We're doomed. Doomed! DOOMED!!!
Posted on 09/29/2005 12:50:31 PM PDT by ex-Texan
The difference between America and Australia: In America everybody’s talking the possibility of a real estate bubble. In Australia, they’re living it.
Real estate prices in Sydney, which rose by about 175 percent from 1994 to 2004, have fallen 10 percent since then and some expect the market to fall farther. "Sydney is undoubtedly the basket case of the national property market," says the Sydney Morning Herald.
Investors are fleeing, says the Australian. "Thousands of home owners are trapped with mortgages higher than the value of their properties as house prices fall,” the national daily reported earlier this month. The investment bank JP Morgan forecasts a 10 percent fall in house prices nationally and regards Sydney and Melbourne as the most "overvalued" housing markets.
Real estate deflation is a worldwide trend, says the International Herald Tribune. "The latest economic data from a broad array of countries indicate that house prices are either rising at a slower rate (France), stagnating (the Netherlands), or dropping (Australia). No one is panicking, especially since underlying economic indicators are good. But there are signs of psychological effects," says the New York Times-run Paris-based daily.
Like quiet discussions of that old question, “It can’t happen here, right?”
(Excerpt) Read more at blogs.washingtonpost.com ...
J.Alan Greenspan has kept the housing bubble going with low interest rates. In addition, Dubya issued an executive order last year ordering Freddie Mac and Fannie Mae to finance homes with no money down! This skullduggery enticed renters to buy homes that they couldn't afford. They are going to be the first ones to face foreclosure in the 2006 real estate crash. So much for minority home ownership.Please pardon the obvious race card reference. But are you the least bit surprised? Of course, the poster may be speaking the truth. I have seen this first hand in Oregon. Many home buyers are stretched beyond their means and took major risks. Minority buyers are cheated every day. I have repeated that personal report about a guy making $ 38,000 a year buying a home for $ 200,000 several times on FR. Learn More? Oh, well, not for me to worry, anyway.
In this state illegal foreclosures are as common as fleas on a dog or bottle flies on bovine squat. By this time next year, the local kangaroo court will be packed with victims of the economic tsunami. Coming soon to a venue near you.
Funny, that doesn't fit my mental image of a bubble popping. My bubbles always reduce to zero.
A spot has appeared on the apple. What could that mean?
So, my house is now worth $472,000 and I have seen only a 158% rise in value over 10 years.
The Tech Stock Bubble hurt me more.
The California bubble will be a bubble that goes below zero because they people stuck will also be charged to clean up the mess and pay for more illegals who may have suffered.
Well, Greenspan has been raising the rate he controlls for several quarters now and the long term real estate rates havae only now started to rise. Greenspan has a habit of being unable to see when he has gone far enough. He usually overdoes things, like a chef who leaves the med rare stake on the grill while he calls the waiter. I expect that Greenspan will let rates rise high enough to bring about a "tight money" slow down in the economy. Of course our storms will tighten and then losen things.
Investors are about equally bearish and bullish but most believe the hey days of the real estate boom are gone for a while.
One thing I think is still driving things is the fact that workers nearing retirement are buying their retirement cottages while holding on to the old homestead. They will soon retire and many will sell in the key job locations. Others will move in and buy these homes because the jobs are still there. Watch out when the jobs go somewhere else.
What is an "illegal foreclosure"?
We're doomed. Doomed! DOOMED!!!
The risk is far more for adjustable rates and interest only loans.
Get a fixed rate now, and especially at 15 or fewer years. That'll be decent protection against any bubble bustin' that comes down the road.
If nothing else you can live in the place and ride it out.
The Australian housing bubble is leaking, not popping. Yet. By next year the median home price in Oz may have lost another 15%. By then a full blown panic may be in the works. What would happen here in the U.S. with sales prices falling 10% nationally? Frankly, I expect the real estate bubble will crash more swiftly in the U.S. The Aussies tightened up on home loans two years ago. Mortgage rates are about 2.5% lower in the U.S. than in Oz.
Australia has never favored interest only loans, ARM loans and 100% financing. About 60% of home mortgages in the U.S. this year were in these very risky categories. 'Nuff said.
How about defining "for a while"??
Is it somewhere between "a little bit" and "some time to come"?
Or maybe between the "near future" and "a dog's age"?
Prognosticate with real figures if you will, or keep your opinions...well, opinions.
Sounds more like a correction, which is necessary on occasion in order to stabilize the market.
"Oh, well, not for me to worry, anyway."
May be true, but your fixation with the topic says otherwise...
Everyone wants to compare real estate to the stock market, but it is totally different. If prices fall 10% or more, you still have a house! When the Nasdaq bubble burst, many of us owned stock in companies that no longer exist. If they value of my house dropped 20% it would still be worth twice what I paid for it four years ago, that's a hell of a lot better than I fared after Klintoon and Rubin announced they had "overcome the business cycle."
The Wash Post writer did not explain fully what is really happening in Aussie land or the market in California. That is the fault of the writer, not my bad. But what did you expect from that D.C. fish wrap? Tid bits of golden wisdom?
That was the case when Greenspan was supporting GWB's weak dollar policy. That's no longer the case. The yield curve is much flatter now.
That's because he adheres to a flawed theory of what causes inflation. Either that or he loves to destroy the economy for the power rush.
Sometime between tomorrow and the long run, Something Bad™ will happen.
"'Nuff said."
LOL, you've posted "nuff said" just how many times, now?
MASTER SHAKE: "But what does it MEAN?"
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