Real Estate: Fundamentals

Quote from Covertibility:

This has to be the dumbest article I've read this year. I'm printing it out just for future laughs. Then again, according to the link above, the author is the publisher of " The Hyperinflation Survival Guide by Dr. Gerald Swanson." A good market for that book would be in South America, any third world country or anyone who lives in fantasy land.
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what exactly do you disagree with? for you to say it is the dumbest article you've read leads me to question your judgement. we are currently in the biggest credit bubble mankind has ever witnessed..... do you think this thing ends pretty? the big question is when...that, i have no answer for. but $100/barrel oil prices may just push it that much closer, something has to give.

i will tell you what the next big scandal is going to be and that is mortgage lending. these guys have put so many bad loans out there that we aren't going to know what hit us when they start going bad. just my opinion, and i don't know when it is going to hit.....but trust me this is going to happen.

some people bitch on here about getting out early but a good trader accepts that dynamic very early in his career. remember Baron Rothschild's famous axiom, "I never buy at the bottom and i always sell too soon." imho, the smartest rule a trader can have.
 
Jem i agree with you


i live in florida and i konw a lot of poeple
who work from home with jobs they had in NY and continue to have...

they just do it online and travel once every couple months up north to attend meetings, show face ,etc

only problem is when u want to change jobs

apartments in nice ares here are approaching NYC type pricing..but the job market here (for a real job) blows..unless you are bi-lingual and can get a job repping Latin America...but still the money is nothing compared with NY or Cali for that matter

just my 2 c
 
Quote from SteveD:

Roach is incorrect. If a house has a "certificate of occupancy" it will have a value. It may be low but there is always a value there.

Try that with a busted company, Enron bonds, etc etc. They all can and do with relative frequency go to ZERO.

And, even if the house has no value, the land underneath has some residual value.

Wall Street keeps warning about the impending doom of a housing bubble because they now realize that the late 90's bubble burned so much money that most of those people will never come back to "investing for the long term" with the likes of Wall Street crooks.

As people get more comfortable with real estate and commissions come down there will be more and more of the investor type of landlord for rentals, flippers, "re-hab" and so forth.

Will there be some stupidity in real estate? Of course. There always is in any market.

SteveD
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Roach would indeed be wrong if he said houses might become worthless. But you know he said no such thing.

Roach speaks of market liquidity, and in a down real estate market transaction volume dries up. The remaining sellers who just have to sell accept much less. In Los Angeles the last real estate cycle lost at least 30% from peak to trough (condos -40%). With the valuations of California real estate these were some pretty big numbers. In the next down cycle the numbers will be MUCH larger.

Unlike with stocks, there is no "market-maker" buyer of last resort, hence Roach's comments "here are no organized futures or options markets for properties..."

Roach also speaks of tightening lenders, this being the other shoe that will as Roach mentions "amplifying the bust".

This is going to be ugly to say the least. Roach is right, and as usual he nailed it.
 
OneWay, you are probably a nice guy but for some reason you just don't understand the real estate market. It is simply supply and demand.

Mr. Roach was trying to imply that real estate was no different than any other class of investment. That is simply not so. Only commodities have some residual value. They do not go to ZERO. All derivatives, options, futures stocks bonds etc etc can and do go to ZERO. They are merely pieces of paper.

Real Estate is different. There may be "re-pricing" but I have never seen or heard of a home being totally worthless. These are "hard" assets that always have some value

There will always be buyers. That is a fact. The seller may not like the price but there are always buyers.

Do not think for one minute that prices HAVE to come down. I think they will but I certainly would not "short" the home builders.

Mr. Roach is wrong and has been for a very long time. He has not "nailed" anything as he has been calling a top for several years now. My guess is he will be gone by the end of the year.

"If you stand on the tracks, ignoring the facts, don't blame the wreck on the train",

SteveD
 
Fannie Mae exec comments (covering his ass...)

http://www.marketwatch.com/news/story.asp?guid={5A56987D-4CB1-4CE9-B082-2DFE1CAA54F6}&siteid=google


"The possibility of a housing bust has "risen sharply in certain parts" of the U.S., thanks to a number of conditions including easier lending standards, a Fannie Mae executive said."

"Thomas Lawler said housing-market conditions in many areas mirror past conditions that preceded regional housing busts. Lawler is senior vice president for risk policy at the housing-finance giant."
 
Quote from SteveD:

Roach is incorrect. If a house has a "certificate of occupancy" it will have a value. It may be low but there is always a value there.
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First of all, Roach never implied that housing prices could or would go to zero.

Second, only an idiot invests based on the risk of losing their entire investment. A dollar will never lose all of its value. That doesn't mean you should keep all you money in cash.

Third, the vast majority of home buyers are leveraged. Under those circumstances it is entirely possible that many Americans will lose their entire real estate investment. If you take leverage into account, the American public stands to lose far more net worth through a housing bubble than a stock bubble.

Martin
 
http://www.palmbeachpost.com/news/content/news/special_reports/housing_boom/archive.html#handcuffed


this link is great and will tell you all you need to about the Palm Beach County Boom. Most hilarious of all are the little blurbs that pop up detailing each little genius play made by these Palm Beach County Players who can do no wrong.

Click on "Winning the Real Estate Game" to witness Dave Del Dotto in action (just kidding... not really).

On this link: http://www.palmbeachpost.com/business/content/news/special_reports/housing_boom/

you can click on the Fox 29 report and watch an actual television news report on the amazing real estate market where single homes are bought and sold 4 times within one year.
 
Quote from SteveD:

OneWay, you are probably a nice guy but for some reason you just don't understand the real estate market. It is simply supply and demand.

Mr. Roach was trying to imply that real estate was no different than any other class of investment. That is simply not so. Only commodities have some residual value. They do not go to ZERO. All derivatives, options, futures stocks bonds etc etc can and do go to ZERO. They are merely pieces of paper.

Real Estate is different. There may be "re-pricing" but I have never seen or heard of a home being totally worthless. These are "hard" assets that always have some value

There will always be buyers. That is a fact. The seller may not like the price but there are always buyers.

Do not think for one minute that prices HAVE to come down. I think they will but I certainly would not "short" the home builders.

Mr. Roach is wrong and has been for a very long time. He has not "nailed" anything as he has been calling a top for several years now. My guess is he will be gone by the end of the year.

"If you stand on the tracks, ignoring the facts, don't blame the wreck on the train",

SteveD [/QUOTE

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Good points and
polar bears had a 2 day run in homebuilders,
looks bullish again:cool:

Also a home mortgage could be considered a bank related derivative.
:cool:
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