Would Internet affect this bust differently from 90s?

NEW -> Contingent Buyer Assistance Program
O

OCMan_IHB

New member
<p>I'm a renting waiting for the right price and right time to buy. I got lucky selling my last house last year with some changes.</p>

<p>My question is, Would internet and readily available RE information (like IHB) affect the time and price level of RE bust bottom? I mean, I guess you can argue both ways in any matter but in 80s and 90s busts, ordinary people like me didn't have a lot of information as to what's happening in RE price and sales volumes and which houses were available for sales and so on. Agents and brokers almost have exclusive or asymmetric information and I think once the public thought RE was a bad investment, people kinda forgot about if for awhile. However, this time, many are waiting on the side like looking like vultures while checking MLS, websites like this one, and sharing information every day. So we may see bottom sooner (since very few are buying and many are waiting), but bottom price way be higher since the houses could be bought up by buyers as they appear to be bargain prematurely. </p>

<p>I guess my point is that the equilibrium point could be here sooner (may be 2009 instead of 2011 or 2012) because of widely available information. I know many are struggling now but majority of people are doing just fine and being very caution of economy and getting ready to pull the trigger when good houses come on the market with good prices. What do you think?</p>
 
<p>I agree that info is now much more available, and that people are doing their research now more than ever (and this helped a lot of people who were ready to buy and backed out after coming across this blog).</p>

<p>But, the resets are still going to have a huge impact, and if you look at the charts... we really do have a long way left to go... </p>
 
Okay... a lot of people think I am a nutter, but I will tell you a secret... I actually do know what I am talking about. There are a few here, who recognize that, and have seen how I have been right, as well as IrvineRenter being right. Don't fall for the bullish trap, use common sense.





Sssshhh... don't tell anyone, but the bottom will only occur when, and only when the NODs and foreclosures slow down. Guess what? They are not slowing down, they are getting worse, and getting worse month after month. Not one OC city, not one price spectrum is immune. This credit crunch is not contained, it is not contained at all. I like to call it the Paulson panic.





Just watch, the foreclosure numbers are going to be ugly for February, and it has 2 less business days than last month.
 
My guess is that you are right and the equilibrium point will come sooner. I also agree with Girl in OC that we probably still have a long way to go.



However, my opinion is that trying to time the market precisely should not be the goal. Instead, make a purchase timing decision using any basic benchmark to determine when prices are close to average/favorable from a historical perspective (ie, price as a function of income, or as a function of rent), only buy as much home as you can comfortably afford with a 15 year fixed mortgage, then forget about it. This suggestion applies only if you are planning to stay in your home for a minimum of 5 years.



If you look at median price charts during the last downturn, there was an occiasional "dead cat" bounce for prices before the bottom was hit, so don't panic if your desired benchmark requires signicant further price deterioration and there is a slight uptick in prices. And even if you end up buying based on some benchmark, and prices keep declining, don't worry about it. As long as you are comfortable with the payments and buy near the historical trend line for a chosen benchmark, you will build equity (unless of course we follow in Japan's footsteps). Even if we follow the Japanese deflation story, if you pay off your home before you retire, what do you care? The one thing wose than owning a depreciating asset is making payments of a depreciating asset.



I'm glad you realize that you were lucky to sell last year - anyone who picks the exact bottom is also just lucky - it's not worth the time trying to figure out exactly when that will happen.
 
<p>Don't listen to graphrix, he doesn't work for a Realtor.</p>

<p>"Now" is a great time to buy, and the best part is that "now" can be when ever you want it to be. Much like "tomorrow" is always a day away, and "yesterday" all your troubles seemed so far away, "now" is always with you. Don't worry about paying 30% or 40% more for a house than it will be worth next year, trust in the government to find a way to repay any losses you might suffer. This is America, after all, and the American Dream depends on you spending more than you can afford to prop up the illusion that we are Free, Brave, and a beacon of light guiding the world.***</p>

<p> </p>

<p> </p>

<p> </p>

<p> </p>

<p> </p>

<p> </p>

<p> </p>

<p> </p>

<p> </p>

<p> </p>

<p> </p>

<p> </p>

<p>***only applies to those with approved credit, 20% down, and blind trust in the goodness of bankers, realtors, and politicians. all others should listen to graphrix.</p>

<p> </p>
 
<p>Internet, fax, Ipod, cellular phones, electronic banking, new laws, redfin, yada, yada, yada.</p>

<p>The thing that drives the markets one way and then the other is human psychology, and that does not change no matter what other external factors may be at work. The other factors may add some extremity, but the basic cycles will never change. Forget what you think. Don't try to be smart. Let the market dictate your strategy.</p>

<p>There was no internet or cell phones during the tulip mania and it ended quickly.</p>
 
/rant on, skip if not interested





The impact of Internet in this country is still mild compared to, say, South Korea, where incidents of cyberviolence has become common. As with all good things, you pay for it one way or another. The internet is a great tool for communication, but it'd also breed mob mentality, and provide a haven for sociopaths and griefers (for those unfamiliar with this term, people who like to make others cry). But for now, we sit in the comfort zone behind our screens.





Is now a good time to buy? When should you buy or sell? The answer to these questions are not solely determined by price and market conditions. If you find an ideal/perfect home today that you love, can easily afford, and intend to live there for the next 20+ years raising your kids, you might want to consider buying it now, because that home might not be for sale later. However, don't buy something that you can't possibly afford, because losing something that you really love will hurt a lot more than not being able to afford it in the first place.





If you're an unemotional buyer, where a house is just a roof over the head with bed and toilet, then you might want to wait. If you feel little or no attachment to material things and one house is same as another (within reason), you don't have to pressure yourself to buy now because the prices aren't going up, and are likely to go down. A little patience will net you tens of thousands of dollars in savings.





If you're a long-term RE investor, and you found property that fits your criteria and the numbers look good, you can buy if you aren't bothered by intermediate term value drops. One of my business partners recently purchased several brand new investment SFR's outside of OC area. The numbers work and he can make a little positive cash-flow if he rents them out. The developer was desperate to unload remaining units in the phase and he negotiated a really good deal, plus great 30-year fixed rate on the loan. In the decades to come they will generate better cash flow and contribute to his early retirement plans. I kicked his butt for not letting me in on one of the units. Also, consider, you don't have to buy in OC. You could invest in RE elsewhere and just rent in OC.





Don't listen to drunk bulls who drank too much cool-aid, and don't bury your head in the sand listening to bitter bears who's self interest is to convince others not to buy and make the market crash as low as possible, so they can become home-owners with glee. Do what's best for you. Don't be afraid to stick your head up a little higher and look around, the world is a big place!





/rant off
 
<p>re: new laws (or lack thereof)... not so sure about that</p>

<p>'Financial Modernization Bill' 1999</p>

<p>http://www.ins.state.ny.us/press/1999/p9905121.htm</p>
 
<em>There was no internet or cell phones during the tulip mania and it ended quickly.





</em>Sad, but I couldn't live without either one of those. Good thing my cell phone has internet.
 
I can't help thinking the internet will speed the decline this time around. The realtors were able to con people into paying too much during the correction of the early 90s because they controlled all the information on the housing market. Now that this information is widely available, and there is commentary on the market like this blog, people are much better educated, and they will be less likely to buy at inflated prices.
 
<p>There's also the "news from the ground" speed of info to the mortgage investors...</p>

Alexa.com stats:

Irvinehousingblog.com users come from these countries:



<a href="http://www.alexa.com/site/ds/top_sites?cc=US&ts_mode=country&lang=none">United States</a>58.7%

<a href="http://www.alexa.com/site/ds/top_sites?cc=CA&ts_mode=country&lang=none">Canada</a>2.4%

<a href="http://www.alexa.com/site/ds/top_sites?cc=GB&ts_mode=country&lang=none">United Kingdom</a>2.4%

<a href="http://www.alexa.com/site/ds/top_sites?cc=AU&ts_mode=country&lang=none">Australia</a>1.8%

<a href="http://www.alexa.com/site/ds/top_sites?cc=IN&ts_mode=country&lang=none">India</a>1.8%




<a class="small ch" style="MARGIN-LEFT: 10px" onclick="textOnOff('upct_five'),textOnOff('upct_all')">More irvinehousingblog.com users...</a>



<a href="http://www.alexa.com/site/ds/top_sites?cc=US&ts_mode=country&lang=none">United States</a>58.7%

<a href="http://www.alexa.com/site/ds/top_sites?cc=CA&ts_mode=country&lang=none">Canada</a>2.4%

<a href="http://www.alexa.com/site/ds/top_sites?cc=GB&ts_mode=country&lang=none">United Kingdom</a>2.4%

<a href="http://www.alexa.com/site/ds/top_sites?cc=AU&ts_mode=country&lang=none">Australia</a>1.8%

<a href="http://www.alexa.com/site/ds/top_sites?cc=IN&ts_mode=country&lang=none">India</a>1.8%

<a href="http://www.alexa.com/site/ds/top_sites?cc=CL&ts_mode=country&lang=none">Chile</a>1.3%

<a href="http://www.alexa.com/site/ds/top_sites?cc=IR&ts_mode=country&lang=none">Iran</a>1.3%

<a href="http://www.alexa.com/site/ds/top_sites?cc=MX&ts_mode=country&lang=none">Mexico</a>1.3%

<a href="http://www.alexa.com/site/ds/top_sites?cc=RO&ts_mode=country&lang=none">Romania</a>1.3%

<a href="http://www.alexa.com/site/ds/top_sites?cc=MY&ts_mode=country&lang=none">Malaysia</a>1.1%

<a href="http://www.alexa.com/site/ds/top_sites?cc=SG&ts_mode=country&lang=none">Singapore</a>1.1%

<a href="http://www.alexa.com/site/ds/top_sites?cc=AR&ts_mode=country&lang=none">Argentina</a>1.1%

<a href="http://www.alexa.com/site/ds/top_sites?cc=BH&ts_mode=country&lang=none">Bahrain</a>1.1%

<a href="http://www.alexa.com/site/ds/top_sites?cc=DE&ts_mode=country&lang=none">Germany</a>1.1%

<a href="http://www.alexa.com/site/ds/top_sites?cc=PH&ts_mode=country&lang=none">Philippines</a>1.1%

<a href="http://www.alexa.com/site/ds/top_sites?cc=CH&ts_mode=country&lang=none">Switzerland</a>0.8%

<a href="http://www.alexa.com/site/ds/top_sites?cc=EG&ts_mode=country&lang=none">Egypt</a>0.8%

<a href="http://www.alexa.com/site/ds/top_sites?cc=MA&ts_mode=country&lang=none">Morocco</a>0.8%

<a href="http://www.alexa.com/site/ds/top_sites?cc=MK&ts_mode=country&lang=none">Macedonia</a>0.8%

<a href="http://www.alexa.com/site/ds/top_sites?cc=PL&ts_mode=country&lang=none">Poland</a>0.8%

<a href="http://www.alexa.com/site/ds/top_sites?cc=SK&ts_mode=country&lang=none">Slovakia</a>0.8%

<a href="http://www.alexa.com/site/ds/top_sites?cc=SV&ts_mode=country&lang=none">El Salvador</a>0.8%

<a href="http://www.alexa.com/site/ds/top_sites?cc=VE&ts_mode=country&lang=none">Venezuela</a>0.8%

<a href="http://www.alexa.com/site/ds/top_sites?cc=CS&ts_mode=country&lang=none">Serbia and Montenegro</a>0.5%

<a href="http://www.alexa.com/site/ds/top_sites?cc=FR&ts_mode=country&lang=none">France</a>0.5%

Other countries13.9%




<a class="small ch" style="MARGIN-LEFT: 10px" onclick="textOnOff('upct_five'),textOnOff('upct_all')">Less...</a>
 
I don't see China or Hong Kong on that list. Does this mean that rich Chinese buyers are not coming to save the OC market from collapse?
 
<p>A cycle is a cycle, and we can all argue the magnitude but I do believe the efficiencies the internet brings to pricing decisions will in fact compress this cycle down a bit. Maybe by 30% or so.</p>
 
<em>"I don't see China or Hong Kong on that list. Does this mean that rich Chinese buyers are not coming to save the OC market from collapse? "</em>

<p>No, it means they have SO much money they don't need to seek any additional information to rationally evaluate the marketplace! The force is so powerful, they cannot be stopped from buying! </p>

<p>SCHB</p>
 
I think that the internet empowers those who seek to learn about the housing market and ultimately will help people to make a sounder investment and buy when they feel the time is right. Buyers will make a home purchase less on personal emotion and see through the market and financial lies spewed by realtors and brokers. Buyers will read the OC register and laugh at the NAR propaganda articles. If their enlightenment makes them sit on the side lines longer, then yes, the bottom will come sooner because of increased overhead supply. Less buyers will be available forcing sellers to lower their prices to attract more buyers. How significant of an impact this situation will cause is unknown. A few pools could probably give us an idea. Ultimately I think this will lead to less knife catchers--less people to support and unstable and financially unsupportable market.



Of course, there are always those who are impatient, financially irresponsible and destined to overpay for housing...Those are the types you need to attract in this market if you're a WTF seller :)
 
You must log in or register to reply here.
Back
Top