Real Estate Crash thread

[skier666]

^^^^^

California has a $28 billion deficit, Illinois $15 billion, and so on....so awesome!

At least rents are going up...my condo's value will fall but at least I'll still have a job renting apartments in Silicon Valley.

[GiBo]

It's fascinating to watch this game unfold. We're a year or two behind the EU. It's a long, slow spiral downwards. All that shitty bank debt has been pawned off on governments around the developed world, and, it's almost on a level of a three card monte game on the sidewalks of Manhattan. Ireland gets "bailed out" by the EU, which includes Portugal, at the time, but then the EU turns around and helps Portugal, who, technically, was just part of the team who helped Ireland from bankruptcy. All the while, everyone ignores the problems in Greece, which are beyond bankruptcy now. How the fuck can a country pay off nearly 10% loans when their GDP is barely registering on the EKG? Spain just stands off to the side, smiling nervously, because, if their smart, they know they're next. France? Give it 5-10 years. And the banks just hide in their closets, avoiding the assured haircuts. Oh, and, then the biggest laugh, Japan today announces that they will be buying EU bonds to help them out. Japan, a country with a debt that equals 200% of GDP and a population that, what, consists of a median age of maybe 55, and allows zero immigrants into the country to fix that?
The next twenty years will be a long, unfolding problem here as the Boomers die off. Here's a factoid for you: As of 01/01/11, 10,000 Boomers a day will turn 65 for 19 years. That's 3.65 million a year. Rounded off to 70 million by 2030. Think of what that will do to our public pension, and more important, public retiree health costs. That's the big one. Full medical for millions and millions of public retirees. You do the math. You've seen their fat asses at the mall, right? You think they are going to go fast? Drugs and hospital care will keep them alive for years and years. And, what's going to happen to the houses they "own"? That tidal wave is happening right now, and it is the phantom "shadow inventory" that no pundit can measure.
The last thing I would do right now with my money is continue paying for an underwater mortgage. Move, reset, rent, don't look back.

Jesus. Let's just declare global banckrupcy and start over then.

The pension stuff's already happening. My city has a $500 million dollar unfunded liability. The city manager is holding 'town hall' meetings to discuss the 'dire financial situation' with the employees. He's not reaching out to be warm and fuzzy and make everyone feel better. He's setting the table for pulling benifits and salary- lots of it. Full lifetime medical is over. People are talking about 25-35% cuts in benifits and salary. And that shit trickles down. Those people aren't heading down to the Home Depot for new tile floors or going to Disneyland.

Aside from feeling pretty hopeless myself, I feel really bad for my kids. My daughter will be graduating from college in about 7 years and I don't see a very bright future for her. So far my advice has been to get the fuck out of this area ASAP.

[Benny Profane]

The pension stuff's already happening. My city has a $500 million dollar unfunded liability. The city manager is holding 'town hall' meetings to discuss the 'dire financial situation' with the employees. He's not reaching out to be warm and fuzzy and make everyone feel better. He's setting the table for pulling benifits and salary- lots of it. Full lifetime medical is over. People are talking about 25-35% cuts in benifits and salary. And that shit trickles down. Those people aren't heading down to the Home Depot for new tile floors or going to Disneyland.

Problem is, the benefits due to present and near future retirees are set in stone. Cannot be modified. Maybe if bankruptcy is declared, but, even then, they may be first in line to be paid off in court. This has already been tested in the courts, and, it's written in state constitutions. Your city manager can only easily deal with new hires (maybe, if the union agrees), but that fix will only be felt thirty years from now.

My aunt pulled me to the side one day after I left college in a very bad economy way back when and tried to tell me what a great deal civil service was, which was where she was ready to retire from. I laughed to myself at the total uncoolness of the concept. Stupid me.

[skiballs]

Benny,
Here's an investmant opportunity for you, from pollyasshat.

If there is a secret nearly 4% tax on every residential home sale that goes into effect in 2013, the residential real estate market will absolutely TANK. You're right. So if you believe what Fox News et al. are telling you, I invite you, PLEASE put your money where your mouth is. You'll get rich!

I'll write puts based on the Case-Shiller index to any of you Beckoids who want to back the talk with some coin. For the record, I know you're either retarded or full of shit. Either you take me up on this offer, or you admit that you're full of shit. Think it over.

[Benny Profane]

I have no idea what you're talking about. English, please.

[skiballs]

I have no idea what you're talking about. English, please.

See polyasshat thread about ever selling your house.

[Benny Profane]

I don't go near that sewer.

[skiballs]

I don't go near that sewer.

Sometimes you gota get dirty to make a buck.
The guy offering the bet is a government economist.

[meatdrink9]

Here's some serious chicken little action for those of you into that sort of thing:

http://www.stansberryresearch.com/pr...=204256&r=Milo


RE deals out here are unbelievable right now.

[liv2ski]

Uuuuuuggh. Thanks for that inspiring morning read^^^^^^^

[Tye 1on]

Hoping we're fairly close to the bottom of the house value swing here, just made an offer on a house in Victor ID.

[Eldo]

Uuuuuuggh. Thanks for that inspiring morning read^^^^^^^

You read all of it?

I stopped as soon as I realized the source. The guy's pitching gold, silver and other metal investments under the guise of a coming economic meltdown.

U. S. JUDGE FINES AGORA SUBSIDIARY AND EDITOR $1.5 M FOR SECURITIES FRAUD

An investment newsletter’s publisher and its editor have been hit with $1.5 million in financial penalties after a U. S. federal judge determined they defrauded their own subscribers in a securities scam.

Judgment in favor of the Securities Exchange Commission and against Maryland-based Pirate Investor LLC, now called Stansberry & Associates Investment Research, LLC, and Frank Porter Stansberry was issued at the U. S. District Court for the District of Maryland on August 1, 2007 – 28 months after the completion of a bench trial. The penalty comprises disgorgement of $1.3 million in profits and interest from the fraudulent activity, for which Pirate Investor and Stansberry are jointly and severally liable, plus a fine of $120,000 against each defendant.

U. S. District Judge Marvin J. Garbis found in favor of a third defendant, Pirate Investor’s parent, Agora, Inc., determining that it could not be held liable for the fraudulent statements of its subsidiary simply “by virtue of its ownership and ability to control Pirate”. There was no evidence that Agora, as opposed to Pirate, directly made the false statements at issue, determined Judge Garbis.

The SEC had accused the defendants of fraud concerning a “Special Report” authored by Stansberry, using the pseudonym ‘Jay McDaniel’, about publicly-listed uranium enrichment services provider USEC, Inc. and a promotional “Super Insider Tip Email” offering the Special Report for sale that was distributed on May 14, 2002, after which Pirate Investor sold 1,217 reports for $1,000 each.

The promotional material offered purchasers of the report the opportunity to “double your money” by acting on “inside tips” that Stansberry had obtained from a “senior executive inside the company”, according to the SEC. However, the SEC alleged that the report, which included a claim that Government approval for a lucrative new pricing agreement involving USEC would be announced on May 22, was replete with lies and the judge agreed.

“The Super Insider Solicitation and the Special Report contain numerous statements that were untrue,” he commented. “Some of the untrue statements may not be actionable. [For example, the use of the pseudonym “Jay McDaniel” or even the predictive nature of some statements.] However, the essential fraudulent element – the misrepresentation that the purveyor of the Special Report had a particular inside source for the precise date on which the stock price would rise – is definitely actionable.”

[Lonnie]

Here's some serious chicken little action for those of you into that sort of thing:

http://www.stansberryresearch.com/pr...=204256&r=Milo

So I should dump all my money into gold and silver then?

Edit: Lol! I didn't see the post above mine....

[GiBo]

Problem is, the benefits due to present and near future retirees are set in stone. Cannot be modified. Maybe if bankruptcy is declared, but, even then, they may be first in line to be paid off in court. This has already been tested in the courts, and, it's written in state constitutions. Your city manager can only easily deal with new hires (maybe, if the union agrees), but that fix will only be felt thirty years from now.

My aunt pulled me to the side one day after I left college in a very bad economy way back when and tried to tell me what a great deal civil service was, which was where she was ready to retire from. I laughed to myself at the total uncoolness of the concept. Stupid me.

The hammer the CM's have is layoffs. They go the union members and say, "Accept a reduction in medical and a paycut or I'll have to layoff x amount of employees." The employees don't always vote to save jobs however (funny how the union brotherhood ain't so brotherly when the longer tenured members' pocket book might be affected). And not suprisingly, it's very easy to get the union members to vote stuff away from future employees.

Ha. I too bristled at the concept of pulblic 'service' (I've always chuckled at the term 'civil servant'- WTF, it's a job not a volunteer gig). But when I got out of school in a bad economy ('93) it was all I could find. The sweet irony of it is I quit to work for a builder because I hated the work environment here. Now I work for here again as a contractor and get no benifits. Your aunt was a sage. I might have been miserable in my old gig had I stayed, but I'd have great health care, 13 paid holidays and 5 weeks vaca right now.

And to those who think muni bonds are a safe bet, I'd be careful. Cities can be very 'creative' about how they show their financial health. Cities run on bonds and they know they need to look healthy to get a good rate. I don't know anyhthng about the bond market, but unless there's some way to determine if your bond is a general or enterprise fund related bond, I'd stay away.

[meatdrink9]

I didn't buy into that link either. Hence the chicken little lead in. I have however started to build a food and water storage just in case. Not due to that link, but due to the fact that I'm a parent and who knows what is ahead. Better safe than sorry. Probably some of my old Mormon brain washing finding it's way to the surface. Ha.

I'm still all about buying real estate. Continuing to ramp things up here. I should have my own brokerage soon (just finishing classes between storm cycles). I've sold 50 houses now and I didn't get my RE license until this thread had been running for quite awhile. A friend has a 2 bed 1 bath brick home with hardwoods and all appliances under contract for 25k right now. The buying is good and renting is good. Great cash flow.

I still need to post pics of our house we got for a steal and remodeled.

[Toadman]

I didn't buy into that link either. Hence the chicken little lead in. I have however started to build a food and water storage just in case. Not due to that link, but due to the fact that I'm a parent and who knows what is ahead. Better safe than sorry. Probably some of my old Mormon brain washing finding it's way to the surface. Ha.

I have a neighbor that fits this mold. He's got the food and water storage thing. Just upped the insulation factor on the house. Has the wood burning stove. I see him every now and again with his wheelborrow collecting deadfall wood in the greenbelt behind the house. He gave me a spare 55 gallon plastic water barrel. I guess I should fill that thing...but it rains a lot in WA.

[dominici]

I have a neighbor that fits this mold. He's got the food and water storage thing. Just upped the insulation factor on the house. Has the wood burning stove. I see him every now and again with his wheelborrow collecting deadfall wood in the greenbelt behind the house. He gave me a spare 55 gallon plastic water barrel. I guess I should fill that thing...but it rains a lot in WA.

I can believe a lot of what's in the stansberry link, only the thing I find strange is that the food and water thing isn't seen as the key to it all. History shows that ultimately, the thing that people queue up for in times of crisis is food and water whether it is in Haiti, New Orleans or Pakistan. Therefore, investing in gold may be a good investment strategy in the relatively short term but ultimately you cannot eat or drink it. Whilst wages and money are still available, it is a good idea to get your hands on it. But surely it would be best to invest what money we have in our own private supply of food and water? Shit will hit the fan there is no doubt. How much no one really knows. But when it does, being able to pull your food out of the ground is infinitely preferable to queueing up with everyone else in my humble opinion.

[GiBo]

[Benny Profane]

Jezuz, I'm just waiting for cheap condos, not the apacolypse.

[meatdrink9]

Therefore, investing in gold may be a good investment strategy in the relatively short term but ultimately you cannot eat or drink it.

My thoughts exactly. If it doesn't actually take care of some basic human need what value does it really have? Nothing more than "oooh, shiny". Same reason I don't buy stocks. If shit hits the fan all I'd own is paper. With real estate when shit hits the fan I have actual shelter.

[GiBo]

Jezuz, I'm just waiting for cheap condos, not the apacolypse.

If you buy some of these predictions, you may get both Benny. If we're fighting over food and water I'm pretty sure condos will be really cheap!

[Benny Profane]

If you buy some of these predictions, you may get both Benny. If we're fighting over food and water I'm pretty sure condos will be really cheap!

Well, you know, bubbles should always over shoot on the downside, they say. Good lord.

[liv2ski]

I can believe a lot of what's in the stansberry link, only the thing I find strange is that the food and water thing isn't seen as the key to it all. History shows that ultimately, the thing that people queue up for in times of crisis is food and water whether it is in Haiti, New Orleans or Pakistan. Therefore, investing in gold may be a good investment strategy in the relatively short term but ultimately you cannot eat or drink it. Whilst wages and money are still available, it is a good idea to get your hands on it. But surely it would be best to invest what money we have in our own private supply of food and water? Shit will hit the fan there is no doubt. How much no one really knows. But when it does, being able to pull your food out of the ground is infinitely preferable to queueing up with everyone else in my humble opinion.

Great take. I too can believe a lot of what's in the Stansberry link.
Meatdrink, I have wondered what will happen in a time of civil unrest and mass unemployment due to a worthless US Dollar. Frankly, I am concerned about getting my rental income in that scenario, so like everything else, I hope it is paid for or you may lose it to the bank.
As far as property values. While I know nothing about Idaho, clearly the trend is down in my opinion. Hell, I just saw CA properties with staring bids at auction of $20k on a on-line auction site. If I didn't own property with substantial equity positions, I would rent for awhile. Frankly, I my wife would let me, I would have sold our RE a year ago and bugged out to the Great White North, but Mrs Liv2ski isn't hearing it.

[grrrr]

The bottom is going to happen in different places at different times. The NW was late to the party, and is later still in seeing the decline level out. I don't know how that will translate to ID, but on this side of WA, most forecasters are looking at a continued slump. We're definitely seeing it here.

As far as rents go, I would have expected that rents would climb more as ownership decreases, but we're not seeing that either. The unemployment rate remains high around here, and that is pushing rental rates down more than enough to compensate for rising numbers of renters.

I don't think that 2.5% increase nationally holds out here. Rents are lower than they were 3 years ago.

[meatdrink9]

Meatdrink, I have wondered what will happen in a time of civil unrest and mass unemployment due to a worthless US Dollar. Frankly, I am concerned about getting my rental income in that scenario, so like everything else, I hope it is paid for or you may lose it to the bank.

I do own several places outright now. And only have 2 mortgages over 100K (just slightly over and both on 15's and coming down fast, one will be under 100K in 2 more months). Most of my house payments (PITI) are under $400 per month. Realistically if I wanted to I could turn it all over to a property management company and retire already. So I'm playing it as safe as you possibly can, but no question depending on the quantity of shit being pumped into the fan and my ability to adapt to it or not I could lose it just like anyone.

I nearly cut my living expenses in half this year with the move to the new house. Trying to play it safe, but still grow.