Real Estate Bubble?

Off Topic
21

[quote]emdawgz1 wrote:
jjblaze wrote:
emdawgz1 wrote:
Its only a housing bubble to the speculators. Guys flipping houses for massive gains. Those days are gone, for a couple of years.

For the average homeowner, the market is what it is. It will continue along its course and hold its value

Suggesting that the housing bubble only affects speculators is like suggesting that the tech bubble only affected day traders. Shrewd speculators aren’t affected by bubbles because they’re long gone once the air starts coming out. Your average joe is left holding the bag. It’s the average person who felt the need to chase this market up that will be punished, the person who paid too dearly, overextended himself, and is upside down and facing an ARM that’s going to readjust in the near future. \

Those are the people who are in trouble. The market is what it is, but if you’re trying to unload your house, then it IS shitty and it’ll likely get worse.

READ THE WORDS I WROTE.

Im not suggesting it only affects speculators. Im suggesting that to the average homeowner, who will live in their house, on average 7.5 years its not a bubble. Housing prices spiked, they are settling now and will continue in the general course that it was on . Look at a graph of home prices over the last 20 years. You wont see a bubble rather a general trend upward.

I swear, some time the folks in this forum are so contentious. So ready to slam someone. If you disagree fine, if you question the veracity of my facts, fine. but how about some intelligent discourse w/o the rancor?[/quote]

Where’s the rancor to which you refer? How exactly were you slammed? Was my discourse not intelligent enough for you? I simply disagree with your assessment of the situation and drew a parallel to the last bubble this country saw. And I did read your words, like where you said “It is only a housing bubble to the speculators.” but I guess I misunderstood you, since you now say “I’m not suggesting it only affects speculators.” Which is it?

I just don’t see how the average person will emerge unscathed when there are over $1 trillion worth of ARMs set to readjust by the end of next year and the FOMC is walking a tightrope between raising rates to appease our foreign debtholders and keeping them low to keep the economy bolstered. I see the situation as VERY dangerous for everyone, and for the economy in general, but what the hell do I know?

22

…It was recently appraised for triple our original purchase price which sucks for us because we have no plans to sell and our property taxes have skyrocketed.

The problem with the massively increasing tax or appraisal rates is that a large amount of your increase is sucked away year after year. I sold the last of my rental properties several years ago, but I was aways amazed that fully 25% (of theoretical 100% occupancy revenues)were taken by taxes and insurance. These two went up every year I owned - 9 years!

Still… having owned a business and making some pretty good $ “day trading”
I think real estate is the best investment for the majority including me

23

[quote]dre wrote:
Good. The housing market has been out of control for how long now? Bring that shiat back down to Earth.[/quote]

Agreed

24

One worry for real estate investors might be the ‘5th migration’. More people are simply giving up on urban areas altogether, and moving to exurbs. From today’s NY Times:

New Era Foreseen for Smalltown, U.S.A.

By RICHARD D. LYONS

THE next wave of development beyond suburbia will focus on small towns whose residents will live more modestly and perceive themselves as the protectors, rather than the exploiters, of their environment, according to an economic and urban development scholar.

The scholar, Dr. Jack Lessinger, has forecast this new era of development and named it ‘‘penturbia,’’ to reflect that it would be the fifth stage development in the grouping of the nation’s population - marking a resurgence of the rural renaissance that started a decade ago then stalled.

Dr. Lessinger, professor emeritus of real-estate and urban development at the University of Washington in Seattle, said two areas of New York State - Greene and Sullivan Counties in the Catskills - are among those on the verge of this new development.

‘‘The country is now entering a population migration that will bring a new period of prosperity to small towns and their surrounding areas,’’ he said. ‘‘Look for penturbia beyond the normal commuting range of the nation’s central cities. It is small cities and towns, new subdivisions, homesteads, industrial and commercial districts interspersed with farms, forests, rivers and lakes.’’

Dr. Lessinger elaborates on his conclusions in a book nearing completion and titled ‘‘Penturbia,’’ derived from his 1986 book ‘‘Regions of Opportunity,’’ which outlined this new period of development. He arrived at his conclusions after studying national population shifts since 1760."

This trend may not bode well for anyone buying within easy driving distance for gangs.

25

I screwed up, gents. The article about Dr. Lessinger is from 1987. He thinks in very long-time frames, muti-decades. My bad.

26

[quote]Headhunter wrote:
…
THE next wave of development beyond suburbia will focus on small towns whose residents will live more modestly and perceive themselves as the protectors, rather than the exploiters, of their environment, according to an economic and urban development scholar.

… [/quote]

That describes my philosphy but it is probably unrealistic to expect a big movement in this direction.

27

[quote]Headhunter wrote:
I screwed up, gents. The article about Dr. Lessinger is from 1987. He thinks in very long-time frames, muti-decades. My bad.

http://query.nytimes.com/gst/fullpage.html?res=9B0DE6DF143DF934A1575AC0A961948260[/quote]

Regardless of the time the article was presented, continued growth is the equalizer.

If there is a forced migration to smaller towns, whether it be because of the price of homes in metropolitan areas or some internal desire to live the ‘simple life’ (which I don’t believe for a second is enough of a motivating factor to produce significant shifts in the market), developers will create “small town” style suburbs. Too much money, too many people. Where the people go, commercialization follows.

I don’t believe in investing in metropolitan areas for reasons all my own, and none of the reasons are because growth will not occur in heavily populated cities. It will continue to occur, areas that have seen a rapid influx of wholesale flipping and exotic loans over the last 10 years will fall for a few years and surge again when the current teenage generation, who are arguably even more focused on material wealth than the current 25-45 age group, starts to purchase expensive property.

28

Keep buying foreign cars. Believe it or not, our cars production in Michigan effect the economy in the remaining states. No one wants to believe it because they’re not involved with it. So keep buying your Toyota’s and Mazda’s and lets see all our money go directly overseas.
~KONG

29

[quote]K O N G wrote:
Keep buying foreign cars. Believe it or not, our cars production in Michigan effect the economy in the remaining states. No one wants to believe it because they’re not involved with it. So keep buying your Toyota’s and Mazda’s and lets see all our money go directly overseas.
~KONG [/quote]

Doesn’t Ford own Mazda?

Doesn’t Toyota make their cars in the US?

30

If you think Toyota is taking your money and putting it back into the American economy, you’d better look again. They may have factories here, the latest down in San Antonio, but that’s the extent of it. Go to Japan and see how many American cars are sold there. I was in California a couple years back and I could barely find an American car driven over there. Better made? Nope. Trendy, if anything.

I’m all about getting my money’s worth. especially when I’m spending 30k. But, I can find an American car equally comparable to any import. Just my economic 101 2 cents for today. Maybe it’s a Motor City thing.

31

[quote]K O N G wrote:
Keep buying foreign cars. Believe it or not, our cars production in Michigan effect the economy in the remaining states. No one wants to believe it because they’re not involved with it. So keep buying your Toyota’s and Mazda’s and lets see all our money go directly overseas.
~KONG [/quote]

I fail to see what this has to do with real estate, but for the sake of discussion:

Ford owns 1/3 of Mazda, Aston Martin, Land Rover, Volvo and Jaguar. Japanese, British, British, Sweedish, British.

GM is Saab, Holden, Vauxhall, Opel. Sweedish, Australian, British, German. Majority shareholder in GM Daewoo, which is South Korean. Saturn was created specifically to mimic Japanese style and company structure.

GM does a ton of work with Suzuki and Isuzu. Isuzu pretty much is GM at this point. Suzuki, if you’d recall, produced the Chevrolet Sprint. Chevrolet/Holden Cruze was on a Suzuki platform. The Chevy Geo and Tracker were Suzukis.

[quote]In March 2005, the Government of Canada provided C$200 million in incentives to General Motors for its Ontario plants, and last fall it provided C$100 million to Ford Motor Co. to expand production and provide jobs, according to Jim Harris. Similar incentives were promised to non-North American auto companies like Toyota, Premier Dalton McGuinty said the money the province and Ottawa are pledging for the project is well-spent. His government has committed C$400 million, including the latest Toyota package of C$125 million, to the province’s automobile sector, which helped finance $5 billion worth of industry projects.

For the first time, in 2004 the total number of cars produced by all makers in Ontario exceeded those produced in Michigan.[/quote]

Of the 12 plants GM is intending to close soon as apart of their ‘restructuring’ (or atleast lay off specific shifts), guess how many are in America?

If you guessed 11, you’d be right!

Jobs > Companies. I’d rather have a Japanese company making money employing American citizens in America than an American company making money exporting jobs.

That said, I do drive a Chevy. Though the whole gung-ho buy American thing is bullshit considering how hard they’re trying to remove as many UAW jobs as possible. Americans didn’t leave American companies, American companies left us.

32

[quote]K O N G wrote:
Better made? Nope. Trendy, if anything. [/quote]

Years of consumer data would like a word with you. Chrysler and GM both had an absolutely abysmal track record with small cars leading into the mid 90s.

American brands have certainly caught up (or are extremely close), but to say that the Japanese car surge in the late 80s wasn’t prompted by superior build quality is just total bullshit.

33

[quote]Dweezil wrote:
…

Jobs > Companies. I’d rather have a Japanese company making money employing American citizens in America than an American company making money exporting jobs.

That said, I do drive a Chevy. Though the whole gung-ho buy American thing is bullshit considering how hard they’re trying to remove as many UAW jobs as possible. Americans didn’t leave American companies, American companies left us.[/quote]

Good post but American car companies have no choice but to do whatever they can to shed themselves of the UAW.

It is a real shame but they cannot stay in business and pay UAW salaries and benefits.

34

[quote]Zap Branigan wrote:
Good post but American car companies have no choice but to do whatever they can to shed themselves of the UAW.

It is a real shame but they cannot stay in business and pay UAW salaries and benefits.[/quote]

I recognize the pressure UAW puts on them, but the bottom line is Berardi’s favorite term: flux.

The Big Three, which now own or have stock in foreign companies (or in the case of Chrysler is now half German), are sending jobs out of the country while Honda, Toyota and Hyundai are bringing jobs into the country.

35

You fail to see how declining car sales affect the housing price drops??

I’m not hijacking the thread but it is a huge factor in stimulating the economy.

36

Dude,

Trying to artificially prop up uncompetitive industries (or participants in a given industry) does not do a country’s economy any good whatsoever in the long run. It merely prolongs the pain.

Markets, including global markets, of which our economy is a part, do best when people buy the best products (supporting the strongest/best of those competing in those markets).
This (a.) forces their competition to improve and (b.) over time causes countries to specialize in what they are able to do best and most efficiently.

The U.S. is NOT a manufacturing-based economy anymore – hasn’t been for many years and will be almost COMPLETELY devoid of manufacturing on a large scale in years to come. It’s too expensive and inefficient to set up large manufacturing operations here relative to China, Taiwan, Korea, Indonesia, etc.

We are, and will gravitate even more towards becoming, much better at being a service sector-oriented (and high-tech product) economy. It is in the WORLD economy’s best interest – both ours AND other nations’ – if each country devotes their resources to what they’re best at. For example:

China, Taiwan: manufacturing, etc.
Colombia: coffee (and cocaine :)).
Japan: high-tech products and autos.
US: services, tech.

Etc., etc., etc. (Those are obviously gross over-simplifications, but you get the point). :wink:

Furthermore, the U.S. car companies, Ford in particular, have gone for years now making a shitload of completely uncompetitive cars (save their truck line), so they have no one to blame but themselves for that.

Toyota’s Camry and Honda’s Accord have been ranked (interchangeably) as #1 and #2 in their class (THE bread-and-butter class of the car industry) for probably about 15 YEARS running now. And what does Ford put out? The fucking Five Hundred. Chevy? The Malibu. It’s like they’re farting in the wind. If I were in the market for a car in that class, in no way would I feel some artificial responsibility to spend all that money on a less desirable product. To the winner go the spoils.

[quote]K O N G wrote:
Keep buying foreign cars. Believe it or not, our cars production in Michigan effect the economy in the remaining states. No one wants to believe it because they’re not involved with it. So keep buying your Toyota’s and Mazda’s and lets see all our money go directly overseas.
~KONG [/quote]

37

[quote]K O N G wrote:
You fail to see how declining car sales affect the housing price drops??

I’m not hijacking the thread but it is a huge factor in stimulating the economy.
[/quote]

Declining car sales, yes. Declining car sales for the Big Three? No. There is zero effect except where plants are being closed, and people relocate.

If you think Ford and GM having declining sales is a huge factor in the economy then you have a very flawed understanding of economics. Most of the Big Three’s work is outsourced already, the hit that comes from people losing jobs in the auto industry happened in the 70s. Toyota and Honda are listed on the NYSE.

The only negative impact to America is pride, and pride is misplaced in companies that have already outsourced the majority of their production work. What stimulates the economy are jobs, and it doesn’t matter if the company that is supplying them is based in America or not.

38

[quote]Dweezil wrote:
What stimulates the economy are jobs, and it doesn’t matter if the company that is supplying them is based in America or not.[/quote]

I pretty much agree with this. Is does not matter much if the billionaire owner/CEO is American or Japanese. He spends his money internationally.

Where the jobs are is what matters.

39

TRY YELLING @ FORD.

Tell them to get back in the car business. Make a better car and stop whining about everything else.

MAKE A BETTER CAR!

40

All you long-winded folks preach about producing a better car or new styles. The styles need some improvement. So, the Japanese don’t buy Fords and neither do the Americans. Where does that all lead to. American car companies going bankrupt and people like yourselfs buying foreign cars and in-turn, putting Americans out of a job.You guys don’t live it every Fucking day. Get a clue. Doesn’t matter what industry you’re involved in.

If I have a chance to buy American made, I do. It stimulates the economy. Just because you live in Fla or PA, doesn’t mean it doesn’t affect you. No vision of the entire economic structure.