More proof real estate is nowhere near a market bottom (2009, investment)

[trickymost]

UPDATE 2-Fannie Mae Aug delinquencies jump; Sept portfolio grew | Reuters

"The delinquency rate on loans in its single-family guarantee business rose 0.28 percentage point to 4.45 percent in August, the most recent data available. That was well above the rate a year earlier when it was 1.57 percent."

Now, who wants to tell me again why it is a great time to buy?

[Brandon Hoffman]

You must be a prospective buyer.

[PokerMunkee]

Because paying someone elses mortgage sucks?

[mathjak107]

and because no one knows whats happening next... all the chicken littles who thought last march was an awful time to invest in the financial markets missed the biggest run up in history right from under the radar... over 60% on most funds with 100% gains on sector funds in certain industries..

anytime anyone thinks they got it all figured out there is always something not even on the radar that alters things just enough so the outcome is something never expected.

want a home? buy a home and forget the fortune telling.

[mathjak107]

one of the things i learned in my 24 years as an investor is that if you think your smart enough to time things, any things, odds are your going to get it quite wrong.


think about it, the biggest drops in things happen when things never looked better and that asset class is soaring.

when things look the worst and the word house or stocks make you want to vomit , that where the biggest gains start.

anyone remember business week magazines infamous "death of equities issue" ?

in the 70's stocks performed so bad for so long and with no bottom in sight. buisiness week magazine ran an article in 1979 featuring a tombstone on the cover and officially declaring equities dead as an asset class.

well from the very next day the greatest bull market in history started soaring to new highs for over a decade producing wealth beyond anyones wildest dreams.

in my experience i find those that dont act for one reason or another are always the same folks that wait so long for the ship to come in the pier collapses. by the time they finally make a move to do something the party is half over or over. alot just never act paralayzed with fear that things can still go lower.. then they complain how they never make money in anything and are better off in cd's.

i have always been rewarded well by getting to the party a little early and waiting. i never catch the bottom of anything but i can tell you im usually in that party when it starts even if i have to wait 5-6 months for things to bottom. the biggest gains are always very early in the game while all the chicken littles are still wondering if this is for real or not.

we still have all those people even now waiting to get back in to the financial markets as soon as they see signs we are turning the corner...


i hate to tell them but thats the time to start taking money off the table, they missed the juciest , easy gains, that ship sailed by the time things start to look rosey.


its up to everyone to decide whats right for them, im just telling you whats right for me,.


2 years ago we wanted a house in the pocono mountains of pa . i negotiated the best deal i could for that market and bought a house.. i dont regret it for a second and we will move there full time next year. i couldnt care less if it went up or down...its my home.

[trickymost]

Some wise words, for certain. It is not easy being a contrarian. Most will be wiped out trying to time anything.

I would agree in principal except real estate is fundamentally a different asset class than equities. The model for financing mortgages is not yet fixed. In fact it is worse than it was last year. The only thing which has changed is the us government has stepped in as the little dutch boy and plugged every hole in the market.

Anyone who fails to see, acknowledge, or act with this understanding is going to be hurt financially, whether you're buying an investment property or a home to raise a family.

As you say stocks were considered toxic in the 70s and then we had the great bull market starting in 80. Well people as you can see even by reading this thread feel real estate is still a sound investment despite the problems we have had to date. By your logic that is an indicator to go the other way as the herd still thinks the trend is rising/stabilized home prices and an improving market which has probably already bottomed.

The fed used up the last of their quantitative easing cash this week and has but 300 billion left to buy mortgage assets.

We'll see what happens and I sure hope I am wrong but looking at the data says more pain to come.

The media and obama say otherwise, but hey, in 1930 Hoover declared the recession over too.

[mjohnson185]

The reason why it's a great time to buy has to do with the interest rates. They will be above 10% in 2 years and then you will look back and say "why didn't I buy when interest rates were 4.75%"....like they are now. I secured 4.75 on a 30 year fixed 3 days ago.

[chet everett]

I will GLADLY lay down CASH against ANY BET that rates will climb to anywhere NEAR that amount anytime before the the Nov 2012 elections.

I literally am SUPREMELY CONFIDANT that there is NO WAY any normal mortgages will be offered at 10%!

Frankly I would say odds are AT LEAST better than 90% against them even exceeding 7%, which is STILL A HISTORICALLY ACCEPTABLE range.

[Dingo99]

Originally Posted by mathjak107

in my experience i find those that dont act for one reason or another are always the same folks that wait so long for the ship to come in the pier collapses. by the time they finally make a move to do something the party is half over or over. alot just never act paralayzed with fear that things can still go lower.. then they complain how they never make money in anything and are better off in cd's.

i have always been rewarded well by getting to the party a little early and waiting. i never catch the bottom of anything but i can tell you im usually in that party when it starts even if i have to wait 5-6 months for things to bottom. the biggest gains are always very early in the game while all the chicken littles are still wondering if this is for real or not.

we still have all those people even now waiting to get back in to the financial markets as soon as they see signs we are turning the corner..

I agree and disagree with this. What your saying is very true in the financial markets, but its different for housing. Prices are not gonna go up quickly any time soon. Its just not gonna happen. Obviously keep your down payment liquid, and jump in if prices start jumping significantly.

I also think it depends on the price of the house your looking to buy. I wouldnt buy a house thats over 300k right now. no way.

[chet everett]

Originally Posted by Dingo99

... wouldnt buy a house thats over 300k right now. no way.

Sadly you are part of a BIG herd that feels the same way.

If you were bullish on real estate when others were bearish and you had assets that you could direct with this strategy you could have had positive returns.

The herd is bearish, hard to profit from that...