Housing is not an investment but what if market behaves like it is?

NEW -> Contingent Buyer Assistance Program
<p>I wanted to sell at peak, not because of profits, but because of hurricanes!!</p>

<p>The hub refused to sell. He likes the house, he likes the amount of land we have etc.</p>

<p>In the meantime it's still worth 2 1/2 times what we paid for it, and I imagine in 5-7 years it will have appreciated again. In the meantime, it's paid for and is the exact same house it was in '05 except for some wear and tear. </p>

<p>And finally, the hub and I are included in those people who are not particularly disciplined and aren't good at saving money. The disciplined are extremely few. We did have a goal however, which was to live in a paid off house. We have attained that goal.</p>

<p>You have to know what your weaknesses are and allow for those weaknesses. It's more likely you will be able to work around your weaknesses than turn them into strengths. </p>
 
"<em>You have to know what your weaknesses are and allow for those weaknesses. It's more likely you will be able to work around your weaknesses than turn them into strengths. </em>"





Jeez, Liz you sound like an inspirational speaker ... :P
 
<p>LL </p>

<p>Congratulations on paying off the home and reaching your goal. Inspirational is correct. </p>

<p>Momopi </p>

<p><em>"then you could stockpile some nails, hand tools, and muzzle loading rifles in your garage for bartering in the post-apocalyptic world of... Mad Max or The Postman." </em></p>

<p>I agree with you except in place of "<em>muzzle loading rifles</em>" I believe in "belt fed". LOL </p>

<p>Good shooting!</p>
 
Hat Tip Patrick.net







It's A Terrible Time To Buy




<a href="http://patrick.net/housing/crash.html">Housing Crash Continues, Bubble Pops</a>
 
ditto SeekingAlpha.com





They Said Housing Prices Couldn't Fall. They Lied.

<a href="http://seekingalpha.com/article/61550-they-said-housing-prices-couldn-t-fall-they-lied?source=patrick.net">They Said Housing Prices Couldn't Fall. They Lied. - Seeking Alpha</a>


<p><em>Now for another myth - housing is only 4.5% of the economy so we shouldn't worry about it...</em></p>



<em>The biggest increase (in unemployment claims) occurred in California, up 27,194, an upsurge blamed on higher layoffs in construction and service industries, and Florida, with an increase in layoffs of 8,496, which was attributed in part to higher layoffs in construction. California and Florida have been particularly hard hit by the housing slump.</em>

>
 
<p>Inspirational speaker? Me? The hub takes me to toastmasters, and I want to tell you I hate inspirational speakers. Even the ones that are obviously very good. I am suspicious of people who want to inspire me. I want to know what they really want out of me. Either I inspire myself, or I don't get inspired.</p>

<p>The hub accuses me of being a big grouch. And it's true, sometimes.</p>

<p>(Anyway, the non inspirational speeches are interesting and the funny ones are sometimes hilarious. Here's this very ordinary, dull looking person, and then they get up there and knock you dead.)</p>
 
<p>Hey Liz,</p>

<p>Maybe this will inspire you:</p>

<p><img alt="" src="http://ecx.images-amazon.com/images/I/51KJJ60M01L._AA240_.jpg" /></p>
 
Hey Troop,





Don't worry about those jobs numbers, anyone who doesn't want to see them just ignores them. <a href="http://forums.irvinehousingblog.com/discussion/1506/">Take a look at all the comments</a>. Chirp, chirp.


<a href="http://www.nytimes.com/2008/01/27/business/27every.html">


Just read Ben Stein</a>, he said subprime would only be a $16 billion loss, hey just because the big boys only wrote off $100 billion last Q U A R T ER, doesn't mean he is wrong.





Oh... yeah, and don't worry, the foreclosure numbers breaking records doesn't mean much. Oh sh*t... sorry, but on 1/23, the highest amount of trustee sales ever was recorded. That's not a bad sign is it? But... but... there are more houses. Ut roh... even adjusted for housing stock it looks like this month will break records. Oh... no big deal, we have plenty of knife catchers to help save the market, er not.
 
So if you find a property at a good price and have the means to purchase it, do you still advise against purchasing because of the current state of the economy?
 
<em>"So if you find a property at a good price and have the means to purchase it, do you still advise against purchasing because of the current state of the economy?"</em>





There are no good prices in this market. Everything is still grossly inflated from the bubble. If you can afford it, you can buy it. Just know that it will lose value. If you wait you will be able to buy a comparable property for much less.
 
Look here (<a title="Permanent Link to Analysis" rel="bookmark" href="http://www.irvinehousingblog.com/analysis/">Analysis</a>) for many of the answers.





<img src="http://www.irvinehousingblog.com/wp-content/uploads/2007/03/ihb-post-irvine-market-decline-chart.jpg" alt="" />
 
<p>IR:</p>

<p>Have you done another overlay on where the numbers actually came in vs your 'red line prediction'?</p>

<p>It is my opinion that the actual decline will waste your line over the next 12 months. I don't think the banks are going to hold REO's much longer. The total decline is probablly about right, but I think the shape of your curve is too conservative.</p>

<p>We'll see. If banks start to dump REO's here soon, I'm right. If they don't, you're right. I used to work in special assets so I kind of understand how that department "thinks" but I could be completely wrong this time. I'm usually not on this sort of thing but my crystal ball is full of mud today.</p>
 
"It is my opinion that the actual decline will waste your line over the next 12 months. I don't think the banks are going to hold REO's much longer. The total decline is probablly about right, but I think the shape of your curve is too conservative."





LOL! When that chart was published, nobody thought the numbers were conservative. I think you are right, though. Prices will drop faster than the red line predicts.





How about this one?





<img src="http://www.irvinehousingblog.com/wp-content/uploads/2007/03/ihb-post-market-decline-extreme.jpg" alt="" />
 
That one might be closer. Still, we're just guessing. If volumes don't pick up soon, it'll be a game on, full throttle trip to the bottom.
 
I think the way prices are dropping we will see a panic. There's no reason to buy when prices will be substantially lower next month, and every reason to sell. Plus the unending flood of foreclosures. A few more months until reality sets in, then an abrupt plummet to rentsaver levels. Prices will drop as fast as desparate sellers will cut prices - several percent a month, probably. I expect that to start in the summer.
 
I think the San Diego experience from last year is probably a good template for what we will see. There was some appreciation in the early spring followed by a cataclysmic drop. I think we will see full-scale panic this fall. Also, the psychology will change as people realize real estate isn't the investment they thought it was. There is still denial in the market right now.





<img src="http://www.irvinehousingblog.com/wp-content/uploads/2008/01/dec07prsqftlt.gif" alt="" />
 
<p>Gadzooks. And it probably has another what? 10-20% to drop.</p>

<p>Walk now. Nay, run. Run very fast. . . .</p>

<p>In the face of a chart like that, I have come to the conclusion that anybody who bought from Sept 2005 on, and put less than 25% down should stop paying right now. I don't think morality requires one to be a chump. I don't think that morality requires you to toss money down the toilet or a black hole. The lenders are going down the toilet anyhow, given that chart. The question becomes, how many do they take down with them? I think that the money should be kept in cash cash, in the sealy, or in a mayonaise jar, together with some gold or silver coins. I am not kidding or joking.</p>

<p>Roubini apparently talked of cascading cross-defaults. Love the alliteration. These are going to be cascading defaults period.</p>
 
lawyerliz,





You have come to see the situation very clearly. Most people either don't bother, or are too horrified by what they are seeing to really open their eyes to the scope and scale of this debacle. I suspect reality will be somewhere between the two charts I posted above. This next year is going to see prices drop so low that most people will give up and add more fuel to the fire. Actually, this could be a good thing for the market. Prices will not stabilize until we have capitulation.
 
<p>I think we have capitulation occuring. If you dig into the stats posted on Lansner's blog about the 18% sales pop in January, you see 1219 pending sales, 607 of which are below $500K. The median of the pending is the 3rd lowest of the 317 in the $500K - $750K range.</p>

<p>Essentially, the pending median is right about $500K which is about 10% below the median of $558K for the 22 days ending Jan. 7th.</p>

<p>Can you imagine January or February posting a 10% loss from the previous month?</p>

<p> </p>

<p> </p>
 
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