tag:blogger.com,1999:blog-13164186.post114879279496304028..comments2024-01-27T19:26:32.604-05:00Comments on Bubble Meter: Bubble Sphere RoundupDavidhttp://www.blogger.com/profile/11169148764438565562noreply@blogger.comBlogger70125tag:blogger.com,1999:blog-13164186.post-1149316064854792042006-06-03T02:27:00.000-04:002006-06-03T02:27:00.000-04:00I dont know any one buyingCarsOr computersOr telev...I dont know any one buying<BR/><BR/>Cars<BR/><BR/>Or computers<BR/><BR/>Or televisions<BR/><BR/>Or clothes<BR/><BR/>as Investments.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149129016502968332006-05-31T22:30:00.000-04:002006-05-31T22:30:00.000-04:00No one takes on an I/O, negative amortization loa...No one takes on an I/O, negative amortization loan for<BR/><BR/>Their cars<BR/><BR/>Or Computers<BR/><BR/>Or Televisions<BR/><BR/>Or ClothesAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149103754544751502006-05-31T15:29:00.000-04:002006-05-31T15:29:00.000-04:00Nobody holds an asset that is loosing value. Excep...<I>Nobody holds an asset that is <BR/>loosing value. </I><BR/><BR/>Except maybe their cars.<BR/><BR/>Or their computers.<BR/><BR/>Or their televisions.<BR/><BR/>Or their clothes.SuperNoVahttps://www.blogger.com/profile/16904585645336377657noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149058173668670092006-05-31T02:49:00.000-04:002006-05-31T02:49:00.000-04:00"I mean, if 11% vacant homes in 1965, 1975, and 19...<I>"I mean, if 11% vacant homes in 1965, 1975, and 1998 didn't mean a crash in prices, why would 12% vacant homes in 2006 mean a crash in prices?"</I><BR/><BR/>Yep the market did'nt crash in 1965,1975 or 1988( expect two local ones Boston and Los Angeles).<BR/><BR/>These numbers are nationally.<BR/><BR/>The Market is crashing in 2006.<BR/>That's the difference. <BR/><BR/>Nobody holds an asset that is <BR/>loosing value.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149057471949682482006-05-31T02:37:00.000-04:002006-05-31T02:37:00.000-04:00And you can also make money as landlordeven with 5...And you can also make money as landlord<BR/>even with 50% occupancy.<BR/><BR/>And the half a million new homes for sale will all equal out in the end.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149050144566272132006-05-31T00:35:00.000-04:002006-05-31T00:35:00.000-04:00“Anonymous said...Looks like that 16M empty homes ...“Anonymous said...<BR/>Looks like that 16M empty homes has<BR/>really scared you.”<BR/><BR/>Haven’t you heard? Inventory and empty homes do not matter.<BR/><BR/>“……….I mean, if 11% vacant homes in 1965, 1975, and 1998 didn't mean a crash in prices, why would 12% vacant homes in 2006 mean a crash in prices?........”<BR/><BR/> It’s all relative. Everything was rosy in 1965,’75 and ’98 when we were seeing $100K in equity month to month and HELOC’ed up to our eyeballs. Remember, real estate never goes down (relatively). So when the bank is about to foreclose on your $500K home, just tell them “relatively” it’s worth $250K (compared to the other 20000 homes on the market) Not only will the debt be forgiven, they’ll cut you a check $250K difference. So you see, you “really” haven’t lost any equity.<BR/><BR/><BR/>Also, everything else remains equal. So, to those empty 16M homes, they are adding more empty homes to the market every day, it all equals out in the end.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149039559756386082006-05-30T21:39:00.000-04:002006-05-30T21:39:00.000-04:00"you have no minimal understanding of what you tal...<I>"you have no minimal understanding of what you talking about."</I><BR/><BR/>Like you have? If you did, you would be<BR/>selling your house right now.<BR/><BR/>Looks like that 16M empty homes has<BR/>really scared you.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149030853585372802006-05-30T19:14:00.000-04:002006-05-30T19:14:00.000-04:00OK I see, so when the bank takes your home just te...<I>OK I see, so when the bank takes your home just tell them “ Hey I know I paid $500K for it, but now it’s worth $250K so I only owe for the $250K that it’s “relatively worth” right? </I><BR/><BR/>Well, if you don't understand basic economics, I'm not going to respond.<BR/><BR/>You've demonstrated one thing in this thread. Not that there is any kind of bubble, or that it will pop, but that you have no minimal understanding of what you talking about.SuperNoVahttps://www.blogger.com/profile/16904585645336377657noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149021557532600632006-05-30T16:39:00.000-04:002006-05-30T16:39:00.000-04:00Super dude….I could answer those questions, but th...Super dude<BR/>….I could answer those questions, but they wouldn't be the relevant questions - they are only half of the relevant questions…..<BR/><BR/>……Higher inventory leads, all other things being equal, to lower relative prices. But it doesn't necessarily lead to lower actual prices…….<BR/><BR/>OK I see, so when the bank takes your home just tell them “ Hey I know I paid $500K for it, but now it’s worth $250K so I only owe for the $250K that it’s “relatively worth” right?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149019525344934572006-05-30T16:05:00.000-04:002006-05-30T16:05:00.000-04:00You should check out the home page of the linkhe p...<I>You should check out the home page of the link<BR/>he posted yesterday.<BR/><BR/>http://www.housingbubblebust.com</I><BR/><BR/>I did take the time to check that link yesterday. It had some numbers, but again, not the relevant one. Indeed, the <B>first</B> number cited on the main page is the 16 million vacant homes figure.....which is meaningless given that figure is not much higher than the level of vacancies in 1998, before the boom. <BR/><BR/>I mean, if 11% vacant homes in 1965, 1975, and 1998 didn't mean a crash in prices, why would 12% vacant homes in 2006 mean a crash in prices?<BR/><BR/>There's no question that supply is increasing faster than demand, and that demand is perhaps contracting. But that doesn't mean that we will see a "crash" of 20+% price decreases. If you are holding out for that...well, don't put your money in the stock market while you are waiting. Because even if you are right, you'll have less money than you do now.<BR/><BR/>(If you want to stick your money somewhere, try Canada).SuperNoVahttps://www.blogger.com/profile/16904585645336377657noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149018601599873852006-05-30T15:50:00.000-04:002006-05-30T15:50:00.000-04:00supernova,Looks like you are really good with numb...supernova,<BR/><BR/>Looks like you are really good with numbers.<BR/><BR/>You should check out the home page of the link<BR/>he posted yesterday.<BR/><BR/>http://www.housingbubblebust.com<BR/><BR/>It has a lot of Housing related data.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149014148746515062006-05-30T14:35:00.000-04:002006-05-30T14:35:00.000-04:00Anonymous said... Super dudeIs inverntory up?Are f...<I>Anonymous said... <BR/>Super dude<BR/><BR/>Is inverntory up?<BR/><BR/>Are forclosures up?<BR/><BR/>Are interest rates up?<BR/><BR/>Are sales down?<BR/><BR/>Are homes sitting on the market longer? </I><BR/><BR/>I could answer those questions, but they wouldn't be the relevant questions - they are only half of the relevant questions.<BR/><BR/>Here's an example you might understand. You own a mutual fund that is worth $1000 in year one. It drops to $700 in year two, then rises to $800 in year three. From year 2 to year 3, it increases in value by 14%. Does that make it a great investment? Sure as hell it doesn't, you're down 20%.<BR/><BR/>That's why asking what inventory is today compared to last year only gives you part of the picture. Sure, inventory is up. But was last year's inventory low? If it was, then isn't it the case that inventory may just be "normal" now?<BR/><BR/>Higher inventory leads, all other things being equal, to lower <B>relative</B> prices. But it doesn't necessarily lead to lower <B>actual</B> prices.<BR/><BR/>Say in "hot market 1" inventory was at 10,000, which produced price increases of 20%. A year later, inventory has increased to 13,000. Does that mean that prices are going to fall? No. It just means that prices will be lower, all things being equal, than if inventory was at 10,000. It could be that at inventory 10,000 in Year 2, prices would be up 25%, and at inventory 13,000, prices would be up 5%.<BR/><BR/>So unless and until you tell me what inventory was from 1989-2006, saying "inventory is up" is totally meaningless.<BR/><BR/>I'll give you a BETTER example. Interest rates are 6.62% on the 30-year right now, right? Well, in 2000, interest rates were in the 8-8.5% range. Did prices go down in 2000? No, it was the beginning of the hot market. So when you say interest rates are up, sure, that will decrease demand, but the absolute level of interest rates is still actually LOWER than when the boom started. So, all other things being equal, demand should still be higher in 2006 than it was at the beginning of the boom in 2000. <BR/><BR/>The same is all true of foreclosures, etc. You need more than one figure - you need context. Like that cockamamie stat posted about 16 million homes being vacant - which is only 1.7 percentage points higher than it was in the still-stangnat housing market of 1998.SuperNoVahttps://www.blogger.com/profile/16904585645336377657noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149010450102306572006-05-30T13:34:00.000-04:002006-05-30T13:34:00.000-04:00David:It's not that you aren't arguing "each and e...David:<BR/><BR/>It's not that you aren't arguing "each and every point"; it's that you aren't responding to ANY of the arguments raised by Supernova and others. <BR/><BR/>If one is convinced about there being a housing bubble, then it should be fairly simple to swat away any red herrings raised by non-bubbleheads. <BR/><BR/>Also, doesn't Anonymous at 9:20 AM's post qualify as a personal attack that violates blog rules?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149009579741905762006-05-30T13:19:00.000-04:002006-05-30T13:19:00.000-04:00Super dudeIs inverntory up?Are forclosures up?Are ...Super dude<BR/><BR/>Is inverntory up?<BR/><BR/>Are forclosures up?<BR/><BR/>Are interest rates up?<BR/><BR/>Are sales down?<BR/><BR/>Are homes sitting on the market longer?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149009472403028292006-05-30T13:17:00.000-04:002006-05-30T13:17:00.000-04:00Hey, are you seeing the data I'm seeing. "Yep" OK,...Hey, are you seeing the data I'm seeing. "Yep" OK, thought so.<BR/><BR/>That's why.<BR/><BR/>Why are you here?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149008777229298652006-05-30T13:06:00.000-04:002006-05-30T13:06:00.000-04:00Well, if there’s no problem, why are they posting ...<I>Well, if there’s no problem, why are they posting comments?</I><BR/><BR/>Well, if the bubble is so obvious and irrefutable, why would you need to post as well?SuperNoVahttps://www.blogger.com/profile/16904585645336377657noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149003737614467492006-05-30T11:42:00.000-04:002006-05-30T11:42:00.000-04:00fritz,I do NOT have time to argue and each and eve...fritz,<BR/><BR/>I do NOT have time to argue and each and every point presented by the housingheads on this site.Davidhttps://www.blogger.com/profile/11169148764438565562noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1149001491438683412006-05-30T11:04:00.000-04:002006-05-30T11:04:00.000-04:00Hoofah!Another thread where bubbleheads got a majo...Hoofah!<BR/><BR/>Another thread where bubbleheads got a major economics and finance spanking! <BR/><BR/>Seems like the only retorts that bubbleheads can muster is either:<BR/><BR/>a) Yeah, well you're going to be crying about your home price when the bubble bursts at some point in time! <BR/><BR/>or <BR/><BR/>b) whatever, ignore the trolls who are really just real estate agents or speculators looking to flip their money losing properties.<BR/><BR/>I also notice that David is oddly missing from these threads and hasn't countered any of the arguments put up by the non-bubbleheads.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1148997898907795472006-05-30T10:04:00.000-04:002006-05-30T10:04:00.000-04:00Wow, Supernova applied a beating. I can't remembe...Wow, Supernova applied a beating. I can't remember ever seeing such well thought posts, and completely futile attempts at responding.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1148990945258282152006-05-30T08:09:00.000-04:002006-05-30T08:09:00.000-04:00"supernova, stop embarassing yourself.You are not ..."supernova, stop embarassing yourself.<BR/>You are not that super afterall."<BR/><BR/>Actually, he's clobbering you.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1148990886311875112006-05-30T08:08:00.000-04:002006-05-30T08:08:00.000-04:00"David didn't post the inventory figures for the p..."David didn't post the inventory figures for the prior 10 years to put the 2006 figures in context.<BR/>"<BR/><BR/>He never does. David only posts selective data that supports his preferred conclusion.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1148962555332227402006-05-30T00:15:00.000-04:002006-05-30T00:15:00.000-04:00supernova, stop embarassing yourself.You are not t...<I>supernova, stop embarassing yourself.<BR/>You are not that super afterall.<BR/><BR/>Check out the latest thread on inventory<BR/>David posted.<BR/><BR/>Looks like Some of those 16M homes are already <BR/>on the market.</I><BR/><BR/>Well, if you do buy a 50k 2BR and it's my place, it probably will be worth only 50K. After all, it will have to have had a bunch of square footage torn out. Probably open to the outside air, too.<BR/><BR/>David's post on inventory shows that inventory is growing. No one disputes that. But a 37% increase in inventory YOY does not automatically mean a crash in house prices of 50% or more. Remember that inventory was at low levels last year - these current levels are more normal. David didn't post the inventory figures for the prior 10 years to put the 2006 figures in context.<BR/><BR/>Just keep wishing for that $50k two bedroom, buddy. Keep wishing. While you're at it, buy some tin foil. You might find it comfortable to wear around your head.SuperNoVahttps://www.blogger.com/profile/16904585645336377657noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1148960403793425322006-05-29T23:40:00.000-04:002006-05-29T23:40:00.000-04:00supernova, stop embarassing yourself.You are not t...supernova, stop embarassing yourself.<BR/>You are not that super afterall.<BR/><BR/>Check out the latest thread on inventory<BR/>David posted.<BR/><BR/>Looks like Some of those 16M homes are already <BR/>on the market.<BR/><BR/><BR/><I>"He's trying to WISH the market into a crash so he can put down 0% and get a 1-year ARM on a 4 BR house in Lyon Village for $300k."</I><BR/><BR/><BR/>No I will buy a 2BDR for 50K cash in a foreclosure auction<BR/>a few years from now.<BR/>It might be yours :)<BR/><BR/>My weekend is up. <BR/>I will catch up with you folks at a later day.<BR/>Bye.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1148959848772933832006-05-29T23:30:00.000-04:002006-05-29T23:30:00.000-04:00"I live in a building with 16 units."Clearly, your...<I>"I live in a building with 16 units."<BR/><BR/>Clearly, your particular circumstance is applicable across all possible scenarios.</I><BR/><BR/>Mind you, he was the one that first raised the concept that it was *impossible* to make money with 50% occupancy. Of course it's not impossible. I just gave him one scenario. You can lose money with 100% occupancy, too.<BR/><BR/>But he told us all we needed to know when he said that he lives in a building in 16 units.<BR/><BR/>He's trying to WISH the market into a crash so he can put down 0% and get a 1-year ARM on a 4 BR house in Lyon Village for $300k. He doesn't realize that he would never be able to afford that because the economic conditions precipitating and succeeding that would be so severe that he couldn't afford the place he currently lives in. <BR/><BR/>The 55%-70% declines the bubbleheads talk about - after only a 3.5% annualized real return in the residential real estate market since the last top in 1989 - is so absurd they probably can't comprehend it.<BR/><BR/>In New Orleans, the average selling price of a home has dropped from $111,500 to $59,500 since Katrina. That's a 45-50% drop. *THE CITY WAS EFFECTIVELY DESTROYED, MOST OF THE POPULATION NO LONGER LIVES THERE AND REAL ESTATE PRICES ONLY DROPPED 45-50%* Mind you, that doesn't even adjust for the repair/replacement costs implicit in those prices. Plug those prices back in, and you've got a much smaller drop.<BR/><BR/>Now, does a 1996 inventory level in the DC market scare you as much?SuperNoVahttps://www.blogger.com/profile/16904585645336377657noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1148959637886894882006-05-29T23:27:00.000-04:002006-05-29T23:27:00.000-04:00You must be buying itin Huntsville, Alabamaand ren...You must be buying it<BR/>in Huntsville, Alabama<BR/>and renting it in <BR/>Los Angeles, California.Anonymousnoreply@blogger.com