patrick.net

It's human nature to think that the big jackpot is always "right around the corner". If not for this phenomenon, there would be no gamblers or Vegas. Take the hero huckster Peter Schiff, for example: his entire schtik is that his advice will pay off "right around the corner".

And I think the black swan will surface only when we stop looking for it.

Banks clearly have the ability to maintain large inventories. The billion dollar question is "for how long." As far as I can tell, it is indefinite as they still stand to lose a lot more by releasing gobs of inventory. As noted above, a black swan event could change that. The thing with black swan events is that you really don't see them coming. A bunch of people usually guess the initiating event in advance, but I think that it is often luck of the draw making them right more than sage wisdom.

so I guess the foreclosure tsunami is not coming after all... however I am sure bank savings interest rates and CD's will still drop from 0.nothing% to 0.even-more-nothing%

Where is that Tsunami of foreclosures?

About 5 years ago.

If banks are letting people squat and they are not selling inventory, more and more people are realizing that they can only gain from squatting. Basic queuing theory would tell you that there is more inventory coming in than going out, so inventory should be going up, not down. So, what's the catch here? Well, what the realtard is not showing you is the "real" shadow inventory, which is the number of deadbeat house owners which haven't yet received their NTS. This squatting inventory is many times bigger than the 20,000 that the realtard alleges, there is, and this is the inventory which is going up every month, month after month. So, the magician realtard is saying "see, there is no coin in my hand", but the coin is in his pocket. He is only showing you the tip of the iceberg, but there is a huge sheet of ice just under the surface. But, if you are really gullible enough to believe that there is only 20,000 inventory, then, even with 1.5 years of inventory, this is a sign of a very sick market, because, a healthy market is only 6 months of inventory, and with 1.5 years, prices should still be dropping.

We bought a fixer in February in Danville and already have 20% equity! No more PMI for us! Sweat equity and patience paid off! Now our house payment is lower than rent!

sheltielover1 says

We bought a fixer in February in Danville and already have 20% equity! No more PMI for us! Sweat equity and patience paid off! Now our house payment is lower than rent!

Keep dreaming, you cool-aid drinker. It's more like you have -20% equity.

dunnross says

If banks are letting people squat and they are not selling inventory, more and more people are realizing that they can only gain from squatting.

Are you suggesting that more and more people are squatting? What are people doing, "buying up" houses just to squat in them? I'm pretty sure the NINJA-loan gravy train dried up a long time ago.

dunnross says

sheltielover1 says

We bought a fixer in February in Danville and already have 20% equity! No more PMI for us! Sweat equity and patience paid off! Now our house payment is lower than rent!

Keep dreaming, you cool-aid drinker. It's more like you have -20% equity.

You're just jealous! The numbers do not lie and everyone needs to have a place to live! I can now look at my home and bank account and smile. No worries over a crappy landlord or having a place to live. Unless you just hit the lottery or inherited a large amount of money we all have a monthly payment for a roof over our heads!

wthrfrk80 says

Are you suggesting that more and more people are squatting

You wish! People are not "Buying up" any houses to squat in them. With more than half of mortgage holders in phoenix already under water, you don't need to buy, in order to squat. Just stop paying mortgage, that's all.

dunnross says

sheltielover1 says

We bought a fixer in February in Danville and already have 20% equity! No more PMI for us! Sweat equity and patience paid off! Now our house payment is lower than rent!

Keep dreaming, you cool-aid drinker. It's more like you have -20% equity.

I was a very active member of the Housing Bubble Blog for years and rented for almost 9 years.. I AM FAR from a koolaide drinker! Even fellow followers of the blog have seen my house and think we did the right thing.. Why do you have to tear people down and criticize? Be happy for once!

sheltielover1 says

No worries over a crappy landlord or having a place to live.

Yes, no worry about a crappy landlord. But you have to worry about a crappy boss who will fire your ass, and you will be back to renting faster than I can say "Negative Equity"!

dunnross says

With more than half of mortgage holders in phoenix already under water, you don't need to buy, in order to squat. Just stop paying mortgage, that's all.

Fair enough. But if the banks don't seem to mind people squatting, why would those houses ever hit the market?

sheltielover1 says

I was a very active member of the Housing Bubble Blog for years and rented for almost 9 years.. I AM FAR from a koolaide drinker!

Remember, the goal of the bubble is to pull in as many people in, as possible, both before and after it pops. If houses just kept on dropping in price, people would stay away, and nobody would be suckered in. So, that's why you have these, dead-cat bounces on the way down. You are just one of those cool-aid drinkers, who got sucked in on the way down, instead of way up. There is absolutely no difference, between a knife catcher, like you, and somebody who took the plunge back in 2006.

dunnross says

Remember, the goal of the bubble is to pull in as many people in, as possible, both before and after it pops.

Are you suggesting the bubble was somehow "engineered"?

As they say, never attribute to malice which can be adequately explained by stupidity.

dunnross says

sheltielover1 says

No worries over a crappy landlord or having a place to live.

Yes, no worry about a crappy landlord. But you have to worry about a crappy boss who will fire your ass, and you will be back to renting faster than I can say "Negative Equity"!

Luckily I am a highly educated and credentialed IT worker who has skills which are in high demand. I do not think finding a new job would be a problem for me.. In fact I'd probably get a $20 - $30k raise leaving my current job...

dunnross says

sheltielover1 says

I was a very active member of the Housing Bubble Blog for years and rented for almost 9 years.. I AM FAR from a koolaide drinker!

Remember, the goal of the bubble is to pull in as many people in, as possible, both before and after it pops. If houses just kept on dropping in price, people would stay away, and nobody would be suckered in. So, that's why you have these, dead-cat bounces on the way down. You are just one of those cool-aid drinkers, who got sucked in on the way down, instead of way up. There is absolutely no difference, between a knife catcher, like you, and somebody who took the plunge back in 2006.

So you're saying rents are going to plunge as well?? I think not.. I have a fixed 30 year mortgage we will pay off in 10 years and I don't think of a house as an "investment." It is a place to live.. I am happy... Payment is cheaper than rent and a much nicer house in a great area...

wthrfrk80 says

Fair enough. But if the banks don't seem to mind people squatting, why would those houses ever hit the market?

You're making a big assumption there, that banks like to be in the 0 revenue landlording business. But reality is quite opposite of perception. Banks are not landlords, and houses are hitting the market, eventually. The average time for squatting is about 15 months in California (more in judicial states). You see, squatting deadbeats are costing these banks lots of money, because they are not just paying the mortgage, they are not paying their taxes, either, and the longer they squat, the larger is the tax liability for the bank. Furthermore, squatting deadbeats are not very handy around the house, and they let these houses deteriorate. So, the houses are just sitting there, losing value, losing equity, and banks are just going to let this happen, in front of their eyes. Is that what you think?

sheltielover1 says

In fact I'd probably get a $20 - $30k raise leaving my current job...

Yes, just like you already have 20% equity in your house, which you bought in February. Heck, if making money was so easy as you think it is, maybe we should all, just quit our jobs, and start flipping houses for a living. Wait, that already happened, and most of those flippers got burned. Oh, sorry, I got carried away with all that "positive attitude" aura which seems to be contagious on this blog.

wthrfrk80 says

Are you suggesting the bubble was somehow "engineered"?

Yes, the bubble was engineered by the FED, wouldn't you say so? Most bubbles are engineered because they don't naturally happen. Problem, is, most people lose money on bubbles.

sheltielover1 says

So you're saying rents are going to plunge as well??

Yes, that's exactly what I am saying. It happened before, even in the Bay Area, and it will happen again. As it is, already, you can't find any nice places in the Bay Area right now, where mortgage is lower than rent, and if you think you can, you are fooling yourself.

wthrfrk80 says

Fair enough. But if the banks don't seem to mind people squatting, why would those houses ever hit the market?

The only way banks would not sell these houses, is if they really thought that prices were going to go up, in the future. But, reality is, prices are dropping, and, soon, will be dropping even faster.