patrick.net

The wave V of V of V in housing prices will come when the Ferangi starts speculating in earth real estates.

Between CRABS and 'Roid is Prime,' I'm laughing my ass off. Just brilliant. Thanks for the laughs, guys and girls...I need it after slamming my finger in the trunk of the car (don't ask) and spending tonight in the ER to get Xrays, a hole poked in my fingernail, a tetanus shot, and a bandaid.

Oh, and don't buy into all that 'Roid hype. I hear the asteroids are full of assholes driving oversized sport utility ships and living in gawdy McSpace Stations.

I want to go wherever the Klingons are. Warf is hot.

Jack, thanks for 'Roid is Prime! Hilarious :mrgreen:

And thanks to whomever axed "Dr. Doom" --Ya beat me to it!

Home'roids are going to be all the rage in the future. You just have to pay through the ass to get one.

Jamie, sorry to hear about the finger.........ouch. I had a tetanus shot from stepping on a rusty nail once, I think the shot hurt worse. I feel for you.

Btw, I got the house that I wanted to rent (yaaaa!)

I'm curious about what some of you think will happen with the stock market if the housing market goes flat or declines. Historically the stock market and the RE market move opposite eachother, so the simplistic view would say that stocks are likely to go up as it appears housing is on the decline. But as we all know there are other fingers in the pie so to speak and I wonder if things are going to be different this time. Any opinions would be greatly appreciated.

Any opinions would be greatly appreciated.

Ok, I must be tired, I'm going to get opinions anyway, right? I've been emailing people on craigslist trying to get boxes for moving today and keep saying things like "anything you have would be appreciated" so I guess I'm still in begging mode.

Hey, I'll ramble a bit then everyone can tell me how wrong I am. I think possibly there won't be any (or much) money for the stock market. If people are running negative savings, repeatedly depleting the equity in their homes, etc...then there may not be any money to invest anywhere (okay, so I know there'll always be people w/a lot of money...but I'm talking about joe-blow who didn't even consider investing much until the tech market bubble...when everyone over the age of 16 started buying stocks).

So, it might depend on how quickly people can sell before the RE bubble bursts (assuming it will). If it's a slow bust, then some % of people that make some money will look to the stock market to invest. If it's a rapid bust, then (relatively) suddenly, you'll have people selling at, or near to, a loss; and also people simply refusing to sell...but then they wouldn't be having extra $ for the stock market, either.
Now just to cover my ass I'll say it will fall somewhere in between.
Okay, now I'm bracing myself to hear the flaws in my "logic"...go easy, please!

SJ Jim

I think in many cases you'll be right. But my husband doesn't tend to do investments for the average Joe Blow, after all, those guys are usually living paycheck to paycheck. Most big investors are usually people who have enough money that they are not going to be affected by market changes as much as the leveraged homeowner who scrimped and saved to get in a home using the NAAVLP. So I'm wondering if there are enough of the "big" investors out there to move the market. I mean, are the people who are out there buying homes now the people who usually invest in the stock market?

Surfer-X coined the term. It means Non Amortized Anal Voodoo Loan Product.

Okay, for the sake of having nothing better to do, here's some numbers for s.san jose real estate:
41% of homes put on the market in July have sold.
So far in September, 138 new homes on the market compared to 437 in August (31.5%). Interestingly, in "luxury" neighborhoods, the numbers are 49 in Sep compared to 111 in Aug (47%); in middle class neighborhoods, the numbers are 89 compared to 326 (27%). We had a holiday weekend, back to school, etc., so I think the listing *might* increase in rate as the month goes on...of course it might not!
Oh, also, it seems the last 2-3 days have seen a slight converging of the 2 & 10 year bonds...going back to that yield curve reversion thing. Quite possibly the Katrina effect will end up being just a blip in the general trend of reversion. Funny thing is that different financial sites seem to show different yields, but the difference (btwn 2 & 10 yr) seems to be decreasing for all.

Is it National Association for the Advancement of Very Leveraged People?

I forgot to tell you, that's very clever.

As far as whether or not RE and stocks move opposite eachother, I'm deferring to another's expertise. One of my husband's partners has been in the stock business for over 25 years, he also owned RE in the past and has a lot of experience in both fields. He tells me that historically RE and stocks move opposite, and I have read other sources that corroborate that. I am willing to listen to this guy because he and his other (senior ) partner are two of the biggest brokers in N california. They have over a billion $$ in management. They are the biggest team in the N California complex and manage more than any other team in N California including the bay area. My husband was extreeeeeeeeeemely lucky to get on their team. I don't get the opportunity to talk to the guy often, but when I do I listen.

I think when I said reversion I *actually* meant inversion, re: yield curve. Chicken's done, time for dinner.

I’m curious about what some of you think will happen with the stock market if the housing market goes flat or declines. Historically the stock market and the RE market move opposite each other, so the simplistic view would say that stocks are likely to go up as it appears housing is on the decline.

Good question, and I'm afraid I don't have a pat answer for it. I'm nowhere close to being an expert on securities & the financial markets. Maybe you could ask Warren Buffett or his protege, Peter P? ;-)

As you say, one might expect things to pick up in the Dow or Nasdaq once the bloom is off the rose for RE. People need to have somewhere to put their investment/401K dollars, and current Treasury & corporate bond yields aren't exactly setting the world on fire, especially after factoring in inflation (if you consider "stealth" off-the-books inflation, they look even worse). However, the P/E ratio on the S&P 500, while way down from its 2000 peak is still (low 20s) above the historic average of around 15. Hard to say really.

Personally, I hold mostly domestic & international index mutual stock funds, plus index bond funds with mostly short-to-medium term Treasuries. As others pointed out above, index funds are a great passive way to diversify and limit costs at the same time. (*Not investment advice*)

SQT,
So, then, perhaps the "big" money would look to "safer", less volatile investments...or look more to overseas markets.

SQT,
So, then, perhaps the “big” money would look to “safer”, less volatile investments…or look more to overseas markets.

Perhaps. I don't have the "big" money unfortunately, so I just get to speculate. :)

Though I guess if there was any way to make an educated guess as to where the "big" money is likely to go, then the rest of us could take advantage of that knowlege. Here's hoping anyway.

By the way, honest stock brokers are worth their weight in gold because honest and decent ones are EXTREMELY rare. Even if the honest and good broker can’t advise clients in order to meet the index, many people like the concept of having a broker and it is 100 times better to have an honest one than the typical churning type. SactoQt, I bet your husband is a good broker, so don’t interpret my comments in a negative way.

No offense taken. Believe me, we've seen a lot (and I mean A LOT) of unscrupulous brokers in the last 10 years. In fact, my husband was afraid early in his career that he wouldn't last because he didn't fit the typical broker mold. Now it has worked in his favor because he has many very very loyal clients. Most of his business is done on referrals and fortunately, when someone likes their broker, they do send every friend and relative to do business with you. It really is a business about relationships, and all those brokers out there just churning business don't last, nor should they.

Hey SQT, sounds like a good broker! Reminds me of what you'd want in a realtor but would have very little chance of finding today.

Stand, thanks for the illuminating #'s regarding stock market investment. So, then, does it stand to reason that even the very very wealthy were compliant in propping up the markets during the tech boom...since their $$$ would seem to have the biggest influence on market ups/downs?

Oops, Stand = Stan (=Stanman) in previous post.

Stanman

That's AWFUL, but unfortunately too common. My husband used to tell me about guys like that during the tech boom (when they were REALLY common) and it just burned him up because it gave the business such a bad name. And worse, those guys would make tons of money and then run. My husband works for Merrill Lynch, and a lot of brokers who work there are frequently wooed by other companies. So a lot of those churn and burn 'em types would often look good on paper because it would appear they were doing a lot of business. They'd then get an offer from a bank or a smaller firm that would pay them a $200,000 signing bonus. They'd take that, work at that firm for a year or two, then leave the industry all together. I wouldn't be surprised at all if a bunch of people of that ilk are now RE brokers or mortgage brokers (no kidding). People of this type never stay in one business very long, so the only advice I could give to someone who might want a broker is to look for one who's been in the business awhile. 2 or 3 years is not enough of a track record to place too much trust in someone with your money. I'm sorry about what happened to your mom, I'm just glad she has you to look out for her interests.

Oh, and I don't know if she can get her money back, but I do know that ML often pays off legal suits rather than go to court, they don't like the negative press. I don't know about other brokerage firms, but it's worth looking into.

Stanman

I wish I had some better advice. I'm surprised that such lousy brokers could last so long, but sometimes they manage to hang on longer than they should. My husband's firm tries to monitor that kind of behavior, they have compliance officers who watch for that kind of activity, and the managers in his office don't manage accounts. Usually the bad apples are fired before too long, but I guess there are always those who fall through the cracks.

ajh, you can clear the cookies of the browser each time after you leave comments.

Jamie, hope your finger is all right.

Maybe we should round up all the Bubbleheads to help with the move!
On second thought, let me just volunteer Peter P and MP to help you out. No trouble at all. They will be there next Sunday at 8:00AM with the Budget truck.

Lol :lol:

My husband would be only too happy.

Btw, anyone have any boxes? ;)

Thanks Ha Ha

I should've looked it up. I went by memory-- not as accurate.

Jack, I think you should just keep posting as 'Roid is Prime--so we can laugh every time we see it.

Sacto, congrats on getting the house you want!

Thanks for the finger sympathy. It's much better now--just not ready for typing yet. It's not broken, thank goodness.

Sacto, sorry no boxes here. I have however gotten them from the rear warehouse area of retail stores before.

So is everyone tired of stories like this?
http://www.nypost.com/news/regionalnews/52439.htm

"September 9, 2005 -- Here's more grist for the bubble babble: Residential real-estate prices in Manhattan have been plummeting this summer.
The average price of a Manhattan apartment has dropped from $1.332 million in June to $1.145 million by the end of August — more than 14 percent, according to the latest monthly report by the Halstead real-estate company.

Likewise, the median price of the Big Apple's condos and co-ops has dipped from a high of $831,250 in June to $725,000 in August, a 12 percent drop.

While the summer months have traditionally been a slow time for real estate..."

So is everyone tired of stories like this?

Heck, no! I call that "entertainment". :twisted:

Fun happy Doubleplusgood new thread: Brave New Housing Market

Whoops, forgot to wait until the obligatory 200th post.

I

am

so

sorry.

There --200 posts!

untelligible

Your bitching about Jack isn't particularly intelligible either.

@ScottC

Suppose I buy a large tract of land at $1000 an acre, subdivide and develop it, then sell 10 acre lots at $60,000 each. The cost to me for each lot is $10,000; the profit is $50,000. If there are 200 lots, I can easily make $1,000,000 (minus the cost of development). If I owner finance the lots at 10% interest (assuming the buyer puts up a $10,000 down payment, pays for the land), I can make $38,800,000. Before you laugh, know that I am doing this right now.

Sounds like a very sweet deal....

To develop this large tract of land would surely be very expensive?
You would have to add roads and utilities wouldn't you?

It would probably be "out of town" a fair way and may not have a big appeal that you might think. But I guess Vegas had the same start.

I guess there would also be legals, taxes, marketing costs, salesmens commissions etc.

I don't understand why buyers would vendor finance at 10% though, when finance is more competitive elsewhere?

Does sound like good numbers though, but keep it quiet otherwise everybody will start doing it.