November 24, 2005

Check out these nasty listing and depreciation values from Miami - OUCH!

From the home of speculative condo flipper hell, welcome to bubble panic:

Date / Inventory / 25th Percentile / 50th Percentile / 75th Percentile

11/21/2005 18,261 $284,900 $405,000 $662,000
11/14/2005 17,601 $284,000 $405,000 $662,000
11/07/2005 16,952 $284,900 $405,000 $660,000
11/01/2005 16,424 $285,000 $410,000 $675,000
10/28/2005 16,425 $285,000 $410,000 $675,000
10/21/2005 16,977 $285,000 $409,900 $675,000
10/14/2005 15,894 $285,000 $409,000 $674,900
10/07/2005 15,296 $287,000 $412,000 $680,000
10/01/2005 14,953 $288,000 $415,000 $685,000
09/28/2005 14,655 $289,000 $415,000 $690,000
09/21/2005 14,251 $289,000 $417,900 $695,000
09/14/2005 13,604 $289,900 $420,000 $699,000
09/07/2005 13,064 $289,000 $423,900 $701,000
09/01/2005 12,800 $289,000 $422,900 $714,000
08/28/2005 12,882 $286,990 $420,000 $709,000
08/21/2005 12,606 $289,000 $424,900 $719,000
08/14/2005 12,361 $289,000 $425,000 $700,000


Tom said...

OUCH! I have been predicting this ever since I saw the iirational exuberance. Time and time again I was met as a doomsayer, chick little "The sky is falling, the sky is falling."

Well I analyze the facts and there is no reason housing prices should be this high. Wages nor inflation have kept up. This reminds me exactly of the .com boom and housing is on it's last leg.

Do I think housing is a bad investment? Well I don't think it's truly an investment unless it immediately puts money in your picket in a fundamental way. Not counting the tax breaks that might change or count on the prices going up. But to count that you could rent it and that the rent would be enough to cover expenses and then some. Any appreciation achieved was icing on the cake. A solid appreciation would be 3%.

Do I think people got lucky with this boom?? Of course, all the realtors, mortgage brokers, appraisers, and flippers have profited. It is a high stakes game of musical chairs where the last person standing will be the one hurt the most.

This is the perfect storm that will cause a crash. It won't be a one year decline or a 2 year decline, but instead it will be a gradual decline over time that will continue to feed into other things. This is a correction that will take years once all the wealth accumulation just evaporates.

Read this article here to see a very nice piece that someone explains so clearly, eloquently, and articulately.

We are geaded for trouble and have been on this path for sometime. The train has a lot of momentum and it's about to derail. The best thing to do is cash out of real estate and wait till it over corrects and buy it at the bottom. In the meantime explore other methods of investment that will allow you to hedge yourself against a falling economy, including exploring investing in international money markets to coincide with a drop in the dollars value.

Warren Buffet did this and made a nice chunk of change on flipping the dollar. He also has a ton of cash on hand and the hawk is going to swoop in and buy properties from desparate sellers and banks and distressed prices.

You think this man's a genius but he knows what is going to happen by watching the fundamentals and not getting all wrapped up in the hype and hoopla of what's going on around him.

They often say do exactly the opposite of what everyone else is doing and more times than not you will succeed.

Have I made money from the real estate housing boom? You bet but I also exited a year ago to play it safe. I quit while I was ahead. Did I lose out?? Yes but I stuck with my exit strategy in order to protect my gain and to get out of a market that was acting anything but normal. It's definitely over-heated and is about to go through a major meltdown of the coming years. In fact, take of your blinders, open your eyes and you can see it is happening all around us.

Orlando has a record number of homes on the market, as more people try and get out before the housing bubble collapses under it's own weight you will see this numbr increase across the country.

Hedge funds will get burned that have invested in Real Estate and in Oil as that drops. One area of investment that looks good is Apartment REITs perhaps as more people default on their loans and ruin their credit they will need a place to live. The only question is if the economy doesn't take a large enough hit that causes us to lose massive amounts of jobs and pushes us from a severe recession into a depression.

Only you! can protect yourself. The government, NAR, realtors, mortgage agents, nor your friends who give you horrible advise about housing till be there to protect you. The only person they truly care about is themselves and their bottom line. It's these people that have siphoned off a large amount of value in homes which is about to disappear. This is scary and I'm warning everyone I know. if they choose not to listen at least I can say with a clear consciece that I did everything that I could have possibly done.

Thanks for listening.

Tom said...

Opps this is the link

Tom said...

Another interesting artcle:,2547,TCP_1213_4242880,00.html

Tom said...

I found this interesting quote below from this website:

The U.S. economy faced a major recession in 2001 and had a minor one. The newborn slump was strangled in its crib by of the most central planners who ever lived. Alan Greenspan cut lending rates. George W. Bush boosted spending. The resultant shock of renewed, ersatz demand not only postponed the recession, it pushed consumers, investors, and businesspeople to make even more egregious errors. Investors bought stock with low earnings yields. Consumers went further into debt. Government liabilities rose. The trade deficit grew larger. On the other side of the globe, foreign businessmen worked overtime to meet the phony new demand; China has enjoyed a capital spending boom as excessive as any the world has ever seen.

Our own Fed chairman, guardian of the nation's money, custodian of its economy, night watchman of its wealth: How could he do such a thing? He turned a financial bubble into an economic bubble. Not only were the prices of financial assets ballooned to excess, so were the prices of houses and the debts of the average household. And the economy itself was transformed. By 2005, the housing bubble was no longer an investment phenomenon, but an economic one affecting almost everybody. In some areas, half of all new jobs were related to housing. People built houses; people financed houses; people remodeled houses; people sold houses to each other; people put in so many granite countertops that whole mountains had been flattened to quarry the stuff.

adam lake said...

from portland oregon:
i live in nw portland, or. in my building alone there are 3 units that have dropped there prices ~10% in the past few weeks. around the corner is another property with a price reduced sign. at a 404 sq. ft. starting point, (i bought at 280 sq. ft. 18 months ago) i am actually glad to see things move to more rational values...hoping to swoop in at the panic stage and get some deals.

blogger said...

adam - patience.. panic stage may be down 50% or more


what goes up MUST come down. Don't catch that falling knife - it always will cut you

Holgs said...

Hmmm.. One thing to notice... The 11/21 median numbers didn't change at ALL over the 11/14 numbers? Could that possibly mean not a single sale? Probably not, but that would be insane if true...

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