patrick.net

There is a severe shortage of homes, especially since very little was built in the last 6 years. People from all over the world are desperate to buy American real estate. Interest rates are still too damn low.
We are in a boom unlike anything you have ever seen.

Strategist says

People from all over the world are desperate to buy American real estate.

Just yesterday, I was nearly trampled by a stampede of buyers' brokers representing Chindian billionaires who wanted a 1br in Bayview (gangland). Psy has popularized Gangnam Style so effectively that everyone on earth wants in on that action. Secretaries in Saigon dream of someday retiring to Bayview, where sweet staccato gunfire can lull their grandchildren to sleep.

curious2 says

Strategist says

People from all over the world are desperate to buy American real estate.

Just yesterday, I was nearly trampled by a stampede of buyers' brokers representing Chindian billionaires who wanted a 1br in Bayview (gangland). Psy has popularized Gangnam Style so effectively that everyone on earth wants in on that action. Secretaries in Saigon dream of someday retiring to Bayview, where sweet staccato gunfire can lull their grandchildren to sleep.

Locations where every one want to go to will always have ever rising real estate prices. Places like Detroit where no one wants to be in will always have declining real estate prices.

Strategist says

Detroit

...was, for many years, a place where many people wanted to go. That's why they built so many nice houses there. Then, things changed, and people didn't want to go there anymore. The lesson: sometimes locations where everyone wants to go, can become places nobody wants to go, and then rising prices become falling prices. This lesson is worth remembering when people tell you real estate can only go up, that it doesn't matter what price you pay, because someone else will surely pay more, etc. Real estate has tremendous inherent risk because you can't control what will happen in the area, and you can't pick up your real estate and leave. If a major local employer relocates elsewhere, and the "drug war" turns your town into a killing field, the bottom can fall out of your investment.

curious2 says

Strategist says

Detroit

...was, for many years, a place where many people wanted to go. That's why they built so many nice houses there. Then, things changed, and people didn't want to go there anymore. The lesson: sometimes locations where everyone wants to go, can become places nobody wants to go, and then rising prices become falling prices. This lesson is worth remembering when people tell you real estate can only go up, that it doesn't matter what price you pay, because someone else will surely pay more, etc. Real estate has tremendous inherent risk because you can't control what will happen in the area, and you can't pick up your real estate and leave. If a major local employer relocates elsewhere, and the "drug war" turns your town into a killing field, the bottom can fall out of your investment.

You are right, desirable places can turn around just like fashion.
Yet, everyone wants to come to America, especially to California. It's been like that for a long time, and does not look like it's ending anytime soon.
How many people in California who complain about high real estate prices are willing to settle down in Detroit? I don't know any.

This time around, however, hedge funds & private investment trusts are fueling up to 40% of the purchases. The idea being is that housing has joined the world of futures trading & that's got the word *disaster*, written all over it.

It doesn't take much for an elephant stampede of traders, pushing the sell button around the same time.

Strategist says

Yet, everyone wants to come to America, especially to California. It's been like that for a long time, and does not look like it's ending anytime soon.

How many people in California who complain about high real estate prices are willing to settle down in Detroit? I don't know any.

so where are the Californians leaving for...

yes, you could see Californians leave for Detroit, what do you think Santa Clara - San Jose looked liked back in the day ? Certainly were not the Urbanite Gucci shoes wearing crowd.... far from it !

Throw out every Liberal govt worker out of the city.. and bring in some Business folks..
see what happens...

Strategist says

There is a severe shortage of homes, especially since very little was built in the last 6 years. People from all over the world are desperate to buy American real estate. Interest rates are still too damn low.

We are in a boom unlike anything you have ever seen.

You are leveraging yourself like crazy and buying anything you can then right??? hahah

Strategist says

How many people in California who complain about high real estate prices are willing to settle down in Detroit? I don't know any.

maybe not detroit, but to texas, nevada, washington, oregon, etc, etc... yes

http://www.nbclosangeles.com/news/local/Californias-Population-Moving-Out-182914961.html

http://www.foxnews.com/us/2012/09/24/residents-leave-california-in-droves-over-last-two-decades-study-finds/

curious2 says

Strategist says

People from all over the world are desperate to buy American real estate.

Just yesterday, I was nearly trampled by a stampede of buyers' brokers representing Chindian billionaires who wanted a 1br in Bayview (gangland). Psy has popularized Gangnam Style so effectively that everyone on earth wants in on that action. Secretaries in Saigon dream of someday retiring to Bayview, where sweet staccato gunfire can lull their grandchildren to sleep.

Bayview, San Francisco?

mell says

Bayview, San Francisco?

Yes

curious2 says

mell says

Bayview, San Francisco?

Yes

That's just nuts, gentrification or not, this is still a bad hood. There's hope though cause Asians usually don't fuck around when defending their families and businesses so if they start colonizing bayview they could turn it around ;)

Strategist says

There is a severe shortage of homes, especially since very little was built in the last 6 years. People from all over the world are desperate to buy American real estate.

Wrong. There is NO shortage of housing units (e.g. empty and completely sold cities in China; empty houses in suburban; vacant new rental buildings). There is just damn high demand on housing as investment or inflation shield vehicle. Real Estate becomes overrated as investment vehicle. Personally I don’t know any passive investment with so high holding costs. Don’t mix it with buy to rent, which when purchased for right price and run professionally, is a business.

curious2 says

Just yesterday, I was nearly trampled by a stampede of buyers' brokers representing Chindian billionaires who wanted a 1br in Bayview (gangland). Psy has popularized Gangnam Style so effectively that everyone on earth wants in on that action. Secretaries in Saigon dream of someday retiring to Bayview, where sweet staccato gunfire can lull their grandchildren to sleep.

You have no idea what Gangnam style is. Its not "Gangland" as you imply... Rather Gangnam is an exclusive area in Korea where the elite and rich live and play... exactly the opposite of what you suggest.

http://en.wikipedia.org/wiki/Gangnam_District

furthermore, i highly doubt Chinese BILLIONAIRES are stampeding to buy 1br in Bayview... you did say BILLIONAIRES right? Next time just leave it at MILLIONAIRES, it sounds more believable..

REpro says

There is NO shortage of housing units (e.g. empty and completely sold cities in China; empty houses in suburban; vacant new rental buildings)

the empty cities are in BFE and were stimulus / "pork" spending projects

I haven't been closer to China than Seoul but given their population situation I suspect housing is incredibly constricted in all high-wage areas.

http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20130818000018&cid=1202

http://www.shanghaidaily.com/Business/real-estate/Shenzhen-hikes-down-payment-as-city-leads-home-price-rises/shdaily.shtml

As for the demographics:

shows things will tighten up for the next 10 years but then get better as the 1-child policy really starts biting.

Call it Crazy says

It's nice to go to a forum to escape from reality a while and read some delusional postings...

LOL!

thomaswong.1986 says

Throw out every Liberal govt worker out of the city.. and bring in some Business folks..

see what happens...

There are a lot of guys from Enron, Lehman, Bear Stearns, Arthur Andersen who might be looking for jobs.

Meccos says

Strategist says

There is a severe shortage of homes, especially since very little was built in the last 6 years. People from all over the world are desperate to buy American real estate. Interest rates are still too damn low.

We are in a boom unlike anything you have ever seen.

You are leveraging yourself like crazy and buying anything you can then right??? hahah

I did buy Spring 2012.
My regrets.....not having leveraged. I'll make up with the home builder stocks as they are about to take off.

turtledove says

thomaswong.1986 says

Throw out every Liberal govt worker out of the city.. and bring in some Business folks..

see what happens...

There are a lot of guys from Enron, Lehman, Bear Stearns, Arthur Andersen who might be looking for jobs.

In Detroit?
Not much to steal there you know.

Strategist says

In Detroit?

Not much to steal there you know.

Detroit just got $300M in federal assistance in September. So much pillaging, so little time.

Bubbabear says

bubble 2.0 can only end badly

Central banks will not let this end in deflation.

It could end in inflation.

turtledove says

Detroit just got $300M in federal assistance in September. So much pillaging, so little time.

Need to get over that... Think of what Santa Clara / Sunnyvale was before it was
the Tech Central .. Silicon Valley. There are possibility... lets not kill the Goose
that will lay the Golden egg...

there are no other solutions... and dont expect anyone to
"bring home the beacon" forever... what else is there "turn your vote for FED money"

Enron, Lehman, Bear Stearns, Arthur Andersen... you already have the biggest robbers in Govt already. Thats the problem here.

http://www.youtube.com/embed/nXoidHdzNs8

Heraclitusstudent says

Bubbabear says

bubble 2.0 can only end badly

Central banks will not let this end in deflation.

It could end in inflation.

Real estate is the best way to hedge against inflation.

Strategist says

Real estate is the best way to hedge against inflation.

It's a joke, right?
We all know what leverage means.
When inflation is 10% and rates 15%, what leverage will there be?

Heraclitusstudent says

Strategist says

Real estate is the best way to hedge against inflation.

It's a joke, right?

We all know what leverage means.

When inflation is 10% and rates 15%, what leverage will there be?

No joke, just a fact.
Rates are 4% now. Lock em in and pray for inflation. If your prayers are answered it will feel like getting a home for free.

Strategist says

Real estate is the best way to hedge against inflation.

not very liquid, not easy to offload, duration of holding period, and carries high costs... maintenance, tax, and other payments.

you may be better off buying securities ...that hedge against inflation.

thomaswong.1986 says

Strategist says

Real estate is the best way to hedge against inflation.

not very liquid, not easy to offload, duration of holding period, and carries high costs... maintenance, tax, and other payments.

you may be better off buying securities ...that hedge against inflation.

Securities don't do well in a high inflation environment. Trust me on this. If you expect inflation, real estate is the only way to go.
Real Estate as it stands now is so undervalued, it can only go up.

Strategist says

Rates are 4% now. Lock em in and pray for inflation. If your prayers are answered it will feel like getting a home for free.

Leverage! What is gained on the mortgage will be lost in equity.

Inflation would mean the end of the current macro background. A severe repricing of assets.

I think we need to start another Phoenix thread. When the market started moderating Roberto went into lull mode. He also was good at posting data on the Phoenix locale. Redfin shows a 27% increase in inventory for November (year over year) and a reduction in the number of home sold (down 25%). PPSF is finally starting to fall slightly (though it should due to seasonality).

Ducky said: Yes but Phoenix is soooooo not California.
Tell me about it. Late Nov. & Dec. closings in my hood have pretty crazy PPSF numbers. Feels a bit like winter 99/00, but maybe I'm just having flashbacks.
I did notice Phoenix seems to be about 6 months ahead of us, so hope springs eternal...