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Old 01-29-2008, 02:46 PM
 
Location: America
6,993 posts, read 17,300,486 times
Reputation: 2093

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Quote:
Originally Posted by CJFlorida View Post
Anyone want to guess what that chart will look like in 5 years?
I play my bets at 180

 
Old 01-29-2008, 03:35 PM
 
548 posts, read 534,549 times
Reputation: 126
Quote:
Originally Posted by Wild Style View Post
I play my bets at 180
Your an optimist wild!! I am thinking things go back to 1999-2000, like 110 or so.

We shall see.
 
Old 01-29-2008, 04:31 PM
LM1
 
Location: NEFL/Chi, IL
833 posts, read 989,620 times
Reputation: 344
Given inflation, the costs associated with raw materials and the relatively strong desire for Florida housing (compared to other places) anyone who thinks the prices are going to return to the days of $120K, well, I sure wish we could bet on that.

People don't seem to understand that a decline from upward trending DOES NOT automatically suggest a return to past medians.



I agree that the FL housing market was horrendously bloated, our US economic model has fundamental fissures in its foundation pertaining to wages, inflation and the cost of essentials (like housing) and in time, things for the total economy could get ugly... But on the issue of housing, just because it exhibited a substantial upward pricing trend does not mean that it will invariably fall back down to "where it used to be".
 
Old 01-29-2008, 04:39 PM
 
548 posts, read 534,549 times
Reputation: 126
Quote:
Originally Posted by LM1 View Post
Given inflation, the costs associated with raw materials and the relatively strong desire for Florida housing (compared to other places) anyone who thinks the prices are going to return to the days of $120K, well, I sure wish we could bet on that.

People don't seem to understand that a decline from upward trending DOES NOT automatically suggest a return to past medians.



I agree that the FL housing market was horrendously bloated, our US economic model has fundamental fissures in its foundation pertaining to wages, inflation and the cost of essentials (like housing) and in time, things for the total economy could get ugly... But on the issue of housing, just because it exhibited a substantial upward pricing trend does not mean that it will invariably fall back down to "where it used to be".
Your chart shows the DOW, which operates on totally different principles than housing. The companies that make up the DOW change periodically. And the companies are designed for making profits, the ones that do not do not survive.

Housing is 100% different. Housing operates on fundamentals based on income. The bottom line is how much money people have left over to spend for principal and interest, after all other expenses. Higher gas prices, higher food prices,higher education costs, higher property taxes and insurance...less money can go towards the mortgage. Wages have been flat since 2000, other costs have gone way up....less money to go towards the mortgage than in 2000.

The housing curve was very gentle for 100 years, except the World Wars. Since 2000, the curve has been perverted from the norm.

Bubbles can swing back BELOW their starting points. Look at history and you see that bubbles most of the time end up BELOW their fundamental levels, after they pop. The housing market could over correct to the negative.

Again we shall all find out together...but showing a DOW graph is irrelevant.

I enjoy your posts, sorry to have to disagree 100% on this one though!

Last edited by CJFlorida; 01-29-2008 at 04:48 PM..
 
Old 01-29-2008, 04:41 PM
 
Location: Reality
1,050 posts, read 1,923,612 times
Reputation: 259
Quote:
Originally Posted by Wild Style View Post
I play my bets at 180
There's a lot of factors involved. A big one is all the funny money that's been printed, the dollar in 2013 will be much weaker than it was in 1999-2000.

That said, 181 Bob!
 
Old 01-29-2008, 04:53 PM
LM1
 
Location: NEFL/Chi, IL
833 posts, read 989,620 times
Reputation: 344
Quote:
Originally Posted by CJFlorida View Post
Your chart shows the DOW, which operates on totally different principles than housing. The companies that make up the DOW change periodically. And the companies are designed for making profits, the ones that do not do not survive.

Housing is 100% different. Housing operates on fundamentals based on income. The bottom line is how much money people have left over to spend for principal and interest, after all other expenses. Higher gas prices, higher food prices,higher education costs, higher property taxes and insurance...less money can go towards the mortgage. Wages have been flat since 2000, other costs have gone way up....less money to go towards the mortgage than in 2000.

The housing curve was very gentle for 100 years, except the World Wars. Since 2000, the curve has been perverted from the norm.

Bubbles can swing back BELOW their starting points. Look at history and you see that bubbles most of the time end up BELOW their fundamental levels, after they pop. The housing market could over correct to the negative.

Again we shall all find out together...but showing a DOW graph is irrelevant.

I enjoy your posts, sorry to have to disagree 100% on this one though!
I was mainly addressing the unsophisticated, laypersons concept that "what goes up must come down", ala citing historical charts and using them to soothsay where the "bottom" will be. I was obviously not saying the Dow was the same as the housing market.

Also, income models for housing changed profoundly over the past 30 years, particularly in FL, and there is just so much more to it than that...

It's good that you went on record with an actual figure- $110- now, I just need to go find a bookie who will let me put my life savings against that number.
 
Old 01-29-2008, 04:57 PM
 
548 posts, read 534,549 times
Reputation: 126
Quote:
Originally Posted by LM1 View Post
I was mainly addressing the unsophisticated, laypersons concept that "what goes up must come down", ala citing historical charts and using them to soothsay where the "bottom" will be. I was obviously not saying the Dow was the same as the housing market.

Also, income models for housing changed profoundly over the past 30 years, particularly in FL, and there is just so much more to it than that...

It's good that you went on record with an actual figure- $110- now, I just need to go find a bookie who will let me put my life savings against that number.
I don't agree the income model has changed the past 30 years. The majority of housing is still purchased by people who live and work in the state. Sure their are 2nd homes for out of staters, but the majority are permanent residences. Nothing has changed, people can still afford about 28% of net income towards housing.

We shall see. I already made my bets and am protecting my profits.

I listened to the housing bubble blog and they convinced me to sell in April 2005 for a profit, rent for 1/2 the cost of owning, buy gold at 400, and bail on the market at 14000.

So I may indeed be wrong about 110....so be it....I've won enough gambles already the past few years. I am not a greedy sort, nor wishing ill will on others. I actually hope I am dead wrong from now on about housing. I have been right enough the last few years to put our family in a nice position. If I am wrong from now on, I will be happy to admit it down the line.

Last edited by CJFlorida; 01-29-2008 at 05:05 PM..
 
Old 01-29-2008, 09:20 PM
 
Location: Tampa
3,982 posts, read 10,425,883 times
Reputation: 1200
Broward home sales drop 27% in 2007; Prices drop 1% -- South Florida Sun-Sentinel.com

im waiting for the freefall, but 1.8% aint it.

Starting to wonder if its really going to happen...
 
Old 01-29-2008, 09:32 PM
 
548 posts, read 534,549 times
Reputation: 126
Quote:
Originally Posted by crystalblue View Post
Broward home sales drop 27% in 2007; Prices drop 1% -- South Florida Sun-Sentinel.com

im waiting for the freefall, but 1.8% aint it.

Starting to wonder if its really going to happen...
Take realtor stats with a grain of salt. Incentives and give backs at closing, which increase in slow markets, are not counted in the sale prices. Also, from Dec 06-Dec 07 the drop was 10%.

"In December, Broward County's median price of $329,800 fell 10 percent from $367,600 in December 2006. Sales last month tumbled 33 percent, to 415 from 618 in December a year ago."

Figure inflation was at least 5% last year and your real drop was 15%. My guess is with increase give backs and other funny tricks, the drop was 15-20%.

Last edited by Keeper; 02-27-2008 at 09:18 AM.. Reason: removed copyrighted material/no link provided
 
Old 01-29-2008, 09:39 PM
 
Location: Tampa
3,982 posts, read 10,425,883 times
Reputation: 1200
Quote:
Originally Posted by CJFlorida View Post
Take realtor stats with a grain of salt. Incentives and give backs at closing, which increase in slow markets, are not counted in the sale prices.

Also, from Dec 06-Dec 07 the drop was 10%.

"In December, Broward County's median price of $329,800 fell 10 percent from $367,600 in December 2006. Sales last month tumbled 33 percent, to 415 from 618 in December a year ago."

Figure inflation was at least 5% last year and your real drop was 15%.

My guess is with increase give backs and other funny tricks, the drop was 15-20%.
yeah, but, for broward to be affordable, and assuming a traditional 3x income, the median price would need to drop to 150-180k. I just dont see that happening...

Broward County, Florida - Selected Economic Characteristics: 2006
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