I call that the happy wife premium.
These days though the auctions are filled w big money interests.
Getting more difficult to buy these types at decent prices.
ATL market is heating up for certain.
With losses rising in Atlanta, the only “big money” is in fact losses.
Winners: Those who remain in cash/cash equivalent positions.
Losers: Those who trade cash for hard(depreciating) assets.
Case Closed.