Make no mistake about it. The real estate bubble is going to pop and it is going to send many markets in a spin. You do not want to be caught with your pants down when this comes. Beware! Now for some stats. feel free to add your own
For 40 years, home prices rose about 1% above inflation. Since 1995, real estate has been soaring 35 points above inflation. Americans owe twice as much as 10 years ago, at 7 trillion. With Fannie Mae's execs being caught cooking the books as well. When this crash hits, your $120,000 home will be worth maybe $60,000 to $70,000. Whatever goes up must come down, just like the dot com bubble, only much worse. With greenspan raising interest rates, ARM (adjustible rate mortgages) will throw many folks out of their homes and disqualify many others from owning a home. Shoot! They're already telling us we can buy with no money down. Can you see the writing on the wall brother? Can you see their desperation. NO money down. In the nation's hottest real estate market, Las Vegas, the number of unsold homes rose 1000% in just a few months. prices went flat almost overnight. It takes twice as long to sell a house in california as it did a year ago. In 2001, only about 1 out of 10 home buyers needed an ARM. LAst year more than 1 out of 3 were an ARM. When Greenspan raises them interest rates, along with crazy gas prices and the dollar decline, do you think we're in for rosy economic times. Have you been listening to Lou Dobbs on CNN and the growing trade deficit with China he talks so much about. Wake up O Sleeper! And get your financial house in order. No doubt, we will see the rise of gold to $500 by December and gas and oil will continue to soar. Your fed paper dollar is a joke! Anyone want subtract from this, feel free you false economic prophets! The real estate crash is coming. Be ready!
Posted by slim on :
I will not comment on your post point by point, but will say this, you are right my friend, only problem is I'm afraid your words fall upon deft ears. Get your own financial house in order and let the rest learn.
Posted by Polarbear17 on :
I agree to a point that real estate is over priced in many parts of the country, But here in the Mid west i can still aford to buy a house,Yes for $43,000 you too can own a 3 bedroom 1200 sq ft rancher.But wait if your right weatherbill and there is a bubble then maybe next spring i can buy the same house for $30k instead. Lets hope i can make enough profit from these stocks to pay cash outright ....
Posted by slim on :
If you intend to make your money in the market that's fine, but you had better do it by the first in the year. I have a feeling the market's going to go south soon after the first year. Don't forget the heating bill this winter in Chicago.
Posted by glassman on :
the real estate bubble? it won't pop and crash, just stop inflating so much, and probly drift down, but just a little..
i do like gold for a 6 month plus hold... silver too...
the eldest baby boomers control the market for now...whatever they decide will be hot next, will be hot..if the housing market stalls, but doesn't crash? stocks should pick up, the problem there is nobody trusts the Street much these days, can't imagine why
.. lets see? 1945? they be 55 to 65 years old now.... better start investing ( for a 5- 10 year outlook)in nursing home and elder care soon
who makes depends? Posted by derek111c on :
I agree with you Weather, the real estate market is due for a correction. I believe great majorities of people who disagree are biasing their opinion towards what they would like to see happen other then what is logical. Many homeowners are proud and would like to see the housing market climb forever. Right now the psychological trend along with interest rates is in the real estate market’s favor. I believe it will all change real soon. Only thing IMO saving the housing market right now IMO is gloomy economic indicators such as high oil prices driving the yields on long term bonds down. Long term bonds follow mortgage rates very closely. We just a pretty good earning quarter IMO. I believe many companies have repositioned themselves for growth and it will be reflected in the economy real soon. Once this crash starts it will create a new psychological trend.
Posted by JOELGA on :
I do know this. When the market does shift, and people cannot sustain their inflated morgage due to special financing, be ready! This will be a great opportunity for one to pick up their dream home at an under inflated cost. ie (lots of forclosures) and it is unfortunate for those who have not done their financial homework in life that has led to such dismay.
Posted by Dustoff101 on :
Around here I have the ocean behind me and private, state and fed forest service lands surrounding me...
Logging and recreation trumps developement.
I am basicly on an island!
People coming outa California, to the Oregon coast in droves..
They got money and buy tons of depends!
They also find my fishing holes, which really tee's me off!!!!
POINT IS ????? LOCATION, LOCATION, LOCATION!
Posted by pennydays on :
I do agree with you all. My husband and I were just talking about it this morning. We live in Miami, FL and I tell you, the Real Estate Mkt here has gone crazy, prices so unreal. The cost on gasoline keeps on going up and up. The salary, well lets just say....it stinks. I do see alot of foreclosures etc. and certain areas at a stand still, without movement on home sales it gets rougher and rougher. No job growth. Its funny how the president says there's been job growth, but, not here, where its over populated and keeps on growing but job opportunities not growing.
Posted by keithsan on :
bubble won't matter unless your flipping real estate moving soon or have a no money down mortgage.
If you buy now planning on living in your home for 5 years or so, you'll be fine.
Posted by Pennies to Dollars on :
I think the inflated prices will drop, but not by a lot. Then again, no one really knows for sure.
Hasn't it always been a matter of supply and demand?
Posted by slim on :
I have been reading these posts over and over and over, I cannot believe what I read. Some say that will be no housing bubble burst, just a slight drop in the inflated prices, well I hope you're right, because if you're right and I'm wrong we'll all be okay, if I'm right and you're wrong, you'll think you went to Hell. One poster complains of no jobs, we don't manufacture anything in this country anymore, we are a service oriented society. We are a warehouse for the rest of the world, we are the consumer for every other nation that manufactures,what kind of jobs do you think we should or could create? Energy is skyhigh, with no end in sight, and it touches every other facet of our society. When it starts to go it will go like dominoes. How long will it take? That I cannot predict, I seriously doubt if it can last 15 more years, and by that I mean life as we know it. You are staring a depression in the eye like you've never known before. Most of the posters I am assuming are around 40 to 50 years old, you don't know what bad times are like, at least 90% of you don't. I know what it's like to be young, you don't know what it's like to be old. If there was ever a thing in this world I wanted to be proved wrong on, this is it. Good luck to everyone.
Posted by Squekee on :
Newbie here, and yes Slim also I want to add that nobody mentioned that this is all mentioned in the bible towards end times, which we are I believe currently in. Anybody concur with me on this?
Posted by treemoney on :
Its supply and demand. As long as there are willing buyers the prices will continue to increase. Eventually I think where I live in California something has to give. Houses that arnt even that great are going for 500,000 dollars. Either people will start moving to other parts of the country,or multiple families will start living in one house(which ive started to see) or the economy will go downhill because people arnt making 5 times the income but houses in CA have gone up almost 500 percent in the last fifteen years. I think there will be a slight drop but I think the days of getting a nice house for 150,000 in CA are over.
Posted by bdgee on :
Squekee,
However much you want others to respect your religious views, you need to learn to respect theirs and this does not. Maybe you could try preaching somewhere it isn't inappropriate.
Posted by Squekee on :
I never disrespected anybody's views, i just simply wanted to know how and what people felt about these bible predictions coming true. that's it! Hell I'm not even that religious.It just intrigues me to know peoples views on the predictions that are materializing. I enjoy talking to people about it, as it is an interesting subject to me that's it. Sorry if it offended you but that's not what I'm after. I even enjoy talking to friends on the phone about it. How did you construe this as preaching?? That I'd like to know.
Posted by derek111c on :
Lately here in Maryland, I am seeing many street corners left and right decorated with 5 or more real estate for sale signs. Gee, that really looks promising. Really makes me believe the demand is just rocketing way above market supply. I think I will go out and buy as many houses as I can, because it is impossible to lose on real estate. NO risk what so ever. Even though if I only lost 10% on a 200k house I would be out 20K, but why mention that, that is impossible. Everyone buy immediately the population here is increasing faster than Chinas. The massive baby boomer population is buying up all the land. Also the polar ice caps are melting covering up the land left and right. Buy it while you can. You must also understand everyone in this country earns a six figure income so everyone will be able to continually afford excessively priced real estate. A crash is not possible because we also know much more about economics and markets than in the past, just like we did during the 2000 tech market bubble. Of course I am kidding.
Posted by derek111c on :
Since the housing market is such an opportunity this home building stock looks like a great investment. I swear this chart looks so familiar.
quote:Originally posted by Squekee: Newbie here, and yes Slim also I want to add that nobody mentioned that this is all mentioned in the bible towards end times, which we are I believe currently in. Anybody concur with me on this?
Okay, you're taking this a little too far now.
Posted by Pennies to Dollars on :
quote:Originally posted by treemoney: Its supply and demand. As long as there are willing buyers the prices will continue to increase. Eventually I think where I live in California something has to give. Houses that arnt even that great are going for 500,000 dollars. Either people will start moving to other parts of the country,or multiple families will start living in one house(which ive started to see) or the economy will go downhill because people arnt making 5 times the income but houses in CA have gone up almost 500 percent in the last fifteen years. I think there will be a slight drop but I think the days of getting a nice house for 150,000 in CA are over.
I agree. A slight drop in price, but nothing major. We'll see though.
Posted by Golf57 on :
It all depends what part of the country you're from. In Florida the prices have have skyrocketed and will continue to do so for several more years. The reason why Florida is a little different than most of the states is, because you're buying a piece of paradise when you move to FL. CLIMATE, CLIMATE, CLIMATE that's why the market will keep on going up in FL.
The people that move to FL already have money they move here because they can't stand all the rain,freezing cold,ice well you guys get the picture.Where else can you plan a golf outing three months in advance and not have to worry wether or not the weather will cooporate because 99% of the time the weather always cooperates in Floria.
Posted by Golf57 on :
It all depends what part of the country you're from. In Florida the prices have have skyrocketed and will continue to do so for several more years. The reason why Florida is a little different than most of the states is, because you're buying a piece of paradise when you move to FL. CLIMATE, CLIMATE, CLIMATE that's why the market will keep on going up in FL.
The people that move to FL already have money they move here because they can't stand all the rain,freezing cold,ice well you guys get the picture.Where else can you plan a golf outing three months in advance and not have to worry wether or not the weather will cooporate because 99% of the time the weather always cooperates in Floria.
Posted by derek111c on :
I agree, Florida has really been building up and it is a nice place to live. I also agree many contributors to the appreciation or depreciation of real estate are local. I hear location, location, location all the time, but it must be realized that we just saw a real estate boom across the nation that was fueled by a major non-local (nation wide) factor. Excessively low interest rates. Take the stock market for example; have you ever heard the statement along the lines "ships rise with the tide"? This example is comparable to a non-local factor. An example of a local factor compared to the real estate market would be a factor that only affects a specific stock or a specific sector of stocks. An example of this could be a new patent, winning a lawsuit, or finalizing some sort of significant merger or acquisition. The economy seems to have always surprised us and I believe it will continue to do so.
Posted by slim on :
Pennies to dollars,please take it easy on Squekee, he is probably a young man all fired up. I'm not offended by his posts, and I am an agnostic. Anyway with age wisdom comes, he enjoys being in on the debate, as I'm quite sure we all do. I thoroughly enjoy reading all the posts, so keep up the good work gives me something to do.
Posted by BuyTex on :
that is funny, though: "He11, I'm not even religious."
Property values going up here in Texas, but we're not on the so-called "bubble" like the coasts. Our bigger problem? Lots of housing/apartment starts & completions--but no new traffic improvements to help folks move around...
Posted by bdgee on :
Gotta excuse Tex. He's been up here in north central Texas so long (and probably without a vacation) that he forgets we too are on the coast. To tell the truth, up here, we hardly ever know what goes on in Beaumont or Brownsville or anywhere between and they aren't too sure about us. But he's right, lots of new houses, no new roads.
Posted by Squekee on :
Buytex....I said Hell I'm not even "THAT" religious, meaning I do believe in god but I don't go around stuffing it down peoples throats. I keep my beliefs to myself and sometimes like to inquire about other peoples beliefs simply because I love to hear different opinions and enjoy a good conversation, That's about it. I'm intrigued by things that I can't physically see I guess. Anyway, you won't hear anymore religious talk from me. Have a nice evening!
Posted by BuyTex on :
Squeke, sorry if I quoted out of context. I just thought it was funny the way you phrased it...But hey if you like to discuss stuff, plenty of "off topic" threads pop up, and if you don't see one interesting? It's easy to start one...
Posted by glassman on :
quote:Originally posted by glassman: the real estate bubble? it won't pop and crash, just stop inflating so much, and probly drift down, but just a little..
i do like gold for a 6 month plus hold... silver too...
the eldest baby boomers control the market for now...whatever they decide will be hot next, will be hot..if the housing market stalls, but doesn't crash? stocks should pick up, the problem there is nobody trusts the Street much these days, can't imagine why
.. lets see? 1945? they be 55 to 65 years old now.... better start investing ( for a 5- 10 year outlook)in nursing home and elder care soon
who makes depends?
gold is going up
there is a realestate bubble popping right now after all.....
prices are dropping in hurricane risk areas....
Posted by blue_in_MI on :
here's a very interesting "real estate bubble" resource for you bubble-burst folks:
Prices still high in my neighborhood, hoping they ride the peak here for a bit and take less of a fall, got a city train coming in.
Glass,
I know your a big gold fan currently, I on the other hand recently (couple months ago) flipped my euros into dollars for nice bank and will flip them back in a few years hopefully.
Gold and Dollar both going up, my guess is gold is wrong but that is from charts. I haven't worked the whole inflation/recession debate out.
I know they both don't run at the same time. You still loading gold here at highs?
Posted by carlos6466 on :
they say that property is becoming a hot commodity in the south, and records have show that after disaters occur, property values sharply increase! (i.e. new york, maimi, san francisco, japan)
Posted by BuyAtBottom on :
will be a good time to get some good deals when it pops and like i have been saying it won't be too long now. i am ready.
Posted by weatherbill on :
Hey, maybe some land in south louisiana is going really cheap....wonder what it is per acre for some rural land out there.... That would be a good winter home half the year
Posted by ChrisNC on :
rising material costs drives realestate upward also the growing population has merit to bring prices higher. I dont think the hot markets will keep jumping up but a trickle effect should come from surrounding areas to catch up the rest.
Posted by treemoney on :
I think there will be a signifigant drop soon. the population is growing, but this has always been the case and prices didnt go up this high before. Eventually what will hapen is people will quit buying houses and the prices will then be lowered. Most families cant afford a 500000 dollar house. Especially if we go into a recesion. The rising interest rates may also have a lowering affect on homes. Rising oil isnt helping people either. Ive heard there are signs of slowing right now. As far as natural disasters are concerned, I know that after the northridge earthquake in CA house price droped a lot.
Posted by Dustoff101 on :
Yep, people may sell into strength down there in the disaster zone,and then get outa there..
Buying power is going down and home prices are going up..Geee what ya suppose might happen...
Good solid pieces under 200k should remain constant, I hope!
Posted by BuyAtBottom on :
also next fed rate meeting coming up quick this time. in about 5 weeks. i think it is on november 1st.
Posted by abram on :
Reinventing financial options will keep the housing market comfortable. JMO.
Posted by bond006 on :
Another thing I heard on the news last night that they may be changing the tax laws and one thing they want to do is reduce or eliminate your mortage interest.A lot of people will sawllow that big payment for a tax deduction.But with no deduction they tend to be more of a price shopper.
Posted by Thorn on :
Real dstate is not going to go away, unless they set up some sort of high-valued real estate protection. That's where the rich store their assets and dodge taxes. If anything happens to real estate, someone rich or in a high place will do something about it.
Posted by FlipMe on :
Bush's tax panel would limit break for homeowners Dems complain plan would hit California, other blue states hard Kathleen Pender
Wednesday, October 19, 2005
A tax reform proposal agreed upon Tuesday by President Bush's advisory panel would eliminate the federal deduction for state and local taxes and sharply limit the tax break for home mortgage interest.
That's leading some Democrats in California and New York to assail it as an attack on the blue states -- the ones that voted Democratic in the 2004 presidential election -- which tend to have higher taxes and housing costs.
"The Bush panel's recommendations are a double-barreled blast aimed squarely at California and the middle class," state Treasurer Phil Angelides said in a press release. "These recommendations are good for Texas, but bad for California."
Sen. Charles Schumer, D-N.Y., called it a pernicious proposal and a "dagger to the heart of the people of New York."
The bipartisan panel, appointed by Bush early this year, was asked to identify ways to simplify federal tax laws and redistribute the "burdens and benefits" of federal tax "in an appropriately progressive manner while recognizing the importance of homeownership and charity." Its proposals, on balance, are supposed to neither raise nor lower federal tax revenue.
Most observers think the proposal has little chance of adoption because of the broad range of interest groups -- not to mention political sacred cows -- it would threaten. Still, the plan is expected to spark a far-reaching debate on tax reform.
The plan, which the panel plans to finish up next week, would simplify taxes for the about one-third of taxpayers who itemize deductions -- by eliminating them. Schedule A, the IRS form used to itemize deductions, would go bye-bye along with many other tax-return forms.
The deduction for interest on a home mortgage, the biggest write-off for many taxpayers, would be eliminated and replaced with a tax credit.
Under current law, taxpayers who itemize deductions can deduct interest on up to $1 million in mortgage debt. The interest can be on one or two homes as long as it doesn't total more than $1 million.
A deduction reduces income before taxes are calculated. The higher your tax rate, the bigger the benefit.
A tax credit, by comparison, reduces your final tax bill dollar for dollar, regardless of income.
The proposal calls for replacing the mortgage-interest deduction with a tax credit equal to 15 percent of the interest paid on one home. The credit could be claimed even by those who do not itemize deductions today.
The credit would apply only to interest on mortgages up to the limit for loans guaranteed by the Federal Housing Administration.
The FHA limit varies by region, but in most parts of California, it is $312,895. That is well below the median price of a home in California ($568,000) and less than half of the median price of a Bay Area home.
In many parts of the country, the FHA limit is above the median home price. The average FHA limit nationwide is $265,000.
The plan "would be devastating for states like California where real estate values have skyrocketed and affordability is at its lowest levels," said Sen. Dianne Feinstein, D-Calif.
The proposal would eliminate any tax break for interest paid on a second home or a home equity loan or line of credit.
Under the proposal, the first $600,000 of profit from the sale of a primary residence would be tax-free for married couples filing jointly. That amount would be indexed to inflation. Any profit over that amount would be taxed as ordinary income.
Under current law, couples can exclude up to $500,000 in profit from the sale of a home, but anything over that is taxed at the lower capital gains rate.
Jerry Howard, chief executive of the National Association of Home Builders, said the plan, if enacted by Congress, would "put an immediate chill on the housing markets and reverse almost a century of housing policy."
On the plus side for blue states, the proposal also calls for eliminating the alternative minimum tax, a separate, mind-boggling system that raises taxes for a small but rapidly growing number of middle- and upper-middle-income taxpayers. It could affect 30 million Americans in 2010, up from 2 million in 2002.
The way most people fall into the alternative minimum tax is by claiming large deductions for state and local taxes, said Clint Stretch, director of tax policy with the accounting firm Deloitte & Touche.
On a per-capita basis, the states with the most people paying alternative minimum tax are New Jersey, New York, Connecticut, California, Massachusetts and Maryland. All are blue states.
Repealing the alternative minimum tax would reduce taxes for many Americans, but eliminating the deduction for state and local taxes would raise them for many more.
Whether individuals would be better or worse off overall depends on their personal situation and other aspects of the tax plan.
"The political problem is that a lot of the people who will benefit from the AMT being repealed don't know they have the problem yet," Stretch said.
The proposal also would reduce the number of federal tax brackets. Today, there are six, ranging from 10 to 35 percent. Under the proposal, there would be four, ranging from 15 to 33 percent.
The panel endorsed two plans for taxing capital gains from investments.
Stretch said the tax panel was trying to simplify taxes without shifting the burden rich to poor, from poor to rich or from state to state.
Ideally, the tax burden paid by the top 20 percent, the next 20 percent and so on would be the same before and after reform. But even if that happens, there could be big tax-burden shifts within those groups, and an individual's taxes could change dramatically based on whether they own a home, what kind of investments they have and other factors.
"This is a very complicated puzzle to try to piece together," Stretch said.
So much for tax simplification.
Net Worth runs in the Business section Tuesdays, Thursdays and Sundays. E-mail Kathleen Pender at kpender*sfchronicle.com.
Posted by Ktrain420 on :
Rates go up the market will slow down this winter....then when summer hit's again the market will maintain it's upward trend. Prices will not drop they will stagger. The housing market has slowed down already, look at the history, winter is slow, summer is great....just the opposite of the stock market.
THERE WILL BE NO REAL ESTATE CRASH.
GOOD DAY ALL
Posted by glassman on :
quote:Originally posted by glassman: the real estate bubble? it won't pop and crash, just stop inflating so much, and probly drift down, but just a little..
i do like gold for a 6 month plus hold... silver too...
the eldest baby boomers control the market for now...whatever they decide will be hot next, will be hot..if the housing market stalls, but doesn't crash? stocks should pick up, the problem there is nobody trusts the Street much these days, can't imagine why
.. lets see? 1945? they be 55 to 65 years old now.... better start investing ( for a 5- 10 year outlook)in nursing home and elder care soon
who makes depends?
gold is about halfway there now, up about 15%..... will start letting some go if it hits 500$ this week or next....
Posted by Dustoff101 on :
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