[kort677]

Originally Posted by JimKing

The Big Picture | Nasdaq versus 1929 bubble

The second Great Depression

There are many similarities between the pre-Depression era and our own. Paul Alexander Gusmorino says: “The Great Depression was the worst economic slump ever in U.S. history, and one which spread to virtually all of the industrialized world. The depression began in late 1929 and lasted for about a decade. . . . The excessive speculation in the late 1920s kept the stock market artificially high, but eventually led to large market crashes. These market crashes, combined with the misdistribution of wealth, caused the American economy to capsize.”

“[The income disparity] between the rich and the middle class grew throughout the 1920s. While the disposable income per capita rose 9 percent from 1920 to 1929, those with income within the top 1 percent enjoyed a stupendous 75 percent increase in per capita disposable income . . . A major reason for this large and growing gap between the rich and the working-class people was the increased manufacturing output throughout this period. From 1923-1929 the average output per worker increased 32 percent in manufacturing. During that same period, average wages for manufacturing jobs increased only 8 percent (This ultimately causes a decrease in demand and leads to growth in credit spending)

“The federal government also contributed to the growing gap between the rich and middle-class. Calvin Coolidge’s (pro business) administration passed the Revenue Act of 1926, which reduced federal income and inheritance taxes dramatically . . . (At the same time) the Supreme Court ruled minimum-wage legislation unconstitutional.

“The bottom three quarters of the population had an aggregate income of less than 45 percent of the combined national income; while the top 25 percent of the population took in more than 55 percent of the national income . . . Between 1925 and 1929 the total credit more than doubled from $1.38 billion to around $3 billion.”

Just like now, the growing wage gap has spawned massive speculative bubbles as well as a steady up-tick in credit spending. Wage stagnation forces workers to seek other opportunities for getting ahead. When wages fail to keep pace with productivity then demand naturally decreases and business begins to flag. The only way to spur more buying is by easing interest rates or expanding personal credit, and that is when equity bubbles begin to appear. That’s what happened to the stock market before 1929 as well as to the real estate market in 2007. The availability of credit has kept the housing market afloat but, ultimately, the result will be the same.

On Monday October 21, 1929, the over-valued stock market began its downward plunge. It managed a brief mid-week comeback, but seven days later, on Black Tuesday, it plummeted again; 16 million shares were dumped and there were no buyers.

The game was over.

Confidence evaporated overnight. People stopped buying on credit, the bubble-economy collapsed, and the mighty locomotive for growth, the American consumer, hobbled into the Great Depression. Tariffs were thrown up, foreigners stopped buying American goods; banks closed, business went bust, and unemployment skyrocketed. Ten years later the country was still reeling from the implosion.

Now, 77 years later, Greenspan has led us sheep-like to the same precipice. The economic dilemma we’re facing could have been avoided if the expansion of personal credit had been curtailed by prudent monetary policy at the Federal Reserve and if wealth were more evenly distributed as it was in the ’60s and ’70s. But that’s not the case; so we’re headed for hard times.

1+1=3 eh? not too much there resembles the economic world we see today, greenspan has been gone for awhile, and here's another revelation for you, the rich will always be rich

[kort677]

Originally Posted by lostbuyer

The News-Press, news-press.com, Denny Grimes, Successful sellers know how to attract potential buyers (http://www.news-press.com/apps/pbcs.dll/article?AID=/20070715/COLUMNISTS42/70713060/1118/COLUMNISTS42 - broken link)

what point are you trying to make? the article makes much sense

[SKB]

Originally Posted by kort677

the guy said he can get you into a house for 200k, what's stopping you from taking him up on the offer? you have a gazillion excuses why you can't buy now, I suspect that all you have are excuses and no intention of ever buying a house.


For someone who works in credit you seem to have a lack of understanding many of the basics of how to put debt to work in a positive way.
People, companies, governments all use debt to fund things they cannot afford to pay cash on the barrel for.

as long as you manage your debts properly debt can be used to fund things that you want or need to have but cannot afford to pay cash for.

used properly debt is a tool and only the people who are unable to manage their debt or don't understand basic economic principles are the ones who get in trouble from debt or are afraid to use their ability to obtain credit. Debt is not your enemy if managed and used wisely, are you capable?

Kort, I will not even respond to your cheap credit shot. We are moving to WPB, Mike didn't say he can get me a home in the WPB area. My husband's JOB is there is no negotiation on that. We are even willing to commute from PSL.

Mike, what area are you referring to?

[SKB]

Originally Posted by Mike Peterson

No one is looking down on you. You have a budgeted amount, it doesn't matter that you can afford 10x's that budgeted amount, the budgeted amount is what you want to spend. But don't expect people to drop their price just because that is all you want to spend. Wait for your price, you might get it or you might not.

And yes, for $200,000 I can get you into a brand new, turn key home, in a nice area. It is just not the nice area you want to be in.

I don't know what area you are referring to but let's make this clear.

It's not that we "don't want" to be in a certain area, my husband's job is in WPB.

[ddlove01]

Originally Posted by SKB

The median income for those towns: PSL, 49K, Wellington 75K, Jupiter 55K.

Just curious...does median income mean the same thing as household income? Or is this just one person's income? Have you checked the local online papers for these areas? I saw tons of deals from various builders selling houses including land for 150K to 175K. You just have to know where to look.

PSL area > tcpalm.com I think Wellington and Jupiter will be > palmbeachpost.com

Have you searched craigslist.org for houses for sale? Do you really believe houses are priced this way in FL only? Try TN, houses in the lower to mid 200s. NC same thing (that match your criteria). I know you don't have any interest in those states, but both of those states have about the same median income as FL (sometimes even lower!)

[SKB]

Originally Posted by Mike Peterson

The product is not the focal point of the analogy but I guess that is why you miss the point.

You have choices
#1- take more money out of savings and buy the price being asked
#2- finance and make payments
#3- wait and hope the price comes down
#4- find something that is within your budget.


Now you say, why should you be forced to buy half the house you would have gotten before the run up.

Why did you not buy before?

Why should the people that bought before have to come down 50% because it is all you want to pay?

The demand was there to send the prices that high, there are some events that have forced downward pressure on some pricing. It all remains to be seen where they will go.

You know what, forget it. I do not have to explain myself, go back and read my posts and find out the answers to your questions on why we didn't buy and why we have been living overseas since 1999.

You are obviously trying to get a rise out of me, and quite frankly, I am not interested. I must frustrate the he@@ out of you. I am your worst nightmare, a potential buyer who is educated, and waiting the market out like thousands of others. It must also be tough on you that Chief, FireMed, myself and others are talking on this board (that thousands read) about the real truth on what is going on out there. You are fighting a losing battle.


It's hard to make a living when your buyers are not buying.

Hey all of you silent lurkers, make sure you read www.thehousingbubbleblog.com this site gives you the real truth of what is happening in the USA housing bubble crash.

[SKB]

Originally Posted by rstate

Mike, all of your responses made perfect sense.

SKB - you said you can buy a house anwhere from $200k-$600k and decided you only want to spend $200k. That's your decision. A seller has the same option to determine the price they'll sell their home for. If you don't like their price... don't buy it. But there's no reason to disrespect them because you don't like their selling price.

Yes and the seller can ask anything he wishes, just one problem with that, guess what it is?

[kort677]

Originally Posted by SKB

Kort, I will not even respond to your cheap credit shot. We are moving to WPB, Mike didn't say he can get me a home in the WPB area. My husband's JOB is there is no negotiation on that. We are even willing to commute from PSL.

Mike, what area are you referring to?

like **** jagger sang
"you can't always get what you want but if you try sometimes you'll get what you need"

The reality is that you would like to move to the WPB area.

the question is are you willing to pay the price that the WPB area command?

It appears that homes in the WPB area are priced higher than your apparent price range.
Do you know that there are less desirable areas near WPB where you might be able to find a home in your price range but there will be trade offs that you'll have to accept.

Like it or not as a buyer you cannot force a seller to sell at a price that you like, if the seller wants to sell he'll lower his price to level where it will sell or he'll just carry the house until a buyer is willing to come closer to his price.

offering 200k on a house priced at 450k will rarely turn into a deal.

Good luck with your house hunt, good luck with your move and may all your dreams come true

[SKB]

Originally Posted by ddlove01

Just curious...does median income mean the same thing as household income? Or is this just one person's income? Have you checked the local online papers for these areas? I saw tons of deals from various builders selling houses including land for 150K to 175K. You just have to know where to look.

PSL area > tcpalm.com I think Wellington and Jupiter will be > palmbeachpost.com

Have you searched craigslist.org for houses for sale? Do you really believe houses are priced this way in FL only? Try TN, houses in the lower to mid 200s. NC same thing (that match your criteria). I know you don't have any interest in those states, but both of those states have about the same median income as FL (sometimes even lower!)

The median is the halfway point of households, half make more than that and half make less. Think of it like the middle point.

[ddlove01]

Why do threads like this always turn out the same, people arguing all the time. This thread contains very useful information, it's a shame...