March 18, 2007

Get ready Phoenix etc: "Real estate prices will go down 40-50 percent in bubble areas. You can't believe how bad it's going to get"

You thought HP was brutally honest? Check out what Jim Rogers has to say:

Real Estate in Certain Areas Will Go Down 40% to 50%

Jim Rogers, former George Soros partner and co-founder of the original Soros' hedge fund, is on the Reuters wire this morning, forecasting a real estate crash:

"You can't believe how bad it's going to get before it gets any better. . It's going to be a disaster for many people who don't have a clue about what happens when a real estate bubble pops."

"Real estate prices will go down 40-50 percent in bubble areas. There will be massive defaults. This time it'll be worse because we haven't had this kind of speculative buying in U.S. history. When markets turn from bubble to reality, a lot of people get burned."

28 comments:

ecobuilder said...

Keith, (a.k.a Master of Drama)

Be careful what you wish (pray) for, you may get. In other words if Great Depression happens you may lose your job. Do you think 300k is enough to survive that collapse? Do you have bullet-proof occupation (like security guard, cop, foreclosure auctioneer)?

I wish that we'll se Japan-like scenario.

Shakster said...

Phoenix ,Sac,Vegas,Victorville ,and on ,and on.Like that Sacramento blog.Their updates are showing 25 to 35% drops in asking prices.Of course the deniers will say that those aren't the guberment numbers,so they don't hold any weight,but as with all the ostriches,Reality doesn't hold any weight either.

Anonymous said...

Welcome Back! Or (more to the point) thank god you're back

Anonymous said...

In the words of the profane Mogambo,
we are FUCKING DOOMED. DOOMED I tells
ya.

Mark in San Diego said...

MSM is now sounding like HP - from this morning's San Diego Tribune!

March 18, 2007

" Most people, it is commonly said, go through five stages when dealing with doom: denial, anger, bargaining, depression and acceptance.

As far as San Diego bankruptcy attorney Mark Miller is concerned, many homeowners are only in the “denial” stage regarding the subprime lending crisis, although they may soon slip into “anger.”

Miller deals with the crisis every day. In the past eight months, he has watched as clients lost about 150 homes through foreclosure."

Mark in San Diego said...

Link to full San Diego Tribune article:

http://tinyurl.com/36amkr

who knows said...

Have you seen HGTV's just released fall lineup?
Flop this house, Don't buy me, my house is not worth how much, Don't sell this house, kitchen (renovations) arsons

Anonymous said...

In certain bubbly areas - like Miami Beach and San Diego, yes. In most bubbly areas, 15-25% in nominal dollars and 30-40% in real dollars. Unless Helicopter Ben really cranks up the printing presses. Then it will be much worse.

Anonymous said...

when the next depression hits, God forbid, we can find ourselves illegals in countries like China, Japan and India.

then those countries will enact a comprehensive immigration reform and we can all live there happily ever after.

Anonymous said...

Swanny is trying to start covering his a--. Get ready for comments like " I never said phx was a great place to invest but look at the wonderful cactus plants"

"I doubted the bubble talk through three years of huge growth, and now through 15 months of a slow loss in values. I freely concede that I might be wrong, but, as always, I think there are very good reasons to bank on the Phoenix residential real estate market."

Swanny
Who was right?

a.creampuff said...

It's over. I mean HP's job is done. Keith, the MSM has finally caught up. We can read quality articles about this everywhere. What made housing bubble blogs so amazing was they were 6 months to a year ahead of the "news". Time to start focussing more on what the panic will look like, what to do in the aftermath, etc.

Anonymous said...

Creampuf,
Good idea! Food panic, water panic, shelter panic, self defense panic, crime panic. Choose your poison and keep it handy. Even an AK and a shotgun wont take out the herds of hungry, angry and desperate droves headed our way.
Be careful what you wish for...
"F" Gold... Better stock up on MRE's!

Anonymous said...

Wow, you guys are sure a bunch of pessimists!!! It's a bunch o' bubbleony. Takes me back to my childhood when my uncle built an atomic bomb shelter out on his ranch...hmmm, maybe I'm gonna head on up there real soon, yessireee... on the other hand, maybe I'll stick around and see what happens.

Depression? We're already in a recession, I live in Colorado where you're lucky to have a service job making $10/hour and where houses are a million and more. Wait till property taxes quit coming in and even the steady good jobs working for the city and county will dry up. Not to mention retail and service jobs, tourism will dry up. What the heck happened to our manufacturing economy???

Answer - the corporations got greedy and sent them oversees so they could make more money. We could then buy lots more cheap junk that we couldn't live without. We all got a bit greedy, didn't we??? We all wanted it all right now, without having to work and save for it. Our depression-era elders had lots of good advice we just ignored. I'm glad most of them aren't around to see the wreckage we're gonna call the good old USA.

Sorry to be such a pessimist, I truly hope things don't get really bad. I'm a defender of the underdog, and a real drepression will hurt our children and pets most, in my opinion.

vegas crash watcher said...

The Depression-era types gave us the welfare state. They know nothing. The fought in wars to preserve elites and socialism. They can't die off soon enough.
Government is the problem.

Anonymous said...

Does anyone know what a 50% decline in Phoenix would look like?That would devastate that town. Even 20% down would destroy it and its residents financially

Greg Swann is so fuc@ed

Anonymous said...

has anyone heard of nouveou riche university? I know some people that went to a seminar and now want to be real estate investor.

Anonymous said...

Regarding the advice of the depression-era types, yeah, they weren't the "Greatest Generation" they were made ut to be, but they did tell us to save and live within our means. But yeah, I think you're on to something about the gubmint.

Our greatest enemy is our own government.

FlyingMonkeyWarrior said...

nouveou riche university
++++++++
Yes, that is where Casey Serin of IAFF learned how to be a fliptard.

Anonymous said...

I lived in Houston in the 1980s. When I was transferred out of state, I was able to sell my condo to the company for the outstanding principal amount on the mortgage. When the company finally sold the condo, they got 50 cents on the dollar.

All the big Texas banks were bought and recapitalized by out of state banks. If the real estate bubble is nationwide, which I think it pretty much is, then who will recapitalize our country's financial institutions?

Bitter Renter said...

Despite a 100% increase in home prices in Portland in the last 5 years, most here don't think there's a bubble and that the declines will skip right over oh-so-special Portland.
An article in yesterday's paper about all the condo towers going up (about 20) was an interview with the bank that financed many of them. The woman from the bank said she was sure the bust wasn't going to hit Portland condos towers because everyone wants to live here. And I guess they all have $500K to spend on a box of air. Many of the developers are reporting a high percentage of units pre-sold but the small print said that was only deposits. Wonder how many will get cancelled?

dcydell said...

vegas crash watcher said...
The Depression-era types gave us the welfare state. They know nothing. The fought in wars to preserve elites and socialism. They can't die off soon enough.
Government is the problem.

Government IS the problem, but it was the debasing of the electorate that allowed for the debasing of the currency, the culture, the neighborhoods, the public school system and just about everything else.
None of what has been lost can be regained at the ballot box. Impossible.

Lost Cause said...

Gee...a recesion during wartime? Who could manage to do a thing like that? But look who is running the country? I think he could manage.

Anonymous said...

I have a million cash ready to invest in the Phoenix market!

Anonymous said...

Glad to see that GW Bush & Dick Cheney are still incharge!

George W. Groovy said...

In a perfect world the greediest people would pay the steepest price for the real estate bubble, but this kind of poetic justice is mostly for the movies. We should never assume that prices will fall in inverse proportion to how and where they went up. So far, Detroit has been hardest hit by declining property values, despite the fact that it was never in a bubble situation. This scenario will likely be repeated in cities and towns across America, where the economy is already shaky. Places like Portland, Phoenix and Las Vegas may well be spared all or most of it.

Anonymous said...

Isn't this great? My property taxes might go down. Might be able to buy a second home cheap with no money down and rent it out for positive cash flow?

Why are housing starts up 9%. Don't they know there is a meltdown in progress?

Anonymous said...

is Ross Perot looking smarter and smarter lately? as we suffer the after effects of the giant sucking sound as he so elo... well that he talked about.

Anonymous said...

Thanks for the link, Mark.

It's nice to see the main-stream media (MSM) FINALLY catch on that a full-blown credit bubble (from loose lending practices and easy money) was fueling the housing bubble all along.

That's right, kiddos, there was NO "fundamental shortage of housing", no "rising population levels", etc. It was a CREDIT bubble, where ANYONE could get "easy money" without verification or having a job (see Casey Serin). As one industry insider noted, it was "easier to buy a home than to get financing for a refrigerator".

Now that prices are collapsing, the cries of "but it's different here" are seen as nothing more than denial, the first stage of dealing with grief (after being scammed by a corrupt REIC that forced buyers to jump in, out of fear that the REIC warning of, "don't let the American Dream pass you by" were true)....

Nope, we had nothing but a good ol' fashioned devaluation of our currency, with lenders rolling out virtual wheel barrows to allow anyone to walk off with money that wasn't even the lenders (lenders assumed they were passing off the risks to Wall St. in the form of CDOs. Fortunately, they're finally realizing this isn't the case, and there IS at least a modicum of accountability).

It's a good thing the Feds DON'T track real estate prices as one of their indices of inflation, or they'd never have allowed this situation to occur (the Feds care more about the prices of consumables, like cigarettes). In fact, the real estate bubble bursting is probably the best thing that COULD happen, as otherwise the madness MUST continue longer, and housing afforbability would decline even further.

Is anyone else seeing similarities between our current situation the Weimar Republic of the 1920's, where Germans loaded up devalued currency in a wheelbarrow just to buy a loaf of bread? Instead of bread, people are watching house prices explode beyond affordability....

This article is worth a read, as there are many interesting parallels (unless you're one of those "but this time it's different" types):

http://tinyurl.com/ek9pe

Remember the old saying: those who forget history are doomed to repeat it...