[Shores9]

Originally Posted by josephhawkinson

hey you exactly knew what I meant, pull a dollar from your pocket read it "Federal Reserve Note" it reads. FED sets the interest rates, FED is a private banking system, it is not part of the government and yes it does print our money (through treasury). Wake up and smell the coffee. your desperate attacks to debunk the ALL EVIDENT HOUSING BUBBLE BURST is not funny anymore.

it is a long read but , this may open your eyes:

http://www.moneyweek.com/file/19785/...fall-next.html

anybody who is not aware of the dire housing situation please READ the ABOVE article, it summarizes nicely.

Secondly, I say housing is NOT affordable at the moment and Shores9 starts comparing 2006 to 2002. Last time I checked RE cheerleaders were comparing previous year to current year. Does YOY (year over year) mean anything to you? I am sure housing is better than 1930 at the moment but the way it is heading is obvious. Sept numbers are coming out and and most places it is worse than August, sharper YOY declines. Well I heard many say it has hit the bottom but really, every month I hear the same thing. (ironic?)

Shores9 I am not going to assume anything but are you a REALTOR? or are you trying to sell your home? or do you work in a RE related job (insurance, mortgage, construction etc)

And yes I am a realtor and have ties to the industry from the banking mortgage origination/underwriting side to RE sales for over 18 years. I have seen this Bla Bla Bla before and still the RE market continues to climb over the long term.

If you want some intelligent discussion on these topics you should try reading WSJ real estate discussion board, however as I said before “you can explain it to someone but you can’t comprehend it for them.

If you read my post which I’m now confident you didn’t because my quick stat was about YOY 05-06 with 02 for perspective I now understand why your banter makes sense at least to you. Do you fully read your own new sources?

And the article you quoted was written by Mike Shedlock for Whiskey and Gunpowder. Who is Whiskey & Gunpowder other than a free, twice-per-week, e-mail service Tell me these guys are agenda free. If they didn’t publish something sensational who would subscribe to them?

[connie]

I participated in this type of discussion a few months ago and, at that time, held the opinion that the housing market would decline but not terribly. Others presented a more dire view.

I do not think we will see the same housing slump as in the 90s, since those days included high unemployment and interest rates, which we do not currently suffer. I think our economy is stronger now, and I also think the banks will work hard with people to avoid foreclosure etc., i.e. special mortgage payment plans, hardship payment plans.

But in the interest of fairness, I have to conclude that the people who held more dire views of the real estate market (JosephHawkinson, Shannon, Muggy etc) have the better argument. It's awful to admit, since we are trying to sell out here in Cal, but the evidence is simply there. People can't sell because prices are too high and incomes cannot support them. Creative financing is a less attractive option because people are seeing the problems that others are facing (thank God, since people should not buy what they can't afford). I think sellers, and real estate personnel, are the last ones to recognize what is obvious to everyone else. But this is definitely a hard correction. Maybe not a crash (at least not where I am), but a hard correction.

It almost seems like this is one of those situations where the common man is calling the situation for what it is, and the talking heads/market analysts/Harvard economists etc. are trying to make it into some kind of
interesting debate where the outcome is not yet certain. I hate writing this post, but I have to admit that others with more dire views simply have the better argument. They are right, and the evidence is there.

[josephhawkinson]

Connie,

Thank you for your comments. It is refreshing to see sellers come to a conclusion which is sensible. I hate to see people going to foreclosure, I dont enjoy it Moderator cut: ... however just for your information and remark about the banks wont let homeowners go to foreclosure, you may want to check the latest data. CA is leading the highest level of foreclosures in Sept, the month before it was FL. Like you suggested those toxic loans people took on for houses they could not in fact afford "can" turn the situation into a crash rather than a correction. Though FED has not increased rates lately but local FEDs have been crying out for inflation fears and sooner or later rates will have to go up , that can only make the situation worse because ARMs adjusting at higher rates and people not qualifying for traditional mortgage because of equity loss.

Greed, deception, stupidity and politics that allowed the lenders infest the RE market with toxic loans like interest only etc are to blame.

[Muggy]

Originally Posted by Shores9

I take it you weren’t playing natural gas futures

I don't get it. Is this a joke or an insult? I'm all for a good laugh or a witty jab, but this is neither. I told you why renting is better than owning right now. I've explained it to you but I can't make you comprehend...

[Shores9]

Originally Posted by Muggy

I don't get it. Is this a joke or an insult? ...

Definitely not an insult, just the opposite. The fact that you are not an active participant in futures is a great thing especially considering what has recently happened to Amaranth [hedge funds] and their 6.5 billion dollar loss in natural gas futures (hence the reference to natural gas). As a result their 9 billion dollar fund totally collapsed. Sorry for the misunderstanding

[Muggy]

No need to apologize. You were actually being serious! I just picked a random market (I thought you were making a tenuous "hot air" joke or something). Misfire on both ends. We're good. Back to the old debate...

Sorry for another edit: the point I was making is that renters and realtors often go head to head with all of this bubble stuff when we both are going to suffer for all of this nonsense (masterfully played by those at arm's length who had the timing and capital). I just wish other people could get rich creating something "good" instead of toying with habitats.

[shannon94]

Originally Posted by connie

I participated in this type of discussion a few months ago and, at that time, held the opinion that the housing market would decline but not terribly. Others presented a more dire view.

I do not think we will see the same housing slump as in the 90s, since those days included high unemployment and interest rates, which we do not currently suffer. I think our economy is stronger now, and I also think the banks will work hard with people to avoid foreclosure etc., i.e. special mortgage payment plans, hardship payment plans.

But in the interest of fairness, I have to conclude that the people who held more dire views of the real estate market (JosephHawkinson, Shannon, Muggy etc) have the better argument. It's awful to admit, since we are trying to sell out here in Cal, but the evidence is simply there. People can't sell because prices are too high and incomes cannot support them. Creative financing is a less attractive option because people are seeing the problems that others are facing (thank God, since people should not buy what they can't afford). I think sellers, and real estate personnel, are the last ones to recognize what is obvious to everyone else. But this is definitely a hard correction. Maybe not a crash (at least not where I am), but a hard correction.

It almost seems like this is one of those situations where the common man is calling the situation for what it is, and the talking heads/market analysts/Harvard economists etc. are trying to make it into some kind of
interesting debate where the outcome is not yet certain. I hate writing this post, but I have to admit that others with more dire views simply have the better argument. They are right, and the evidence is there.

Welcome to the dark side Connie!! lol Just kidding. I really do hope things work out well for you soon. I'm saying a prayer for all my fellow Californians.....despite my views.

[shannon94]

Originally Posted by Shores9

Nobody wants to make a mistake especially when it comes to a major investment like a house and most homebuyer have little investment experience. That being said there’s a lot of paranoia about anything getting so much attention like real estate. Bubble theories and doom and gloomers abound in this environment. They’ve been saying for years that the market couldn’t possibly go any higher and now they are finally right. Now they are trying to say the market will crash… we will see but I don’t think so. Fundamentals do not support a crash. However this is little comfort if you need to sell now.

Don’t let “sound byte news” get the best of you! Unfortunately, most people get their news and information from sources that filter it down to a manageable size with a tilt for the highest impact and as such you wind-up with an incomplete representation (bits and bytes) of the whole picture. The problem only gets worse when ill informed people make it the topic of everyday conversation or flame forums like this.

Two things are keeping people away; 1 – affordability and 2- paranoia.

Affordability has most defiantly been stretched to the max but if you do the math housing prices are still affordable (barley) A correction (downward) in prices of about 3-5% some of which has already happened in most areas of the country will help better align the affordability issue and increase in wages will (over time) make correct any remaining disparity.

Insofar as the paranoia thing… Typically the knee jerk reaction to any uncertainty is to pull back and wait. It’s been almost a year that we have entered the correction phase and the sky has not fallen. Barring a major catastrophe buyers will return and when builders and investors move their inventory the re-sale market will pick-up in a strong fashion however appreciation will probably be relatively flat for some time.. I don’t think we are too far away from this as there are many other positive things happing around us. Gas prices are dropping - unemployment is stable at extremely low levels. The stock market is hold its ground/making gains. Interest rates are still at historical lows.

Paranoia? I think people are just learning from other's mistakes.

[allycat]

Originally Posted by Muggy

I told you why renting is better than owning right now. I've explained it to you but I can't make you comprehend...

So, Muggy, I'm thinking of moving to the Burg or somewhere in Pinellas County if I can land the job I'm after. How long you think the better-to-rent will last and if I am going to buy, when?

I need to start a new life...my post-K life ... well, you know the verb I'm after...

Thanks for the advice

[Muggy]

Originally Posted by allycat

So, Muggy, I'm thinking of moving to the Burg or somewhere in Pinellas County if I can land the job I'm after. How long you think the better-to-rent will last and if I am going to buy, when?

I really have no idea.

The good news is that 6/7 month rental terms are common in Pinellas. I don't think you're going to miss the bottom by much with that time frame (especially since offer-to-closing is usually 2-3 months when you do decide to buy).

The tax and insurance issues need to settle before anything else happens. Most bubble believers (like me) think that homes are overvalued anywhere from 20-50% depending on the market. In Florida, you have the perfect storm: the convergence of taxes and insurance. So, prices need to go back to realistic levels, and THEN the taxes and insurance need to be sorted out.

At work everybody is talking about "getting out of Florida." Everyone that I know that owns is freaking out. Citizens bills are coming in and so are taxes.

I said earlier that I'd buy in the $100k range. As long as I can rent in the $600-$800 range (which I am, and will be for the next 18 months), I'll avoid buying. If the insurance issue doesn't resolve itself it will be a long time until I buy. There is absolutely no reason to buy if your insurance and taxes exceed rental costs. In my current situation I believe this is happening or very close to happening. I'm not even factoring in a mortgage (much less on an overvalued house).