- This topic has 58 replies, 24 voices, and was last updated 18 years, 2 months ago by powayseller.
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August 7, 2006 at 8:16 AM #7120August 7, 2006 at 9:43 AM #31048PerryChaseParticipant
powayseller, thanks for posting the info. I admire your dedication in informing friends and relatives about Real Estate.
However, I’ve given up because poeple just don’t want to listen. They think I’m crazy to predict a 50% crash. Like someone else said here previously, I hate to see people getting hurt by the coming crash, but if it happens it’ll be by their own doing. I don’t feel like it’s my responsibility to educate people anymore.
August 7, 2006 at 10:02 AM #31055AnonymousGuestYeah it is pointless to try to convince everybody. However, among my close friends and relatives pretty much everyone sees the same thing as I do and several friends have also sold recently or are in the process of getting out.
Anyone who is too ignorant or to stupid to see this thing coming deserves to get punished, I have no sympathy for them. It is survival of the fittest. Anyone who has been living here in SD has enjoyed a much better life than most people of the world so what ever suffering this crash causes them will pale in comparison to the difficulty many in the world suffer every day.
August 7, 2006 at 10:34 AM #31061rocketmanParticipantI feel the same way. I’ve been trying to warn everyone I know. I send them links to all the information I can find. I find that my friends and relatives who own real estate in California are in denial. They believe that prices will “flatten out” since California is so desireable. Those who don’t own property want to listen. That’s the way it’s been since June. So now that I’ve warned everyone I know, I am going to stop being an evangelist and just pay attention for new investments.
August 7, 2006 at 10:37 AM #31062powaysellerParticipantOkay, you guys make great points. So let me ask you this, since you’ve probably put some thought into this: what is it about human nature, or these particular people, that prevents them from seeing what you say? Would they read a Dean Baker story like this, and say “Hogwash”! Why?
August 7, 2006 at 10:48 AM #31064JESParticipantMy warning was the sale of my house and the explanation of why I was selling. I left it up to them to research the rest and make their own decisions.
Poway seller – IMO it is confirmation bias – the tendancy we all have to take in information that confirms a belief we have while disregarding information that may contradict it. For example, until I read your posts on another thread about throwing out all your skirts I assumed you were a man! Also, most people tend to be optimistic and want to believe good things are yet to come, don’t you agree?
August 7, 2006 at 11:16 AM #31071AnonymousGuestPS, the reality is the majority of the polulation lacks the analytical capacity that those of us on piggintion have. Most people make decisions based purely on trends, what the masses do or say, etc. Why should they believe you when all of these smooth talking sales people on TV, radio, etc are telling them how great real estate is?
August 7, 2006 at 11:29 AM #31074FormerOwnerParticipantI think home ownership is a core American value. The government supports this by subsidizing housing via tax writeoffs and low mortgage interest rates. It’s also reinforced by TV shows, advertising, etc.
Our country had so much open space that it was relatively easy to build houses further and further out from established cities. Until our domestic oilfields hit peak oil about 30 years ago, we had plenty of cheap oil to allow us to use our cars to cover the vast distances that our suburban lifestyle forced us to traverse every day.
Much of this has changed and I think the suburban way of life is really starting to break down, but it’s hard to go against your core values. Most people still say rent is “throwing money away”. It is, but buying is throwing away two or three times that amount. Nothing is free.
I also think that people view their house (rather than their community) as the center of their lives. Maybe that’s a symptom of our communities breaking down (in some places).
August 7, 2006 at 11:33 AM #31080sdsundevilParticipantFirst off, Mr. Baker is completely wrong about the stock market bubble. There were numerous people who predicted that, including Alan Greenspan when he talked about “irrational exhuberance.”
Secondly, predicting prices will go down is fairly obvious. The question is how much and when. There are always corrections, downturns, etc. One thing is for certain – in the long run prices will go up.
The prevailing sentiment on this website is a hope for a big crash. Why? So people can finally buy who missed the boat? My opinion is that if you want to own, you should buy now. In the long-term you will be fine. It’s impossible to time the bottom (if there is one).
August 7, 2006 at 11:46 AM #31083PDParticipantI sold my house because both my husband and I predict a crash. We made our bet and think it will pay off. Don’t we all want our financial moves to pay off? I feel very bad for those people who are going to get hurt and don’t wish that on anyone. However, you can’t hold back the tide so you better start swimming.
August 7, 2006 at 11:47 AM #31084powaysellerParticipantsdsundevil – read the bubble primer before you post again.
August 7, 2006 at 11:49 AM #31086AnonymousGuestAnyone who buys now is a complete idiot, period.
It could take 10 or 15 years for prices to return to today’s levels. Look at the Nasdaq index, still more than 50% off of its 2000 high. While it is not practical to try to time the aboslute bottom of the market, it sure is easy to see we just passed the peak on the way down. There is no retional reason to purchase an inevestment you know is going down in value.
August 7, 2006 at 11:50 AM #31088Mark HolmesParticipantWell, Sun Devil, yeah I do hope there is a crash. Why? Because I want to buy a house to live in. Not to slap a coat of paint on, throw in some granite counter tops and sell to the next flipper. To spend the next twenty years making a HOME. I haven’t been willing to buy a half-a-million dollar fixer-upper in Normal Heights (moved here four years ago and wanted to buy two years ago) so have watched in frustration from the sidelines. Common sense has told me that this mania was unsustainable, especially with the prevalence of exotic lending and insane income to valuation ratios. So yes, maybe I and others are impatient for this to end.
August 7, 2006 at 12:10 PM #31091DanielParticipantFolks, give the guy a break. Let’s not chase out of this forum everyone who disagrees.
There is a lot of “positive reinforcement” on this site, whether most of us realize it or not. Seeing dozens of people agreeing with one’s views is certainly rewarding, but it is not the greatest recipe for critical thought. I would actually like it very much if more RE optimists were posting here.
Daniel
August 7, 2006 at 12:11 PM #31092bubba99ParticipantI think the issue of housing continuing to reap double-digit gains is answered. No one expects a continuation of rapid price increases with inventories at six and a half months and interest rates moving up so quickly. But I don’t think the down turn will be as quick as the author of “The Coming Housing Crash” predicts.
He captures all of the standard economic arguments, plus the following:
“many people who had been holding homes in anticipation of price rises will rush to sell, now that the market is headed downward.”
Although this is a logical step, I don’t think it will happen with any great frequency. Having just gone through (4 months ago) selling in front of the price peak, I can say that moving will be avoided by any and all who can.Moving is expensive and traumatic and a lot of hard work. Catching the peak netted me $500k, but I would be reluctant to go through that now that the peak has passed if I did not have to. Increases in variable rates will force many to the sales office, but the rest who can will keep chasing the price down trying to avoid the “move”.
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