Guest yobob1 Posted December 24, 2002 Report Share Posted December 24, 2002 You can call it a bubble or not, makes no difference. The simple fact is if you graph the increase in mortgage debt since the early 80's you will find the same parabolic curve that was evident in stocks. This is simply a case of monetary inflation impacting an asset class via the conduit of imprudent lending practices and artificially low interest rates. Now if equity had risen at the same rate as valuations I would not be as upset about it. But Joe has continually monetized his equity to a perilous state and many new "Joes" are starting out with no equity what so ever. Home prices have increased far beyond the increase in incomes. In fact aggregate incomes are falling when you factor in capital gains, job losses and reduced hours. You only have to look at state or federal tax receipts to figure that out. The market is priced for perfection and has only expanded with rampant subprime lending feeding the bottom of the pyramid. Subprime is going to get it's reins jerked one way or another and the lack of an expanding base will topple the pyramid. Link to comment Share on other sites More sharing options...
DogBoy Posted December 24, 2002 Report Share Posted December 24, 2002 "I do not see owning property here in the midwest as a poor proposition. While there certainly are areas and property here that is laughably priced, this area has been among the most stable in history." Living in the Chicago burbs most of my life I have to comment on this. Last summer there were people going door to door trying find anyone who would sell there house. Finally at the end of the season 4 out of 5 houses on my block (All but mine) went up for sale at exorbitant prices. My neighbors said that after seeing the large dollars being offered and the pressure to sell they couldn't resist. And as for culture I live in one of the most expensive burbs in the Chicago area with supposedly the best schools that money can buy. And all I cay say is to be very fearful of the future of these areas cause everytime I'm out driving around I hear "gangsta rap music" pounding away and all of the listeners I see are lillly white kids. Gangsta culture has taken root in the white burbs big time. And when thse angry young people find out how bleak their future really will be yo'll see acts of violence exploding in the burbs. Right now the white kids just listem to the gansta music. Soon they'll start acting out this reprehensible lifestyle. And recent crime stats show that although overall crime is way down the crime rate among young white men is exploding. We've got a real angry generation of kids getting into the world today and their violent culture of gangsta rap music should be telling us that seomthing is amiss. I can easily forsee a time not too distant when burbs once thought to be the safest will have multiple murders on a daily basis. Of all Real Estate I see midwest burbs as being the world WORST possible deal. Exhorbitant prices at a time and age when the next generation of kids that grew up in these fancy burbs are the angriest and most violent prone we've ever seen. The one possible saving grace is that most of the kids coming out of the "best schools that money can buy" are too stupid to get or hold onto nice properties like their parents have. They'll end up living in nasty apartments and others (probably mostly furriners) will take over their parents houses. That actually is already happenning. At my daughter's high school grad a few years ago MOST of the top honors went to either oriental or indian students. This in a community that is probably 95% white. But I'm confident that in my old age I won't have to endure living next to the young creeps that curently roam the streets of my town cuz they won't have the smarts to afford to live where I do. My neighbors will likely be mostly Indians and Chinese people which is fine with me. I'm tired of hearing the yelling and screaming from the drunkards next door for the last 10 years after they come home from along weekend at the lake condo still drunker than skunks. Besides I love Indian and Chinese food. I go into the local Indian grocery and buy those spice packets and make indian style chicken. They're great people to have as neighbors. Link to comment Share on other sites More sharing options...
Grand Poopercycle Posted December 24, 2002 Report Share Posted December 24, 2002 Hey Dog- Winnetka/Glencoe? Lake Forest? Barrington? Hinsdale? Link to comment Share on other sites More sharing options...
subprime Posted December 26, 2002 Report Share Posted December 26, 2002 DB, Sounds like you suffer from the same hysteria that gripped this nation when Elvis came onto the scene. 20 years ago, my dad told me I would never be able to afford a home because they were so expensive. Funny, now I have two of them(actually the second is a condo). While I think our culture has been in a general decline since the 50's, I don't see today's current teenagers becoming a culture of mass murderers. No question that music, tv and video games have a sickening amount of violence in them, but the overwhelming majority of people in any culture look at killing as a really bad thing. People do mature with age. My parents hated the music I liked. Van Halen, UFO etc. Even worse for my brother who was a real metal head. Now he is an auditor. Quite frankly, with the exception of perhaps one case, people were NOT randomly knocking on doors in the burbs here looking to buy houses. True, it was a sellers market and asking price was often received, but you make it sound like people were foaming at the mouth trying to buy property. Since you lived in the Chicago burbs most of your life, let me ask a question. Have you EVER witnessed a decline in home values here??? That is not to say that couldn't happen, but your argument is based on hysterical assumptions and speculation about the future and not on any facts. If midwest real estate in such a bad investment in your mind, why do you still own your home? Link to comment Share on other sites More sharing options...
longOnUranus Posted December 26, 2002 Report Share Posted December 26, 2002 I grew up in Wilmette, went to NewTrier. Haven't been back in decades. The house my father sold in the sixties for 50K went for 1.6M recently, I heard. I doubt prices will go down too much in the exclusive areas any time soon. The high school top-kids are Indo-Asian in a lot of places. The curriculum fits their capabilities well. At the college and grad level, this demographic generally changes, for whatever reason. What we see in high school valedictorian and ranking demographics is a reflection of increased ethnic numbers, rather than any intrinsic cultural intellectual shift. All who live in America long enough get dumbed down by TV, public schools, crappy food and fluorinated drinking water. Dallas is a different story. Telecom bust ravaged the city, supply now exceeds demand by 6 months in some areas. The pricey areas like Highland Park still command a premium, albeit a smaller one. There are few new billionaires to keep the high-end market pumped up. My friends who see my avator tell me I look just like I did in high school, except I'm usually upright these days. Link to comment Share on other sites More sharing options...
mjkst27 Posted December 26, 2002 Report Share Posted December 26, 2002 Honestly, I don't think "smarts" will impact much on the next gen's ability to make coin. In my relatively short time in the corporate world, what I see that is in high demand is salesmanship and and a general cocksuredness. "Smarts" (aka well roundedness maybe?) is easily a distant third. In the future even more than today, unless you are freakishly intelligent in some narrow discipline and/or very well degreed, it's gonna come down to how well you sell, spin, and politic. Cold smarts alone without the other stuff is a sure way to get dead-ended on your way up the ladder. All else can and will be outsourced to cheaper bidders offshore. Link to comment Share on other sites More sharing options...
Sasquatch Posted December 26, 2002 Report Share Posted December 26, 2002 Seems the Housing and Mortgage Bubbles are in for a Slide.. Mortgage rates, demand dip Group says applications down 7.8% last week despite record low-tying 30-year rate. December 26, 2002: 7:26 AM EST NEW YORK (Reuters) - U.S. mortgage applications fell 7.8 percent last week, even after borrowing rates touched record low levels, a trade group said on Thursday, suggesting that home loan demand, which has been key to the economy, may be slowing. Housing and mortgage demand are widely expected to plateau next year, because rates are not likely to drop much further, and the pool of consumers still looking to buy homes or refinance is shrinking. The housing sector has been a crucial support for the economy during the last two years. Mortgage refinancing fueled one-fifth of U.S. economic growth since 2000, according to a report commissioned by the Homeownership Alliance and released last week. Record home sales have also been a key source of growth in the economy this year, anal cysts said. But home sales and mortgage refinancing are likely to slow next year, said David Berson, chief economist at Fannie Mae, last week. "The best for housing is probably behind us," Sung Won Sohn, chief economist at Wells Fargo & Co. in Minneapolis, said earlier this week. Data about last week's mortgage application activity may show early signs of a slowing housing sector. The 30-year mortgage rate hit 5.74 percent last week, tying a record low, the Mortgage Bankers Association of America (MBA) said Thursday. The 30-year rate also reached that level in the week ended Nov. 8. The MBA began its weekly mortgage survey in 1990. The 15-year rate fell to 5.14 percent last week, its lowest level since 1990, the MBA said. The previous low had been 5.16 percent, in the week ending Oct. 4. Despite the lower rates, the number of applications to refinance mortgages fell 9 percent, bringing the MBA's weekly refinancing index to 4,101.0. The number of applications for mortgages to purchase homes fell 5.4 percent, bringing the MBA's purchase index to 359.4. The overall number of applications for mortgages fell 7.8 percent, bringing the MBA's market index to 908.3. http://money.cnn.com/2002/12/26/news/econo....reut/index.htm .. Link to comment Share on other sites More sharing options...
Hypertiger Posted December 26, 2002 Report Share Posted December 26, 2002 Bull market in bankruptcy is not over, and will blow off this chart in 2003, 2004 will be worse. Total in 1980 was under 400,000 a year, now it is closer to 1,600,000. Debt deflation working it's magic... The refi boom is over, at some point soon the headlines will become astounding... Link to comment Share on other sites More sharing options...
FeedFool Posted December 26, 2002 Report Share Posted December 26, 2002 Bull market in bankruptcy is not over, and will blow off this chart in 2003, 2004 will be worse. Total in 1980 was under 400,000 a year, now it is closer to 1,600,000. Debt deflation working it's magic... The refi boom is over, at some point soon the headlines will become astounding... Looking at your chart, Bankruptcy was going to the moon during the boom time; only thing stopping the rocket ship going to the moon is ultra low interest rates, which has given some breading space. Next year it will break out from double top and start to make new high. Housing boom will end when all the suckers are sucked in and there isn?t any more out there to suck in. No one can tell for sure when the last sucker is in until it happens. Banks job is to lend and it?s not their money. Lend until the last shoe falls off and wait for the Easy al with to bail them out. What have they got to lose? Lend now and be happy, Go bust and still be happy. Heads they win Tails we Lose. Nice game. I like the odds for the big Boyzs. I read some one spent 65K on lunch but it?s not their money, it?s only Toilet paper any way. Every thing Easy al does is for financial industries and that will be the case until whole system collapse. Collapse is a long long away. Link to comment Share on other sites More sharing options...
Hypertiger Posted December 27, 2002 Report Share Posted December 27, 2002 18 months or sooner. For the real estate game and that is the best sugar coating I have. It could end at any second... Link to comment Share on other sites More sharing options...
EasyAl Posted December 27, 2002 Report Share Posted December 27, 2002 This article here is urging people who own the second or third homes to sell. Link to comment Share on other sites More sharing options...
Bearwithme Posted December 28, 2002 Report Share Posted December 28, 2002 Just thought I would recommend clicking on easyal's link to my fellow stoolies. No BS perspective on real estate that is in my opinion very well written. Link to comment Share on other sites More sharing options...
DrStool Posted December 29, 2002 Report Share Posted December 29, 2002 Easy Al is like the Director of the Library of Congress. Need a fact? It's at EasyAl's fingertips. Need to think of a suitable special title for Al. Link to comment Share on other sites More sharing options...
Hypertiger Posted December 29, 2002 Report Share Posted December 29, 2002 Me and the kids will live here for 20 years or so.... yuck. Link to comment Share on other sites More sharing options...
Goldilocks Posted December 29, 2002 Report Share Posted December 29, 2002 I know what you mean Doc. I hate him out of pure jealousy as well. :-) Link to comment Share on other sites More sharing options...
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