Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The hunker down mentality is the big economy killer. As everyone curls up in a fetal position they are creating a self fulfilling prophecy.
The problem we are having is that if we can't price a home, we don't know the value of the securities that are based on the mortgages for those homes.
To respond to the problem the governments of the world have thrown money into the banking system, there is a coordinated rate cut, and commodities prices have dropped like a rock.
Wholesale gas is at $1.86 a gallon. If this continues everyone's gas bill, and home energy bills will be less. People will have more money in their pockets.
The smart money looks for opportunity while everyone else sells in fear.
Now is the time to reign in excess spending, save, save, and save some more, as the job losses mount and the stock market continues to drop like a stone.
Why buy a house now?
because there are many irresponsible, uninformed people that have the idea that not watching the news will shield them from the REALITY of what is taking place in our country. They are OUT OF TOUCH like a presidential candidate I know. Nobody should be buying a home right now...it's suicide. Why ? Markets are STILL declining in hardest hit areas and the economy is falling apart. People should be renting if they know what is best for them.
If you take the time to study the historical real estate data, most of the country is STILL overpriced. In my area, Northern VA, even though prices are 25% below their peak they're still about 25% above their inflation-adjusted historical norms. Therefore, it is not an excellent time to get a "steal".
Yup....entire South Florida (dade, broward and palm beach counties) has another 17% decline to go before we bottom out.
The pack mentality is what keeps those in the lower middle class stuck there forever. If everyone is scared to buy a house, well I should be scared too? Heck no. If prices are dropping, that's when the smart people are buying.
So Jim Rogers isn't buying. So? He's a billionaire. Does he need to buy anything? Ask him if he got that billion dollars by waiting to buy at the top or bottom of a market and I'm sure you'll get the same answer.
Warren Buffet just sank many millions into the market. He seems to be a pretty successful guy too.
It's pack mentality. There are those that understand when it's time to break away and they're the ones that succeed in life. Those that just go with the flow stay where they're at.
The world needs both of them, so whatever you choose is your prerogative and that's totally fine. But common sense tells me to buy something when it's devalued because the market ALWAYS goes up.
The pack mentality is what keeps those in the lower middle class stuck there forever. If everyone is scared to buy a house, well I should be scared too? Heck no. If prices are dropping, that's when the smart people are buying.
So Jim Rogers isn't buying. So? He's a billionaire. Does he need to buy anything? Ask him if he got that billion dollars by waiting to buy at the top or bottom of a market and I'm sure you'll get the same answer.
Warren Buffet just sank many millions into the market. He seems to be a pretty successful guy too.
It's pack mentality. There are those that understand when it's time to break away and they're the ones that succeed in life. Those that just go with the flow stay where they're at.
The world needs both of them, so whatever you choose is your prerogative and that's totally fine. But common sense tells me to buy something when it's devalued because the market ALWAYS goes up.
Ahhh yes... So let me see if I understand your post correctly. If I buy now, I am a successful person. If I wait until prices find a bottom, I'm a loser. Ok, got it.
The intention of all these daily federal interventions is to keep the credit spigots open so Americans can go even deeper into debt to buy more stuff they can’t actually afford. This should be clear enough to anyone who listens to what our leaders are actually saying. When speaking about the need for an even larger fiscal stimulus package, Barney Frank, chairman of the House Financial Services Committee, said, “We have to prop up consumption.” He has it backwards. The government has been propping up consumption for far too long, and the best thing they can do now is remove the props so spending can be replaced by savings.
Were the government to allow market forces to work, Americans would now have to pay cash for their consumption. That would mean no instant credit for new cars, plasma TVs, appliances, consumer electronics, clothing, furniture, etc. Unless buyers actually had the cash in their checking accounts these purchases would have to be deferred. From an economic perspective this is precisely what the doctor ordered. But for an economy based 72 percent on consumer spending, the medicine will go down hard.
Ultimately, a serious reduction in consumer and mortgage credit, combined with an increase in personal savings, would again provide a pool of needed capital for businesses to produce products and provide employment opportunities. However, the danger is that this potential credit could be completely crowded out by massive borrowing by the Federal Government. In addition, prices for such things as houses and college tuition will fall sharply, as the credit artificially propping them up disappears. People would still be able to buy houses and send their kids to college only they would pay much lower prices when they do.
Ahhh yes... So let me see if I understand your post correctly. If I buy now, I am a successful person. If I wait until prices find a bottom, I'm a loser. Ok, got it.
I said that if you bought high like so many people who wait until it's a hot market to buy, you're not a good investor. Nobody knows when the bottom is going to hit, but it's definitely down right now and it's not going to drop much further. It can't. I didn't call anyone a loser.
You're not a loser because of your investment non-strategy. It's the trolling....
Then maybe you can explain your problem with my statement about people needing to "reign in their spending and save".
The statement in and of itself is benign, it's the hunker down the sky is falling context that you placed it in that I have a problem with. It's the fear mentality that will exacerbate the down turn in the economy.
I've been through this crap before, in the 70's when we had gas lines I worked a full time job and went to school at night, I bought my first house when interest rates were twice what they are now. When I sold my first house I reviewed my costs and my gains. The result was that I lived in my first house for 5 years and when I sold it I was able to say that I lived in that house rent free for 5 years.
I've purchased a number of properties over the years, I normally have purchased during a down turn. I got good deals. The only time I purchased a house during the peak is the house I'm in right now, but my wife and I wanted the location. I'll be in this house for a while, but if I was looking...
Down turns are the time to look for opportunities. Don't be stupid and over extend yourself, but if you're in the market for anything house, car, boat, anything that you can afford then go forward. The economy will get better. Unless everyone hunkers down.
The hunker down mentality is the big economy killer. As everyone curls up in a fetal position they are creating a self fulfilling prophecy.
The problem we are having is that if we can't price a home, we don't know the value of the securities that are based on the mortgages for those homes.
To respond to the problem the governments of the world have thrown money into the banking system, there is a coordinated rate cut, and commodities prices have dropped like a rock.
Wholesale gas is at $1.86 a gallon. If this continues everyone's gas bill, and home energy bills will be less. People will have more money in their pockets.
The smart money looks for opportunity while everyone else sells in fear.
The "hunker down" mentality is necessary and will happen no matter what the government says or does.
Consumers who can afford things will eventually buy them when the price has fallen. I'm beginning to get back into consuming now that asset values are starting to decline. I'm taking more vacations/cruises/etc. Eventually, when a house I'd like can be bought with the equivalent of 100 ounces of gold, I'll probably step in and buy it.
Hunkering down is great for those who kept their powder dry.
I said that if you bought high like so many people who wait until it's a hot market to buy, you're not a good investor. Nobody knows when the bottom is going to hit, but it's definitely down right now and it's not going to drop much further. It can't. I didn't call anyone a loser.
You're not a loser because of your investment non-strategy. It's the trolling....
There is no way house prices will follow a V pattern and shoot back up. House prices are generally sticky and the pendulum has to overswing before returning to equilibrium. Since there's essentially no way to ressurect the credit market (despite the best attempts by the gubmint), I'll be satisfied buying when I can do it with a minimal/no mortgage.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
