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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (10892)	6/1/2003 8:00:30 PM
From: chemist61	Read Replies (1) \| Respond to of 306849

In some areas of the country like California there is something of an ethnic influence going on. Whole families are saving money and buying houses. These folks are outstanding savers, better than most americans. It is the savings rate that is so poor in the USA, not the income. I think we need to assume that many of these houses were purchased with huge $$ down. Or people put money down which they got as a profit of the real estate they just sold. At least that's my impression ... this kinda resembles the bigger fool game, just turnover rate is slower than the one of dot.coms (or tulips).

To: Lizzie Tudor who wrote (10892)	6/1/2003 11:54:01 PM
From: J. P.	Read Replies (1) \| Respond to of 306849

<<I think we need to assume that many of these houses were purchased with huge $$ down. >> I think that most of these homes were purchased with large cash windfalls from the sale of the previous home. <<These folks are outstanding savers, better than most americans.>> right, we lazy shiftless Americans. Perhaps if more of us were from a background of living 10 in a shack with no running water we would be more competitive in our own country.

To: Lizzie Tudor who wrote (10892)	6/4/2003 10:45:31 AM
From: Amy J	Read Replies (1) \| Respond to of 306849

Hi Lizzie, RE: "In some areas of the country like California there is something of an ethnic influence going on. Whole families are saving money and buying houses. These folks are outstanding savers, better than most americans. It is the savings rate that is so poor in the USA, not the income. I think we need to assume that many of these houses were purchased with huge $$ down. " I disagree with your thesis that housing prices have risen due to ethnicity of savings driving prices up, and here's why: 0. I think debt is driving the prices up, not savings. As interest rates drop, debt becomes cheaper and thus grows. While housing prices are directly related to income levels, the economy is currently experiencing an imbalance. 1. Palo Alto housing costs more than Fremont and Milpitas. Those that save, do not believe in debt-ridden, high-mortgage lifestyles. There are more Asians living in Milpitas than Palo Alto. There are more Indians living in Fremont than Palo Alto. (Palo Alto being more expensive.) Based upon those I know, there seems to be more high-consuming, highly leveraged, high-debt ridden people in Palo Alto. 2. Contary to popular belief, immigrant families do not pack themselves into one house. If they are Asian, Mom and Dad probably own property in Hong Kong, Taiwan, or mainland China, and if they are Indian, Mom and Dad probably own property in India, and the parents probably visit the USA once a year. But there are a few Asians who do seem to avoid paying some taxes by shifting property and family assets to their children (as the Asian culture is more trusting of the children to take care of the parents.) I don't think it's a good thing, nor fair to others who are paying their fair share of taxes (and more), if there are some people who are shifting their assets to the children in order to minimize paying taxes. I think the government should crack down on that. But the government should stop subsidizing high-flying, high-consuming, highly leveraged people who get big mortgages that drive prices up, up, up, at the expense of those people who responsbily save money. There was an interesting post the other day on this thread, something about, the USA economy is currently imbalanced and is rewarding unproductive behavior. Is that good? I guess it's good for selling government bonds. Never bet against the government's debt. The government prefers and has established policy to reward the people who are highly leveraged consumers of mortgages. Real estate gains are not always taxed, but stock gains are. This is because the government needs buyers for its debt-ridden bonds, more than it needs stock investors. Regards, Amy J

To: Lizzie Tudor who wrote (10892)	6/6/2003 11:44:10 PM
From: RealMuLan	Read Replies (1) \| Respond to of 306849

>>I think we need to assume that many of these houses were purchased with huge $$ down.<< In some areas in LA, or even in Seattle, it is an understatement. There were quite a number of Chinese, from Taiwan, HK, and in recent years, Mainland China, paid $300k-$500K Cash to buy houses. They are not eligible for mortgage, and they were not interested in it anyway. And in case of a lot of Chinese graduated here in the US, yes, your assumption is right. Majority of Chinese I know of bought their house with at least 20% down payment, some even higher. So their monthly payment is not that high for a 2-income family. With the refinancing, a couple of them all switched to 15 year term from 30 years. Compared to most of Americans I know, still paying those 30 years of mortgage.