REAL ESTATE is ripe for a burst ! - Page 3 - GoFuckYourself.com

SomeCreep · 05-22-2005, 03:16 AM

100 bursts

ADL Colin · 05-22-2005, 04:48 AM

101 ways to skin a cat

rounders · 05-22-2005, 05:44 AM

nice thread

howard · 05-22-2005, 06:10 AM

Lars---I 100% agree with you.

I am in the philly area. In 89 i bought a townhouse. In 91 sold it at a small loss. In 91 bought a big house. I sold it in 98 (after divorce)10% higher than I purchased it but must have put 100k into it--so I lost.

But both my x and I bought townhouses at the end of 98 beginning of 99 and were both up 2.5 times what we paid.

The other side of this equation was the stockmarket made a fortune from 89-98 and this is when real estate was at a standstill. Real Estate jumped from 98 till today and the stockmarket has taken a bath..Now its time for the reverse to happen...

I am back in the market now and I expect it to be big for the next several years. I don't know if the nasdaq will hit 5000 again by 2010 but I'd bet it will closer to 5000 then 2000. Its time to buy good profitable tech stocks again. Be smart and don't allow any losses over 20% and sell them when u have too and do not ever fall in love with any 1 company. I use a service call Cabot since the late 80's and they made me a fortune until the market dived and I started thinking that I new everything and started listening to myself. Pick a broker that u trust or a stock picking service that u trust and just listen to them....

TheSaint · 05-22-2005, 06:14 AM

Like any market, the bubble popping, if indeed it does, will take out some of the excess in the housing market. People who were truly stupid (bidding against each other above the asking price, buying houses unseen, etc.) could get hurt.

But most single family real estate sold in the U.S is owner occupied. I signed a contract to for a house in Flordia, and am not worried. I negotiated the hell out of and did the research. What is driving the growth in that area is an influx of baby-boomers and retirees. They are running out of land, and as new development becomes impossible, the existing real estate goes up. I don't think its possible to come up with a forecast where Florida stops growing. Its just not possible to manufacture area to live with Florida's most valuable commodity - sunshine.

The reason real estate never shaves off 50 or 60% as stock markets occasionally do is simple - you don't have to sell during the downterm, if you occupy the house and aren't in over your head. I've waited out at least two real estate downturns in my life and came out fine, so I am not worried about this one either.

Japan is a totally different case. Totally fucked up banking system and corruption killed their econcomy off.

C_U_Next_Tuesday · 05-22-2005, 08:42 AM

Quote:

Originally Posted by azguy

Real estate is fun and profitable, but the real $$ (at least IMHO) is in the stock market. Real estate has been a nice ride in the past 3 years. Moving on...

we just switched out 401 k over to a real estate fund and that bitch is making mad money the past three weeks.

My friend who bought a house on the beach in florida a few years ago for 110k, it's now worth 215K..

I wonder what my house is at at the moment.

bradpitt · 05-22-2005, 08:52 AM

I made millions and will continue to. There will not be a crash but taking insanly huge profits may stop.. fine with me.

Penthouse Tony · 05-22-2005, 09:57 AM

Your home is only an investment if you sell it. Always remember that.

Eagleman · 05-22-2005, 10:06 AM

i THINK IT'S ALMOST OVER......

Gottis · 05-22-2005, 10:13 AM

Quote:

Originally Posted by bradpitt

I made millions and will continue to. There will not be a crash but taking insanly huge profits may stop.. fine with me.

Of course you couldn't care less, you bank $20 million per picture you're in.

KRL · 05-22-2005, 10:13 AM

Bubbles eventually burst just like chewing gum. But the good thing there's always new packs of gum in the economic pipeline for us to all blow up again.

Xenophage · 05-22-2005, 10:21 AM

Quote:

Originally Posted by Almighty Colin

Lars,

I thought the exact same thing when I saw the cover of Fortune.

Yup when all the News is screaming about how your mising the boat the end is near..

when the stock market was rocking it was on the front page of newspapers many times right before th end.. how often do you see the stock market on the front page of the newspaper.. when ya go to a party of average joes.. all you hear about is how they are getting rich or want to get in.... and how they are suddenly experts.. I have not heard talk of the latest IPO or the next hot .com in along time.. but I do hear real estate real estate.. this means most people are already in or just about to take the final plunge...

It will be interesting to see hwo things unfold in the next year.

Xenophage · 05-22-2005, 10:25 AM

Quote:

Originally Posted by latinasojourn

there is another mitigating factor which is not mentioned in the treatise above.

deficit spending and the iraqi war will begin to push inflation in the coming 36 months---i predict big-time inflation.

mortgage interest rates will rise this is true---but folks who got in with a low interest rate (fixed rate) amotized loan might come out OK for the most part, because they will be paying off that loan with inflated dollars.

if you have an ARM you will be mostly fucked.

if want you to get into RE now in the USA you should look for areas with good price to rental ratios---this means buying properties at approx 70-90 times their monthly market rent.

there are many places in USA you can do this if you are willing to relocate---and that's where you can make a killing in the next 5-10 years.

but WTF do i know. i basically retired when i was 35, all from real profits.

nice good tips.. In santa cruz I have always ahd to buy stuff ata rageing 12-15 times monthly rent.. today you can not find anything with better than 10.. meaning nothing is worth buying here.. And I dont want to move and I like to be a little hands on on the properties.. Thats prolly cost me some money over the years.

Xenophage · 05-22-2005, 10:33 AM

Quote:

Originally Posted by KRL

Bubbles eventually burst just like chewing gum. But the good thing there's always new packs of gum in the economic pipeline for us to all blow up again.

hahaha nice one. Are you a current buyer of real estate ? Last 6 months ?

latinasojourn · 05-22-2005, 11:31 AM

Quote:

Originally Posted by LegendaryLars

nice good tips.. In santa cruz I have always ahd to buy stuff ata rageing 12-15 times monthly rent.. today you can not find anything with better than 10.. meaning nothing is worth buying here.. And I dont want to move and I like to be a little hands on on the properties.. Thats prolly cost me some money over the years.

yes, i made my first big money in SF bay area real estate in the late 70's and 80's. i understand what you are talking about.

the problem with the bay area (and many other highly gentrified areas in the usa) is that rental values do not support mortgages and other landlord costs so the carrying costs are too high, and the leverage is not good.

add to that a semi-socialist mindset on the part of the general electorate (rent control issues fucked up berkeley for me big-time) and you will see a MUCH greater ROI is areas like kansas, indiana, SD, MN, MI, WI, etc etc.

good luck to you, SC is a great town, but i will never pay a cool million to live next to a bunch of jigs or pot smoking renters. that's the prob with the bay area---it's a quality of life issue.

steffie · 05-22-2005, 11:53 AM

Quote:

Originally Posted by KMR Stitch

Lars you are taking out 1 key factor.

The Baby boomers are coming out of retirement AGE 60-65 ish A lot of them will be moving to warmer southern areas. Florida/Texas/Cali

The market might bust in a few areas but still be strong in the south.

and the Southwest - New Mexico is hot right now

latinasojourn · 05-22-2005, 12:13 PM

Quote:

Originally Posted by steffie

and the Southwest - New Mexico is hot right now

yes, very true.

xNetworx · 05-22-2005, 12:17 PM

Quote:

Originally Posted by azguy

Real estate is fun and profitable, but the real $$ (at least IMHO) is in the stock market. Real estate has been a nice ride in the past 3 years. Moving on...

The stock market blows for most

Mr.Fiction · 05-22-2005, 12:21 PM

Quote:

Originally Posted by latinasojourn

good luck to you, SC is a great town, but i will never pay a cool million to live next to a bunch of jigs or pot smoking renters. that's the prob with the bay area---it's a quality of life issue.

Quality of life is why people move there. It's just that your definition of "quality" and theirs must be different.

$5 submissions · 05-22-2005, 01:59 PM

Quote:

deficit spending and the iraqi war will begin to push inflation in the coming 36 months---i predict big-time inflation.

mortgage interest rates will rise this is true---but folks who got in with a low interest rate (fixed rate) amotized loan might come out OK for the most part, because they will be paying off that loan with inflated dollars.

True. But their main worry won't be so much the mortgage payments they are paying but the erosion of the value of their property. If there are fewer buyers coming in later to push the price of existing inventories up, the prices will begin to stagnate or even fall. This usually puts the fear into some real estate holders because they become UPSIDE DOWN on their loans -- (ie., payments are worth more than the value of the property). Hence, they sell--thereby triggering another round of price erosion.

Quote:

Originally Posted by latinasojourn

if you have an ARM you will be mostly fucked.

These will be the first group of people that suffer. Unfortunately, even fixed rate guys will suffer as well once base property value begins eroding due to inflation-based rate changes.

Alex From San Diego · 05-22-2005, 03:47 PM

Right now I have over 550k in equity in my primary residence which is right on the coast over looking the bay and ocean. I have a fixed interest rate on my mortgage of which is under 2k per month or roughly 8% of my gross monthly salary. If this so called bubble occurs, I could care less because I have no intentions of selling in the next 10 years. Why would I? I consider San Diego to be in the top 10 places to live relative to climate.

Even if prices fall, they won't fall more than 10%-12% and especially not on the coast and if they did, I still have plenty of leverage against my home if I needed it.

As for my other rental properties here all within 4 miles of my residence, the rents I collect are enough to cover my mortgage.

As for this new place I picked up down the street, I have an equity line of credit against my home available to me anytime. I pump 120k into this dump and now my investment is still well below the comps in this area even if the market was to drop here. I could turn around and sell it below the comps and still put an easy 150k-200k in my pocket before capital gains.

Why would I sell it though? I won't. I'll collect 85% of my mortgage thru rents. Sounds like I lost right? Not at all. Remember my personal residence mortgage accounts for only 8% of my gross monthly income and My rents received covers my other mortgages.

There is this thing the lender always factors in when deciding what loan amount you can qualify for. It is called Debt-to-Income Ratios. This ratio usually can't exceed 32% of the front end ratio and 38% on the back end ratio. Simply put. Your payment on a home loan can't exceed 32% of your gross monthly salary and your debts such as auto loans, Credit cards etc...can't exceed 38% of your gross monthly income.

At 8%, I'm well under the standard of 32% therefore meaning I have room to play if I am upside down on a property through rents received. The extra 20-24% of play (disposable income) I have is then used to pay off that equity line of credit I used to improve this new property. Once it is paid off in a short time usually before or within 2 months of or after completion of the improvements, I just have to repeat the cycle.

The problem with most is they exceed their means and leverage everything they have and when a small hicup or crisis occurs, they are screwed.

The key to real estate is to buy smart and know what to buy. The time to buy is anytime. Those who are waiting for the right time are the same people who have always been behind the power curve their entire life.

Drake · 05-22-2005, 04:01 PM

Quote:

Originally Posted by Alex From San Diego

Right now I have over 550k in equity in my primary residence which is right on the coast over looking the bay and ocean. I have a fixed interest rate on my mortgage of which is under 2k per month or roughly 8% of my gross monthly salary. If this so called bubble occurs, I could care less because I have no intentions of selling in the next 10 years. Why would I? I consider San Diego to be in the top 10 places to live relative to climate.

Even if prices fall, they won't fall more than 10%-12% and especially not on the coast and if they did, I still have plenty of leverage against my home if I needed it.

As for my other rental properties here all within 4 miles of my residence, the rents I collect are enough to cover my mortgage.

As for this new place I picked up down the street, I have an equity line of credit against my home available to me anytime. I pump 120k into this dump and now my investment is still well below the comps in this area even if the market was to drop here. I could turn around and sell it below the comps and still put an easy 150k-200k in my pocket before capital gains.

Why would I sell it though? I won't. I'll collect 85% of my mortgage thru rents. Sounds like I lost right? Not at all. Remember my personal residence mortgage accounts for only 8% of my gross monthly income and My rents received covers my other mortgages.

There is this thing the lender always factors in when deciding what loan amount you can qualify for. It is called Debt-to-Income Ratios. This ratio usually can't exceed 32% of the front end ratio and 38% on the back end ratio. Simply put. Your payment on a home loan can't exceed 32% of your gross monthly salary and your debts such as auto loans, Credit cards etc...can't exceed 38% of your gross monthly income.

At 8%, I'm well under the standard of 32% therefore meaning I have room to play if I am upside down on a property through rents received. The extra 20-24% of play (disposable income) I have is then used to pay off that equity line of credit I used to improve this new property. Once it is paid off in a short time usually before or within 2 months of or after completion of the improvements, I just have to repeat the cycle.

The problem with most is they exceed their means and leverage everything they have and when a small hicup or crisis occurs, they are screwed.

The key to real estate is to buy smart and know what to buy. The time to buy is anytime. Those who are waiting for the right time are the same people who have always been behind the power curve their entire life.

Great post

mockingbich · 05-22-2005, 04:37 PM

Quote:

Originally Posted by jonesy

RUN FOR THE HILLS!

THE IMMIGRANTS ARE GOING TO RUIN THE USA!

same bullshit was said at the turn of the century, 20's, 30's, 40's when every nationality immigrated to this country.

my advice to to get an education.

Hey smart guy

There was no immigration in the 20's 30's and first half of the 40's because of a moratorium due to the excessive Ellis Island immigration at the turn of the century

You're the one that needs an education

Don't confuse illegal immigration with LEGAL immigration... They produce completely different results

Rick Latona · 05-22-2005, 04:59 PM

Lars,

I totally agree with you and I've been preaching this for almost a year now. Georgia property has increased less than most states in the nation. I feel ok about my house because I bought the cheapest one in the very best neighborhood. Also, I don't have a mortgage at all. ;) That said, I'd be nervous as hell buying a home in New York, Florida, California, Arizona, Hawaii or Nevada right now. If you are buying a home in one of those states and are doing an interest only mortgage, you can't say we didn't tell you so.

Greg B · 05-22-2005, 05:20 PM

Quote:

Originally Posted by Rick Latona

Lars,

I totally agree with you and I've been preaching this for almost a year now. Georgia property has increased less than most states in the nation. I feel ok about my house because I bought the cheapest one in the very best neighborhood. Also, I don't have a mortgage at all. ;) That said, I'd be nervous as hell buying a home in New York, Florida, California, Arizona, Hawaii or Nevada right now. If you are buying a home in one of those states and are doing an interest only mortgage, you can't say we didn't tell you so.

Well said Rich.

I was looking at Georgia and found CHEAP land BUT if I were a renter ( which I will NOT do ) I would never buy in Georgia. Far too many depressed income areas.

Renting is a nightmare nowadays UNLESS you have specified clientele ( aka college students/alum/faculty/employees ).

Reason being is people get irresponsible, stupid and you end up with no life of your own.

I buy outright. No mortgages etc. I buy the land, build on the land, own my shit and fuck mankind.

If I buy a property it's because I'm going to hook that fucker up so cool I will have upscale buyers lined up as far back to the borders of the Klingon Empire.

Greg B · 05-22-2005, 05:22 PM

Quote:

Originally Posted by latinasojourn

good luck to you, SC is a great town, but i will never pay a cool million to live next to a bunch of jigs or pot smoking renters. that's the prob with the bay area---it's a quality of life issue.

Gee, I hope you don't have any black people as tenants or employees now or for the rest of history cause if they saw this post and wanted to take you to court for discrimination purposes you'ld have some 'splainin' to do.

Greg B · 05-22-2005, 05:49 PM

Quote:

Originally Posted by HighRoller

I have been a full time real estate investor for 3 years, and I network with up to 1500 investors locally at a time.

No matter if real estate goes up and down doesn't matter to my business.
We get houses 10-20% from market value, from builders, sellers, and investors about to go into foreclosure and bankrupts every day of the week, I can't keep up with the discounted homes, their are so many.

I will tell you that Minnesota is one of the most steady markets their is, and the last 1-2 years has been a buyers market.

You will see a drop in California.

Florida and Nevada will have intermitted set backs
as at certain moments they overbuild.

We are getting connected with the florida pre-construction
where 1100 people a day move there, and you can be assured
that the retirement population will double in the next 5-10 years
that's the largest lifestyle change in the history of the US.
Also the creative class of many top paid professionals couldn't
realistically live anywhere they wanted as their jobs tyed them to
a specific area, with technology, email, fax, phones, teleconferencing etc
we all have flexibility for the creative class allowing them to move to desirable areas. I know people in real estate in Nevada I work with
it's still booming big, yes last half of last year it went form 2000 to 14000 listings almost over night, another 4 months went buy and the demand was big again. I know 1+ year ago they had about 8000 people a month moving down there, I haven't heard the latest, Arizona is where a lot of people seem to be buying the lots, nevada I think it's still on it's way out in the next year ot two, sure it will keep building, but keep in mind much of the builders are from cali, not even looking at the property like it was said.

Florida will be big for a long long time, but certain areas.

As far as people thinking stocks are better than real estate
I can't even get into why that comment is soo far off
"leverage" is the only word that needs to be said
and yes real estate does go down in pocket areas, but has
gone up about 5% in 100+ years, and 6% more recent 30-40 years.

Californian's are so far overleveraged over other states, it will go down in areas. it will take a while to recover, that's just how it works, needs a correction, not a big deal really, if we are all in it for the long term.

Listen to Highroller. That's the voice of practical, professional wisdom speaking.

I agree yet see a wee bit more of a not-so-happy scenario. You have to add into the equation disasters of man made and nature. New presidential election coming up in 3 years and the heat is going to be on. The scariest factor is going to be seniors who are debt ridden and baby boomers retiring or trying to retire and are debt ridden. Their kids getting out of college are debt ridden before they enter the work world.

That's the scenario of the near future boys and girls. The only way to resolve it is families teaming up again.

ABC News is just now covering what I'm talking about! Global diseases ( watch that bird flu thing ) and senior citizen's pensions. Guaranteed retirement plans in W. Virginia $5 Billion in debt! One thing we ain't running out of is old folks. 40+ states are in a quarter trillion $ hole for retirement. Who's gonna pick up the slack for these retirees?

Mark my words, listen to what Highroller just laid out too.

For some of us who saw the light and are making money via the web there's a glimmer of hope as we can network and make great dough and stash it away. Some of us are webmasters, some artists, some marketers etc. Making crazy money constantly. WE will not fall off but I guarantee you in a year or two people will be looking up to us to rescue their asses. Especially us who have low overheads and high ROIs. If shit hit the fan I always know I have numerous other pals in pornmeistering I can work with. Likewise to them.

We can't trust the governments to rescue our asses, we have to do it ourselves.

Unless there's a major breakthrough in energy or medicine we're gonna be doomed.

That's the big scary scenario for the powers that be, energy revolution and it's coming fast!

betsy · 05-22-2005, 06:48 PM

According to the California Association of Realtors, the percentage of households in California able to afford a median-priced home stood at 18 percent in March. 18%! I figure if the market can't support the prices, they have to come down. Right? RIGHT?!?!

*prays for act of god - earthquake, lottery, whatever*

Source: http://www.builderonline.com/industr...ticleID=127167

Greg B · 05-22-2005, 07:31 PM

Quote:

Originally Posted by betsyAFF!

According to the California Association of Realtors, the percentage of households in California able to afford a median-priced home stood at 18 percent in March. 18%! I figure if the market can't support the prices, they have to come down. Right? RIGHT?!?!

*prays for act of god - earthquake, lottery, whatever*

Source: http://www.builderonline.com/industr...ticleID=127167

The percentages are THAT high??? I'm not being sarcastic either.

Xenophage · 05-25-2005, 02:00 PM

Quote:

Originally Posted by Greg B

The percentages are THAT high??? I'm not being sarcastic either.

In santa cruz only 15% can afford a home.

Xenophage · 06-01-2005, 03:25 PM

Gezzze every fuckign magazine and newspaper is touting the fucking housing market and how its the next greta way to get rich quick... the END IS NEAR ~!

DateDoc · 06-01-2005, 03:46 PM

Quote:

Originally Posted by LegendaryLars

Gezzze every fuckign magazine and newspaper is touting the fucking housing market and how its the next greta way to get rich quick... the END IS NEAR ~!

Hmmm, even Bob Toll says there are 4 years left in the current bubble before prices begin to subside. Granted he may be biased in that he runs one of the biggest residential building corps in the country but he has typically been on point when it comes to predicting the market.

HighRoller · 06-01-2005, 06:00 PM

By the way if anyone is interested in getting big into real estate investing

here are most of the largest message boards:

Creonline.com
RealEstateInvesting.com
TheCreativeInvestor.com
Naked-Investor.com
REIclub.com
RealEstateTalks.com
Forum.richdad.com/forums
Dealmakerscafe.com

And you can probably look on reiclub.com to find
local real estate clubs in your area with other investors.

If you start to get into it, you will get addicted, I promise
once you learn all the big deals people are making, how
much of an increase foreclosures have and are
the great tax laws in favor of real estate owners.

HighRoller · 06-01-2005, 06:06 PM

Quote:

Originally Posted by jonesy

high roller

id like to contact you if possible.

you can contact me at ron at onewebsite.com

$5 submissions · 06-01-2005, 08:44 PM

I bookmarked this gem. Will retrieve it in 3 years and check housing pricing at that point

Spunky · 06-01-2005, 08:55 PM

Always has been a solid investment

sh33p · 06-01-2005, 10:21 PM

Wait till interest rates rise and there's a mad stampede of bankrupt ppl fleeing the city.

Quote:

Originally Posted by Elli

Vancouver real estate looks to be on the rise, considering the 2010 winter Olympics and the accompanying road/infrastructure improvements. I wish I still owned my house...

inthestars · 06-01-2005, 10:52 PM

Quote:

Originally Posted by ContentProducer

Yeah, and I hope it bursts soon in Vegas, I want to buy in about 8 months.

You're not the only one.

jonesy · 06-01-2005, 11:02 PM

Quote:

Originally Posted by mockingbich

Hey smart guy

There was no immigration in the 20's 30's and first half of the 40's because of a moratorium due to the excessive Ellis Island immigration at the turn of the century

You're the one that needs an education

Don't confuse illegal immigration with LEGAL immigration... They produce completely different results

Xenophobia was basically what i was getting at which held no water then and holds no water now.

i shouldve been more specific. sorry about that.

jonesy · 06-02-2005, 12:57 AM

Quote:

Originally Posted by HighRoller

By the way if anyone is interested in getting big into real estate investing

here are most of the largest message boards:

Creonline.com
RealEstateInvesting.com
TheCreativeInvestor.com
Naked-Investor.com
REIclub.com
RealEstateTalks.com
Forum.richdad.com/forums
Dealmakerscafe.com

And you can probably look on reiclub.com to find
local real estate clubs in your area with other investors.

If you start to get into it, you will get addicted, I promise
once you learn all the big deals people are making, how
much of an increase foreclosures have and are
the great tax laws in favor of real estate owners.

best post for anyone wanting to get info on what it takes to get started in real estate.

tons of info.

high roller- thanks for the email but i forgot what the hell i was going to contact you about

it was real estate based but in what regard arghhhh

ADL Colin · 06-02-2005, 01:10 AM

Quote:

Originally Posted by $5 submissions

I bookmarked this gem. Will retrieve it in 3 years and check housing pricing at that point

I'll bump it.

ADL Colin · 06-02-2005, 01:11 AM

One of my bookmarks.

http://patrick.net/housing/crash.html#links

Now, has there have been hundreds of such articles on a "bubble" and it turned out there wasn't one? My experience has been that when the talk turns to "bubble" there is one - and it does burst.

Greg B · 06-02-2005, 07:02 PM

Tonight ABC Evening News ran a segment on 'Interest Only' home loans. Basically for a few years all you do is pay the interest on a mortgage for a few years and then you start paying your mortgage and interest. Their profile showed a scenario where the home buyer pays $1,200 per month instead of $1,600 and then when the honeymoon is over that jumps to $1,800 for a $300k house.

$1,800 for a $300k house isn't bad. That's lunch money. Taxes and water bills etc. after blows that up a might but still that's the kind of money you can make at McDonalds or something. If you live near a college and rent you're in the clear.

What the problem is is that 65% of California home owners are 'interest only' and they all assume their homes are going to grow BUT.....

Can you see the possible disastrous scenario?

jonesy · 06-02-2005, 08:10 PM

Quote:

Originally Posted by Greg B

Tonight ABC Evening News ran a segment on 'Interest Only' home loans. Basically for a few years all you do is pay the interest on a mortgage for a few years and then you start paying your mortgage and interest. Their profile showed a scenario where the home buyer pays $1,200 per month instead of $1,600 and then when the honeymoon is over that jumps to $1,800 for a $300k house..?

they also forgot to mention that usually the rates on interest-only loans can change as often as every month, yr to yr, or may be fixed for a 10-year period.

this is whats going on now and in a few yrs your going to see people losing their homes.

Xenophage · 06-02-2005, 08:57 PM

Quote:

Originally Posted by Almighty Colin

One of my bookmarks.

http://patrick.net/housing/crash.html#links

Now, has there have been hundreds of such articles on a "bubble" and it turned out there wasn't one? My experience has been that when the talk turns to "bubble" there is one - and it does burst.

Ohh very interesting thanks so much !

SleazyDream · 06-02-2005, 09:00 PM

an interest rate hike will spark this - then i'll buy property like mad

Xenophage · 06-02-2005, 10:22 PM

here is another good article that i just found

http://biz.yahoo.com/bizwk/050601/nf...480_db042.html

MASHED IN MASSACHUSETTS. That's why economists -- even Federal Reserve Chairman Alan Greenspan -- are worrying lately about "froth" in the housing market. It's not that they expect home prices to plummet across the country or mass foreclosures to ruin banks (although, if things were to get really bad, that's a possibility in some regions). Rather, they see that an almost inevitable retrenchment in home price appreciation will act like rain on the economy's real estate-fueled parade.

"Housing has been a huge support for the economy ever since the 2001 recession," says Dean Baker, co-director of the Center for Economic & Policy Research, in Washington, D.C. "If the housing bubble bursts, it basically flips in reverse." If people lose jobs and can't pull cash out of their homes by refinancing, they will also feel the need to save more. While increased savings is a good thing over the long run, it can slow the economy in the short run.

That's what happened in Massachusetts in the early 1990s, when the economy slowed and tech companies that had spurred regional economic growth retrenched. Peter Cohan, a management consultant and author in Marlborough, Mass., remembers his angst in 1992 when, expecting his second child and wanting a larger home, he put his house on the market, only to find it was worth 10% less than he paid for it four years earlier. He and his wife decided to stay put, adding onto the house instead. The value of the house didn't return to the 1986 level until 1995, he says.

reynold · 06-03-2005, 01:27 AM

If you can't invest it in GFY, venture it in real estate men!

ADL Colin · 06-03-2005, 02:00 AM

Quote:

Originally Posted by LegendaryLars

Ohh very interesting thanks so much !

:-)

Lars, I know you'll like this one. Looks like there will be a good hedge coming.

---

Robert Shiller knows bubbles, and he might have just the solution.

The Yale University finance professor ? and author of "Irrational Exuberance," a book that deftly called the dot-com bubble ? is a lead figure at Macro Securities Research. The New York research group has developed financial instruments ? called "MACROs" ? that will be tied to a housing index that tracks property values in certain cities. By purchasing Up MACROs or Down MACROs, investors would be able to place bets on whether a property market is going to keep rising, or whether it's going to fizzle.

In effect, speculators could play the bubble: They could short the City of Angels and go long on the Big Apple, or vice versa. Homeowners in bubbly markets could hedge against a pop. They could stand to gain if the value of their homes go down. If property values keep rising, of course, the homeowners lose on their MACRO investments -- but at least their homes would be worth more.

These days Mr. Shiller is convinced the U.S. housing market is rife with bubble-like behavior. Home-buyer psychology today "fits in with the model of a bubble," he says. "It's a wishful-thinking atmosphere that develops the idea that everything is going to be all right, and there's the sense that you have to get in at any cost because prices are going to keep going up."

Robert Hartwig, chief economist at the Insurance Information Institute, says the MACRO securities may be the best -- and only -- way homeowners can protect the value of their homes. Speculators, including hedge funds, could help add liquidity to the market, he says.

MACRO Securities has filed plans for the new securities with the Securities and Exchange Commission. The company intends to roll out its MACRO securities later this year and, in its filing with the SEC, said it hopes to list the securities on the American Stock Exchange. It also has a deal to develop housing-price-indexed futures with the Chicago Mercantile Exchange.

Semi-Retired-Dave · 06-03-2005, 10:39 AM

I have some properties in Vegas if anyone is looking.
Real Estate is awesome if you can afford them if the market crashes.
If you can't afford to carry them on market crash seasons, then your Fucked.

But, if you are interested in a house in Vegas, I have a few left.

We can work out some kind of deal. I think one has a pool.

05-22-2005, 03:16 AM	#101
SomeCreep :glugglug Join Date: Mar 2003 Location: Where the Wild Things Are Posts: 26,118	100 bursts __________________ Webair Hosting I use and recommend Webair for hosting.

05-22-2005, 04:48 AM	#102
ADL Colin Too lazy to set a custom title Join Date: Feb 2001 Location: Tube Titans, USA Posts: 11,929	101 ways to skin a cat __________________ Adult Date Link - $50 PPS starting NOW! -- good and JUICY! skype = "adultdatelink"

05-22-2005, 05:44 AM	#103
rounders Confirmed User Join Date: Sep 2003 Location: p0rn0stars & h0es Posts: 2,931	nice thread __________________ ICQ#: 153923840

05-22-2005, 06:10 AM	#104
howard Confirmed User Join Date: Feb 2002 Location: phila Posts: 1,827	Lars---I 100% agree with you. I am in the philly area. In 89 i bought a townhouse. In 91 sold it at a small loss. In 91 bought a big house. I sold it in 98 (after divorce)10% higher than I purchased it but must have put 100k into it--so I lost. But both my x and I bought townhouses at the end of 98 beginning of 99 and were both up 2.5 times what we paid. The other side of this equation was the stockmarket made a fortune from 89-98 and this is when real estate was at a standstill. Real Estate jumped from 98 till today and the stockmarket has taken a bath..Now its time for the reverse to happen... I am back in the market now and I expect it to be big for the next several years. I don't know if the nasdaq will hit 5000 again by 2010 but I'd bet it will closer to 5000 then 2000. Its time to buy good profitable tech stocks again. Be smart and don't allow any losses over 20% and sell them when u have too and do not ever fall in love with any 1 company. I use a service call Cabot since the late 80's and they made me a fortune until the market dived and I started thinking that I new everything and started listening to myself. Pick a broker that u trust or a stock picking service that u trust and just listen to them.... __________________ perkissmedia.com [email protected] 318621803 perkymon993 Skype

05-22-2005, 06:14 AM	#105
TheSaint Confirmed User Join Date: Jun 2003 Location: Everywhere at once Posts: 991	Like any market, the bubble popping, if indeed it does, will take out some of the excess in the housing market. People who were truly stupid (bidding against each other above the asking price, buying houses unseen, etc.) could get hurt. But most single family real estate sold in the U.S is owner occupied. I signed a contract to for a house in Flordia, and am not worried. I negotiated the hell out of and did the research. What is driving the growth in that area is an influx of baby-boomers and retirees. They are running out of land, and as new development becomes impossible, the existing real estate goes up. I don't think its possible to come up with a forecast where Florida stops growing. Its just not possible to manufacture area to live with Florida's most valuable commodity - sunshine. The reason real estate never shaves off 50 or 60% as stock markets occasionally do is simple - you don't have to sell during the downterm, if you occupy the house and aren't in over your head. I've waited out at least two real estate downturns in my life and came out fine, so I am not worried about this one either. Japan is a totally different case. Totally fucked up banking system and corruption killed their econcomy off. __________________ I have no signature

05-22-2005, 08:52 AM	#107
bradpitt I have traffic for sale! Join Date: May 2005 Posts: 150	I made millions and will continue to. There will not be a crash but taking insanly huge profits may stop.. fine with me.

05-22-2005, 09:57 AM	#108
Penthouse Tony Confirmed User Industry Role: Join Date: Apr 2004 Location: Mountain View, CA Posts: 5,835	Your home is only an investment if you sell it. Always remember that. __________________ aamos AT FFN dot com Penthouse.com Business Development ICQ: 49090846 \| Yahoo IM: ff_aamos

05-22-2005, 10:06 AM	#109
Eagleman Confirmed User Join Date: Mar 2005 Posts: 104	i THINK IT'S ALMOST OVER......

05-22-2005, 10:13 AM	#111
KRL Entrepreneur Join Date: Oct 2002 Location: USA Posts: 31,429	Bubbles eventually burst just like chewing gum. But the good thing there's always new packs of gum in the economic pipeline for us to all blow up again. __________________ If you would like to develop your domains, you can lease inexpensive foreign labor from the leaders in the field at iWebmasters.com TO LOWER YOUR COSTS AND INCREASE YOUR PRODUCTION! * * * * * * * * * * * * Domains Adult News KRL's Newsletter Biz Tips Just Listed Domains

05-22-2005, 03:47 PM	#121
Alex From San Diego Confirmed User Join Date: May 2001 Location: San Diego Posts: 1,642	Right now I have over 550k in equity in my primary residence which is right on the coast over looking the bay and ocean. I have a fixed interest rate on my mortgage of which is under 2k per month or roughly 8% of my gross monthly salary. If this so called bubble occurs, I could care less because I have no intentions of selling in the next 10 years. Why would I? I consider San Diego to be in the top 10 places to live relative to climate. Even if prices fall, they won't fall more than 10%-12% and especially not on the coast and if they did, I still have plenty of leverage against my home if I needed it. As for my other rental properties here all within 4 miles of my residence, the rents I collect are enough to cover my mortgage. As for this new place I picked up down the street, I have an equity line of credit against my home available to me anytime. I pump 120k into this dump and now my investment is still well below the comps in this area even if the market was to drop here. I could turn around and sell it below the comps and still put an easy 150k-200k in my pocket before capital gains. Why would I sell it though? I won't. I'll collect 85% of my mortgage thru rents. Sounds like I lost right? Not at all. Remember my personal residence mortgage accounts for only 8% of my gross monthly income and My rents received covers my other mortgages. There is this thing the lender always factors in when deciding what loan amount you can qualify for. It is called Debt-to-Income Ratios. This ratio usually can't exceed 32% of the front end ratio and 38% on the back end ratio. Simply put. Your payment on a home loan can't exceed 32% of your gross monthly salary and your debts such as auto loans, Credit cards etc...can't exceed 38% of your gross monthly income. At 8%, I'm well under the standard of 32% therefore meaning I have room to play if I am upside down on a property through rents received. The extra 20-24% of play (disposable income) I have is then used to pay off that equity line of credit I used to improve this new property. Once it is paid off in a short time usually before or within 2 months of or after completion of the improvements, I just have to repeat the cycle. The problem with most is they exceed their means and leverage everything they have and when a small hicup or crisis occurs, they are screwed. The key to real estate is to buy smart and know what to buy. The time to buy is anytime. Those who are waiting for the right time are the same people who have always been behind the power curve their entire life. __________________ We are what we repeatedly do.-Aristotle

05-22-2005, 04:59 PM	#124
Rick Latona The Best Ideas Start Here Join Date: Dec 2002 Location: Atlanta Posts: 6,037	Lars, I totally agree with you and I've been preaching this for almost a year now. Georgia property has increased less than most states in the nation. I feel ok about my house because I bought the cheapest one in the very best neighborhood. Also, I don't have a mortgage at all. ;) That said, I'd be nervous as hell buying a home in New York, Florida, California, Arizona, Hawaii or Nevada right now. If you are buying a home in one of those states and are doing an interest only mortgage, you can't say we didn't tell you so. __________________ Regards, Rick Latona http://latonas.com Latona's - We Sell Money Making Web Properties Note to buyers of websites and traffic: please check our inventory at http://latonas.com/websites-for-sale. If you would like to make an offer on something, just let me know.

05-22-2005, 06:48 PM	#128
betsy Confirmed User Join Date: Mar 2005 Location: Brooklyn, yo! Posts: 625	According to the California Association of Realtors, the percentage of households in California able to afford a median-priced home stood at 18 percent in March. 18%! I figure if the market can't support the prices, they have to come down. Right? RIGHT?!?! prays for act of god - earthquake, lottery, whatever Source: http://www.builderonline.com/industr...ticleID=127167 __________________ www.phoxglove.com YIM: phoxgloveent ICQ: 237171474 AIM: phoxglove

06-01-2005, 03:25 PM	#131
Xenophage Registered User Industry Role: Join Date: Oct 2001 Posts: 12,122	Gezzze every fuckign magazine and newspaper is touting the fucking housing market and how its the next greta way to get rich quick... the END IS NEAR ~!

06-01-2005, 06:00 PM	#133
HighRoller Confirmed User Join Date: Feb 2003 Location: MN Posts: 1,037	By the way if anyone is interested in getting big into real estate investing here are most of the largest message boards: Creonline.com RealEstateInvesting.com TheCreativeInvestor.com Naked-Investor.com REIclub.com RealEstateTalks.com Forum.richdad.com/forums Dealmakerscafe.com And you can probably look on reiclub.com to find local real estate clubs in your area with other investors. If you start to get into it, you will get addicted, I promise once you learn all the big deals people are making, how much of an increase foreclosures have and are the great tax laws in favor of real estate owners.

06-01-2005, 08:44 PM	#135
$5 submissions I help you SUCCEED Industry Role: Join Date: Nov 2003 Location: The Pearl of the Orient Seas Posts: 32,195	I bookmarked this gem. Will retrieve it in 3 years and check housing pricing at that point __________________ Need a NON-ADULT income stream? We build your YOUTUBE CHANNEL for only $20 per video! For Hire: $3/hour or $400 per month Marketing Specialist Virtual Assistants

06-01-2005, 08:55 PM	#136
Spunky I need a beer Industry Role: Join Date: Jun 2002 Location: ♠ Toiletville ♠ Posts: 133,934	Always has been a solid investment __________________ *YOUR INFORMATION HERE*

06-02-2005, 01:11 AM	#142
ADL Colin Too lazy to set a custom title Join Date: Feb 2001 Location: Tube Titans, USA Posts: 11,929	One of my bookmarks. http://patrick.net/housing/crash.html#links Now, has there have been hundreds of such articles on a "bubble" and it turned out there wasn't one? My experience has been that when the talk turns to "bubble" there is one - and it does burst. __________________ Adult Date Link - $50 PPS starting NOW! -- good and JUICY! skype = "adultdatelink"

06-02-2005, 07:02 PM	#143
Greg B So Fucking Banned Join Date: Jul 2001 Location: EARTH (for the time being) Posts: 7,014	Tonight ABC Evening News ran a segment on 'Interest Only' home loans. Basically for a few years all you do is pay the interest on a mortgage for a few years and then you start paying your mortgage and interest. Their profile showed a scenario where the home buyer pays $1,200 per month instead of $1,600 and then when the honeymoon is over that jumps to $1,800 for a $300k house. $1,800 for a $300k house isn't bad. That's lunch money. Taxes and water bills etc. after blows that up a might but still that's the kind of money you can make at McDonalds or something. If you live near a college and rent you're in the clear. What the problem is is that 65% of California home owners are 'interest only' and they all assume their homes are going to grow BUT..... Can you see the possible disastrous scenario?

06-02-2005, 09:00 PM	#146
SleazyDream I'm here for SPORT Industry Role: Join Date: Jul 2001 Location: Phone # (401) 285-0696 Posts: 41,470	an interest rate hike will spark this - then i'll buy property like mad __________________ This dog, is dog, a dog, good dog, way dog, to dog, keep dog, an dog, idiot dog, busy dog, for dog, 20 dog, seconds dog! Now read without the word dog.

06-02-2005, 10:22 PM	#147
Xenophage Registered User Industry Role: Join Date: Oct 2001 Posts: 12,122	here is another good article that i just found http://biz.yahoo.com/bizwk/050601/nf...480_db042.html MASHED IN MASSACHUSETTS. That's why economists -- even Federal Reserve Chairman Alan Greenspan -- are worrying lately about "froth" in the housing market. It's not that they expect home prices to plummet across the country or mass foreclosures to ruin banks (although, if things were to get really bad, that's a possibility in some regions). Rather, they see that an almost inevitable retrenchment in home price appreciation will act like rain on the economy's real estate-fueled parade. "Housing has been a huge support for the economy ever since the 2001 recession," says Dean Baker, co-director of the Center for Economic & Policy Research, in Washington, D.C. "If the housing bubble bursts, it basically flips in reverse." If people lose jobs and can't pull cash out of their homes by refinancing, they will also feel the need to save more. While increased savings is a good thing over the long run, it can slow the economy in the short run. That's what happened in Massachusetts in the early 1990s, when the economy slowed and tech companies that had spurred regional economic growth retrenched. Peter Cohan, a management consultant and author in Marlborough, Mass., remembers his angst in 1992 when, expecting his second child and wanting a larger home, he put his house on the market, only to find it was worth 10% less than he paid for it four years earlier. He and his wife decided to stay put, adding onto the house instead. The value of the house didn't return to the 1986 level until 1995, he says.

06-03-2005, 01:27 AM	#148
reynold Too lazy to set a custom title Join Date: Oct 2002 Location: Global Traveler Posts: 51,271	If you can't invest it in GFY, venture it in real estate men!

06-03-2005, 10:39 AM	#150
Semi-Retired-Dave Too lazy to set a custom title Join Date: Apr 2004 Location: LA Posts: 11,190	I have some properties in Vegas if anyone is looking. Real Estate is awesome if you can afford them if the market crashes. If you can't afford to carry them on market crash seasons, then your Fucked. But, if you are interested in a house in Vegas, I have a few left. We can work out some kind of deal. I think one has a pool. __________________ Support a Good Cause