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From what I read..RE is projected to bottom out sometime in mid 2009 (optimistic) while the pessimistic view is 2010 and beyond.
Why do you call people who are waiting greedy ?
Wouldn't it be more of a prudent decision not to jump so as not to end up with a higher mortgage than home value ?
And I am speaking from a strictly local viewpoint..some areas are fine while others are still depreciating.
I am merely suggesting that those that wait around, convinced we still have an urealistic drop in percentages going forward, are, perhaps, crossing the "greedy line" themselves. If they are waiting because they haven't found the right house, then that's different. But those shopping for homes and compairing them to "foreclosure prices", thinking that those are comps to compare by, are, IMO, greedy as well. It's unrealistic to think that anyone should be able to buy a home for a steal. Taking advantage of someones' misfortune is greedy, when the one for sale next door is NOT a foreclosure and priced accordingly. It's "geedy" to assume that all real estate is still overpriced and has a long way to drop. If consumers are so worried about our nation, the financial market, and the real estate market, then OUR consumers should help the situation, not hurt it further. The real estate market has gone from people thinking it's over priced everywhere to INSISTING it still is and expecting to still get that "dream home" at a bargain basement price. Homes in ALL cities around our nation have a HUGE price range for a reason. There are actually people who think they should get the 3/4-1mil dollar homes for 50% or less. This is Greedy!! The differences are blantantly obvious and I have repeated this over and over throughout many threads on this forum since May.
Right or wrong, taking advantage of other's misfortunes to get ahead is what capitalism is all about. Buy low, sell high. Not buy high, sell low.
Essentially, real estate and the stock market are the world's largest Ponzi scheme, artificially propped up by inflation and speculation. We all know it but think we can get in and get out before the thing collapses.
We are all part of this Ponzi scheme, whether we like it or not. Perhaps you could have 100% of your resources in Gold if you don't like it, but you will make less over the long haul.
Actually, if things get really bad the one true commodity will be food. Even Gold does not have any real value. This is one reason why I am glad my family is in agriculture. If things get really bad, we will still be able to produce food, whether will machines or not. We will never starve, so long as we are able to keep our land (our land is all owned free and clear btw). If the economy goes like something out of a Mad Max film, people will still need to eat. Sure, petroleum will be valuable but ultimately food is more valuable. You need to eat to survive. You don't need to drive to survive.
Even those investing in short-term FDIC backed funds are part of this Ponzi scheme as you are basically matching inflation at best. You are not building any truth wealth earning 3-4% in your CDs, though it is certainly better than losing 50% on the stock market or 20-40% on real estate.
Like any Ponzi scheme, we just hope there is someone out there dumber than us to bail us out.
Regardless, real estate mania is over. People's attitudes towards real estate is going to change just as people's attitudes changed towards the stock market changed during the depression. The average person isn't going to be speculating in real estate anymore. The easy money in real estate is gone.
Both my parents grew up during the Great Depression. Both of their respective families lost their homes in the Great Depression as did almost 50% of homeowners, during that time. My father actually spent some serious time, living in a car.
These experiences *****ed them away from ever risking buying a home, so great was their fear of the unknown risk. And so they paid rent to other people for the rest of their lives, paying off other people's homes, a few times, over.
Had they been able to take a longer term view, absolute worst case, is they could have minimally achieved the financial effect of living rent free for all those years.
I suspect that there is going to be a new generation of people who will be ownership adverse for similar reasons.
Sorry your parents had it so rough. My family had tough times during the Depression but being fairly conservative farming families, we got thru it. (My dad and aunt's farm is a combination of my ancestors land holdings over the past 5 generations). The early 1980s were tough too, but we got thru that time too. Because of that, my dad has been overly risk adverse, which has him in a nice position now with no debt, but it also did not allow him to expand as fast as perhaps he could have otherwise.
He is going to buy more land in the next couple of years, but feels (I agree 100%) that land prices will come down off of their highs as they economy softens and commodity prices fall. He is going to do this to help my brother get a head start in farming. I most likely will get involved too as I want to ensure my brother is able to expand enough to keep the farm in the family for generations to come.
My mom's side (no real money) actually was hit worse. My grandfather had to come home and work on their farm and did not finish high school until he was 21. It was only because of the GI bill that he was able to go to college. Ironically, on the "poor" side of the family my grandfather worked as lender for the Ag department, never accumulating any real assets except a house, a car, and a few bank accounts (I don't think they owned stocks, just CDs). He was an extremely conservative man who never got very far ahead though he did raise 2 children and support a stay at home mom (my mother had student loans which my dad paid off once they were married).
I saw the same thing with my great grandparents on my dad's side. My grandmother's father was fairly risk adverse and only invested in CDs and bonds while my grandfather's father invested in stocks and was willing to mortgage his farm to come up with the down payment to buy other farms. Ultimately, both sides did fine, but one side ended up with several hundred thousand (1960 he died at 90) and the other with millions (1973 he died at 97).
I think people like your parents who rented out of fear and people like Humanoid (assuming they are to be believed) are not the same. Humanoid chooses to rent and could buy a place at anytime, just does not feel like it makes sense for them. Both your parents and Humanoid are risk adverse, but I think Humanoid has more resources to work with and thus more options. Humanoid will get ahead financially, whether they buy a house or continue to rent for the rest of their lives. I may not like Humanoid's attitude but I admit they seem to get the whole financial game and appear to have the resources to live a pretty decent life. Your parents may not have had this option. My grandfather on my mom's side was not that much different from your parents, dying in 1989 with $110K house and $20K in the bank. My dad's side is a different story, but also they had the benefit of generation after generation building wealth, which my mom's side did not.
ofcourse they are. if the banks balance sheets weren't being proped up by government handouts they'd be forced to liquidate their positions to the highest bidders. as things stand they can hold on and wait for better days.
This does not mean that balance sheets are markets. Also, banks will stop lending before they sell assets at fire sell pricing. That is exactly what they are doing now.
Quote:
Originally Posted by middle-aged mom
I suspect that there is going to be a new generation of people who will be ownership adverse for similar reasons.
I don't know. My relatives from the depression (the ones that were adults during it) rented too, but they were from big cities and renting didn't have the same negative association as it does today. If renting becomes more popular I think it will have just as much to do with increased desire for mobility and things of that nature.
Anyhow, what I had in mind is that people are going to stop thinking of their house as an investment and savings account. This has been done since the baby boomers.
Quote:
Originally Posted by Humboldt1
If the economy goes like something out of a Mad Max film, people will still need to eat. Sure, petroleum will be valuable but ultimately food is more valuable. You need to eat to survive. You don't need to drive to survive.
If the economy gets this bad then the people in the best position will be the ones with the biggest guns. The fact that your family owns the land "free and clear" means nothing. The government can come and take it any time they want, or some other powerful group.
If the economy gets this bad then the people in the best position will be the ones with the biggest guns. The fact that your family owns the land "free and clear" means nothing. The government can come and take it any time they want, or some other powerful group.
We have guns too and political clout in that area to back us up. But thanks for playing
Right or wrong, taking advantage of other's misfortunes to get ahead is what capitalism is all about. Buy low, sell high. Not buy high, sell low.
Essentially, real estate and the stock market are the world's largest Ponzi scheme, artificially propped up by inflation and speculation. We all know it but think we can get in and get out before the thing collapses.
We are all part of this Ponzi scheme, whether we like it or not. Perhaps you could have 100% of your resources in Gold if you don't like it, but you will make less over the long haul.
Actually, if things get really bad the one true commodity will be food. Even Gold does not have any real value. This is one reason why I am glad my family is in agriculture. If things get really bad, we will still be able to produce food, whether will machines or not. We will never starve, so long as we are able to keep our land (our land is all owned free and clear btw). If the economy goes like something out of a Mad Max film, people will still need to eat. Sure, petroleum will be valuable but ultimately food is more valuable. You need to eat to survive. You don't need to drive to survive.
Even those investing in short-term FDIC backed funds are part of this Ponzi scheme as you are basically matching inflation at best. You are not building any truth wealth earning 3-4% in your CDs, though it is certainly better than losing 50% on the stock market or 20-40% on real estate.
Like any Ponzi scheme, we just hope there is someone out there dumber than us to bail us out.
Humboldt,
While we disagree on many things, I always repsect your posts as you seem to bring wise info to the board. But I must attempt to argue with you on this one.
First, when speaking of misfortunes and capitalism, I am not talking about the homes that are NOT in foreclosure. I am saying that many expect to "capitalize" if you will, on EVERYTHING, just because some are facing misfortunes. Capitalism does not work this way as this is UNREALISTIC greed on misunderstood assumptions that since our nation is struggling right now, everyone, even those who can't afford it, should be able to take advantage. These "vulture types" are resentful that houses are priced over where they can afford because they want all the bells and whistles. It doesn't work that way.
Secondly, comparing the stock market to the real estate market is innaccurate. And I'm quite shocked you actually believe the "Ponzi Scheme theory". But even if the stock market is some part of the "ponzi scheme", the real estate market is not, in any sense of the word.
Real estate is REAL PRODUCT with real material and those vary in cost and quality. Brick/Stone is more expensive than Cedar/Hardi board siding and this more expensive than cheap looking aluminum or vinyl. Some homes are larger, offer more expensive details like custom woodwork where some have none. Some are built with 2x6 walls, some 2x4, some have dual zone heating/cooling, some do not. Some offer state of the art home systems, some do not. Some have high-end kitchens with custom cabinets and expensive appliances while others have the bare basics. Some have more baths than others and in those, very expensive product like spa showers, tile showers/tubs instead of cheap acrylic liners. Hopefully, your getting my point as far as products.
Then you have the labor that it cost to build and lastly the cost of the land and that varies greatly on location and size.
None of this yells "Ponzi Scheme" to me or most others, I'm sure. Many understand why real estate has all sorts of price ranges and why some is less expensive and some more. The problem and what I refer to as "greedy" in some is that many buyers expect all the more expensive things listed above for the same $ as the cheap crap construction down the road. This is not apples comparison, period. While many of us are educated enough to understand that some real estate got out of hand where prices were concerned, many also did not and the current inventory has many, many differences and why there are ALL price ranges available to purchase. But the market has been taken over in some part by buyers with very, very unrealistic expectations in what they think their money should buy and this is largely based on what has been drilled into them for quite a while now which is- "dont buy now, everything is overpriced and going down" Even you have been persuaded into thinking real estate will fall another 10-15% and not recover until 2010. Why do you think that?
And what are you basing it on? All reports and predictions are nothing but just that- predictions. No one knows if real estate will keep falling, how much it will if so, and how long it will take to recover. The truth is there are better deals out there right now than there have been in many years and it just can't last forever. I can't speak for the market you're shopping in (which I believe is rental investment property?) but SF homes in our area have truly only dropped at 10,000 increments at a time and not that often. Most are still within less than 40,000 of original ask (in the 500,000-600,000 range). There is just nothing to support that the one that is 500,000 today will be 450,000(another 10% drop) to 425,000(another 15% drop) as you predicted by 2010. It's just very unrealistic. Many will just not move if this idea actually starts to manifest in any way. I know if we thought it was going that direction, we'd have pulled ours off the market, backed out of our contract to build the one we're in now, and stayed put.
In essense, this is not an arguement, just a reasonable, calm approach to a big problem from someone with a different perspective as how it looks "on the other side" of what is reported. Yes, the media "card" again and the arguement that they and the analyists can be wrong. They are just guessing, just like you and me. It seems to me there is a lot more to be said for the "self prophecy" arguement than anyone wants to admit. But one thing is for sure. People are misled and scared because of it and that certainly did work if that was the goal. It baffles me that anyone who can buy something with $ down, be approved for a loan, have bank approve its value, why those are scared to buy because they think it is still too much money and will go down in value because everyone says it will- especially on forums like these.
In a sense, the stock market just suffored the same fate and worse. People went running scared and sold off and cashed in, making a real mess of the financial system. PANIC will destroy before the actual destruction itself!!
Look: it's really simple. I'd rather buy 5 percent more off the bottom than take a 20 plus percent hit in negative equity.
I track foreclosures every day. They haven't gone down. But when they do ... that's when I'll be looking to buy.
But I'm not going to be stupid enough to pay too much. Anybody who thinks now is the time to buy hasn't looked at the inventory.
And I'm talking about the REAL inventory ... foreclosures and homes that are about to become foreclosures.
But you're in California, and that's DIFFERENT. Although, you are gambleing a lot on the "foreclosure" market and the hopes that a house worth ANYTHING will be one you like. Most foreclosures have been "beaten up" and if there are multiple amounts in one area, the whole area has gone down the tubes as well. Why would you want to put down your roots in a situation like that? Just an opinion, but curious none the less. Also, how do you know what homes are about to become foreclosures? Gossip on the street and predictions by rumor? Again, youare in California and we have ALL been argueing about what a mess your state has made of the nation's real estate as a whole!
We have guns too and political clout in that area to back us up. But thanks for playing
I can name a few Chicago gangs that have far more. Your political clout means nothing either. It is not after all the current government that would be around.
During troubled times its rather easy to start populist revolutions, anybody with wealth will be at risk just as they were during other such periods in history.
It is amusing that you think you and your family can guard your entire farm though.
Regardless, such events are very unlikely. But if they do occur your family if anything is more at risk than otherwise.
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Greed is "good" if you can profit from it
