Steve2009

Likewise with Ireland, 4 years into the crash and sellers are still in cloud cuckoo land, although negative equity means that many have no choice but to hold out.

LongWayHome

I lived in Phoenix between 2000 and 2007. 2005/2006 was an absolute frenzy, I had a friend who was desperately trying to buy a house but could not get one. Every house on sale had about 20 offers, and it was a matter of how much you would go over asking price to secure the deal (in a lot of cases $20k over). He could not get into the market and gave up. It was crazy. I bought a house in 2003, and sold in 2006 so I did well out of it (more dumb luck than any strategy). But the sentiment around 2005/2006 was all swashbuckle. Every second tool was getting an RE license. Every 3rd tool was quitting their jobs to start 'flipping houses'. All ended in tears of course.......

freebo

Longish post from Mish Schedlock - posted without comment

link

pomtastic

In Australia, every 3rd tool buys an investment property. It's not unusual to find a bank clerk on $60K a year who has a 'portfolio' (love that expression) of 4-5 houses, all pyramided up. It's so unsustainable it's beyond funny and so similar to your observations in Phoenix. s

The Perth market went into a frenzy in 2004 - early 2007. There are plenty of RE agents in Perth who aren't selling now and we'll have to see how long they can go without the commission, especially the ones who pay a rental fee to their main agent. Mercedes, Audi, BMW leases have to be paid. The only ones doing OK are the agents who are discounting and meeting the market, plenty of other agents who are holding out for 2008/09 prices and tellling their clients that the market will shortly boom

Peter Schiff said buy real estate when all the estate agents are either in jail and unemployed, then you know the market has hit bottom - we're seeing the start of this now in Perth.

ozzieeagle

My Cousin made at least 800K to 1 Mil from doing exactly this, in the years 2000 through to 2007. He is Semi Retired now and living on the Gold Coast.. He had Properties in Darwin, Cairns, Gladstone, and the Gold Coast, 5 all up as two were on the GC, whilst renting and working in Melbourne. He paid out his Gold Coast Property (Banora point and lived in that with quite a bit of surplus cash)

He left his wife around the end of 1999 (just when his youngest turned 18 )and had very little cash, nothing in property at all.. Basically pennyless, with a fairly well paid and very secure job (prison officer). . He really did start with just about zero cash at age 54ish... Luckily for him and for some obscure reason she didn't touch his generous super, which combined with his property investments left him with quite a tidy sum when he turned 60. He mixed with quite a few people that did exactly the same thing. and was always urging me to do the same.... (I didnt listen which was probably a mistake) He goes overseas at least 5 times a year and he and his partner work the occassional part time shift at the prison farm in the Gold Coast hinter land.

Steve2009

Let's see who rises to the bait.

renth

Good on him. All about timing. I plan to do the same the next time the wheel turns.

Anectodal - neighbours house on market, forced sale - divorce. Well known agent suggested lowering the price after very little interest. Owners sacked agent. House still on market.

Vash the Stampede

I wasn't aware that I'd been posting with any particular passion. My prevailing emotion is one of bemusement. Having witnessed 5 years of failed "Australia property crash" prophecies, I am sceptical of anyone who's still pushing the real estate Armageddon scenario, particuarly when they talk as if Australia and America are identical nations with identical economies, identical real estate legislation, identical banking legislation, and identical market forces.

The smart people in property are the ones with large amounts of equity and at least 30% of their portfolio completely paid off.

Wish I'd saved the source; I was reading it just yesterday. From memory, they were ordinary markets like Illinois.

Steve2009

5 years is nothing. You'd barely make a dent in the mortgage. Some are blessed with patience.

Vash the Stampede

5 years of failed property crash predictions is not "nothing." It's 5 years of armchair pundits embarrassing themselves with nonsensical catastrophising. Every year we were told "this will be the year", and it wasn't.

geordiebloke

Property prices go up and come down, sometimes even crash, we all know that.

But over time, the long term, they always return to their previous value and start to climb again, as has already been said, it's all about timing when it comes to investments and doesn't, or shouldn't really matter when it's your home.

What strikes me on this thread is apparent glee that some posters have in predicting a crash and all the fall out that will bring for some people.

Now, if you're a first time buyer, I can understand your excitement at the thought of property prices crashing, indeed, I think I would probably benefit myself.

However certain posters give the impression that it's more about the fact that some people have been lucky enough to make money out of property over recent years, whilst they, with their perceived financial expertise, have not.

Even more frustrating for some posters is the fact that mr and mrs average could have a "portfolio" and have escaped from the financial constraints of a low income.

What an incredibly pompous view this is and one that smacks of jelousy

Amazulu

Great post.

Steve2009

I agree that predicting the timing of a crash is silly. Picking bottoms is for baboons, predicting a peak is a similar past time.

5 or 10 years of paying interest repayments on a bloated mortgage only to be wiped out is a lot more embarrassing. Although I have the utmost sympathy for the poor misguided souls who befall this fate.

Steve2009

Meanwhile the mortgagee wastes huge amounts of money.
This I agree is reprehensible. Schadenfreude gets you no where. Equally reprehensible though is trying to sucker greater fools into the market to keep the bubble going. Like spruikers in a multi-level marketing scheme.

iamthecreaturefromuranus

Unlike renting?