No doubt I am talking my book. But people talking bubbles are trying to get your money out of real estate and back into equities. Or looking to buy a pullback on nice house in a good area.
Caring only about the carrying cost, not the price? That sounds like "I can buy a lot of stock on margin, no matter it is price inflated or not, as long as the margin rate is low". Also, talking about the fundamentals: The paper says that baby boomers kids are buying, the US population are increasing fast. Well, how much can that support the housing and at what price do they support? Missing. One way to see the fundamentals in housing is to look at the rent/mortgage ratio. This paper conveniently omitted that part. This paper just made a guess, which is worth less than the paper it used.
Yep. Interesting point. Everyone in the nation is thinking about cost-of-carry. America is living in how-much-does-it-cost-per-month mentality... That's a really bad sign..
the one argument that always cracks me up is... "...but a house is different because you can live in it..." well shit.....when you can't make your payments any more because you lost your job along with the other 30 million Kali gov-drones....AND your home-value just fell 100K below your interest-only ARM balance; the banksters are NOT going to let you live in it. . The other really ludicrous RE argument is this one... "purchase price isn't important...all that matters is the monthly payment". Well hmmm....ya know, I tried that one out on various organizations, and it did NOT go over well a'tall ! Fer instance, the county swore up and down that it did indeed matter what the PRICE was. Oh yes they did....$$$$$ And the insurance company....they rudely refused to listen to my "monthly payment" argument at all... But ya know who pissed me off the most? Yup, the two-years-from-now buyer! When I tried to explain to him that price didn't matter, that bastid just laughed in my face! :eek: well damn...now I'm 200K underwater and dropping daily, the specs are LONG gone from the market, the bank's calling every day, every house on my block is for sale, and I just got a pink-slip at work....and the damn buyers are saying that it matters what the silly PRICE is ! Can you believe it? note; this IS going to all end badly...and not just by 25% either...
Maybe he is right, maybe the doom and gloomers are right. None of us will know until we are looking in the rear view mirror. I would like to point out though that a 35% retracement in housing could have a terrible effect on people, especially those getting negative ARM and intererst only loans. Most people dont buy stocks are margin, so they are paid for 100% in cash. Most people buy real estate at 5 to 1 margin. Brandon