Posted on 10/28/2007 4:14:43 AM PDT by Jacquerie
About the same time oil stops going up.
Dingdingdingding!
We have a winner!
You are looking through the telescope from the wrong end. Banks can offer credit (lead a horse to water) but they can't make it drink. Japan dropped its interest rates to ZERO and that didn't stop their deflation. Once a credit cycle ends, low rates won't cause people to take on more debt.
Not even at zero percent.
"If recession should threaten serious consequences for business (as is not indicated at present) there is little doubt that the Federal Reserve System would take steps to ease the money market and so check the movement."
---Harvard Economic Society, October 19, 1929
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."
~~Ludwig von Mises
I think the most pessimistic assessment from major housing economists is that inventory will peak in the 4th quarter of 2007 (which we are in) and prices will hit their trough in the 4th quarter of 2008. After that prices will stabilize and begin to rise, depending or which market you’re in. The 4th quarter of 2008 will be four yours exactly since the housing recession began. You may not see any noticeable increases until the 4th quarter of 2009 in most places. But at least when you have to sell something you can do it without a sense of panic.
Part of the logjam is no first time buyers, because of credit issues, and no California buyers, but the biggest contributer to the slow down are sellers living in la,la land, who will not let their homes go for less than what they perceived it was worth last year.
The government regulated the market to the point where it limited viable alternatives and reduced competition. Some of it was in protection of scam artists posing as insurance companies, but truly viable alternatives were driven out of the system as well.
Yeah, but the bigger question is, is the earth getting heavier or lighter? Inquiring minds want to know.
That's the essential trade-off I found. Newer means smaller, more cheaply appointed, and built so far away that where you are was a cow pasture only a few years ago, with supporting roads and infrastructure appropriate for a cow pasture. Older means larger, closer-in, and an easy commute, but you have to sink money into things like plumbing, wiring, and a roof.
So many people are of a mind set like yours. Here is a positive story about rentals, which we bought, despite so many nay sayers out there in 2001 as an exchange from our family home we bought in 1983, when interest rates were 14%. We took the profits and bought a 10 unit apartment and a nine unit multifamily property, leveraging our money to put 20% down on each, with our profits from living and renting our first home for 18 years.
We manage them ourselves, we do most of the repairs ourselves and last year netted about $35,000. Now with being self employed, most of our lives and no pension plan or possibly no social security, we figure we will keep them, pull our hair out occasionally managing them, but will have a nice flow of income when we retire and they are paid off in 10 years.
Real Estate is a fantastic long term investment, similar to the stock market. The flippers and speculators give each a bad name and scare people. Where else can you turn an $83,000 investment into over a million dollar asset in a 20+ year time period? Only in real estate.
You’ve described the market in southern Arizona.
We bought our house in 2004. In early 2006, it was supposedly worth 50% more. Now, if we needed to sell, we could:
1 - Sell it for what we have in it in a week, or
2 - Not sell it for 3-4 years because we’re asking for the ‘2006 value’.
The toughest part would be selling it when we’re surrounded by houses purchased on speculation, so just about every other house is for sale. However, most of those were bought at the height of the boom, so they cannot sell without significant loss...and won’t probably do so for another 3-4 years easy. In that sense, it would make selling it easy...we can get our money back and sell it for 25-30% less than what all the others are asking.
But the builder kept building, and now has a ton of houses he cannot move.
Arrrgh....are "home warranties" common in your area? They are here; almost all realtors have the seller buy a one year policy which covers a whole bunch of stuff...cost is maybe a bit over 400 bucks.
Toddster is a smart guy. And he’s right.
And you should ping folks you talk about.
Have fun fighting the “power.”
My homeowner’s warranty only covers appliances, the furnace, things like that.
.
Coward. Liar.
Not sure the home warranty was that great. Shortly after moving in to our new home, our hot water tank went out and it was like 9 degrees outside. We had to wait two weeks to get the thing repaired. I thought I was going to die! We had to go with the person that was referred to us by the warranty people. They still didn’t pay for all of it.
Just a hunch, but it seems that the only places prices are going down or sales lagging are in the overcrowded and over priced areas. I live in Denver and prices are holding fairly well and sales, while down a bit, are still reasonble.
Walk through some new houses. They are built like !#@$% and typically have no yards at all.
They aren't building many nice houses these days. Just ugly boxes on tiny lots with walls made of chip board and HOA boards checking your prostate weekly (to make sure it's still compliant with their precious rules).
Your old house will outlast the new ones. You made the right choice.
Google....$83,000 would have bought your 754 shares when it went public 3 years ago....those shares are now worth $504,790....
We manage them ourselves, we do most of the repairs ourselves and last year netted about $35,000
That's great! I just choose not to deal with renters...I wish you well...and hope you never suffer the renters I have...the last one chased his wife through the house firing a shotgun at her...did $17,000 damage just to the ceilings and front door....and....you gested it..he could not pay for the repairs...lost his deposit...but the rest came from my pocket.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.