On the other hand, if you are one of the lucky souls that sold your properties at the peak -- you may be sitting pretty right now. Just wait, watch and listen. By the end of next year, there will be hundreds of foreclosures to invest in and make real money. "Location, location, location. Buy low, sell high. Nada por nada." This is not a "gloom and doom" post. It is a helpful post. And very hopeful post. Good times are coming just around the corner!
For the naysayers, I reiterate your mantras: "Nothing to see here. Not in my neighborhood. Prices are sill going up. No foreclosures near me today. Time to move on"
There is a famous piece of art entitled: "Ce n'est pas une pipe". It depicts a pipe.
Might be in the house market in a few years. Should be a good time to buy.
Let's look at Las Vegas, which the writer uses a "breathtaking" example. The 2,900 homes for sale in 2004 was an incredibly low number for the size of the city. The 17,000 currently on the market is an admittedly high number, caused by the bailing out of speculators. The average of these two numbers (10,000) represents a proper balance. As soon as the speculators wash out, we should be right back where we belong.
70% of homes in LV are selling in under 90 days, even today. What does that tell you? It says that despite the increase in inventory, the sky is not falling yet. And how could it? 6,000 a month move here. These people need places to live.
I believe prices will fall here and across the country, and this is a good thing. Will it lead to economic calamity? No. In fact, unless one is in foreclosure, it really won't even matter. It will greatly help people like my sister, a school teacher, who currently can't even afford a modest condominium.
We'll just keep paying on our less than $200,000 ten year mortgage for fourteen acres above Silicon Valley, thank you. To get out and then buy in again later would triple our property taxes.
interesting tidbit from the article:
"It was cheap money as well that fuelled America’s property bubble. Now, that bubble seems to be losing gas."
I'm surprised you missed it, ET. ;)
Pity those who still have interest only, adjustable rate mortgages, for they shall soon be known as Dual Income No Equity (DINES).
I only know one thing for sure...no matter the finacial environment, there are people ALWAYS buying jewelry, fancy cars, boats, Hummers, and big houses......there are people at every NFL game paying top dollars and Southwest at least seemed very very busy in January, and February, and March....
For all to learn from - especially on the Fed.
The Founding of The Federal Reserve (video)
http://mises.org:88/Rothbard-Fed
Jackson's 2nd Bank US VETO (very important - what he correctly and constitutionally opposed is just what we ended up with in 1913)
http://alpha.furman.edu/~benson/docs/ajveto.htm
How Progressives Rewrote the Constitution
http://www.cato.org/realaudio/cbf-02-15-06.ram
The Issue of Tariffs: How U.S. Revenue Collection Was Turned Inside-Out (video)
http://mises.org:88/Sophocleus
Size Matters: How Big Government Puts the Squeeze on America's Families, Finances, and Freedom (And Limits the Pursuit of Happiness)
http://www.cato.org/realaudio/cbf-02-02-06.ram
Big Business and the Rise of American Statism
http://praxeology.net/RC-BRS.htm
The Great Depression, World War II, and American Prosperity, Part I (video)
http://www.mises.org/multimedia/video/Woods/Woods5.wmv
Secrets of the Federal Reserve
http://www.barefootsworld.net/fs_m_ch_01.html
I bought my 1700 sq. ft. house on 3/4 of an acre in 1986 for $90,000. Now it's supposedly worth $360,000 - but that's the land. Anyone who bought my house for that price would likely tear it down and build some new huge place on it.
The guy next door had his (newer) house up for sale for ~$450,000. I told my wife "He'll never get that." And I was right. He's taken it off the market. I was talking to him and his real estate agent out on his lawn and I told him to his face, "You have to realize that your house is a teardown." He protested, but the real estate agent backed me up. Now he's found out I was right.
There's all kinds of huge new houses built in my neighborhood - 2500, 3500, 5000 sq. ft. on 1/5 acre or less lots, just squeezed on, selling for 1/2 a million dollars or more. Who's going to buy them down the line? These folks are going to find themselves upside down, with a house value of less than they paid for them.
Oh no. It's so much more than that.It's six bushels of gloom and doom BS from a gloom and doom website/newsletter.
blame Bush.
Seriously, I am not happy about rates going up but none of us want to see a replay of the Nixon-Ford-Carter years when adjustable mortgages were at 12% and inflation was out of control.
Maybe it's time to convert to cash. Gold is tempting, but most commodities are also overpriced these days.
I don't know if he still lives in France and has established residence there. Apparently, selling a newsletter in the US does not require much familiarity with day to day living in the US.
I don't believe it either.
There is going to be tremendous growth in Asis....India and China. We as Americans are preferred because we work hard and have stuff they want and need.
This means growth. Demand will fuel the markets.
Freepers rarely appreciate any advice on what to do with their own money. Free advice is considered to be rude speech on this forum. Cautionary advice is viwed as chiding. Mentioning your successes is always seen as bragging.
My advice, which is widely thought to be of little value, is to allow them to hit their own bumps on the way down, get the scars you and I already have and let them fight their way back up to the top.
Bill Bonner is a perennial dollar bear but he is also a very smart guy, and I pay attention to what he says. The timing is the thing, of course, as always--but it does appear to him and me that the bull market in equities, tied to real estate, is over-- or at best, a dead man walking.
I sort of just ignore all this crap. K.I.S.S. My wife and I bought when prices were still low but rates had gone down. I recall seeing the same set of circumstances in the early 90s. Rates are lowered to stimulate the economy, and one sector that seems to respond to that is real estate. Home buying and home building feeds economic growth, etc etc. Anyway, we bought a nice little place that we can afford. End of story. The rest of the world can go to hell.
"For the naysayers, I reiterate your mantras: "Nothing to see here. Not in my neighborhood. Prices are sill going up. No foreclosures near me today. Time to move on""
ROTF! I noticed that this past year you and I have been "pounded" by other FReepers when we calmly speak the truth : )