I found this article extremely informative, a little scary, but good to know.
It will deffinetly be interesting to see what happens the next 5-10 years.
good chart…from page 9/16:
-Mike
Yes that is a very interesting chart. It puzzles me how somebody can possibly think prices are done following, they are just ignoring the fact that the Government is still artificially trying to keep house prices high. It isnt going to work, they will run out of money.
I welcome it though, by the time they really fall, like they will, im going to have a health chunk of change to buy these houses.
There is way too much gloom and doom out in the news…I wouldnt be surprised if we end up plateauing here for a while and creep upward over time…Im sorry I dont buy into all this…There is tons of money on the sidelines…TONS…Yes the average American is on the balls of his/her a$$ but the upper class has tons saved…Salivating at the thought of putting it to work…Real Estate will always be around and the thought of prime real estate becoming somehow worthless is a pipe dream…Dont get me wrong the little shack in Idaho may become worthless but prime RE will hold its value to a degree…
My thinking is you have to start to nibble somewhere…A bell doesnt go off when the bottom is put in…
I understand what your saying also. I think my views are probably influenced by my location. You live in New York, while I live in bull$hit, Indiana (where there is no “prime” real estate really.)
I can tell you, in the Midwest, the market definetly hasnt hit bottom though. Houses that were selling EASILY for 100K 3-4 years ago are on sale for 60-70K and they STILL arent selling. I look for these houses to hit 30-40% of their value before this is all over.
If you want CHEAP GOOD HOUSES, go to the small towns in the Midwest!
Salivating at the thought of putting it to work..
just did…
I like prime.
-Mike
Real Estate will always be around and the thought of prime real estate becoming somehow worthless is a pipe dream.
Yep, I am sure the buyer of the 3 family, 2 houses down from my rental, that sold in 3 days of being listed would agree with you. We aren’t talking about a 50k house here, this is a 199k house, that sold 3 years ago for 219k.
Property located in solid neighborhoods will sell NOW if priced right, in good shape and located on the coasts.
Houses with little to no demand in over supplied areas will be the ones getting hit the hardest in this.
REIER,
I agree…good post…
The other day we saw a 27% drop in existing homes sales and two days later we saw a drop of 12.4% on new home sales year over year in July. The market has once again closed below 10,000 on the DOW and the S&P is knocking on 1,000’s door. Unemployment is increasing again. The Federal deficit is 1.4 trillion and the year isn’t over. 48 of the 50 States also have a budget deficit. Almost every major city in the US is running a budget deficit due to decreased property tax revenues and or sales tax receipts. Federal taxes are set to rise in 2011 along with local municipalities increasing taxes. In Atlanta they had 30,000 people show up for 432 section 8 rentals. The economy is far from improving and in my opinion at best we will see a protracted sideways market.
great post Sean…
nice to see someone picking up the slack where PM left off…
miss the guy… :smile
c’mon Mike…at least, say hello…
-Mike
Sean L
Let’s not forget how far the equity markets have bounced from their lows…I agree that we are in no way in a honeymoon period but a pullback was iminent…If we break new lows that we will be the bearish signal I’m looking for otherwise like u said we are sidways here…Thats why I said earlier the rubber band isn’t stretched enough in either direction to interest me…Doing nothing is the play right now in the markets or adding if your bullish to longs that are deep in the money…Some Hedge Funds like Appaloosa are overweighted in financials…Its amazing what the pros are doing…Thats why I’m on the fence right now…Sideways is what I agree with…
The way I see it there are basically two state of minds based on people’s current situation. The people that are making money see opportunity and little gloom and doom. People that aren’t making money see nothing but negativity and the entire country going down the crapper.
I know a rehaber and his partner who think things are great and have never been better. They are currently working on 8 rehabs, 4 properties sold and buying 3 more properties all this month. All in bread and butter neighborhoods. They sell every single home they finish because they do a top notch job on all and they price their homes at or below true market value.
Don’t forget real estate is local.
The message is not half as scary as it should be, because the author does not really understand what is happening.
We are in the perfect storm, housing prices are tumbling, and for the most part are going to continue due to the retirement of the Baby Boomers.
The Boomers fueled the expansion of the economy for the last 30 years, but these folks are in their middle 50’s to 65 years of age. This is a time of down sizing and removing investment dollars from the market for living expenses. The much smaller birth rates generations that have followed cannot sustain the economy to the same level. The government will soon hit a brick wall as the boomers start to take from SSI, there tax basis will also be dropping substantially.
Healthcare, assisted living facilities, and the funeral industry are going to prosper until the boomers are no more.
I am going to make a prediction, our government is going to seize through exorbitant taxation the Roth IRA’'s and 401k’s of the boomers. There is no way they are going to allow the majority of Americans who did not plan for their retirement to receive nothing from SSI, after they paid into the fund for their whole lives.
If you think the Roth is guaranteed tax free, then think again. If GM stock holders can be swept aside by a government edict then the tax code can be amended just as easily.
I bet we see quite a few of those Mc Mansions converted to duplexes.
A little extreme Dennis but who knows…I wouldn’t put anything past this administration…Im equally as mad at the Mexican Drug cartels …Now my wife won’t move to Cabo …She thinks we are going to get kidnapped…I think she watched Man on Fire one to many times…
I get the sense that the republicans will gain some seats this fall and that could make it difficult to push an agenda from either side (gridlock). That’s supposedly good for stocks because the rules won’t be changed mid-game.
The baby boomers won’t be taking all their money out of the stock market. They’ll likely shift it to some more fixed income, but their nestegg will need to last maybe 20 or 30 yrs. Beisdes, The boomers I’ve talked to echo the same sentiment I’ve seen in the media. They’ve lost so much in their retirement fund that they’ve postponed their retirement or they’ll be working in their retirement.
A lot of healthcare facilities are getting squeezed because their medicare/medicaid reimburement is being cut every year. Unless you have a “private pay”, which means the oerson is payingout of pocket, these facilities will suffer more and more. There are very few private pay parients out there… Not enough to make a difference.
We definitelyhave some interesting times ahead.
I am going to make a prediction, our government is going to seize through exorbitant taxation the Roth IRA''s and 401k's of the boomers. There is no way they are going to allow the majority of Americans who did not plan for their retirement to receive nothing from SSI, after they paid into the fund for their whole lives
I have to agree with Rookie. Things are going to get rough, but going this extreme is going to cause more issues than it repairs
So terrible!.. :cry