I'm getting the feeling more and more people are waking up and realizing that the housing ponzi scheme is over, an epic crash is now underway, and the late great housing bubble was just a mirage, which will come and go in the blink of an eye.
The smart money is out, the getting smart money is getting out, and the true losers in this game will be the folks in denial, who see the writing on the wall and do nothing. Financial ruin is on the way. The latest real estate gold rush was simply a rush to fool's gold.
Home Is Where the Worry Is
We are at the endgame for housing. Until recently our national motto has been "In real estate we trust." Just last week the Census Bureau reported that median home prices after inflation rose 32 percent from 2000 to 2005.
In some places, the gains were huge: 127 percent in San Diego, 110 percent in Los Angeles and 79 percent in New York. But real estate -- which has acted as a national piggy bank, with homeowners borrowing and spending against rising house prices -- no longer looks so trustworthy. On this, more than on falling oil prices or a record Dow, hangs the economy's immediate fate.
The boom sowed its own destruction. Coupled with modestly higher interest rates, rising home values have priced more potential buyers out of the market. With fewer buyers, home construction, sales and prices have weakened. To service their loans, some consumers will curb their shopping.
For a while, there was a buyers' panic. By one survey, about 40 percent of houses bought in 2005 were second homes (28 percent for "investment," 12 percent for "vacation"). Dubious new mortgages -- interest-only or less -- aimed to maximize what a buyer could afford.
There's the endgame's true danger: If prices drop too much or too persistently, the damage to confidence and spending won't be easily neutralized.
October 11, 2006
Washington Post column: The endgame for housing is here
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Income in my tangible goods business is falling precipitously. Consumer spending here in Los Angeles California is off much more than the government numbers and the media relate. I feel that the nuclear tension with North Korea will only worsen this dilemma. Fortunately I prepared by watching closely the trends and numbers relating to the bubble and taking action. Based on past trends I feel we have about 2 years until most of the construction in progress will be completed and asset deflation accelerates. It is time to downsize.
Remember whe Donald Trump lost his butt in property in the 90's bubble?
Neither does he!
If the Donald is so rich from real estate why is he "schlepping" out those books and bogus t.v. shows? This guy along with those shows like "Flip This House" and "Designed to Sell" are all signs of this pathetic bubble! Just buy the place and clean the carpet and you can make $100k! Give me a break! The mind dead fools who thought this fraud would go on forever are in for a bad year ahead. Did anyone get the plate number of that Mach truck that ran over the housing boom?
Ya, it had designer plates that said "Greed Is Good".
i was watching "flip this house" the other night. there was a married couple that planned to flip 30 homes over the next 3 years.
the wife actually said:
"...we decided to add an additional half bath to the home. we know that additonal half baths really adds value to the property".
THEY THINK AND EXTRA PLACE TO TAKE A SHIT ADDS VALUE!!!!!!!!!!!!!!!
this what we are dealing with people.
sorry for the typos in my post above.
THEY THINK AND EXTRA PLACE TO TAKE A SHIT ADDS VALUE!!!!!!!!!!!!!!!
When you have a teenager it is not an extra place, it is the only place.
The following was clipped from today's Yahoo business news. It truely is the end of this country as we knew it.
"The United Steelworkers union has blocked a company's plan to send workers to India for low-cost health care. The union called it a "shocking new approach," and questioned the quality of the care employees would receive. Carl Garrett -- a 60-year-old employee of Blue Ridge Paper Products in North Carolina -- had volunteered to have his gall bladder removed and his shoulder muscle repaired in India in exchange for a share in the savings. Now he'll have to wait -- and pay more -- for treatment in the U.S. "I've been left in the cold," Garrett said"
Who the F is buying a SECOND home??!!
I can't afford one!!!
Less than two years later the market bottomed with the DJIA destined to set a new high.
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Sure, pal, but look at what what the Dow 30 is doing: nothing.
It's all smoke and mirrors.
Wait to see what happens 08 Nov....
The DJIA is a misleading indicator, just like the official housing #s or the official inflation number. Thank god the dow got rid of Sears, goodyear and union carbide, and replace them with microsoft and sbc eh?
for a real read on the stock market you have to look at broad based indicators like the S&P 500. And you have to weigh in inflation, which commentators seldom do
Meanwhile, I am truly surprised by the uptrend. Flight to safety, rotation out of housing, something is driving it and it's not the fundamentals.
The US is heading into a recession, the bond market is telling us where we're heading
corporate earnings will not explode in such an environment to warrant these higher PEs
patience - don't get sucked into a sucker's rally I'd say
This IS Priceless, Some Local OrlandoSentinal.com News
Bankruptcies likely to spike, experts warn
Adjustable-rate-mortgage payments are rising, forcing unpleasant options.
Richard Burnett | Sentinel Staff Writer
Posted October 11, 2006
Consumer lawyers say they are already beginning to see some
"victims"
of real-estate investments during the housing boom.
Jonathan Alper, a bankruptcy lawyer in Heathrow, said a couple who recently visited his office faced insolvency after buying two $400,000 homes as investment properties. With annual household income of only $75,000, the couple quickly defaulted on the loans. They blamed the ill-advised venture on tips from a "wealth-in-real-estate" seminar.
url to read more, only lasts for two weeks from 10/11/06
:http://tinyurl.com/rgy8b
THEY THINK AND EXTRA PLACE TO TAKE A SHIT ADDS VALUE!!!!!!!!!!!!!!!
I THINK THIS SHOULD BE THE MOTTO FOR THE HOUSING COLLAPSE.
check this out great read..
Another Stealth Depression in the Making
The Modus Operandi since the difficult but sane policies of Volcker has been to print more and more money, at a faster and faster pace if need be, in order to keep the good times rolling. In so doing, massive economic dislocations have taken place, most important of which has been the housing bubble, which temporarily avoided the next Great Depression that would have and quite frankly should have followed the insane stock market bubble of the 1990s that was caused by excessively easy monetary policy by Alan Greenspan’s Fed. The chart on your left puts the housing bubble in perspective
http://tinyurl.com/s58mw
MinutesFromNYC, New York has a lot of businesses that have very little to do with Wall St.
I seem to recall hearing about stock market ‘wizards’ thinking that they could fly out of office windows.
The areas around NYC are taking hits. This will produce the same thing that is occurring in other places. It might take slightly longer. If your lucky.
infidelwoman 6:22:26 posted:
“Jonathan Alper, a bankruptcy lawyer in Heathrow, said a couple who recently visited his office faced insolvency after buying two $400,000 homes as investment properties. With annual household income of only $75,000, the couple quickly defaulted on the loans. They blamed the ill-advised venture on tips from a "wealth-in-real-estate" seminar.”
---------------------------
Yes, it is the seminar’s fault that this couple sunk themselves $800K into housing debt. No critical thinking - let alone no common sense, no planning, no personal responsibility.
Anybody on this board feeling sorry for these people?
minutesfromNYC said...
It is a good thing the NYC Metropolitan area is immune to said declines. People are earning lots of money out here and with Wall St bonuses, able to purchase million dollar cape cods.
Wednesday, October 11, 2006 4:27:03 PM
It looks like NYC housing took a hit today.
CNN-Aircraft crashes into New York building
IS THAT A PIC OF FOOLS GOLD>>????
Ummm...
Here's the reason homes aren't selling like they did before.
People aren't greedy, they're unrealistic.
Ok, they're greedy.
"IS THAT A PIC OF FOOLS GOLD>>????"
yeppers keef sent me a pic of his stash.
Hey Keith,
Have you ever driven past the houses you flipped? I have, and guess what? They are falling apart, the landscape is going to hell. I guess when you are losing money the grass and trees are not that important.
"i was watching "flip this house" the other night. there was a married couple that planned to flip 30 homes over the next 3 years.
the wife actually said:
"...we decided to add an additional half bath to the home. we know that additonal half baths really adds value to the property"."
I'm not convinced about the "adds value" stats which have been compiled over the past few years. Everything rose in value no matter if nothing was done to it.
"IS THAT A PIC OF FOOLS GOLD>>????"
yeppers keef sent me a pic of his stash.
-----------------------------------
LoL! LOL! LOL!
Since Japan's bubble is used often to compare the current trends in the USA I decided to go on google and search for real estate for sale or rent in Japan to find out what 13 years of falling prices (60% decline in home prices) has meant to the affordabiility of most Japanese familes....answer, SQUAT! Apartments, and these are small even by New York City standards ranged from 80000000 to 100000000 yen and up. That is over $850,00 US and UP! This is after a 60% decline!
For those who have studied the dual asset bubbles, real estate and stocks, they had the Mother of all bubbles and we haven't come close yet. Also they have a declining population and we have a rising population. One article I read said that home prices have fallen in out-lying areas of Tokyo to around 30-40,000,000 and many japanese who bought in the 90s still owe up to 10,000,000 yen more than they can sell their small flats for.
Do you think that $300,000 for a 2400 sq ft house in say Phoenix is a bigger bubble than in Tokyo after 13 years plus of declines? I think most Japanese would love to buy such a large place at that price.
Anyway, also looked at Zillow for areas I use to live in in Phoenix and some neighborhoods showed declines and others continue to rise. I'm not sure I trust Zillow. Friends on the ground there say that prices are starting to crack at all prices levels, not just the high end. I think the fear mentality has finally been awakened in Phoenicians. Also I think people realize that there is lots of cheap land and that supply and demand laws still apply and they main reason anyone lives in Phoenix is affordability, which they lost last year.
>The smart money is out, the getting smart money is getting out, and the true losers in this game will be the folks in denial, who see the writing on the wall and do nothing. Financial ruin is on the way. The latest real estate gold rush was simply a rush to fool's gold.
Couldn't this be said about any investing market?? Stocks, metals, etc.??
I don't remember the smart money getting pinched when the dot coms went bust. There's a reason they are called the 'smart money' after all.
"...we decided to add an additional half bath to the home. we know that additonal half baths really adds value to the property".
Welcome to Bexley, Ohio... home to the Ohio Governor's Mansion and 80 year old middle class homes. Bexley is a sub-city within Columbus, Ohio.
The point... Many of the 3 bedroom 1 bath strip homes in this sub-city built in the 1930's and 40's have a single bath on the 2nd floor. Adding a 1/2 bath to the first floor does add real value in this unique situation. Who wants to climb the stairs everytime you need to take a PISS?
For almost any other situation where a home already has a 1st floor bath; I agree that an extra SHI*TTER is a flipper's waste of money.
Panicerly, can any city really? But fundamentally is Phoenix's economy and different than Vegas? Yes, Vegas is a one-industry town, Phoenix has tourism, agriculture, industry, military bases, universities, large hospitals, high tech companies.
On the other hand, let's compare Tokyo to Los Angeles or San Francisco. California has more venture capital than any country outside the USA. Their economy would make them one of the largest GDP countries in the world if they were a seperate entity.
Do you think the average Japanese in 1990 earned more than the average American? Their bubble makes ours look like a cat-walk in the park. My point was they survived. Their government spent and spent and spent and pumped out yen and more yen (which helped the carry trade and the world wide asset bubble) and their national debt per capita is much higher than ours and STILL their house prices except in those rural areas (no different in any country) where there is a population drain are high by European or American standards.
And yes, I'd rather be stuck in a large house and comfortable if I was going to have that debt than be a Japanese guy stuck in a 400 sq ft flat with a mortgage of $400,000 or more.
Just because I point this out doesn't mean I think homes have been turned into assets instead of homes or that I think prices are too high as a result in almost every part of America, rural included since no jobs equals no ability to even pay for a $50,000 house.
People just have to define "endgame" in this equation. We are not there yet and when we do arrive what will it really mean for the majority of Americans? The poor ye have always as Jesus once said so nothing ever changes there. The rich? They hardly ever suffer either. It is the war on the middle class that worries me most.
I'm no different than most bloggers on this site. Would love a nice, small house with character in a nice neighborhood in a city with culture, liberals, good paying jobs, low taxes, good climate, no pollution etc and realize that it ain't going to happen. Things just keep getting more expensive, taxes, gas, electricity, water, food, insurance, cars, and houses.
I travel a lot and I don't see where the citizens of Italy, Spain, Germany, Denmark, France, Britain, Ireland, Australia, Japan, Canada, etc are any different or that home prices in many of those countries seem even more expensive to me than most cities here in this country.
Like the articles I refered to from the BBC earlier this week that said prices were rising again in Britain at like 7% and that the average house there is just under $400,000 now makes the median price of $250,000 or what ever it is now sound less of a bubble yet their press sings the same mantra that "it is different here."
I'm just glad I'm not Japanese. I'd much rather loose 20% of $300,000 than 60% of $1,000,000 or more that the average home was selling for in Japan in 1990. I'm sorry, $850,000 after a 60% drop doesn't sound like a bargain to me in Tokyo.
INCREASING POPULATION OF ILLEGAL ALIENS, LIKE LONDON AND PARIS, AND STREET RIOTS AND BURNINGS, ALL FOR SOMEBODY TO SELL HOUSING AT IRRATIONAL PRICES TO?
ON BORROWED MONEY, FRACTIONAL RESERVE BANKING?!!
Regarding: knuckle heads
recently my knuckle head sis and b-inlaw negotiated a 28% reduction in price
in florida from last years prices.
i still think they overpaid.
yea, but did they become "VICTIMS" and pick up a McMansion with un- affordable payments in Bubblisious downtown Miami to flip, or are they in a $200,000.oo range, 30 year fixed, in still booming Central Florida? The bottom 25% will no way see a 28% hair cut, in Central Florida, in traditional "a home to live in" imho.
Now the tourist condos are going on the auction block. The last 20 in a mega Condohotel will be auctioned (British tourist FB). Saw the sign yesterday, by WDW, and no one Local wants to live there anyway. ug.
Now we wait and watch.
fuck you retailer
anonopussy
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