[trespam]

Just when you thought we had enough negativism:

Couple good collections of information on housing. Housing crash blog [link]. A page with links to housing crash articles. [link]. And a blog on the housing bubble. [link]. Read and weep.

[basketballjones]

Discussion about the housing bubble although negative are still useful. The multitude of warnings may tend to drown each other out, but the messages shouldn't be ignored.

[trespam]

$this->bbcode_second_pass_quote('basketballjones', 'D')iscussion about the housing bubble although negative are still useful. The multitude of warnings may tend to drown each other out, but the messages shouldn't be ignored.

[Pops]

Thanks Tre, just as I’ve been making optimistic posts this morning, lol!

One thing that struck me was that homebuilders reportedly are still increasing their starts. Of course in a market where the lot cost say, 50k to develop and the house costs say, 200k to build and the market stands at 500k prices need to fall 50% before they have a loss.

OTOH, someone buying at 500k with 5% down is in trouble when prices only fall that 5%.

The upshot is that the builders have no real incentive to keep the market up and in fact ultimately will exacerbate the glut of listing when prices ultimately fall and still make a profit.

[JLA]

$this->bbcode_second_pass_quote('Pops', 'T')hanks Tre, just as I’ve been making optimistic posts this morning, lol!

One thing that struck me was that homebuilders reportedly are still increasing their starts. Of course in a market where the lot cost say, 50k to develop and the house costs say, 200k to build and the market stands at 500k prices need to fall 50% before they have a loss.

OTOH, someone buying at 500k with 5% down is in trouble when prices only fall that 5%.

The upshot is that the builders have no real incentive to keep the market up and in fact ultimately will exacerbate the glut of listing when prices ultimately fall and still make a profit.

[Pops]

“No excess supplyâ€

[smiley]

I was talking with a constructor a while back. We were discussing the quality of newly built houses. My house has its 75th anniversary this year, that of my parents is 125 years old. I wondered whether the newly built houses could last that long.

To my amazement he said that the houses they are building now are designed for a lifetime of 30 years. In thirty years they either need major overhaul or they are going to fall apart. He argued that in thirty years these models would be out of fashion anyway and most probably will be replaced by new models.

A house as a fashion item, I still have problems wrapping my brain about that one.

Anyway by the looks of it our "excess supply" will have turned into a serious shortage in thirty years or so.

[Doly]

The truth is that new tech doesnt normally fit well in old houses. For example, in the future everybody is going to need very well insulated houses, to save as much as possible in heating. It's much easier to build an energy-efficient house than to adapt an old one to be energy-efficient.

[JLA]

[quote="Pops"]“No excess supplyâ€

[cube]

Does this mean I can't use the equity in my house as an ATM machine anymore?

I believe the "economic recovery" of today is just as much of an illusion as the "boom years" of the dot com era. Yes there's money changing hands but where is it coming from?

Some illusionary unsustainable bubble. But look on the brite side once this bubble pops we won't have to worry about anymore bubbles for the foreseeable future.

[shortonoil]

Want to know where the money is coming from? Take a look at the M3 money supply growth and compare it with the growth in GDP. Whola, instant money. Just like instant pudding, except just not as sticky!

[Pops]

I see what you are getting at JLA. And a scarcity of available rental housing on top of a wave of foreclosures would certainly add injury to insult.

According to this site http://www.prcdc.org/programs/housing04/housing04.html
“At 68.6 percent, the homeownership rate in the United States is at an all-time high.â€

[FatherOfTwo]

$this->bbcode_second_pass_quote('Doly', 'T')he truth is that new tech doesnt normally fit well in old houses. For example, in the future everybody is going to need very well insulated houses, to save as much as possible in heating. It's much easier to build an energy-efficient house than to adapt an old one to be energy-efficient.

[pea-jay]

From today's LATIMES.

Putting Stock in Properties

$this->bbcode_second_pass_quote('', '[')b]Putting Stock in Property
Echoing the dot-com boom, many middle- class investors are rushing into real estate.

By David Streitfeld, Times Staff Writer

SAN FRANCISCO — Chris Boome, an insurance agent in the suburb of Burlingame, doesn't want to work the rest of his life. Who does? But at 58, Boome knows he hasn't saved enough to retire.

So a few weeks ago, he revamped his retirement accounts. He sold most of the mutual fund shares and used the cash to buy an $83,500 chunk of land in the Nevada hills, a stretch of ground he had seen only in a photograph.

"This is more exciting than a mutual fund," Boome said. "It feels safer too. You buy a piece of dirt, you feel you'll always have a piece of dirt."

[Keith_McClary]

$this->bbcode_second_pass_quote('cube', '
')Some illusionary unsustainable bubble. But look on the brite side once this bubble pops we won't have to worry about anymore bubbles for the foreseeable future.

[Keith_McClary]

$this->bbcode_second_pass_quote('trespam', ' ') A page with links to housing crash articles. [link].

[hull3551]

I dunno, I see a strange (yet precarious) situation here. We see the economic news touting new home starts being so high. I think this number is meaningless, as the number of days a home stays listed on the market (which I see is inccreasing) carries more relevance. It's great that the manufacturers (incidentally trading at inflated industry P/E multiples) can continue to produce units and it looks all rosy on the surface, but there seems once the profitability of this overcapacity hits their quarterly earnings, then I think you'll see some correction. However, some of the manufacturers' margins on these homes are in excess of 100%, so it will take quite a correction before these companies are adversely affected.

I think continued credit tightening will be the lynch pin here: prospective buyers unable to afford the paytments due to higher rates, which will be the result of banks raising their rates due to the fed raising rates, and foreign investors begininning to shy away from government-back agency debt (such as FNMA and FHLMC).

[SD_Scott]

http://www.msnbc.msn.com/id/7720453/

[Leanan]

As well they should.

All the dot-com money has flowed into real estate. The exuberance is just as irrational. We've basically traded one bubble for another.

It's nuts. Everyone and their mother is speculating on real estate, buying houses and condos with the intent to "flip" them for a large profit. They're going to get burned, just as all those dot-com investors were. The only question is when.

[frankthetank]

A relative of mine bought a piece of land(hunting) in this area over a month ago for a good price(1500/acre). He sold it last week.

net profit:
$57,000

although the money is being turned over into ANOTHER piece of property ($2400/acre), therefore escaping capital gains.

Thats why people are so attracted to real estate.

I agree that it can't last forever.