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.
Lots of fear and apprehension in the land of milk and honey. Our sense of job security, our family budgets, our sense of satisfaction in prospects for the future, etc. etc. - all seem under duress. With this in mind I see many would be first-time buyers missing the boat so to speak, as fear and apprehension stifles opportunity. I speak to the historic low interest rates, the beaten down housing prices (in many areas), and the government first-time buyers tax incentive expiring April 30, 2010. With human behavior I sense we share a herd mentality (with our four-legged friends), in that most of us only move when the group moves. Little wonder there are less Warren Buffets or Steve Jobs in the world. As with the stock market bubble, as with the housing bubble, the majority gets the timing all wrong. Picking a top, or a bottom is a losers game. I'm thinking many would-be buyers are going to remember the opportunities that could have been in housing. I'm thinking would-be buyers may surmise they can hit the market lows and capitalize on them, but a little more housing valuation fall may not make-up for paying higher financing rates when interest rates are higher. I hope house shoppers look at everything and avoid the herd mentality. BTW: I ain't no Realtor/lender, and I have nothing to gain from speaking my mind on this subject except the hope that people will think twice about their motivations in this housing environment.
No, the herd already bought houses, and is now known as "homeowners." The herd is only beginning to rush out of this investment class. The herd is leveraged, so the herd is trapped.
When people talk about interest rates and incentives spurring growth, I think about what my dad told me about Japan. He was a broker in about 1990-1991 when their asset bubble burst. He remembers when they lowered interest rates and came up with all these incentives, he bet (on behalf of his clients) that the yen would lose value and the Tokyo stock market would grow, I suppose on the backs of its export champions. "It was just inevitable." Yet, 1991 came and went, no growth in the Japanese market. 1992 came and went, no growth. 1993 came and went, no growth. 1994 came and went, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004 came and went.. STILL no growth, despite low interest rates and stimulus.
bongo makes great points. I call it the sheep slaughter. The people that come late to the party, when everyone is doing it, get slaughtefred the most. The internet bubble was a classic example. The housing bubble another.
Is it Buffet, who say you gotta buy when their is blood in the streets? In a few years, we will look back and say, that was obviously the opportunity of a lifetime, just like buying CAT at 19 last March, or many other great blue chips that have gone up 100-300% since then.
I look at my neighbors townhouse, he bought in January 2008 and paid 152,000. For what he paid I bought my unit (in much better condition), and also bought a condo in Summerlin, Nevada and also bought a house in Chiangmai, Thailand, and also bought a 3 bedroom 1 bath home on an acre, with city water in Souther Arizona.
22,000 current TH/Condo
35,400 Summerlin Condo
23,500 House in Chiangmai, Thailand
47,500 House in Santa Cruz County, AZ
______
128,400
Only time will tell and of course, each zipcode will have its own bottom at a different moment than the others.
That said, the only herd mentality I see growing right now is the one to strategically default. And that doesn't say good things about where prices might be headed.
The herd of young couples in Seattle (late 20s/early 30s, no kids) seems to be jumping all over houses in the 450K range right now... I didn't think we were part of a "herd" at all (making offers in the last few months) until I realized just how much foot traffic every single property was getting. Decent houses in that range are going under contract within 2-3 days, without exception.
The herd mentality was buying in 2004-2006. The herd mentality is in thinking that house is a great investment. The herd mentality is thinking price will never go down.
The herd mentality is mass defaulting.
The herd mentality is buying overpriced houses in Govt controlled super subsidized market.
Once the subsidy evaporates, we will see what happen in 2011/2012 onward. Then we will know what herd mentality is.
Yeah, I was gonna say, the herd is currently in a feeding frenzy. There are lots of areas of Los Angeles with marginal supply available because anything halfway decent already received many multiple offers.
The average buyer here still is buying a house only for 3-5 years. LOL.
Send some of your "herders" to my town in GA. Things are d-e-a-d unless you are priced at about $138k. Unfortunately, we paid $190k in 2006.
I also just saw an article today that said more people are choosing to pay their credit cards on time and let the mortgage payments slide (opposite of past trends). Of course, that does not bode well as more of these homes may hit the market as foreclosures. The money quote was something like "People can't buy groceries with their homes" meaning that the credit cards must be preserved because folks need them to pay for essentials now.
The herd should become familiar with a phrase...."Pigs get slaughtered".
The herd never changed its course but briefly when we had our first glimpse of the real problems we face in late 2008.
Here we are today, marginally recovered at best and possibly ready for another brutal leg down in the economy, and yet I have coworkers with no business trading stocks telling me they bought Apple stock at $210 recently (AFTER a nearly 300% increase in 9 months).
It took generations after the depression for folks to get over their fears of buying - just ask MaM. It's going to take a lot more pain to knock into the herd's minds that owning a home is a place to live first and an investment last.
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.
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.
