Short Housing

I rent my house. I refuse to pay the agent's 6% fee (highway robbery to me). I think if one puts a pencil to it, renting is not much more expensive than owning (if at all, but I know it depends on the local market).

What about maintenance and repairs? If the hot water heater or the a/c goes out, there's no money out of my pocket and it's not my headache (and time) to fix it. I like that. I know I'm not building equity and I get no interest deduction, but if I can buy a house for half price in the next 5-10 years (maybe less), I'm way ahead of the game. PLUS I can use (what would have been) my down payment to trade!

Check out Prechter's "Conquer the Crash." In it he states: "real estate prices have always fallen hard when stock prices have fallen hard." I'm convinced. WIth all the unsustainable debt out there, there has to be a huge adjustment in the future. I see a lot of 2 income families only a few paychecks away from trouble. What if one of them loses a job?

I think this real estate bubble is at least as big as the Nasdaq bubble (that was). No money down? That's huge leverage.

I'm sittin' tight.
 
Originally posted by chisel
I rent my house. I refuse to pay the agent's 6% fee

Sellers pay the commision, not the buyer. So how does that affect you?


but if I can buy a house for half price in the next 5-10 years (maybe less), I'm way ahead of the game. PLUS I can use (what would have been) my down payment to trade!

What if you are wrong about the price of houses? And what if you lose your down payment trading?

Check out Prechter's...
Who has been more wrong for more time than Prechter? If I had his approach to life, I wouldn't be concerned with selling my house, I would be living in a fallout shelter!

I think this real estate bubble is at least as big as the Nasdaq bubble (that was). No money down? That's huge leverage.

I guess it remains to be seen if it is a bubble.....and if it is, I don't know of any suburban homes that actually lost value over any real significant time frame.
And how do people buy homes with no money down????? I have heard this mentioned, but I don't know what it means. (unless you are talking about VA mortgages
 
Originally posted by rs7
Originally posted by chisel
And how do people buy homes with no money down????? I have heard this mentioned, but I don't know what it means.
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Financing by the seller..
 
If I was going to short real estate I would focus on the office building REITs, like EquityOffice etc. They are going to be the most hurt by the NASDAQ bubble busting. Throw in Enron and other energy companies and probably some big brokerage companies in NY downsizing and you could have a 20-25% vacancy across the country in office space.

Everyone talks about a "housing bubble" but they almost always mention So Calif, East Coast, Bay area of Ca.. No one talks about middle America and other spots like Tex. Az. Fl and other sunbelt states where the most construction is taking place. As long as interest rates stay below 8% there is a bottomless pit of buyers. Some high end residences have appreciated tremendously in the last 3-5 years but that is not the average house.

Housing is a life style choice. A lot of people live in houses with a huge amount of "paper equity" but this is there HOME. They have no desire to move or "cash in". They are perfectly happy to pay off the mortgage and live debt free. Everyone has to live someplace!! If you sell your stock portfolio you put the money in the bank....if you sell your house you have to MOVE someplace else. That is a huge emotional decision for the vast majority of people.

I am in real estate in Houston and I lived through the 80's and did see a pure depression of real estate that is hard to describe to anyone that was not here to see it firsthand.

Just my two cents worth, LOL
 
the WSJ sports an article about 'fears of a real estate bubble prompt selling' in one of the back sections Tuesday.

As far as RE - associated equities, maybe I should sell low and buy lower....some of these puppies might get <i>enronish.</i>
 
Anybody notice that the ratings on these stocks are still high even though they are coming down....sound familiar? I wonder how many people will get burnt this time holding the bag.:)
 
Im in chicago, got my loft at 181 per squar foot, two years ago.

My neighbor down the street is selling his for 170 per squar ft.

there are 50 buildings in my neighborhood, all new and most empty

top for sure
 
dude. you must be the only person who isn't making a killing in real estate!:D

I'm sorry for you. I've bought some tops and sold some lows in my time.
 
Originally posted by chasinfla
dude. you must be the only person who isn't making a killing in real estate!:D

I'm sorry for you. I've bought some tops and sold some lows in my time.
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I also had bad timing selling my first home.But I still made a little. I was just early. The home I sold 11 years ago for 140k is now worth (I hear) over 300. But I lived in it for 4 years, and made 12k on it, so I can't really complain. The profit covered more than 25% of my mortgage while I lived there, and add in the tax benefits, so my real monthly cost can be looked at as if I were paying only half of my mortgage. Beats renting by far. So now, I am truly reluctant to sell....even though my wife wants to cash out, and I have way more house than I need. But where to go? I looked at new construction, and the locations suck, and the houses are so much smaller. It seems like my best bang for the buck is to stay put. I wish I could figure out a logical alternative.
 
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