i agree. i distinctly remember being able to buy 8 gallons of gas for $10 a few years ago. i don't get that anymore.
CNBC real estate bubble
- Thread starter taodr
- Start date
A link? Article title?Originally posted by inandlong
Axis et al,
I am terrible with some things, so just go to www.cbsmarketwatch.com. It is an archived article, but it was written the day of or the day after our sell-off on Tuesday. You have to read Thom Calandra today. He and Tomi Kilgore are always right on it. No conjecture. Just straightforward logic with some TA thrown in too.
PM me if you can't find it.
Interesting point about inflation at the supermarket. I go to the grocery store with my wife and I cannot believe the prices of some things. We just went the other night and I wanted some strawberries but had to pay almost $3.00 for a little plastic container of them. Cinnamon Toast Crunch cereal was over $5.00 for a little box... What is this world coming too?
If Cap'n Crunch raises the price on that darn cereal again, I'm sinking the little SOB's boat!!!!!!
Back on topic..... Until interest rates increase and the music stops, I don't foresee much in the way of a sharp decline in housing. Once the spigot is shut, watch out......
I believe, the mean price for a home in O.C., Calif has decreased for the past two months. Unfortunately they are still a 'mean' $355K or so!
Later,
Cracked
houses wont crash like stocks do.houses arent marked to market every day.if joe blow pays too much he will just live in it as long as he has a job to make the payments.
if we start losing a lot of jobs then look out.
if we start losing a lot of jobs then look out.
I guess you're right about inflation. Of course, the price of staples is not what I usually consider in that group but you are right.
As long as the demand for housing is high the prices will not falter. Should there be a dearth of buyers, then watch out. And if a bunch of newly refinanced and new buyers are laid off and cannot afford their homes, they walk. This glut will drive prices down also.
At www.CBSMarketwatch.com, on the front page is a pic of Thom Callandra. Click to read. Near the bottom of his article is a title "Desmond's 90-90 update. Click the link..."Panic Selling on NYSE.
If you have to register, it is free. And worth it. Not all of the authors are good. The economist-types usually present the classroom textbook view.
Ever wonder why textbook examples are often quoted by these guys. Because textbook examples are so few and far between.
"Those who can, do...those who can't, teach." Not always true, but who here doesn't think that the game of life is easier to coach than play?
As long as the demand for housing is high the prices will not falter. Should there be a dearth of buyers, then watch out. And if a bunch of newly refinanced and new buyers are laid off and cannot afford their homes, they walk. This glut will drive prices down also.
At www.CBSMarketwatch.com, on the front page is a pic of Thom Callandra. Click to read. Near the bottom of his article is a title "Desmond's 90-90 update. Click the link..."Panic Selling on NYSE.
If you have to register, it is free. And worth it. Not all of the authors are good. The economist-types usually present the classroom textbook view.
Ever wonder why textbook examples are often quoted by these guys. Because textbook examples are so few and far between.
"Those who can, do...those who can't, teach." Not always true, but who here doesn't think that the game of life is easier to coach than play?
Been through two crashes in So Cal. 40%+ reductions in value in under 2-3 years. People move/sell for all sorts of reasons and an increase in rates would drive affordability into the toilet. Affordability is already down in the 20% range in Orange County. If the rates increased 1% point it would drive it even lower.
People are speculating regarding the never ending rising home prices now and the 3% down or no down programs aren't helping. People in those programs have little to no risk of loss, ex. Credit. The credit issue is a joke because I know a bunch of people with rotten, and that not a strong enough adjective, credit that find a way to get financed. Buy now, sell for a profit and move up is the mantra now. When the availability of funds stop, the the party is over.
The one dynamic that IS different is the Cap Gains exemption for a primary residence.
The buying and reasoning/sales pitch today is no different in prior real estate bubbles/moves.
Just MO......
Later,
Cracked
Well....this a subject dear to my heart. I'm a real esate appraiser and I've been very busy. I think you have two main dynamics going on in real esate right now. #1 you have an influx of new buyers because of low interest rates and demographics. Namely household formation due to immigrants and the Echo Boomers (children of the original Baby Boomers). #2 you have very low inventory, partly due to the these new buyers snapping up homes and and the difficulty in developing land because of regulatory/environmental concerns. The costs to develop new lots and build new homes continues to rise. Just last week the county I live in voted to raise "cash proffers" (what builders are asked to pay for impact on fire, police, schools etc..) from $5800 to $9000 per lot. These two conditions have combined to give us both "cost-push" and "demand-pull" inflation in housing. Not only that but you have all kinds of new programs to aid people buying a home. Underwriting is relaxed. People with iffy credit and no savings are buying homes. A lot of deals are done with NO APPRAISAL. Or they use an AVM, which is a lot less detailed. Who knows how it will end? I personally feel that the interest rate component has really skewed things and that a sharp rise in rates would be the crack in the dam. But remember, even if values did drop, it doesn't mean you have to sell. As long as you can afford the payment, you still have a place to live. Also, real esate has historically been very localized.
I thought last year was the peak in refi's, but now we are seeing a whole new group of refi's. Not to lower an interst rate, but to take money out. If it ends badly it will probably be like a plane wreck....not one thing going wrong...but a combination of things.
I thought last year was the peak in refi's, but now we are seeing a whole new group of refi's. Not to lower an interst rate, but to take money out. If it ends badly it will probably be like a plane wreck....not one thing going wrong...but a combination of things.
All the housing 'bubble' talk makes a lot of sense, and for the near term I'm of the opinion we could expect a mild to nasty 'correction'. In the long term, I think the prospects for real estate, especially in the Southwest and Florida, are pretty bright. USA population is slated to increase by about 200-250 million in the next 50 or so years; a combination of baby boom II (their kids) and immigration. (where do you think those mexicans are gonna wanna live?)
Save your cash and get ready to step into some prime beachfront when the bubble breaks!