patrick.net

LOL! Hey, I hear they work cheap –could really save a bundle not having to hire all those lazy, spoiled Americans. Plus they already speak Spanish!

Will they collaborate with the Border Watch Minutemen though?

A recent legal immigrant myself, I dislike illegal immigration just as much as anyone does. But, I respect those Latinos who work hard on farms or pick up undesirable cleaning jobs simply because some of our own citizens would rather sit on their fat ass to claim food stamps and watch TV all day than work. Seeking a better life is a basic human need, I was born to a better situation overseas, so I can afford to emigrate to any country legally. If I was born to the same situation as those illegal immigrants, would I risk everything to go across the border? Hell Yes. That is simply an economic force hard to fend off.

Plus, their children will automatically become American citizens anyway, unless everyone wants to amend the Constitution. I am all for that, I think this is long overdue, we and Canada are the only two idiot countries that hand out citizenship left and right to any births on US/Canadian soil. Australia stopped doing that, Europe stopped doing that, I don't see us that desperate for population growth. If children born to foreign parents are no longer recognized as US citizens and denied all social benefits, there will definitely much less of a motive for someone to cross the border.

There is also nothing wrong with outsourcing, business seeks profits, and that is the only raison d'etre for any company. America is supposed to discard these low-paying, low-productivity jobs to third world countries so that our more elite labor force can move up the food chain. But do we have enough education to go around to make our labor force elites that can take up all the best jobs in the world? Obviously not, because our public school system is a JOKE.

..."long-term average supply of 6.5 months"

Does that "average" strike anyone as rather high? And, how accurate is "days on market" really? Realtors would only have an accurate figure if demand is relatively stable, which is NOT the present situation.

Does that “average” strike anyone as rather high? And, how accurate is “days on market” really? Realtors would only have an accurate figure if demand is relatively stable, which is NOT the present situation.

When did they start looking at historical averages? Let's see, the average real appreciation of real estate is...

The NAR, as they have in the past, will continue to forcast the future a helluva lot more accurately than have the bubbleheads.

Were there bubbleheads in the past?

Excellent points, Owneroccupier.

Um, yes. I was recently going over my Merrill Lynch files, they “called the top” over two years ago, almost three. Schiller? Same thing. I could go on and on.

Well, last year, I predicted the bubble will end in 3-5 years. Looks like I is coming early now. I am not accurate. :(

Just a word of caution for those who want to pick up cheap properties after the bubble, be patient. Wait for at least 5 years.

I have witnessed this first hand in Tokyo and Hong Kong after the RE bubble bursts. RE bubble takes a LONNNNNNNNG time to deflate. Those who jumped in at the 6th year after the peak still found themselves trapped in a downward spiral. You won't get your dream property for 50% of what it is going for today. A prime property in any of these markets never lost that much, although the general market headed down 60-80%.

When does it bottom out? The last BA bubble took 5 years to hit the bottom. The RE of today's scale may easily take a decade to reach the bottom. If you are renting, find yourself a nice pad, be prepared to camp out there for at least 6-8 years before you commit yourself to buying, if you care about picking up the best deal on earth.

I do think 6 months sounds about “normal” up until about 5 years ago..

Yeah--that's what I was wondering about! If that's what they're doing, it would be rather funny, because they're citing old data to compare new "bubble" data, while ignoring past growth trends (10+ years), and hailing current sales/pricing as a new paradigm. From the coworker's convos, to the realtor spin, I find this all very amusing. It's not a bad reason to grab a beer, take a seat on the sideliness, and enjoy the show! :)

What about Ocotober? (I know, not the bubble burstiing, just some mysterious “event” that will LEAD to the demise of all human kind?)

We will see. I will get you a beer if I am wrong, okay?

If you think inventory in CA will reach correction levels any time soon, good luck. I wonder how many even know what the inventory was going into the last correction in order to put the current numbers in perspective?

go ahead--tell us.
If the situation in San Diego is any indication, we should know soon.
Inventory first, prices follow.

If you think inventory in CA will reach correction levels any time soon, good luck. I wonder how many even know what the inventory was going into the last correction in order to put the current numbers in perspective?

Reflexivity. Correction brings inventory brings correction brings inventory...

Moreover, demand decreases when inventory increases (!). This will swing around inventory level (inventory/sales) rather quickly.

One big difference in the last BA bubble vs the current one is, last one was driven by owner-occupiers. There were very few investors flipping multiple properties in marginal areas. This time, there are far more investors holding on to 2+ properties with our newly invented interest-only loans in lots of marginal areas (because the cost of holding properties in nice areas is simply too prohibitive).

After the bubble, we shall see a widening differential between the prime and non-prime areas in BA. Place that are currently undesirable will be much more so afterwards, all the abandoned homes and forclosures will lead to further financial straining for the local councils, worse school system and inadequate funds for local police force. In short, the rich gets hurt a bit, the poor gets hurt a lot, disproportionately. It will be sad to see some up-and-coming neighborhoods becoming ghost towns after the retreat of investors.

One big difference in the last BA bubble vs the current one is, last one was driven by owner-occupiers.

So it was caused by people like you!

You are claiming that THEY are saying “new paradigm” –and at the same time, you are nailing them for using OLD “days on market” norms?

Well, I am not by any means saying that the OLD “days on market” norms are out the window. The market is not crashing YET. However, I shall maintain that "days on market" will reach correction level more quickly than before. Hurricanes are forming much more quickly nowadays.

Van Kouver, I would love to buy in Vancouver a few years later, seriously. My wife loves False Creek and Coal Harbour.

Owner-occupiers are fine, we just want a roof over our head. I am not going to abandon my home or take a loss as long as I can cover my mortgage. It is the investors who are bringing the biggest damage to this market. They are ready to jump ship any time.

Owner occupier is your friend, we are in the same trench.

Owner occupier is your friend, we are in the same trench.

I know. Just could not resist. ;)

Now I cant decide what I should root for, the October “event” or the beer. Or is this antother one of those “pre-loaded” predictions where you will simply say: Two Hurricanes = October event? TSINGTAO this time perhaps….

If I am evil I would just say "Two Hurricanes = October event". But that is not what I have in mind.

TSINGTAO is prime.

But Kurt, you are saying two things at the same time here.

You are claiming that THEY are saying “new paradigm” –and at the same time, you are nailing them for using OLD “days on market” norms?

Really, am I doing what I accuse? Well, it's just a general observation of what they're saying...I'm not making the claims, am I? :) I've read of realtors claiming the old growth figures, wages, etc. are not indicative of current RE pricing...so if they're using old inventory stats, I find that confusing (imo).
I'm happy to embrace historical data. I've already seen where short-term, hype/profit driven projections lead during the dot-com. Since I really find a similarity between dot-com pundits and realtor speak, I'm naturally wary, suspicious, and skeptical. Someone wise once said, to paraphrase: "fantastic claims demand fantastic evidence."
Realtors make some pretty tall claims that beg for a similar level of data, evidence.

Whew

I couldn't check in much today, so I am very happy to see actual intelligent conversations taking place.

Harm

I emailed my husband the address to gotexit.net because I thought it was so hilarious. I also liked the craigslist post (and your translation) too too funny.

Btw, I'm getting very busy these days. We need more threadmaster's. Anyone anyone??? I'm going to keep pestering until someone steps up. :razz:

VanKouver,

what's your market like? I remember that u guys had a big crash in 1991, and it took almost 10 years to get back to 91 price, is that the case? How big was the crash in 91?

Btw, I've always liked Vancouver. But I am just so amazed that how can a high-tax, jobless place support so many high-priced properties? Is Vancouver only reserved for rich retirees?

Bravo. However, slavish adherence to a single, underlying market philosophy will often lead you contrary to your own best interest by blinding you to significant event-specific factors.

We will find out soon enough. In a few years, I mean...

Owneroccupier Says:
You won’t get your dream property for 50% of what it is going for today.

This needs emphasis, in my opinion.

You won’t get your dream property for 50% of what it is going for today.

Timing any market is exceptionally difficult, and is more luck than skill. RE is especially tough, because of the time lag and fragmented information. I sometimes get the feeling here on this board that lots of folk thing they'll swoop in like robber barrons and buy mansions for pennies on the dollar. This won't happen. Period. If it does, it's the 1930s all over again and you'll be in a soup line with me right behind you.

When the RE bubble corrects, the fundamentals of many other parts of the economy will also change and it will be hard to position yourself to really benefit by much, unless you are already so cash rich as to make it almost a moot point. The main things that will prevent many from exploiting lower nominal prices will be much higher borrowing rates, more restrictive lender policies, increased income volatility, and uncertainty about the future value of the house asset itself.

I think the sainer thing to do is keep waiting to buy until your own personal situation puts you in a position to feel comfortable about your purchase. That is, you have a reasonable loan and enough certainty about your future earnings to support the payments. In other words, buy what you can afford and are willing to buy. That's the best way to time things. If you can afford a 750K $hitbox, but wouldn't buy it; don't. Maybe you'll buy a 750K reasonable SFH, or a 550K $hitbox and feel better about it some time later.

Btw, I’ve always liked Vancouver. But I am just so amazed that how can a high-tax, jobless place support so many high-priced properties? Is Vancouver only reserved for rich retirees?

MIRAGE again? It is indeed a very good place to retire in.

I think the sainer thing to do is keep waiting to buy until your own personal situation puts you in a position to feel comfortable about your purchase. That is, you have a reasonable loan and enough certainty about your future earnings to support the payments.

Very true.

However, 50% correction in some homes should be no big deal for the financial system. When that happens, the median price will probably register a loss of 20% or less.

For a primary residence, it is always fine to buy if one feels comfortable about the deal.

Randy H, I agree with you.

Most people on this board also expect the correction to happen in a few months. It won't. It takes years to unwind. So if they want to wait for the bottom, they should be really really patient. Be prepared to wait for your dream property discounted to perhaps 35% of today's value, adjusted for inflation/loss in USD value etc, 8 years down the road.

The $hitboxes will go down real fast. But you don't want to live in $hitbox neighborhood during a downtime in America. Trust me, it is hazardous to life.

I meant 65% of today's value, 35% of today's value, yeah, I wish.

Randy really has a point. I much rather have higher rent and higher overall income in the economy in order to justify the higher price than have a crashing economy. If my preference is irrelevant. We must position for the crash if that is the likely outcome.

Well Vancouver is kinda “prime” but there is evidence of overbuilding
and the September inventory may be up above the last two years ultimately it is a glacial pace and requires infinite patience….

It has "overbuilding" written all over the wall. I guess condos will be a good buy in a few years.

Plus the CAD/USD exchange rate was around 1.6/1.0...

I looked at Vancouver in 2001 and am sorry to have passed. Well, there will always be opportunities in the future since RE will likely become very unpopular in the next decade.

yes we have oil, we have minerals and coal, we have water and at some point will be willing to sell everthing to the highest bidder

Oil or tar sand?

here’s today’s sunset

primetroll, please do not tempt us.

Primetroll,

we are well aware of the black gold reserve up there. We consider Canada a province of the Empire of America, thanks for keeping the oil, gold, lumber intact. :-)

But, Peter, am I to understand that as a climb down from your previously stated “October Surprise” position shared by all of the wizards on Ben’s mushroom farm?

Not exactly. It will be a credit market event. RE corrections take years.

Mushroom farm? If it is white truffle I am up for it.

Jack--
LOL...online here, it's good to be reminded we're both reasonable guys...even if I know how to tap phone boxes ;)

SactoQt -

Hey, sorry for the primadonna thing back top this thread. Shouldn't have done the "I'm leaving thing." Really not a response to anything said here. Really juvenille.

Further, thanks for monitoring the thread. It's a public service, and you're not even taking my tax money at the point of a gun.

Finally, I meant what I said about letting trolls talk, but I didn't say it with the intent to rub salt in the surfers wounds. I apologize for doing that.

As for the person who questioned my level of hate?
There is almost none left. What you read is disappointment and disgust, not hate.

Oh, and Jamie, please don't assume too much when you read my posts. When I said middle america would find california type diversity unwelcome, I neither implied nor stated that I was of like mind. I don't like American culture much, so I find it quite easy to deal with others.

"Oh, and Jamie, please don’t assume too much when you read my posts."

Escape, I'm sorry I read more into your post than you meant. :-)

Central Cali,

I don't have any fast stats on how many migrant workers are still employed in CA agriculture, but I doubt it's zero (the UFWs still in business, I gather ;-) ). You may be right about mechanization eliminating many of those jobs, but last time I travelled up the I-5 I saw plenty of 'em working the fields.

Mr Left-Right-Wrong,

Hispanic tax-paying, legal workers: no problemo! The more skilled & educated, the better for everyone. Illegal, easily exploited, wage-depressing anything: not so good.