[peterb]

Comparing this RE cycle to the last one from 1990 to 1997 may be a little off. This one seems to be happening a lot faster and with much more severity. I think this is primarily due to all the loans being really bad for the barrower. In the 1990 scenario there was a recession that fueled the housing down-turn. So I think it was a smoother and less harsh down-cycle. This time we have a huge amount of bad loans followed by a recession. Hence the much sharper and severe cycle. The market went up fast and high from 2002 to 2006 and I think we’ll see an equally fast and hard drop due to the current situation. We’re already at or near 2003 prices according to Rich’s charts and this down-cycle is far from over.
Since RE prices are closely tied to employment, I doubt we’ll see the bottom of this cycle until employment starts to improve. So, if there’s another 2 or 3 years of poor employment and more bad loans go REO and interest rates increase, etc…this current “stabilization” in some of the local RE markets may be a false rally and prove to be a loss for all the “investors” that are currently buying.

[peterb]

Comparing this RE cycle to the last one from 1990 to 1997 may be a little off. This one seems to be happening a lot faster and with much more severity. I think this is primarily due to all the loans being really bad for the barrower. In the 1990 scenario there was a recession that fueled the housing down-turn. So I think it was a smoother and less harsh down-cycle. This time we have a huge amount of bad loans followed by a recession. Hence the much sharper and severe cycle. The market went up fast and high from 2002 to 2006 and I think we’ll see an equally fast and hard drop due to the current situation. We’re already at or near 2003 prices according to Rich’s charts and this down-cycle is far from over.
Since RE prices are closely tied to employment, I doubt we’ll see the bottom of this cycle until employment starts to improve. So, if there’s another 2 or 3 years of poor employment and more bad loans go REO and interest rates increase, etc…this current “stabilization” in some of the local RE markets may be a false rally and prove to be a loss for all the “investors” that are currently buying.

[peterb]

Comparing this RE cycle to the last one from 1990 to 1997 may be a little off. This one seems to be happening a lot faster and with much more severity. I think this is primarily due to all the loans being really bad for the barrower. In the 1990 scenario there was a recession that fueled the housing down-turn. So I think it was a smoother and less harsh down-cycle. This time we have a huge amount of bad loans followed by a recession. Hence the much sharper and severe cycle. The market went up fast and high from 2002 to 2006 and I think we’ll see an equally fast and hard drop due to the current situation. We’re already at or near 2003 prices according to Rich’s charts and this down-cycle is far from over.
Since RE prices are closely tied to employment, I doubt we’ll see the bottom of this cycle until employment starts to improve. So, if there’s another 2 or 3 years of poor employment and more bad loans go REO and interest rates increase, etc…this current “stabilization” in some of the local RE markets may be a false rally and prove to be a loss for all the “investors” that are currently buying.

[peterb]

Comparing this RE cycle to the last one from 1990 to 1997 may be a little off. This one seems to be happening a lot faster and with much more severity. I think this is primarily due to all the loans being really bad for the barrower. In the 1990 scenario there was a recession that fueled the housing down-turn. So I think it was a smoother and less harsh down-cycle. This time we have a huge amount of bad loans followed by a recession. Hence the much sharper and severe cycle. The market went up fast and high from 2002 to 2006 and I think we’ll see an equally fast and hard drop due to the current situation. We’re already at or near 2003 prices according to Rich’s charts and this down-cycle is far from over.
Since RE prices are closely tied to employment, I doubt we’ll see the bottom of this cycle until employment starts to improve. So, if there’s another 2 or 3 years of poor employment and more bad loans go REO and interest rates increase, etc…this current “stabilization” in some of the local RE markets may be a false rally and prove to be a loss for all the “investors” that are currently buying.

[peterb]

Comparing this RE cycle to the last one from 1990 to 1997 may be a little off. This one seems to be happening a lot faster and with much more severity. I think this is primarily due to all the loans being really bad for the barrower. In the 1990 scenario there was a recession that fueled the housing down-turn. So I think it was a smoother and less harsh down-cycle. This time we have a huge amount of bad loans followed by a recession. Hence the much sharper and severe cycle. The market went up fast and high from 2002 to 2006 and I think we’ll see an equally fast and hard drop due to the current situation. We’re already at or near 2003 prices according to Rich’s charts and this down-cycle is far from over.
Since RE prices are closely tied to employment, I doubt we’ll see the bottom of this cycle until employment starts to improve. So, if there’s another 2 or 3 years of poor employment and more bad loans go REO and interest rates increase, etc…this current “stabilization” in some of the local RE markets may be a false rally and prove to be a loss for all the “investors” that are currently buying.

[peterb]

We’re so used to seeing real estate in CA rise over a 10 year time frame that we tend to automatically consider paying rent as “throwing away money”. But really, it’s all a financial decision. Comparing rent to buying from a financial perspective still requires that one calculate all the real cost involved. I have been a landlord and a home owner for many years. Even with all the tax deductions, etc…if it werent for appreciation, being a landlord would be a losing position. If you look at states with very low levels of appreciation, often the only arguement for home ownership is that over the long haul one gains equity in the house by paying off the loan. And then eventually lives mortgage free or at least very reduced due to inflation reducing the mortgage over time and the tax deductions.

[peterb]

We’re so used to seeing real estate in CA rise over a 10 year time frame that we tend to automatically consider paying rent as “throwing away money”. But really, it’s all a financial decision. Comparing rent to buying from a financial perspective still requires that one calculate all the real cost involved. I have been a landlord and a home owner for many years. Even with all the tax deductions, etc…if it werent for appreciation, being a landlord would be a losing position. If you look at states with very low levels of appreciation, often the only arguement for home ownership is that over the long haul one gains equity in the house by paying off the loan. And then eventually lives mortgage free or at least very reduced due to inflation reducing the mortgage over time and the tax deductions.

[peterb]

We’re so used to seeing real estate in CA rise over a 10 year time frame that we tend to automatically consider paying rent as “throwing away money”. But really, it’s all a financial decision. Comparing rent to buying from a financial perspective still requires that one calculate all the real cost involved. I have been a landlord and a home owner for many years. Even with all the tax deductions, etc…if it werent for appreciation, being a landlord would be a losing position. If you look at states with very low levels of appreciation, often the only arguement for home ownership is that over the long haul one gains equity in the house by paying off the loan. And then eventually lives mortgage free or at least very reduced due to inflation reducing the mortgage over time and the tax deductions.

[peterb]

We’re so used to seeing real estate in CA rise over a 10 year time frame that we tend to automatically consider paying rent as “throwing away money”. But really, it’s all a financial decision. Comparing rent to buying from a financial perspective still requires that one calculate all the real cost involved. I have been a landlord and a home owner for many years. Even with all the tax deductions, etc…if it werent for appreciation, being a landlord would be a losing position. If you look at states with very low levels of appreciation, often the only arguement for home ownership is that over the long haul one gains equity in the house by paying off the loan. And then eventually lives mortgage free or at least very reduced due to inflation reducing the mortgage over time and the tax deductions.

[peterb]

We’re so used to seeing real estate in CA rise over a 10 year time frame that we tend to automatically consider paying rent as “throwing away money”. But really, it’s all a financial decision. Comparing rent to buying from a financial perspective still requires that one calculate all the real cost involved. I have been a landlord and a home owner for many years. Even with all the tax deductions, etc…if it werent for appreciation, being a landlord would be a losing position. If you look at states with very low levels of appreciation, often the only arguement for home ownership is that over the long haul one gains equity in the house by paying off the loan. And then eventually lives mortgage free or at least very reduced due to inflation reducing the mortgage over time and the tax deductions.

[peterb]

Anti-trust laws, drug safety and stock market regulations all have their beginings due to corporate and systemic abuses. So the FTC, FDA, SEC and other govt regulatory groups were enacted to avoid these abuses in the future. Maybe they were all shams to begin with in order to give the population the impression that the govt was trying to solve certain problems, but the end result was that they were a reaction to big problems that occured when corporations were allowed to function completely unchecked. The problem is that these groups have morphed into control devices by the very corporations that they’re supposed to regulate. I dont think it’s “protection money” so much as it’s “control money”.
By lacking any energy policy for the last 40 years, we are now at the mercy of the “free market”. I agree that this will be self-correcting in that high prices will intitiate change and alternatives, but it will be painful for many people because we were not prepared for it. Eventhough Stevie Wonder could have seen it comming.

[peterb]

Anti-trust laws, drug safety and stock market regulations all have their beginings due to corporate and systemic abuses. So the FTC, FDA, SEC and other govt regulatory groups were enacted to avoid these abuses in the future. Maybe they were all shams to begin with in order to give the population the impression that the govt was trying to solve certain problems, but the end result was that they were a reaction to big problems that occured when corporations were allowed to function completely unchecked. The problem is that these groups have morphed into control devices by the very corporations that they’re supposed to regulate. I dont think it’s “protection money” so much as it’s “control money”.
By lacking any energy policy for the last 40 years, we are now at the mercy of the “free market”. I agree that this will be self-correcting in that high prices will intitiate change and alternatives, but it will be painful for many people because we were not prepared for it. Eventhough Stevie Wonder could have seen it comming.

[peterb]

Anti-trust laws, drug safety and stock market regulations all have their beginings due to corporate and systemic abuses. So the FTC, FDA, SEC and other govt regulatory groups were enacted to avoid these abuses in the future. Maybe they were all shams to begin with in order to give the population the impression that the govt was trying to solve certain problems, but the end result was that they were a reaction to big problems that occured when corporations were allowed to function completely unchecked. The problem is that these groups have morphed into control devices by the very corporations that they’re supposed to regulate. I dont think it’s “protection money” so much as it’s “control money”.
By lacking any energy policy for the last 40 years, we are now at the mercy of the “free market”. I agree that this will be self-correcting in that high prices will intitiate change and alternatives, but it will be painful for many people because we were not prepared for it. Eventhough Stevie Wonder could have seen it comming.

[peterb]

Anti-trust laws, drug safety and stock market regulations all have their beginings due to corporate and systemic abuses. So the FTC, FDA, SEC and other govt regulatory groups were enacted to avoid these abuses in the future. Maybe they were all shams to begin with in order to give the population the impression that the govt was trying to solve certain problems, but the end result was that they were a reaction to big problems that occured when corporations were allowed to function completely unchecked. The problem is that these groups have morphed into control devices by the very corporations that they’re supposed to regulate. I dont think it’s “protection money” so much as it’s “control money”.
By lacking any energy policy for the last 40 years, we are now at the mercy of the “free market”. I agree that this will be self-correcting in that high prices will intitiate change and alternatives, but it will be painful for many people because we were not prepared for it. Eventhough Stevie Wonder could have seen it comming.

[peterb]

Anti-trust laws, drug safety and stock market regulations all have their beginings due to corporate and systemic abuses. So the FTC, FDA, SEC and other govt regulatory groups were enacted to avoid these abuses in the future. Maybe they were all shams to begin with in order to give the population the impression that the govt was trying to solve certain problems, but the end result was that they were a reaction to big problems that occured when corporations were allowed to function completely unchecked. The problem is that these groups have morphed into control devices by the very corporations that they’re supposed to regulate. I dont think it’s “protection money” so much as it’s “control money”.
By lacking any energy policy for the last 40 years, we are now at the mercy of the “free market”. I agree that this will be self-correcting in that high prices will intitiate change and alternatives, but it will be painful for many people because we were not prepared for it. Eventhough Stevie Wonder could have seen it comming.

[Author]

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