US House Prices
#61
Lost in BE Cyberspace
Joined: Jan 2006
Location: San Francisco
Posts: 12,852
Re: US House Prices
Have the stagnation/falls not been caused to a great exteny by the rising interest rate cycle. Looks like there could be a couple of cuts at the next couple of Fed meetings () and hopefully more in the new year to attempt to reduce repos and underpine market. There is also possible Govt intervention to stop repos accelerating. Therefore, is there possible truth in the moto buy when things are looking bleak??
Not convinced rate cuts will make a lot of difference at this point. The tidal wave of teaser rate resets is growing and even if rates fall a half point, a lot of those folks are going to be in trouble. Plus the ridiculously loose lending standards of the last few years aren't going to return any time soon meaning there are simply going to be a lot less qualified buyers out there. Additionally, the proposed bailout for subprime borrowers is so limited in scope, it's really just a political bandage. Could a larger bailout happen? Well, it's possible, but I can't see Bush going for it. And for once he'd be right:- why should folks who have made poor financial decisions be bailed out of the consequences of said decisions?
#62
Re: US House Prices
As I ride to work I see maybe 10 houses being built and another 10 that have been recently built and sit empty.... all 5,000+ sqrft too... couple at 10k +...
#63
Re: US House Prices
Like house prices, to a certain extent it's regional. My UK council tax is certainly higher than my US property tax was. My monthly mortgage payments on the other hand are 4 times in the UK what they were in the US, for a smaller house with fewer amenities. (But then I was living in TN, where houses and property taxes are lower than most of the US)
#64
Re: US House Prices
Well there's another saying too: "don't catch a falling knife"
Could a larger bailout happen? Well, it's possible, but I can't see Bush going for it. And for once he'd be right:- why should folks who have made poor financial decisions be bailed out of the consequences of said decisions?
Could a larger bailout happen? Well, it's possible, but I can't see Bush going for it. And for once he'd be right:- why should folks who have made poor financial decisions be bailed out of the consequences of said decisions?
There was an interesting article in TIME last week...article itself was pretty bland, but it ended with a question along the lines of "when we don't even guarantee basic medical care for all, why should we provide a safety net to protect individuals against real estate losses".
Anyone who invests in stocks/shares/mutual funds must be aware of the warning along the lines of "prices can go down as well as up and past performance is no guarantee of future performance". If folk can read that when they're finding homes for their IRA and 401k funds, surely they can remember it when it comes to buying property....
#65
Lost in BE Cyberspace
Joined: Jan 2006
Location: San Francisco
Posts: 12,852
Re: US House Prices
Should a larger bailout happen? If folk were mis-sold ARM's or coerced into buying property then maybe there should be some accountability somewhere (as say in the "misselling" of endowments in the UK) but to be honest, I reckon most people go into property without too much persuasion....its been seen as a "sure thing" for too long. And the refinancing for second mortgages to buy Plasma screens, new cars etc is just crazy....
#66
Just Joined
Thread Starter
Joined: Jul 2007
Posts: 21
Re: US House Prices
Well there's another saying too: "don't catch a falling knife"
Not convinced rate cuts will make a lot of difference at this point. The tidal wave of teaser rate resets is growing and even if rates fall a half point, a lot of those folks are going to be in trouble. Plus the ridiculously loose lending standards of the last few years aren't going to return any time soon meaning there are simply going to be a lot less qualified buyers out there. Additionally, the proposed bailout for subprime borrowers is so limited in scope, it's really just a political bandage. Could a larger bailout happen? Well, it's possible, but I can't see Bush going for it. And for once he'd be right:- why should folks who have made poor financial decisions be bailed out of the consequences of said decisions?
Not convinced rate cuts will make a lot of difference at this point. The tidal wave of teaser rate resets is growing and even if rates fall a half point, a lot of those folks are going to be in trouble. Plus the ridiculously loose lending standards of the last few years aren't going to return any time soon meaning there are simply going to be a lot less qualified buyers out there. Additionally, the proposed bailout for subprime borrowers is so limited in scope, it's really just a political bandage. Could a larger bailout happen? Well, it's possible, but I can't see Bush going for it. And for once he'd be right:- why should folks who have made poor financial decisions be bailed out of the consequences of said decisions?
#67
Lost in BE Cyberspace
Joined: Jan 2006
Location: San Francisco
Posts: 12,852
Re: US House Prices
Noone can predict the future, but US housing downturns in the past have typically seen slowly decreasing prices over many years. Given the massive increase in prices over the last few years due mainly to now-disappeared loose credit, I can't see why this downturn wouldn't be at least as severe and long-lasting.
Last edited by Giantaxe; Sep 5th 2007 at 9:11 pm.
#68
Re: US House Prices
Should a larger bailout happen? If folk were mis-sold ARM's or coerced into buying property then maybe there should be some accountability somewhere (as say in the "misselling" of endowments in the UK) but to be honest, I reckon most people go into property without too much persuasion....its been seen as a "sure thing" for too long. And the refinancing for second mortgages to buy Plasma screens, new cars etc is just crazy....
There was an interesting article in TIME last week...article itself was pretty bland, but it ended with a question along the lines of "when we don't even guarantee basic medical care for all, why should we provide a safety net to protect individuals against real estate losses".
Anyone who invests in stocks/shares/mutual funds must be aware of the warning along the lines of "prices can go down as well as up and past performance is no guarantee of future performance". If folk can read that when they're finding homes for their IRA and 401k funds, surely they can remember it when it comes to buying property....
There was an interesting article in TIME last week...article itself was pretty bland, but it ended with a question along the lines of "when we don't even guarantee basic medical care for all, why should we provide a safety net to protect individuals against real estate losses".
Anyone who invests in stocks/shares/mutual funds must be aware of the warning along the lines of "prices can go down as well as up and past performance is no guarantee of future performance". If folk can read that when they're finding homes for their IRA and 401k funds, surely they can remember it when it comes to buying property....
In March 2000 I put most of the cash I took back from the US into tech-heavy mutual funds. Within months, the value of my holdings were down to 50%. Even now, the value is about only 25%. One of the funds (Amerindo) went down to zero largely because of financial misdealings by the fund manager. Another way over-hyped company (Marconi) also dropped to zero.
Was/am I pissed off? Too right. Do I wish I could do something? Too right. Who do I think was mostly to blame? Me. Dumb, dumb, dumb decisions made by one person - me.
"Potentially high yield" usually goes with "high risk". Admittedly, there are situations where people were misinformed (e.g., selling of endowments by agents who stood to make a mint in commission back in the 80s and 90s), but in most such situations, too many people won't accept their own responsibility for taking the decision. As the old saw goes, "If it seems too good to be true ..."
#69
Re: US House Prices
Its funny, we're tossing up throwing some money at a new (to us) mutual fund my wife found....low cost, no-load, its got a good track record of bringing in 30%+ annual returns over 1, 3, 5, 10 years...making it #1 in its sector every year for the last 10 years.... which to me raised a bit of a red flag as to what they are doing that they can consistently bring in such market beating results.....sure enough checked them out on a few websites and they are waaaaay up in the top right corner of the risk/reward matrices....sooner or later its got to come unstuck. Think we may just throw some money at it anyway (it kinds of fit cos we're a bit light on risk!), but probably no more than we'd lay on a roulette table in Vegas
#70
Re: US House Prices
Thing is, for every 1 dunroving willing to stand up and say my decision, my responsibility, there's probably another dozen behind blaming the broker, the government, the banks, the oil companies, the media, the terrorists, the dog, the bloke works down the chipshop swears he's elvis.....
#71
Re: US House Prices
I actually think this is a true statement - in a buy and hold capacity. Your own house, owned for the 30 years of your mortgage, will almost for sure have risen greatly in value over that period.
It's the real estate "goes up every month, forever" mentality and the overextended greedy short term investors who are now suffering - as they should. If the market has continued to rise, would the people who are bleating now be upset? No, they'd be laughing all the way to the bank - in the way that the people who bought in 2000 and sold in 2005 managed to do.
It's the real estate "goes up every month, forever" mentality and the overextended greedy short term investors who are now suffering - as they should. If the market has continued to rise, would the people who are bleating now be upset? No, they'd be laughing all the way to the bank - in the way that the people who bought in 2000 and sold in 2005 managed to do.