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When will housing hit bottom?
Market Watch ^ | 24 October 2007 | Rex Nutting

Posted on 10/28/2007 4:14:43 AM PDT by Jacquerie

WASHINGTON (MarketWatch) -- The housing market is just getting worse. Home resales tumbled 8% in September to the lowest levels in this decade, prompting the obvious question: When will it all end?

The honest answer is no one knows. Optimists have been saying for more than a year that the worst is behind us, while the pessimists have been saying recovery is still a year, or years, away.

(Excerpt) Read more at marketwatch.com ...


TOPICS: Business/Economy
KEYWORDS: housing; mortgage; subprime
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To: purpleraine
Going into debt is not the definition of an investment. The whole concept of a "home equity loan".... "put your equity to work for you"... is just dumb. It's called voo-doo economics. It does not create wealth, unless you're willing to sell that primary residence at the drop of a hat.

Rental property is another animal. It is an investment assuming you can rent it for more than the annual expenses.

Have you never heard the old saying "don't put all your eggs in one basket". That means diversify. People loosing their homes didn't understand that SIMPLE principle.

101 posted on 10/28/2007 4:20:50 PM PDT by kjam22 (see me play the guitar here http://www.youtube.com/watch?v=noHy7Cuoucc)
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To: Jacquerie

round here they expect lower and median priced homes to fall to 2000 levels

(nashville metro)

it just started here...the slowdown


102 posted on 10/28/2007 4:22:05 PM PDT by wardaddy (Behind the lines in Vichy Nashville)
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To: mtbopfuyn

“Can’t tell that here. More housing developments going up every day.”


Here too. But the houses that are still going up are glorified trailers on lots so small you can hear your neighbors televisions. And the labor used to build them? I think you can guess.


103 posted on 10/28/2007 4:29:02 PM PDT by moehoward
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To: kjam22
If you can borrow money for less than you can make on it, then you're ahead of the game. That's how banks make their money.

If you can double or triple your retirement in the process then do it.

I don't understand why you'd be selling something at the drop of a hat. We have four homes. If the price is down or the interest is up and we want to do something, we just wait for the cycle to change. We decide when and what to do.

You keep saying put all you eggs in one basket and you don't know what you're talking about. You made that up. I never said we do that, nor do I advise others to do it.

Your view of rental property is limited. You don't always assume that your expenses will be exceeded by the rent. Sometimes you do something for long term gain and tax break, not for immediate cash flow.

It is clear to me that you are operating with less than sufficient information and are inexperienced.

I really don't have time to give you a full primer.

There are many personal finance books out, I suggest you check some them and expand your knowledge, before your 85 and out of money.

104 posted on 10/28/2007 4:41:32 PM PDT by purpleraine
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To: WashingtonSource
"panic"

While I certainly share some of the unease that many Americans have about the current situation, panic is not in my dictionary. I've been in some very dire situations in my past concerning housing and money, and I survived them. We'll all survive the current mess too. What I object to is the habit of Big Media to predict disaster and catastrophe every time there is some sort of predictable downturn in the economy or sector of the market.

105 posted on 10/28/2007 4:43:46 PM PDT by driftless2
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To: driftless2

Millions of home owners are not in a panic. They don’t HAVE to sell or refinance a 100% loan. So they just sit and wait it out and watch the show.


106 posted on 10/28/2007 4:45:33 PM PDT by purpleraine
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To: Jacquerie

IMO, we’ve seen nothing yet and this will become a global issue.


107 posted on 10/28/2007 4:46:49 PM PDT by A CA Guy (God Bless America, God bless and keep safe our fighting men and women.)
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To: purpleraine
If you're buying rental property (acquiring debt) with the expectation that it will go up and at some point, some day, be profitable to sell it... that's called speculating. It's not the same as investing. And you're being a long term investor in a speculative market. You can do that with stocks, maintain diversified portfolio, and not risk as much money in one spot.

And it you're buying rental property for a tax break... that's not an investment either. It's called a tax deduction.

I know you don't believe me. You should spend some time listening to someone like Dave Ramsey or something.

108 posted on 10/28/2007 4:48:06 PM PDT by kjam22 (see me play the guitar here http://www.youtube.com/watch?v=noHy7Cuoucc)
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To: purpleraine

I manage my mother’s accounts, and my mother-in-law’s accounts. They live very comfortably off the income it generates, and the various accounts grow at a rate of return that exceeds inflation. They’ll never have to work. And they’ll leave solid estates to their children. And it isn’t based on an upturn in the housing market.


109 posted on 10/28/2007 4:52:12 PM PDT by kjam22 (see me play the guitar here http://www.youtube.com/watch?v=noHy7Cuoucc)
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To: Jacquerie

My guess is in about 3 years.


110 posted on 10/28/2007 4:53:45 PM PDT by dalereed
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To: kjam22
It's not that I don't "believe" you. It's that your wrong based upon the history of the US over that last 240 years.

You don't think real estate is an investment, it's speculating. Since when do all investments have "no" speculation. And lay out the risk factor of buying long-term real estate.

I guess you have an investment with more leverage and less risk. You are so many standard deviations off center, I can no loner offer you anything. I'm gone. Best wishes to you in your paid off modest home. I hope your money will sustain a long life.

111 posted on 10/28/2007 4:57:29 PM PDT by purpleraine
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To: kjam22
I'm out, but I saw that you are managing estates and I shivered at the thought. Think of how much money your family could have made if you knew something about leverage.

I guess, based upon your approach, the value of the homes is not included as an investment, it's a widget or whatchamacallit, and therefore the equity will not be passed along to the heirs.

Good luck to your family.

112 posted on 10/28/2007 5:00:55 PM PDT by purpleraine
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To: purpleraine
If you want leverage.... go put all of your money in Sirius Satellite Radio. You can buy it for 3.57 per share. In 20 years it will be worth $100. But if you really want leverage... you gotta put it all there. Any dollar you don't put there is a dollar unlevereged... right? A person who invests all of their money in the housing market is doing the same thing. Especially if they're buying rental property that won't pay the bills right now.

Leverege is a code word for "risk". High risk does not always mean high return.

113 posted on 10/28/2007 5:09:44 PM PDT by kjam22 (see me play the guitar here http://www.youtube.com/watch?v=noHy7Cuoucc)
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To: kjam22
I apologize. My husband asked me what was wrong with me and I realize I was preoccupied with other things.

Your goals determine your investmnents. So if cash flow is your concern you can do one thing and long-term gain another. But they can both be done in real estate.

I think you misunderstand leverage.

If I put 50,000 in the stock market and it goes up 10%, I make $5,000. If I put 50,000 down on a 500,000 property and the renters make the payment and it goes up 10%, it makes $50,000, because I can leverage the 450,000 the bank loaned to make 50,000. The bank doesn't make me pay the appreciation to them. It's mine to keep.

Having the right investment can increase your retirment by 2-3 times a 401 k or IRA. Many people will outlive their payouts.

114 posted on 10/28/2007 5:16:31 PM PDT by purpleraine
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To: Jacquerie

In the urban river cities of Northern Ky, Population less than 100,000 there are at minimum 5,000 new condo units already on line which need to be sold for betwen $200,000 and $2,000,000. The math just does not work. The real estate grifters just don’t understand that it is way already over, It is F**kin over. Get another job for ten years , and then come back.


115 posted on 10/28/2007 5:19:28 PM PDT by nkycincinnatikid
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To: purpleraine
In my state if you have a $500,000 dollar house... your taxes will be about 5000. Your insurance will be close to 4500. And you have no guarantee that you'll make 10%. And it's 100% taxable (unlike other investment opportunities) And you haven't made the 10% until you sell the property. You've made it on paper, and as I said... if you're talking about rental property that you can dump whenever you need to, that's one thing. If you're talking about your primary residence it makes it's another.

But beyond that..... if you're buying a piece of property for 500k to use as rental property... then you've got a screw loose. So you buy 4 or 5 pieces of property that equate to that dollar value. That means you've got to keep 4 or 5 renters that all pay on time, and don't tear the house up etc. You can make money doing it... but it's not investing. It's called running a business.

116 posted on 10/28/2007 5:28:45 PM PDT by kjam22 (see me play the guitar here http://www.youtube.com/watch?v=noHy7Cuoucc)
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To: mtbopfuyn

“More people on the planet and no new land being created means it never will hit bottom.”

Unless you live in Detroit.


117 posted on 10/28/2007 8:49:55 PM PDT by art_rocks
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To: PUGACHEV

You have to see what they are doing in Denver. Denver has two large areas close to downtown, 10-15 minutes where tons of new homes are being built.

The smaller area is Lowry, an old air force base. The second is Stapleton, which was the old airport. The yards are small but it is an easy commute downtown.

Heres the web site for the development. It is interesting.

http://www.stapletondenver.com/


118 posted on 10/28/2007 9:02:07 PM PDT by art_rocks
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To: giotto
Never catch a falling knife, as they say.

The trick is to catch it on the bounce....or make that the double bounce.....

119 posted on 10/29/2007 5:07:33 AM PDT by cbkaty (I may not always post...but I am always here......)
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To: kjam22
Are you really that unable to understand a simple example? You took a generic example and shot it down. The example is an equation. I did the same gain with stock as the sRE investment to show you LEVERAGE. You can plug in any number. 500,000 was an EXAMPLE.

If you're in a state where you don't make any money on RE, then you're right, you don't have an investment, you have a house. BTW the law in the US allows citizens of one state to invest in other states. That's how you make money.

120 posted on 10/29/2007 6:09:39 AM PDT by purpleraine
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