Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > Pennsylvania > Lehigh Valley
 [Register]
Lehigh Valley Allentown-Bethlehem-Easton
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 11-11-2009, 11:59 PM
 
135 posts, read 368,791 times
Reputation: 26

Advertisements

The Lehigh Valley housing market was doomed from the beginning of the housing bubble. Now only those who purchased during the bubble years of 2002-2008 will not agree and that's fine but reality is only beginning to set in for those who did. The only difference between the DotCom bubble and the most recent housing bubble are dates and size. The DotCom bubble was a recession and the housing bubble is causing a depression.

Reality is very simple. I said in the late 1990s that the DotCom boom was bogus. I asked people, "How are these internet companies going to make hundreds of millions to support their stock valuation when the total retail market for the product they sell is under $100 million a year."

I asked for justification, just as I am now. For some reason the gain could never be justified beyond a single answer.

The answer was always, "I don't care how they are going to make money, I bought the stock at $18 and now it is trading at $120. I'm making a killing."

Reality is that your gains are worthless unless you can cash them in. Some people do but the mega rich who truly control the market will always be able to cash in before you. We call this THE HOUSE ALWAYS WINS!!!

Every year millions of people lose billions of dollars to casinos. A few hundred cash out with massive gains. Same story with the lottery. The stock market has become nothing but a casino. The owner operators are Goldman Sachs, JP Morgan, and the Fed. However we do not dedicate TV networks, newspapers, and hundreds of pundits to cover casinos. We do however for Wall Street, isn't that a bit odd. Wall Street has become a game, the problem is that the umpires don't play fair. The definitely favor the home team.

What makes me so angry is that the asset bubbles have been proven. Dow 14,000 was proven to be attained only through the massive leveraging of assets. Leverage ratios higher than 100:1. How can a climb back to that be justified?

The Dotcom fiasco was proven to be caused by massive amounts of venture capital being spent to grow corporations that never even had a chance to make dollar one. Rather than look at real business models, investors bought on wild predictions and drove stocks to massive earnings ratios. The exact same thing that is happening now. No company can justify a P/E ratio over 50 even with double digit profit growth. Right now we are valuing quite a few corporations at a few hundred times their actual earnings. Why is this going on again?

The housing bubble was driven mainly by the speculation of complete morons that convinced themselves that homes could appreciate in value by 100% every 3-5 years. Realtors and banks worked together to promote this charade because they were making out like bandits.

That was until reality set in. It doesn't take a genius to figure out when assets and stocks are overvalued. It just takes a little common sense. The problem is that common sense usually takes a backseat to the illusion of easy money. Goldman Sachs and the rest of the thieves know this all too well. As long as people are stupid enough to believe in the promise of easy money they'll be there to take your money in exchange for it.
Reply With Quote Quick reply to this message

 
Old 11-12-2009, 09:52 PM
 
61 posts, read 225,221 times
Reputation: 28
I need to track down that Deutsche bank study from the summer that had Allentown in the top 10 markets that have yet to see a full correction. They predicted that we still had a 19% drop. Because of the lower gas prices we have been shielded from a true drop. We're still considerably higher than the pricing seen in 2002-3 which cannot be justified when you take a serious look at things.
Reply With Quote Quick reply to this message
 
Old 11-13-2009, 10:10 AM
 
135 posts, read 368,791 times
Reputation: 26
Quote:
Originally Posted by Matt_PSU View Post
I need to track down that Deutsche bank study from the summer that had Allentown in the top 10 markets that have yet to see a full correction. They predicted that we still had a 19% drop. Because of the lower gas prices we have been shielded from a true drop. We're still considerably higher than the pricing seen in 2002-3 which cannot be justified when you take a serious look at things.
Of course we are going to see the full correction. It took 8 years to go up and will be going down for the same time at minimum. Japan experienced the same type situation and they are still going through a lost decade.

People should have seen this coming especially after the DotCom disaster. There are still people who think "Housing will be making a comeback" but those are usually used house salesman or overextended homeowners with zero to negative equity.

It's far from over and prices will not be justified for decades not years. Any market that saw price run ups like ours did will eventually go back to pre bubble values and then some. When you think about it prices started rising at 3-6% a year from the mid 90's up until the real nonsense of 2002 and on. Even at the 3-6% thats too fast too soon. Fundamentals of housing must be in line with historical figures or you have a decrease in values after the run up. This has happened many times in the past but never has the run up been so quick and high. History repeats itself and this will be no different.

Here is a graph that's all over the place on the web. It's got data for over 100 years and shows the previous run ups in values. Our bubble makes Japans look small and they are still suffering.

http://graphics8.nytimes.com/images/...aph2.large.gif

Real estate bubbles are like gravity. What goes up must come down.
Reply With Quote Quick reply to this message
 
Old 11-13-2009, 10:15 AM
 
135 posts, read 368,791 times
Reputation: 26
Quote:
Originally Posted by Matt_PSU View Post
I need to track down that Deutsche bank study from the summer that had Allentown in the top 10 markets that have yet to see a full correction. They predicted that we still had a 19% drop. Because of the lower gas prices we have been shielded from a true drop. We're still considerably higher than the pricing seen in 2002-3 which cannot be justified when you take a serious look at things.
Another thing that will accelerate the decline in this areas values will be the commercial crash that's just starting. With unemployment going to continue to rise for years to come it can only lead to what needs to happen, a major correction.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Settings
X
Data:
Loading data...
Based on 2000-2020 data
Loading data...

123
Hide US histogram


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > Pennsylvania > Lehigh Valley
Similar Threads
View detailed profiles of:

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top