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

To: Drygulch Dan who wrote (31311)	5/16/2005 11:31:05 AM
From: Valuepro	Respond to of 306849

Drygulch, "...apparently you have no interest in the view of the predictive nature of the long term trend." Well, not exactly. It depends on what your considering in terms of time, and what your looking to understand about the future. Over the spans of time you are talking about individuals made money in stocks. However, timing is everything. Those who bought in near the start of the Great Depression (1929) had to wait 25 years to break even, assuming they were able to hold onto their stocks. I think real estate mirrored those returns, too. But, and over many decades/generations money has been made. So, is your goal to transfer wealth to another generation, or to build it and enjoy it in your own lifetime leaving something behind? Having said that, if you expand the trend lines over centuries, you will get a different picture, so it much depends on what you call "long term" and for what objective, and what point in time one enters the trend. As you know, the world's centers of wealth creation have been in relative flux since the fall of the Byzanteen Empire. I could agree with your contention within one of those periods in which a nation is a major economic power, but to invest by the old rules during a transitionary time (as we are in now) can be very dangerous. For support, I point to the fact that we are in the early days of a global commodities boom, and this is the first time since near the dawn of the Industrial Revolution that such is not being driven by demand from the United States. It means we are a declining power. The new center of demand is Asia in general, and more particularly China and India. Further, there are not enough raw materials available on the planet to sustain growth in China - never mind India - without eventually horrible economic consequences being suffered by some of the other current industrial powers. Some argue this doesn't make sense, because China depends on foreign sales so much. To some extent that is true, however domestic economic growth is quickly replacing dependence on trade. [That's what happened here after the Industrial Revolution took hold, which, by the way, was largely financed with foreign money - just like China and India today.] Doesn't this mean rampant inflation connected with commodities prices, and isn't inflation bad? For everyone else on the planet it will be disaster. As long as domestic growth can offset inflationary pressures caused by higher prices for raw materials, China (and India) will do fine while the rest of us endure falling purchasing power and falling prices for certain classes of assets, like real estate. "The interesting thing about your "China alone" comments is that it implies a bypass of traditional investment flows. This to me is good news." O.k., I can understand why that looks good to some observers. Looking deeper, one may appreciate that gaining financial leverage over a foreign power is a subtle form of warfare, and no amount of spending on arms can protect against it. And in consumer goods too... Wal-Mart sells enough Chinese made goods in the United States that that activity ranks with the GDPs of many mid-sized nations. We are becoming so China dependent, I find it truly scary, for with all their new found power and appreciation of capitalism as a tool, they are still communists. Except for my home, I am completely out of real estate now and try to encourage my friends to do the same. My investments are in raw materials - mining and energy for the most part.

To: Drygulch Dan who wrote (31311)	5/16/2005 11:49:10 AM
From: Mike Johnston	Respond to of 306849

If the offer on the house came in at 1.1 mln and if the Satrans accepted it, possibly they would start receiving death threats from their "disappointed neighbors". ( a la J. Joseph who downgraded semiconductor stocks at the start of the nasdaq bubble collapse) Makes you think what would happen if prices dropped to 800K. The Open House: Anyone There? Jerry and Laura Satran's Sunday open house is empty. Their lushly appointed home--4,600 square feet in one of Carmel Valley's newest developments--is the sort of place you'd go out of your way to check out even if you were perfectly happy where you lived. It has a grand spiral staircase in the front hall. There are five bedrooms and 4.5 baths, formal living and dining rooms, and a game room upstairs that's big enough for a regulation-size pool table. The kitchen has two islands, both with marble countertops. Jerry, a lawyer, and Laura, a teacher, are asking $ 1.3 million. But here they are, the second week the house has been on the market, drumming their fingers. The previous Sunday, Jerry says, 40 visitors stopped by. No offers. Drive down the street and you'll see that their beautiful home is hardly unique. The layout is the same as the house three doors down, and three doors down from that. High turnover in their development four of the 12 houses on their block have been sold in the year and a half it has existed almost ensures that a house like theirs will be on the market again soon. Their last place, in Carlsbad, sold for $ 615,000--the full asking price--the first day it was on the market. Still, the Satrans are optimistic about this one. They're San Diegans, after all. "We're not in any rush," Jerry insists. Two weeks later the Satrans receive an offer: $ 1.2 million. Not the full asking price. No one seems more disappointed than the neighbors. One woman suggests the Satrans would be hurting the entire block if they settled for less than $ 1.25 million. "She says she was only going to be here for two years, so don't screw up the comps," says Laura. "She's not being cruel--everybody who lives here is in it for the investment." Message 21325191

To: Drygulch Dan who wrote (31311)	5/16/2005 6:00:09 PM
From: patron_anejo_por_favor	Respond to of 306849

>> If the US is ground zero for capitalism in practice, let the investing flow freely, lets see what the market really will bear and perhaps it will eventually lead to a trickle down effect to other countries thus helping to improve those countries general well-being.<< I agree...a great way to start would be to get rid of GSE's, and to get rid of the exemption of 500K on primary residence sales.....let all asset classes (stocks, bonds, real estate, collectibles) be taxed equally (or not at all, preferrably) on capital gains. Let 'er rip!