Should be any day now!!! LOL!
I plan on popping out of gold somewhere near the top...
That's a great strategy!!! LOL!
Posted on 10/14/2006 9:48:44 AM PDT by GodGunsGuts
'The US housing bubble will disappear'
By Laurie Osborne, Editor
Published 11th Sep 2006
That the US housing bubble will disappear someday is a certainty. That it will blow up catastrophically is a fair bet, warns The Daily Reckoning's Bill Bonner.
Observing recent statistics, Bonner calls the evidence "formidable".
The total value of residential property in developed countries rose by more than $30 trillion, to $70 trillion, over the past five years – eclipsing the combined GDPs of those nations.
Consumer spending and residential construction have accounted for 90 percent of the total growth in the American GDP over the last four years, and more than 40 percent of all private-sector jobs created since 2001 have been in housing-related sectors, including construction and mortgage brokering.
America made some of its biggest gains this past year, with average prices of homes rising 12.5% in the year and prices in Florida, California, Nevada, Hawaii, Maryland and Washington, DC, rising more than 20 percent, while in Palm Beach County, Florida, it rose over 35%. Sales of existing homes in the US set a new high at 7.18 million in April.
Some foreign countries showed bigger gains than the US in the last year, with prices up by 23.6 percent in South Africa, 19 percent in Hong Kong and over 15 percent in Spain and France. But average house prices have actually fallen by 7% in Australia since 2003; Sydney's bubblicious prices have plunged by 16%. In Britain, sales have contracted by a third from last year and have also slowed down in Ireland, the Netherlands and New Zealand. In Britain and Australia, these declines followed what were only very modest interest rate increases.
23 percent of all American houses bought last year were for investment and in Miami, one speculation hot spot, 70% of condo buyers are investors/speculators.
Last year, 42 percent of America's first-time buyers – and 25 percent of all buyers – put no money down.
In California, 60 percent of all new mortgages this year are interest-only or negative-amortization.
House prices in relation to rent have hit all-time highs in the US, Britain, Australia, New Zealand, France, Spain, the Netherlands, Ireland and Belgium. In the US, the ratio is 35 percent above its 1975-2000 average. The price to rent ratio is a cardinal indicator of over valuation.
You have encapsulated much of the history of America especially the move West. Even Ben Franklin had a stake in the move West, in particular the Ohio Company, which is apparently a State now, although there is some doubt.
Heh!
There is a house standing vacant about one mile away. I watched the original owners make a killing after slapping on one coat of cheap paint. Then watched the new owners throw a BIG party. They added some ginger bread touches and put it back on the market. For sale signs were posted for many months. Now the house is vacant again. Recently there has been new "upgrade" activity at the home. But it still is vacant. It has been vacant for about six months.
By the way, gold is back up again:
Rents are firm around DC. There are increases in desirable areas close-in, steady in the middle, and some drops out in tract mansion country. All in all a healthy market, plenty of demand and adequate supply.
No, it's fairly predictable. The RE market goes nuts for five years and then levels off. In NJ there is only SO MUCH you can tax people. The L&B assessment is at an all time HIGH. Plus we just added a 7% tax to fund all the pork we routinely indulge in. So with that in mind, real estate is sitting. Till there is some property tax relief and this 7% tax is removed, I don't see the market recovering as quickly as it did in the past. More people are moving OUT of NJ than moving IN NJ. In the Spring, We hope to join the exit. We've got the highest property tax in the nation! Eventually even the Demoncrats will do something about it.
But if you use interest-free credit card offers to fund margin gold trading, and always buy at the bottom and always sell at the top, you can't help but make a killing!
It's twue!
That depends upon whether 0% interest is being negatively ammortized at something like current bond rates. If so, after a couple of years of a no interest loan you have dug yourself a nice deep negative equity hole.
Yep, if rents actually drop, then real estate will have to fall even further to close the gap. Thanks for the gold link. I'm hoping we have seen the bottom. I'm still hoping for $700 plus by the end of the year.
I don't expect to make anything on gold and silver. It is strictly cash in the mattress except it doesn't burn and they can't print up more of it.
My contention that gold entered a secular bull market in 2001. This bull run will continue for years to come. Gold will continue to rise until we solve our triple deficits and thus save the USD. Until that day, I plan on trading gold. The top in gold should roughly coincide with a bottom in the stock market. I plan on popping out of gold somewhere near the top and then investing my profits in the stock market. And from there, assuming past cycles hold true, into real estate.
Uh, whaddayathink Greenspan has been doing since he bacame FRB chairman? Do you think 2% overnight rates might have had something to do with the last few years' run up in real-estate prices? Don't you think Bernanke understands that? Why did he start raising rates pretty ferociously? How is Bernanke going to further pump up the market - pay people to take out loans? Do you think the value of my house in DC really trippled in 5 years to where three senior federal bureaucracts could not pay the mortgage? I don't. Why don't I cash out? If I were a speculator I would, but I live here because I have a job.
The 70's are a pretty good comparison, I bought some gold then too but only because I collected coins and stamps. There is no Paul Volker on the horizon to get us out of the inflation mess that we will end up in, nor any politicians with enough sense to find a Volker. So while I think you are right about exiting gold at some point, I think the deficits will have to be "addressed" with a nice dose of inflation first.
Gosh aren't you getting relief from the government via what you pay in with hard earned labor via taxes?
If not, why all I can say is I'm shocked!
If your house in DC tripled then it has also dropped 20% in the last year (give or take). The bureaucrat salaries will get increased a bit faster and will catch up to those prices in at most 10 years. But real estate could increase even more if the Fed starts to see too much of drop (impacting the economy). We are stuck in inflation mode whether we like it or not, and right now the Fed likes it.
Thats the best way to use it
You hit the nail right on the head. The day I see a fed chairman talking like Volcker is the day I exit gold!
Buy gold!
Should be any day now!!! LOL!
I plan on popping out of gold somewhere near the top...
That's a great strategy!!! LOL!
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