Nothing better than a good bubble story - the $500,000 you just made on your 5 year old house.. The neighbor who now owns 5 homes all with negative cash flow... The 22 year old bartender who just got his real estate license and is day trading condos
Here's your space - have at it
November 06, 2005
Readers - Tell Your Bubble Story Here
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9 comments:
I bought my condo for $171k in 2003. Sold it in July for $315k. Took the proceeds and put it in a 4% savings account.
Now I'll wait for the market to burst - and it will. I figure 2 to 4 years.
Rent is a steal! Owners with $4,000 monthly costs on a sweet condo renting for $1500 a month. And they get to eat the depreciation.
What fools. I feel sorry for all homeowners who don't sell asap. Like holding Cisco stock at $400 as it fell to $10.
Huh-boy! I bought my first condo in 1998 for $59,000. I rented it for a while and my husband and I bought a house. We sold the less than 600 sqft condo for $159,000 in 2003. Pretty sweet!
The house we bought had been on the market for more than 150 days in a fiery hot housing market. When we saw it we knew why. It was in need of a major aesthetic update - which we gave it. By the early spring of 2005 we were hearing amazing things about the home prices in our neighborhood - could it really be true that our $308,000 home purchased in 2001 was now worth $700k in 2005? Well, in a word, NO. But we didn't learn that until we'd already downsized into a mere $500k bungalow and had the old house on the market all summer with only one low ball offer submitted. It's fall now which means serious sales doldrums around here. We've rented out the house for the winter and will give it a go in the spring.
The downward spiral of the United States of America: There is plenty of irrefutable evidence on the residential real estate bubble that has come to light. The facts, the greed, the real estate fraud, the indictments, the fines, the convictions the incarcerations, the record consumer debt, the shattered dreams, the bankruptcies and the foreclosures continue to climb. Millions of citizens of this great nation have chosen to become slaves to debt stemming from "artificial equity" being spent on things that people just cannot afford. Real estate appraisal & mortgage fraud along with poor judgement influenced by media propaganda and driven by historic low interest rates are responsible for a destructive economic downward spiral by creating an insatiable housing "frenzy". This housing bubble could not exist if the rules in mortgage lending were kept in place. For decades, the house pricing standard for qualified homebuyers was limited to 2.5 times your annual income. Today, I have read about folks who qualify for up to 12 times their annual income for an interest only "no doc" home loan. In some states this practice is unlawful and is referred to as predatory lending. The residential real estate bubble will be bursting soon. A good indicator is the growing inventory of houses that continue to pile up throughout the nation. Abundant news is available for real estate fraud, predatory lending, the residential real estate bubble, communist China, our nations porous borders, the U.S. deficit, American consumer debt, the failed "two" party political system, and American poverty increasing for the fourth straight year. My personal favorite journalists that accurately write great articles are Danielle DiMartino, Broderick Perkins, Paul Krugman, Bill Fleckenstein and Fred Dattolo. Thanks to everyone who is actively fighting the real estate propaganda, the political greed of the federal, state and local governments, corporate irresponsibility and avidity, the felonious behavior of real estate agents, brokers, home builders, appraisers, lenders, and other guilty parties that I have failed to mention.
Matthew 8:20 And Jesus saith unto him, The foxes have holes, and the birds of the air have nests; but the Son of man hath not where to lay his head.
The evidence is alarming and shocking in how many trillions of dollars are made by predatory lending that is currently resulting in a 25% default rate. People that could not have qualified for a house prior to the terrorist attack our great nation suffered on September 11, 2001, now qualify for a $300,000 & $400,000 house that is really worth substantially less. It has been documented that the market grew at a healthy rate of .4% from 1975-1995. But in places such as in San Diego, California real estate has gone up more then double! Are you getting the picture yet? Are you with me? It appears that the Federal governments answer to our failing economy after 9-11 was to keep the economy moving through a real estate bubble by lowering the federal interest rate to a record low federal reserve interest rate of just 1%. Almost everything is made in China and outsourcing continues to grow from corporate greed. American consumers are giving China over 50 billion dollars a month which they are using to strengthen their military like the world has not ever seen. Our country transformed from standing as a nation of industry to a nation of providing 'service' and now the service industry has been out-sourced to India along with other jobs such as information and technology (IT). But that is a separate issue. The bottom line is that there are very, very few high paying jobs created every month in the United States. How will Americans remain decent consumers if they do not have a decent job? The nation was deceived into believing that homeowners got rich almost overnight. Take a look at Imperial County California for example. Homes in Heber, Calif (92249) had a 'comp' average of around $45,000.00 before 9-11-2001. Now check on house prices for Heber with new homes from Centex and DR Horton producing houses with a price tag of more then $300,000 and climbing. Please keep in mind that Imperial County is infamous for having the highest unemployment in the state of California (26.3%) and ranks in top ten for unemployment in the the nation. More than 21% of Heber residents are below the poverty line. The median annual income for Heber residents is $29,000.00. If the housing bubble can come to Heber, then it can happen anywhere. Title information is public so please take a look for yourself my friend. People who have no knowledge of real estate have dove into a market and and bought into mess much worse then the infamous internet bubble. Face it folks, we have become a nation of debt ridden consumption junkies. Americans have nothing saved up and a mountain of debt. The governments idea to correct a failing economy was by offering a record low interest rate in order to have a record number of homeowners that could have never qualified for that new house without some "creative financing" and "rule bending" for some mortgage lenders. Several appraisers chose to break the law by inflating house prices with the "drive-by" appraisals in many cities throughout the nation. Our largest lenders Fannie Mae and Freddie Mac are nearly out of the game with their debt to loan ratio being so high. Alan Greenspan, (Federal Reserve Chairman) has raised and is raising interest slow and steady to trim down the house buying frenzy. Is it working? Somewhat, now instead of a month supply of houses nationwide, the United States have just over a seven-month supply of houses and the inventory continues to grow every month. New house prices have been slashed by more then 100,000 to attract buyers in some areas of Las Vegas not to mention the market crises looming in Florida and other parts of our country. That my friend is just the beginning. The market has peaked and now has begun to valley but the inevitable economic collapse is coming. I do not believe that people who suffered through the horrible depression of 1929 are the ones rolling around in a SUV that they cannot afford pulling up in a driveway of a recently purchased $700,000 house that was $265,000 three years ago. People who have chose to use the artificial equity in their home as an "ATM card" are going to be in a world of hurt if they are not already. The FBI has received thousands upon thousands of complaints of real estate fraud. There are an increasing amount of reports surfacing for new home builders refunding consumers without admitting guilt for their contribution of real estate fraud. Then there are the poor real estate appraisers that are getting fired for not being a team player for the good old boy network. What agency is defending the appraisers who are actually reporting the lenders twisting their arm for inflated appraisals? Lenders in many areas are writing loans based on fictitious and artificially inflated prices for this real estate bubble. The appraisers that lack the courage to resist the pressure from these lenders should be fined and prosecuted on a much larger scale everywhere that this is taking place. At least some of the real estate appraisers "playing the bubble game" are getting fined and imprisoned for their part in contributing to the residential real estate bubble. Appraisal fraud is a serious and prosecutable crime. This bubble was created from greed and fueled by a combination of fear and ignorance. One day this predatory lending will catch up with the people responsible for creating a nation of slaves to debt. I have to believe that the administration of justice will come to everyone who has willfully committed real estate fraud. If you would like to read more on this growing crises, you may read on the cause and effect of the housing bubble fraud at the following website: www.mossback.net/bubble
bubblesitter: was there a price drop in bergen county in the early 1990s? we moved to passaic county in 1994 and have seen a lot of growth... i've suggested renting to the family but finding something reasonable is close to impossible.
In 1990 we lost 15% on a house in Marin County and moved to a house in the desert above LA where we lost 50% and shorted the bank $10.000. I don't know if you can still sell short with the new bankruptcy laws. We gave all the profits back from the late 80's boom and then some.
The moral to the story...
1)Be conservative not over optomistic or cocky.
2)When the city gets a cold, the country gets AIDS.
3)Be nice to your parents, you may be moving back home!
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An interesting read...
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I am so sick of renting. I'm 29 and would like to start my life. Can all the investors please find something else to go nuts over?!!
Not to mention the GREED!
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