patrick.net

bmwman91 says

the bust portion of the cycle starting around 2016.

That's an interesting stance. What will be the causes of this potential bust?

RentingForHalfTheCost says

Supply was at 9yrs in Cali at the time. Are you debating that? And we are all
still very screwed. Except Concord and Phoenix people I guess, cause everything
is so hunky dory according to the real estate bulls. Hope the Fed stays your
friend long enough for you to lock in some of them magnificent gains you crow
about non-stop.

Problem with all you shadow inventory types, is you would focus, way too much on the amount and never the disposition.

Every month with you guys it was some sort of apoplectic fit of hysterics "OMG!!!! - LOOK the shadow inventory is HUGE!!!!", with an assumption that it was all going to be puked up, all at once, en masse, in a "woooosh" type event, driving prices back to the stone age.

As far as I was concerned it matterd not if it was 3 months or three decades of shadow inventory, so long as it was metered, out, slowly, drip, drip, drip, style as it had been since early 2008. So long as that continued, it was only a matter of time before price declines decelerated, flatlined, and then rose, albeit slightly less than they would have if the shadow inventory had not existed. Still amazes me how you guys could not see that.

Other problem with you bears is you were focused on problems which matter not now, but 10 or 20 or even 50+ years from now. Make no mistake, when looking at demographics, national debt, etc, etc, etc, there is no doubt this country is indeed screwed. However, since It likely we will all be long since dead and buried before those headwinds get severe enough to worry about, many of the bulls will just simply continue to buy homes and live their lives, all to the frustration of the bears, many of whom will sit sidelined about macroeconomic worries til the day they die.

RentingForHalfTheCost says

Supply was at 9yrs in Cali at the time. Are you debating that?

nominated.

This one really makes me laugh. There can be no debate on this issue--the verdict is in. You were wrong. Own it.

What sort of appreciation are you projecting over the next 5-10 years for housing?

Do you see a "bursting point" over the next 10 years or so? Bursting point being when there is a strong pull back in home prices, think shades of 2010/2011.

As a non-home owner I'm hoping/banking on the stock market to also grow over this ramp up period as I'll be sidelined from the housing market.

Thanks, and this is a great thread.

Goran_K says

bmwman91 says

the bust portion of the cycle starting around 2016.

That's an interesting stance. What will be the causes of this potential bust?

I don't want to put words into their mouths any more than I have, so I'll give my take on it. Basically, it looks like all of the various measures taken to bolster housing prices are working, and will continue to do so. Eventually, many owners will have enough positive equity that they will want to sell, and inventories will rise at this higher price point. Even with rates as low as they are now, there just are not all that many people that are qualified to mortgage a house at that price, given RESPONSIBLE lending standards (20% DP, 46% DTI or less). At that point, I see 2 possibilities:

1) House prices stagnate and drop. While it is plausible that owners will just de-list and send us back to nonexistent inventories, I think that there is a mass psychology factor there and lots of on-the-fence sellers will panic because the strong seller's market that started last year will suddenly look like a buyer's market, and they will want to cash out "while they still can."

2) Lending standards loosen up again and that propels the bubble to new levels. ARMs blow up in people's faces and we get another delightful melt-down.

I would bank more on option 1 than option 2 though. Maybe I put too much faith into Wall Street, but I don't see them repeating last decade's mistakes again so soon.

robertoaribas says

RentingForHalfTheCost says

Supply was at 9yrs in Cali at the time. Are you debating that?

Yes, I care to debate that!

The 9yr figure factors in the shadow inventory, which as we all know is still being heavily manipulated. Will that end? Doesn't look like anytime soon. Thank the Fed and what will be 2 or 3 decades of lost progress for this country. We are almost through 1 decade already. I don't think anything has improved, just shits and starts.

RentingForHalfTheCost says

The 9yr figure factors in the shadow inventory

The 9 year figure was complete BS as many on here told you. You have to be careful when you see estimates for shadow inventory that include all underwater homeowners--the vast majority of them aren't going to walk away.

tatupu70 says

RentingForHalfTheCost says

The 9yr figure factors in the shadow inventory

The 9 year figure was complete BS as many on here told you. You have to be careful when you see estimates for shadow inventory that include all underwater homeowners--the vast majority of them aren't going to walk away.

I still disagree with anyone on this issue. The shadow inventory is very real. Highly manipulated, but real.

RentingForHalfTheCost says

tatupu70 says

RentingForHalfTheCost says

The 9yr figure factors in the shadow inventory

The 9 year figure was complete BS as many on here told you. You have to be careful when you see estimates for shadow inventory that include all underwater homeowners--the vast majority of them aren't going to walk away.

I still disagree with anyone on this issue. The shadow inventory is very real. Highly manipulated, but real.

Regardless of how much there is, as long as shadow inventory remains in the shadows, it hardly matters. Is your theory that the manipulators who have managed to keep all this inventory on the market suddenly going to stop manipulating?

RentingForHalfTheCost says

tatupu70 says

RentingForHalfTheCost says

The 9yr figure factors in the shadow inventory

The 9 year figure was complete BS as many on here told you. You have to be careful when you see estimates for shadow inventory that include all underwater homeowners--the vast majority of them aren't going to walk away.

I still disagree with anyone on this issue. The shadow inventory is very real. Highly manipulated, but real.

Assuming arguendo, it is real why did you always focus on the number, and not the way it was going to be disposed of? You would certainly agree that 9 years of shadow inventory listed, en masse, in 18 months time, would have a large difference vs say 9 years of shadow inventory, metered out slowly over 18 years.

So given that MTM was relaxed in 2009, and the general disposition of the fed (circa 2009 & beyond) why did you continue to believe it was all going to be puked up in some "woosh" type event, driving prices down into the stone age?

At what point did you wake up, and realize, gee, maybe that whole "dont fight the fed" thing had some merit to it?

CDon says

At what point did you wake up, and realize, gee, maybe that whole "dont fight the fed" thing had some merit to it?

At the point where I realized our grandchildren, and then their children, will be bearing the punishment for our greed. I guess you can't underestimate how far our leaders will go. Everyone on here seems so happy that we have rapped future generations of the prosperity we had. I am not. You and others can keep gloating like you had a crystal ball, but in the end there is a huge problem still brewing that wouldn't take much to push us into another fiscal crisis. I'm definitely ready and I hope others are as well. Nothing has really changed except stealing from our future. I was negative about the next decade back in 2007, but now I am just overall negative about this country. Sad...

RentingForHalfTheCost says

At the point where I realized our grandchildren, and then their children, will be bearing the punishment for our greed.

Well said - the kids thank you.

E-man says

A picture is worth a thousand words. The green line shows we go through this event in every recession, and we WILL approach the red line again. That's the Fed's ultimate goal.

WORTH REPEATING.

RentingForHalfTheCost says

but in the end there is a huge problem still brewing that wouldn't take much to
push us into another fiscal crisis.

Hey--we can agree about this. The problem is wealth disparity and until we can find a solution, it won't take much to push us into another recession/depression.

RentingForHalfTheCost says

CDon says

At what point did you wake up, and realize, gee, maybe that whole "dont fight the fed" thing had some merit to it?

At the point where I realized our grandchildren, and then their children, will be bearing the punishment for our greed. I guess you can't underestimate how far our leaders will go. Everyone on here seems so happy that we have rapped future generations of the prosperity we had. I am not. You and others can keep gloating like you had a crystal ball, but in the end there is a huge problem still brewing that wouldn't take much to push us into another fiscal crisis. I'm definitely ready and I hope others are as well. Nothing has really changed except stealing from our future. I was negative about the next decade back in 2007, but now I am just overall negative about this country. Sad...

If you look at my posting history, I have noted several times the predicament that our country is in the the very long term. Still, not once did my emotions about what "should be" affect my recognition about what "is".

Imagine how much better your calls would have been too had they not been clouded with the emotion of your feelings of what should be.

CDon says

Imagine how much better your calls would have been too had they not been clouded with the emotion of your feelings of what should be.

I have more than fine on my calls. Even though I stayed away from housing (aside from owning in areas outside of the SFBA), I loaded up on the market in 2009-2011 and have been rewarded handsomely. So, sure, housing hasn't done what I would expect or hope, but the reasons for that are fine with me, because my wealth verses housing costs just keep improving each year. Only 6 months through this year and most major stock indexes are up 20% or more. I still wouldn't add to my housing position, and probably won't until there is the inevitable shift. Interesting that already there is talk in the Feds meetings about easing up on the QE forever. It will come, there is no endless pit of money to play with. Although, there is war to distract everyone from our dilemma. Which I have predicted numerous times on here. Instead of admitting to our financial disaster, we will undoubtedly declare war and put fear back into everyone's minds. Give it a couple more years. The last thing you will think about is your house equity.

RentingForHalfTheCost says

Only 6 months through this year and most major stock indexes are up 20% or more

If housing didn't bounce back, do you believe the stock market would still be up 20%?

Whether it be QE or the manipulation of shadow inventory, a lot of people have profited from it, including those who didn't even purchase RE.

The biggest losers were the doom and gloomers who decided that they should keep holding cash because Cash was King.

zesta says

RentingForHalfTheCost says

Only 6 months through this year and most major stock indexes are up 20% or more

If housing didn't bounce back, do you believe the stock market would still be up 20%?

Whether it be QE or the manipulation of shadow inventory, a lot of people have profited from it, including those who didn't even purchase RE.

The biggest losers were the doom and gloomers who decided that they should keep holding cash because Cash was King.

I don't think it's wise to ever disrespect cash. Equities and RE are simply vehicles to transform a pile of cash into a bigger pile of cash in the end. That in itself makes cash king and deserving of a place on the top of the asset vehicles hierarchy.

zesta says

RentingForHalfTheCost says

Only 6 months through this year and most major stock indexes are up 20% or more

If housing didn't bounce back, do you believe the stock market would still be up 20%?

Whether it be QE or the manipulation of shadow inventory, a lot of people have profited from it, including those who didn't even purchase RE.

The biggest losers were the doom and gloomers who decided that they should keep holding cash because Cash was King.

Very true. QE is really at the root of any of the moves in real estate or equities. I admit that I underestimated the extend that this gov't/fed would extend itself to protect asset prices. Cash hasn't been a good place to be the last few years. My only regret is not at all about housing, it is that I should have just been buying and rolling over option calls on equities rather than owning the underlying stock. If anyone really had a crystal ball, like many believe they do, then why don't I here about people who did just that? No riskier than buying housing in this market IMHO.

I'm still kicking myself for not putting a hundy on the 6-9 exacta at preakness.

robertoaribas says

rentingwithhalfabrain, you are just lying and making stuff up on here. Sure, anyone can look backwards and say 'I should have done X on day Y' that has nothing to do with anything.

That simply does not count as thinking, it is just crap. By that same logic, I should have gone to California last year, and bought 10 homes on credit...

My point exactly. Looking backwards really proves nothing. If you are doing what-ifs then why housing? Why not out of the money calls and make some real money. Housing is so 1990s. It is old already...

RentingForHalfTheCost says

Why you keep harping on the other is amazing to me. Simply amazing.

Well, it might be because you were obviously lying. You know, just a thought.

RentingForHalfTheCost says

CDon
says

Imagine how much better your calls would have been too had they not been
clouded with the emotion of your feelings of what should be.

I have more than fine on my calls. Even though I stayed away from housing
(aside from owning in areas outside of the SFBA), I loaded up on the market in
2009-2011 and have been rewarded handsomely. So, sure, housing hasn't done what
I would expect or hope, but the reasons for that are fine with me, because my
wealth verses housing costs just keep improving each year.

OK, so suspending the whole MCD fake dates/expose "biasing" thing, perhaps you need to ask yourself, if you are doing awesome in making equities calls, why are your calls on housing so abysmal?

Remember, this site was, first and foremost a housing bubble site. It was originally populated by a lot of people who got priced out in the 2006 bubble, and waited out the 2007-2009 downturn. By 2012, all they wanted to know was "is this it"? - can we now buy and get on with life?

Yet, if you look at the beginning of this this thread, here you are, in early 2012, guns a blazing, telling people as follows:

- without job improvement, you can "bet your grandmothers china" that there will be "no housing improvement", and that "time will be our witness here. Don't say I didn't warn you."

- dunnross is telling us that we will see his nominal 1975 prices and you give it a "+1"

- you later tell us there is another "20% drop that is coming our way soon"

- you then get into a conflict with tatupu about what constitutes "real" data, irked that the MSM is ignoring the shadow inventory, saying "To say inventories are short for 2012 when we know the shadow inventory gorilla is walking into the room is crazy. The inventories are going to explode incredibly in 2012, just wait."

Mind you too, this is but one of many of your posts in early 2012 that had a certain, cocksure - pound the table certainty - that the people who were buying homes, even just to live in were making a terrible terrible mistake.

Well given that time has proven your remarks wrong don't be surprised that people are giving you a hard time about it now. Its just the way it goes. Given the overall certainty of your tone, had time proven you right, you would be deserving of praise - since you were not, you are deserving of ridicule.

So again, going forward, maybe your alleged fantastic predictions and performance in equities (all of which are presumably made without emotion) should be your guide in making further predictions on housing. Start being right for a while, and people wont be giving you such a hard time going forward.

There's a lot of lover's quarrels going on in this thread.

CDon says

why are your calls on housing so abysmal?

Simple answer. The Fed has bankrupt the country going forward. Sad to see. Myself, along with many others, never expected it. My calls on real estate follow the fundamentals and they have not changes. It is a shell game with the Feds holding all the cards at this point. Believe in it, if it is making you money, but until this shell game is over, none of my money will enter the game. Most people buying at this point, which is what determines the market prices, are counting on continual gains. I don't see how that is remotely possible. My nature would have me out at this point, so looking back I would still never enter. I have been in and out, have now been in and out of another runup in the stock market. I'm doing fine. You can have housing. I don't care for it much like this. Hope you get out at the right time.

RentingForHalfTheCost says

Most people buying at this point, which is what determines the market prices,
are counting on continual gains.

Where is the evidence that the investment component is the main driver of buying real estate?

robertoaribas says

It's time for me to take a break; maybe drive out to OC and hang out on the beach....

Laguna Beach? :)

Going to be crowded here this weekend.

RentingForHalfTheCost says

For most selling covered calls and getting a repeatable 6-10% annually is a great option.

True, and hopefully the stock won't raise that much past the target price when the option contract comes due. Greed should be contained, and playing a covered call option is a safe way to make a good return on investment.

Keep an eye on P/E ratio, when it gets past 22 then I would start selling or at least stop buying if I plan on holding my stocks for at least 5 or more years.

I think the next crash will come very quickly and with at least a 30% drop because almost everybody is expecting it. It will almost be like a run on the banks.