New Bubble? : $610 a sq foot in Atwater Village (short sales, foreclosures)

[BRinSM]

Originally Posted by Politicalprison

Let me guess you guys in the real estate business?

let me guess, you've never taken a college level finance course...

[munchitup]

Originally Posted by Politicalprison

Haven't you ever heard if you can't afford it don't buy it? I wish it was back to the days you didn't need a loan to buy a home. I went to best buy (worst store ever) too look for computer they are all overpriced but a big financing desk nearby and everyone's at the financing desk ....what a sick world

They are financing them because of the 0 interest.

I could easily afford to buy my computer right now, but why not spread it over 12 months with 0 percent interest? That's why they are at the financing desk.

I agree America has a buy-now pay-later mentality but I think you are maybe a overreacting a bit,

[jm1982]

Yeah makes sense if they can get zero percent. Of course not everyone will pay it off...but that's another story.

[munchitup]

Originally Posted by jm1982

Yeah makes sense if they can get zero percent. Of course not everyone will pay it off...but that's another story.

Their deal is (at least when I bought my new computer last month) you spend over $750 on something at Best Buy, you get 0 percent financing. Of course, you have to get approved for the Best Buy Card, which I doubt is difficult.

The trick is if you miss a payment or don't pay it off in full after 12 months all of the interest gets tacked back on and some penalties. So they are just banking on you screwing up. I'm sure tons of people do. I did my last computer this way too, it's a great deal if you make your payments.

Also the Best Buy card has ridiculous interest rates (I think 26% or something) so I never use it unless I can get the free financing.

[munchitup]

Originally Posted by Politicalprison

Do you know about fractional reserve banking?

I have never heard of this, please enlighten me.

Oh and in my opinion the real racket in America is the student loan situation. It's gonna be awesome when that bubble bursts.

[jm1982]

Yeah...apparently bankers that advise the Federal Reserve are warning of a student loan and farmland bubble..comparing it to the subprime crisis..

"“Recent growth in student-loan debt, to nearly $1 trillion, now exceeds credit-card outstandings and has parallels to the housing crisis,” the council said in its Feb. 3, 2012, meeting. The trend has continued, with the Consumer Financial Protection Bureau saying in March 2012 that student debt had topped a record $1 trillion. "


Things could get interesting..

Bankers Warn Fed of Farm, Student Loan Bubbles Echoing Subprime - Bloomberg

[genjy]

Originally Posted by munchitup

I have never heard of this, please enlighten me.

Oh and in my opinion the real racket in America is the student loan situation. It's gonna be awesome when that bubble bursts.

The gov subsidized me a student loan of $35k that I had no way of paying back when I was a student... but then of course I got a good job thanks to my degree and paid it all back within 10 years.

The interest paid was barely anything.

The gov afforded me an education that I couldn't have afforded!

[munchitup]

Originally Posted by genjy

The gov subsidized me a student loan of $35k that I had no way of paying back when I was a student... but then of course I got a good job thanks to my degree and paid it all back within 10 years.

The interest paid was barely anything.

The gov afforded me an education that I couldn't have afforded!

That's good. I wasn't saying good student loans are the problem.

It's mostly due to trade-schools and for-profit institutions. My student loan is reasonable, as are my wife's six-figure loans, though hers have some outrageous interest rates (and one has a penalty for paying back too soon, which I think is now illegal).

[jm1982]

True many of these schools have very high tuition fees that they are able to charge because of the ability to get financing. When or if they graduate they usually aren't making much more than they would of without the degree...and that's if they can find a job.

[JohnG72]

It's incorrect that loans are driving the current So Cal Estate market. Actually it's a ridiculous rate of cash purchases right now. It has to be since most appraisals lag in a rising market and in a rapidly rising market like what exists right now, most homes don't come close to appraising at what the highest offers are. What's driving the market is utter lack of inventory.

Just like the last bubble, someone's gonna be holding the bag at the end and this time around, due to the heavy presence of cash investors, it won't be the banks and govt left holding the bag.