Housing Boom a Bust?

National Post ^ | 5/13/ 2006 | Jacqueline Thorpe, Financial Post

[bkepley]

Lets say he made $125,000 per house on average. For six houses, he made $750,000. Even if he lost his deposit over two (article says $1,000 per house), he is still ahead by more than half a million. Not bad.

Not bad for his pocket. Not much good for anyone else that I can see.

[TheOracleAtLilac]

You don't sound like a native.

There's nuthin' to recommend downtown LA. or all of L.A. for that matter.
It's not a destination.
Any attempts (like Bunker Hill, etc) to make it a draw will fail cuz nothing (except crime & poverty) is centrally located in L.A.

[dennisw]

Check out this excellent PDF file from this month's Harper's Mag. "Illustrated guide to the coming housing collapse"

Takes a few seconds to load. Is 4mb size.


http://www.shloky.com/files/housing%20boom.pdf

[Toddsterpatriot]

In 1929, every Tom, Dick and Harry was buying hyper-priced stocks on margin and with ......interest only loans.

Yeah, margin loans are interest only. Duh.

[ex-Texan]

I saw it for real in the Harpers article that hit the newsstands on May 1st.

[Swordfished]

You're right, I'm not a native. But I have lived in the outlying area (Santa Monica) for about 3 years now.

You seem convinced that LA is eternally damned. Do you have some kind of axe to grind?

There are at least 120 new or redevelopment projects on the boards or under construction for downtown, nearly all at market-rate. To me that points to poverty being crowded out and crime lessened. Far from a panacea, but moving in an upward direction.

[Porterville]

So angry, so strident, so incapable of understanding....

[RobbyS]

Maybe the illegalsworking in the construction trade will decide to go home.

[Arizona Carolyn]

IMO that is what is likely to happen. In the early late 80's early 90's we had a huge run up (not like this) and then under Clinton a fall back before it stabilized for about 7 years and then the next runup.

It will probably fall back some now and then find a stable point and in a few years accelerate again (provided a Republican is elected in '08).

[Arizona Carolyn]

How much of that did he pay in taxes?

[TheOracleAtLilac]

There's a lotta folks who (mistakenly) want to "revitalize" the downtown area much like what has been done to many eastern cities.

My point: L.A. is unlike those cities in that nothing is centralized.

Regarding L.A. being eternally damned - you bet - look to the city council & the tax base for a clue to your future.

Como se dice mierda del Norte ?

of course, L.A. may be a trade up from the people's republic of Santa Monica ;-)

[Moonman62]

But north,in Broward Co., it's different. I have people literally knocking on my door asking me if I want to sell.

Tell them to go to South Broward. There are for sale signs all over the place. There was an article in the paper today about the skyrocketing cost of new construction. That should keep a floor under the prices for awhile. I think some people can't handle the big increases in insurance, taxes, gas and electricity. They probably have adjustable rate mortgages too.

[Bubba_Leroy]

"An estimated 25% to 50% of all U.S. jobs have been connected to the housing industry in recent years"

An estimated 50% to 75% of all statistics cited in newspaper articles are made up out of thin air.

[Swordfished]

Yeah I agree the 'revitalization' of downtown LA isn't going to follow the same pattern as other cities, because it, like you say, is fundamentally different from the eastern cities you mention (more spread out, etc.).

What's your take on the fact that there appears to be a market for all the new development?

Don't get me started on the people's republic of Santa Monica...

[wizr]

"But north,in Broward Co., it's different."

Oh, yeah!! Isn't that where the "COPS" TV program started?

"Bad boy, bad boy, whatchyou gonna do?......."

[TheOracleAtLilac]

What's your take on the fact that there appears to be a market for all the new development?

Just a guess... that it's
A. for weekday lawyers &/or
B. foreign money & or for foreigners (asians).

It sure isn't for retiring boomers - they never had a "downtown experience"nor want one

It sure isn't for govt employees - they don't have the $s

[TheOracleAtLilac]

FWIW, I was told that property ownership can speed up the green card & residency process for aliens & that this has been exploited mostly by the Koreans...& probably continues.

[Herakles]

"People are mentally spooked and the argument is: 'Why does the Fed have to continue to beat it to destroy it?' " he says. "I don't get it."

Because of all the funny money the treasury (by way of the REPUBLICAN congress - yea, it's hard for me to believe too) is printing, not to mention all the money we are borrowing from the Chinese to fuel this expansion.

This all reminds me of something that happened a couple of years ago, but the people complaining then were the grandmothers et. al. who were margined to the eyeballs in the stock market.

Money is a scarce resource, not a freebie!

[Polybius]

In 1929, every Tom, Dick and Harry was buying hyper-priced stocks on margin and with ......interest only loans.

Yeah, margin loans are interest only. Duh.

It's a little bit more complicated than that.

Margin Trading: What Is Buying On Margin?

[Toddsterpatriot]

It's a little bit more complicated than that.

I used to be a margin clerk. You don't have to explain margins to me.