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It's a general question related to housing and rather open ended. Not certain it's possible to discuss without emotion, but we can try. Heck, it is the "Real Estate" forum. Where is glenn telling us we missed the bottom?!
Kyle Bass at a Summit recently called housing key to the economy as "the single (biggest)(largest) asset class we have" and I think he's right. The embedded videos are from CNBC and really worth watching if economics and housing interests you. This is not some beans and bullets survivalist or Cramer flailing around like an idiot for TV. It's smart people talking about very relevant things. You won't get an answer in the end of what is going to happen, but it's thought provoking.
Dr Housing Bubble wrote a very nice piece today and one of its underlying themes is that "Owning with no equity is renting with no mobility". Arguably a "Gloom" blog post, but worth a read if you want to skip the commentary and review the data on its own.
We are in the market right now and planning on buying as soon as we choose a home in our area. Went to a couple open houses in our area, one of which the owner happened to be there and let it slip that no one else had been to see his home as of yet and the open house only had an hour to go. At the other open house I am betting we were the only people there as well. Another home we saw that we like had the price lowered from $335,000 to $319,000 and I was planning on offering them $320,000 at the time. Now we plan on making an offer of $300,000. All I can say is that this is a great time to buy. That is kind of my beliefe anyway, buy when no one else is and sell when everyone else is buying. Not that we plan on selling the home we will soon buy. We want to stay in that place till our kids kids have kids. Another thing that I learned from Warren Buffet. He has been in his home since 1956.
...but the rarely work out as planned. I watched the videos and they seem mostly believable, but honestly with enough time to make my own charts and pull my own stats together and enough practice of sounding like a professor I bet I could make just as convincing an argument that was 180 degrees opposite.
For commercial real estate and the investors stuck with large holdings the short term looks awful. Long term we all die...
We are in the market right now and planning on buying as soon as we choose a home in our area. Went to a couple open houses in our area, one of which the owner happened to be there and let it slip that no one else had been to see his home as of yet and the open house only had an hour to go. At the other open house I am betting we were the only people there as well. Another home we saw that we like had the price lowered from $335,000 to $319,000 and I was planning on offering them $320,000 at the time. Now we plan on making an offer of $300,000. All I can say is that this is a great time to buy. That is kind of my beliefe anyway, buy when no one else is and sell when everyone else is buying. Not that we plan on selling the home we will soon buy. We want to stay in that place till our kids kids have kids. Another thing that I learned from Warren Buffet. He has been in his home since 1956.
I think Warren Buffet got lost somewhere in this mess and it would be better to emulate his Father. The sound bites are very different now, especially when you consider he took a bailout.
Good luck in your negotiations. Would be cool to hear how your experience goes. I'm guessing you're using a Buyer's Agent?
Quote:
Originally Posted by chet everett
...but the rarely work out as planned. I watched the videos and they seem mostly believable, but honestly with enough time to make my own charts and pull my own stats together and enough practice of sounding like a professor I bet I could make just as convincing an argument that was 180 degrees opposite.
For commercial real estate and the investors stuck with large holdings the short term looks awful. Long term we all die...
I'm not sure what 180 degrees of what those guys are saying is - would you be making an argument that things are moving along well? It's really your perspective, though, right? If I was a boomer, I'd probably look at housing today and kind of shrug my shoulders - probably say something along the lines of it is being what it is. Heck, if I bought even as little as 10 years ago I'd probably have minor concerns - take my lumps, everyone is hurting.
Those big theories aside; based on your posts I know you're in the business in some capacity - you see what's happening. Still to this day some of the 400, 500k entry point neighborhoods are an absolute joke... That's a whole bunch of folks who should be making 150k minimum that probably will need to take fast food jobs when the 99weeks runs out. I know I have a bad rep as one of the RE bears around here - means I can't get my mind around comparables being the entire story. I don't have access to any real data, but based on blog chatter it just seems like a whole bunch of bottom feeding right now.
I wonder if people would still buy today if they knew values were going to drop 20% next year?
My point, no one knows for sure what is going to happen, but a flood of inventory will not help home values.
Given the Bank of America moratorium on foreclosures, its hard for me to imagine a flood of inventory any time soon. If anything, supply will be artificially reduced for a while -- how long is anyone's guess (4 months to 4 years).
And the can continues to get kicked down the road....
Is it just a matter of time before the current Administration takes 'credit' for keeping homeowners in their homes just a while longer - good PR prior to the election?
I wonder if people would still buy today if they knew values were going to drop 20% next year?
My point, no one knows for sure what is going to happen, but a flood of inventory will not help home values.
I bought in May knowing full well market value of my home could very well fall another 20% next year and I am very happy with my decision. I was not at all happy renting.
I bought in May knowing full well market value of my home could very well fall another 20% next year and I am very happy with my decision. I was not at all happy renting.
I would guess your happiness depends on how much you house cost.
IE, if you bought a house for $800K and it fell $160K, I am guessing you would be much less pleased than if you bought your house for $120K and it fell $24K, particularly if rental cost surpassed mortgage cost.
Anyway, I agree with the comment regarding the foreclosure moratorium. Well see if there are "ZOMG real estate is going up, we will be priced out forever" morons out there that will create a new minibubble on minimal transactions. Gee, sort of mirrors the stock market, yes?
I wonder if people would still buy today if they knew values were going to drop 20% next year?
My point, no one knows for sure what is going to happen, but a flood of inventory will not help home values.
That's a no brainer! However, some of us have been waiting a long time and are facing a rather different situation. In our case, we decided to ride the storm since late 2003. In the meantime, our son was born and space is badly needed. I don't think we can wait any longer, even though depreciation on home values seems very evident.
Considering the rate of inflation and average income, we feel that home values, at least in New Jersey, have not fallen to levels that match people's income. The halt on foreclosures, as someone else said, seems a bit too much of a coincidence now that elections are close. As far as capital formation or savings is concerned, if we keep our money in the bank, the Feds will do their job at debasing the little savings we have. If we decide to buy, then our home will most likely depreciate in the coming years for reasons we all already know. It is a loose-loose situation for the average American....
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Theories are wonderful things...
