Posted on 04/03/2006 7:38:13 AM PDT by ex-Texan
As in the late 70s, the Fed is inflating the money supply to make the debt easier to pay.
That's why gold has doubled in three years.
The gold is not worth more, it's just that the dollar is worth less.
BUMP
I refinanced 4 yrs ago at 4.75 for 15 yrs. Many of my friends have refied a couple times and taken equity out each time, and a former employee of mine in Las Vegas is driving around in a new mercedes he bought with the increase in 'equity' in a home he has owned all of 18 months. There are tough times coming in some, but not all markets. Northern California is ripe for a correction, as most of the loans there are interest only and the like. Here in the midwest, prices have not appreciated as much and people are generally more conservative with their finances.
I live in Nevada, so I can probably help you here.
The desert is good for two things: military exercises (including blowing up atomic weapons) and mining.
People paid an overinflated price for Nevada property because they were mainly buying investment properties, i.e. Californians that were banking on the Great California Exodus, so they snatched up homes in Reno and Vegas and put them up for rent. Well, they flooded the market with rentals they couldn't rent and here we are today.
I just sold a stock {EPIX} which was us 15% in less than one hour this morning. Too much, too fast. Wrong! At the high {so far} it was up 26%!!
You can only see tops in the rear view mirror.
P.S. I've been trying to talk it down {so I can get back in} for the last hour, but to no avail. It's still way above where I sold it.
P.S.S. Oh, wait, It just spiked down. Looks like the party's over. Now I don't want to buy any more!!!!
Californians leave a path of real estate destruction wherever they go.
Seattle being a prime example.
"It is a favorite topic of many liberal economists, columnists, and bloggers"
Yes, it sure is. Even on FR.
Are you kidding. I have been listening to ex-Texan advise since he started warning us of the housing bubble three years ago. In that time I lost out of 80% gains. ex-Texan has done a great service to the people of this forum by continually harping on this issue saving people from making money.
Thanks for the explanation. Speculating on those Californians. You can't blame people for trying.
BTW, I love the desert out in Nevada and Utah, but I can't fathom living out there though. It's beautiful country!
What a dumb, realy dumb statistic. They are not comparing the same land, they are comparing all land sold. In 2004 and 2005 there were some big land deals of very expensive commerical/condominium land. Now they are comparing that to cheaper deals that have been made this year for residential developments on the outskirts of town. Certainly land closer to the strip is going to cost a heck of a lot more and sway the statistics significantly. You bubble heads spin every stat into some doom and gloom BS no matter how ignorant the stat is.
"They continue to have strong sales and earnings."
Really? I read in the WSJ a few weeks ago about how they were having to use substantial incentives to sell in many areas, and had also experienced a lot of cancellations.
"..but why the speechifying about it?"
Because writers get payed to write.
"What kind of places are just handing out money to anyone who claims to make X dollars?"
Places that charge a premium based on the unspoken risk.
I agree; it's something you have to be born into to really appreciate. I'm 4th generation Nevadan, as is Mrs. randog, so this is home.
No, I sound rational. Face it, that statistic you quoted is meaningless. Comparing a period of time that had several large highend real estate deals with a period that did not is not an honest assessment of what is going on. The stat is comparing prices paid near the strip with prices on the outskirts of town. I am not telling anyone to jump in or not to jump in. People should be cautious in certain areas of the country. Most areas you are safe in going ahead a purchasing a home if you plan to stay there for a while. Housing is not fullproof, but it is one of the safest and most lucrative investments a person makes.
A guy I know at the local watering hole matches the type of person you describe completely. He's never been involved in contracting and isn't even handy with such things, but he somehow got the idea he could buy a lot, have a house built, and make a bunch of easy $.
Surprise surpise, the more he gets into it, the worse its looking. This "deal" has been going on for about a year now and they haven't even broken ground yet. And all this in the free falling economy of the Cleveland Ohio area.
Last year was exceptionally spectacular due to heavy rains. The whole desert from Death Valley up through Tonopah was in bloom. The wife and I got some great pics. This year might be a repeat.
please. most people buying homes are not speculating. The assume their houses will go up in value but that's not speculating. People are willing to pay 500K for a 1 bedroom condo in DC rather than a 5 bedroom 4 bath 500K house in Prince William County just to sit in rush hour traffic 1.5-2 hours a day (comming AND going).
The market may mellow but it aint going to burst.
They aint making anymore land but they are making more and more people.
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