Accidental Prophet… Housing Cheerleader boom or bust (Naples: real estate, foreclosures)
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Muggy, so nice of you to tee up my last thread for me to take a swing at. In that thread you referred to me at an “Accidental Prophet” Be Honest you really don’t believe that do you??
Yes I was a housing cheerleader when I joined this forum back in Oct 06 but even though I am in real estate my posts were highly critical of the NAR, as well as, realtor organizations and realtors in general. Over 2 years ago I changed tunes and began agreeing with the housing bears (correctly so). Most openly with this thread //www.city-data.com/forum/flori...ere-right.html
This didn’t mean I was a housing bust cheerleader like you and so many others; in fact I was horrified at the potential prospects that lay in front of us. If you read this posted Nov 06 //www.city-data.com/forum/flori...ing#post165560 I said
“if real estate dropped 20%+ across the board we’d all be in deep - you know what - not just here in the US but globally. Risk and investment in US real estate (either directly or via secondary securities) is spread across the world. A resetting of this nature in real estate prices would have to follow a reset in almost all other values including salaries, raw material prices, food and energy, stock market, corporate share value etc. Basically a depression but on a global level”.
Accidental Prophet… I think not. Unfortunately, as the law of unintended consequences goes… you all (housing bust cheerleaders) are getting your wish and a whole lot more!!
Has the stock market (corporate share value) reset – yes! By about 42% down
Has energy reset – yes $140+ a barrel to $41
Jobs (and salaries) – yes heading down currently in progress.
Raw materials prices have and continue to come down
Depression – not quite there yet but this has a long way to go
So do you feel so comfortable and boastful today about how wise you are?
Are you nervous that this might last 10+ years as it did after the depression here in the US and the “Lost Decade” in Japan (BTW both after huge sums of money were thrown at the problem – sound familiar??).
If it lasts that long – can you outlast it??
Will your job be spared – if not can you “out-compete” the 1000 people who apply for 10 new positions?
Will you have food clothing and shelter for your wife and baby?
Please don’t answer – they are rhetorical questions. I really hope this would happen to you or anyone – just be careful for what you wish!
They wanted a return to 'Old Florida'. Give this rotten economy a few more months and that's what we'll have... foreclosures, mall closings, and alligators roaming the streets.
The Dm’s will have their day and should enjoy it – it won’t last long!
We are in an economic downturn – call it what you will… it will turn!
As for Florida --- we were in recession 2+ years ago and didn’t know it – as a result we will likely adjust and recover sooner.
As miserable as things are – if you live in Florida at least you’re warm and the sun is shining on your face.
Florida won't recover as fast as other states, simply because Florida depends too much on tourists and retirees. You need young families and young familes need JOBS. Unless this state expands its industry, it will always be severely lacking in jobs and young families will go elsewhere. You cannot pay your rent/mortgages, bills, eat, SUNSHINE.
Florida won't recover as fast as other states, simply because Florida depends too much on tourists and retirees. You need young families and young familes need JOBS. Unless this state expands its industry, it will always be severely lacking in jobs and young families will go elsewhere. You cannot pay your rent/mortgages, bills, eat, SUNSHINE.
Cali – broke bankrupt – giving IOU’s for tax refunds
NY – near bankrupt – main industry (banking) in the tank. Taxes skyrocketing… even taxing health care benefits ouch!!
Michigan – banks are bulldozing foreclosed houses because no one will buy them
Carolinas – worse shape than us with less to offer.
GA – I think they now have Dominos Pizza – That should be a big draw.
New Mexico, Arizona, Texas, TN, FL stand to gain big from people leaving states like those mentioned above
Even though you can’t eat it SUNSHINE is always attractive.
The lower property prices go the brighter Florida's future will be. Incomes are low so housing prices have to drop, significantly. Hopefully if development stops agricultural land will return to sustainable prices. Tourism and agriculture are Florida's main industries. The failing retailers will leave vacant space that will not be filled, hopefully putting downward pressure on commercial real estate. The only hope for a better Florida comes in low real estate prices. Otherwise, the state will be dominated by the fools from around the world who put us in the mess we are currently in.
Muggy, so nice of you to tee up my last thread for me to take a swing at. In that thread you referred to me at an “Accidental Prophet” Be Honest you really don’t believe that do you??
Yes I was a housing cheerleader when I joined this forum back in Oct 06 but even though I am in real estate my posts were highly critical of the NAR, as well as, realtor organizations and realtors in general. Over 2 years ago I changed tunes and began agreeing with the housing bears (correctly so). Most openly with this thread //www.city-data.com/forum/flori...ere-right.html
This didn’t mean I was a housing bust cheerleader like you and so many others; in fact I was horrified at the potential prospects that lay in front of us. If you read this posted Nov 06 //www.city-data.com/forum/flori...ing#post165560 I said
“if real estate dropped 20%+ across the board we’d all be in deep - you know what - not just here in the US but globally. Risk and investment in US real estate (either directly or via secondary securities) is spread across the world. A resetting of this nature in real estate prices would have to follow a reset in almost all other values including salaries, raw material prices, food and energy, stock market, corporate share value etc. Basically a depression but on a global level”.
Accidental Prophet… I think not. Unfortunately, as the law of unintended consequences goes… you all (housing bust cheerleaders) are getting your wish and a whole lot more!!
Has the stock market (corporate share value) reset – yes! By about 42% down
Has energy reset – yes $140+ a barrel to $41
Jobs (and salaries) – yes heading down currently in progress.
Raw materials prices have and continue to come down
Depression – not quite there yet but this has a long way to go
So do you feel so comfortable and boastful today about how wise you are?
Are you nervous that this might last 10+ years as it did after the depression here in the US and the “Lost Decade” in Japan (BTW both after huge sums of money were thrown at the problem – sound familiar??).
If it lasts that long – can you outlast it??
Will your job be spared – if not can you “out-compete” the 1000 people who apply for 10 new positions?
Will you have food clothing and shelter for your wife and baby?
Please don’t answer – they are rhetorical questions. I really hope this would happen to you or anyone – just be careful for what you wish!
Your conclusions are correct but your assertion that it’s because of real estate is not correct. Real Estate was a means to an end. They (the government and banksters) used an asset bubble to pull America out of a severe recession. See, in 2001 had they not pushed real estate so hard by pushing exotic loans and lowering interest rates (oh and thank you Clinton for repealing the glass steagull act), we would have gone through then what we are going through now. Only thing is, they have no more bubbles to blow, at least not for a long while. See, this fiasco started back in the 1970s when Nixon pushed America away from a commodity based currency into a fiat monetary system, where in money has no intrinsic value. The purpose of which was to allow govts to inflate or deflate the monetary system as they saw fit. Then, they shifted us (America) from being a large producer nation to that of a service based nation. What services do you ask? Well, that would be Finance, Insurance and Real Estate better known as the F.I.R.E. economy. The problem with that is, these things have no true value and they do not provide the world with anything of which they truly need. To drive this F.I.R.E. economy along, they would use cheap and easily available credit. For example, you want that new BMW M3 but you only make 50,000 a year? No problem, refinance your home and go get it. While you’re at it, go get yourself that new 6,000 dollar scuba gear you always wanted. This is what I like to call faux wealth. This has another affect though. Let’s say you want to open up a best buy, well in order to do that you have to do an economic analysis of the area you want to open up in. First you look and see what the demographics are like, how many men, women, children, blacks, whites and so on. What are the average incomes and then how much of that will they spend on goods? Then you figure out your exact location etc. Well, in doing those analyses, not only was true wealth taken into account, but also peoples access to cheap and easy credit (credit cards, home equity loans etc.). Well what happens when that credit is no longer available? Obviously when the musical chairs stops, there will not be enough chairs for a lot of these businesses to have a seat. But a bigger question is where did this credit come from? Who financed all this? What happens when they realize we are over leveraged and can’t pay up? The tap gets cut off naturally. That means businesses by the dozens close up, people get laid off, certain career fields dry up or die and on and on it goes.
To understand where the money came from you just have to look to the sovereign wealth funds of Asian and Middle Eastern countries. We lived like self indulgent children off their dime. Now we are to the point we can no longer afford to service our debts, we are in trouble because no one wants to lend and we can't afford to spend, spend, and spend anymore. The housing market was just a ponzi scheme used to spur on another bubble (just like the tech and telecomm bubble and the many other bubbles before it). It works like this, prices get pushed up to astronomical heights, then when those debts can no longer be serviced and the inflated asset is deemed to be well over priced the prices of said assets come crashing down.
So what is to happen now? Well massive deleveraging, inflating of the dollar to devalue the debt to be able to pay it down. Some debts, no many debts will have to be written off or written down significantly and many, many business will close up shop because Main Street cannot afford to support the level of spending necessary to support these businesses. Means a lot of homes are going to be abandoned, tent cities, and people moving in with parents. It also means high crime, desperation and many other sad events. Doesn't mean the end of the world, but it does mean the end of a self indulgent era. Oh and I didn't even get to gas prices rebounding and peak oil. Either way, things are going to be different, Much different. A lot of pain is in order but also a lot of opportunities for people to start business and fill voids left by large corporations. Like let’s take star bucks. They might not make it back from this one. But it’s an opportunity for a mom and pop shop to step in and fill that void. If they can offer the best darn coffee, service and atmosphere that locals can get behind. The list goes on and on for the different types of businesses one can get into as a result of all this. All this also means the way the government operates and does business is going to have to change but again it’s going to be very painful. Some even say there may not be enough work to go around after all this is said and done. I mean the population explosion in America is a direct result of over indulgent policies. Well what happens when that is all done and our consumption and production capacity is vastly reduced?
This might be evil but I do hope selfish types who never cared about their fellow Americans suffer. You know the ones, the pull yourself up by the boot strap types who had no care in the world for the plight of the less fortunate. I hope those types lose everything. That is the only way they will learn is through experience. I think if that happens we could become a more caring and kind society as a result. Or we could devolve into some mad maxx scenario (shrugs) God help us.
Cali – broke bankrupt – giving IOU’s for tax refunds
NY – near bankrupt – main industry (banking) in the tank. Taxes skyrocketing… even taxing health care benefits ouch!!
Michigan – banks are bulldozing foreclosed houses because no one will buy them
Carolinas – worse shape than us with less to offer.
GA – I think they now have Dominos Pizza – That should be a big draw.
New Mexico, Arizona, Texas, TN, FL stand to gain big from people leaving states like those mentioned above
Even though you can’t eat it SUNSHINE is always attractive.
People are leaving Florida as well. I think its people from other countries that are off setting the American flight from Florida. Only thing is, I think a study said these foreigners are not remaining long term, they just use the state as a spring board. Truthfully though, what does FL have to offer? Not everyone is into the "sunshine and beaches" and last time I checked, no one excepts either of those as legal tender.
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