Housing Boom Fading, Leading Real Estate Economist Says

Origiator Times ^ | 10/31/2005 | Steve Brown

[Citizen of the Savage Nation]

I can only surmise that you missed the great surge in appreciation these last few years and you're pissed.

Aint that the damned truth. When I bought in 2001, there were chicken littles screaming the same thing, the crash was at hand...anyone buying now is going to get slaughtered yadda yadda...meanwhile, 4 years later, here I am with a 30 yr fixed at 5.5% and up by 50% (200% over the $80k down), I am so glad I didn't listen to those fools back then.

[kx9088]

We sold our condo 3 weeks ago. It was on the market for 5 days.

Hopefully they don't back out and in the next week or two the hard landing hits around here and they don't take notice :D

[2 Kool 2 Be 4-Gotten]

Co-worker in Silicon valley area told me yesterday he sold a house - he said it was on the market for 7 days. So some houses are still moving out there.

[ArmstedFragg]

Merced(ites? ians? ers?)

Mercederists.

[palmer]

Oh no! People in Washington DC metro area will have to live with 5% appreciation on their $650,000 colonials instead of 20% appreciation on their $250,000 colonials!

So what is your house worth now?

[palmer]

Not in Seattle.

Hey, how'd it work out in Seattle?

[silverleaf]

You are questioning me on a comment posted:

on Monday, October 31, 2005 4:13:59 PM

YGBSM

and what does MY personal situation have to do wth 4 year old commentary on inflated property values in the DC burbs?
Typical lib tactic- ignore the fact or nonfact (or satire) of the comment and attack the questioner’s personal background?

[palmer]

Bitter eh? I just like gloating about how right I was.

[BobL]

Nice call. It is fun to read these threads. It’s like the Twilight Zone episode where a group of old people say that playing “kick the can will make them young again”. But one old one tells them their full of it...you probably know the rest.

[palmer]

It was an easy call then and even easier in retrospect. But one thing I didn't factor in was the huge growth in the Federal Govt. That has kept prices pretty firm the closer to DC that you get. Further than 20 miles out it has been rough with 550-600k houses selling for 350 (bank sale). Go even farther, 60+ miles where I live, and the market is dead except for 150k or less. 100k houses are selling like gangbusters, 300k and up are just sitting doing nothing.

I should go look for an old gold thread since we know the price will never go over $550.

[codercpc]

Wow, what a prophetic post.

I love reading old posts, and this one hit the nail on the head. What is your next prediction, so I can "cash in, or cash out" whatever the case may be?

[BobL]

I agree it was an easy call, in hindsight. When the price of houses are 5 to 10 times incomes in many areas, something is going to crash - but when? In my case I shorted Countrywide and several other financials. It was NERVE-RACKING being about the only person in the country that actually read some of their loan documents (from a Florida county website) rather than simply taking the word of Orangeman.

I managed to ride Countrywide all the way down, and rode the others maybe 25% down, before getting cold feet and bailing. I kept my stock-picking record perfect...which was that every stock I ever ‘owned’ has gone down - but this time I got a nice car out of it. LOL.

I agree, with the feds printing money like mad, and with these sick attempts to prop up housing prices, it’s really hard to predict what’s next. Unfortunately people involved in gold don’t sit around like zombies, but instead are proactive and have already priced in inflation (i.e., when I started shorting, it was late 2006 - I could not believe that these stocks were still near their highs...WHAT IDIOTS were holding them?).

Now we have a new world, where every country is trying to kill their currency at the same time. The logical thing would be to buy land - but it is being inflated by low interest rates - so I wait for the bottom to fall out of the dollar.

[palmer]

We are supposed to buy what nobody else wants, based on the market signal of price. Houses are still a bit high although in my county 60-70 miles west of DC there are livable (i.e. rentable) houses for reasonable prices. BobL points out that gold has inflation priced into it. The Fed will have to allow high inflation sooner or later to alleviate the debt burden (other alternative is to default, or I suppose we could grow our way out of it). But our public and private debt is also deflationary as it hangs over the economy. Here's what I would buy: a bunch of dredges for gold mining to sell to urbanites who decide to become gold prospectors. Buy scads of shovels to sell to the folks who can't afford a dredge.

Seriosuly though, I like BobL's land idea but other people are still snapping it up. Even better to buy land with something on it like timber or water. I "buy" collectable gold and silver by trading in junk and bulk precious metals. The prices are high, driven by the PM prices, but often a low multiple. I've got a stash of copper wire although I might end up using some of it myself. Buy a decent classic car if you like that sort of thing. Go to the flea market and buy things that look good; I buy unique colored glass pieces (vases, bowls, etc) but only if they look unique and colorful. I don't pretend that it's worth anything, but at buck or five bucks does that really matter?