Housing schmousing...

murray t turtle · Jun 28, 2005

Quote from cakulev:

I still think the key question is how much he is planning to stay.
If he stays say 2-3 years then the huge transaction costs will probably eat any potential appreciation (if any).

If he is moving for good it doesnât matter much bubble or not. He could compare rents with mortgage cost but again it depends how much he values being a homeowner. My perception of that value is significantly different than the one from my wife.

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Helpful points , and when I have bought, didnt get in a hurry,
which some of our Realtor friends didnt like much.

Besides RE isnt liquid like stocks;
and while RE agents certainly are worth comissions as as full time pecialists generaly are,
wide bid/ask/exspenses in RE.

Ivanovich · Jun 29, 2005

Quote from Thunderdog:

Oh, come on, don't be such a spoil sport. What about that shorting builders/shorting bonds/buying gold hedge play that you referred to on page 2 of this thread? Maybe you could get some former employees of Banker's Trust to write a special derivative for you like they did for Procter & Gamble.

I'm sorry....where did I refer to that?

Lawrence Chan · Jun 29, 2005

There are two types of ownership to a house/condo/whatever as my company partner always said,

1. hope of making money
2. consumption

if it is consumption, then nothing should affect your decision except affordability, and if you truly think you like a place and would like to live there for the rest of your life

if it is making money, then it is something else and open up a whole can of worms

slickman · Jun 30, 2005

I hear few words mentioned talking about it (the carry trade; that old chestnut) but that trade is getting squeezed to a point where the costs of unwinding are beginning to outweigh the spread.

The short term rates have to cross a threshold and hold there longer than the market expects. That should not take long for weak hands to lose their grip; thus a domino effect (to what extent is conjecture). Furthermore, what kind of leverage is being acutely applied to long term rates?

Monetary policy has been enitirely too accomodative for too long. This stance renders the fed impotent to achieving some of its goals.

aPismoClam · Jun 30, 2005

Quote from Lawrence Chan:

There are two types of ownership to a house/condo/whatever as my company partner always said,

1. hope of making money
2. consumption

if it is consumption, then nothing should affect your decision except affordability, and if you truly think you like a place and would like to live there for the rest of your life

if it is making money, then it is something else and open up a whole can of worms

yeah, housing: the ultimate consumable.

Ivanovich · Jun 30, 2005

Quote from Lawrence Chan:

if it is consumption, then nothing should affect your decision except affordability, and if you truly think you like a place and would like to live there for the rest of your life
[/B]

What about getting what you pay for? The thought here is that homes in the Northern NJ area going for well over half a million are certainly NOT worth that price. And perhaps by waiting, this price will drop a bit.

Lawrence Chan · Jun 30, 2005

Quote from Ivanovich:

What about getting what you pay for? The thought here is that homes in the Northern NJ area going for well over half a million are certainly NOT worth that price. And perhaps by waiting, this price will drop a bit.

When it is consumption, there is no such thing as objective valuation anymore

e.g. you like a movie so much you buy it the first day it is available in the store, knowingly know that in a week or so, it will be at least 10 to 15% lower in price.

Thats why affordability is the only factor remaining, although most people over estimate their ability to afford anything

Thunderdog · Jun 30, 2005

Quote from Thunderdog:

Oh, come on, don't be such a spoil sport. What about that shorting builders/shorting bonds/buying gold hedge play that you referred to on page 2 of this thread? Maybe you could get some former employees of Banker's Trust to write a special derivative for you like they did for Procter & Gamble.

Quote from Ivanovich:

I'm sorry....where did I refer to that?

Please refer to the last post on page 2 of this thread:

Quote from cakulev:

Shorting builders? Short bonds? Buy gold?

Perhaps I took it "slightly" out of context for dramatic effect. Poetic license, and all that.

Covertibility · Jun 30, 2005

Housing bears still at it, oh wait, its this site...these are just apartment dwellers who can't afford anything.

tanp21 · Jun 30, 2005

Quote from Covertibility:

Housing bears still at it, oh wait, its this site...these are just apartment dwellers who can't afford anything.

Careful what you say. My 600 square foot apartment in NYC is worth more than your house.