| Author |
Message
|
| gugaplex |
 Posted: Wed Jul 05, 2006 11:40 am Post subject: Caution: Real Estate May SLOOOW! |
 |
|
Investing Manager
|
I would be careful what real estate investments you make in today's (and tomorrow's) markets. Perhaps the safer place to invest would be in retirement spots such that are NOT in Florida. The real estate market is losing steam in the hot markets such as California, New Jersey, New York, etc. I would avoid these markets like the plague.
As for the over-all national market, I expect price increases to taper-off and perhaps start to gradually decline at the turn of the decade... |
|
| Back to top |
|
 |
| t-bag |
| Posted: Wed Jul 05, 2006 12:03 pm Post subject: |
|
|
Investing Sr. Associate
|
Real estate has been slowing for the past couple months, I'm just glad it didn't burst like many predicted. My local is a good example of the national scene.
In Palm Beach County the median home price went from an all time high of 421k in november 05 down to 391k currently, which is still outrageous. The market was loosing pretty heavily until May but has corrected a litte since, the national market did approxametly the same thing. Fortunatly It didn't burst like the doomsday "experts" predicted but it did slow significantly. Doing a quick search of the MLS will show you how much it has slowed. There are more homes listed on MLS than back in November and they are on MLS for months now instead of days, which in my opinion is better.
On the flip side the condo market is still climbing, the median condo price in Palm Beach County has climbed to 218k+. The gains have slowed but they are still in the positive as apposed to the home market. I speculate this is because there still is so much condo activity currently going on and because they are attainable to those who can't afford homes at current prices, myself included. In the city limits of Miami alone there are 65,000 new condos under construction or in the permit process, which leads me to believe the condo market will follow the housing market in due time.
Also another kick in the pants for the condo market (as well as the rental market, South florida having one of the lowest vacancy rates in the nation) is the fact that many appartment complex's have been bought out by huge publically traded companies such as Tarragon or American Invsco who are kicking out the residents, such as myself, and converting them to condos. Thus flooding the market with even more condos and less apartments, and less places for blue collar workers and newly minted professionals to live   But the more professionals I talk to the more it seems these companies have jumped onto a sinking ship. |
|
| Back to top |
|
|
| Grimreaper |
| Posted: Wed Jul 05, 2006 12:28 pm Post subject: |
|
|
CFO
|
R.E. prices aren't going to correct the same way stock prices did during 2001. You won't have the house at 21 Jump St, Anywhere, U.S.A. lose 50% of its value in one day like DIGL did during the tech bubble correction.  Right now prices are still hanging in there because sellers don't believe home prices can possibly lose value. It's just like any other market though....controlled by supply and demand. Demand was curtailed by affordability. Supply was increased by sellers who thought they would try and bank their 100% gain they were handed in the past 3 years. Now you have a glut of stubborn sellers and no buyers. The fokes that will be forced to sell soon will begin the adjustment phase in pricing. The final wave will be set by the banks who will be dumping large inventories of homes they were forced to foreclose on. That won't take place for at least 2 years I'm wreckin. But keep following your local sales reports. It won't be long before you will see steady year over year declines in home prices as the months move forward. Yet one more great investment opportunity that will be presented to those who are patient at the cost of those who had to have it at any price! Gotta luvit! I sho do!  |
|
| Back to top |
|
|
| t-bag |
| Posted: Wed Jul 05, 2006 12:52 pm Post subject: |
|
|
Investing Sr. Associate
|
| Grimreaper wrote: |
R.E. prices aren't going to correct the same way stock prices did during 2001. You won't have the house at 21 Jump St, Anywhere, U.S.A. lose 50% of its value in one day like DIGL did during the tech bubble correction... |
Fortunatly housing corrections aren't as wild as stocks. I think the world would end, or at least default, if house values suddenly droped 50%. The forclosure market is already picking up from all the people that bought in last year with all those rediculous financing terms. The place I live now wanted me to use some very fancy footwork to get this apartment, agghm, sorry condo and I'm glad I didn't. But these forclosures which I think will continue will provide many future opportunities....
| Grimreaper wrote: |
.... Yet one more great investment opportunity that will be presented to those who are patient at the cost of those who had to have it at any price! Gotta luvit! I sho do! |
Absolutly, I'm glad I did REI in '04 but I still keep my eyes open, because the opportunitys are abound. Just now not every Joe Blow can make $100k in a week signing a couple papers. |
|
| Back to top |
|
|
| Grimreaper |
| Posted: Wed Jul 05, 2006 1:19 pm Post subject: |
|
|
CFO
|
| I think the real opportunities will start coming along within 1 year or so. If you think about it logically, the person who bought a home in 2001 paid 2001 prices which were (in my area) 50% lower than current prices. So the bank carrying that first mortgage only needs to be made whole on a 2001 mortgage! In many cases the homeowner went and took out a second mortgage or a line of credit against the "spread" betwixt the first mortgage and the "fantasy" equity. The lenders that lent that money are secondary lenders in many cases and are in a position where they will have to bid against the first lender at the foreclosure sale or their loan will be wiped out in the foreclosure process....unless they foreclose as the second mortgage holder first. You are going to see many secondary lenders go defunct in the next several years and as is always the case....the bad debt will be wiped out when those loans get wiped clean from the books. That's the way things work in America. Bad debt gets eliminated, companies that make bad loans get eliminated, the whole process gets started all over again. Most of the best deals will be had by cash buyers....unless you are lucky enough to find somebody that is in the foreclosure process on a first mortgage and you can work directly with the borrower and the lender at the same time. I suspect a company like LEND will go defunct and any properties they are holding when they go defunct will be liquidated through something similar to the Resolution Trust Company that was setup by da govmint back in the 1980's when a similar speculative bubble in R.E. (caused by a boom in oil interestingly enough) materialized. Should be fun! |
|
| Back to top |
|
|
| gugaplex |
| Posted: Thu Jul 06, 2006 12:51 pm Post subject: |
|
|
Investing Manager
|
| I agree that R.E. prices do not "correct" like stocks do, however it is all relative. If stocks look ripe for a correction you can sell at the click of a mouse, whilst selling real estate can take months (or years in an extreme situation), while the prices are dropping. |
|
| Back to top |
|
|
| Grimreaper |
| Posted: Wed Jul 26, 2006 3:28 am Post subject: |
|
|
CFO
|
Based on yesterday's existing home sales report I think it is a purty good bet that the .9% increase in home prices will be the last monthly rise in prices we see for awhile. I guess there is sumbody out there that doesn't quite understand the laws of supply n demand but with a 39% increase in home inventories over last year in June...and sales pace that would take 6.8 months to clear all current inventory....maybe it's time to start doing what those fokes who was buying last June should have done before buying....THINK ABOUT IT! Home prices in 3 of 4 sections of the country have already begun dropping. Down in da south, midwest...steady out west. Looks like most o'da morons live in the northeast! Sales were down 9.8% year over year but prices were up 7.2%!  |
|
| Back to top |
|
|
| gugaplex |
| Posted: Fri Jul 28, 2006 1:52 am Post subject: |
|
|
Investing Manager
|
| I'm adding home-builder stocks to my long-term radar. Looking for a gradual decline (continuation) in their stocks that will eventually make them extremely under-valued. This will probably take at least 6-12 months... |
|
| Back to top |
|
|
| Grimreaper |
| Posted: Fri Jul 28, 2006 2:45 am Post subject: |
|
|
CFO
|
| gugaplex wrote: | | I'm adding home-builder stocks to my long-term radar. Looking for a gradual decline (continuation) in their stocks that will eventually make them extremely under-valued. This will probably take at least 6-12 months... |
Here's one to watch if a Him or Herricane hits, CAV. Methinks it's a mobile home builder. They always drive those up after a majer hurricane. Right now da chawt of CAV be sayin that there will be no storms in the south. I'm hoping that if there is 1 it takes out da Hamptons. Of course those fokes would never settle for temporary housing in a mobile home. Looks like CAV will eventually break balow $3. I know Warren Buffett took a stake in this stock but I'm not sure if he still owns any.  |
|
| Back to top |
|
|
| Grimreaper |
| Posted: Sat Aug 05, 2006 10:10 am Post subject: |
|
|
CFO
|
| Ahhhhh, California, land of the terminally stoopid where keeping up wit da Jones's (even if it means your ultimate financial demise) carries more weight than in any udder state. Data Quick reports that 20275 default notices were sent out to Ca homeowners in the 2nd quarter...up 27% from 1 year ago and 10.5% more than in the first quarter. "Honey! I told ya we couldn't afford this $650000 home that was actually worth $250000 when we bought it but noooooooo......you didn't wanna lissen! Well I guess your plan to use the home's equity to buy that new Mercedes in a year when this place was s'psed ta be werth $800000 like you said it would ain't gonna happen now....is it?!!" |
|
| Back to top |
|
|
|
|
 |
| gugaplex |
| Posted: Mon Aug 07, 2006 2:10 pm Post subject: |
|
|
Investing Manager
|
The frothy markets will get hit first, but not significantly. More stable markets will have reduced yearly gains, but nonetheless show 3-4% yearly returns. The problem is that the returns will barely out-pace inflation, thereby discouraging further "investment" demand for real estate. This drop in real estate investment will pressure the general market, but not in such a way that we have a crash.
However, there may be a crash in real estate prices in 6-7 years from now, as the Baby-Boomers start down-sizing their homes while they enter retirement (especially considering that Baby-Boomers represent 1/3 Americans). |
|
| Back to top |
|
|
| Grimreaper |
| Posted: Mon Aug 07, 2006 2:33 pm Post subject: |
|
|
CFO
|
| gugaplex wrote: | The frothy markets will get hit first, but not significantly. More stable markets will have reduced yearly gains, but nonetheless show 3-4% yearly returns. The problem is that the returns will barely out-pace inflation, thereby discouraging further "investment" demand for real estate. This drop in real estate investment will pressure the general market, but not in such a way that we have a crash.
However, there may be a crash in real estate prices in 6-7 years from now, as the Baby-Boomers start down-sizing their homes while they enter retirement (especially considering that Baby-Boomers represent 1/3 Americans). |
Yeah....maybe we should all just invest in plain ole land like Cramer and his stoopid "land banks". Land has appreciated an average of 1.5% per year over the long haul....but here in my area lots that sold for $3000-$5000 about 3 years ago (with no takers) still have owners advertising them for $35000+ cause they haven't realized they are complete idiots yet. Keep watchin those existing home sales reports....the very next one will show an overall decline in home prices year over year....that'd be the Aug sales report coming out in early Sept. It'll only get worse from there. 
BTW, the baby boomers have all moved down here to a place called The Villages which is run by a big nationally known home builder. The land used to build those homes on was bought up for rediculous prices without thought whatsoever by the homebuilder. Why? because the builder knew he could take a $5000 lot, pay $35000 for it, build a home that cost $80000 to build and sell it to your baby boomer for $200K+. I doubt they'll be downsizing....they are stuck with their overpriced home forever. May as well pass it on down to their kids n grandkids....especially in developments that catered to the idiotic "baby boomers" with more $$$ than sense. |
|
| Back to top |
|
|
| Grimreaper |
| Posted: Tue Aug 15, 2006 8:15 am Post subject: |
|
|
CFO
|
| Oh Boo hoo! Robert Toll, da CEO from homebuilder TOL is now complaining that mawket conditions are the worst he has seen in 40 years. Well that's what ya git for being a greedy sumbeitch a$$hole! Of course Robert Toll is probably just making his feelings known through CNBC (the voice o'da sheisters) just so he can get his company's stock price down anudder 50% so he can reload....after he sold a bunch of stock into the Cramer induced frezy in TOL. If you remember, when the Cramer's a Mad Monkey show first aired TOL was one of his "must own" stocks....right up there at the 52 week high! Check the archives and you'll see. Cramer's fav-o-rite sector right cheeya right now? Da energy pigs! Should I play taps now....or wait until you are down 50% on yer oilpig play and Cramer is sayin, "Well, you should have been selling at the high....bulls make muny, bears make muny, hawgs get slaughtered!" Thanks Jim! |
|
| Back to top |
|
|
| poornewb |
| Posted: Tue Aug 15, 2006 8:54 am Post subject: |
|
|
Investing Manager
|
So if there is going to be a glut of everything once the baby boomers start down sizeing and kicking the bucket, does that mean they didnt have any kids?? Isnt the average kids per household over 2? if so there will be plenty of people moving into houses and taking up the space of all those old and ripened baby boomers.
People act like when all the baby boomers kick the bucket were going to have less people around??? WRONG!! |
|
| Back to top |
|
|
| Grimreaper |
| Posted: Tue Aug 15, 2006 8:59 am Post subject: |
|
|
CFO
|
| poornewb wrote: | So if there is going to be a glut of everything once the baby boomers start down sizeing and kicking the bucket, does that mean they didnt have any kids?? Isnt the average kids per household over 2? if so there will be plenty of people moving into houses and taking up the space of all those old and ripened baby boomers.
People act like when all the baby boomers kick the bucket were going to have less people around??? WRONG!! |
We'll have wetbacks moving into the U.S. from Mex illegally. They will all work in the construction trades, do shoddy repair work, overcharge, and file leans against the baby boomers who refuse to pay...eventually taking da home in foreclosure. That demand will take up da slack of the baby boomers leaving home for Fla. |
|
| Back to top |
|
|
|
|
stock market game on the web. At eInvesting you compete for monthly cash prizes while you interact, make virtual dollars, purchase items, and trade in the realistic stock market simulator. We make investing FUN!
