Friday, July 21, 2006

Inventory Overload in Tampa, FL

Inventory overload in Tampa, Florida.
Picture from Martin Weiss' Safe Money Report.

43 comments:

  1. waiting for godotJuly 21, 2006 9:00 AM

    It is like "The Matrix" of real estate signs. They keep popping up, and they look exactly alike

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  2. LOL. Wow.

    OTOH, Tampa is beautiful, from the little I have seen of it. Of course, that doesn't mean you can make up any price and someone should pay it.

    A Redskins fan

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  3. LOL. Wow.

    OTOH, Tampa is beautiful, from the little I have seen of it. Of course, that doesn't mean you can make up any price and someone should pay it.

    A Redskins fan

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  4. This comment has been removed by a blog administrator.

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  5. David,

    Come on ... From the pic it's pretty obvious that (1) these signs are in front of a building and not a bunch of houses, (2) they are all from the same real estate brokerage, (3) they each bear the name of a different agent from this real estate brokerage, and as such (4) this is a promotion for a real estate brokerage that has lots of agents and is thus probably (5) very successful.

    Gosh, has hoping for the Great Pumpkin to arrive gotten so "desparate" that any and all "signs" can get so misinterpretted (pun intended)?

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  6. One word:

    Photoshop.

    Are you Bubbleheads really that gullible?

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  7. waiting for godotJuly 21, 2006 10:45 AM

    "One word: Photoshop."

    Some more than others...It's obvious, do you really think a RE company would want that type of image?

    Lance, You are so polarized when it comes to defending RE agents, that you will defend even the most asinine situations. Where is your objectivity?

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  8. This comment has been removed by a blog administrator.

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  9. godot asked:
    "Where is your objectivity?"

    let me turn around the question on you ... Where is YOUR objectivity when you blame the messenger for the message? most of us, bubblehead and housinghead alike, will agree that it is not a good thing from a societal standpoint when houses (and condos) are outside the reach of a large number of people. but being so myopic as to blame real estate agents for this situation is analogous to "killing the messenger because of the message". as i've tried to bring up for discussion numerous times before, what is happening now is much bigger than any one group of people or any one industry. we are witnessing a massive shift in the economic fundamentals of our country brought about by the globalization of our world economy and several administrations who rather than concentrate getting ALL of us to partake in the opportunities being brought about by this shift, have just concentrated on getting "the haves" to benefit from the shift ... leaving the "have-nots" to fend for themselves. in light of this, isn't it a bit silly to blame everything on the big bad real estate agents ... this makes bubbleheads look so powerless in the face of forces larger than themselves that they must resort to erecting "evil gods" to be combatted rather than facing the real issues and acting in their own self-best interests in accordance with what they then will see rather than what they want to see. 'nuff said. do as you please. i'm doing okay and don't know how else to help other than trying to enlighten those that aren't ... as others on this post such as Va_Investor and Fritz have been doing. you might have noticed that none of the housingheads on this blog have ever said "buy 'cause prices never go down" or "make a fortune in real estate" ... you are confusing us with the snake oil salesmen that ARE out there and will always be out there. rest assured that the snake oil salesmen wouldn't care enough about you to be on this blog trying to help you.

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  10. Lance said...
    David,

    "Come on ... From the pic it's pretty obvious that (1) these signs are in front of a building and not a bunch of houses, (2) they are all from the same real estate brokerage, (3) they each bear the name of a different agent from this real estate brokerage, and as such (4) this is a promotion for a real estate brokerage that has lots of agents and is thus probably (5) very successful."


    Come on Lance, really. Now your argument is “the signs are a figment of your imagination”, “they are not really there”, “obviously some sort of other explanation”, “most likely fairy dust sprinkled a little too liberally”.

    Could it be that FL has seen a +300% YOY increase in inventory?

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  11. I believe this is the first time I have agreed with Lance...I cannot
    figure out where these signs would be. Before you start throwing spears, I think the real estate market is tanking...I just dont understand this picture...Can anyone enlighten me here?

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  12. On second look, it does appear to be in front of a building and not a house. From that standpoint, the pic is somewhat misleading and the caption is definitely misleading.

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  13. waiting for godotJuly 21, 2006 11:39 AM

    "Where is YOUR objectivity when you blame the messenger for the message?"

    I think that if you look back through some of my posts, you will see that I do not view RE agents in the way that think. I view them as high-end retail salespeople, and not as evil powerful villains. Their goal is to get a listing and sell a house. Some will look after their client or customer's best interest, and others will look out for their own. I believe that the homeowner should be educated enough to distinguish the difference.

    I also believe that the average person is capable of handling the transaction on their own, but due to the emotional aspect of selling a home, many need an agent to hold their hand during the process - at least the first time. This will keep agents in business, but I would not be surprised to see commissions come down as information continues to flow at a faster pace.

    Now there is some objectivity!

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  14. Here's a funny story; in Kansas City they call it a crime and do lawsuits when properties were sold for which the rent can't cover the mortgage, but on the East Coast, we call it a smart future investment...

    Using inflated appraisals and bogus paperwork, he stuck numerous, unwitting investors with houses where rental income could not possibly cover the mortgage payments. Often, the investors sold the houses at a loss or abandoned them and defaulted on the loans. Some lenders and investors have fought back through lawsuits against Barber.

    http://www.kansascity.com/mld/kansascity/15087311.htm

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  15. “i'm doing okay and don't know how else to help other than trying to enlighten those that aren't ... as others on this post such as Va_Investor and Fritz have been doing.”

    I have yet to see you, “Fritz”, or Va_Investor post any data that support any argument.

    Please, enlighten us with any data that shows trends of sales increase, an inventory decrease, a reduction in foreclosures, and/or a reduction in the number of ARM’s resetting.

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  16. good post godot ... though i don't agree with you entirely about people being able to fully handle everything ... if you read my post on another thread earlier this week, you know that i was raised in the business as my dad was a real estate broker some 30 - 40 years ago and i actually held a license for some 6 months back when i was 19, but even i would not attempt to sell my own home for numerous reasons including that i feel one needs an 'intermediary' there to get the best deal during negotiations and also that you really need to be "in the business" to know the market you are dealing in (usually.) i'll compare this to a doctor. doctor's families usually go to a different doctor. it's not to say that dr dad or mom won't help out with the little things, but overall care and any real problems are handled by another doctor ... usually on a reciprocity type of basis. this ensure that there is the proper distance involved for being objective and that emotions don't come into play ... as you already stated. additionally, even doctors specialize because no one person can be knowledgeable about everything at all times ... since things keep changing. let's say your dad was a regular doctor, would you really want to be treated by him for a heart ailment? i mean he would have studied this in med school and read a few articles on him ... or would you rather be treated by the heart specialist who is seeing dozens of folks with heart problems a week, operating on them regularly, and involved in all the organizations that disseminate new devlopments and treatments available? I don't know what you do for a living, but unless it is real estate, I'd don't believe you'd be in a position to do yourself the best service ... particulary when you are selling a property. (Remember, I bought without a real estate agent ... BUT this only occured after working with 2 real estate agents over a 4 - 5 month period and learning what they knew about today's market and grafting it on to what I knew about real estate from decades ago formal and informal training. i.e., I'm not really convinced that the average person out there could really do themselves justice by buying on their own.) One other consideration. Real estate agents are part of a network that you are not a part of. Yes, you can read their ads and look at their on-line sites, but there is no denying that these are THEIR sites and their network ... And yes, you may be able to get valuable info from these sites and this network that THEY are paying for, but you are essentially a "free rider" ... Like the guy who rips off his cable TV. Now, how long do you think the sites and listings will survive if everyone becamse a "free rider"? Imagine everyone ripping off their cable service and no one paying for it? How long before the cable service gets shut down? So your claim that the info is out there and real estate agents will someday not be needed is a questionable one. And belies a basic misunderstanding you have about the role of agents ... namely that "showing you a house" ... or "showing your house to prospective buyers" is the end all and be all of their purpose. I would say that that makes up maybe 5% of their purpose ... which is why most agents would prefer you did your own looking under their guidance. I can tell you, my agents both gave me access to MLS listings and didn't even accompany me to the Sunday open houses I was going to ... One of them (the first) to his detriment as I still needed some handholding at the time ... (smile)

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  17. robert said:
    "Please, enlighten us with any data that shows trends of sales increase, an inventory decrease, a reduction in foreclosures, and/or a reduction in the number of ARM’s resetting."

    again, for whatever reason Robert, I have learned that won't cannot see the forest for the trees ... even if it jumped out and bit you in the face. you keep looking for validation of your position in numbers that I and others have gone round and round with you explaining why they mean NOTHING ... absolutely NOTHING ... but yet you persist ... and I am not playing this game with you.

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  18. Lance,

    How can declining median prices mean nothing?

    Would you advise someone to take out a loan for 100% financing, using an IO or ARM structured loan in a market with declining prices?

    I don't care how rose colored your glasses are over the long term, this is a highly leveraged and risky venture.

    My $0.02.

    Source: http://www.realtor.org/Research.nsf/Pages/MetroPrice

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  19. Lance said...
    “you keep looking for validation of your position in numbers that I and others have gone round and round with you explaining why they mean NOTHING ... absolutely NOTHING ...”

    And I have asked you, which/what numbers should we take a look at? What numbers in this changing real estate market actually mean something? Tell me, and I’ll track those too.











    Or, is it just a gut feeling you have?

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  20. robert: Stop pestering other posters. You have been warned.

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  21. Guess what Lance!

    When Orlando has nearly a 400% increase in inventory in one year. IT IS CALLED A HOUSING EXPLOSION!!!. You write this long email based on nothing. The reality is on the streets and there is tons of blood flowing. The continued lies of a soft landing and prices continuing to go up is a joke. Everytime you go to mcdonalds or some place you eat, ask yourself, how could they afford anything in florida. A teacher or policeman. They work for you and hate your guts because they pay 40 - 50 - 60 percent of their income to live in a crime infested area, while govt agencies wont accept grants to develop any housing that people can afford. If you live in a gated community, I cant have a teacher live next to me. My property wont increase in value 50% this year. Of course none of this applies to you. You are just the cheerleaders of the group. LOL

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  22. “you keep looking for validation of your position in numbers that I and others have gone round and round with you explaining why they mean NOTHING ... absolutely NOTHING ...”

    And I have asked you, which/what numbers should we take a look at? What numbers in this changing real estate market actually mean something? Tell me, and I’ll track those too."

    Robert, take a look at rates of appreciation over past 5 years perhaps. How do you like those numbers? See all the appreciation gained by homeowners, including Lance. See also that appreciation has yet to go negative. Makes you mad, I'd guess, that you missed out and Lance and nearly 70% of all Americans didn't. Now you want prices to fall, but they haven't yet broadly fallen in any significant amount. So, without these falling prices, you're citing all this other data, which so far has had negligible impact on prices. Lance is right to ignore you.

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  23. Housinghead mantra: There is no time not to buy a house.

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  24. Wow,

    With everyone "knowing" Florida real estate inventory is shooting up, if this is an add... its sending the wrong message.

    If it is photoshopped, its still a funny message! :P

    I've put this as my background photo on my computer just for laughs.

    If it doesn't mean anything... people will ignore it. But I'm curious if it raises questions... If nothing else, it will be a conversation starter!

    I do agree with Lance on the affordability issue... how do we get there? Transfer jobs to affordable areas? My company is planning to do that!

    Neil

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  25. david said...
    “robert: Stop pestering other posters. You have been warned.”

    Pestering?

    I would think you’d like to know just what numbers you should supply your readers. After all, inventory, ARM’s and foreclosures mean (and I quote) “absolutely NOTHING” according to the wisest real estate professional in the room.

    So Lance, what is it? What’s the data David and his readers should be tracking?

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  26. Anonymous said...

    ”Robert, take a look at rates of appreciation over past 5 years perhaps. How do you like those numbers?”

    Pretty well thank you, I sold in ‘05

    “See all the appreciation gained by homeowners, including Lance. See also that appreciation has yet to go negative.”

    And it never will? Great! Funny though, with a guarantee like that, you’d think the inventory would shrink due to all the investors snatching up all these great deals on the market. One question, what percentage of home owners that bought in ’05 have no or negative equity?



    “Makes you mad, I'd guess, that you missed out and Lance and nearly 70% of all Americans didn't.”

    Yep missed out alright, Lance bought at the peak. With the average homeowner moving aprox. every five years it’ll be interesting to see what happens to that 70%.

    “Now you want prices to fall, but they haven't yet broadly fallen in any significant amount. So, without these falling prices, you're citing all this other data, which so far has had negligible impact on prices”

    This “other data”? What data do you track?

    “Lance is right to ignore you”

    Ignoring me, or can’t answer the question? It’s a simple question. I think Lance could give a very informative answer.

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  27. Housing Expert: 'Soft Landing' Off Mark

    By David Streitfeld, Times Staff Writer
    July 21, 2006

    Leslie Appleton-Young is at a loss for words.

    The chief economist of the California Assn. of Realtors has stopped using the term "soft landing" to describe the state's real estate market, saying she no longer feels comfortable with that mild label.

    “Maybe we need something new. That's all I'm prepared to say," Appleton-Young said Thursday.

    The shift in language comes as debate over the real estate market is intensifying. The long-awaited drop-off is happening, but there's little agreement about how brutal the landing will be.

    Federal Reserve Chairman Ben S. Bernanke said in congressional testimony Thursday that the national housing downturn so far appears orderly.

    At about the same time, however, D.R. Horton Inc. Chief Executive Donald Tomnitz was telling analysts that the home builder's sales in June "absolutely fell off the Richter scale." Horton, the nation's largest builder of residential housing, has numerous projects in California.

    For real estate optimists, the phrase "soft landing" conveyed the soothing notion that the run-up in values over the last few years would be permanent. It wasn't a bubble, it was a new plateau.

    The Realtors association last month lowered its 2006 sales prediction from a 2% slip to a 16.8% drop. That was when Appleton-Young first told the San Diego Union-Tribune that she didn't feel comfortable any longer using "soft landing."

    "I'm sorry I ever made that comment," she said Thursday. "When I get my new term, I'll let you know."

    If there's one group in California still unreservedly bullish on real estate, it might be the throngs lining up to take the licensing exams.

    The state Department of Real Estate recently reported that the total number of agents in the state passed 500,000 in May for the first time. That's one agent for every 55 adults in the state.

    Appleton-Young had no qualms about predicting a hard landing here: "We're expecting a fairly significant shakeout."

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  28. The funny thing about inventory in FL is that no one knows for sure how many houses and condos are for sale. FSBOs, people who have lost hope, FBs, homebuilders, banks, flippers, rentals that would be sold given half a chance. It boggles the mind. My gut feeling, the entire state is for sale if someone would just make an offer.

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  29. This comment has been removed by a blog administrator.

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  30. Robert asked:
    "Ignoring me, or can’t answer the question? It’s a simple question. I think Lance could give a very informative answer."
    Robert, believe it or not, I am NOT on here 24/7 ... Again, we've gone through this a dozen times ... The numbers you are watching are fine and dandy if you are a flipper and looking to make short term gains. They mean little if you are a long term invester such as Va_Investor and absolutely nothing if you are a homeowner ... or wannabe homeowner as some of the bubbleheads are. (Others, such as yourself, are probably just looking for validation of their choosing to rent over buy for underlying reasons that are really unrelated to the affordability of buying.) In brief, if you are looking to buy a home, the thought of resale value shouldn't even cross your mind. All you should worry about is (1) does it suit your needs and (2) can I afford it longterm. (An investor looks to see whether it is profitable longterm and doesn't care about ups and downs in shortterm). So, as one other poster aluded to, YES I do believe that for a prospective homeowner (or longterm investor) there IS no bad time to buy ... just incompetent buyers looking to blame the economy for their inability to listen, understand, and learn from those who have successfully acquired themselves a place to call home that will be affordable into the longterm come h@ll or highwater. 'nuff said. We've gone through all this before ... please make yourself a note and put it on the fridge so that you don't have to ask me again. Thanks.

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  31. That's insane! Not that I don't trust the credibility of this site but that almost looks photoshopped.

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  32. Robert said "With the average homeowner moving aprox. every five years it’ll be interesting to see what happens to that 70%."

    Ouch. You're right... How can people afford to pay 6% commision on a home every 5 years if they're paying 8X+ income? That would be that entire 5 years discretionary income for a homeowner...

    Lance said "In brief, if you are looking to buy a home, the thought of resale value shouldn't even cross your mind. " ???? Traditional advice is the FIRST thing you look for when buying a home is how you will sell it. Lance, normally you have much in your posts I agree with, but not this. Since life throws weird pitches, one must expect to move earlier than one's plans (but hope for a longer stay). Resale value of a home is critical.

    Neil

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  33. Neil,

    Longterm viability of the neighborhood city you are buyin in IS important for the homebuyer because they don't want to have to move any sooner than needed. This also ensures that IF you happen to have to move, you shouldn't have suffered a REAL loss. (Remember the discussion about it not mattering if there was a general decline across the board 'cause if you had to sell "low" under thos circumstances, you would also be in a position to buy "low" elsewhere. The problem would be if you bought in an area that dropped relative to other areas.)
    Are we in agreement again?

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  34. Lance said...
    “I do believe that for a prospective homeowner (or longterm investor) there IS no bad time to buy”

    Thanks for the data Lance. Next time you think about going in to one of your rants about why now is a good time to buy, be sure to preface it with that statement. And in case you don’t, I'll have this on the fridge and I’ll post it for you.

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  35. Lance said...
    Longterm viability of the neighborhood city you are buyin in IS important for the homebuyer because they don't want to have to move any sooner than needed. This also ensures that IF you happen to have to move, you shouldn't have suffered a REAL loss.

    Not true Lance! I didn't think I'd have to pull this off the fridge this soon.


    Lance said...
    “I do believe that for a prospective homeowner (or longterm investor) there IS no bad time to buy”

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  36. Robert, if you really can't understand why that statement is unequivocally correct, then you will never attempt to be a homeowner, because the difference between owning a home and "buying a short term investment" is a concept you just can't grasp and will do you major damage in the end. Making money off a shortterm purchase of a house and becoming economically stable through th longterm purchase of a home, are not the same. I agree it is a difficult concept which most of us understand intuitively, but for your own longterm stability and enconomic health, you really need to try to understand it - even though for you it will be non-intuitive ... Otherwise, you will someday for sure find yourself knocking on some stranger's door begging for shelter. Remember, you were the guy who told us that money in your pocket was earning interest. I really hope someone has set you straight on that by now. That would be start in looking at these matters as an intelligent and rational individual. Good luck to you. I've really done all I can to help you. You need to learn to help yourself now.

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  37. Quoting Lance "Longterm viability of the neighborhood city you are buyin in IS important for the homebuyer because they don't want to have to move any sooner than needed. This also ensures that IF you happen to have to move, you shouldn't have suffered a REAL loss. (Remember the discussion about it not mattering if there was a general decline across the board 'cause if you had to sell "low" under thos circumstances, you would also be in a position to buy "low" elsewhere. The problem would be if you bought in an area that dropped relative to other areas.)
    Are we in agreement again?"

    Ahhh... I think we're talking two different scenarios. In my field, its common to "jump ship" every 5 years and move to another metropolitan area. This, its not just the neighborhood quality, but the ability of a home to hold resale value through any markets. For example, my first employeer shut down a *huge* campus two years into my employment. Since I had a bright career path there, I moved with the company to the consolodated campus.

    So my argument is resale of a home matters. e.g., my next purchase won't be my "dream home." It will be a place I'll be happy in, but I intend to "upsize" in 5 to 7 years. Thus, I will *really* look into a properties ability to sell for little loss (or hopefully a gain). Yes, I do value a home's "utilization value," so a small loss isn't a bad thing.

    But what I cannot afford in my field is to be "geographically locked" due to an underwater mortage. For example, out of the blue today I was given a job offer within my company by an old collegue. Where? I don't know yet. All I know is the skills required for that job. It could be in Los Angeles, Austin, Washington DC, or Mississippi. (That should start giving you a clue as to which fortune 500 company I work for...) I'm not looking to move today... but its rare in my field to move to less than five geographic locations over a career; simple fact of the work I do. And this job could be a worthwhile opportunity. :)

    So I think we're talking about homes from two viewpoints. You seem to have a "buy and hold 10 years+" outlook and me from a "buy for 5 to 7 years and move on" perspective. And right now, I don't believe in 5 years any home in my area will have not lost value. :( So I'll wait a bit longer (the inventory is out of balance and the price to salaries is crazy by any measure).

    On topic, that photo is going to give me nightmares... its too Matix like.

    Neil

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  38. Come on people. Leave lance alone in his
    fantasy world where real estate never goes
    down.

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  39. heres the joke. those who brought a home to flip in the past few years are paying alot more or will be soon. so now they say, (people who didnt buy missed the boat, bitter and will never see prices fall back to pre 2001 again.) talk to me in 2008, when there is blood on the streets. all the investments you brought have to be sold somehow. i paid off two homes in 7 years and own a rental property that thanks to the flipfloppers, can ask for any reasonable priced rent, because everyone needs a place to live. i am making more money every year than investing in my property. and i put the money i earned to pay off the property sooner. i may pay off my mortgage in less than 10 years than 15 years. keep the property based on real cost and now am in school and not working for a while. all of this and i am younger than 40. in three years, i have been to austraila, japan, hawaii, canada and monaco. next year italy. and, i never paid for an adj loan. prices can go up or down. i make enough money that lance, robert and any other real estate condo is a joke. they cant sleep very well at night.

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  40. neil,

    you are the perfect candidate for longterm renting. you are not willing or able to put down roots, so why on earth are you buying? my guess is that you are falling into the trap of looking at a home as a "short term investment". Again, it is not ... If you are looking for an investment, rent and then spend what is left over for stock purchases!

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  41. Lance said...
    “Good luck to you. I've really done all I can to help you. You need to learn to help yourself now.”

    As I began a rant in response, I remembered….Where is it, hang on…….over here on the fridge. Ah yes, here it is.

    Let’s see. When asked about data points, any data points at all as to what one should follow in the real estate market, what do you come up with?

    Lance said...
    “….I do believe that for a prospective homeowner (or longterm investor) there IS no bad time to buy ...”

    Thanks for your help Lance, that puts things in perspective. I understand the “short term” and “long term” concept of buying. I also understand the concept that you have locked in your long term investment by buying at the peak. No matter what happens to your neighborhood, your job or any other life changing event, and as median prices (slowly) fall while inventory continues to skyrocket, you have indeed solidified your long term commitment to your long term investment.

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  42. Lance,
    Don't worry, I am investing and saving my pennies. :) But one day I do want "roots."

    But I will also wait for the market to be right (both carrier and housing). I could explain how one marches up through "opportunities" in my field until one "breaks through the glass ceiling" and can then progress up at a headquarters... but this is a real estate blog. ;) Let's just say I am setting things up for it to be "right" for me to buy in about two years. :) Convieniently when I think home inventory will have been at the right level for the right amount of time.

    Let's just say eventually one enters "the next stage." I just have a plan on when and why. Where (due to housing prices) is up in the air...

    Neil

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