Buying a House: Things you Should Consider
Author: Alexander
Posted: Wed May 04, 2005 4:12 pm
Post subject: Buying a House
The coming housing bubble
Homes: U.K. went cold; U.S. could too, Money.com, 4 May 05
"Between the fourth quarter of 2000 and 2004, U.K. home prices increased 88 percent, on average, according to the Halifax house price index. U.S. home prices, meanwhile, increased 35 percent during that time, according to the National Association of Realtors.
The U.K. housing market started to gain steam in the late 1990s, beginning with the higher-priced properties in London and spilling over to virtually every region and every type of housing. "Buy-to-let" became all the rage as investors shifted funds from their traditional portfolios into rental properties. . . .
"It was rising at a 20 percent annual rate and then suddenly stopped in its tracks," said John Calverley, chief economist and strategist of American Express Bank in London and author of "Bubbles and How to Survive Them."
While economists disagree on whether the U.K. is experiencing a temporary lull or the beginning of a housing bust, buyers there seem to be waking up to the idea that double-digit price gains can't last forever. Prices overall have been flat, with small increases in some areas and declines in others. . . .
"My sense is that the U.K. market is two or three years ahead of the U.S. market," said Calverley. Every market has its own dynamic, but there are lessons to be learned from what's playing out across the pond. . . .
Yet, U.K. buyers -- who typically finance with monthly adjustable-rate loans -- did eventually take notice after the Bank of England started raising rates. By most measures, housing prices started declining in June 2004 after the bank's third quarter-point rate increase. . . .
According to the Council of Mortgage Lenders, lending to "buy-to-let" investors dropped 18 percent between the first and second half of 2004 – compared with only a 3 percent drop for owner-occupied buyers. During that time, the number of such investors unable to meet their mortgage payments increased 50 percent.
"People were buying thinking they'd rent it out and make 15 or 20 percent appreciation, but now they're left with only the rental yield," said Stansfield at Capital Economics."
http://money.cnn.com/2005/05/03/real_estate/investment_prop/lessons/index.htm
Board Monitor
Board Monitor/ Administrator
Posted: Thu May 05, 2005 8:47 am
Post subject: Buying a House
Interesting. Thanks for the post!
_________________
Best Regards,
Curtis Arnold
Board Monitor
http://www.cardratings.com
(501) 663-0314
Author: nixuzer
Posted: Thu May 05, 2005 8:55 pm
Post subject: Buying a House
Since I'm not sure of the tax benefits and implications of home ownership outside the U.S. this is intended to address people living in the U.S.
A group of guys that I meet with have actually been discussing this lately and we've arrived at different conclusions but the issue has been, Is a home a good or mediocre investment? Here are a few links that are food for thought, some relate to what some people are saying is the coming bust of the housing market in the U.S. The interesting part for me is that coming from the tech sector I'm starting to see the same statements being made by 'real estate gurus' that were being made by 'tech gurus' prior to the equity market crash a few years back (see 4th link)....just replace tech/computers with the term real estate/rental properties.
Like anything it is a speculative situation that you need to determine which speculators you agree with. As I've said in other posts...stay debt free (or get debt free), keep a 3-6 month emergency fund and never charge money on your credit cards you can't afford to write a check for right now..the only exception being a reasonable home mortgage. There are rare circumstances that will violate this (like an unexpected, expensive health crisis that you don't have coverage for, been there done that) but those should be a small fraction of the population and Ethan Allen's 'once in a lifetime showroom sale' does not qualify as an emergency that you must use your credit card for.
Don't get trapped in a housing bubble;
http://moneycentral.msn.com/content/Banking/Homebuyingguide/P37631.asp
Housing bubble is real, report says
http://moneycentral.msn.com/content/invest/extra/P87483.asp
Is your house really a good investment?
http://www.smartmoney.com/mag/index.cfm?story=feb02-investment
Housing mania will end in tears
http://moneycentral.msn.com/content/P108402.asp
In a market this hot, home buyers and investors can easily get singed. Here's what could happen. Plus: Tips to get you through unscathed.
http://biz.yahoo.com/special/realest05_article1.html
The Buy vs. Rent Decision
http://biz.yahoo.com/pfg/e10buyrent/
Rent vs Buy Calculator
http://home-equity.interest.com/content/calculators/rentvsbuy.asp
Growth Calculator (good for comparing different investments)
http://www.fidelity.ca/fidelity/cda/ext_app/growth_calculator_eng/0,,,00.html
Board Monitor
Board Monitor/ Administrator
Posted: Fri May 06, 2005 8:26 am
Post subject: Buying a House
Great post! Enjoyed the links. I think the one exception to this would be buying houses as rental property. My wife and I are seriously looking in to this option.
_________________
Best Regards,
Curtis Arnold
Board Monitor
http://www.cardratings.com
(501) 663-0314
Author: Alexander
Posted: Mon May 23, 2005 12:39 pm
Post subject: Buying a House
Good links. Thanks!
I think there is money to be made once the bubble bursts. I think that will be around 2007, but it might be a bit later. In areas where the price appreciation has not gone wild there will always be individual home owners who will sell at a discount. If we get a small recession or even just an economic slowdown along with rising interest rates people who handle their debt badly may not be able to file bankruptcy while they still have a job due to the new bankruptcy laws so there will be foreclosures even in nice areas.
Last edited by Alexander on Tue May 24, 2005 9:04 pm; edited 1 time in total
Author: nixuzer
Posted: Mon May 23, 2005 12:57 pm
Post subject: Buying a House
Alexander wrote:
I think that will be around 2007, but it might be a bit later.
Why would you say that it will be 2007? Also, what would cause you to believe that there will be a burst of the bubble?
Some more links supporting/refuting the housing bubble bursting:
After the Housing Boom
http://www.businessweek.com/magazine/content/05_15/b3928001_mz001.htm
Fed Watch: The Fed and the Housing Bubble
http://economistsview.blogspot.com/2005/05/fed-watch-fed-and-housing-bubble.html
As Prices Rise, Homeowners Go Deep in Debt to Buy Real Estate
http://bigpicture.typepad.com/comments/2005/05/as_prices_rise_.html
Price Bubble Won't Burst
http://www.realtor.org/rmomag.nsf/pages/indwatch200207152
More Than a Bubble Keeps Housing Prices Sky-High
http://www.ksg.harvard.edu/news/opeds/2004/retsinas_bubble_more_lat_042004.htm
_________________
"Failure is not fatal. Only failure to get back up is." :: John C. Maxwell
Author Alexander
Posted: Mon May 23, 2005 1:25 pm
Post subject: Buying a House
If the federal government was running close to a balanced budget we would be due for our next small recession at the end of the decade but I think it will be sooner. Greenspan seems to want to get the housing bubble to burst before he retires which in Jan 2006 so if the fed keeps raising rates the stock market will slide first and then we may see a small economic down turn in the whole US economy in a year or two that will cause the bubble to pop on the costs.
In the heartland and the south east there may not be a bubble but their may be a period where home prices will be flat for several years.
There are other factors that can cause the housing bubble to burst. If China un-pegs currency and gets into economic problems or another major terrorist attack happens in the US that could be the event that stops the irrational exuberance. The normal price of a home almost always goes up 1% beyond inflation in the long term. Inflation has been around 2.5% for the last 5 years or so. So, the appreciation of a home should be 3.5% on average. Any place where the price has been going up over say 6% would be a place that could see a bubble bursting.
Author: nixuzer
Posted: Mon May 23, 2005 1:54 pm
Post subject: Buying a House
Alexander wrote:
Greenspan seems to want to get the housing bubble to burst before he retires
Would you mind providing some links to the fact that he wants to burst the housing bubble? I was aware of the fact that he was retiring but not that he wanted to burst the bubble (whether perceived or real).
The only thing I've seen is that he has stated that he sees some 'frothing' in the housing market and localized bubbles but not that he wishes to sqash it. Granted he has to be careful what he says (can anyone see him saying, "Yea there is a really bad housing bubble and everyone should sell now, refinance or get their debt down before this baby goes bad"...not likely)
I can't say that I can find a link that states that Greenspan intends to burst the housing bubble. You might check out Creamers site: He seems to think that Greenspan will keep raising rates until the housing bubble is burst even if it means making the stock market go down.
http://find.thestreet.com/cgi-bin/texis/rmyradio
In general, the price of a house rises exactly 1% beyond inflation over the long term and inflation is at about 3.25% right now and has been at about 2.5% for the last 5 years or so. So any market that is seeing price appreciation above 4% is seeing unrealistic price appreciation.
There are several factors that make me think that the bubble will burst soon.
1. Inflation up. Especially energy prices.
2. Productivity down. Declines in education and engineering prominence combined with the PC revolution ending.
3. A flat yield curve that is about to become inverted.
4. The bankruptcy reform bill is about to increase the number of home repossessions in up-scale neighborhoods.
5. Economic insanity. People are living beyond their means, charging more, and saving less.
6. The federal deficit. This will cause upward pressure in interest rates.
Home sales soar to record
"The median price of an existing home topped $200,000 for the first time, climbing to $206,000 nationwide, up about 7 percent from March and 15 percent from a year earlier. Half of existing homes sold above the median and half below. "
http://money.cnn.com/2005/05/24/news/economy/homesales/index.htm
Minutes show energy prices concerned Fed
http://customwire.ap.org/dynamic/stories/F/FED_MINUTES?SITE=VANOV&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2005-05-24-14-04-38
http://money.cnn.com/2005/05/24/markets/markets_newyork/index.htm
Greenspan Calls Housing `Speculation' Unsustainable (Update2)
http://quote.bloomberg.com/apps/news?pid=10000006&sid=al0s_e02NpsE&refer=home
Bubble bubble toil and trouble: duuhhhh edition
"The gap between income and Massachusetts home prices is the widest since the peak of the 1980s housing bubble, and that gap, intensified by rising interest rates, should cause home prices to dip later this year, according to an economic forecast released yesterday."
http://bluemassgroup.typepad.com/blue_mass_group/2005/05/bubble_bubble_t.html
The Fed sees bubbles -- and keeps them secret
http://moneycentral.msn.com/content/P108996.asp
The Fed Starts to Show Concern Over Bubble
http://www.realestatejournal.com/buysell/salestrends/20050519-wessel.html
Fed Governor - no housing bubble but sharp price falls in some areas
http://housing-bubble.com/news/fed-housing-bubble-010303.html
Fed voices concern at signs of a housing bubble
http://www.post-gazette.com/pg/05139/507226.stm
Greenspan Sees Bubbles in Housing
http://www.latimes.com/business/la-fi-green21may21,1,3482524.story?coll=la-headlines-business
Popping the Housing Bubble
http://www.qando.net/details.aspx?Entry=1686
San Francisco Bay Area Housing Crash Continues
http://patrick.net/housing/crash.html
Yield Curve Flattens Into "Danger Zone"
http://thehousingbubble.blogspot.com/2005/05/yield-curve-flattens-into-danger-zone.html
Historical Yield Curve
http://fixedincome.fidelity.com/fi/FIHistoricalYield
Housing, hedge funds spur bubble worries
Some experts fear low interest rates may have pumped too much cash into global markets
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/05/22/BUG5OCSNES1.DTL
Revolving consumer credit hovered above the $800 billion milestone in February.
http://www.cardweb.com/cardtrak/news/2005/april/7a.html
The Godzilla Economy
http://dsiegel.blogs.com/thoughts/2005/03/the_godzilla_ec.html
Moor inflation predictor:
http://fintrend.com/ftf/images/charts/mip20050518.gif
Author: Alexander
Posted: Wed May 25, 2005 11:56 am
Post subject: Buying a House
NPR Radio Program
Real Estate Reality Check
"For many Americans a house has become more than a home. It's become a personal ATM, a source of easy money.
The latest housing sales numbers show the country is still in the grips of feverish real estate boom that's driven the average price of a single family home up 50 percent. That means home equity loans and refinancing have become the new way to pay for vacations or college.
This frenzy has some economists warning that what goes up must come down. And if it does drop -- it's going to come down on top of a lot of people who are stretched far beyond their means. And since real estate helps the overall economy by giving consumers more money to spend...a market crash could hit home for all of us."
http://www.theconnection.org/shows/2005/05/20050525_a_main.asp
Author: nixuzer
Posted: Wed May 25, 2005 7:01 pm
Post subject: Re: OK
Alexander wrote:
The Fed sees bubbles -- and keeps them secret
http://moneycentral.msn.com/content/P108996.asp
All of the links you provided in the post were interesting but this one especially interested me. This has continued to be interesting as of course these poeple aren't going to say things are looking bad because they don't want to cause 'widespread panic.' As I seem to recall Greenspan saying before (but can't seem to locate it at the moment) sometimes it is hard to see problems until after they've occurred.
For some reason this whole thread got me thinking about a contract I was back in 1999-2000 where the company I was working for was partially owned by Enron. Everyone was converting their investments into Enron stock (or worse...borrowing to invest) because it was doing so well. A lilttle while after the 'announcement' I made a call to an old acquaintance up there to see how everyone was doing, he said the building was 'very quiet.' Fortunately I didn't get caught up in the hoopla and instead just kept working on getting debt free and getting some money for my emergency fund. Same mindset....If everyone is doing it maybe it is time to step back and look at the numbers which, Alexander, you've done a great job of starting to expose people to through the links in your posts. Time will tell what the reality of the situation is, hopefully for the sake of people that are overleveraged it is a somewhat soft landing.
_________________
"Failure is not fatal. Only failure to get back up is." :: John C. Maxwell
Author: nixuzer
Posted: Fri May 27, 2005 9:11 am
Post subject: The real risks of
investing in real estate
Here's another good article that touches on the issues related to the overconfidence in the mortgage industry. It has some good, common sense approaches if you are going to become a real estate investor in the current market.
1. Watch your cash flow
2. Mind the cap
3. Don’t be in a rush
4. Know who’s paying
5. Have an exit strategy
6. Make sure it’s for you
_________________
"Failure is not fatal. Only failure to get back up is." :: John C. Maxwell
Author: nixuzer
Posted: Fri May 27, 2005 10:02 pm
Post subject: Buying a House
You know, it's hard not to keep the articles a coming. This is a 3 part article that is pretty interesting so far.
Real Estate Bubble
_________________
"Failure is not fatal. Only failure to get back up is." :: John C. Maxwell
Author: nixuzer
Posted: Mon Jun 20, 2005 9:51 am
Post subject: Buying a House
Just stumbled across this, looks like the Feds also see a problem with the extreme overlending to uncreditworthy people, this was back in May.
http://www.federalreserve.gov/boarddocs/press/bcreg/2005/20050516/attachment.pdf
_________________
"Failure is not fatal. Only failure to get back up is." :: John C. Maxwell
Author: nixuzer
Posted: Wed Jul 06, 2005 6:18 pm
Post subject: Buying a House
The humor just won't stop
http://www.usatoday.com/money/perfi/housing/2005-07-05-million-dollar-trailers_x.htm
_________________
"Failure is not fatal. Only failure to get back up is." :: John C. Maxwell
Posted: Wed May 04, 2005 4:12 pm
Post subject: Buying a House
The coming housing bubble
Homes: U.K. went cold; U.S. could too, Money.com, 4 May 05
"Between the fourth quarter of 2000 and 2004, U.K. home prices increased 88 percent, on average, according to the Halifax house price index. U.S. home prices, meanwhile, increased 35 percent during that time, according to the National Association of Realtors.
The U.K. housing market started to gain steam in the late 1990s, beginning with the higher-priced properties in London and spilling over to virtually every region and every type of housing. "Buy-to-let" became all the rage as investors shifted funds from their traditional portfolios into rental properties. . . .
"It was rising at a 20 percent annual rate and then suddenly stopped in its tracks," said John Calverley, chief economist and strategist of American Express Bank in London and author of "Bubbles and How to Survive Them."
While economists disagree on whether the U.K. is experiencing a temporary lull or the beginning of a housing bust, buyers there seem to be waking up to the idea that double-digit price gains can't last forever. Prices overall have been flat, with small increases in some areas and declines in others. . . .
"My sense is that the U.K. market is two or three years ahead of the U.S. market," said Calverley. Every market has its own dynamic, but there are lessons to be learned from what's playing out across the pond. . . .
Yet, U.K. buyers -- who typically finance with monthly adjustable-rate loans -- did eventually take notice after the Bank of England started raising rates. By most measures, housing prices started declining in June 2004 after the bank's third quarter-point rate increase. . . .
According to the Council of Mortgage Lenders, lending to "buy-to-let" investors dropped 18 percent between the first and second half of 2004 – compared with only a 3 percent drop for owner-occupied buyers. During that time, the number of such investors unable to meet their mortgage payments increased 50 percent.
"People were buying thinking they'd rent it out and make 15 or 20 percent appreciation, but now they're left with only the rental yield," said Stansfield at Capital Economics."
http://money.cnn.com/2005/05/03/real_estate/investment_prop/lessons/index.htm
Board Monitor
Board Monitor/ Administrator
Posted: Thu May 05, 2005 8:47 am
Post subject: Buying a House
Interesting. Thanks for the post!
_________________
Best Regards,
Curtis Arnold
Board Monitor
http://www.cardratings.com
(501) 663-0314
Author: nixuzer
Posted: Thu May 05, 2005 8:55 pm
Post subject: Buying a House
Since I'm not sure of the tax benefits and implications of home ownership outside the U.S. this is intended to address people living in the U.S.
A group of guys that I meet with have actually been discussing this lately and we've arrived at different conclusions but the issue has been, Is a home a good or mediocre investment? Here are a few links that are food for thought, some relate to what some people are saying is the coming bust of the housing market in the U.S. The interesting part for me is that coming from the tech sector I'm starting to see the same statements being made by 'real estate gurus' that were being made by 'tech gurus' prior to the equity market crash a few years back (see 4th link)....just replace tech/computers with the term real estate/rental properties.
Like anything it is a speculative situation that you need to determine which speculators you agree with. As I've said in other posts...stay debt free (or get debt free), keep a 3-6 month emergency fund and never charge money on your credit cards you can't afford to write a check for right now..the only exception being a reasonable home mortgage. There are rare circumstances that will violate this (like an unexpected, expensive health crisis that you don't have coverage for, been there done that) but those should be a small fraction of the population and Ethan Allen's 'once in a lifetime showroom sale' does not qualify as an emergency that you must use your credit card for.
Don't get trapped in a housing bubble;
http://moneycentral.msn.com/content/Banking/Homebuyingguide/P37631.asp
Housing bubble is real, report says
http://moneycentral.msn.com/content/invest/extra/P87483.asp
Is your house really a good investment?
http://www.smartmoney.com/mag/index.cfm?story=feb02-investment
Housing mania will end in tears
http://moneycentral.msn.com/content/P108402.asp
In a market this hot, home buyers and investors can easily get singed. Here's what could happen. Plus: Tips to get you through unscathed.
http://biz.yahoo.com/special/realest05_article1.html
The Buy vs. Rent Decision
http://biz.yahoo.com/pfg/e10buyrent/
Rent vs Buy Calculator
http://home-equity.interest.com/content/calculators/rentvsbuy.asp
Growth Calculator (good for comparing different investments)
http://www.fidelity.ca/fidelity/cda/ext_app/growth_calculator_eng/0,,,00.html
Board Monitor
Board Monitor/ Administrator
Posted: Fri May 06, 2005 8:26 am
Post subject: Buying a House
Great post! Enjoyed the links. I think the one exception to this would be buying houses as rental property. My wife and I are seriously looking in to this option.
_________________
Best Regards,
Curtis Arnold
Board Monitor
http://www.cardratings.com
(501) 663-0314
Author: Alexander
Posted: Mon May 23, 2005 12:39 pm
Post subject: Buying a House
Good links. Thanks!
I think there is money to be made once the bubble bursts. I think that will be around 2007, but it might be a bit later. In areas where the price appreciation has not gone wild there will always be individual home owners who will sell at a discount. If we get a small recession or even just an economic slowdown along with rising interest rates people who handle their debt badly may not be able to file bankruptcy while they still have a job due to the new bankruptcy laws so there will be foreclosures even in nice areas.
Last edited by Alexander on Tue May 24, 2005 9:04 pm; edited 1 time in total
Author: nixuzer
Posted: Mon May 23, 2005 12:57 pm
Post subject: Buying a House
Alexander wrote:
I think that will be around 2007, but it might be a bit later.
Why would you say that it will be 2007? Also, what would cause you to believe that there will be a burst of the bubble?
Some more links supporting/refuting the housing bubble bursting:
After the Housing Boom
http://www.businessweek.com/magazine/content/05_15/b3928001_mz001.htm
Fed Watch: The Fed and the Housing Bubble
http://economistsview.blogspot.com/2005/05/fed-watch-fed-and-housing-bubble.html
As Prices Rise, Homeowners Go Deep in Debt to Buy Real Estate
http://bigpicture.typepad.com/comments/2005/05/as_prices_rise_.html
Price Bubble Won't Burst
http://www.realtor.org/rmomag.nsf/pages/indwatch200207152
More Than a Bubble Keeps Housing Prices Sky-High
http://www.ksg.harvard.edu/news/opeds/2004/retsinas_bubble_more_lat_042004.htm
_________________
"Failure is not fatal. Only failure to get back up is." :: John C. Maxwell
Author Alexander
Posted: Mon May 23, 2005 1:25 pm
Post subject: Buying a House
If the federal government was running close to a balanced budget we would be due for our next small recession at the end of the decade but I think it will be sooner. Greenspan seems to want to get the housing bubble to burst before he retires which in Jan 2006 so if the fed keeps raising rates the stock market will slide first and then we may see a small economic down turn in the whole US economy in a year or two that will cause the bubble to pop on the costs.
In the heartland and the south east there may not be a bubble but their may be a period where home prices will be flat for several years.
There are other factors that can cause the housing bubble to burst. If China un-pegs currency and gets into economic problems or another major terrorist attack happens in the US that could be the event that stops the irrational exuberance. The normal price of a home almost always goes up 1% beyond inflation in the long term. Inflation has been around 2.5% for the last 5 years or so. So, the appreciation of a home should be 3.5% on average. Any place where the price has been going up over say 6% would be a place that could see a bubble bursting.
Author: nixuzer
Posted: Mon May 23, 2005 1:54 pm
Post subject: Buying a House
Alexander wrote:
Greenspan seems to want to get the housing bubble to burst before he retires
Would you mind providing some links to the fact that he wants to burst the housing bubble? I was aware of the fact that he was retiring but not that he wanted to burst the bubble (whether perceived or real).
The only thing I've seen is that he has stated that he sees some 'frothing' in the housing market and localized bubbles but not that he wishes to sqash it. Granted he has to be careful what he says (can anyone see him saying, "Yea there is a really bad housing bubble and everyone should sell now, refinance or get their debt down before this baby goes bad"...not likely)
I can't say that I can find a link that states that Greenspan intends to burst the housing bubble. You might check out Creamers site: He seems to think that Greenspan will keep raising rates until the housing bubble is burst even if it means making the stock market go down.
http://find.thestreet.com/cgi-bin/texis/rmyradio
In general, the price of a house rises exactly 1% beyond inflation over the long term and inflation is at about 3.25% right now and has been at about 2.5% for the last 5 years or so. So any market that is seeing price appreciation above 4% is seeing unrealistic price appreciation.
There are several factors that make me think that the bubble will burst soon.
1. Inflation up. Especially energy prices.
2. Productivity down. Declines in education and engineering prominence combined with the PC revolution ending.
3. A flat yield curve that is about to become inverted.
4. The bankruptcy reform bill is about to increase the number of home repossessions in up-scale neighborhoods.
5. Economic insanity. People are living beyond their means, charging more, and saving less.
6. The federal deficit. This will cause upward pressure in interest rates.
Home sales soar to record
"The median price of an existing home topped $200,000 for the first time, climbing to $206,000 nationwide, up about 7 percent from March and 15 percent from a year earlier. Half of existing homes sold above the median and half below. "
http://money.cnn.com/2005/05/24/news/economy/homesales/index.htm
Minutes show energy prices concerned Fed
http://customwire.ap.org/dynamic/stories/F/FED_MINUTES?SITE=VANOV&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2005-05-24-14-04-38
http://money.cnn.com/2005/05/24/markets/markets_newyork/index.htm
Greenspan Calls Housing `Speculation' Unsustainable (Update2)
http://quote.bloomberg.com/apps/news?pid=10000006&sid=al0s_e02NpsE&refer=home
Bubble bubble toil and trouble: duuhhhh edition
"The gap between income and Massachusetts home prices is the widest since the peak of the 1980s housing bubble, and that gap, intensified by rising interest rates, should cause home prices to dip later this year, according to an economic forecast released yesterday."
http://bluemassgroup.typepad.com/blue_mass_group/2005/05/bubble_bubble_t.html
The Fed sees bubbles -- and keeps them secret
http://moneycentral.msn.com/content/P108996.asp
The Fed Starts to Show Concern Over Bubble
http://www.realestatejournal.com/buysell/salestrends/20050519-wessel.html
Fed Governor - no housing bubble but sharp price falls in some areas
http://housing-bubble.com/news/fed-housing-bubble-010303.html
Fed voices concern at signs of a housing bubble
http://www.post-gazette.com/pg/05139/507226.stm
Greenspan Sees Bubbles in Housing
http://www.latimes.com/business/la-fi-green21may21,1,3482524.story?coll=la-headlines-business
Popping the Housing Bubble
http://www.qando.net/details.aspx?Entry=1686
San Francisco Bay Area Housing Crash Continues
http://patrick.net/housing/crash.html
Yield Curve Flattens Into "Danger Zone"
http://thehousingbubble.blogspot.com/2005/05/yield-curve-flattens-into-danger-zone.html
Historical Yield Curve
http://fixedincome.fidelity.com/fi/FIHistoricalYield
Housing, hedge funds spur bubble worries
Some experts fear low interest rates may have pumped too much cash into global markets
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/05/22/BUG5OCSNES1.DTL
Revolving consumer credit hovered above the $800 billion milestone in February.
http://www.cardweb.com/cardtrak/news/2005/april/7a.html
The Godzilla Economy
http://dsiegel.blogs.com/thoughts/2005/03/the_godzilla_ec.html
Moor inflation predictor:
http://fintrend.com/ftf/images/charts/mip20050518.gif
Author: Alexander
Posted: Wed May 25, 2005 11:56 am
Post subject: Buying a House
NPR Radio Program
Real Estate Reality Check
"For many Americans a house has become more than a home. It's become a personal ATM, a source of easy money.
The latest housing sales numbers show the country is still in the grips of feverish real estate boom that's driven the average price of a single family home up 50 percent. That means home equity loans and refinancing have become the new way to pay for vacations or college.
This frenzy has some economists warning that what goes up must come down. And if it does drop -- it's going to come down on top of a lot of people who are stretched far beyond their means. And since real estate helps the overall economy by giving consumers more money to spend...a market crash could hit home for all of us."
http://www.theconnection.org/shows/2005/05/20050525_a_main.asp
Author: nixuzer
Posted: Wed May 25, 2005 7:01 pm
Post subject: Re: OK
Alexander wrote:
The Fed sees bubbles -- and keeps them secret
http://moneycentral.msn.com/content/P108996.asp
All of the links you provided in the post were interesting but this one especially interested me. This has continued to be interesting as of course these poeple aren't going to say things are looking bad because they don't want to cause 'widespread panic.' As I seem to recall Greenspan saying before (but can't seem to locate it at the moment) sometimes it is hard to see problems until after they've occurred.
For some reason this whole thread got me thinking about a contract I was back in 1999-2000 where the company I was working for was partially owned by Enron. Everyone was converting their investments into Enron stock (or worse...borrowing to invest) because it was doing so well. A lilttle while after the 'announcement' I made a call to an old acquaintance up there to see how everyone was doing, he said the building was 'very quiet.' Fortunately I didn't get caught up in the hoopla and instead just kept working on getting debt free and getting some money for my emergency fund. Same mindset....If everyone is doing it maybe it is time to step back and look at the numbers which, Alexander, you've done a great job of starting to expose people to through the links in your posts. Time will tell what the reality of the situation is, hopefully for the sake of people that are overleveraged it is a somewhat soft landing.
_________________
"Failure is not fatal. Only failure to get back up is." :: John C. Maxwell
Author: nixuzer
Posted: Fri May 27, 2005 9:11 am
Post subject: The real risks of
investing in real estate
Here's another good article that touches on the issues related to the overconfidence in the mortgage industry. It has some good, common sense approaches if you are going to become a real estate investor in the current market.
1. Watch your cash flow
2. Mind the cap
3. Don’t be in a rush
4. Know who’s paying
5. Have an exit strategy
6. Make sure it’s for you
_________________
"Failure is not fatal. Only failure to get back up is." :: John C. Maxwell
Author: nixuzer
Posted: Fri May 27, 2005 10:02 pm
Post subject: Buying a House
You know, it's hard not to keep the articles a coming. This is a 3 part article that is pretty interesting so far.
Real Estate Bubble
_________________
"Failure is not fatal. Only failure to get back up is." :: John C. Maxwell
Author: nixuzer
Posted: Mon Jun 20, 2005 9:51 am
Post subject: Buying a House
Just stumbled across this, looks like the Feds also see a problem with the extreme overlending to uncreditworthy people, this was back in May.
http://www.federalreserve.gov/boarddocs/press/bcreg/2005/20050516/attachment.pdf
_________________
"Failure is not fatal. Only failure to get back up is." :: John C. Maxwell
Author: nixuzer
Posted: Wed Jul 06, 2005 6:18 pm
Post subject: Buying a House
The humor just won't stop
http://www.usatoday.com/money/perfi/housing/2005-07-05-million-dollar-trailers_x.htm
_________________
"Failure is not fatal. Only failure to get back up is." :: John C. Maxwell
posted by CardRatings.com at 11:01 AM
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