A wise HP'er had this to say about what I would call the "capitulation" stage. I don't know what year this will be - heck, it could be 2007, or it could be 2017. But it will happen. Look to Japan for clues, but after every debt-fueled speculative bubble comes the "revulsion" or "capitulation" stage, where the bubbled asset frankly grosses people out.
Houses will be seen as evil. Only fools will own houses.
Then, my friends, it's finally time to buy again.
So, it's easy for a mainstreamer to poo poo lotteries and stock trading, however, it's nearly impossible to see the home as a financial death trap since it's a part of our identity. That's why this RE collapse is going to rip a major hole in the fabric of our society. Never before, in America's history has the home been the source of evil. Evil was always something else, Geronimo's raiders, Jesse Jame's gunslingers, Kaiser's (followed by Hitler's) Germanys, Stalin's Russia. Now for the first time, it's "RE"ally within.
September 09, 2006
When will housing be seen as "evil", the source of all that is bad and wrong with the world?
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33 comments:
oh, man, those realtors are funny aren't they?
richard - FYI I've built and owned three homes. Homeownership will no longer be the American Dream - that, my realtor friend, will be renting. Homeownership will be a death trap for many.
Good luck with the job search
Guess that's gonna become the only argument for why a person should buy a home as prices taaaaaaaaaaaaaaaaaaaank. "You need to buy into the American dream! It's your patriotic duty!"
Anon said:"You need to buy into the American dream! It's your patriotic duty!"
Yes! help our economy get back on track, buy a home!
I can hear it all now...
I have rented. I have owned. I have built from the ground up. I have purchased the already built. A house can be a home, but a home does not have to be a house. That realtor is a crock of sh#t. The American dream is soon to become the American nightmare.
if you don't buy a home, you're unamerican. you're with the terrorists
pathetic
"Homeownership is the foundation of our country and the American dream"
Really? What amendment in the consitution does it say life, liberty and the pursuit of home ownership? Actually freedom of speech is the foundation of this country, something that Keith celebrates, something you obviously don't get with your snide "you've crossed the line" comment, go back to the gutter from which you came, the party is over, hope you saved for a rainy day during the last few years of raking in the commish dinero because you are going to need it
one more thing, pay attention closely, between the Dept. of Justice, i.e. RICO laws as they relate to the MLS and Google/Yahoo get ready to learn a new word and a new phrase Mr. Soon To Be Marginalized Realtor, ready? ok, here they are:
1. Disintermediation
2. Would you like fries with that?
Well, I certainly wounldn't want to enter the market today, but I sure don't consider my (owned) home evil. I bought and paid for my 5 acres 15 years ago, built my home 10 years ago, and have since retired the mortgage.
I'm glad you guys are happily renting for less than a current mortage payment, but it sure isn't cheaper than *owning* (as in free and clear) property. You can go on and make you rent payments in perpetuity, which WILL get far more expensive as the fundamentals come back into line.
I'll be putting my former payments into mutual funds (that's right, the other evil thing around here). Why is it that houses have to revert to fundamentals but not stocks? Sure stocks may shake out a bit with the unrest we're experiencing, but over the last 100 years they've averaged better than 10%
Sure beats chasing gold spikes...
one more thing for realtor johnson:
one of the cornerstones of the constitution and this great nation is to be free from tyranny, so here is my question: when you were helping sellers rip off the next generation by having them pay wildly inflated prices and thus saddling them with stupid loans and a massive debt burden in the process weren't you in fact helping place them under a form of tyranny? aren't you mr. johnson the antithesis of the american dream when you lead the innocent lambs to a lifetime of servitude under the tyranny of massive debt obligations?
one more thing, no seriously this is it, houses in and of themselves aren't evil and in fact they are a great and might I add tax efficient way to build some wealth provided you buy it at the right price but the real value of a house is when it becomes a home
peace
GREED should be seen as the evil source. Housing was just the result of it.
"sure beats chasing gold spikes..."
over the last few years gold has been a much better investment thatn stocks. the dow has fallen 50% in gold terms.
"Only fools will own houses."
Keith, are you serious? Really?
idiot
Sell House
Rent
Buy Gold
Keith researched it
" suzanne said...
Sell House
Rent
Buy Gold
Keith researched it "
It's too late. I bought gold when it was $350/oz. I'll buy a house when it'll be $40k.
Don't beleive me? 40k???
Yeh, folks. That's easy. After hyperinflation period the new $$$ currency will appear. I think US$ will lose a couple zeros.
We're heading to Super-Great Depression, and there is only one possible scenario we'll see:
First - short deflationary period, (stagflation, be more precise).
Next - hyperinflation TSUNAMI. Dollar will lose its position as international reserve currency (watch for US/Treasure Bonds Defaults).
Then central banks will get together to design a new currency, but current dollar is doomed.
I've been investing in gold since 2000 and stopped it in 2004. Too much gold isn't good. I'd better buy AK-47 and lot of ammo or leave this country for a while.
OK let me get this straight oh wise one...NOT!
Renting instead of owning? That's the most idiotic idea I've heard EVER.
Who owns the home you are renting?
Maybe the Government? Socialist.
Or maybe someone who takes your doomsday blogging and myopic financial advise with less than a grain of salt, invests in the historically beneficial programs of "home ownership" and creates wealth from all who would rather pay rent and long for doom and gloom.
that was funny (long time HP'ers know why....)
I agree with you 100% eco on the Gold thing...
A "Socialist" version of renting would be like 30 people all "owning" a building and sharing.
"Renting" is impossible in Socialism. The Government is the ultimate anti-socialist. Yet, people continue to fall for that old axiom even to this day.
since 2000, gold has been a better investment than housing. the only difference is most buy housing with leverage.
The bloom is off the rose.
"Real Estate" will be a bad word at parties.
I say 2008-2009.
"man, I got killed in real estate - rode it all the way up then rode it all the way down, just like those damn dot-com stocks"
that'll be the party chatter in 2008
I am 57 years old. I have owned my residence for 31 of those 57 years. I have been renting since selling my last residence in June of 2004.
For most of my life I have been a true believer in owning my place to live, and it has served me well in building a significant nest egg.
However, times have changed. I don't see much, if any, real estate appreciation for at least 5 years.
And I have discovered that renting has quite a few advantages.
1.) you can pick up and move any time you want...try that with a house you own these days!
2.) any maintenance expenses are someone else's expense
3.) no property taxes (yes, I realize it's 'in the rent')
4.) I'm not losing any money while property values adjust downward to a realistic level
5.) I could care less what happens to interest rates! (except that higher rates earn me more on my savings)
The bottom line: the old wisdom that you are always better off owning than renting is not necessarily true..especially now.
nice post old timer. great point, what was true yesterday may not be true today and you need to adapt, keep an open mind, react
living in chernoybl may have been great in the 70's.
owning pets.com was fun in 99
putting $ down on a new condo in arizona in 2000 - brilliant
but then the world changed, and some choose not to change with it, and we all know how that'll end up
not good
"over the last few years gold has been a much better investment thatn stocks. the dow has fallen 50% in gold terms."
Over the last few years is exactly my point, I invest for the long term and realize that trying to time the market is a sucker bet.
How has gold done vs stocks over the last 10, 20, or 40 years?
RICHARD M JOHNSTON,REALTOR=DELUSION
HEY!! MR. JOHNSTON THE REALTOR SAID,"YOU REALLY CROSSED THE LINE."
IS THERE A REAL ESTATE JIHAD,WAHABI,OR FUNDAMENTALIST WING THAT PLACES HOME OWNERSHIP IN THE SAME CONTEXT AS RELIGIOUS FUNDAMENTALISM?
YOU ARE RIGHT!! THINGS ARE GOING TO GET NASTY AND SCARY!!
Owning a house is a great thing as long as your mortgage isn't twice what it would rent for. 1999 was a great year to buy SoCal real estate 30 yr fixed 7.75% conv was the only loan available.I had to prove my actual $4500/month income too to qualify
buying in San Diego now is just plain unsustainable for most families
This whole 'American Dream'image with emphasis on the importance of home ownership is promoted by the government to collect property taxes(which have doubled with the 'boom')and have something to seize if a citizen gets out of line.
"Who owns the home you are renting?"
-------------------------------------
True - but who owns the MONEY you're renting?
Even pre-bubble, US banks counted on Americans to move every 7 years and get a new mortgage. Here in Alaska, you either rent a house from a landlord, or rent money from Mr. Cuddy (CEO First National Bank of Alaska - great Weiss rating BTW - only large bank to survive the real estate blowdown in the late '80's and not get turned into a drive-through doughnut shop or ice cream parlor).
Owning a home is great as long as you bought pre-bubble and at a reasoanble price (I paid 220k @ 5.375 fixed for a 2 story, 1700sq ft 1992 cookie cutter in CA in 2003). AND as long as you keep the balance the same and DONT refinance. Most people I know that bought pre 2003 have taken out most of the home equity to buy the H2s and granite countertops. My balance has actually gone down since then. Pay down the loan, what a concept.
"How has gold done vs stocks over the last 10, 20, or 40 years?"
stocks aren't that far ahead and gold is doing much better than enron stock is, or the thousands of companies that've been delisted over the decades.
Very true, Chris. Got tired of renting and decided to buy. After seeing the prices (not to mention the quality of the merchandise), I decided to continue renting.
The only reason i still rent is it gives me the opportunity to take my time to look around with no rush decisions!
I can also leave with very short notice!
it's convenient
"Today I bought 10,000 shares of this new start up internet BTB company. They sell supplies to business customers over the web. They have not made any money yet but their business model is rock solid and the IPO should go nuts!"
In 1999 saying that at a dinner party would have everyone in earshot asking you how they could get on board. Saying that today would get you nothing but looks of "Are your retarded?"
RE investing will be the same story 1-2 years from now.
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