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DWCAP.
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April 28, 2008 at 10:32 PM #196085April 28, 2008 at 10:42 PM #195981
SD Realtor
ParticipantYeah I know you have taken a beating on this site but I admire you for hanging in there. I did note that your post did not call for a bottom or anything of the sorts. I guess we all have our own bias when we read peoples posts. I find that my posts never seem to correctly display my intent many times as well.
One thing that concerns me about the inflation hedge, is that there are many things that tie into it. Right now as long as real estate depreciates faster then inflation then I am okay. While I am slowly watching the value of my lump of cash go down (and it sucks) the intent of that lump is to buy real estate. Thus the asset for which the lump will be exchanged for is still depreciating faster then the lump itself. Thus I am okay with the lump being the lump and the asset to keep depreciating. However we do NOT need hyper inflation to swing things the other way, all we need is the depreciation of the asset to run slower then the depreciation of the lump of cash.
Furthermore what is also not discussed at all, is the widening of the gulf between the have and have nots. If we do run into an inflationary spiral, I very much believe we will see a situation of the rich getting a HELL of alot richer by scooping up real estate with cash or very high equity stakes. Will real estate valuations fall? Of course… however will real estate be affordable and will the valuations scale with the interest rate hikes? Hard to say. I do not think it is a slam dunk to say that real estate depreciation will be commensurate or even exceed the change in monthly payment needed to overcome substantial rate hikes. It becomes very iffy and again will have severe variances by areas. The problem becomes much more unpredictable, especially when those with large reserves start to get involved.
SD Realtor
April 28, 2008 at 10:42 PM #196013ParticipantYeah I know you have taken a beating on this site but I admire you for hanging in there. I did note that your post did not call for a bottom or anything of the sorts. I guess we all have our own bias when we read peoples posts. I find that my posts never seem to correctly display my intent many times as well.
One thing that concerns me about the inflation hedge, is that there are many things that tie into it. Right now as long as real estate depreciates faster then inflation then I am okay. While I am slowly watching the value of my lump of cash go down (and it sucks) the intent of that lump is to buy real estate. Thus the asset for which the lump will be exchanged for is still depreciating faster then the lump itself. Thus I am okay with the lump being the lump and the asset to keep depreciating. However we do NOT need hyper inflation to swing things the other way, all we need is the depreciation of the asset to run slower then the depreciation of the lump of cash.
Furthermore what is also not discussed at all, is the widening of the gulf between the have and have nots. If we do run into an inflationary spiral, I very much believe we will see a situation of the rich getting a HELL of alot richer by scooping up real estate with cash or very high equity stakes. Will real estate valuations fall? Of course… however will real estate be affordable and will the valuations scale with the interest rate hikes? Hard to say. I do not think it is a slam dunk to say that real estate depreciation will be commensurate or even exceed the change in monthly payment needed to overcome substantial rate hikes. It becomes very iffy and again will have severe variances by areas. The problem becomes much more unpredictable, especially when those with large reserves start to get involved.
SD Realtor
April 28, 2008 at 10:42 PM #196039ParticipantYeah I know you have taken a beating on this site but I admire you for hanging in there. I did note that your post did not call for a bottom or anything of the sorts. I guess we all have our own bias when we read peoples posts. I find that my posts never seem to correctly display my intent many times as well.
One thing that concerns me about the inflation hedge, is that there are many things that tie into it. Right now as long as real estate depreciates faster then inflation then I am okay. While I am slowly watching the value of my lump of cash go down (and it sucks) the intent of that lump is to buy real estate. Thus the asset for which the lump will be exchanged for is still depreciating faster then the lump itself. Thus I am okay with the lump being the lump and the asset to keep depreciating. However we do NOT need hyper inflation to swing things the other way, all we need is the depreciation of the asset to run slower then the depreciation of the lump of cash.
Furthermore what is also not discussed at all, is the widening of the gulf between the have and have nots. If we do run into an inflationary spiral, I very much believe we will see a situation of the rich getting a HELL of alot richer by scooping up real estate with cash or very high equity stakes. Will real estate valuations fall? Of course… however will real estate be affordable and will the valuations scale with the interest rate hikes? Hard to say. I do not think it is a slam dunk to say that real estate depreciation will be commensurate or even exceed the change in monthly payment needed to overcome substantial rate hikes. It becomes very iffy and again will have severe variances by areas. The problem becomes much more unpredictable, especially when those with large reserves start to get involved.
SD Realtor
April 28, 2008 at 10:42 PM #196057ParticipantYeah I know you have taken a beating on this site but I admire you for hanging in there. I did note that your post did not call for a bottom or anything of the sorts. I guess we all have our own bias when we read peoples posts. I find that my posts never seem to correctly display my intent many times as well.
One thing that concerns me about the inflation hedge, is that there are many things that tie into it. Right now as long as real estate depreciates faster then inflation then I am okay. While I am slowly watching the value of my lump of cash go down (and it sucks) the intent of that lump is to buy real estate. Thus the asset for which the lump will be exchanged for is still depreciating faster then the lump itself. Thus I am okay with the lump being the lump and the asset to keep depreciating. However we do NOT need hyper inflation to swing things the other way, all we need is the depreciation of the asset to run slower then the depreciation of the lump of cash.
Furthermore what is also not discussed at all, is the widening of the gulf between the have and have nots. If we do run into an inflationary spiral, I very much believe we will see a situation of the rich getting a HELL of alot richer by scooping up real estate with cash or very high equity stakes. Will real estate valuations fall? Of course… however will real estate be affordable and will the valuations scale with the interest rate hikes? Hard to say. I do not think it is a slam dunk to say that real estate depreciation will be commensurate or even exceed the change in monthly payment needed to overcome substantial rate hikes. It becomes very iffy and again will have severe variances by areas. The problem becomes much more unpredictable, especially when those with large reserves start to get involved.
SD Realtor
April 28, 2008 at 10:42 PM #196100ParticipantYeah I know you have taken a beating on this site but I admire you for hanging in there. I did note that your post did not call for a bottom or anything of the sorts. I guess we all have our own bias when we read peoples posts. I find that my posts never seem to correctly display my intent many times as well.
One thing that concerns me about the inflation hedge, is that there are many things that tie into it. Right now as long as real estate depreciates faster then inflation then I am okay. While I am slowly watching the value of my lump of cash go down (and it sucks) the intent of that lump is to buy real estate. Thus the asset for which the lump will be exchanged for is still depreciating faster then the lump itself. Thus I am okay with the lump being the lump and the asset to keep depreciating. However we do NOT need hyper inflation to swing things the other way, all we need is the depreciation of the asset to run slower then the depreciation of the lump of cash.
Furthermore what is also not discussed at all, is the widening of the gulf between the have and have nots. If we do run into an inflationary spiral, I very much believe we will see a situation of the rich getting a HELL of alot richer by scooping up real estate with cash or very high equity stakes. Will real estate valuations fall? Of course… however will real estate be affordable and will the valuations scale with the interest rate hikes? Hard to say. I do not think it is a slam dunk to say that real estate depreciation will be commensurate or even exceed the change in monthly payment needed to overcome substantial rate hikes. It becomes very iffy and again will have severe variances by areas. The problem becomes much more unpredictable, especially when those with large reserves start to get involved.
SD Realtor
April 29, 2008 at 5:14 AM #196001pemeliza
Participant“The problem becomes much more unpredictable, especially when those with large reserves start to get involved.”
They are involved. Cash or close to cash transactions seem to be the norm nowadays on the best coastal properties with the best schools. While there have been a few good deals struck on the coast for most of us they are an illusion because we didn’t honestly have much of a shot at buying them. That’s why the normal sellers are holding firm. They know that some buyer is going to get tired of playing games with the banks and come looking for something they can actually buy.
Ten years ago folks that got priced out of Carmel Valley, Del Mar and La Jolla had the option of buying in the sleepy towns called Carlsbad and Encinitas. Those that took the risk and bought up north have now been substantially rewarded as these areas have IMHO now become premier areas to live and most owners have deep equity positions.
Instead of asking the question of what are good affordable areas that have perhaps not yet been discovered, most people on this board seem obsessed with hoping the train comes back to the station. Once the rich folks get involved the train rarely makes a second pass. I have seen this happen with countless areas around the country.
April 29, 2008 at 5:14 AM #196032Participant“The problem becomes much more unpredictable, especially when those with large reserves start to get involved.”
They are involved. Cash or close to cash transactions seem to be the norm nowadays on the best coastal properties with the best schools. While there have been a few good deals struck on the coast for most of us they are an illusion because we didn’t honestly have much of a shot at buying them. That’s why the normal sellers are holding firm. They know that some buyer is going to get tired of playing games with the banks and come looking for something they can actually buy.
Ten years ago folks that got priced out of Carmel Valley, Del Mar and La Jolla had the option of buying in the sleepy towns called Carlsbad and Encinitas. Those that took the risk and bought up north have now been substantially rewarded as these areas have IMHO now become premier areas to live and most owners have deep equity positions.
Instead of asking the question of what are good affordable areas that have perhaps not yet been discovered, most people on this board seem obsessed with hoping the train comes back to the station. Once the rich folks get involved the train rarely makes a second pass. I have seen this happen with countless areas around the country.
April 29, 2008 at 5:14 AM #196059Participant“The problem becomes much more unpredictable, especially when those with large reserves start to get involved.”
They are involved. Cash or close to cash transactions seem to be the norm nowadays on the best coastal properties with the best schools. While there have been a few good deals struck on the coast for most of us they are an illusion because we didn’t honestly have much of a shot at buying them. That’s why the normal sellers are holding firm. They know that some buyer is going to get tired of playing games with the banks and come looking for something they can actually buy.
Ten years ago folks that got priced out of Carmel Valley, Del Mar and La Jolla had the option of buying in the sleepy towns called Carlsbad and Encinitas. Those that took the risk and bought up north have now been substantially rewarded as these areas have IMHO now become premier areas to live and most owners have deep equity positions.
Instead of asking the question of what are good affordable areas that have perhaps not yet been discovered, most people on this board seem obsessed with hoping the train comes back to the station. Once the rich folks get involved the train rarely makes a second pass. I have seen this happen with countless areas around the country.
April 29, 2008 at 5:14 AM #196079Participant“The problem becomes much more unpredictable, especially when those with large reserves start to get involved.”
They are involved. Cash or close to cash transactions seem to be the norm nowadays on the best coastal properties with the best schools. While there have been a few good deals struck on the coast for most of us they are an illusion because we didn’t honestly have much of a shot at buying them. That’s why the normal sellers are holding firm. They know that some buyer is going to get tired of playing games with the banks and come looking for something they can actually buy.
Ten years ago folks that got priced out of Carmel Valley, Del Mar and La Jolla had the option of buying in the sleepy towns called Carlsbad and Encinitas. Those that took the risk and bought up north have now been substantially rewarded as these areas have IMHO now become premier areas to live and most owners have deep equity positions.
Instead of asking the question of what are good affordable areas that have perhaps not yet been discovered, most people on this board seem obsessed with hoping the train comes back to the station. Once the rich folks get involved the train rarely makes a second pass. I have seen this happen with countless areas around the country.
April 29, 2008 at 5:14 AM #196120Participant“The problem becomes much more unpredictable, especially when those with large reserves start to get involved.”
They are involved. Cash or close to cash transactions seem to be the norm nowadays on the best coastal properties with the best schools. While there have been a few good deals struck on the coast for most of us they are an illusion because we didn’t honestly have much of a shot at buying them. That’s why the normal sellers are holding firm. They know that some buyer is going to get tired of playing games with the banks and come looking for something they can actually buy.
Ten years ago folks that got priced out of Carmel Valley, Del Mar and La Jolla had the option of buying in the sleepy towns called Carlsbad and Encinitas. Those that took the risk and bought up north have now been substantially rewarded as these areas have IMHO now become premier areas to live and most owners have deep equity positions.
Instead of asking the question of what are good affordable areas that have perhaps not yet been discovered, most people on this board seem obsessed with hoping the train comes back to the station. Once the rich folks get involved the train rarely makes a second pass. I have seen this happen with countless areas around the country.
April 29, 2008 at 5:33 AM #196006Bugs
ParticipantSorry, but I just don’t see how the one number flattening can be considered indicative of anything.
This is another example of the folly of comparing the two datasets against each other as if they’re the same. They aren’t.
The gross number of all sellers is more or less stable, but the number of compelled-to-sell is increasing every month. The sellers who have left are those discretionary sellers who weren’t selling anything last year anyway.
This is happening against the backdrop of a declining rate of sales. If anything, the current supply/demand dynamic looks a lot worse now than it did last year.
What you’re looking for is an increase in the number of buyers against an equally decreasing number of sellers. Even when that happens it’s going to take a while. This aircraft carrier is not going to turn on a dime.
April 29, 2008 at 5:33 AM #196038ParticipantSorry, but I just don’t see how the one number flattening can be considered indicative of anything.
This is another example of the folly of comparing the two datasets against each other as if they’re the same. They aren’t.
The gross number of all sellers is more or less stable, but the number of compelled-to-sell is increasing every month. The sellers who have left are those discretionary sellers who weren’t selling anything last year anyway.
This is happening against the backdrop of a declining rate of sales. If anything, the current supply/demand dynamic looks a lot worse now than it did last year.
What you’re looking for is an increase in the number of buyers against an equally decreasing number of sellers. Even when that happens it’s going to take a while. This aircraft carrier is not going to turn on a dime.
April 29, 2008 at 5:33 AM #196063ParticipantSorry, but I just don’t see how the one number flattening can be considered indicative of anything.
This is another example of the folly of comparing the two datasets against each other as if they’re the same. They aren’t.
The gross number of all sellers is more or less stable, but the number of compelled-to-sell is increasing every month. The sellers who have left are those discretionary sellers who weren’t selling anything last year anyway.
This is happening against the backdrop of a declining rate of sales. If anything, the current supply/demand dynamic looks a lot worse now than it did last year.
What you’re looking for is an increase in the number of buyers against an equally decreasing number of sellers. Even when that happens it’s going to take a while. This aircraft carrier is not going to turn on a dime.
April 29, 2008 at 5:33 AM #196084ParticipantSorry, but I just don’t see how the one number flattening can be considered indicative of anything.
This is another example of the folly of comparing the two datasets against each other as if they’re the same. They aren’t.
The gross number of all sellers is more or less stable, but the number of compelled-to-sell is increasing every month. The sellers who have left are those discretionary sellers who weren’t selling anything last year anyway.
This is happening against the backdrop of a declining rate of sales. If anything, the current supply/demand dynamic looks a lot worse now than it did last year.
What you’re looking for is an increase in the number of buyers against an equally decreasing number of sellers. Even when that happens it’s going to take a while. This aircraft carrier is not going to turn on a dime.
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