There is no bubble

Free Republic | 8/24/05 | Self

[wizr]

"Who cares if the average income family can no longer afford the average home. Don't worry. Their money is unimportant. They should be renters anyway. The big players control the game now, the little guy is insignificant now and forever.

Housing will appreciate 10,15,20% a year, year in and year out- forever. Don't ever expect a correction. In just ten years the AVERAGE house will be well over $400,000, pricing completely out the average worker, which is a good thing in the long run for the invester class."

Spoken like a true plutocrat. Look it up.

[babble-on]

i think you're missing the sarcasm of the original post.

[bigsigh]

I think there may be some geographic or price level bubbles. But, my money is on the low end of the market in Southern Cal. Population driven and seeing 10 offers for a $300,000 condo. People driving over the mountain from Victor Valley to work in the LA basin.

When the population decreases wake me up.

[sharktrager]

Actually THAT is the problem. New home sales are where it's at. Most people just aren't interested in existing homes in many markets.

[wizr]

Could be I've gotten thin skinned on this issue. After being trampled, for months, by those that say the skyrocketing housing market is a good thing, this was just too close to the truth.

I still don't see the humor of it. Sorry.

[Steven W.]

We have PLENTY of land. Ever fly across the country, and look out the window? We have vast tracks of empty land.

It's government owned & not available for public use nor is it in the prime locations where people traditionally want to live!

[Kevin OMalley]

BFLR = Bump for later reading.

[JRGeary]

Marshall Reddick has some good ideas, but you need to be very careful. I bought 5 homes through Marshall Reddick and Jeff Cassell. Of the 5 homes, 2 are vacant and 3 are leased. Of the leased homes, only 1 has paid rent for August 2005. For the one that paid rent the beginning of August, I have not yet received a check for the property manager, Jeff Cassell. For this and other reasons, I am concerned that Cassell is lapping, running a Ponzi scheme or not reporting rental income. In summary, I collected no rent on any of the 5 homes for August 2005.

Also, be careful of bait and switch. I purchased the homes through Jeff Cassell and Marshall Reddick and entered into property management agreements with Jeff Cassell. The terms of the property management agreement were good (as promised by Jeff and Marshall). Now Cassell wants to cancel the 3 years contracts after a year. (This may be a good thing if Cassell is a crook).

I contacted Marshall Reddick's office numerous times. Marshall Reddick's office was of zero help. Reddick and Cassell lured me in with low cost of property management, collected their sales commissions, and are now reneging on the property management contract. I hope that there is nothing illegal going on, but it is very had to get information from Reddick or Cassell.

Be careful

[jettester]

Thank you for your insight and I'll be praying for resolution for you on the properties mentioned. As the old saying goes, you don't go into the ministry for the benefits, so anything that can help fill in the gaps and add a little bit doesn't hurt. However, I know of two pastors literally wiped out from scams in the past and many present ones who seem too gullible for their own good.

Most of this stuff sounds "too good to be true" and it probably is. Again, thank you for your counsel.

[chris1]

I wish houses near me were 400k.

[chris1]

I am convinced that if things keep going the way they are going, the average person will not even be able to fathom traditional home ownership.

The vultures of wall street and speculators have turned the housing market into nothing different that the dot.com era all over again.

[bigsigh]

hold on a minute, quick draw.

There are many real estate markets. In southern cal the below average market is driven by population AND investors. Tell me when the popluation will drop and I'll tell you when those in the low end can start sweating.

[bigsigh]

As baby boomers age, you will see more and more three income homes. The last 30 years we saw the two income family become normal. The 40 year mortgage and the third income will keep people in ownership.

[chris1]

Just more ways to pick more pockets.

I knew something was seriously wrong when many of the people I knew who got washed up in the speculative stock market mess of the late 90's went immediately into RE after the market tanked. Many became mortgage brokers, "developers", agents, and otherwise tried to get in any position to skim a few bucks while really knowing nothing about what they are doing.

Many on the RE industry really have not a clue about RE laws or common title related issues.

[bigsigh]

I invest and I'm a broker. But also diversifying by building a storage business.

If you do some research and don't have to sell at a specific time, you should do well in RE.

[chris1]

I am most concerned about the average hard working guy or family being able to afford anything anymore. Its like the elite and the left would like nothing better than most people living like the old soviet union while they take the good property for themselves and make it so prohibitive to own anything.

In my neck of the woods, most people in their 30's don't even fathom home ownership other than living many to a single house or buying a multiple family house while living themselves in the basement.

[bigsigh]

so, what do you propose a government inacted price cut?

[chris1]

No, I propose that less zoning regulations be put on home building so that it does not make moderate home construction not feasible, less property taxes from governments so that people can afford to stay in their homes, and a serious look at the ponzi scheme like financing going on that is aiding the run up in prices.

[Always Right]

Bubbles are local, most places won't see any fall and those that do, there will be a fairly soft landing, perhaps a 10% fall. Of course if you had 20-30% runnup over the last year, a 10% correction is not a big deal. Fear-mongering bubble heads.

[irishjuggler]

Tell me when the popluation will drop and I'll tell you when those in the low end can start sweating.

It's precisely those in the low end who have the most to worry about. A rising population won't continue to drive up home prices if that population can't afford the montly payments necessary to sustain those prices. A low income couple who buy a $400,000 "low end" home in California with an interest-only ARM and nothing down will be wiped out if interest rates were to shoot up to 10% in a few years. There's a mentality that high interest rates are simply impossible. How quickly we forget that rates were higher than 10% as recently as 15 years ago. Why can't that happen again?