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Old 02-05-2009, 10:53 PM
191 posts, read 602,543 times
Reputation: 44


Originally I figured the lehigh valley real estate bubble would end up with prices ending up around 2000 levels. The worlds best economists/investors have changed my opinion though. I agree with them that prices will end up somewhere around what prices in 1997 were. Since the lehigh valley experienced the same bubble (prices doubled in a few years) then we should expect what's coming just like FL, CA, NJ etc. The lehigh valley is not exempt to this crash and it's here now like a slow moving worm the crash has arrived and we be with us until the bottom finally comes and after reading this article from bloomberg and believing what John R. Talbott, a former investment banker for Goldman Sachs say's in this article it should be evident to anyone with an open mind. Those who don't agree are most likely people who overpaid during the bubble and those involved with the housing market like real estate people.

Here is a small piece from the article and the the link which will let you read the entire thing.


Bloomberg.com: Arts and Culture

At the end of 2008, a record 19 million U.S. homes stood empty and homeownership sank to an eight-year low as banks seized homes faster than they could sell them, the U.S. Census Bureau said this week. Almost one in six owners with mortgages owed more than their homes were worth, Zillow.com said the same day.
By the time the crash ends, Talbott predicts, homeowners will have lost as much as $10 trillion, with investors and banks worldwide losing almost $2 trillion. And just as the U.S. starts getting over a prolonged recession, the first big wave of baby boomers will retire, depriving the economy of their productivity (and high consumption), he says.
Back to 1997
So how far will the price of your home on the range fall? Citing historical data and trends, Talbott concludes that real prices should return to their average 1997 levels, adjusted for inflation. Why 1997? A 120-year historical graph shows that real home prices in the U.S. stayed relatively flat for 100 years, then began rising in 1981 and surged from 1997 to 2006.
A return to 1997 prices “would get us out of the heady, crazy days from 1997 to 2006 in which banks were lending large amounts of money under poor supervision and aggressive terms.”


When you want to read what's really going on with housing/credit check out

Listening to the horrific articles in the local newspaper the morning call run articles that quote local realtors or the local realtors economist is just not logical. If you want a good idea on what a used car's value is would you take the word of the commision based salesman or would you investigate and take the word of independant people who don't make money off the price you pay? It's the same thing with the housing market. People with a vested interest will lie and deceive you.

Experience is what people look for. It's my opinion that people with 5 years or less of experience are still wet behind the ears. 7-10 years of experience gives you much better insight and in the case of commision sales the person usually becomes a better liar.

Last edited by toobusytoday; 02-06-2009 at 12:09 PM.. Reason: Manual signatures are not allowed.
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Old 02-05-2009, 10:55 PM
191 posts, read 602,543 times
Reputation: 44
Don't forget about this video. It's startling the similarities of today vs during the great depression. It will shock you and it should.

YouTube - Housing Bubble vs. Great Depression
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Old 02-06-2009, 08:15 AM
619 posts, read 1,876,872 times
Reputation: 342
So, what's your suggested solution? What do you think should be done? Do you like the idea of the (up to) $15000 credit for homebuyers just added to the Spending Bill? How do you think that will impact the trends?
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Old 02-06-2009, 10:12 AM
191 posts, read 602,543 times
Reputation: 44
Originally Posted by mczabe View Post
So, what's your suggested solution? What do you think should be done? Do you like the idea of the (up to) $15000 credit for homebuyers just added to the Spending Bill? How do you think that will impact the trends?

That's just a pony show. It will only make the downfall longer. We have to do simply let everything go. It's what all the top economist are saying. You don't bail out anything that will only make the problem bigger, see history for all the answers. See Japan's housing bubble which is almost identical to what's happening here. The fed's are taking the suggestions to fix the problem from the same people who created the problem. Smoke and mirrors that's all your going to get. Let everything run it's course and it will fix itself. The last "new deal" drug things out for years longer than needed.

All those who purchased during the bubble will never see those values again, not in the century. Once those people accept that, they can move on. Either keep paying for a home that's never going to be worth what you owe or walk away file bankruptcy and rent. In 2-3 years after bankruptcy you can get home loans that are just as good as not filing banktuptcy. That's where we are heading. People are just walking away from their homes and it will increase every year for years to come. When people stop believing the lies realtors tell (they are now more than ever and it will only increase) No matter what your local realtor thinks. Reality sets in when you view the history of home values. When prices more than double in 6 years, the light should have went off. How it didn't is those who were dumb enough to not remember the dot.com bubble which preceded this housing bubble amazes me. Keep thinking that home is worth 250k when it sold for 110k 5 years prior, that's IDIOTIC!


That graph makes sense to everyone who doesn't try and sell homes or anyone that didn't buy during the bubble.

Last edited by toobusytoday; 02-06-2009 at 12:08 PM..
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