Short Housing

The salespeople at the home developments where I live around Corona are so arrogant they act like they are doing you a favor just to speak to you. Of course just about every new home development phase sells out as soon as they put them up for sale. Boy, I sure wouldn't mind seeing it turn around on them.
 
They'll be asking if you want to "Super Size your meal" soon enough. Of course I totally understand the salespersions attitude as I've been labeled as arrogant on these boards..... which really cracks me up...... :) Most of the salespeople never understand the concept of saving for a rainy day and a chimp with the ability to read and write could perform their duties in the current environment.

It's getting to the point that you have to have a yearly income of about 80-90K to qualify for the AVERAGE home in So. Orange County..... Amazing!!!!!!

I'm getting computer generated recorded phone messages at least 5 times a week from mortgage brokers wanting to re-fi. You getting any of those? The other one I get is for a Satellite dish. Sheesh, never thought having a phone would be so bothersome.....
 
I also get the computerized refinancing sales messages (as well as the satellite).

I have noticed with the new housing developments out where I live that they first open a phase with say 1,800 to 2,300 square foot homes for around $230,000 just to see how the demand is. Now when those sell out what they are doing is 2,700 to 3,300 square feet with everything around $300,000. They won't even build the smaller cheaper homes anymore. I guess they make more profit with the larger ones.

Whatever they are doing they are selling it as soon as they put it up for sale. Wow
 
Another dynamic is the Rent vs. Mortgage debate.

As the rents come down as they have and the mortgages continue to increase the benefit of owning becomes less attractive. Of course the american dream of owning a house is still strong in the minds of buyers regardless of the actual cost related to the purchase/rent analysis. My sister just sold her place and is going to rent because of the difference in monthly cost in the area she's moving to, rent 1300 mortgage 2100. Even at the most favorable tax rates she'd be lucky to break even and avoids the risk of potentially being up upside-down in an overpriced home.

I use a theory that the payment of a home will stay about the same and the price is determined primarily by interest rates. If you had a 300K home with a payment of 2000/mo @ 6.75%, that same house at 10% would still have the same payment, but the price would be lower in the 180-200 range. Of course other factors also come into play, but, I have noticed this appears to occur. I still believe that the burst this time will cause an even greater % reduction in home values than in prior run-ups.

Have a great day,

Cracked
 
Originally posted by rs7
Hey, how soon is "eminent"?
More...
"But reading the Economist recently, I was reminded that in Japan in the first two years of its bubble breaking, Japanese real estate -- land and property -- went up even as the Japanese market went down 50%. " (An Interview With Jeremy Grantham, Barron's).
 
I was in Barnes & Noble yesterday, and this 30-mid 30ish couple walk in I overhear the husband (I guess looking at William O'Neal's book)- "How to make money in stocks? Ha! Hilarious. Easy. Don't buy 'em!" His wife thought that was a blast, and they both promptly walked over to the real estate books area...
 
real estate crashed in new england in the late 80's. loans were called, millionaires went back to work, banks negotiated. an amazing redistribution of wealth took place. and of course, 4 years later, it was all but forgotten (by many, certainly not by all).

this time around I think it'll be different. just can't see it bouncing back so fast.

hope i'm wrong.

anyway, guess I thought of shorting housing too late....
 
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