December 12, 2006 at 10:42 AM #8049kev374Participant
why do homeowners get so upset and angry when I even suggest that home prices may go down? Normally calm people suddenly get agitated and even get into shouting matches when it comes to protecting the severely inflated price of their homes. When I suggest prices may go down they act like I stole from their children. WTF! Have these people become so deluded that they are unable to face reality? Have they built all their dreams on this illusion of wealth and now they are unable to even fathom the thought that they may lose it all? How naive and blind are these people?
This topic is affecting my relationship with my family (most of who are homeowners while I am not) and friends, so I’ve just quit talking about it with them anymore!
Anyone have similar experiences?December 12, 2006 at 10:57 AM #41517Mark HolmesParticipant
Well, yes, of course. But now is the time to be gracious. Evidence is finally seeping into the mainstream media that the ride is over. The last thing you want to do is rub salt in these people’s wounds. Remember that for a lot of them, it’s not just paper wealth they’re losing. For those who refinanced and took out loads of cash, or for those who bought at or near the peak, they could quickly end up upside down on their homes. Not pretty. In fact, as someone who dreams of a modest home in San Diego, I find it very very sad. I wouldn’t want to be in the same situation. I do, however, see friends and family facing these very situations. Be understanding. Don’t gloat. No one likes to hear “I told you so.”December 12, 2006 at 11:04 AM #41520lendingbubblecontinuesParticipant
The truth hurts for these people. F*** ’em! (Family members included!!)December 12, 2006 at 11:07 AM #41521
Yes, people also get mad when we tell them they are getting fat, that they are losing their hair or that they have bags under their eyes … or a few new wrinkles.
Just because they get mad doesn’t mean it’s untrue. It’s simply that it’s a sore subject.December 12, 2006 at 12:11 PM #41525poorgradstudentParticipant
It is indeed a sore subject for some people, especially those who foolishly acted as if the “good times” would never end.
Studies have shown that people get irrational and emotional when their investments lose money.December 12, 2006 at 12:12 PM #41527
“Studies have shown that people get irrational and emotional when their investments lose money.”
That’s a classic !December 12, 2006 at 12:48 PM #41530BugsParticipant
Houses are not merely investment vehicles. They fulfil emotional needs and for many people contribute heavily to their personal identity. Many people consider their homes to be their most prized possession and an indication of both their financial acumen and their social status.
As an appraiser I run into this all the time. When you tell a homeowner that their home isn’t worth what they think it’s worth you’re not just commenting on the price of the home. You’re also saying that the homeowner isn’t worth as much as they think they are; that they aren’t as smart as they think they are; and that they don’t have as much social standing as they think they have.
Truly, it’s probably better for your relationships if you just keep your opinion on this to yourself unless cornered.December 12, 2006 at 1:05 PM #41531PerryChaseParticipant
My grand ma used to tell me that I was too thin or fat, pale, etc… She was a demanding lady and nothing was quite good enough for her. But I loved her because she made delicious food and told me wonderful bedtime stories. She’s probably why I take criticism quite well now.
Mark Holmes is right, if you value your friendships, don’t rub it in. However, I think that’s is not fair because they were probably gloating when they were “making” money and you weren’t. What goes around comes around; but if you’re spiritual, you’d let it slide. If not, feel free to vent anonymously online, ha.ha 😉December 12, 2006 at 1:16 PM #41532anxvarietyParticipant
I’ve always blamed the media.. I believe it trains people to be short tempered and dramatic.. also teaches them to have knee jerk responses to opinions that are not standard.. Most people just aren’t very perceptive and cannot critically think for themselves, they need to be spoonfed, but only from the media not their friends or other people…December 12, 2006 at 1:50 PM #41534ibjamesParticipant
Almost everyone I have encountered is the same with me. They are so confident sometimes I feel like I am the one that’s wrong! Yet I just spend 5 minutes on this site and look at the data and I know I am doing the right thing by waiting.
It’s crazy though, people act like I’m crazyDecember 12, 2006 at 5:02 PM #41542AnonymousGuest
Anytime I talk about “the bubble”, people look at me like I’m from another planet!!
BTW, I’m a homeowner and I paid my house off 4 months ago. I live in Orange County and have been appalled at the run-up in housing prices, include my own. I hope it goes down at least 30% because I feel “the bubble” is bad for America as a whole. We need a correction…in the long run we will be better off as a society.December 12, 2006 at 5:02 PM #41543AnonymousGuest
Anytime I talk about “the bubble”, people look at me like I’m from another planet!!
BTW, I’m a homeowner and I paid my house off 4 months ago. I live in Orange County and have been appalled at the run-up in housing prices, include my own. I hope it goes down at least 30% because I feel “the bubble” is bad for America as a whole. We need a correction…in the long run we will be better off as a society.December 12, 2006 at 7:01 PM #41547FormerOwnerParticipant
Home ownership is the American dream. It’s so engrained in the national psyche (reinforced by the REIC) that saying houses prices could fall is, to most people, like saying the moon could fall. Everyone looks at the last 10 years appreciation and projects that into the future. Last year, I remember having a conversation with someone. I used my own house as an example (which had already more than doubled in value in 5 years) and said, “What, you’re saying it will double again in five years? Who would buy it?” The person said something to the effect that “…of course it will.” The conversation ended there. I subsequenty sold that house. Now I have to resist the temptation to say “I told you so.” It’s also too late to warn anybody to get their house in order. If they’re highly leveraged or need to sell and haven’t already done it, it’s probably too late to avoid any nasty consequences.December 13, 2006 at 7:57 AM #41567bubba99Participant
Remember that most of the main stream R.E. professionals are still telling people that prices are stable, will only decrease by a few percentage points, and still in 2006 have not dropped as much as they went up in 2005 alone.
For many the jury is still out on whether the decline in housing prices will be substantial or just a hicup Although we have seen some declines in R.E. prices, the run up since 2001 is way more spectacular. Most who bought in 2000 – 2003 and maybe early 2004 are still (to the untrained eye) in good shape. Although foreclosures are up to three times last years rate, the higher levels are normal for the years before 2001.
If the homeowners who took out toxic loans in 2004 – 2006 can continue to refinance with new loans (toxic or otherwise) the anticipated shock from foreclosures will not be there to drag down prices next year. If home owners continue to keep their overpriced properties off the market price declines will continue to be modest. If people in mortgage trouble continue to work three jobs to keep up the payments on their houses . . .
Plus I have not seen anything yet that ties R.E. prices to the “value” of the dollar. If the dollar value is declining on the world market, then asset prices in dollars should increase – much like stocks and other hard assets do as the dollar declines – in theory. If this is true then we should be seeing a 10% increase in R.E. due to currency offsetting bubble declines. If housing prices are insulated against world currency prices until inflation takes up the difference in the domestic market, then there will be no currency impact in the short run and . . .
So before you get too angry with family, try to see how fragile any position is.December 13, 2006 at 8:28 AM #41569
Bubba – Several good points, especially the following
… I have not seen anything yet that ties R.E. prices to the “value” of the dollar. If the dollar value is declining on the world market, then asset prices in dollars should increase – much like stocks and other hard assets do as the dollar declines – in theory. If this is true then we should be seeing a 10% increase in R.E. due to currency offsetting bubble declines.
This is why I don’t understand why people who are bearish on real estate, economy, and the US dollar think that weakened dollar and ensuing inflation won’t reduce the depths of a real estate collapse. If we have significant inflation, coupled with a weaker dollar, why won’t the the value of hard assets (RE included) tend to hold their value ?
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