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Eugene
ParticipantParticipantParticipantLocation isn’t great but it’s not Inland Empire. You can get almost anywhere from RB to La Jolla to downtown, in half an hour. And it’s technically on the border of Santee/Lakeside.
Prices per square foot aren’t out of line for the area. Check out 92071 on sdlookup.com.
Square footage is where they have a problem. I might consider a decently priced 4br in the area – but their 4br single-family houses start at 3000+ square feet …
ParticipantLocation isn’t great but it’s not Inland Empire. You can get almost anywhere from RB to La Jolla to downtown, in half an hour. And it’s technically on the border of Santee/Lakeside.
Prices per square foot aren’t out of line for the area. Check out 92071 on sdlookup.com.
Square footage is where they have a problem. I might consider a decently priced 4br in the area – but their 4br single-family houses start at 3000+ square feet …
ParticipantStock market is a zero sum game. Close to it, anyway. Dividend paying stocks are okay, anything else is prone to bubbles.
It’s the same story as with houses. Long term houses are good investments but it does not mean that you should drop everything and buy a house in Carmel Valley. Long term, stocks are even better investments. With any bubble, if you get in at the peak, you stand to lose much more (and faster) than you stand to gain from normal growth of the asset.
Right now there are bubbles of varying degrees in most foreign stock markets. Shanghai composite index is up 6x in two years. Is that because of world economy growth?
Currencies are _not_ good investments long term. They are temporary solutions when you think that market correction is likely. Euro CDs and bonds give you guaranteed 5% a year. Stock markets historically give 10% on average. In any given year they might give you 20% and might give you -25%. Given deflating global housing bubble, credit problems, and American consumers rapidly running out of money, which one do you think is more likely?
Myself I’m mostly in cash, gold, and TIPS, with a few speculative bets against the American consumer (SCC, retailer put options). My expectations include continued dollar decline, falling discretionary consumer spending during the winter gradually developing into recession, eventually second round of credit crunch, this time driven by mass defaults in Prime/Alt-A sectors. When the dust settles, time will come to buy a house and move into stocks.
ParticipantStock market is a zero sum game. Close to it, anyway. Dividend paying stocks are okay, anything else is prone to bubbles.
It’s the same story as with houses. Long term houses are good investments but it does not mean that you should drop everything and buy a house in Carmel Valley. Long term, stocks are even better investments. With any bubble, if you get in at the peak, you stand to lose much more (and faster) than you stand to gain from normal growth of the asset.
Right now there are bubbles of varying degrees in most foreign stock markets. Shanghai composite index is up 6x in two years. Is that because of world economy growth?
Currencies are _not_ good investments long term. They are temporary solutions when you think that market correction is likely. Euro CDs and bonds give you guaranteed 5% a year. Stock markets historically give 10% on average. In any given year they might give you 20% and might give you -25%. Given deflating global housing bubble, credit problems, and American consumers rapidly running out of money, which one do you think is more likely?
Myself I’m mostly in cash, gold, and TIPS, with a few speculative bets against the American consumer (SCC, retailer put options). My expectations include continued dollar decline, falling discretionary consumer spending during the winter gradually developing into recession, eventually second round of credit crunch, this time driven by mass defaults in Prime/Alt-A sectors. When the dust settles, time will come to buy a house and move into stocks.
ParticipantNow realistically, how many Brazilian businessmen can afford to give a million bucks to the U.S. government for the right to buy a $2m house in La Jolla? And wouldn’t those businessmen prefer a Mediterranean country? I’m not sure about immigration restrictions, but Italian or Portuguese real estate can’t be more expensive than La Jolla.
ParticipantNow realistically, how many Brazilian businessmen can afford to give a million bucks to the U.S. government for the right to buy a $2m house in La Jolla? And wouldn’t those businessmen prefer a Mediterranean country? I’m not sure about immigration restrictions, but Italian or Portuguese real estate can’t be more expensive than La Jolla.
ParticipantIf I were a rich foreigner looking for a place to retire, La Jolla would not be near the top of my list.
In Brazil, that kind of money buys you a 10,000 sq ft beachfront mansion, or a huge ranch with orange and banana plantations, and you’ll save enough cash to hire a bunch of servants for life to take care of your property. (Their minimum wage is $200 a month and many people don’t make even that)
Visa problem is an even bigger one. You can’t just buy a house and move here. The whole immigration system is set up to make sure people DON’T do that. With the exception of Canadians, almost any foreigner who intends to stay in the country for more than 90 days needs to get a visa. There are two kinds of visas – immigration and non-immigration. To get an immigration visa, you need to have relatives here, find a good job in the States (H1B process), marry a U.S. citizen, or invest $1,000,000 into the U.S. economy. (Buying a house does not qualify.) Non-immigration visas are given to tourists and U.S. embassy is free to deny a tourist visa to anyone. In fact, owning a house in the States is an indication of immigration intentions and that alone is grounds for automatic denial of a tourist visa.
Would you want to spend 2+ million dollars on a house if you knew that you had no legal right to stay in the country and its government could prevent you from coming back if you left?
ParticipantIf I were a rich foreigner looking for a place to retire, La Jolla would not be near the top of my list.
In Brazil, that kind of money buys you a 10,000 sq ft beachfront mansion, or a huge ranch with orange and banana plantations, and you’ll save enough cash to hire a bunch of servants for life to take care of your property. (Their minimum wage is $200 a month and many people don’t make even that)
Visa problem is an even bigger one. You can’t just buy a house and move here. The whole immigration system is set up to make sure people DON’T do that. With the exception of Canadians, almost any foreigner who intends to stay in the country for more than 90 days needs to get a visa. There are two kinds of visas – immigration and non-immigration. To get an immigration visa, you need to have relatives here, find a good job in the States (H1B process), marry a U.S. citizen, or invest $1,000,000 into the U.S. economy. (Buying a house does not qualify.) Non-immigration visas are given to tourists and U.S. embassy is free to deny a tourist visa to anyone. In fact, owning a house in the States is an indication of immigration intentions and that alone is grounds for automatic denial of a tourist visa.
Would you want to spend 2+ million dollars on a house if you knew that you had no legal right to stay in the country and its government could prevent you from coming back if you left?
Participant{total off-topic}
Will the bursting R/E bubble hurt some guy in Montana or Texas? A little, but it’s gonna hurt like hell in Southern California
Popular sentiment, but i’m not sure if it’s entirely true.
On one hand, yes, we had huge runup in prices and Texas didn’t. So we have further to fall.
On the other hand, look at the list of places with most foreclosures. Half of them didn’t see much appreciation. Denver is #6. Memphis is #9. Atlanta is #12. Atlanta home prices grew barely 10% inflation-adjusted since 2001 and yet they are having more foreclosures per capita than San Diego.
Bubble in house prices may have been confined to CA/NV/AZ/FL, but lending standards were lax everywhere, and it’s much easier to overbuild in the Plains than in Southern California where it’s hard to find a good chunk of flat land that’s free of environmental restrictions within 1 hour drive from downown LA or SD.
I have a feeling that Texas has its share of $14,000/year ARMed Mexican strawberry pickers.
Participant{total off-topic}
Will the bursting R/E bubble hurt some guy in Montana or Texas? A little, but it’s gonna hurt like hell in Southern California
Popular sentiment, but i’m not sure if it’s entirely true.
On one hand, yes, we had huge runup in prices and Texas didn’t. So we have further to fall.
On the other hand, look at the list of places with most foreclosures. Half of them didn’t see much appreciation. Denver is #6. Memphis is #9. Atlanta is #12. Atlanta home prices grew barely 10% inflation-adjusted since 2001 and yet they are having more foreclosures per capita than San Diego.
Bubble in house prices may have been confined to CA/NV/AZ/FL, but lending standards were lax everywhere, and it’s much easier to overbuild in the Plains than in Southern California where it’s hard to find a good chunk of flat land that’s free of environmental restrictions within 1 hour drive from downown LA or SD.
I have a feeling that Texas has its share of $14,000/year ARMed Mexican strawberry pickers.
ParticipantI don’t think that you covered the possibility of a 0%-1% Discount OR Fed Funds Rate.
1% Fed Funds Rate is possible, but I don’t see it translating into lower mortgage rates. We all saw what happened to 10-year treasuries after the last cut.
ParticipantI don’t think that you covered the possibility of a 0%-1% Discount OR Fed Funds Rate.
1% Fed Funds Rate is possible, but I don’t see it translating into lower mortgage rates. We all saw what happened to 10-year treasuries after the last cut.
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