Real Estate Market / Inflation / Recession / Depression (mortgage, loans, for sale)

[CosmicWizard]

jazzlover wrote:

My specific point about out-of-staters is that a lot of the real estate bubble in Colorado has been financed and perpetrated by out-of-state people cashing out their equity in inflated real estate markets elsewhere (California is but one example) and using that to purchase Colorado property--contributing to real estate price inflation here.

Bob from down south wrote:

The only real animosity I've actually seen displayed first-hand for out-of-staters in my limited time in CO in the last year was directed at the so-called "equity locusts"--those from California and other high-cost markets that made a fortune in the bubble runup, cashed out while the getting was good, then took their windfall into Colorado and proceeded to bid up housing prices to the point where the working class could no longer afford to live where they grew up. To that degree, Colorado was affected by the California housing mania, and it seems understandable that some of the natives might still be grumpy enough to want a few scalps.

The out-of-state buyers are only half of a real estate transaction. No one pointed a gun at the Colorado-owner of the home to sell it at the inflated price. Lets realize that both parties contributed to the higher prices. It makes no sense to bash the good fortune of California property owners who happened to be in the right place at the right time. When they purchased their property they did so at a risk, not having any assurrance that their property would appreciate. They lucked out. Isn't this exactly what you're hoping to do with your investments whatever they may be? You guys are living on sour grapes. It's time to quit the bitching, moaning, griping, whining, and complaining and change your diet.

[jazzlover]

Originally Posted by NewAgeRedneck

[ No one pointed a gun at the Colorado-owner of the home to sell it at the inflated price. Lets realize that both parties contributed to the higher prices.

You are absolutely right about that. Some of those sellers also "traded up"--helping to fuel the fire expanding the bubble. This is one of those unfortunate circumstances in which what may make good economic sense for the individual eventually adds up to collective suicide for the economy. I'm sure the same justification that you make for the buyers and sellers of real estate, NewAgeRedneck, was made for some of the people (on both sides of the transaction) who ran stock prices up to the moon leading up to October, 1929. Whatever good sense it made for them individually, it perpetrated a crash that sent the economy into a decade-plus-long funk that nearly wrecked the country. Like the stock market then, when people started speculating on their home values in the last decade or so, the table was set for the mess we're in now.

Websters definition:
spec·u·late: to assume a business risk in hope of gain; especially : to buy or sell in expectation of profiting from market fluctuations

It also follows that when the average Joe Public gets goaded, cajoled, seduced, or sweet-talked into joining the speculative fray, that is usually when the most egregious and dangerous irrationality in the market ensues. The parallels between the 1929 stock market behavior and the behavior of the current real estate markets are way too similar. They will almost certainly lead to the same result. Do I blame the realtors, lenders, buyers, and sellers for this mess? Yes. Who is most at fault? That's like asking whose fault prostitution is. The john? The prostitute? The pimp? They all have a part in it.

[CosmicWizard]

jazzlover wrote:

Do I blame the realtors, lenders, buyers, and sellers for this mess? Yes. Who is most at fault? That's like asking whose fault prostitution is. The john? The prostitute? The pimp? They all have a part in it.

In some way, those who sat on the sidelines and ALLOWED it to happen also played a part in it. Blaming and fault finding ( no matter who is at fault ) only prolong the problem. Let us find a way to move beyond the blame game and go forward.


jazzlover wrote:

Whatever good sense it made for them individually, it perpetrated a crash that sent the economy into a decade-plus-long funk that nearly wrecked the country. Like the stock market then, when people started speculating on their home values in the last decade or so, the table was set for the mess we're in now.

Does this mean that if one of your investments was to triple in value, that you would some how see it as a bad thing for the overall economy or does this logic apply only to the investments of others?

[multitrak]

Originally Posted by jazzlover

Do I blame the realtors, lenders, buyers, and sellers for this mess? Yes. Who is most at fault? That's like asking whose fault prostitution is. The john? The prostitute? The pimp? They all have a part in it.

now would buffy be the pimp, prostitute, or john?

Buffett said he sold two residential units in San Francisco about two years ago. The real estate agents wanted him to list one of the properties for $995,000, but Buffett listed it above $1 million and it sold for $1,750,000 in one day, the billionaire recalled.

Housing weakness isn't over yet, Buffett says - MarketWatch

[Maltose]

Denver foreclosure rate up

Foreclosure rate jumps 637.5 percent : More Business : The Rocky Mountain News.

Denver median price down

Denver-area median housing prices plunge : Real Estate : The Rocky Mountain News

[sterlinggirl]

Nice derailment Redneck, but Jazz and Bob consistently point out that you shouldn't view a home as an investment. The 'home investing' mania is what drove up the prices to unrealistic levels.

[multitrak]

all fear mongering rhetoric aside, some facts still remain: one, the stock market has recovered and moved higher as the threat of recession or depression abated; second, gold has moved lower indicating that the risk of financial chaos has lessened; three, the dollar appears to have bottomed and has moved higher; and four, the denver real estate market has bottomed and will stabilize over the remainder of the year. while the investors, individuals and families that overextended themselves may have some more future pain and suffering, the economy as a whole is on the road to recovery. and the economic recovery will accelerate once crude oil, now near a peak, moves lower. so forget the talk about crude oil super spikes to $200/bbl and other such silly blather. depression? yeah, right, whatever...

s&p500 chart: Futures Trading and Commodities Trading : Discount Brokerage Services

gold chart: Futures Trading and Commodities Trading : Discount Brokerage Services

dollar chart: Futures Trading and Commodities Trading : Discount Brokerage Services

denver housing chart: http://chartsrdc.cme.com:443/cs/char...=DEN&_month=-1

[sterlinggirl]

Dow.....still in the 12K range where it's been stuck ever since it took a dive from 14. It did have a brief rally, but has been backing off of that top. Factor in the decline in the dollar to see how many years profit you just lost. The new 12K is actually the old 6-8K.

Dollar....If I sell my house for double what I paid, I'll think I broke even. Everybody who thinks they haven't lost their ***** because their houses have held their dollar value for the last few years would be shocked if they made a chart showing its value in oil, silver, gold, wheat, Euros, Pounds, Looneys, etc. Don't count on the media to make one of these charts for you. They don't want you to see it....

When you factor market declines with dollar declines, you can realize that the front range lost half its real estate wealth in the last few years.

[CosmicWizard]

sterlinggirl wrote:

Nice derailment Redneck, but Jazz and Bob consistently point out that you shouldn't view a home as an investment. The 'home investing' mania is what drove up the prices to unrealistic levels.

Not EVERYONE thinks like that. Many people have made B-I-G $$$ by viewing home ownership as an investment, and others are getting burned....similar to most other investments. I'm guessing that both Bob and Jazz missed out on the opportunity to make money via home ownership so they blame anyone who did as players inducing the real estate bubble. Anyone can play the blame game, but that does nothing to resolve the issue.

[jazzlover]

Originally Posted by NewAgeRedneck

sterlinggirl wrote:

Nice derailment Redneck, but Jazz and Bob consistently point out that you shouldn't view a home as an investment. The 'home investing' mania is what drove up the prices to unrealistic levels.

Not EVERYONE thinks like that. Many people have made B-I-G $$$ by viewing home ownership as an investment, and others are getting burned....similar to most other investments. I'm guessing that both Bob and Jazz missed out on the opportunity to make money via home ownership so they blame anyone who did as players inducing the real estate bubble. Anyone can play the blame game, but that does nothing to resolve the issue.

Bad guess. I came out whole in the real estate market BEFORE the wheels started falling off. I followed my my own advice. That said, I didn't, and don't, consider my home as a speculative investment. It's a place to live.