There is a Real Estate crash coming

[YetAnotherOne]

A couple of years ago, just before I left NoCal, I spoke with a realtor who had clients flipping a home a month and making money at it, even after his commission. It got to the point out there where almost half the loans were subprime and something well over 4/5 were some combination of subprime, interest only, or variable rate.

The pattern was pretty clear: legitimately densly populated areas were seeing significant but sustainable increases in home prices; the speculators noticed this and jumped into those markets which, as speculators always do, greatly accelerated the market's motion; and the poor dumb idiots came along right at the top, just in time to lose their life's savings. Happens on Wall St., happens in real estate, happens in the commodities markets, etc. Pretty much anywhere goods or equities change hands you'll see this cycle at work and it always ends the same way. Painful though the correction is for many it's absolutely necessary for the long term health of the market. Here's hoping the government stays far away from this mess.

[Axewielder]

So the "bigger picture" question is...what is the possible downside to the Dow Jones on account of this mess? 12,000? 11,000?

[emperor_black]

VinceV, I have seen houses waiting to be sold for almost a year and all that. but still there are brand new homes in san jose selling for as high as 850K. These are not super big houses either. They are just three bedroom houses with one at the first floor and two on the top floor. I'm like "where the fuck is the housing bubble-crash that everyone is talking about?" In the bay area it seems there is no such thing as the housing market crash. What's changed is that nowadays builders are not even building houses unless people approach them with a pre-approval.

My biggest question, hopefully someone can answer... I and my wife are working...we are a first time home buyers. Is this a good time to buy a 700K house in san jose CA?

[YetAnotherOne]

So the "bigger picture" question is...what is the possible downside to the Dow Jones on account of this mess? 12,000? 11,000?

Back into four digits, hopefully not into three.

[atomic charvel guy]

Real estate crash? Where? Not here. Nope.... definitely not here. :p

You got that right. Over a million and a half people moved to San Diego last year alone. I see two bedroom shacks in Costa Mesa that are going for 750-800k, and they're nothing to brag about. I see it feathering down very slowly as long as it's not in walking distance to the sand.

[ken]

The point of my thread is you know things are no so good when the "News puds" have to find a "Bright spot" to show that the world is not ending. It doesn't matter that I live here in a trailer.

Don't be modest property-mogul-Fett: TWO trailers.

[Rich#6]

Right now I think the market is adjusting itself. Years ago the experts said that the county I live in that the property values were over inflated. Now no one can sell their house. They are asking too much. They don't get that with the rates at 6.75% (which is still low and below prime) it is a buyers market. The problem too is banks gave out loans to anyone before and now they are overcompensating.

[Wayniac]

So the "bigger picture" question is...what is the possible downside to the Dow Jones on account of this mess? 12,000? 11,000?

It will probably be similar to 1989-1992 again... whatever % that adjustment was...?

[Jason1212]

I wonder how this will effect the markets today.

http://money.excite.com/jsp/nw/nwdt_rt_top.jsp?news_id=ap-d8r24h781&

[Bert]

My biggest question, hopefully someone can answer... I and my wife are working...we are a first time home buyers. Is this a good time to buy a 700K house in san jose CA?

I'd say if you don't already own property that you would have to sell in order to buy, you should sit on the sidelines for a bit while this works itself out. Let's put it this way, it's pretty certain prices won't be going up in the near future, but there is a big downside risk. Just my (uninformed) opinion.

[fett]

I said this before. I lived in Marin County during a period where prices were flat for 10 YEARS. There will be plenty of time to buy a house.

[442w30]

Quote:
Originally Posted by Axewielder View Post
So the "bigger picture" question is...what is the possible downside to the Dow Jones on account of this mess? 12,000? 11,000?

Back into four digits, hopefully not into three.

I can't find my original post that I thought 10k or 4 digits was coming but here is the chart that was in that thread.

[442w30]

9,440 today boys. Hope no one wants to retire in the next 12 months

[horns666]

COOL..I'm retired...and SAFE!!!

Good luck!!!

[442w30]

COOL..I'm retired...and SAFE!!!

Good luck!!!

Heh, I am retarded, just a few letters off from retired.

It is so weird because other than funny money going away and apparently loans drying up, there hasn't been much fallout around the Central TX area.

I actually think that this is falling so fast that there are some walking dead out there that don't know it. There will be a rash of folks going belly up once they top out that pile of credit cards. That should be happening just in time for XMas.

Winter vacation spots should be decimated this year.