patrick.net

FYI: Patrick fixed the average rents graph last night (so it shows the year):
patrick.net

And he alphabetized the average rents by City table:
patrick.net/cache/rankrent.html

Hmm... novice investors initially unwilling to cut prices as the market turns... even at a profit!

Greed is now impairing their decisions.

I have it currently listed at 389,990 much lower than the 400 I expected.
Hmm… novice investors initially unwilling to cut prices as the market turns… even at a profit!

Someone @ "richdad" should tell him to sell to break even--he'll be lucky to do that.
Looks like a great site for a bear to lurk, hehe.

In case you needed any more evidence for NOT trusting anything Mr. Lereah says, here's some more:

Apparently David's not so new to the investment book-writing game after all. He published this gem back in June, 2000 (just as internet stocks were tanking):

"The Rules for Growing Rich : Making Money in the New Information Economy" tinyurl.com/a55qc

As one reviewer put it, this book puts "unlimited faith in Internet related stocks that would have had you buying and holding leaders at the price peak in 2000, and subsequently losing over 80 plus percent of your money."

MORAL: Whenever David Lereah writes an "investment" book about a particular market, get the hell out of that market --fast.

I have no idea why "investors" all expect to be able to sell at an expected "peak" value. Market goes up and down all the time.

Perhaps they are taking real estates never go down literally.

@KurtS,

Someone @ “richdad” should tell him to sell to break even–he’ll be lucky to do that.

One of the posters did exactly that --the guy just ignored him!

One of the posters did exactly that –the guy just ignored him!

Soon enough he will be asking for advice to break even - when the market is down 20%.

When greed and stupidity go together... we should just watch and entertain ourselves.

As one reviewer put it, this book puts “unlimited faith in Internet related stocks that would have had you buying and holding leaders at the price peak in 2000, and subsequently losing over 80 plus percent of your money.”

Seems Lereah is one to jump on whatever is hot at the time. The fact that his book was published a couple of months after the tech market crashed shows that Lereah isn't a great prognisticator, he's just someone who writes a book whenever there's a mania. Like I said before, he's gotten lucky on the RE market. Right place right time, nothing else.

"Like I said before, he’s gotten lucky on the RE market. Right place right time, nothing else."

Yep, that's why he waited until 2005 to get this book published! Like I said, if he had writen the book in 1995 then I would be VERY impressed.

That guy in Sac is hilarious but not unique. I posted before about a friend of my husband's who recently sold his home and now the new owner thinks she can rent the house for $1500 or higher even though bigger homes in the neighborhood are renting for less. And even if she gets the rent she wants she'll still be negative cash flow. I can't figure out how she thought this was a good buy. The market is slowing and there is no way she'd get more than she paid for it, and it's not good for cash flow as a rental. What was she smoking when she bought the place? Oh and to add to the mix, my husband just told me that 2 sex offenders live on the same street. That ought to add value to the property. :eek:

read The Tipping Point by Malcolm Gladwell

Just started "Tipping Point". "Blink" was very good.

Also, the new developed homes seems to have a much higher demand than the homes on the resale market. The builders have been sold out month after month, but homes on the resale market has languished. I've undercut the builders price and still have had problems with selling the house.

I find this quite interesting, as well, because I have read other articles where the resale market is doing better than the new homes. I guess it's really tough to figure out which way the pendulum is going to swing.

I think, the market has come down for sure.

Most of the homes looks like staying in the Market for more than a month. It used to be days before in this area.

TestMe....

That is definitely what's happening...in a lot of areas, my friend. You will do well to do a little homework quickly in order to sell, even it means setting a lower price. You are on the down side of the peak, which is not a good place to be right now.

BayQT~

Jack,

*DING*
The @“richdad” thread ends with the flipper doing EXACTLY as you predicted. Sad...

I have been trying to sell my condo for the past 2 months in Fremont,CA but no luck so far. I think, the market has come down for sure.

TestMe--good luck; I hope it works out for you. If volume's high in Fremont, you might consider Jack's advice--and not chase the market down (imho).
I'm also actually rather surprised at turnaround; I thought sales were still brisk in S.Bay.
On the other hand, I've noticed more "for sale" signs last weekend down there--if that's any indication.

October surge

Surge in ___?

(A) interest rate
(B) inventory
(C) bankruptcy
(D) All of the above

they end up losing far more money by being stingy with too-small, incremental price reductions, often doing nothing more than following down a dropping market. At this point they are still practicing need-based pricing and STILL not being realistic.

That whole scenario is being played out by sellers of a Dublin townhouse I have been watching. On the market in April...didn't sell for 2+ months....dropped price, uh, a BIG $2,000....recently took it off the market. Perhaps they were just sniffing around to see what numbers would come in. Perhaps not.

BayQT~

October could well be the beginning of the end for some areas, and actually show a surge for others. (IMHO as they say)

I wouldn't be surprised. Some might see a flattening/drop as the "low" and buy. Possibly old news, but reminds me of the conversation overheard "London RE is low--time to buy is now!"

Or is it that you just like the way “October” looks in print Peter P?

I just have a weird feeling about October.

Jack,

Actually it is a current thread. The last post (today) is from the flipper, making his final decision:

"Looking at this situation from a business perspective, I have decided to keep the [house] on the market empty until the end of Labor Day Weekend. If I don't get an offer by then, I will go forward with renting out the house and refinancing the loan at a better rate."

In previous posts he also said he was "losing about 2K a month" in interest ALONE. He also said that the most he could get in rent was $1200-1500/month.

Wow, with a "business perspective" like that, he should be working for Worldcom.

Probably some of everything will happen, everywhere. (How’s that for a cover-my-ass prediction?)
Well, at least you're have no responsibility in this scenario, so your CYA has "equity." ;)

The slowness is going to be excruciatingly painful, now matter HOW it plays out.
Yes, I agree people will generally "chase the market all the way down." Gloating all the way up = whining all the way down? I can see the IJ headlines now...

Just got a visit from some former neighbors down in the DC burbs. They are waiting until their son graduates next spring to sell.

They were very curious about why I had sold in such a rush, etcetera.

I then noted that the inventory in Fairfax VA was up about 25%+ relative to July 04. I then felt bad. I don't gloat, generally. I just do my happy dance by myself in the bedroom with the lights out. But I felt like I had just inadvertently stuck it to them.

They are retiring and movign to a bed and breakfast in Viriginia - the real Virginia. They both had a hint of fear on their faces. Then they reassured themselves - "oh the market will still be good in the spring."

Yeah, maybe, maybe not. For folks like them, who are selling out for the last time, coming in 18 months after the peak can make the difference between steak or burgers once a week for the rest of their lives.

Anyway -
Hey Praet, good to hear from you you English guy!
It is sad.
People already talking about "rebuilding" New Orleans. How about, it's time to go? I like the idea of chicks boobs out everywhere, and all that, but moving is a huge pain I only want to do once again. Rebuild? No thanks.

Gloating all the way up = whining all the way down

I am so surprised that flippers/sellers are whining already. It is like someone complaining about water being too warm in a cannibal's pot, not knowing what is going to happen next.

Rates do not need to hit 7%... people are already stetching themselves thin with 1% NAAVLPs.

Jack, now that MP is gone, are you more of a bull or a bear? Or an optimistic bear? Or a cautious bull?

Agreed - higher rates would certainly accelerate the pace of price corrections, but at this point, people are already stretched so thin (especially in CA, FL, MA, etc.), it's not even a necessary catalyst. Prices will plateau and fall when enough people realize that the "20%/year forever" era is over.

Another distinction worth noting: Only fixed-rate mortgages are based on the 10-year bond rates, and these are becoming rarer every day. ARMs, and option-ARMs (neg-ams) will begin adjusting upwards right after the "teaser" rate period ends (usually 1 year). Greenspan's 2.5% of hikes are AREADY making a difference for many people.

I am so surprised that flippers/sellers are whining already. It is like someone complaining about water being too warm in a cannibal’s pot, not knowing what is going to happen next.

But didn't they see the guy/gal across the signing table with the bone through their nose?? :lol: Ok...that was bad. (slap on the hand) Bad, QT!

BayQT~

But didn’t they see the guy/gal across the signing table with the bone through their nose?? Ok…that was bad. (slap on the hand) Bad, QT!

They are thinking those bones are from the veal chops...

Dinner after "spa" ? :twisted:

B. R. A. C.

I must be more stupid because I don't know that acronym.

I’ll even do it for you 1700*2=3400.

Looks like it is beyond greed... it is stupid greed simmered in the emotion of pride.

B. R. A. C.
I must be more stupid because I don’t know that acronym.

DoD's Base Realignment And Closure 2005
www.defenselink.mil/brac/

Oh how I can’t wait to do the crazy miner dance.

When the time comes, we're going to have to organize a "crazy miner" square dance, so we can all do it together.

When the time comes, we’re going to have to organize a “crazy miner” square dance, so we can all do it together.

How about November 1, 2005? ;)

4) $3.00/gallon ahahahahahahahahahhahaha

How about

"$6.99/gallon HAHAHAHA"

I have already paid $3.19 a gallon already... $3 is nothing new. :(

When asked if they were worried about having a mortgage where their payments could increase while the vaule of their house was going down almost all of them said they will refi if rates start to go up (they said this after the obligatory “real estate never goes down” response).

When asked if they were worried about falling house prices almost all of them said they will sell if the market drops. ;)

These people are delusional. The point is that they do not want to bear the pain (sell/refi). Instead, they hope for a quick turnaound.

Every time a hurricane roles through it will knock down the partially built condos so the supply won’t be able to catch up to the demand, driving prices higer.

LOL :lol:

Her “expert opinion”: the more hurricanes the higer the price of condos. Every time a hurricane roles through it will knock down the partially built condos so the supply won’t be able to catch up to the demand, driving prices higer. One of my favorite bubble interviews thus far.

I wonder how long it took her to come up with THAT ridiculous statement.

BayQT~

I’m not sure I like the TONE of that question! (What would you like me to be?)

Relax, Jack. I like you just the way you are. Just curious. :)

It was like watching Fox news– you eventually burn out from the constant “sameness” of it all.

But... but we all care about that poor girl who is missing in Aruba, right?

I meant; ‘Blog BULL its a tough job but somebody has to do it’

Jack, I know you have a tough job. That's why I admire you so much. ;)