I must admit, while during the stock bubble I researched prior bubbles and correctly identified it, I was caught wrong-footed on the real-estate bubble. I had really just assumed that once stocks drop substantially, it would mean people would have less money and would have to sell their houses more often, starting about 1-4 years after the equity pop. Boy was I wrong! -Taric
Well, after the dot.com collapse, people began to realize that we should invest in real stuff, and guess what is more real than the real-estate? So people poured money into real-estate. similarly, in 1972-73, after the collapse in 1969-70 of the high growth concepts, people began to circle around the blue chips-and the bluest of them, the nifty-fifty, became everyone's dream.
imho Smart Money exits early and flows elsewhere. It's the retail dumb money caught at the top that gets hurt. I suspect commodities and some foreign markets will rally after real estate collapses. Brazil and Japan will definitely see influx of funds. China related Hong Kong listings probably a good bet too. Commodities, probably grains and metals best bets right now.
" David Lereah, chief economist of the National Association of Realtors and author of "Are You Missing the Real Estate Boom?" " " this is his bias. i can see your bias. it doesn't matter, the market will decide. there are only so many suckers (left). i am really really looking forward to that bankruptcy law to take effect in october(i believe) then... when the popping begins, these folks would owe money of the difference between the mortgage and the prices of house sold by the bank. i was just asking my parents if they wanna buy houses in costal lousiana & mississippi. become the market makers. a 100k house there before katrina would probably go for half of the value even if they're in good shape. i am not trying to be mean and heartless. but this is what market makers do. i have family in gulfport MS just in case if you want to question my intentions. i will do the same for the california market when banks are willing to sell it at any price. (we'll see if this happens)
Would this really happen though? When Florida got hit with natural distasters the last few years, house prices haven't slowed down. That said the scope and markets are very different. I have no experience in this.. but just curious. I agree if prices do in fact go 50% lower it would most likely make a good buying opportunity over the long term, at least in areas where employment is expected to return to close to pre-katrina levels. -Taric
What happened to rising rates were going to bring down housing? Anyone, anyone? I still can't believe Robert Shiller isn't selling his 2 homes..wtf, he should be buying bottle water, guns, gold and foreign curriencies (LOL). We still in that rising rate environment?
Yours, sir. Your amount. Don't forget the lesson of Homestead, FL. Rebuilding money dried up after about 2 years and the town was basically dead thereafter. You can rebuild the buildings, but without the jobs there provided by local businesses (many of which will probably relocate out of fear of a similar event) you just don't get anything beyond a local basic service/retail economy.
Katrina was the bubble-popping-pin I was looking for to pop the housing bubble. Gas prices stays in the $3 range. People spend less, go shopping less... retail earnings down..
Single Family homes in the middle of fucking nowhere with 100 mile commutes to work go down. Condos (close to work) go up up up. I've seen this coming for years.
quote He called it "very unsophisticated." Anthony Hsieh, chief executive of LendingTree Loans, an Internet-based mortgage company, used a more disparaging term. "If you own your own home free and clear, people will often refer to you as a fool. All that money sitting there, doing nothing." unquote i saw mr hsieh on cnbc the other day. i'll bet he drives a SL600... a bunch of people doing business with his company drives a 2nd hand car. quote Federal guidelines recommend homeowners devote less than $30 of every $100 in pretax income to housing. But 40% of Californians exceed that, according to a new report by the Public Policy Institute of California. That's higher than in 1990, when the previous real estate boom was cresting after several years in which housing-price rises outpaced salary gains. The figure then was 36%. unquote quote CMG Financial Services, a mortgage company in San Ramon, Calif., introduced another tool this summer: a combination checking account and mortgage. It works like this: Your paycheck is deposited into your account and immediately applied to your mortgage principal. Over the course of the month, as you spend money on food, gas and other necessities, the principal creeps back up. But the result is that your mortgage debt gets paid off more quickly. That's the theory, at least. Of course, if you're indulgent, you can pay much less of your mortgage â like none. Any shortfall is added on to the principal. unquote really mean mortgages are coming back