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powayseller
Participantirrational exuberance, bubble believer?
ParticipantAnother poster gave us the link yesterday. I thought it was important enough to be its own thread. I don’t remember who posted it here.
ParticipantI asked Rich if he could add the economic data to the Bubble Primer, and he reminded me that it’s already there. The newbies have GOT to read the Bubble Primer from now on, before I make one response.
If there’s anything new not covered, either Rich could update it, or someone can make a write=up and give it to him to include it in the Primer. He’s real busy right now, so he may appreciate having someone write a summary of new info. Just a thought.
ParticipantWay to go, Bugs!
ParticipantDarryl, I gave you the benefit of the doubt. I gave you the opportunity to prove to us that the Amarillo economy is sound, the loans outstanding are solid, and that housing prices are supported by fundamentals.
You tell me to do my own research?? Get real! I’m not your gopher.
If you come here to peddle wares without understanding the value of your wares, you are premature.
Do some research, and then come back. We’re too smart here, to be fooled by some pretty picture. We are well read, we understand the economy and real estate markets and we want data.
Once you have your data, I will be here to listen to your arguments. So go back to your desk and do some research, to understand your economy and markets better. For all I know, you are in a classic speculative bubble yourself!
How dare you tell me to research if you are in a bubble? Why would I want to use my time to research the bubblicous-ness of Amarillo, TX? I’m not your gopher.
ParticipantDarrell, this is a discussion board, not a sales forum. Your idea is good though, but Amarillo prices will crash too. Now it the time to CASH OUT AND RENT. DO NOT BUY REAL ESTATE ANYWHERE IN THE WORLD. Instead,buy gold, commodities, oil. Oil will go through the roof. But don’t buy gold yet, wait for a while for the price to drop.
Participantlostkitty – I will be at the meeting tomorrow, and we can exchange phone #s then. If you’re not going, look me up in the phone book.
ParticipantSince when does a critique of our culture or government policy imply an invitation to get out? VCJM wrote:
“d) I assume you are here in the US. If you dislike it as much as your writings indicate, please leave.” Free speech is our right, and we are in the forum to exchange ideas. Every one who disagrees with us is supposed to leave the country? Get real! I know apologies have been exchanged, but hs did not need to apologize for that statement. Americans are indoctrinated to spend.Look,, 70% of our GDP is consumer spending. Why? Shouldn’t most of our GDP be capital spending, research and develpment, inventing cars that don’t need gasoline, making better products, investing in education?
The U.S. savings rate is negative. We are the largest debtor nation in the world! These are facts. Anyone who is offended by pointing this out is too sensitive. We have to be strong enough to handle the reality. Of course there are exceptions to this rule, but taken as a whole, the Americans measure their success and status by how many toys they have, and that’s why we have a trade deficit, negative savings, and a looming crisis in our social security and medicare programs.
Other countries measure their self worth by how well they treat their elders, how educated they are, how they look, their spiritual powers. Those are the goals they strive for in their personal lives.
I agree with hs. If you want to argue with me, then do so. Unlike hs, I will not apologize.
ParticipantDarrell Young, I agree that cashing out in CA is a great idea, so I did just that. Once you cash out, you can either rent in CA as I did, or buy in a lower-priced city.
If you choose to leave CA and buy elsewhere, you have to be careful to not buy iknto another bubble. The question I would ask is, “What is the income/median home price ratio today, compared to its historical average?”
In SD, the average is 7, and we are at 14.
What is the average multiple in Amarillo, and what is it today? After all, wages are the fundamental that supports a true non-bubble housing pirce.
The second question is what percentage of sales and refis in the last 5 years are adjustable mortgages (I/O, option ARM, ARM) and stated income, so I get an idea of the future foreclosure rate.
In Omaha, NE, the income/home price multiple is the same as it’s always been, but the high use of ARMs are causing home prices to drop.
Third, how is the job market? Has main employment been in construction, real estate, lending, and MEW-related (retail, restaurant, travel, services)? Or is employment independent of the real estate market and MEW? Even Omaha NE had most new jobs in the last years in construction, and they are starting to lose jobs there. The construction and MEW dependence is not limited to CA. It is nationwide, and I wonder if Amarillo is somehow isolated in this regard.
So please answer these 3 questions, and then we will all know whether Amarillo is a good deal, or waiting to fall off a cliff.
ParticipantI’ve never heard of Texans moving to SD. All data and anecdotes point to many people LEAVING SAN DIEGO.
Every day that I go into a store, I start a conversation with the clerk, owner, whatever. I ask them about their business, whether they are hiring because people are leaving San Diego, if they themselves know anyone who moved out of SD, if their customers fill up with gas and why not, etc. I learn about what’s going on by interviewing daily the people I meet. My kids are so annoyed with me. Their most often repeated phrase when I start one of these conversations is, “Mom, I’m going to go wait outside for you”. Then it’s my cue to wrap it up.
Anyway, what I’m hearing in my own little survey is that people are leaving San Diego in droves. This makes it harder to hire and recruit people.
There may be people here and there moving to San Diego, but the trend is to leave, at the rate of 44,000/year as of last June. I bet this year we lost 60,000 people.
ParticipantOpen mics are an accident, preparing questions for a phone survey are not.
This survey was metiuclously planned and executed, and then the results were marketed and published.
So the question is: why did the NAR reverse course on it previous message that housing is hot, there’ll be a soft landing, and this is a good time to buy? I remember last month Lereah first mentioned that rising interest rates could hurt housing, sort of hinting that the Fed should stop raising rates to save housing and the economy.
The Senators questioning Bernanke brought this up. Sarbanes had been lobbied by the NAHB, and showed a chart that showed new home starts falling off a cliff. He said that the NAHB explained to him that the drop in housing sales is causing rents to go up, raising the CPI, causing the Fed to raise rates to reduce CPI, lowering housing sales and creating a vicious cycle. From this comment I realized that the industries are definitely lobbying these senators.
Bernanke’s response was the CPI is only one indicator they use, and that the PCE is more accurate since it excludes rents. He emphasized repeatedly that they look at many factors, not just the CPI. They consider the markets, anecdotes, statistical modeling, prediction of future events, surveys of consumer perception of inflation, and many data inputs of wages, productivity, purchasing prices… So he’s really not a dufus who just looks at CPI, he’s too smart for that.
ParticipantPlease come, peace!
ParticipantMaybe Bugs, but it would be a sudden reversal. Sudden. Why?
ParticipantIn the last downturn, unemployment peaked over a 3-year period. graph
It was 8% in SD, 10% in CA, and 12% in the Inland Empire. Since this time will be worse, would be expect 12% unemployment in SD?
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