Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: Sizing the Housing Bubble
Old 07-26-2006, 10:32 AM   #261
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,385
Re: Sizing the Housing Bubble

Quote:
Originally Posted by al_bundy
1br in queens in rego park
1 block from subway, AC, elevator and maintenance includes gas and electric. Nice concrete building, very little noise heard from neighbors. around 750 sq ft total.
Thanks, Al.

Ha
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Sizing the Housing Bubble
Old 07-26-2006, 12:06 PM   #262
Thinks s/he gets paid by the post
lazygood4nothinbum's Avatar
 
Join Date: Feb 2006
Posts: 3,895
Re: Sizing the Housing Bubble

hey, girls, get a room.
__________________

__________________
"off with their heads"~~dr. joseph-ignace guillotin

"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
lazygood4nothinbum is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 03:49 PM   #263
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Sizing the Housing Bubble

Some data from the NAR...

http://money.cnn.com/2006/07/25/real...ex.htm?cnn=yes

And if you dont like the data or find some issues with it, I promise I wont take it personally
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 03:54 PM   #264
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,112
Re: Sizing the Housing Bubble

Quote:
Originally Posted by Cute Fuzzy Bunny
And if you dont like the data or find some issues with it, I promise I wont take it personally
Good, because you are a little late in posting your redundant duplication:

http://early-retirement.org/forums/i...3.88#msg158275

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 04:05 PM   #265
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: Sizing the Housing Bubble

Quote:
Originally Posted by Cute Fuzzy Bunny
And if you dont like the data or find some issues with it, I promise I wont take it personally
You might if your name is Ingo Winzer.

Ingo seems like a good guy. * He even went to MIT. * But he wants me to pay $1669 to figure out which metrics he used to determine that Alex's region of LA is 57% overvalued. * I have a problem with that data. *
__________________
wabmester is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 05:01 PM   #266
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,385
Re: Sizing the Housing Bubble

Quote:
Originally Posted by REWahoo!
redundant duplication
Are you testing us?

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 05:37 PM   #267
Recycles dryer sheets
 
Join Date: Feb 2004
Posts: 178
Re: Sizing the Housing Bubble

Search turns up nothing along these lines so I'll post a link.

If you want a really bearish view of housing, try http://thehousingbubbleblog.com/.

They are brutal.
__________________
I'd rather be sailing.
nfs is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 06:09 PM   #268
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Re: Sizing the Housing Bubble

I talked today to the real estate developer we have invested with in the last few years. As might be expected he is very irritated with the popular press talking up the real estate bust. As a result he claims that many first time home/condo buyers aren't buying but instead waiting for a better price. Buyers are also waiting for interest rates to drop. However, the population growth in the Phoenix area has far outpaced real estate availability. So there are lots of buyers out there, but they aren't buying.

He thinks this will continue for a while and could contribute to price drops.

He also thinks that speculators are out of the market now and when you sell you will be selling to a buyer who wants the property to live in. However, the speculators are selling, competing for buyers. This has happened to some extent in one of our condo developments. Although the develpment isn't all sold out yet, some of the early speculative buyers are trying to sell their units too.

Our condo units still keep selling, though the sales have slowed. Part is the natural summer slowdown in the southeast. On the other hand, rents have increased dramatically so we continue to make money every month.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 06:43 PM   #269
Full time employment: Posting here.
Alex's Avatar
 
Join Date: May 2006
Posts: 696
Re: Sizing the Housing Bubble

Quote:
Originally Posted by wab
You might if your name is Ingo Winzer.

Ingo seems like a good guy. He even went to MIT. But he wants me to pay $1669 to figure out which metrics he used to determine that Alex's region of LA is 57% overvalued. I have a problem with that data.
I'll do it for free. He pulled it out of his arse. You just saved $1,669 - now go buy a new hat.
__________________
Oh, you hate your job? Why didn't you say so? There's a support group for that. It's called EVERYBODY, and they meet at the bar.--Drew Carey
Alex is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 08:40 PM   #270
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 1,543
Re: Sizing the Housing Bubble

this whole housing bubble nonsense is easy to figure out without all the newspaper stories

take the average first time homebuyer. can they afford a decent home in your area on the average salary if they were buying for the first time with today's rates? how long would it take to save for a down payment?

NYC area $400,000 average price of a home is pretty expensive at 6.7% interest

if an average couple would buy my place for $250,000 like my wife thinks, it's still a nice chunk of change and a long time to save up 15% - 20% down

__________________
al_bundy is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 09:02 PM   #271
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: Sizing the Housing Bubble

Quote:
Originally Posted by al_bundy
how long would it take to save for a down payment?

NYC area $400,000 average price of a home is pretty expensive at 6.7% interest
After this thing pops, people will be asking "how did this happen?"

1) Creative financing requiring no down payment (or even negative down payments in some cases).

2) Creative financing requiring low upfront interest payments (IO's and neg amorts)

3) Speculation which fed on the rising prices caused by (1) and (2) and then fed on itself.

I posted an article by a federal reserve economist back a couple of pages back that showed these trends.* *Basically, lenders started taking much more risk in 1992, and people who normally wouldn't be home owners became home owners.* *Now we get to see what happens after those new owners discover that they really couldn't afford to buy a house....
__________________
wabmester is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 09:37 PM   #272
Dryer sheet wannabe
 
Join Date: Jun 2005
Posts: 24
Re: Sizing the Housing Bubble

Average Manhattan 2 bed price is about 1.2 mill.

Prices are not going down at present.
__________________
NYC Guy is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 09:48 PM   #273
Recycles dryer sheets
 
Join Date: Jun 2006
Posts: 473
Re: Sizing the Housing Bubble

Quote:
Originally Posted by wab
Now we get to see what happens after those new owners discover that they really couldn't afford to buy a house....
A related problem that I think I have noticed is that even some people who would *normally be able to buy a house the old-fashioned way, don't any more.

For example, there is a young couple (no kids) in Baltimore. *They make more than $100K/y between the two of them. Last year they were in the market for a ~$300K house, which was reasonable since they should have been able to afford it under most regular circumstances.

However, in years past, they would have spent a couple years saving for a downpayment, which would have taught them self-discipline and other useful skills, and then gotten a fixed rate mortgage. Instead, they went out and got some kind of ARM with no money down. They have effectively no savings and continue spending all of their money on cars, toys, restaurants, etc. What will happen to them when their ARM and monthly payments go up and prices go down? Considering that they have no equity or savings with tons of credit card debt, will they have to sell their luxury SUVs and buy used cars? Stop eating out?

In this particular case, I suspect that they are making enough money to be able to survive if/when they adjust their spending habits. However, I am not so sure about those who have more bought even more expensive houses in the last few years and have similarly imprudent lifestyles.
__________________
Scrooge is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 10:10 PM   #274
gone traveling
 
Join Date: May 2006
Posts: 1,036
Re: Sizing the Housing Bubble

Quote:
Originally Posted by wab
Well, I suspect that you invested more than $7000 unless you had one of those cool 0% interest-only loans.* *But you do have a point: leverage is great when the asset value goes up.
WAB* *1978 purchased Diamond Head condo with $2000 down with a 15 year fully amortized mortgage.* 9% ouch

1986* purchased Bay Area single family home with $5,000 total on a 30 year FHA fixed mortgage.* No fancy footwork here, anyone could have done the same.* 12% What was I thinking?







Unfortunately, leverage is really bad when the asset price goes down.You must have gotten this from a seminar.* I doubt you could explain what you mean.As for how you could have made more money: if you had invested the same amount in the stock market in 1986 with the same amount of leverage, I suspect you would have made more money.


Didn't 1929 deal with that leverage stock purchasing thing?* So you still haven't explained how to turn $7K into $900K.

My point is that when I purchased in the 70's 80's 90's or 2000's It was always "how can people afford to buy at these prices?!!"* and I never heard "I should buy two cause they're half of what they sold last year"

You are scaring the children.* A home purchase is scary enough and maybe not right for all people or in all situations* but at least in California if you don't buy when you are able and have a need then you will most likely always be a renter.* You still need to buy what you can keep and buy smart but waiting for the day before the market jumps to buy usually doesn't work.
__________________
honobob is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 10:30 PM   #275
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,112
Re: Sizing the Housing Bubble

Quote:
Originally Posted by HaHa
Are you testing us?

Ha
Yes, via repetitive repetition.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 10:33 PM   #276
Recycles dryer sheets
 
Join Date: Dec 2005
Location: San Diego
Posts: 468
Re: Sizing the Housing Bubble

Quote:
Originally Posted by REWahoo!
Yes, via repetitive repetition.
What was that again?
__________________
califdreamer is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 11:00 PM   #277
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: Sizing the Housing Bubble

Quote:
Originally Posted by honobob
Unfortunately, leverage is really bad when the asset price goes down.

You must have gotten this from a seminar.* I doubt you could explain what you mean.
It means that many of my California neighbors who bought in the late 1980's found themselves with upside-down mortgages when the last bubble popped.* * That bubble took 6 years to finish popping.* *The average person lives in their house for less than 6 years.* *You want pain?* *Try paying a real estate agent to sell your home while you owe more than it's worth.

I don't know why you insist on pretending that you made $900K on a $7000 investment.* *Do you want the "children" as you call them to believe that you don't need to pay interest, taxes, principal, maintenance, and closing costs, and that houses always appreciate more than the rate of inflation?* * Sorry, that's not how it works.

Without a doubt, houses have appreciated at a remarkable rate over the last 8 years or so.* *Historically (since 1940-something), they appreciated at about the rate of inflation.* *You seem to believe that you'll be able to hold onto those remarkable paper gains over the next few years.* *I doubt it, but we'll see.

As I showed you with that nifty rent vs buy calculator, in normal circumstances you can expect a home to be a better investment than renting if you're able to live in the home for at least 8 years.* *These past few years have not been normal circumstances.* * And my guess is that the next several years won't be either, in the other direction.

Now, I'll admit that a house can be a great inflation hedge.* *You're protected two ways: your home will generally appreciate with inflation, and your mortgage payment does not.* *So while renters have their rents increase with inflation, home owners mortgage payments stay fixed (usually) and they "pay themselves" with the principal payments.* Sort of a forced savings plan.* That, combined with the various tax breaks, generally makes buying a house a pretty good deal. (Unless you buy at the top of a bubble, of course.)
__________________
wabmester is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-26-2006, 11:51 PM   #278
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,275
Re: Sizing the Housing Bubble

Well, I just read an article on Yahoo talking about how housing prices are starting to be flat or go down in a number of markets... and they mentioned Boston..

For all the people who say housing prices can not go down a lot have not heard about Houston in the '80s.. lot of overbuilding, lots of people buying houses with little down etc. etc... then it went POP..

I bought my house in 1986 at half the price the last owner paid two years earlier... and it has only caught up to that previous value THIS YEAR..

And if you owned a townhouse in certain parts of town you could not even sell them for $5,000... and they sold for $45,000 a couple of years earlier... and since that area of town has gone downhill, they still are not worth what they sold for when new..

I do not believe that this will happen in any place as it was the worst housing decline in history... but, I do think that people who only see prices going up are looking through rose colored glasses..
__________________
Texas Proud is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-27-2006, 12:26 AM   #279
gone traveling
 
Join Date: May 2006
Posts: 1,036
Re: Sizing the Housing Bubble

WAB
Have you ever purchased real property or invested in the stock market? *Are you under 30? *Your knowledge and experience seems to consists of what your (parents?) *neighbors went through or some graph/ report from ...bubble.com. *In my tract home subdivision the 1991 high sale was less than 9% above the bubble bust sale and recovered in less than 6 years.

Sorry, but this is how real property works.
The tenants have been paying my Taxes/Maintenance/principal/interest/insurance/maintenance for the last 24 years. *Had positive cash flow from day one of rental. *And since the mortgage was paid off in 1993 I've had all that exta money for other investments. *I was paying more than renting when I purchased in CA but was able to refi shortly after at no costs at 9 then 7.5 then 5.25 and prop 13 keeps my taxes low so in just a few years PITI was even with renting and for at least 10 years I'm at least $700 a month UNDER the cost of renting not even considering the income tax benefit. *My equity today from both is over $900K if I sell today or $810K if I sell ...(insert your bubble date here)......... or $1.8m sometime within the next 10 years.

You seem to think that appreciation was recently invented. *Prop 13 in 1978 was the result of the skyrocketing appreciation in the early 1970s *In Hawaii my property increased 300% from 1978-81. *Ca. doubled from 86 to 88. *Over 30 years of history are stacked against your guesses which are affecting your decisions HOW? *Wait to buy? *Higher interest rates could wipe out any savings if lower prices happen.

WAB *You are wrong. The problem is not buying at the top of the "bubble", it's selling at the bottom. *Just say No!
__________________
honobob is offline   Reply With Quote
Re: Sizing the Housing Bubble
Old 07-27-2006, 12:29 AM   #280
Thinks s/he gets paid by the post
 
Join Date: Jan 2004
Posts: 2,049
Re: Sizing the Housing Bubble

Housing is different from the stock market! It may have happened in Japan but it can't happen here!

http://money.cnn.com/2005/09/19/real...rice_declines/

Take Los Angeles, where real estate has been turbocharged for nearly 10 years. But the early 1990s were a different story; the average house price in L.A. dropped from $222,200 in 1990 to $176,300 in 1996, a loss of 20.7 percent.

Furthermore, those are nominal prices, not real values.

__________________

__________________
eridanus is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
How to take advantage of a housing bubble? Sam FIRE and Money 8 03-29-2007 12:21 PM
Psychology of the Housing Bubble (and its collapse) justin Other topics 132 01-26-2007 02:33 PM
What Real Estate Bubble? Art FIRE and Money 76 11-09-2006 03:33 PM
Housing bubble bursts....in Shangai camberiu FIRE and Money 5 01-19-2006 02:12 AM
Bad tax law funding the housing bubble? laurence FIRE and Money 12 08-02-2005 07:48 PM

 

 
All times are GMT -6. The time now is 10:25 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.