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lamoneyguy
ParticipantPerryChase is right on the money. A trend that drives me crazy in politician speak is the “let me introduce you to the Smith family” or “let me tell you about the Rodriguez family…”
Everything is reduced to anecdotes. But there’s a reason they all do it. It works.
Stories sell. People can relate to a family losing their home and $50k in the process because some realtor convinced them they could always take out a HELOC when prices go up. They don’t relate to DOM and price/income ratios.
ParticipantParticipantYes, sdrealtor, we want to know the details. Not where the properties are, but the numbers. Purchase price, HOA, loan terms to get cash flow positive or close. Very interesting.
August 17, 2006 at 8:31 AM in reply to: The Real Story Behind the Los Angeles County 6.6% Median Price Increase #32138Participantsdrealtor, I disagree. Look again at the numbers, it clearly shows two things. 1) prices ROSE in low income communities on mostly strong to stable number of sales, 2) prices FELL in high income communities on severely declining number of sales.
If your theory were true the sales numbers would not differ so dramatically, and they would be moving in the same direction. But they’re not. It is clear that sales activity remains strong in low income areas, while it has fallen off a cliff in high income areas. This could mean money coming in from outside the communities either for investment purposes or from people “moving down” as PD and Socalarm suggested.
I don’t think I fully buy those theories either. I think we are seeing the bottom of a pyramid scheme. The least educated with the least resources unfortunately gets suckered in at the end of the party.
ParticipantThis is looking like a smart move. Well done.
ParticipantIt’s not political correctness to feel sympathy when someone makes a mistake that puts them in a bad financial situation. It’s being human. Someone you know is going through a rough time, you say, “Sorry man, hope things get better for you.”
ParticipantI know you said “big IF” but don’t you think we are more likely to see bond yields rise? What happens to apartment REITs in a declining RE market and likely accompanied rising rates?
ParticipantWhy apartment REITs? Because foreclosed homeowners will flock to aparment buildings? Is apartment pricing totally independent or even inverse to the SFR/Condo/Townhouse market? I don’t think so. Won’t the value of apartment REITs also decline in a declining real estate environment?
~<http://www.itsjustmoney.blogs.com">lamoneyguy
ParticipantGood analysis FSD, and demonstrates why the nominal increases that the real estate industry continues to champion is meaningless. Imagin, this guy “made” $75k in two years, but really lost money, or at best broke even. How well would you have done if you only “made” $40k?
ParticipantAgreed Rankandfile. I didn’t mean to imply that medical costs are restricted to the elderly. I was just trying to come up with another example in which costs may get very high despite genuine efforts to live within your means.
ParticipantI don’t agree for one second with this comment:
“The data shows that people are borrowing more money not because of over-consumption, but because they’re caught in a bind,” says Weller, a senior economist at the CAP. “In that bind, the only escape valve for middle class families is to borrow more money.”
Perhaps for some for whom medical expenses caused their debt, or unexpectedly caring for an elderl parent. But most families are trying to live a lifestyle they cannot afford.
ParticipantCarlisle,
I think the response to all of the above is, “It won’t be different this time.” Have you read Rich’s bubble primer? If so, you know that one of the key components is the runaway job growth in real estate related industries. This may be a chicken or the egg type of thing, but those jobs will not only be lost in a down market, but flat as well. We are in that flat market. The jobs are already being lost. When the built up house ATM reserves runs its course, the game will be lost.Also, it’s not as simple as saying, “Hey! It’s either different or not!” It CAN be different in some respects but not in others. However, if that is the case, you have to ask why. As state above, I don’t believe it will be different for any of the questions. But if we are to see a decline without employment problems, what would be the cause? Unprecedented lending standards? Unusual rates of investor activity?
If things are to be different for questions 1 or 3, what would be the cause? I can think of no reason.
ParticipantWhen do the July sales numbers come out? Should be very interesting. Even more interesting as we approach Oct/Nov peak levels.
ParticipantVirtually every major boom/bust cycle is followed by “discovery” of fraud, lawsuits and government regulation.
See 1929 crash followed by the Securities Act of 1933 and the Securities Exchange Act of 1934.
See the 2000 tech crash followed by Sarbanes Oxley Act of 2002.
What will this one bring?
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