Real Estate bubble bust may be worse than Dot Com bubble bust

I'm thankful I live relatively central to Seattle (renting), but I'm already seeing people thinking about this, and prices of central housing has risen dramatically compared to far-and-away suburbs. I just hope there's a motion/design/architecture present at the time to help centralize and expand those suburbs into their own useful cultural hubs, instead of letting them suffocate and becoming wastelands.. and talk about devalued property.

(hmmm, don't know if that makes sense or not.)

Point above being that there are many smart people who think that there is still a lot of money to be made in real estate in the bubble markets. There have been real estate naysayers about this bubble for at least two years, and frankly, there are investors out there who can afford to ride out the bubble even if it bursts.

I might also point out that many people in the 'burbs consider their lifestyles to be full of relevant culture--they see what they do (convenient, quality child rearing, even if it makes for a long commute) as the very definition of their culture. Church, youth soccer, Chuck E. Cheese, and all that shit is their culture. For many of them, it's now multiple-generations deep. Exurbs, suburbs, white flight, whatever--the only reason they even bother associating with the MSA is for the airport, sports teams, and a place of employment.

I might also point out that many people in the 'burbs consider their lifestyles to be full of relevant culture--they see what they do (convenient, quality child rearing, even if it makes for a long commute) as the very definition of their culture

man, do you got that fuckin' right. I never really understood the pejorative context of the insult "breeder" until i got a temp job at a huge suburban mortgage building. The place was filled with mostly middle-class women who primary defining characteristic is spitting out crotch-spawnlings as fast as they can; lots of mothers of varying educational backgrounds and of varying marital status who all had like 3 kids by the time they turned 23.

seriously, it made me realize why much mainstream american pop culture(read: things covered by the E! channel) is how it is. Kids are DEIFIED in our culture, due in part to so many folks having absolutely no identify except in terms of rearing children. These were the folks who'd come home from work, cook dinner, watch American Idol, go to bed, then come into work the next day to discuss the previous night's American Idol all the live-fuckin'-long day. They then would go home, cook dinner, and watch that night's Idol. Repeat for 30+ years.

My buddy had to sit next to them. I hid inside of my clamshell headphones.

also, i should correct myself; that Onion headline above should be something like "Home-Buying Up Among Suburban Lame-o's"

m.

Nothing at all wrong with making $75K, although in figuring ROI you want to make sure you consider all relevant factors (inflation, taxes, tax implications, any improvements, etc.) If you are thorough in figuring out ROI then you can accurate compare it to other possible investment vehicles over the same period in real terms.

That Hissing Sound

http://www.nytimes.com/2005/08/23/opinion/23harris.html?ex=1125028800&en=3852efb8d3e0f346&ei=5070

August 23, 2005
Bubble? What Bubble?
By CHRIS HARRIS

Los Angeles

SO, you've been thinking about buying that first home, but you keep reading reports that this "housing bubble" may finally be nearing its peak. Things are cooling off; better sit things out for a while, right? Well, you've never been more wrong in your life.

As an expert in the field - I've spent my entire life living in or behind homes - I can assure you that aside from any moment in the past decade, there has never been a better time to enter the real estate market. Here are two important reasons.

We already experienced the Internet bubble. The crash taught us all that a feeling of invincibility can lead to disaster. Now that we've learned this humbling lesson, there's absolutely no possible way it could ever happen again to us.

More important, the housing market is incredibly durable. Unlike sneakers with lights in them or monogrammed poker chips or - I believe - computers, houses are not some fad that people will any day now look at and say: "This is stupid. I don't want mine anymore." Housing is a basic need, not unlike shelter.

The following Q. and A. should ease any remaining concerns.

Q. Are you sure I haven't missed the boat? Housing prices have risen so much already.

A. Actually, if you look at this chart, which is based on my years of research, you'll find that prices have been remarkably stable. No less a man than Winston Churchill put it best: "Now this is not the end. It is not even the beginning of the end. But it is, perhaps [a phenomenal time for buying that starter home you've had your eye on]."

Q. Winston Churchill really said that?

A. I don't know why you're arguing with me. I used quotation marks.

Q. With my luck, the second I buy a home the market will collapse.

A. This just doesn't make any sense. There are literally trillions divided by trillions of new homeowners every week. Do you really think the entire market is geared to maximize your bad luck?

Q. I'm still not convinced.

A. Well then, look at these numbers:

Now: 58

Five years from now: 8,472

That's a nearly 15,000 percent increase!

Q. Wow. Wait, what exactly are those numbers?

A. What? What kind of question is that? This is just the kind of foot-dragging that's kept you paying rent on the same roach-infested closet for years while your home-owning friends have gotten fantastically wealthy. Did you know that we homeowners are having Champagne-and-caviar parties every weekend and not inviting you?

Q. Come on.

A. It's true. And sometimes we hire the White Stripes to play. That's right, the White Stripes. You love the White Stripes, don't you? Then buy a house!

Q. Aren't you being a little pushy?

A. What on earth is wrong with you? I'm doing this as a favor. It's not like I'm desperately trying to convince you because I myself have overspeculated in the housing market, now suddenly it's peaking, and if it doesn't continue its insane and completely unjustifiable rise then I'll lose everything. It's not that at all. Just relax.

Q. You relax.

A. I am relaxed. You're the one who's not relaxed. I'm totally fine.

And so to all prospective buyers out there, I say be confident as you pursue the American dream of owning your own home. And to my aunt in San Francisco, I love you and desperately need to ask you for a favor. Please return my calls before the 12th of next month.

Chris Harris is a writer for the forthcoming television show "How I Met Your Mother."

http://graphics8.nytimes.com/images/2005/08/22/opinion/oped2.650.jpg

http://money.cnn.com/2005/08/16/news/funny/mr_housing_bubble.reut/bubble_tshirt.jpg
A disclaimer at the bottom reads, "Not affiliated with Mr. Internet Bubble."

Chuckle.

My aunt works for Corcoran. I have to ask her about this.

HAHA! good times virus!

yeah.... if all goes well, we close at the end of this month on our first home. bubble or no, we need a place to live. and we got a good deal i think. nashville definitely has an inflated market in some hoods, but i think we bought where our house value will probably stay similar. if not, oh well.
m.

but yeah, i bet that same shack would go for a lot more in a few other markets. the bottom line for us is that i think we were able to get something we'll be able to afford, which makes the bubbble less of a worry. it would've been scary to buy too much house and then have it devalue wickedly. having to sell in 5-7 years and owe more than i could get for it would suck.
m.

http://www.observer.com/therealestate/2005/08/barbara-corcoran-resigns.html

Alan Greenspan in an unusually festive mood.

In the meantime, I'm gonna let the U.S. financial goatse.cxing ride out, and see what things are like in the aftermath.

btw do you know how many bison ted motherfuckin' turner owns? a shitload!

http://www.jacksonhole.com/index.summer.asp

...I couldn't resist.

http://americangourmet.net/ProductImages/16347.jpg

http://news.bbc.co.uk/1/hi/business/4193008.stm

One of the things everyone keeps telling me is "Big condo building going in over there, 50 apartments on that corner, blah blah." Ok, so if there's all this new construction and all these new apartments going in, I guess that means the neighborhood could get much nicer and property values could go up. But couldn't it also mean developers are rushing to cash in on the frenzy, overbuilding, and that demand will outstrip supply?

(granted, not currently bigger than dot com burst, so it seems)

http://money.cnn.com/2006/03/24/news/economy/newhome_sales/?cnn=yes

http://www.lectlaw.com/files/lat06.htm

It's just a matter of finding one...

My friend could have made $100,000 profit in a year on a place he bought if he had sold when I told him to. Oh well, at least he has a place to live, I guess.

Sales strategies in a buyers' market

• Put your home up for sale only if you have to move soon. If you have the option, wait for the market to rebound.

• Understand that real estate cycles are just that: cyclical. What comes down will eventually go back up.

• Price realistically — and stop dreaming of getting as much as your former neighbor got last year.

• Remember that buyers have more choices, so make your house as appealing as possible by cleaning and reducing clutter.

• Anxious sellers create worried buyers, so try to avoid being home when real estate agents show the property.

• Offer to pay some of the buyers' nonrecurring closing costs, like the loan appraisal, loan points, credit report, title insurance and property inspection fees.

• Get a professional home inspection before you put your house on the market.

• SUX 2 B U LOL

Source: Journal News research