Real Estate Crash thread

Maureen Dowd??? For fucks sake, what the hell does she have to do with this? Shit, 75% of the boneheads who thought it would last forever don't even know who she is. And she could give a fuck. She's probably sipping wine right now in the Hamptons, eyeing her meal ticket possibilities for later life.

Thomas Freidman is the man you should read. He's been telling the world in simple terms over the last decade how the world is changing, the field leveling. Woe to those who ignore it. Read the Lexus and the Olive Tree, and The world is Flat.

But, of course, I sense that someone's got that "liberal media" hate thing goin' on, which always begs the question, if you don't read those papers, where do you get your info? Fox? Rush?

You have toadmit though, Tom Vu was dead on the last 15yrs.

I like Friedman, he can be pretty expedient politically sometimes but overall he's the talent of that Op-editorial page.

I don't believe I've ever purposely listened to Rush Limbaugh. I saw more of him on ESPN than I've ever heard him on the radio.

but since you asked I read the WaPo website daily, the Washington Times, and the WSJ.

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Originally Posted by mr_gyptian

you've left out the "Rich get Richer" spin.

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What spin? The policies of the Bush admin all but guarantee a significant increase in the concentration of capital. The structure of the income tax cuts, estate tax phase out, foreign investment opportunities, currency movement, etc. -- all of them drive to a common outcome. You don't need conspiracy theories, or to believe that any group of people are evil or are in collusion. You just need to look at the inevitable economic consequences of Bush's policies. And the likely impact on the US real estate market.

What is it that causes you to use the term "spin" in this context? What makes it so hard to see simple cause and effect?

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Originally Posted by spindrift

What spin? The policies of the Bush admin all but guarantee a significant increase in the concentration of capital. The structure of the income tax cuts, estate tax phase out, foreign investment opportunities, currency movement, etc. -- all of them drive to a common outcome. You don't need conspiracy theories, or to believe that any group of people are evil or are in collusion. You just need to look at the inevitable economic consequences of Bush's policies. And the likely impact on the US real estate market.

What is it that causes you to use the term "spin" in this context? What makes it so hard to see simple cause and effect?

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To paraphrase Tom Wolfe "A Noble Class always seems to be descending on the United States but it always seems to land somewhere else."

I wonder if all the "poor" people that fell off the tax roles are bitching about Bush's tax policies that favor the rich?

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Originally Posted by mr_gyptian

To paraphrase Tom Wolfe "A Noble Class always seems to be descending on the United States but it always seems to land somewhere else."

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He was fun as a young man, with his greatest works about the supernova of American culture embodied in Ken Kesey and Junior Johnson. Too bad he just wanted to grow old as a Virginia dandy on the Upper East Side. WTF? We don't want a fucking "Noble Class". What are they anyway, but a bunch of Eurotrash smoking up the Vail bars, spending their great grandaddy's wealth.
We want to live free, watch Idol, and drive up to our 2000 calories. And get rich quick.

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Originally Posted by mr_gyptian

... I work and make more than you do. not only that, but I'm probably 20 years your junior. I also don't live in some suck ass midwestern town.

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^ The true measure of intelligence, integrity, and worth. :rolleyes2

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Originally Posted by truth

...or in my case, the bargain hunting. Bring it on. I'm in full vulture mode.

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Ha Ha. My next purchase will be an office in Downtown SLC, or a house downtown that can be used as an office. May not happen for a little while though. After that, it's the purchase of a house or property in Eden. With 3 ski resorts in that little valley and 2 of 3 with big expansions in the works I have a feeling that place will blow up soon.

There were people who still made money when the stock market ate shit, there are people who find ways to lose money when things are up. I think if you invest wisely regardless of huge overall trends you'll always come out alright.

BTW, Real Estate freaking rules. I should've quit my job long ago and focused on it more. I've made more from my Denver houses (part-time efforts) than I ever did working 40 hours a week for the man. No way I'll ever go back to work for someone else again.

Eden? sshhhhhh!!'

That place totally sucks. Maybe if you like icy bumps and wifi on the chairlift.;)

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Originally Posted by Cono Este

You have toadmit though, Tom Vu was dead on the last 15yrs.

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What happened to this guy?

I saw him on 20/20 or 60 minutes back in the day. I loved his infomercials. "no, no, no this is my house, this is my cars, this my boat, and these are my women. Come I will teach you my secrets."

nevermind I answered my own question

http://infomercial.tvheaven.com/tomvu.htm

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Originally Posted by Cono Este

Eden? sshhhhhh!!'

That place totally sucks. Maybe if you like icy bumps and wifi on the chairlift.;)

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Yeah, seriously MD9, sshhhh!!! I haven't finished my 1031's yet. Jerk.


;)

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Originally Posted by bklyntrayc

^ The true measure of intelligence, integrity, and worth. :rolleyes2

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sniping when I'm not even on the board. slow day in Bed-Stuy?

snoooooze...

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Originally Posted by mr_gyptian

sniping when I'm not even on the board. slow day in Bed-Stuy?

snoooooze...

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That's the weakest response I think I've ever seen from you. I'm disappointed, you must have had a very busy weekend. I'll give you a pass, since your still tired.

Who knew you were leaving in less than 2 hours? Next time I'll pay more attention to what you're doing.

"The Q1 OFHEO House Price Index will be released on Thursday, 10 A.M. EST. The headline number is the year over year price increase - and that will still be positive.

However, I expect the US and many Metropolitan Statistical Area's (MSA) might see negative Q1 appreciation declining prices. Those will be the interesting numbers.

The US hasn't seen declining annual home prices since the Depression, however nationwide annual appreciation was close to zero in the early '90s. There have been several quarters of negative appreciation, the worst being Q4 1990 when US housing prices declined 0.47% (1.9% annualized). If prices decline more than 0.47% for Q1 2006, than Q1 will be the worst quarter in OFHEO's HPI history."

Who's that a quote from, Benny?

And why does Mr_G think he makes more money than you, or that Saratoga is in the midwest?

NYT real estate blog, interest rates are going up on his trust's bond holdings, I suppose, and, um, somebody needs to use g-o-o-g-l-e m-a-p-s.

Someone was really really off, I'll gladly take 2%. Looks like the pop is being pushed off for a few more months, definetly won't happen before Nov.
http://www.ofheo.gov/media/pdf/1q06hpi.pdf

fuck bonds Good RE investment is still the way to go Woot Woot

edit to remove bravado

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Originally Posted by iceman

Who's that a quote from, Benny?

And why does Mr_G think he makes more money than you, or that Saratoga is in the midwest?

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can you tell the difference between Ohio and upstate NY?

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Originally Posted by mr_gyptian

can you tell the difference between Ohio and upstate NY?

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Further proof gyptians a dumbass. Hows the negative CO real estate going?

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Originally Posted by cj001f

Further proof gyptians a dumbass. Hows the negative CO real estate going?

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it's not negative in Summit, Garfield, Pitkin, or Eagle counties. but I'll keep you posted.

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Originally Posted by mr_gyptian

can you tell the difference between Ohio and upstate NY?

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Well there've been two winter olympics just up the road from Saratoga and Whiteface has over 3300' of vertical, so yeah, I guess I could.

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Originally Posted by meatdrink9

Ha Ha. My next purchase will be an office in Downtown SLC, or a house downtown that can be used as an office. May not happen for a little while though. After that, it's the purchase of a house or property in Eden. With 3 ski resorts in that little valley and 2 of 3 with big expansions in the works I have a feeling that place will blow up soon.

There were people who still made money when the stock market ate shit, there are people who find ways to lose money when things are up. I think if you invest wisely regardless of huge overall trends you'll always come out alright.

BTW, Real Estate freaking rules. I should've quit my job long ago and focused on it more. I've made more from my Denver houses (part-time efforts) than I ever did working 40 hours a week for the man. No way I'll ever go back to work for someone else again.

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My inlaws just bought a little house in Eden. They couldn't resist the price, and they love Snowbasin. Looks like I'll be paying you a visit soon.

And yes, real estate rocks. The demand for housing in Seattle is so high that most properties sell in a weekend with multiple offers, regardless of interest rates, and this will probably be the case for quite a long time.

Reuters 6/1/2006

U.S. construction spending unexpectedly dipped 0.1 percent in April, its first decline in 10 months, due to a sharp drop in outlays on residential building, a government report showed on Thursday.

Construction spending declined to a seasonally adjusted annual rate of $1.196 trillion in April from March's record pace of $1.197 trillion, which was revised slightly downward, the Commerce Department reported.

Wall Street economists polled by Reuters forecast April construction spending to be unchanged from the originally reported March rate of $1.199 trillion. The decline in total spending was the first month-on-month drop since June 2005.

Private construction fell 0.1 percent to an annual pace of $933.3 billion as private residential construction fell 1.1 percent to a $657.1 billion rate after hitting a record high in March. April marked the biggest fall for residential outlays since a 1.4 percent drop in January 2004.

Economists have been expecting a slowdown in the overheated U.S. housing market for some time and have anticipated that business spending would help to offset this drag on the economy.

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Originally Posted by mr_gyptian

it's not negative in Summit, Garfield, Pitkin, or Eagle counties. but I'll keep you posted.

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That would be because Wall St. types like my parents have been putting their money into housing instead of the stock market since 2001-02. Vacation homes are always the first to feel the pinch(which is a large portion of Summit and Eagle counties). You may not go negative but you certainly will see a bigger supply of available housing, longer times houses are on the market and a slow down of new building in the next year or two. Things like this always take a little longer to reach the heartland but the returns in the various financial markets are getting to where real estate is no longer the place to get the best ROI. Also understand that the real estate boom was a worldwide trend so it just wasn't US dollars driving the bus and world destinations like Vail recieved the benefits. Like any bull market they always have a problem going beyond 6 to 7 years.

"UCLA Anderson Forecast Director Edward Leamer said all the speculation about what the central bank and its new chairman, Ben S. Bernanke, should do about rates was folly because of a real estate slowdown that was well underway.

"I don't think the Fed, at this point, has much control," Leamer said.

"We have a sick sector, the housing sector, and there's not a whole lot of medicine the Fed can provide."

Leamer's group sees declining home sales contributing to a broad economic slowdown that bottoms out at 2% growth and stays there for at least a couple of years.

"It's been a drunken party for several years," he said. "Now, we have to deal with the hangover.""

http://www.latimes.com/business/la-f...lines-business

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Originally Posted by sea2ski

That would be because Wall St. types like my parents have been putting their money into housing instead of the stock market since 2001-02. Vacation homes are always the first to feel the pinch(which is a large portion of Summit and Eagle counties). You may not go negative but you certainly will see a bigger supply of available housing, longer times houses are on the market and a slow down of new building in the next year or two. Things like this always take a little longer to reach the heartland but the returns in the various financial markets are getting to where real estate is no longer the place to get the best ROI. Also understand that the real estate boom was a worldwide trend so it just wasn't US dollars driving the bus and world destinations like Vail recieved the benefits. Like any bull market they always have a problem going beyond 6 to 7 years.

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For along time I agreed with this position. I put off buying a cabin in Tahoe in 2000 only to watch them double:frown: Obviously this had alot to do with lower rates, but when I moved there temprorarily in 2004 I realized that like myself, so many people can now work from these locations now. Tahoe at least, is no longer just a vacation destination. Plus all the retired people. Shit I know sales people now who work out of Maui. THE INTERNET changed alot. Whats a couple of hours drive once or twice a week to able to live in Summit county these days. Its worth it to many.

Still alot of second homes though, I hope I am wrong.

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Originally Posted by Theodore

Just asked my processor since he knows more than I. He said most are 10 year interest only. At that point you are essentially looking at a traditional 20 year amortized loan. Essentially you are paying $ for the sake of paying $ to live in a house. You make no headway into your debt at all. The shorter the term a mortgage is amortized over the less interest you pay, but the higher the payment(obviously).

So, those poor bastards who got into a house for the sake of getting a house and have their financial picture set using their interest only loan are in for a painful wake up call when they start eating into the principle.

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I think that's a simplistic way to look at it. The interest only loans can be bad, but they also can be good. And the 30 yr fixed ones (with 10 yrs of I/O) are most surely not the ones you need to worry about. They have certainty attached to them, unlike the shorter I/O loans. I have one of them, I should know.

I know exactly what I will be paying for the next 10 yrs, and I know exactly what I will be paying for the 20 after that. I expect that in 10 years time, the additional payment will be manageable at worst (assuming I don't refi before that). I grew up in the 80's, when interest rates were in double digits. I'm protected if that happens, my rate is fixed.

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Originally Posted by mr_gyptian

it's not negative in Summit, Garfield, Pitkin, or Eagle counties. but I'll keep you posted.

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don't believe it's negative in Boulder either, at least not city of boulder. And I do not belive a place like Boulder will ever "burst", it's simply too desirable a place to live for that to happen (snicker all you want ;)). Not saying it won't flatten, as it did when tech stuff crashed, but it's not going to burst.

I was looking at a duplex in shit. louis where I now live. (sorry Karl). Anyway, with the 30 yr up a point the GRM was way too low for what people are asking. Like 7. Unless rent rises they need to shave 10-15% off the ask. MOst of these were bought and fixed up by flippers. Im waiting a year, I might be right for once out of the last 7 yrs:frown: :frown:

The people who bought to hold and re financed down over the last few yrs are still lookin mighty good.

But the people who are in the hot markets, who bought for the appreciation, have a negative cashflow, and did not lock in are gonna feel it.

I remeber buying my house in California, back around 9/11. I saw a house where a guy paid about 30% more than he was now listing it for. He had only owned the house for 2 yrs! All his equity, gone.

Granted, it was dot.com related. But that sucks.

IF rates keep rising, wages must rise as well, or the prices have to come down. jUst look at it from a first time buyer perspective. That payment is now 20% higher. Its gonna cut of the people new to the market, for sure. And rates are still cheap.

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Originally Posted by meatdrink9

BTW, Real Estate freaking rules. I should've quit my job long ago and focused on it more. I've made more from my Denver houses (part-time efforts) than I ever did working 40 hours a week for the man. No way I'll ever go back to work for someone else again.

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^^^^^This WILL be me next year.^^^^^

Great stuff MD9. We are super focused on this biz right now and now that I finally got a website and some private money investors we are sure in full vulture mode!!!

Had one closing on a sell last week and 2 buy closings this week, the market here is ripe.

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Originally Posted by Cono Este

For along time I agreed with this position. I put off buying a cabin in Tahoe in 2000 only to watch them double:frown: Obviously this had alot to do with lower rates, but when I moved there temprorarily in 2004 I realized that like myself, so many people can now work from these locations now. Tahoe at least, is no longer just a vacation destination. Plus all the retired people. Shit I know sales people now who work out of Maui. THE INTERNET changed alot. Whats a couple of hours drive once or twice a week to able to live in Summit county these days. Its worth it to many.

Still alot of second homes though, I hope I am wrong.

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I wouldn't disagree with your statement about more people working from areas like Summit County and I definitely agree with you statement about retiring baby boomers being a driving force behind the real estate market in resort areas.(That was one of the factors in my parents decision) However, I will say these areas have a different pricing structure than say suburban NY, SF, Chicago or just about any other major metropolitan area.

What my comments are based on is a lot of the spending on housing was based on low interest rates and money that might normally be put in the stock market going into vacation homes. I saw this type of thing happening on the Jersey Shore resort communities. I will also say what is now happening is a lot of the people who bought those vacation homes are now selling them because they didn't really use them that much and don't want to pay for the maintenance. They are taking that money and placing it back into the financial markets. This in turn is increasing the available housing and preventing prices from rising.

The pricing on the vacation homes is different than primary housing where prices are less flexible because most people look at their house as a retirement nest egg and will be more likely not to sell below a certain price. This isn't the case with someone who looks at a piece of property as an investment and has already made lets say 60% on their intitial investment in a vacation home over a three year period. A twenty percent annual return on your money is pretty good and the seller would be much more willing to sell at a lower price, because they are already ahead of what that same money would have returned in a financial market.

Understand for a Wall St. type, home buying is done for sheltering income from the tax man as much as it is done because the buyer has fallen in love with the idea of owning a home in a particular location. That is very different reason for owning real estate than the reason most people have for owning real estate.

What causes me to be skepital is my memory from the early ninties. I had a friend who kept playing the leverage game, he and his fmaily parlayed that shit into about 25 mil. Then they went for one last push and lost it all.

It happens.

But if done conservatively, and if implemented like md9 suggests, its still a great investment. But like anything, it not always up and up, and you have to be prepared to ride it out soemtimes.

With rates looking the way they do, you have to play it conservatively.

Oh you are so right about real estate not always going up. The condo I currently live in I bought for about half of original asking price when it was newly built. Of course it's tripled in value since I bought it six years ago. :D

Like with any boom you always hear the successes and not the failures.

http://web-xp2a-pws.ntrs.com/content...t/dd052506.pdf

http://bigpicture.typepad.com/commen...state_dat.html

Here is a place for you to put your money benny, tailor made just for you. Short that is.

http://www.usatoday.com/money/perfi/...-futures_x.htm

some good stuff here

http://www.thehousingbubbleblog.com/

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Originally Posted by Cono Este

Here is a place for you to put your money benny, tailor made just for you. Short that is.

http://www.usatoday.com/money/perfi/...-futures_x.htm

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Aother way for people to lose their money in a derivatives market! :)

Any more detailed info anywhere? Could be interesting &/or amusing.

If the stuff is tied to contracts against real real estate, I can just see SF housing prices rising because of a short squeeze!!! Yikes!

Or the car dealership squeeze routine at closing - "well sir, you would not want to be caught in a housing downturn, but for a modest fee of 2% of sales price we can provide you with a 5 year put on your house...and you'll get a risk mitigation discount on your mortgage...".

Or how about zero cost collars?

The more I think about it, the weirder it gets!

This is a super-kewl site that shows the house sales in your neighborhood
on a google map!

Zillow.com

Selling a home? Good luck
Record inventory to pull down prices in area, experts say

By John Rebchook, Rocky Mountain News
June 8, 2006

The record number of unsold homes in the Denver-area market topped 30,000, and the inventory glut is expected to drive down home prices in an already soft market.

There were 30,457 unsold homes on the market last month, according to figures released Wednesday by Metrolist, which tracks homes sold by Realtors.

That eclipses the record set in April, when 29,045 homes were on the market, and it is almost 21 percent more than the 25,198 homes available in May 2005, according to reports released by Steve McGuire of RE/MAX Professionals and independent broker Gary Bauer.

The ever-growing number of "for sale" homes competing with one another is being fueled by foreclosures. Blame overbuilding, a loss of high- paying jobs and rising interest rates, experts say.

Since the beginning of the year, the metro area has ranked near the top of the nation in percentage of homes going into foreclosure. In 2005, 2 percent of all homes in the metro area ended up in foreclosure, the highest rate in 15 years, and that trend has continued this year.

The recent downturn in the stock market, spurred by Federal Reserve Chairman Ben Bernanke's comments on keeping inflation under control, also could have a chilling impact on sales during what should be the hot selling season.

"I'm just floored by these numbers," said Kurt Poole, principal of Metro Brokers/Poole Properties in Highlands Ranch. "It's hard to find anything positive to say about the home sales market."

Poole noted that he has been saying for the past two years that the market is at the bottom and should start to creep up.

"But clearly it is not at the bottom yet," he said. "It seems bottomless."

McGuire said that the supply will continue to grow through the summer, as people tend to try to sell and buy homes before the school year starts.

The huge number of unsold homes is causing a bottleneck in sales and likely will drive down home prices and make homes tougher to sell, he warned.

"It's really the basic law of supply and demand," McGuire said.

The median, or middle, price of a home in May was $250,943, up slightly from $250,000 in April and $248,000 in May 2005. The average price of a single-family home, at $315,257, was down from $318,949 in April but up from $304,635 a year ago.

It now appears that the price of homes in upscale areas such as Cherry Hills Village and Greenwood Village are starting to soften, McGuire said.

"And there's no support for the low end of the market," McGuire said, which is being hammered by near-record numbers of foreclosures, especially in Adams County and parts of Aurora.

Bauer said the number of unsold homes on the market is near the top.

"We never thought we would see 30,000, but here we are," Bauer said. "We may hit 31,000, but I don't think we'll go much beyond that."

Bauer said that the recent nose dive in the stock market could further slow home sales because people can feel less rich and lose confidence in the market.

"That's what scares me," Bauer said. "It shouldn't impact the home market, but it can. The perception is that it could hurt the sales market, and perception becomes reality. On the other hand, one month does not make the market."


By the numbers

30,457 Number of "for sale" homes on the market in the Denver area in May.

21% increase from a year ago.

• Reasons: Experts blame foreclosures, overbuilding, a loss of high-paying jobs and rising interest rates.

Copyright 2006, Rocky Mountain News. All Rights Reserved.

Prices were up 14% last quarter, 24% in my neighborhood.
Crash?? More like a continuation of a decadee plus boom.