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Patrick's Interview on PeakProsperity.com


By Patrick   Follow   Fri, 2 Nov 2012, 1:47pm PDT   1,289 views   5 comments
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But recently there have been growing reports in the media of a housing "recovery". So we've invited Patrick Killelea, founder of the popular housing site Patrick.net and author of The Housing Trap: How Buyers Are Captured and Abused and How to Defend Yourself, to clarify the situation.

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curious2   Fri, 2 Nov 2012, 2:03pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 1

Good point that the hedge funds have excess capital and don't need to borrow, but even so I think they prefer to use Other People's Money and limited liability structures. That way, the upside is multiplied by leverage, while the downside becomes mostly someone else's problem. And since Bubbles Ben's stated policy is to prop up housing prices, specifically by promoting debt, he seems more than happy to cooperate in a national leveraged buy-up.

Patrick   Fri, 2 Nov 2012, 2:22pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 2

Ben sure does want to promote debt and highly leveraged buying. The problem for him is that not everyone thinks that's such a good idea anymore. They've seen that they really can be on the hook for that debt when prices fall.

toothfairy   Fri, 2 Nov 2012, 2:59pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 3

Great interview you made some good points there.

Interesting discussion about how outside money from the dot com bubble caused inflation in housing prices.

Also I totally agree with your stance on having more freedom by not being saddled with debt. But my solution to that is buying a house thats mostly paid off. Paying rent every month is not much different from being saddled with debt unless you have other investments that pays your rent for you.

upisdown   Sun, 4 Nov 2012, 11:53pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 4

Patrick,

That was an excellent interview that covered a lot of areas. You gave some good examples and briefly touched on one area that I thought needed some more info about. The lifecycle costs for any given house vary but are very important. I know that you don't experience the extreme weather changes in your location, but elsewhere it's an important issue. People that are going to to buy any house should also know what kind of costs that they might/will incur in living in it, especially because most buyers are tapped after they bought and can't afford to upgrade or improve the structure.
Anyway, just a thought.

upisdown   Sun, 4 Nov 2012, 11:58pm PST   Share   Quote   Permalink   Like   Dislike     Comment 5

Also, I noticed that you didn't point out the fact that current owners were renting and saving before they were able to buy.

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