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Housing Values To Rise After "Bubble" ??


Tommy The Cat
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Marc Faber also sees the debt crisis leading to war:

http://moneynews.com/StreetTalk/marc-faber...omo_code=9706-1

 

This transcends politics ... politics itself becomes a puppet show put on to dazzle the masses while the economic stuff goes on backstage where they can't see it.

 

Well, EVERYTHING so far as human intercourse is involved can be interpreted as political. Personally, in the moderating capacities that I have held, the TOS generally observed "politics" as anything patently based on left-right dogma and stereotypes and non-constructive (ie: democrats ~ liberal or leftist and republicans ~ right-wing fascist), not simply most anything that involved monetary policy or perspectives of sound finance. IMO, it is nearly impossible to discuss finance without delving into why things happen the way they do.

 

As for the contrarian Mr. Faber, perhaps he has merely read a history book or two. What he describes somewhat ambiguously is the machinery of civilization as it has always existed. What I would like to see is some of these guys pinned down on their opinions of what goes on behind the scenes and who they see as the beneficiaries of these mechanisms.

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  • 10 months later...
I went to a courthouse-steps foreclosure auction for Dallas County Texas last week, testing the waters for possible investment property. The morning auction was about 500 homes. I went back and forth between two auctioneers with 100 homes each. All but 6 of 200 were won by forced bank bids. Nothing there was worth $1.00 over the lien.

 

This struck me as a bad sign, especially considering that Dallas is a county that has been very lightly hit by this crisis, since housing prices are moderate here.

 

I'm thinking that Alt-A resets+ ending of the tax credit+ avalanche of people with bad credit+tighter loan standards+overall suckish economy = further cratering of prices.

 

Is there a reason to think the fat lady has sung?

None.

 

Act Two is starting soon.

That was my response to Lynda99 in Jan 2010, a year ago. It appears that there will be Acts Three and perhaps Acts IV.

 

Most experts are strongly suggesting that by the middle of next year, we may be facing the largest banking crises ever. Why? The refusal or inability for the banks to absorb and account for debt (foreclosures), flush the debt and the foreclosed properties out through the market.

 

Financial Trickery To Catch Up with Banks

 

Now let's add the Commercial RE debacle now coming to its own head.

 

500 banks could fail between 2010 and 2011 as Commercial Real Estate loans begin to default.

 

What is the portend for housing values? Residential real estate values will stagnate and/or drop yet further.

 

Does this stagnation/decline really matter in the overall scheme of things (not speaking to your home but the market in general)? Not really. With credit to continue to be limited for the most excellent FICOs, with significant down payments, foreclosures swelling housing inventories (supply-demand) and the continuing distrust of the financial sectors, the true value of RRE is nowhere to be found.

Edited by Tommy The Cat
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Along comes the latest from Case-Schiller who reports “On a year-over-year basis, sales are down more than 25% and the month’s (Oct 2010) supply of unsold homes is about 50% above where it was during the same months of last year.”

 

Double Dip A Reality? I certainly think it is and I beloeve there is worse news yet to come.

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  • 2 weeks later...

I live north of Tampa. We definitely are in a double-dip, and I expect that prices will bump along the bottom for a long, long time--but that doesn't tell the whole story. The other part of the story is the reluctance of banks to release (or even take onto their books) "shadow inventory". In short, the home next to mine was taken back by the bank over a year ago and so far no realty sign. Another, larger and more luxurious home in our neighborhood has been in litigation since '08, and the bank's efforts have been less than desultory ... the case simply isn't moving. Of course, the high end recovers last, so the bank is in no hurry to take this nonpeforming asset onto its books. I hear tales of homes in Holiday moving in the $30s when they would have been at least in the $160s a couple of years ago. And in Chelsea Meadows, a complex of identical townhomes in central Pasco county, a unit went last year for $9,500 (and you can buy 'em all day for $20k) ... at the peak: $130k. You can look this up on the Pasco property appraiser's website very easily if you question it.

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I live north of Tampa. We definitely are in a double-dip, and I expect that prices will bump along the bottom for a long, long time--but that doesn't tell the whole story. The other part of the story is the reluctance of banks to release (or even take onto their books) "shadow inventory". In short, the home next to mine was taken back by the bank over a year ago and so far no realty sign. Another, larger and more luxurious home in our neighborhood has been in litigation since '08, and the bank's efforts have been less than desultory ... the case simply isn't moving. Of course, the high end recovers last, so the bank is in no hurry to take this nonpeforming asset onto its books. I hear tales of homes in Holiday moving in the $30s when they would have been at least in the $160s a couple of years ago. And in Chelsea Meadows, a complex of identical townhomes in central Pasco county, a unit went last year for $9,500 (and you can buy 'em all day for $20k) ... at the peak: $130k. You can look this up on the Pasco property appraiser's website very easily if you question it.

Don't question you one iota, flacorp, I own properties in the Panhandle and south of you Lee/Collier Counties. Much of the same to report.
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A look at Japan's real estate market graph over the last 20 years indicates that we may scrape along the bottom for a long, long, long time.

 

You cannot even remotely compare Japan and the US in regards to population and housing needs as a result of.

 

How many illegal immigrants are in Japan currently?

 

How many LEGAL immigrants have become Japanese citizens in the last 20 years?

 

Do the research ... you will be amazed at the numbers or hint: (lack of).

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This is a very interesting thread full of great posters with very insightful comment and studied opinion.

 

I will say a couple of things ... very non-scientific in nature but born from living through the scenarios real time. Let me say that I am very sympathetic to ANYONE who is sitting in a house that is underwater in value compared to mortgage balance and I truly feel bad for you. I don't know that if I was in that place I wouldn't "strategically default" if for no other reason than to try to bring the lender to reality along with myself. If you are in this situation and I don't care how you got there ... it sucks.

 

I have heard all these same dire predicitons of doom and gloom end of the world proclamations after every stock market crash/correction/decline, the S&L debacle in the 80's, the recession of the late 70's early 80's (with interest rates in the 15% range), when "gold" crashed, after the dot com implosion, 9/11, etc etc etc etc etc.

 

And believe me .... SURE I KNOW that "This time it's different" .... until it turns out that it's NOT.

 

To the younger folks in here: IF you are comtemplating buying a house/real estate/rentals/land/whatever ..... Start counting threads like this one, count articles online and headlines on the "financial" magazines on the news stands, count the lead off stories on the evening news and when in your opinion it reaches a crescendo ... BUY. The "herd" is NEVER right. NEVER. The "herd" always ends up in the trucks heading to the slaughterhouse. The one or two who dart off into the woods live to roam another day. The time to buy is when the blood in the streets is deepest. Is housing there yet? Maybe we go down another 10% or so in 11 but it sure seems we are close to the bottom. A lot of blood-in-the-streets investors are saying 2012 ... they usually like to see some small upticks first.

 

Threads, articles, "studies", papers, statistics with doom and gloom propensities are ALWAYS LEAD indicators.....of a bottom. Look no further in the past than March 2009 when "gurus" like Suze Orman and Jim Cramer and the Evening News pundits were all proclaiming the "end of wall street forever" and telling you to put what's left of your investments into "cash' paying nothing. Had you placed CASH into the market at that point you'd be up amost 90% now on the Dow let alone where the small cap markets are . Talk about a contrary strategy .... anyone who calmly rode out the decline and added more along the way as usual is now UP over all .... and frankly too many older folks are too heavily invested in risk assets and should use this recovery to re-allocate to a more appropriate portfolio mix.

 

As far as housing in the USA goes .....

 

There are STILL people getting married and having kids ... or NOT getting married and still having kids. Kids grow up and sooner or later live somewhere.

There are STILL people who would literally saw off an appendage to get into this country. They have to live somewhere. Along with their families who soon join them

There are STILL FAR FAR FAR more people in this country who own their homes OUTRIGHT than those WITH a mortgage.

There are STILL FAR more people WORKING than not ... a percentage of whom will ALWAYS be moving somewhere.

There are STILL FAR more pople retiring WITH sufficient assets than not who will be buying new/smaller/nicer/warmer location whatever homes.

There are STILL working families who are on the hunt for the "great American vacation home" at the shore/mountains/woods/wherever.

 

New construction has ground literally to a halt. DO THE MATH. It won't take too many years of effectively ZERO new construction, MORE people, and a couple of recovery years to stabilize the housing market. THEN what do you think happens? Panic to the UPSIDE. With mortgage rates to follow ....

 

Ask yourselves WHY are German/Dutch/Swiss/Eastern European investors buying up waterfront/waterview distressed properties in Florida ... LOOK at what passes for their own "ocean front" or go try to find a home on the Mediterranean somewhere to buy. You will be STUNNED at the pricing.

 

Bottom line is that IF you are looking and you see something that you LOVE .... bid 15% under asking and buy the house. No one rings a bell at the bottom or blows a horn at the top .... but we are waaaaaaaaaaaaaaaay closer to the bottom than the top.

 

Those who bet against the USA economy long term and the "free-est" large country capitalistic society on the earth do so at their own financial peril.

 

What was before will be again.

 

 

 

 

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The survey of home builders predicts they will build 575k units in '11 and sell 400k. Which leaves 175k of spec inventory. Doesn't seem like a recipe for a price recovery except in a few hot markets.

 

I do agree that there will be an inflection point one day. That day is not today. Having said that, if you shop for a property priced at a sharp discount to its neighbors and either you plan to live in it or it will cash flow quite well as a rental, go ahead and buy it.

 

Flipping won't be in the cards again for a few more years, except in those very specific markets where properties remain hot.

 

P.S. - The waterfront near me IS cheap, but mainly because the insurance has become prohibitive.

Edited by flacorps
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  • 2 weeks later...

This is really an opportunity to upgrade the housing stock in this country. If it has lead paint, friable asbestos, mold, is a dilapidated trailer or shotgun shack or row house, it ought to get bulldozed. Obsolete or hazardous habitations ought to be ruthlessly eliminated in favor of programs that move people to decent dwellings. If we eliminated crap people shouldn't be living in anyway, it would go a long way toward eliminating the oversupply.

 

We poured sand in the engines of the clunkers, didn't we?

 

Yup. Getting rid of oversupply is one major thing that would help. If municipalities own houses that are unsafe, they usually bulldoze them anyway. However, there are literally THOUSANDS of homes listed in Detroit (for example) under $5000. If the city (or State of Michigan) ponied up the funds to buy those homes and just tear them down, it would reduce supply AND get rid of the crap on the market.

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Another shoe has dropped, potentially bigger than the robosigning scandal, but nobody has really caught on yet:

 

Y’know how in national elections its always “Florida, Florida, Florida”? Well fasten your seatbelts because banks are about to be big losers in the shadow inventory waiting game. Per a new ruling, HOAs can spur timely sales.

 

http://www.poliakoffoncondohoaliving.com/2010/12/critically-important-florida-foreclosure-ruling-finally-gives-condos-and-hoas-weapon-against-banks/

 

 

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If the city (or State of Michigan) ponied up the funds to buy those homes and just tear them down, it would reduce supply AND get rid of the crap on the market.

 

 

problem is, Detroit and the entire state of MI are beyond broke. Wayne county refuses to take these homes through a delinquent tax sale. Sorta like hot potato, lol. Nobody wants to pay to maintain or raze them.

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This is a very interesting thread full of great posters with very insightful comment and studied opinion.

 

I will say a couple of things ... very non-scientific in nature but born from living through the scenarios real time. Let me say that I am very sympathetic to ANYONE who is sitting in a house that is underwater in value compared to mortgage balance and I truly feel bad for you. I don't know that if I was in that place I wouldn't "strategically default" if for no other reason than to try to bring the lender to reality along with myself. If you are in this situation and I don't care how you got there ... it sucks.

 

I have heard all these same dire predicitons of doom and gloom end of the world proclamations after every stock market crash/correction/decline, the S&L debacle in the 80's, the recession of the late 70's early 80's (with interest rates in the 15% range), when "gold" crashed, after the dot com implosion, 9/11, etc etc etc etc etc.

 

And believe me .... SURE I KNOW that "This time it's different" .... until it turns out that it's NOT.

 

To the younger folks in here: IF you are comtemplating buying a house/real estate/rentals/land/whatever ..... Start counting threads like this one, count articles online and headlines on the "financial" magazines on the news stands, count the lead off stories on the evening news and when in your opinion it reaches a crescendo ... BUY. The "herd" is NEVER right. NEVER. The "herd" always ends up in the trucks heading to the slaughterhouse. The one or two who dart off into the woods live to roam another day. The time to buy is when the blood in the streets is deepest. Is housing there yet? Maybe we go down another 10% or so in 11 but it sure seems we are close to the bottom. A lot of blood-in-the-streets investors are saying 2012 ... they usually like to see some small upticks first.

 

Threads, articles, "studies", papers, statistics with doom and gloom propensities are ALWAYS LEAD indicators.....of a bottom. Look no further in the past than March 2009 when "gurus" like Suze Orman and Jim Cramer and the Evening News pundits were all proclaiming the "end of wall street forever" and telling you to put what's left of your investments into "cash' paying nothing. Had you placed CASH into the market at that point you'd be up amost 90% now on the Dow let alone where the small cap markets are . Talk about a contrary strategy .... anyone who calmly rode out the decline and added more along the way as usual is now UP over all .... and frankly too many older folks are too heavily invested in risk assets and should use this recovery to re-allocate to a more appropriate portfolio mix.

 

As far as housing in the USA goes .....

 

There are STILL people getting married and having kids ... or NOT getting married and still having kids. Kids grow up and sooner or later live somewhere.

There are STILL people who would literally saw off an appendage to get into this country. They have to live somewhere. Along with their families who soon join them

There are STILL FAR FAR FAR more people in this country who own their homes OUTRIGHT than those WITH a mortgage.

There are STILL FAR more people WORKING than not ... a percentage of whom will ALWAYS be moving somewhere.

There are STILL FAR more pople retiring WITH sufficient assets than not who will be buying new/smaller/nicer/warmer location whatever homes.

There are STILL working families who are on the hunt for the "great American vacation home" at the shore/mountains/woods/wherever.

 

New construction has ground literally to a halt. DO THE MATH. It won't take too many years of effectively ZERO new construction, MORE people, and a couple of recovery years to stabilize the housing market. THEN what do you think happens? Panic to the UPSIDE. With mortgage rates to follow ....

 

Ask yourselves WHY are German/Dutch/Swiss/Eastern European investors buying up waterfront/waterview distressed properties in Florida ... LOOK at what passes for their own "ocean front" or go try to find a home on the Mediterranean somewhere to buy. You will be STUNNED at the pricing.

 

Bottom line is that IF you are looking and you see something that you LOVE .... bid 15% under asking and buy the house. No one rings a bell at the bottom or blows a horn at the top .... but we are waaaaaaaaaaaaaaaay closer to the bottom than the top.

 

Those who bet against the USA economy long term and the "free-est" large country capitalistic society on the earth do so at their own financial peril.

 

What was before will be again.

 

 

I agree with this, everyone loves doom and gloom. People love to watch local news and talk about when there is threat of snow, storms and such.. just when dow was at 6k people love to say its gonna get worse and worse...people I believe mostly do not like to look at things in a positive light, it doesn't sell!

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The survey of home builders predicts they will build 575k units in '11 and sell 400k. Which leaves 175k of spec inventory. Doesn't seem like a recipe for a price recovery except in a few hot markets.

 

I do agree that there will be an inflection point one day. That day is not today. Having said that, if you shop for a property priced at a sharp discount to its neighbors and either you plan to live in it or it will cash flow quite well as a rental, go ahead and buy it.

 

Flipping won't be in the cards again for a few more years, except in those very specific markets where properties remain hot.

 

P.S. - The waterfront near me IS cheap, but mainly because the insurance has become prohibitive.

 

How cheap is cheap? swfl near gulf still holds value pretty well. It seems crazy that people looking at beach homes are worried about insurance.

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How cheap is cheap? swfl near gulf still holds value pretty well. It seems crazy that people looking at beach homes are worried about insurance.

 

Sanibel is vastly different than New Port Richey.

 

US 19 in that area has become a blighted mess of vacant or underutilized shopping centers, the neighborhoods on the West side of 19 are getting quite rough, and the homes on the canals are fetching as little as $130k but with prohibitive insurance costs.

 

http://www.zillow.com/homes/46396526_zpid/

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... everyone loves doom and gloom. People love to watch local news and talk about when there is threat of snow, storms and such.. just when dow was at 6k people love to say its gonna get worse and worse...people I believe mostly do not like to look at things in a positive light, it doesn't sell!

 

Here's something positive:

http://www.zerohedge.com/article/guest-post-kubler-ross-model-denial-acceptance-and-renewal-america

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... everyone loves doom and gloom. People love to watch local news and talk about when there is threat of snow, storms and such.. just when dow was at 6k people love to say its gonna get worse and worse...people I believe mostly do not like to look at things in a positive light, it doesn't sell!

 

Here's something positive:

http://www.zerohedge.com/article/guest-post-kubler-ross-model-denial-acceptance-and-renewal-america

 

 

that wasn't positive :blink:

 

I will be the first to admit I am not extremely educated with all this. I just believe you bet on things that are beaten down, but good basis to come back, Thats how I invest in the market and real estate. So far has treated me well, but you never know what the future holds. All aspects of life are a gamble everyday health, wealth, relationships.

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  • 2 years later...

Just an update: The house next door has finally gone on the market. The main thing slowing down the process was that the former owner had deeded his home in lieu of foreclosure not to the bank itself but to the bank's trust, with the foreclosure mill as trustee. That wouldn't have been a problem, except that firm (Ben Ezra & Katz) went under, leaving the trust in a quandary. The bank consequently felt the shortest route to a solution was to keep the foreclosure action going, which took them some time to process. Apparently they finally got a deed.

 

The other home I mentioned is 21527 Wilderness Lake Blvd., and it is not on the market, and in fact the foreclosure got dismissed for lack of prosecution. There is another home in the same situation on Stoneleigh. I know of 9 empty foreclosed homes in my community and I have NOT done anything like a thorough canvassing.

 

http://www.mapbuilder.net/users/flacorps/105883

 

This crisis is far from over, regardless of what the press leads you to believe.

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