Why Long Island House Values Must Plummet (Milton: loans, first time home buyer)

[modmondays]

Originally Posted by Chrisk327

not sure what 9/11 has to do with this.

wall street is a big part of the huge apartment prices in NYC and houses in the hamptons. However, I don't think we have many investment bankers living in the vast majority of LI areas. Yes there is money for everyone else as in it kept people employed, but the big salaries I don't think were affecting the "normal" areas.

In my neck of the woods the big multiplier was the easy credit.

I'm with JrProfessor on this one, we've seen a decline, but in the nicer areas, there still might be a bit to go, but we're not falling off a cliff.

Many, many financial people live in Nassau North and South. The entire North Shore as a matter of fact...... They had the $$$ to drive up the housing prices in those bidding wars - - and they certainly did. This forced more housing demand in Suffolk (further out) which raised prices out there accordingly as well.....it was a domino situation during the bubble. And not just here, but throughout the country where the mega-suburb began to spring up due to over-inflated housing prices within the closer-in suburb.

9/11 also created a housing rush - - out of Manhattan and to the "safer" suburbs...sort of subliminal, but I recall that "emotionally" it was quite apparent.

[mathjak107]

one negative for housing demand that you rarely see mentioned is the baby boomers kids are a smaller generation...... for every 10 baby boomer housholds there are roughly 8 next generation housholds


the flip side is you may have more and more wealthy emerging market and now emerging emerging market immigrants coming here buying real estate

[slynn41072]

Originally Posted by modmondays

Many, many financial people live in Nassau North and South. The entire North Shore as a matter of fact...... They had the $$$ to drive up the housing prices in those bidding wars - - and they certainly did. This forced more housing demand in Suffolk (further out) which raised prices out there accordingly as well.....it was a domino situation during the bubble. And not just here, but throughout the country where the mega-suburb began to spring up due to over-inflated housing prices within the closer-in suburb.

9/11 also created a housing rush - - out of Manhattan and to the "safer" suburbs...sort of subliminal, but I recall that "emotionally" it was quite
apparent.

I agree with what you are saying about 9/11. We sold our house and moved off LI in Oct. 2002 a little over a year after 9/11. My house went up 135,000 in just that one year, 217,000 over the course of 4 years. We took the money and ran so to speak. I knew then that it was crazy. Salaries didn't go up that much in 4 years or even a years time. It was almost to good to be true.

[modmondays]

Originally Posted by slynn41072

I agree with what you are saying about 9/11. We sold our house and moved off LI in Oct. 2002 a little over a year after 9/11. My house went up 135,000 in just that one year, 217,000 over the course of 4 years. We took the money and ran so to speak. I knew then that it was crazy. Salaries didn't go up that much in 4 years or even a years time. It was almost to good to be true.

9/11 completely freaked out those that worked down in the Financial District at the time (and of course, the rest of us). And at that time, those that worked down there were the classic uptown "classic-6" co-op dwellers. Thousands of these people/familes got the heck out-of -Dodge between 9/11 and 2005 - - and they went to Nassau, NJ and Westchester. And since many "needed" to be at work at the crack of dawn to monitor the international markets, the "safe suburbs" they selected were naturally within a :45 minute commute or less to Wall St.

I dont think anybody should "underestimate" the effect of 9/11 - - and the ensuing terrorism alerts - - which occured in Manhattan during the time period of our little LI housing bubble. Our bubble pricing - - in particular - -got injected with additional steroids driving local prices to nose-bleed levels unlike any other urban American market encountered.

[I_Love_LI_but]

Originally Posted by modmondays

I dont think anybody should "underestimate" the effect of 9/11 - - and the ensuing terrorism alerts - - which occured in Manhattan during the time period of our little LI housing bubble. Our bubble pricing - - in particular - -got injected with additional steroids driving local prices to nose-bleed levels unlike any other urban American market encountered.

Good theory. Seems like Cali really got the steroids and their bubble was even higher than ours. What do you think led to that in Cali? Yeah, Cali has always had nice weather and scenery so people like it a lot, but there are so many negatives too: earthquakes, flash floods, mudslides fires, high taxes, high crime and gangs in a lot of places. I wonder why the homes in Cali shot up even more than around here.

[LIBoy]

As a follow up to my earlier post, yesterday’s FOMC announcement evidenced our government’s intent to inflate our way out of this housing bubble. This will prevent further decline at current housing prices.

Also, with complete rollout of DU2 by May, trouble homeowners will be allowed to refi up to 105% of their home value. (YES, it is the new no homeowner left behind initiative ) This will allow many homeowners who currently cant afford, to stay in their house.

The combinations of lower borrowing cost and available credit will no doubt benefit existing homeowners. Unfortunately, this will punish the prudent: people who save, live within their means, and plan for the future.

Do the math, the writing is on the wall. Housing will not drop much further and far from plummeting. If you are still not convinced to buy by now, a house is probably not meant for you. Just watch out for the comeback of $4 gas.

[TomMoser]

Originally Posted by LIBoy

As a follow up to my earlier post, yesterday’s FOMC announcement evidenced our government’s intent to inflate our way out of this housing bubble. This will prevent further decline at current housing prices.

Also, with complete rollout of DU2 by May, trouble homeowners will be allowed to refi up to 105% of their home value. (YES, it is the new no homeowner left behind initiative ) This will allow many homeowners who currently cant afford, to stay in their house.

The combinations of lower borrowing cost and available credit will no doubt benefit existing homeowners. Unfortunately, this will punish the prudent: people who save, live within their means, and plan for the future.

Do the math, the writing is on the wall. Housing will not drop much further and far from plummeting. If you are still not convinced to buy by now, a house is probably not meant for you. Just watch out for the comeback of $4 gas.

I agree that the Feds actions yesterday are designed to create housing inflation at the expense of the dollar. This combined with it's stated intent to buy 1 Trillion worth of mortgage backed securities should also push the mortgage rate temporarily to the 4% level. Unfortunately, you can't create inflation in only one sector. Everything is about to go up in a big way.

[MikeyKid]

Originally Posted by LIBoy

Do the math, the writing is on the wall. Housing will not drop much further and far from plummeting. If you are still not convinced to buy by now, a house is probably not meant for you. Just watch out for the comeback of $4 gas.

I just don't get what you mean here... This just seems to be an odd brain dump of info in your head. =P

Based on the opinions I've read, the inflation is specifically to fight the deflation and counteract / even it out... whether it works or not is a pretty good debate item, but it seems obvious that the intent / hope is to flatten the decline and stabilize it.

The economy isn't some sports car with a turbo charger and handling package... it's more like a giant RV with peddle power.

[I_Love_LI_but]

Originally Posted by MikeyKid

The economy isn't some sports car with a turbo charger and handling package... it's more like a giant RV with peddle power.

And we, the taxpayers, are like the Flintstones powering it with our feet!

[LIBoy]

“Only government can take perfectly good paper, cover it with perfectly good ink and make the combination worthless.” - Milton Friedman

The housing market is no different than everything else. If we are fighting deflation (ie. housing market) with inflation, I think it is fair to expect inflated prices for other commodities. Soon, we will see dollar stores changing their signs to $2.