US real estate

[EMRGLOBAL]

then what's the point?
-----------------------------------------------

Well good question BOB. However, if I were to revert back to my old way's I would say....BOB PULL YOU HEAD OUT OF YOUR ARSE.

Instead, I will try a new approach with the idiots, I mean members on ET.

90% of American's hold their "NET WORTH" in their house. So, the point is as the housing "Crash" continues, against the PUNDITS cheer-leading recovery mode, this means that 'AMERIKA' over all is worth less in "REAL NET WORTH".

Of course you throw the dollar on top of the housing crash and watch your "NET WORTH" flow out the window faster than water pours out of a damn, when the flood gates are open.

Ok, now throw in all you "BABYBOOMBERS" who are about to get bitch slaped when the INDU takes a dive to the lows of 08. No idea when this will be but the "INDU Bubble" can not last much longer.


Bottom line, the country is in a Depression and the Depression is Local as you say. But the housing data points to two things.
1- Another serious down move in the economy.
2. A great buying opportunity for those who have real income, great credit score or cash to play with.

THIS IS THE BEST BUYING OPPORTUNITY FOR A HOME IN MODERN HISTORY!!!!!!!!!!! Of course, RE is local, so you have to do your research before you jump in...like all those inverters three years ago..who poured into MIAMI and called the bottom.

 

[dumb_mother]

Quote from EMRGLOBAL:
THIS IS THE BEST BUYING OPPORTUNITY FOR A HOME IN MODERN HISTORY!!!!!!!!!!!

i have to completely disagree with this statement.

as you pointed out housing prices are likely to continue to decline, even if we are looking at a negative real interest rate environment- if the asset you are looking to purchase is going to continue to go down in price you my as well wait a bit longer to purchase it. i think the real time to buy a house will be once mortgage rates hit 10+% and then just to pay cash, until then i'd sit in physical assets or "tollbooth" stocks like nat gas pipelines, electic lines, refineries and of course physical silver. sit back and watch home values collapse along with the dollar over the next decade.

another option is to wait for the mortgage deduction to be taken away by congress and the next day go offer someone 25% less than they were asking and cite the lack of the mortgage deduction, because the upper end housing market will drop by at least 25% if that legislation passes

there is no reason to go out and buy a house now when 30+% of the market is foreclosures and all housing markets are in clear bear market trends, it's never the safe or best play to try and catch a falling knife, wait til housing prices recover and jump 20% to get in- you won't "call the bottom" but you also won't be the sucker who buys it and watches the price drop yet again in half.

 

[tradewiz50]

http://www.realtor.com

 

[Bob111]

Quote from dumb_mother:

i have to completely disagree with this statement.

same here..i see no reason to buy,unless you have some good connections,that allow you to buy at the prices way below current market(on other hand-if you have such connections-you can make money in any market)
buy to live-that's fine. but buy to rent? you have to do helluva home work before that. for example in my area-if i buy and rent today at our current prices-my return would be around 1-2% after all expenses. f ** that..bank pays more or same without any hassle....not to mention further downside risks..as far as i remember typical rent use to be around 10% after all expenses...

 

[gptrader]

Rent, no ties, chose where you want to live. Stuck if you buy, be sure you want want 7-19 years

Quote from Bob111:

same here..i see no reason to buy,unless you have some good connections,that allow you to buy at the prices way below current market(on other hand-if you have such connections-you can make money in any market)
buy to live-that's fine. but buy to rent? you have to do helluva home work before that. for example in my area-if i buy and rent today at our current prices-my return would be around 1-2% after all expenses. f ** that..bank pays more or same without any hassle....not to mention further downside risks..as far as i remember typical rent use to be around 10% after all expenses...

 

[tyrant]

Quote from Bob111:

same here..i see no reason to buy,unless you have some good connections,that allow you to buy at the prices way below current market(on other hand-if you have such connections-you can make money in any market)
buy to live-that's fine. but buy to rent? you have to do helluva home work before that. for example in my area-if i buy and rent today at our current prices-my return would be around 1-2% after all expenses. f ** that..bank pays more or same without any hassle....not to mention further downside risks..as far as i remember typical rent use to be around 10% after all expenses...

If prices have fallen in your area, return should be closer to at least 6-7% right? Care to explain why you would only get 1-2%?

 

[sle]

Quote from peilthetraveler:

There are some luxury condos by my house that fell in value over 80%. They were originally $287k and now can be had for about $50k.

I might be wrong, but I don't really think anything that sells for 287k could be considered luxury.

 

[tyrant]

Quote from dumb_mother:

i have to completely disagree with this statement.

as you pointed out housing prices are likely to continue to decline, even if we are looking at a negative real interest rate environment- if the asset you are looking to purchase is going to continue to go down in price you my as well wait a bit longer to purchase it. i think the real time to buy a house will be once mortgage rates hit 10+% and then just to pay cash, until then i'd sit in physical assets or "tollbooth" stocks like nat gas pipelines, electic lines, refineries and of course physical silver. sit back and watch home values collapse along with the dollar over the next decade.

another option is to wait for the mortgage deduction to be taken away by congress and the next day go offer someone 25% less than they were asking and cite the lack of the mortgage deduction, because the upper end housing market will drop by at least 25% if that legislation passes

there is no reason to go out and buy a house now when 30+% of the market is foreclosures and all housing markets are in clear bear market trends, it's never the safe or best play to try and catch a falling knife, wait til housing prices recover and jump 20% to get in- you won't "call the bottom" but you also won't be the sucker who buys it and watches the price drop yet again in half.

How certain mortgage rate will go to10%? In the long run, property prices tend to go up. A 50% correction is serious enough now. I think US props at good location is a buy now. Buy where there is almost guaranteed tenants. As long as rentals cover monthly payments and they should given depressed prices, should be good.

 

[Random.Capital]

Quote from tyrant:

In the long run, property prices tend to go up.

In the long run, property prices go up at the same rate the economy goes up.

A 50% correction is serious enough now.

There's another 50% coming. Current mortgage policy is unsustainable, and like all unsustainables, it will come to an end.

 

[tyrant]

Quote from Ghost of Cutten:

It's simple. At the peak, some condos were selling at a rental yield of 2-3%. If the rental yield goes up to 6-8%, then the price has to fall 50-75% - assuming the rent stayed the same. If the rent fell somewhat, the price can fall even more. Basic arithmetic.

If rental yield is 6-8% now, it should be a good buy, meaning prices should go back up. Even if it does not, it still gives positive cash flow monthly. In Asia, properties giving such returns have no chance to make it into the market. It will be gobbled up. maybe a crash is imminent in Asia including Australia.