Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: what's ahead for home values?
Old 01-17-2006, 10:05 PM   #41
Dryer sheet wannabe
 
Join Date: Jan 2006
Posts: 11
Re: what's ahead for home values?

This may be of interest to some of you. See the link below for info on Housing futures that are scheduled to be launched this year by the CME. By this summer, you may be able to hedge instead of selling.

http://www.cme.com/trading/prd/env/h...over16250.html
http://www.macromarkets.com/index_files/indexes.htm
__________________

__________________
zeb 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: what's ahead for home values?
Old 01-18-2006, 12:25 AM   #42
Recycles dryer sheets
 
Join Date: Dec 2005
Location: San Diego
Posts: 468
Re: what's ahead for home values?

Quote:
Originally Posted by zeb
This may be of interest to some of you. See the link below for info on Housing futures that are scheduled to be launched this year by the CME. By this summer, you may be able to hedge instead of selling.

http://www.cme.com/trading/prd/env/h...over16250.html
http://www.macromarkets.com/index_files/indexes.htm
Thanks Zeb for the info on the housing futures and options. I will be curious to see how expensive San Diego housing puts will be.
__________________

__________________
califdreamer is offline   Reply With Quote
Re: what's ahead for home values?
Old 01-18-2006, 12:55 AM   #43
Dryer sheet wannabe
 
Join Date: Jan 2006
Posts: 11
Re: what's ahead for home values?

Quote:
Originally Posted by califdreamer
Thanks Zeb for the info on the housing futures and options. I will be curious to see how expensive San Diego housing puts will be.
I'm sure the puts will be expensive. Shorting the futures contract would probably be a better way to go (put up your margin and roll your contracts until the correction). An interesting way to lock in the current MV of your home.
__________________
zeb is offline   Reply With Quote
Re: what's ahead for home values?
Old 01-19-2006, 04:28 PM   #44
Thinks s/he gets paid by the post
tryan's Avatar
 
Join Date: Mar 2005
Posts: 2,449
Re: what's ahead for home values?

Quote:
I sold, and am renting a house about 100 times better than the old house. The family hasn't been this happy since before we bought the last house. Worked perfectly for us, and I believe it will only get better.

When the old house was overvalued about 60% from what I thought it should be valued, I knew it was time to sell.
Ok, renting MIGHT "work-out", but it might not. Why take the risk?

My neighbor told me about a co-worker who sold his house and rented. 2 years with an out of state landlord, the wife is miserable. He's doing all the repairs himself - else nothing gets done - just like before. Make a long story short, they bought back into the same neighborhood for a 100k more than they sold for. Biggest mistake of their life.

Another friend sold to move to a better school district. Thought they would find a house in 6 months. Been renting for the last year and a half. Now feels priced out of the market. Refuses to buy at these prices. 4 kids in a 900 sq ft apartment. Parents are bordering on depression. Biggest mistake of thier lifes.

Why take the chance ... there's a quality of life issue here.
__________________
FIRE'd since 2005
tryan is offline   Reply With Quote
Re: what's ahead for home values?
Old 01-19-2006, 05:18 PM   #45
Thinks s/he gets paid by the post
free4now's Avatar
 
Join Date: Dec 2005
Posts: 1,225
Re: what's ahead for home values?

tryan both of those cases you gave concern people who in hindsight should not have sold their homes because they failed to benefit from real estate appreciation after selling. The idea is that you shouldn't sell because you risk missing out on future appreciation. I think most people are in agreement at this point that there's not going to be much more near term appreciation. If anything the risk is the opposite, that you would fail to sell and therefore miss the opportunity to sell at todays inflated prices.

I'm not saying that one should or shouldn't sell, just that it's not at all obvious that it's riskier to sell.

__________________
free4now is offline   Reply With Quote
Re: what's ahead for home values?
Old 01-19-2006, 06:08 PM   #46
 
Posts: n/a
Re: what's ahead for home values?

CNBC today featured the Real Estate Bubble, most of California, Southern Florida, Boston and Washington area, 25 % drop in prices, but gradual, not sudden.
__________________
  Reply With Quote
Re: what's ahead for home values?
Old 01-19-2006, 06:13 PM   #47
Thinks s/he gets paid by the post
tryan's Avatar
 
Join Date: Mar 2005
Posts: 2,449
Re: what's ahead for home values?

Quote:
most people are in agreement at this point that there's not going to be much more near term appreciation
The two sellers in my previous example were certianly believers that the peak had past (why else would one try to time the market) ... but that's exactly the point - no one knows the future .... and your betting quite a bit (timing the market with the primary residence).
__________________
FIRE'd since 2005
tryan is offline   Reply With Quote
Re: what's ahead for home values?
Old 01-19-2006, 06:45 PM   #48
Thinks s/he gets paid by the post
free4now's Avatar
 
Join Date: Dec 2005
Posts: 1,225
Re: what's ahead for home values?

Tryan, I certainly agree that the transaction costs involved in selling a home make it extremely unsuited as a vehicle for market timing.

It wasn't clear that the sellers in your example were trying to time the market; there are many good reasons to sell besides trying to time the market. One good reason is simply that doing rent versus owning calculations for your situation strongly favors renting.

At any rate, I agree that when there's no strong indication that selling or holding a property is the right way to go, it's best to err on the side of holding.
__________________

__________________
free4now 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
Soup Lines Ahead? Bill Gross Speaks haha FIRE and Money 45 09-05-2006 07:19 PM
Great Boom Ahead by Harry Dent dwk FIRE and Money 4 12-17-2005 07:39 AM
Property Values and Telecommuters Caroline Life after FIRE 17 05-09-2005 11:56 AM
Volcker Sees More Decline in Dollar Ahead Hyperborea FIRE and Money 11 12-06-2004 04:58 PM
SWR, terminal values, TIPS, I-bnds & comm paper sgeeeee FIRE and Money 144 02-25-2004 04:35 PM

 

 
All times are GMT -6. The time now is 05:21 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.