[sdduuuude]

I don’t completely disagree with your comments on inflation and money supply, buy your basic economics needs some work.

I believe this is an incorrect statement:

“For any commodity … its real value (use value) is defined by its function”

This is not its “real value.” That is its “value in use”
Each individual has a different value in use for each commodity.

A commodity’s value in use is defined by its function, but its real value is the highest price someone is willing to pay at a given instant in time. Period.

I also disagree with this:
“From that time on, taking in to account depreciation, changes in location desirability (assuming constant use value and reasonably stable wages), the price of the property is completely a function of the value of the currency.”

It may also be a function of the availability of capital – related to, but not the same as “value of the currency.”

Also, we can see an example of how value in use is not the “real value”. A commodity may have a constant value in use, and currency may have the same value, but if nobody can borrow the money to buy it, the price they are willing to pay can go down. Thus, the value of the commodity goes down.

I think the housing increase has not been entirely a result of currency devaluation, but a mis-valuation of mortgage debt instruments by Wall Street that has let to rampant lending of money that should never have been lent.

[sdduuuude]

Thanks for the nice comment.

I hope there isn’t such a thing as a “Spokane Housing Bubble” web site.

[sdduuuude]

Thanks for the nice comment.

I hope there isn’t such a thing as a “Spokane Housing Bubble” web site.

[sdduuuude]

I think it will be like a bouncy rubber ball going down a long flight of steps.

Down up down a little more up down a little more up down up a little down alot back up down more.

One thing you must understand about markets in general is that they are where they are for a reason. Those reasons need to change in order for the market to change. Change is difficult and takes time.

Also, in a market where transaction time from “I think I’ll sell” to “closed” can take many months, that prevents anything from happening quickly.

I get the feeling people view the housing market like the stock market when they talk about bubbles bursting and such.
Lets see …
Stocks – millions of transactions a day, transaction time of 1 second.
Houses – hundreds of transactions a day, transaction time of 3 months.

How fast can it possibly move ?

The closest thing we had to a “pop” was the subprime market collapse. Still, the effects of that on the housing market wasn’t immediate. The effects of even a “pop” like that take months to fully affect the market.

Furthermore, you can’t short sell houses. The market has to drop by people not buying. The act of not buying is a passive act and doesn’t force the market down. It drops bit by bit as sellers reluctantly decide to lower prices.

Lastly, as Rich said in one of his recent posts – there are forces pushing the other way. They aren’t just going to disappear overnight.

They typical down months could be fairly dramatic – but the the Spring will always bring buyers who think the bottom is here and we’ll get little up bounces.

This is soooo the story of the boiling frog.

D

[sdduuuude]

I think it will be like a bouncy rubber ball going down a long flight of steps.

Down up down a little more up down a little more up down up a little down alot back up down more.

One thing you must understand about markets in general is that they are where they are for a reason. Those reasons need to change in order for the market to change. Change is difficult and takes time.

Also, in a market where transaction time from “I think I’ll sell” to “closed” can take many months, that prevents anything from happening quickly.

I get the feeling people view the housing market like the stock market when they talk about bubbles bursting and such.
Lets see …
Stocks – millions of transactions a day, transaction time of 1 second.
Houses – hundreds of transactions a day, transaction time of 3 months.

How fast can it possibly move ?

The closest thing we had to a “pop” was the subprime market collapse. Still, the effects of that on the housing market wasn’t immediate. The effects of even a “pop” like that take months to fully affect the market.

Furthermore, you can’t short sell houses. The market has to drop by people not buying. The act of not buying is a passive act and doesn’t force the market down. It drops bit by bit as sellers reluctantly decide to lower prices.

Lastly, as Rich said in one of his recent posts – there are forces pushing the other way. They aren’t just going to disappear overnight.

They typical down months could be fairly dramatic – but the the Spring will always bring buyers who think the bottom is here and we’ll get little up bounces.

This is soooo the story of the boiling frog.

D

[sdduuuude]

One thing you might consider is to save a little more aggressively, and possibly make some extra payments to the higher-interest loan.

Keep on top of the market. Know what your house is worth. If the market does start to slide, try to keep some money around in case you are forced to sell, or try paying off the second really early.

That way, you always have some equity and a forced sale doesn’t kill you.

i.e. now that you know the reality of the situation, don’t just ignore it, bite the bullet now to keep yourself from a short sale later.

D

[sdduuuude]

One thing you might consider is to save a little more aggressively, and possibly make some extra payments to the higher-interest loan.

Keep on top of the market. Know what your house is worth. If the market does start to slide, try to keep some money around in case you are forced to sell, or try paying off the second really early.

That way, you always have some equity and a forced sale doesn’t kill you.

i.e. now that you know the reality of the situation, don’t just ignore it, bite the bullet now to keep yourself from a short sale later.

D

[sdduuuude]

I hear powayseller will return to this forum in latesummer2008 .

[sdduuuude]

I hear powayseller will return to this forum in latesummer2008 .

[sdduuuude]

“…why would someone want to buy a USED HOME”

I know what you mean, but my answer would be:

New homes …
1) tend to be out in the boonies.
2) tend to have homeowner fees
3) have lower-quality construction
4) have virtually no landscaping.
5) have little space between houses.
6) look just like the neighbors house
7) are a pain to get fixed because the builders don’t back their work. If there are issues with a USED home, I can just get a home warranty and get issues resolved quickly

[sdduuuude]

“…why would someone want to buy a USED HOME”

I know what you mean, but my answer would be:

New homes …
1) tend to be out in the boonies.
2) tend to have homeowner fees
3) have lower-quality construction
4) have virtually no landscaping.
5) have little space between houses.
6) look just like the neighbors house
7) are a pain to get fixed because the builders don’t back their work. If there are issues with a USED home, I can just get a home warranty and get issues resolved quickly

[sdduuuude]

Think of 2 scenarios in which you start out with $50,000 to trade.

In scenario A you work and make $100K/yr, pay $30K in taxes, put $10K into your trading fund and trade once per year to adjust your portfolio.

In scenario B, you don’t work, you just trade, trying to turn the $50,000 into $70,000 in after-tax profits that you have to live on, pay taxes on, and use to increase the value of your trading fund, AND earn profits in excess of the growth achieved by the 50K of investments. Good luck with that.

The scenario changes dramatically if you are only employable as a $20K/year worker and you have $1,000,000 in your fund. Even then, can you really do better than the market by 20K with the time you spend?

Remember – you don’t have to earn SOME money with your trades. You have to earn more than you could earning a salary plus what you can earn with the investment funds in a less time-consuming investment plan.

[sdduuuude]

Think of 2 scenarios in which you start out with $50,000 to trade.

In scenario A you work and make $100K/yr, pay $30K in taxes, put $10K into your trading fund and trade once per year to adjust your portfolio.

In scenario B, you don’t work, you just trade, trying to turn the $50,000 into $70,000 in after-tax profits that you have to live on, pay taxes on, and use to increase the value of your trading fund, AND earn profits in excess of the growth achieved by the 50K of investments. Good luck with that.

The scenario changes dramatically if you are only employable as a $20K/year worker and you have $1,000,000 in your fund. Even then, can you really do better than the market by 20K with the time you spend?

Remember – you don’t have to earn SOME money with your trades. You have to earn more than you could earning a salary plus what you can earn with the investment funds in a less time-consuming investment plan.

[sdduuuude]

Do you have any inventory info?

I know you think total sales is the most important figure, but I think it is the months of inventory – i.e.

inventory / sales.

[sdduuuude]

Do you have any inventory info?

I know you think total sales is the most important figure, but I think it is the months of inventory – i.e.

inventory / sales.

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