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Prices will be set at whatever the market can support.
Agreed. And the market is clearly showing right now that prices are still too way too high. If houses sit on the market for months on end, then they're too expensive, as there are plenty of people out there who do want a house.
If you want to look for an appropriate price, take two similar houses in the same neighborhood - one in foreclosure, one not. Generally the foreclosure house is going to sell faster because the bank is going to accept a lower price. That foreclosure price, by default, becomes the true market price. People holding out for months for higher prices are living in a world of fantasy, smoke and mirrors.
Tallrick is absolutely correct when he says that residential real estate should do nothing but decline in value, as it produces NOTHING for the economy (once it's built and the construction and supplies firms get their money). The growing scarcity of land should be the only thing that tempers the depreciation in residential real estate.
A lot of the wealth in this country came from savvy real estate investing. But who wants to bet that the Rockefellers, the Vanderbilts and the like actually read their contracts before signing them? Investors who buy smart, with a long-term plan, will STILL make money in real estate. Holding a property for 15 years and letting renters pay off your mortgage has always been a way to grow your investment. But you have to be smart about it, and you have to be willing and able to ride out the ups and downs.
Buying property to rent it out is fundamentally different from buying it to simply make money on buy-sell transactions (i.e., betting on asset appreciation).
Yeah and in the same night's episode they had the original "what me worry" guy Barney Frank saying - oh no problem, just bail everyone out and things will get better in a year.
Barney Frank, banking chairman, has got to be the biggest idiot politician there is. Why did 60 minutes give this guy a pass on this entire crises when it happend on his watch (something tells me it's because he has that D as in democrat next to his title)?
" It happened on his watch " ??... thats crap.! It was the Republicans that ran the show , that got us into this mess. The relaxing of our regulations , and the lack of oversight. He is now saddled with this mess to clean up , and , is being hit at all sides by the minority , who filibuster every chance they can get. What don't they get ? , Can't they see , the error in their past ways , and join together with the new leadership ? .. Or , will they just fight to the last dog standing ?......... the days of republican rule is over, for a long while.......its time to come together , and do whats best for the citizens they claim to represent.
" It happened on his watch " ??... thats crap.! It was the Republicans that ran the show , that got us into this mess. .
What's crap? That Barney Frank was not Chariman of the House Financial Services Committe? I assure you he is and was.
Look, there is plenty of blame to go around, dating back to the 80's and earlier. But the dates are without dispute - the financial crises indeed happened on his watch and he has yet to do anything but blame others like the loadmouth coward he is.
I don't want this to get into a political debate, for my purposes all politicians in general are to blame. Clinton, Bush, Pelosi, Frank. We have the politics forum if you want to continue a GOP vs. DEM discussion further. And if you have further questions about political posts than refer to the 'sticky' post on the top of this forum. If you want to debate the liability of Barney Frank further, in a bipartisan spirit, than we can discuss the political contribution he received from fannie mae and freddie mac.
Location: Georgia, on the Florida line, right above Tallahassee
10,471 posts, read 15,827,481 times
Reputation: 6438
Quote:
Originally Posted by car957
Scary. A 70% default rate on Alt-A and Option ARMs will truly be an ugly event. Plus, it will amount in close to $2.6 trillion - the only safe place for any money these days is a bank account.
I am so fortunate that I when I purchased my home, I avoided those instruments. I don't know how many people told me that I was dumb for not going with an ARM - I hope those same folks are not going to default.
I guess that as a taxpayer I'll be paying for this also.
Yeah, they tried all that hocus pocus crap on me. He was all like "You can sell it in 5 years or you can refinance." and I said, " I don't want to sell it in 5 years." and he's like "Well, see, you save money and then you can refinance." and I said "What if I can't refinance? and he's like "Don't worry, it's cool." and I said "30 year fixed." I'm the kind of guy that wants to know what my payment is gonna be every month. They really wanted to give me an ARM though. I guess they made more off it or something.
I find it funny that to buy a 100 K house you need to sign (what seems to be) 100 sheets of paper. But if you buy a 60K car, you don't have to.
What's crap? That Barney Frank was not Chariman of the House Financial Services Committe? I assure you he is and was.
Look, there is plenty of blame to go around, dating back to the 80's and earlier. But the dates are without dispute - the financial crises indeed happened on his watch and he has yet to do anything but blame others like the loadmouth coward he is.
I don't want this to get into a political debate, for my purposes all politicians in general are to blame. Clinton, Bush, Pelosi, Frank. We have the politics forum if you want to continue a GOP vs. DEM discussion further. And if you have further questions about political posts than refer to the 'sticky' post on the top of this forum. If you want to debate the liability of Barney Frank further, in a bipartisan spirit, than we can discuss the political contribution he received from fannie mae and freddie mac.
You have closed this discussion all by yourself., thanks. Black is white , and white is black, you guys keep spinning the same. Thats all I have to say.
Tallrick is absolutely correct when he says that residential real estate should do nothing but decline in value, as it produces NOTHING for the economy (once it's built and the construction and supplies firms get their money). The growing scarcity of land should be the only thing that tempers the depreciation in residential real estate.
Why couldn't the market value it more highly over time? The houses I've been looking at are in a relatively undeveloped area. As the area develops, with increasing access to schools, business, entertainment, shopping, parks, and major roads, one might expect the value to increase. I'm not saying it will or it won't (but I think it will), but saying it "should do nothing but decline in value" is a bit short-sighted in my opinion. I'm also not saying it should double in value in five years or anything.
In case you haven't noticed, there is no support for real estate at the current prices. Hence, your statement above is contradictory.
Really? There are two lots being built up (homes sold already) on my street and several have sold in the last couple of months. Sounds like there's support for real estate at the prices in my area.
I keep hearing the meme that home prices are overvalued, but no one is saying what prices should be. So I ask
what's a good ratio of income to home price? 3x gross household income? 4x?
What is a "decent" home? 3 bedrooms/2 baths? 4/4? 6/4? Finished basement? Granite countertops, stainless steel appliances, and hardwood floors throughout?
Who should be able to buy a home? One earner making minimum wage? Families making over $50,000/year? Is income relevant?
What's a good interest rate? 30 years ago, 18% would have been a good interest rate. For the same monthly payment, that would necessitate a lower home price. Today it is 6%. Should we go back to 18% to force home prices down?
Why couldn't the market value it more highly over time? The houses I've been looking at are in a relatively undeveloped area. As the area develops, with increasing access to schools, business, entertainment, shopping, parks, and major roads, one might expect the value to increase. I'm not saying it will or it won't (but I think it will), but saying it "should do nothing but decline in value" is a bit short-sighted in my opinion. I'm also not saying it should double in value in five years or anything.
Right, but those are external factors that affect certain pieces of real estate. A famous person living in a house could affect its value as well, as could a well-known murder being committed there.
Real estate, in itself without any particular external factors that might make it more desirable, should depreciate.
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