Posted on 08/20/2008 6:30:46 PM PDT by SeekAndFind
OK, I don’t know why that chart did not show up. URL is : http://en.wikipedia.org/wiki/Image:Uspop.svg
Correct. It's going to take at least another 9 months for prices to stabilize. My guess is that it will be 2-3 years after that until we see some decent appreciation. At the moment cash is King.
Real estate may bottom out...which just means that prices stop falling.
There is no guarantee that real estate prices will increase steadily, however. Look at Miami with thousands of empty, new condos coming on the market between now and the end of the year...with thousands still left unsold from before.
As for foreclosures...the bigger discounts are when you buy a distressed mortgage note (often at $0.30 on the Dollar) and do the foreclosure on the deadbeat later, yourself.
That’s buying U.S. real estate at a 70% discount.
Now isn’t the time, we are at least 1 1/2 years from the bottom.
No, but they - we - are interested in downsizing to retirement houses in congenial locations. Money to be had there. I found out the easy way - lucked into it. ;-)
US bank ‘to fail within months’
The global financial crisis is set to get worse, with a large US bank likely to collapse in the next few months, a former IMF chief economist has warned.
Kenneth Rogoff’s comments came as shares in Fannie Mae and Freddie Mac sank on a report that the home lenders would, in effect, be nationalised.
Despite hopes that the US economy had turned the corner, Mr Rogoff claimed it was “not out of the woods”.
“I would even go further to say ‘the worst is to come’,” he said.
“We’re not just going to see mid-sized banks go under in the next few months,” said Mr Rogoff, who held the IMF role between 2001 and 2004.
“We’re going to see a whopper, we’re going to see a big one, one of the big investment banks or big banks.”
We have to see more consolidation in the financial sector before this is over
Kenneth Rogoff
Speaking at a conference in Singapore, Mr Rogoff, now an economics professor at Harvard, forecast that Fannie Mae and Freddie Mac would “probably” not exist in their present form in a few years.
“We have to see more consolidation in the financial sector before this is over.”
On Monday, shares of Fannie Mae fell more than 22%, or $1.76, to close at $6.15. Shares of Freddie Mac fell almost 25%, or $1.46, to $4.39.
‘Wrong move’
Shares in Freddie and Fannie first fell sharply last month on fears that they would run out of money to fund their business, forcing the US government to take radical steps to ease the panic.
snip.
As mortgage guarantors, they must pay out when homeowners default on their loans.
With the housing market across the US crumbling, their finances have come under severe stress.
Problems in the US housing sector prompted the Federal Reserve to slash interest rates to 2% earlier this year.
But Mr Rogoff said the Fed was wrong to cut interest rates as “dramatically” as it did.
snip
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/7569903.stm
Freeple?
You have not seen anything yet in the housing market. Never have so many been upside down in their house they couldnt sell it if they wanted to. These people now have to have at least a 690 beacon score with 20% down and income to justify the full payment. So if you have limited buyers , you could steal a house and hope you break even by renting it, not me sit a bit longer.
I was in Texas in the 80’s when the real estate markat went under. Went down, flattened out, then really went down. Ruined Milk Money John.
Anyway, a fool and his money are soon partying.
Yea, housing was flat in most of the Mid Atlantic states from 1989 to 1999 or so. Thats a long period of time.. Its just ridiculous to assume you could beat inflation forever, wherever, in real estate.
The bottom is not uniform, rather it is at different levels in differing parts of the country. Some locations aren’t even falling. Others are still rising albeit ever so slowly.
timing and prevailing economic conditions at the time of a transaction is the key in real estate. I’ve never owned stock but invested heavily in real estate from the late 60s to 2004 when I cashed out and retired before I was 60. The timing was right when I bought and when I sold. Real estate will go up again but I seriously doubt we’ll see a bubble like the one that just broke and anyone with common sense should have seen it coming. Anyone with common sense should see the even larger financial mess that’s coming unless we address our national and personal debt. The real estate piggy banks aren’t going to be there for most nor is there going to be investors around who have faith in our economy enough to finance our debt. I think we’re all in for a huge shock. We don’t make anything anymore and soon there won’t be faith in our service sector either.
“One of these days maybe I will get a house for only one silver ounce.”
Yup, just as soon as the metal thieves are done with it.
It's not the down, it's not the market, it's not even whether or not you're upside down. It's whether or not you can make the payment.
Some are reluctant to buy, but in soCal we can now get cash flow on rentals. Hard to do 2 years ago. I put an investor in a house in Hemet in July for 130,000. He's getting $425 a month positive cash flow.
RE continues to be a great long-term investment, tax break, and where else can you get the leverage that RE provides?
People that want safe, liquid, and rate of return should try tax advantaged, indexed universal life. Good method of building your retirement also.
I have been through the real estate bust in Texas. We had people jumping in “good deals” only to find the price going lower (yup they ended up let it go back to the lender). The real estate cycle is a slow one,no need to be in a hurry. I would rather buy on a true upswing than attempt to catch a falling knife.
Well considering the Feds, and those who do demographics have told us we’ll have 50 million more people in the U.S. in the next decade or two, I’d say RE is pretty good bet for the future.
Just a wild guess through.
Have I got a deal for you! A nice place in Wynne, Arkansas. Email me for details :-D
Manhattan has been the lone holdout in the housing crash. That is about the end. Manhattan is going to be hit hard over the next 24 months.
A big, unspoken cause of this irrational housing boom was the idiotic mortgage deduction, and lack of a renter's deduction. They need to either scrap the former, or enable the latter. How did owning a home ever become "The American Dream"? In countries like China the "Dream" is to SAVE money for future prosperity. Americans don't save shit. Balance of payments don't lie.
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