housing crash

Quote from ratboy88:

i spend my day "day trading" so yes, timing is very important. i don't make predictions about my trading...if i need to change my opinion on a dime, then i do it. it is not about being right or wrong..it is about what i do when i am right and what i do when i am wrong. has nothing to do with making a prediction on a chat room board. LOL LOL LOL and believe it or not i am not married to being right about the bubble..... if we experience hyper-inflation then i would change my prediction in a heart beat.
and btw, 2 years is nothing for a bubble....these things take time ya know.

but bottomline we will never know how this plays out because you are afraid to go on the record and establish what you would consider a bubble. if we hit 25% you would say that is not enough.....30% who knows. i say get off the fence oldtimer and get some balls.
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A day trader with a 2 year prediction? LOL! What a riot. I'm sure your day trading gives you considerable qualifications for the real estate "predictions" that you make!

But in terms of the record, I'm not sure why it's important to you that I define "bubble". I don't think we're in one. I've already said I don't think we're going to decline "overall" in any kind of a meaningful manner. I don't think we are at a long lasting peak. I'm sure if your prediction comes true any time in the near term future you'll know I was wrong. And by the way, I do hold a meaningful position in rental real estate, so a decline of any magnitude will affect my net worth.

While you characters were all predicting the upcoming crash, I was stating the opposite....a period by the way that saw real estate continue to move up, in some cases, dramatically. In terms of the homebuilders specifically we saw Toll Brothers double over the course of one thread.

In the meantime sonny, if you need a place to rent let me know.

OldTrader
 
Quote from OldTrader:

A day trader with a 2 year prediction? LOL! What a riot. I'm sure your day trading gives you considerable qualifications for the real estate "predictions" that you make!..................

OldTrader
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my prediction has nothing to do with my day trading. c'mon gramps put your teeth back in and think about this one. you know you might want to cut down on the american cheese in your diet...i hear it leads to Alzheimers.
 
Quote from ratboy88:

my prediction has nothing to do with my day trading.
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Exactly my point sonny: in fact, your prediction is one that you are singularly unqualified to make. But that's the nice thing about message boards....daytraders get to pontificate on all sorts of things that they know nothing about.

OldTrader
 
Quote from OldTrader:

Exactly my point sonny: in fact, your prediction is one that you are singularly unqualified to make. But that's the nice thing about message boards....daytraders get to pontificate on all sorts of things that they know nothing about.

OldTrader
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another nice thing about message boards is it gives senior citizens a place where they can "gum" it up about the old'en days. now go eat ur strained peas and carrots.
 
The thing is, the ramifications of a 20% decline in home prices this time around are so much larger. It has been home equity and declining savings that has propped up consumer spending. Once home prices fall ~20% the second and third order effects are going to be the ones that matter.

A housing slump risks a consumer spending slump, risks a production and hiring slump, risks an employment and income slump, further risking home prices and consumer spending ...

It is even worse if the housing slump is brought on by a spike in interest rates, because higher interest rates impact corporate profits, consumer debt service, government debt service, etc.

That is what unwinding a leveraged economy looks like - margin call after margin call after margin call. Where it stops is likely some deep dark ugly place.
 
First of all, for the umpteenth time, real estate does not have a "margin call".

The US housing market is based on long term fixed rate self liquidating mortgages. Anything other than this is a very small percentage of the whole residential mortgage market.

Please distinguish between real estate speculators and real live owner occupied homes. Huge difference!!!

In DHOM press release it states there is a back log of 632 contracts that have not closed yet. Without knowing the specific facts that would seem like a slowness or delay on DHOM on delivering the finished home. Not a slow down in DEMAND!! Also, these areas of the country may be fully saturated with new construction. May be easy to meet demand for new construction in that area. Depends on job growth, new family formations, etc.

I have not seen anywhere any meaningful OVER BUILDING on a homebuilders part. Lots of unsold houses!!! Maybe here and there where they built the wrong house in the wrong location. Small local situations.

If you put your home on market for $500,000 and it does not sell, then you reduce the price to $450,000 and it sells, that is not a sign of weakness, necessarily, it was probably priced wrong in the first place.

GOLD: That is one huge bubble, yet again, LOL. IMO, only Dentist and jewelers can set price of gold. Every one else is mere speculator!! And, please, don't start with the "hard" asset nonsense of the third world economy baloney.

KMART: Most major companies have huge land holdings they own in the course of their primary business. That building has to set on something. Some own, some prefer to lease. Wal-mart, for instance, never is a tenant unless not avoidable and they want location very badly. Walgreens and CVS do what is called "sale-leasebacks". Develop buys land, Walgreens signs long-term lease, builder builds building to their specs at a set or negotiated rate. These lease are traded all the time pretty much like a bond. Look in WSJ on Wednesdays in property Market section for ads.

Eddie Lambert saw a unique opportunity to acquire two large retailers that owned an enormous amount of land throughout the US. There is a pony under all the horse manure, LOL. My guess is that he will sort out the situation and convert the operating stores to tenants and form a REIT with the property. This will maximize the land value and make it a more liquid asset.

Very smart and astute play.

This is a political incorrect statement: If you are not a native born American, it is difficult for you to understand the housing market in the US. It is a cultural thing. I am not aware of any country that has what we have here.

SteveD
 
Quote from SteveD:

First of all, for the umpteenth time, real estate does not have a "margin call".


In DHOM press release it states there is a back log of 632 contracts that have not closed yet. Without knowing the specific facts that would seem like a slowness or delay on DHOM on delivering the finished home. Not a slow down in DEMAND!! Also, these areas of the country may be fully saturated with new construction. May be easy to meet demand for new construction in that area. Depends on job growth, new family formations, etc.

SteveD
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First, you clearly don't know how to read. I said in plain english that a leveraged economy will experience margin calls. Obviously I was speaking figuratively to summarize the whole of my post.

Don't twist my comments in order to reiterate your point for the 'upteenth time.' We've seen it umpteen times already.

Second, your comment on DHOM's backlog is painfully embarrassing - for you. It demonstrates that you don't know what a backlog is, you think you understand much more than you do, and that your ignorance is quite dogmatic.

I've seen nothing of value in your posts and you are about a stone's throw away from my ignore list. (I'm pretending you care.)
 
Quote from OldTrader:

Finally, let me say that the guy who bought rental property isn't necessarily forced into "bankruptcy" if prices drop 20%. Alot here depends on what the income of the property is. Personally I don't buy properties that don't cashflow.....so what is important to me is the rent. In the situation that you envision, presumably we will see more renters around, more demand, and therefore it is possible that rents might rise.

OldTrader
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Old Trader,

Love your posts. I have a quick question for you thats a little off-topic. I don't know any REIs who were investing back when rates were high and climbing (or they don't remember) and I've been trying to figure this out:

If one were to buy a property today as an investment, (at these high prices) and put it on a fixed note such that it barely cash flowed (or perhaps slightly negative cash flowed before tax incentive), could you reasonably expect rents to rise in a rising interest rate environment?

All the properties I've purchased were bought at lower rates, and I'm being offered the "other half" of one of my townhouses at a fairly high price compared to what I paid for the first half (but still a discount to market prices). My strategy is to bank on rising rates making renting more commonplace and subsequently rents rising. Is this a very likely scenario, likely, unlikely, or improbable scenario?

Thanks,

SM
 
Quote from SteveD:

GOLD: That is one huge bubble, yet again, LOL. IMO, only Dentist and jewelers can set price of gold. Every one else is mere speculator!! And, please, don't start with the "hard" asset nonsense of the third world economy baloney.
SteveD
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Steve,

I hope you know that my statement about a gold bubble was facetious. I don't believe the "real" price of homes have changed much in the flyover states, and was making the point that it isn't a bubble....or making the point facetiously that the real estate was in a bubble as much as gold was.


SM
 
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