patrick.net

Call it Crazy says

He expects bubble prices, and MORE!!

Where did he say that? He expects prices (where he lives) to go up, but not necessarily to "bubble" levels.

CA real-estate has always been crazy because of the nice climate and strict land-use laws (inelastic supply, which causes big price swings for relatively small changes in demand).

Call it Crazy says

It depends on how hung over they are!!

I always get wasted on Wednesday nights! ;-)

egads101 says

Here is a hint: how widespread a belief is held is NO INDICATION of how true it is.

Except in economics.

http://www.theonion.com/articles/us-economy-grinds-to-halt-as-nation-realizes-money,2912/

The payroll tax increased by 2% January 1 2013 and additional medicare tax plus there other increases up to 3.8% on investment income (don't exactly know where this would show up). You would expect to see the treasury withholding tax volume increase based just on changes in the tax rate. The data that needs to be teased out is the amount of the increase that is from rate increases and what percentage is from job growth. The reality is probably worse than what the graph illustrates.

Always beware of "financial gurus" who claim to know the future.

The unknown is scary. I want to be told "the truth" too. That's why pundits, televangelists, and the Catholic Church make so much money.

I woke up early with a whiff of impending housing collapse in the Cali air.

freak80 says

Housing isn't supposed to "recover" to bubble levels. Housing should track inflation, on average.

Yes, once it returns to natural trendline!

freak80 says

As far as I can tell there are no true "bubbles" right now. Other than the bubble in calling everything a bubble.

There's a bull denial bubble.

How can something most people can't afford be "too cheap"?

Moderate Infidel says

How can something most people can't afford be "too cheap"?

It isn't. It is very expensive. But if you have been brainwashed that taking on debt for 30 years is hip & acceptable in order to own your personal shack, you'd think this is a bargain as well. In a debt-driven society a 30 yr mortgage doesn't look that bad. If people would start trying to avoid debt, esp. long-term debt, the housing market would crash very fast. But that's no going to happen until sentiment towards debt changes or rates explode.

I'm going to go put an offer on a house at 50% over asking because it is too cheap at the current price. I don't like cheap things.

I'm paying $1700 month for a two bedroom when I could buy a "too cheap" 2 bedroom here for 600k and pay a "fair" price instead. Why am I so greedy?

Moderate Infidel says

I'm going to go put an offer on a house at 50% over asking because it is too cheap at the current price. I don't like cheap things.

Hehe. Even worse, agents will tell you that you should not "offend" the seller by making lowish offers. We had a lot of fun back in the days leading to the bubble to routinely bid 25%-50% below asking and having agents go apeshit.

A little cut and paste from housing bubble blog

A little more advice and analysis from the RE “experts” for your enjoyment…

“Stock prices have reached what looks like a permanently high plateau.”
- Irving Fisher, Ph.D. in economics, Oct. 17, 1929

“Home sales are coming down from the mountain peak, but they will level out at a high plateau — a plateau that is higher than previous peaks in the housing cycle.”
- David Lereah, Chief Economist, National Association of Realtors

“It’s impossible for prices to go down this year.”
- Gary Watts, Spokesman Orange Country Association of Realtors

“I don’t worry about new home sales,”
- James Glassman, JP Morgan Chase Economist

“If you own your own home free and clear, people will often refer to you as a fool. All that money sitting there, doing nothing.”
- Anthony Hsieh, CEO Lending Tree

“I think investors will have a good reason to come out here and buy again.”
- Jeromith Sutton, 2006, NAR Investment Advisor

“…housing activity will remain healthy for some time to come.”
- David Lereah, NAR’s chief economist, October 28, 2005

“There is no bubble to burst,”
- Jim Folkman, VP of the Home Builders Association of Central New Mexico

“I’d say this is another very important signal that the economic soft patch we were all worried about is pretty much confined to March”
- David Seiders, Chief Economist, National Association of Home Builders

“The idea that we’re going to see a collapse in the housing market seems to me improbable”
- John Snow, Secretary of the Treasury

“People who talk about a bubble are blowing smoke,”
- Michael Carney, Real Estate Economist
California State Polytechnic University Pomona.
Thursday, February 10, 2005

egads101 says

yep, housing seems to be lulling. Enjoy the lull, because it will not crash.

the oracle has spoken, heed the advice or become like Iwag and the Losh!

Yes, buy the "lull". It only goes up from here. Peoples gots more jobs wif more monies now.

egads101 says

Losh

Baiting again?

egads101 says

As usual, you contribute nothing to this site, and just post ridiculous insults.

the oracle can see it really burns you up being so wrong, but rather than learning from those wiser than you, those who make money by understanding the market, you continue to be a bitter loser. how sad to be you!

what could i learn from Roberto A Ribas who lives with room mates to pay his mortgage in one of the cheapest housing markets in the USA? hahaha

isnt that like a 500 pound man trying to teach people how to be skinny?

egads101 says

housing seems to be lulling

Yes, I must indubitably agree ....housing has been coerced into a morbidly stagnant mode!

Oh WHAT a magnificent QUANDARY this impending situation has FOREBODE!

I think the name "iwag" gives it away...

"Don't feed the trolls."

Call it Crazy says

Are you sad that there won't be a war???

Yes! What will happen to our economy without another war to keep (what remains of) our industry humming?

mell says

or rates explode

Uncle Ben won't let that happen. Too many of his friends would lose money.

Moderate Infidel says

“Stock prices have reached what looks like a permanently high plateau.”

- Irving Fisher, Ph.D. in economics, Oct. 17, 1929

This is worth quoting just so it appears twice. I would like to start compiling quotes and charts from 1920s and comparing them to today. But my job keeps getting in the way.

egads 101 says,

"you guys are a joke!"-" just post ridiculous insults."

We jokers know a Trolling Clown when we read their comments.

If we are buying houses,
Urged on by frantic spouses,
But rates rise high to usury,
As wages drop to penury,
How then can we the sheep afford,
To change the sign from "Sale" to "Sold?"
And if we sweat and strive so long,
To get that fifth of price so strong,
But price that was no longer is!
We must compete with Wall Street wiz,
To change our plight to own from lease,
We sell our children's future cheap,
And reap a mortgage, not a home,
Unless we pay the rent we owe,
To banker now, and tax assessed,
On these hard stones our future rests.
So tell me then, Oracle fair,
What Fates are ours to buy or share?

Damn! Now this dummass posted without a link & used a title that has been used. "Think before you click." doesn't apply to me. ROFLMAO

Try the Thread: "I control the data."

egads101 says

The oracle lives under a tree on a mountain, and yet possesses the ability to predict the housing future...

you seem to judge only by superficial qualities, and strive only for personal insults. You should strive to make yourself feel better, than you wouldn't be such a pathetic person in real life!

is that how you describe phoenix now roberto? is it helping you get renters into your shacks?

Yeah the wishful thinking/denial on this board is an amazing insight into the human mind.

Everyone who bubble sat only to watch prices sky the last 2 years should probably give up and buy with an ARM loan or 'rent 4eva'. No other choices really, you could watch prices rise for the next 5 years only to wait 5 more for them to drop 20%. You snooze you lose.

its a high stakes game for sure. I bought last year, im up 300k. Not much compared to robertowog but its money when I sell.

Oh noes!!! The housing market will crash!!! Buy Gold! It's never been worth zero!

David Losh says

Many homes went through a foreclosure process that kept them off the market. In a more sensible market those homes would have been sold by the home owner rather than them go back to the banks. That created at least a between six months to two years of low inventory.

With this rise in prices some home owners, banks, investors just might sell into the housing market, rather than buy.

Good point.

Inventories up, mortgage applications down, price reductions outnumbering price increases.
I didn't predict it either.
And there is evidence of continued "recovery" in housing?
It's over.

Here is your bubble:

Trulia gives nice long term graphs.

http://www.trulia.com/real_estate/Chicago-Illinois/market-trends/

http://www.trulia.com/real_estate/Miami-Florida/market-trends/

Not as much of a bubble in the first place, in the Bay area, at least compared to places like Miami or Vegas, or Phoenix.

http://www.trulia.com/real_estate/San_Francisco-California/market-trends/

True, but it's so sick that the republicans play the people like that. I don't see how the politicians can be that stupid. Which means it's just a political game to them.

They're all afraid to confront the issue and talk about things like really taking a lot of the money out of politics.

IT is scary though. What is it going to take for us to try to solve these problems ? Can we still be the America that we are now when the government isn't spending beyond its means ?

It's not that scary.
The problem is very simple: the debt and corresponding money supply grew, but inflation was killed, and that meant the debt gets accumulated. The extra money was simply absorbed by the rich.

There are solutions: you could let inflation rise by massively taxing the rich and spending the proceed (the Krugman solution), or you could deflate the debt. Or a combination of the 2.

The worst solution is what they try to do: continue to increase the debt with no inflation.

Heraclitusstudent says

They hear the stridents cries of Krugman shouting "not now", when it has lasted 3 decades+ and nothing has changed or gotten better.

in a general sense the problem is that the concept of 'freedom' invented in the 60s and proliferated in NY and California are simply not financially feasible at all. These "3+ decades" were basically the entire lives of the flower children cum yippies cum yuppies cum retirees with real estate assets. It's simply financially feasible and if we don't stop these people we're all going to be in a load of !@#$.

Heraclitusstudent says

It's not that scary

I wasn't looking at the side of the issue you are. You're right about the net result. But there's also the military power that we project, and use, as well as the way that ways that we deal (and don't deal) with poverty.

MershedPerturders says

in a general sense the problem is that the concept of 'freedom' invented in the 60s and proliferated in NY and California are simply not financially feasible at all

I consider this mostly BS propaganda. The rich benefit from all that spending.

I say the bigger issue is not being willing to pay for what we (the government) spend. Taxes are too low, relative to spending. And that can never resolve itself until we pay our bills. When we pay for what we spend, then we will face the tough decisions. Until then it's all lies and bullshit games from the politicians.

The people who would pay most of the taxes are the same powerful people that need to make the tough decisions. They would rather not pay, but keep on spending too much because it ultimately benefits the 1% as long as this can last.

What happens when it can't last any longer ?

I don't know. Let's hope it isn't a dictatorship.

Raise taxes, eliminate loopholes, cut defense spending (the #1 discretionary expenditure).

What family says "Well, we're spending $500 on groceries, $500 on retirement and education, $500 on rent, and $1000 on paint ball. It's clear we're spending entirely too much money on non-essentials like food, provision for the future, and basic infrastructure. How can we cut those while keeping our vital paint ball budget fully funded?"

Why, yes, yes they are. Just like official government economic figures.

I'm confused. Why are they laying off so many employees if posters here are saying the housing market is strong and prices are going to keep going up due to strong demand. Serious question to those guys

1) If I buy a house in SoCal: $500,000 with 20% down, 30 year mortgage, 3.5% interest rate vs. 4.5% interest rate, the payment is $1,796.18 vs $2,026.74 or a difference of $230.56 per month. Yet you say mortgage rate increases are not relevant?

2) If the Ca economy is going sideways to down, wouldn't home prices being going down as well in conjunction with #1 above?

3) Seasonal increases in home prices along with negative economic conditions in the State along with interest rate increase would make home ownership even more expensive and risky for the homebuyer.

When one considers these three factors in conjunction with each other one comes to the conclusion that home prices will move sideways to lower over the next 6 months. Yet your conclusion is that they will move higher.

I guess you need money to make money and not everyone can be a "big baller" like you.

As for the rest of us looking to home ownership as a place to live, we sit on our downpayment and we wait and rent.

In either case good luck!