Posted on 09/20/2006 10:26:44 AM PDT by GodGunsGuts
For building wealth and making some cash flow, I'll stay wioth real estate. I'm a buy and hold guy and southern California is the place to own. Population projections driving demand.
If true, then why is our debt to income ratio less than 1% higher than it was in 1990 or 1996? What's different about this time? Where's the proof that Americans have taken on more debt than they can service? Where's the pyramid?
You can't go on population figures alone. Like I said in a previous post, Japan has one of the highest population densities in the world. They have literally nowhere to build but up. And yet...
"When the (real estate) bubble burst, property prices plummeted more than 80%... wiping out many families' wealth and helping plunge the economy into 13 years of stagnation." ~ Financial Times, March 24, 2005, referring to Japan in the late 1980s.
http://www.investmentu.com/IUEL/2005/20050328.html
populkation increase is one of the fundamental indicators of the future of the housing market. If you think I'm wrong, then stay with your investmenmt. I have the same options. I'll invest $50,000 have a home worth $500,000 and wait until it doubles once or twice. 10 years twenty, either is okay with me.
>>Where's the pyramid?<<
Just watch.
Is the home for yourself or a separate investment?
Our next purchase will be our fourth rental. All in socal.
Watch what?
Signs?
Warnings?
Indicators?
Trends?
That's one well hidden pyramid. Is it a secret? Does the Plunge Protection Team know about it?
The posts made by doom&gloomers.
In reality, people who really do their homework and keep their mouths shut while they invest can purchase securities at a price cheaper than the price they deserve on the merits.
...and given:
end of 1979 index = 122
end of 2006 index = 195 (here the index does not touch 200 and am assuming that the index by year end will drop slightly to 195. A reasonable estimate.
Then the annualized compounded return for the period 1979-2006 is 1.752%.
calculated as follows:
1.95 = 1.22 (1+i)^27
[(1.95/1.22)^-27 - 1] * 100 = 1.752%
Watch what happens next. Give it a couple more months. Maybe four.
It is only well hidden to those who refuse to see.
Just be careful, and really take a look at the other side before proceeding. My accountant, who owns a number of rental properties, told me that rents go down in housing downturns as well. I figured they would go up as there would be more demand for rental properties during a real estate decline. Not so, says he.
Your accountant is dealing with generalities as we sometimes have a tendancy to do. My houses are in good rental markets.
Let me ask you. If the housing starts are down, prices are high, and the population is up, wouldn't there be more demand for rentals. Wouldn't the occupancy rates increase. If the supply goes down and the demand goes up, which way will the rents go.
In the last year the population of California increased 500,000 and the housing starts fell under 145,000.
The doomers have been saying that for four years now. Why not give us a clue so we know that you have one?
>> The doomers have been saying that for four years now. Why not give us a clue so we know that you have one? The doomers have been saying that for four years now. Why not give us a clue so we know that you have one?<<
Criminy. Give it a rest. I am beginning to feel like I am on a crevo thread. The difference is that in a few months we'll know in this case. See you next year. ;)
‘All Of A Sudden, Prices Are Dropping’ In California
The Contra Costa Times in California. “Nicole Dalesio and her husband have been looking for a home in the Tri-Valley for more than a year. ‘You’d think we had a lot to choose from, but no,’ Dalesio of Pleasanton said. ‘And now, all of the sudden, the prices are dropping.’”
“With buyers and sellers refusing to budge, East Bay median home prices dropped or stayed put for the first time in years while sales continued to decline across the Bay Area in August. Alameda County reported a 28.2 percent drop in year-over-year sales, DataQuick reported. In Contra Costa County, sales toppled 23.5 percent. Solano County sales also dropped 34.3 percent.”
The San Francisco Chronicle. “Real estate agent Barbara Hendrickson can sense a different attitude among home buyers these days. For four weeks, she held open houses on two one-bedroom condominiums in Oakland’s Temescal neighborhood without receiving a single bid. Data released Wednesday show that her feeling has a basis in reality, as home sales in the Bay Area are slowing and prices are softening.”
“‘In Berkeley, it seems some are coming down (in price) a little bit and staying on the market a little longer,’ Oakland resident Forrest Bell said.”
“The hardest-hit real-estate market segment was new homes, whose median price fell 11.6 percent to $574,000 last month, down from $649,000 a year ago. Pulte Homes is offering a week’s free vacation and up to $99,000 in incentives to buyers at its 17 Bay Area developments.”
“‘The sales pace dropped off and our production didn’t drop off as quickly , so we found we had some inventory we didn’t want to have at the end of the year,’ said Merry Sedlak, of Pulte at its Bay Area headquarters in Pleasanton.”
The San Mateo County Times. “The housing slump continues. Bay Area home sales last month dipped to the lowest level in nine years. ‘We can say, with some certainty, price appreciation is zero and may even be slightly retracting. The market is flat and the bubble has popped,’ said economist Chris Thornberg.”
“Still, Tuesday’s move by the Fed to leave a key interest rate unchanged is an encouraging sign when it comes to the outlook for the housing market, (realtor) Earl Rozran said. That’s not the case if you ask Thornberg. ‘This is way beyond the Fed,’ he said. ‘It’s just so out of whack, it’s going to take a long time to clear out.’”
“In Santa Clara County, twenty-seven percent fewer houses changed hands in the county last month than during August last year. The trend was the same in condominiums, with sales down 31.7 percent compared with a year earlier.”
“Jeremy and Tracey Kemp toured more than a dozen homes for sale in San Jose and Santa Clara. Afterward their real estate agent heard from two of the agents listing homes they’d visited, asking about the Kemps’ interest level and letting them know the list price was negotiable.”
“‘We’re seeing more strength in our role as a buyer,’ he said. ‘They were aggressively courting people who had just been walking through.’”
The Marin Independent Journal. “Marin’s home sales volume fell from a year earlier. Total home sales, including condominiums, were down 13 percent from last year, mirroring a trend throughout the Bay Area where sales were down about 47 percent in Napa County, according to DataQuick. Marin condo sales were down 36.4 percent from August 2005. Broker Barry Crotty said condo prices fell because many first-time homebuyers are priced out of the market.”
“The Marin median condo price dropped to $546,500 last month, down from $575,000 last year and down from $555,000 in July.”
“‘So far the major trend is the sharp decrease in sales activity but I expect that prices, which are leveling off now, will decline over the next year,’ said Stephen Levy, director of the Center for the Continuing Study of the California Economy. ‘The reason is that it usually takes several months before sellers realize they are going to need to cut the price to sell,’ Levy said. ‘Over time what starts out as leveling in price can turn into a decline in price.’”
“There are more sellers than buyers lately, Levy noted. ‘Buyers see stories in the news which are correct about the market slowing so they feel they can be more selective and aggressive,’ Levy said.”
The Santa Cruz Sentinel. “Suzanne and George DeLeon found they had to drop the price on their Central Valley home and acre of land from $650,000 to less than $550,000 to lure buyers.”
“Consider the Blaine Street condos in Santa Cruz, where the city’s program helps turn renters into homeowners. The newly built complex of studio and one-bedroom units went on the market in April, with prices from $399,000 to $525,000. Five months later, six of the 13 condos have been sold, and the advertised prices are lower, from $365,000 to $499,000.”
The Daily Bulletin. “In August, the number of new and existing homes sold in San Bernardino County decreased 20.1 percent from August 2005. Ginger Jacobson, owner of High Desert Construction in Victorville, is one of builders lowering prices. She recently knocked $10,000 off a Victorville house and is slowing production of new houses.”
“She acknowledged that the phone isn’t ringing like it was last year. ‘We were getting four calls a day about houses last year. Now it’s more like four calls a week,’ she said.”
“Real-estate investor Enrique Balcazar knew a housing downturn was coming. Although the numbers don’t show decreasing home values in San Bernardino County, Balcazar said he believes they are. DataQuick’s number look back to what happened, not what is happening now, he said.”
“‘It is my general gut feeling..that come around December, you’ll see exactly what I am telling you,’ he said.”
“Broker Jason Bennecke said there is almost no recovery from asking too much when the house comes onto the market. ‘It’s like a dog chasing its tail,’ he said.”
24 year old kid with empty pockets and a head full of informercial get rich quick schemes, and banks loaned him 2.2 MILLION DOLLARS because he lied about his income and his intention to flip the houses, not live in them.
How long before the bank comes crying to Congress asking the prudent savers and taxpayers of America to bail it out?
It would seem he's guilty of fraud--he committed a crime. Also, he almost certainly violated 18 U.S.C. 1503 (IIRC) by submitting false affidavits.
You are absolutely right, and I'd like to see a whole new wing of federal prisons opened up for fraudulent housing flippers. That does not mean the banks who failed to use any due diligence are entitled to a bail out.
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