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what happened? everyone dropped this thread like a hot potato... did i give to much "positive" economic information? LOL!!!!!!!
I have not posted here in a while but think this is an important topic.
jesposito I know where you got your data from and there is no doubt you are correct about the positive impact the new industry and employees will bring to Charleston.
HOWEVER, 96.5% of all real estate transactions are financed by FHA, Fannie Mae and Freddie Mac whom have borrowed over $160 BILLION to stay afloat. They just asked for another $10bil earlier this week because they pay too much for mortgages while large percentages of Americans default. The fact is you would not be selling any homes in Chas. if it were not for the Goobermint! This massive borrowing to keep government real estate financing intact will only result in higher taxes, higher interest rates and more market volatility.
I do not care how many jobs and companies locate to Charleston because if the sovereign debt crisis continues there will be no real estate market because there will be no financing. The real true crash in real estate has not occurred yet because of bailouts. We bailout by printing money our country does not have. If you have this debt crisis spread and currencies collapse the real estate market is toast.
Now if you think Greece is in bad shape then take a look at the U.S. balance sheet. We are worse than Greece. This is a warning to all looking to buy homes in this market. Be VERY careful. Most are better off renting and taking excess cash and invest it in gold, silver and safer currencies than the US Dollar. When you buy a home in a currency that could collapse in a couple of years what do you think your home will be worth? If you can buy your home at a good price and pay it off in less than 10 years then go for it. Unfortunately, the majority of current homebuyers do not fall in this category.
The fact is global and national economic events trump what happens in Charleston. This has been proven by what just occurred in 2008.
I love Charleston and want the real estate industry to be strong again but it has been builit on Ponzinomics. That is a FACT. I am very irritated that every home that is purchased with a tax credit and/or financed by FHA, Fannie (Fraudey) Mae or Freddue (Phoney) Mac will do nothing but put all of us Americans in further debt. Is that worth a homebuyer losing equity in the future so an agent can earn their commission or a homebuilder their profit? The answer is NO.
It is time for many of you to wake up, look around and get a clear understanding of what is currently happening with economies here and around the world.
In my area we are saying this is a peculiar time because we can say it is a good time to buy or sell. Buying is obvious: Low interest rates, plenty of inventory and deals. Selling: yes, because due to some stuff on the horizon we see coming, you better sell asap if you want to sell within the next few years (few= a more specific number based on a few economic issues, but I won't go into that for fear of sounding like an alarmist) But when in front of seller clients, we try to make them understand how much time it really might take for them to be able to get their home back up in value. Most don't like it. But if you NEED to sell you need to get it on the market yesterday and price it right. If you just WANT to sell, then be realistic or don't waste your and other peoples time by "testing the market" . A good agent can show you what you're competing with. In many areas, you're competing with short sales and foreclosures, builder sell outs, etc.
The Euro is on the verge of collapse right now with Greece and other contries defaulting on their debts....
I would stick with gold and silver and probably avoid currencies unless you understand the Forex market. The Yen has outperformed the Dollar the past couple of years.
The US Dollar has not been a strong currency over the past ten years. Many other currencies have outperformed it.
When you buy a home in a currency that could collapse in a couple of years what do you think your home will be worth?
uh... if the dollar collapsed, wouldn't your home would be worth WAY more?
as you can see by your chart, as we extended more and more and more credit in the aftermath of the tech bubble, the value of the dollar eroded, and the value of real estate skyrocketed.
in any case, I am not worried about currency collapse. i think we are Japan, circa 1992. I do share your view, however, that gold will remain at elevated levels due to global quantitative easing, while we suffer from a global overcapacity in just about everything except oil.
on some points i agree and disagree CMR... more than half the homes we sold in March and April were NOT tax credit buyers (many other builders i talked to were surprised to see the same thing). On the other hand yes, if our currency were to collapse the housing market would be toast...I agree, but our worries would go far deeper than what the housing market is doing. We'd be worrying about food and water if we were to see that kind of economic downturn. So my take is with everything happening in CHS if things just stay "even keel" on a National economic level we'll be WAY ahead of the game and if it all collapses than I'll build a bomb shelter .
uh... if the dollar collapsed, wouldn't your home would be worth WAY more?
as you can see by your chart, as we extended more and more and more credit in the aftermath of the tech bubble, the value of the dollar eroded, and the value of real estate skyrocketed.
in any case, I am not worried about currency collapse. i think we are Japan, circa 1992. I do share your view, however, that gold will remain at elevated levels due to global quantitative easing, while we suffer from a global overcapacity in just about everything except oil.
No your home would not be worth more if the dollar collapsed and there was a damaged credit market because nobody could finance. This almost occured in 2008 if not for TARP. The Credit Default Swap (CDS) is a $700 Trillion market that are "ticking time bombs" in Warren Buffetts and many others view and they are NOT regulated. CDS took down Bear Sterns, Lehman, etc and the real estate market.
We extended more credit and real estate appreciated because everyone who had a heartbeat got a mortgage with no money down during the time period the dollar lost value. You did not need income or a job during those days to get a mortgage which is no longer the case.
If the credit markets are shut down and the banks or government can not lend the only way to purchase a home is with cash which most Americans do not have. Fannie Mae and Freddie Mac can not keep operating at billion dollar losses forever.
The engine for real estate is credit. If we are Japan then that engine shuts off and we will have deflation continue for another 10-20 years in real estate. We could also experience hyperinflation with food, energy etc. because the Fed continues to print dollars It could become the worst of both worlds but nobody has a crystal ball.
Good discussion whether you agree with me or not. Nobody is correct until we reach the future so all you can do now is implement risk management which is all I am stressing.
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