OK, be honest. Who's rooting for an epic housing meltdown, and why?

July 09, 2006

OK, be honest. Who's rooting for an epic housing meltdown, and why?

44 comments:

InfidelSix said...: I am for 2 reasons:

1. I believe that a regular Joe with a regular job should be able to buy a regular home and have a family. Something is very wrong when this isn't possible and it's bad for everyone.

2. The evil side (that we all have) would like to see the a$$h@le$ get their comeuppance. I sincerely feel very bad for first time buyers who have been screwed (bought what they couldn't afford w/ a suicide loan AT THE PEAK), but the smug dickheads who think their investing geniuses because a bunch of paper gains fell in their lap. Eat crow smart guy. Oh, and good luck unloading that escalade w/ the spinners... jackass.

3. I do dread the impending recession, but it's necessary - see #1.; July 09, 2006 8:24 PM
Anonymous said...: I am. Isn't everyone who didn't get in on the real estate boom, and who is currently priced out of the market rooting for a drop so they (we) can get in? Come on, there are those who got in early and lucky and are so smug now, but life is a wheel and that wheel turns. There is a time for everything, it's just that this is taking it's time.

The crash is coming, it is just taking it's time to unfold. I've seen it before with my own eyes in Japan from '90 to present. Here is a word of advice - if you're waiting to buy, and prices start to come down, don't buy immediately! Just wait. In Japan prices came down 50% and more! Things will unwind, and you'll be able to get in. Prices are already down on houses here in Mass. - the really expensive ones - but they'll be coming down more!!!; July 09, 2006 8:26 PM
Anonymous said...: I am not

I like that I got lucky I bought my home 10 years ago, and my rental home 6 six years ago, and now can retire by the age of 50 if I want to.

I like that rents are now going up.

I like riding in 1st class.....all you renters ride coach.

I like reading these blogs because it feeds my ego.

I like that you are jealous of me.; July 09, 2006 9:05 PM
Anonymous said...: well I don't like inflation so yes I hope the housing price goes down. If housing doesn't go down then I have to figure inflation is much higher than reported. So if the central bankers can't get inflation under control or don't want to, I buy back in. cash is trash and for the last 5 years you couldn't save fast enough to keep up with the downpayment a responsible buyer would want. House prices went up too fast.
I have cash from a home sale, I now rent, I'm a market timer I guess. I'm taking a big gamble that the us government will protect the dollar. That the FED will rasise interest rates.
the way I figure its easier to buy back in real estate if I'm wrong than sell real estate if I'm right.
Greenspan lowered interest rates to protect big business, will the FED protect small home owners? By keeping rates low, at the expense of inflation. I bet no.

This shouldn't have happened in the first place , crazy low intrest loans with no money down.; July 09, 2006 9:24 PM
Anonymous said...: This is a dual edge sword for me.

I would love an epic crash for this reason. I bought in 2004 and sold in 2006 making a nice profit in Texas. But, now I live in Florida. My wife and I are "rich" and make about 5 times the average household income. The only houses we can afford on our income with our hefty down payment (the entire profit from our last house) are small concrete block bunkers or shacks in crack neighborhoods. I'm not being rude, I'm just being honest when I say this. If we can't afford a home in Florida how can most people who live here.

I'm going to hate the crash for this reason. My company owns a series of apartment complexes in Florida and Georgia. We are about to hit 100% occupancy and we are raising rents to whatever we want. When the prices really start to drop we know our occupancy levels will drop and our rents will go down.

It stinks either way, but I prefer the crash.; July 09, 2006 9:50 PM
Anonymous said...: we are... but a bit scared of our savings... would the bubble take down the world economy with it??? run-a-way debt policy of the US pull the world with it?? double digit inflation to come??? what should we do with our money??? arrrrrgh!!!!; July 09, 2006 9:52 PM
Anonymous said...: We don't owe enough to be rich. . .

This is a great line from some forgettable movie. . .but it says it all - David in Jax is in the same situation - we make probably 4 times the average salary in San Diego County, and have 500K from the sale of our house in Norcal, BUT. . .a decent two bedroom two bath condo (just 1100 Sq Feet) is about 650K. . .something nice with a view is 1,500,000!!! Houses up in La Jolla are in the 3 million range. . .so, unless we take a million dollar mortgage, we live in a small condo next to the bailbond offices and the homeless. Only people who take million dollar mortgages around here can afford something nice. . .so YES I want the housing market to crash so "regular Joe" and everyone else (me) can afford a decent place.; July 09, 2006 9:58 PM
Rob Dawg said...: An epic housing price meltdown only hurts the stupid and greedy. Right now the stupidity and greed is spilling over and negatively impacting others. They need to pay back what they've taken. Anything short od a meltdown and I'll feel as robbed as I did last week when Ken Lay faked his death to avoid prison.; July 09, 2006 10:05 PM
Anonymous said...: When you're in the middle of a hurricane, it's kind of difficult to draw a meanigful picture of the storm clouds or guess how big it is. This blog focuses on housing prices, a tiny element of this impending economic storm.

Taking the hurricane analogy a bit further, some people might have built underground bunkers to survive 250 MPH winds (i.e. they cashed out last year), but what good will that do when the 30-foot storm surge washes in and drowns them (hyperinflation)?

To paraphrase another old movie: In a serious financial crisis there are 50 things that can ruin your life, if you can think of even 25 of them, you're a genius.; July 09, 2006 10:42 PM
Anonymous said...: I am, for a return of sanity both to the economy and the minds of those who're playing this game, endangering everyone.; July 09, 2006 10:52 PM
Anonymous said...: All of you cash-out types sitting smugly should consider this. My German grandfather owned a furniture factory and when inflation started to make his business hard to manage, he sold it all in 1923 and planned to move to South America. He literally had a suitcase full of Reichsmarks from the deal but in the two months it took to arrange travel and pack his belongings, that suitcase of money lost so much purchasing power it was nearly worthless.; July 09, 2006 10:53 PM
Anonymous said...: You do the best you can though. Diversify your assets (however much that might be) as much as possible. If you are worried about hyperinfation hedge with gold or something. If you are worried about a stock crash get BEARX. Oil? get XOM. Or all of the above and yes some gold coins or guns if that floats your boat.
There is definately choppy waters ahead but the last 5 years haven't been great for much but RE and Oil (and recently gold). We are waiting to buy a home in central florida (gainesville keeps showing up on the damn lists as 3rd in price growth for the country grrr) when the the bust gets closer to bottem. It is one slow moving barge and i was hoping for a dive in prices before 2007 but we may have to rent till march 2008 since that will be closer to ARM reset ground zero.
We have a 100k poised for a down payment but why would i trade 100k for 300k in debt and 2x the monthly costs? As much as I want a home for my family those numbers suck. Add hurricane issues and insurance problems...
it will be interesting to see what the hurricane season does to RE down here this year; July 09, 2006 10:58 PM
InfidelSix said...: oh, add 1 more:

People who are sitting on hundreds of thousands in equity gains but are refusing to lower their selling prices because they are so greedy. It'll be fun as hell listening to them cry.

"I should have just lowered my asking price back in 2006, but the cheap buyers who were too cheap and scaredto jump in (read: smart) ruined the market."

Me: I'll give you $20K for the 'Vette; July 09, 2006 11:24 PM
Anonymous said...: yes the German inflation was an extreme example. Germany had lost a war and was being screwed by the winners. They then lost a bigger war and the winners decided on a different strategy to rebuild. So now Germany is solid.
My hope is the US FED knows this and moves to prevent inflation from taking hold.
http://www.safehaven.com/article-5504.htm

Mr Roper sounds fake. I don't beleive him. first class flying, uh huh, most semi-rich people I know are too cheap to fly first class. Buying two houses does not make a person rich, thats silly. I know people who own 10 rentals and drive cheap american cars, and renters who drive imported BMW's.; July 10, 2006 12:04 AM
Anonymous said...: autofx.....i doubt that your house is larger than mine.....why?

i have all of my money in the Holy Grail Of Investing

you can find out more about it at www.crockofsh*t.com

I have access to the source code of many MQL-II and MQ4 scripts that I trade with. Autofx, you should try it! It's grand!!!; July 10, 2006 12:05 AM
Anonymous said...: To the reichsmarks guy:

You don't think I would have my house sale money in USA dollars?. . .spread out in Swiss Francs, Oil Royalty Trusts, and Canadian funds. . .and yes, some USA stocks and bonds, but mostly in oil companies.

BTW- FLASH NEWS - OPEN HOUSE ORGY RUINED BY WORLD CUP!!!. . .

Downtown San Diego realtors had a huge open house orgy today - 30 units in one building for sale, and baloons and sign shakers everywhere - only problem, Big World Cup party in nearby Little Italy, so no parking places. . .I went to one open house and the realtor complained that it was "terrible" because "her customers" couldn't find a parking place because all those "Soccer Fans" took the spaces. . . . .hmmm those "Soccer Fans" ARE her customers. . .20 and 30 something Cosmo Crowd.. . .; July 10, 2006 12:07 AM
Anonymous said...: cactus - i am sorry.....let me clarify. i only fly first class because i travel a lot.......i get automatic upgrades to first class (i don't pay for it)

what i meant to say is that homeowners are first class citizens and renters are second class citizens

sorry for the confusion; July 10, 2006 12:09 AM
Anonymous said...: I thought I knew what greed was until I saw locusts from across the nation swoop into Scottsdale, AZ and speculate at the price of people's lives. This includes the whore landlords that sold everyone out. If I could throw acid in their faces, I would.; July 10, 2006 12:09 AM
Anonymous said...: I bailed out of two rentals in the SF Bay, one last summer (bought in '84) and one (bought in '95) earlier this year and made far more than enough to retire on twice. Sold my McMansion in the Pacific NW (bought in '97) and now rent in one of the best neighborhoods in the city for 60-70% of mortgage costs, even after deductions. I owe(d) a fortune in taxes (no exchanges, took the money and ran), even after the $500K primary residence exemption, but it is worth it to have doubled by investable/liquid assets.

I was in Japan during the '80s bubble. I saw people eating gold-laced sushi, drinking $300 bottles of cognac and shochu, and talking retirement at age 40 from paper (illusory) stock and property gains. We are following Japan by 9-10 years.

I saw the early '90s real estate bust in AZ, and Phoenix and Tucson were like ghost towns. I expect it again, to be made worse by protracted drought and the risk of long-term massive out-migration from AZ, Vegas, and the CA Palm Desert.

Several high-profile, highly successful advisors are selling multi-million-dollar McMansions, including Buffett (a few years ago in So. CA) and Bill Gross and one of his Sr. VPs at PIMCO.

The smartest real estate guy I've ever known is bailing out of his family real estate business and closing up shop after 54 years and two generations, as well as selling his CA beach property and primary residence in Hillsborough CA and renting a house in Menlo Park. I'm in good company with these guys. The smart money knows that a monumental bust is coming, but they want to sell first before the suckers do.

Personally, I don't look forward to a housing meltdown. The Fed will break the printing presses to monetize the trillions of dollars required to bail out Fannie and Freddie, banks, autos, airlines, pensions, Medicare, and eventually Social Security. I expect that there will be a US$ crisis and US gov't default on external debt ahead at some point. A de facto default can occur if the US$ falls far enough fast enough. Many thing that such a scenario makes real property a sure bet. This might have been true in former times when we were on a fixed-echange standard and real estate was either not leveraged much or if at all. Today, US property is hopelessly leveraged and dependent upon further leverage at manageable nominal interest rates and high real interest rates. Real interest rates are set to contract, reducing bank and rentier margins, increasing risk for lenders, and encouraging tighter lending standards and slowing growth of debt. This means that leveraged real estate will perform poorly, not unlike most stocks.

The crash is coming. Prices will either fall significantly and stay low in nominal terms or flatten out and decline modestly but suffer severe declines in real terms and for many years. Either way, growth of consumer spending will slow dramatically, along with real GDP, investment, profits, and payrolls.

Dumbya squandered our diplomatic capital and bankrupted the country. Dumbya will be seen as the worst president the US has ever had. The Red-Staters are slowly coming around to it but have yet to abandon their illusions about "President Cheney" and his henchmen. The Dems are hapless, and history has passed them by. In effect, the US is being run by a criminal syndicate of war profiteers, petro-bankers, and energy company execs and their largest shareholders, all functioning in advance of the imperial corporate-state. Cheney and his ilk care nothing about protecting "the homeland", but they do care deeply about invading, occupying,protecting the "oil lands".

The best recourse for anyone with the ability is to sell and get one's money out of the US$ and diversified out of US assets as much as is humanly possible. Those reading this should write this down and take it to heart. In 5-10 years time, should you heed the advice, you will look back thank fate that you were so advised and that you had the wisdom and courage to act on it.

P.S. Cactus, I'm in the top 4-5% of households by net wealth, and I drive a '95 Honda wagon (perfect condition), and my wife drives a '02 Subaru wagon. Cars are one of the worst investments there is.; July 10, 2006 12:16 AM
Anonymous said...: Mr. Roper, I rent and I fly first class virtually always and have for 15 years. The problem is that first class is not the value it used to be, to which you will probably agree. If I rent, and I am in the top 4-5% by net wealth, then the US is rapidly becoming a second-class country. If the vast majority of Americans' net wealth is primarily in the form of illiquid house equity which they can't access without borrowing (reducing their net wealth) or selling the house and renting, guess what tens of millions of Americans will be forced to do when they still have large mortgage debts and can't afford to retire at age 65-70+? And they won't be moving to FL, AZ, CA Central Valley, or Vegas to retire and rent.; July 10, 2006 12:24 AM
Anonymous said...: I prefer that salaries go up to meet the market value of homes. We have not seen salary increases in a while.

Wouldn't that solve everybody's problem?; July 10, 2006 1:09 AM
Anonymous said...: Hi bc_or

Cars are bad investments, well they arn't investments at all really. Many wealthy persons drive modest cars, high income can drive expensive cars but have no real wealth. So you think we will have a dollar crash? I've been reading that alot these days. Everbank lets you invest in foreign currencies, I was thinking about that myself. I have some CD's but am concerned about the federal reserves resolve about fighting inflation. it could go either way im my thinking, raise rates now, get a recesion next year ( inverted yield curve tells me that ) and then lower interest rates in 2007? Then dollar crash.
I do beleive Americans will start saving again but it maybe too late for many who are counting on there homes as the retirement plan. I doudt the future will be so kind to so many.

mr roper, "renters are second class citizens," you must be landlord. I was, never again.
they beat the hell out of everything.. forget it. But of course now I'm a renter, feels werid after so many years.

Cheaper than buying which is not right, buyers take risk so they should not have to pay more than renting IMO. Its all backwards.; July 10, 2006 1:10 AM
Anonymous said...: please enlighten us on your Holy Grail of TRADING

Seems like a sure thing.....a really sound investment. I am thinking about selling my house and liquidating my 401k to invest in this Holy Grail.

I am sure it is not a sham......no really.; July 10, 2006 1:28 AM
Anonymous said...: desmond - invest your money in the Holy Grail of Trading located at autoforex.net

it's a sure thing; July 10, 2006 1:34 AM
Anonymous said...: I am and I want to believe it's because the long term health of the economy and wellbeing of the American people demands it. An industry that regularly sells people mortgages they simply CANNOT afford by manipulating the monthly payments is truly evil. However, it may be primarily because of all the 20-somethings I see bragging about all their great success without ever having experienced hard work or rigor. I think they need to be taken down a notch.; July 10, 2006 1:52 AM
Anonymous said...: I prefer that salaries go up to meet the market value of homes. We have not seen salary increases in a while.

Wouldn't that solve everybody's problem?

I would think most of the tards that have run themselves into incredible debt, would borrow even more, making the situation even worse. We NEED a crash; July 10, 2006 2:22 AM
Anonymous said...: Deflation is necessary to correct this monster.

The middle class has been crushed. The $9 Trillion debt and over extendened personal debt holders numbering in the hundreds of millions and adding trillions more to the debt load is problematic to say the least. The smoke and mirror economic period has been revealed to many for the ugly beast that it is -- It will not be long before we all realize. ... I unknowingly moved my family into a big bubble area in 2003. Circumstances that took place served as a wake-up call. I read several of the books related to the housing bubble and researched information on the internet. I have taken steps to navigate around this biggest asset/credit/debt bubble in history. Renting in a beautiful spot in God's creation is my choice until the inevidable housing implosion takes place. One more event may be all it takes to slay this dragon. Even our beloved sports athletes will need to be adjusted in their salaries. A revolution of sorts needs to take place.

I have compassion for all that got caught into this mess. I appreciate lifestyles driven by character compared to greed. This HP site has become my favorite internet site to visit. Keith has done a good job in his postings. Some view him as a radical -- He is a realist. A gracious blog host and crusader.

For some comic relief -- JibJab.com video cartoon entitled 205 helps me to face this debacle head on with determination and a smile.; July 10, 2006 2:33 AM
Anonymous said...: It appears that Mr.Roper likes to reply to his own posts.; July 10, 2006 4:51 AM
Anonymous said...: I love that phrase: EPIC housing meltdown.

Yes, I'm rooting for that.

It will be so much healthier for society and econmy as a whole when Americans just go back to what worked in the past:

Get a job, buy an affordable house that you can actually pay off one day.

Give your 20% downpayment to the bank so they've got some security for the loans they make.

Get rid of Fannie May and all the programs that seek to "make homepwnership available to more people" but in fact just allow prices to skyrocket, pricing more people out or turning them into financial idiots who go out on a limb and beyond to get that roof over their head.

We need an epic meltdown so Americans get their financial house in order.; July 10, 2006 5:56 AM
effenheimer said...: "homepwnership"

I love it!

(anyone here young enough to appreciate that typo?); July 10, 2006 6:54 AM
Anonymous said...: The crash is coming, whether we want it to or not. But I can't "root for" a housing meltdown. No, my heart doesn't break for predatory lenders, unethical realtors, or self-congratulatory speculators, but I believe many decent people will suffer, and I can't "root for" suffering. I'm disturbed by the number of people who can.; July 10, 2006 8:09 AM
Anonymous said...: OK, be honest. Who's rooting for an epic housing meltdown

I'm not.

and why?

It would cripple the economy and destroy people's lives.

LMAO. GOOD!!!! It will destroy the lives of the stupid. That needs to happen for the rest of us to continue on.

Bring on the crash.; July 10, 2006 3:34 PM
Anonymous said...: To twib and arioch:
Good post! I agree with you both.; July 10, 2006 5:47 PM
Anonymous said...: Because it is time!

The growth mania and the juggernaut of the Church of the Free Market Triumphant have left us with insurmountable debt, a collapsing environment and a population of TV addicted zombies.

Only another round of Hard Times will remind us Euro-Americans that we are citizens first, not consumers! We have to zero the checking account of the "Malafactors of Great Wealth" who operate through the clever fiction of the corporations. And the only way this will happen is if the Great Housing Collapse leads to the Greater Depression which leads to a complete repudiation of the Regan Revolution.
I want all those Wal Mart shopping, McMansion dwellers in their SUVs to finally get it. Their stupid, selfish greed has fucked us, our children and our grandchildren.
Oh yeah, and it would also remind the country that they allowed this through the election ofGW Bush, A President as Good as the American People.; July 10, 2006 9:46 PM
Anonymous said...: Because any imbalance left uncorrected becomes more and more toxic. Best to "take your medicine" sooner than later....; July 11, 2006 5:14 AM
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Anonymous said...: Hello America, and you guys think you are the only ones!!

I want a crash, but I want it over here in the UK!!

We have the same crap here. Two shelf stackers cant ever afford to buy, if they did manage it they would both have to work ALL there life to pay....40 year mortgages now...CRAZY. No chance to ever have kids. The HSBC is now advertising "4 friends" mortgages....its a sign of change if the customers now have to group together to 'buy' a house.

Personally, I'll rent till it drops, then I'll wait until it hits rock bottom, then I'll buy a repo of a smug git in negative equity!

Good luck Y'ALL; October 16, 2006 7:27 PM
Anonymous said...: This comment has been removed by a blog administrator.; March 15, 2013 5:04 AM

HousingPANIC - The Housing Bubble Blog with an Attitude Problem, 2005 - 2008

July 09, 2006

OK, be honest. Who's rooting for an epic housing meltdown, and why?

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