Are we on are way to play it again? (sales, real estate)

[easytim]

Real Estate Downfall - YouTube

The way it works in America

[fiege1224]

Originally Posted by easytim

Real Estate Downfall - YouTube

The way it works in America

This should be playing in every real estate and bank around the world. If you look at our history this has been repeated over and over for a very long time. What amazes me is they always thing the out come will be different the next time around. What really happens is it just ends worst.

[rikoshaprl]

Something like 70% of the home sales since the crash have been cash deals so it is not likely there will be a crash like the last one. What is more likely is that the dollar will be devalued to pay off our crazy debt with worthless dollars.

[fiege1224]

They always pay cash in down markets. It is when they sell to average people that have to pay with credit later that causes the crash. They end up over paying for the house and any little thing that goes wrong they all go broke. I also believe the government will devalue the dollar. We are about the only ones that haven't done that yet.

[rikoshaprl]

Originally Posted by fiege1224

They always pay cash in down markets. It is when they sell to average people that have to pay with credit later that causes the crash. They end up over paying for the house and any little thing that goes wrong they all go broke. I also believe the government will devalue the dollar. We are about the only ones that haven't done that yet.

If loans were only given to those that could afford to pay them, crashes would be much less likely. Years ago you had to pay mortgage insurance for any loan with less than 20% down. Government backed Fanny/ Freddie has hardly changed their criteria since the last crash.

[MarkDNH]

Originally Posted by fiege1224

I also believe the government will devalue the dollar. We are about the only ones that haven't done that yet.

Not sure if I read that right, but if you are saying the USD hasn't been devalued yet, then you have been misinformed. The USD (no other currency even comes close) has the most notes floating out there than any one else. The USD is the world currency reserve and we have been devaluing (printing out of thin air) it for many decades..... just so happens the past decade it has picked up speed. ZIRP , zero interest rate policy, is printing.
Many nations have already, and more are in the planning stages, have agreements between themselves to sidestep the USD in their trades..... BRICS (Brazil, Russia, India, China, South Africa) just created a fund so they will not need the US controlled World Bank or IMF when liquidity dries up.

[nhkev]

In theory population growth, formation of new households, cost to build are reasons why real estate "normally" go up 3-5%. Whenever banks or govt's get involved to create demand is when the bubble's start. The reason for the boom is because they typically do it at the wrong time. The market could be chugging along at a very sustainable rate. 70% are paying cash because it is a better return than the bank and bonds Within a hard asset that you can either use or create a better return through rent.
When the market is doing just fine, the gov't usually feels people are being left out of the market and start with their subsidies or looser guidelines.

They need to look at it as if they were driving a car. When you are coasting down a hill and picking up speed you do not have to hit the gas. When you are having a hard time climbing a steep hill you need to give it gas. The gov't typically gives the gas when going down hill (the boom) and pulls everything back when struggling (the bust). When a market is getting heated is when they should tighten the reins in and get tighter standards and higher down payments. When the market is sluggish is when they need to give incentives. This isn't a democratic or republican thing because they are both guilty of doing it.

[MarkDNH]

Originally Posted by rikoshaprl

If loans were only given to those that could afford to pay them, crashes would be much less likely. Years ago you had to pay mortgage insurance for any loan with less than 20% down. Government backed Fanny/ Freddie has hardly changed their criteria since the last crash.

Yes but RE prices would just tick up a smidgen every year like they did from the 40's up till the 90's and this so called economy we have had, not just since 08 but also through out the 2000's wouldn't amount to crap.
Refi's, has put many new cars, boats,....etc, in the yards of many that would have taken them a lifetime to save for. RE prices surge...... yipeee..... look honey.... weeze got instant equity.

[easytim]

New housing starts were reported to be down 8.1% today, on the National News. First big drop in over a year.

[fiege1224]

Originally Posted by easytim

New housing starts were reported to be down 8.1% today, on the National News. First big drop in over a year.

I just got back from my home at the cape and I couldn't see any down cycle there on building. They are building all over near me. I just hope prices don't go up or down. That way just maybe my taxes won't keep going up. LOL. I can dream.