Quote of the Day
For every person crying that the sky is falling I know of another person (you and myself included) sitting on a pile of cash. Ask yourself how many people you know who are hoping to purchase a distressed property in the next year or two. I don’t understand why so many of you are so…
For every person crying that the sky is falling I know of another person (you and myself included) sitting on a pile of cash. Ask yourself how many people you know who are hoping to purchase a distressed property in the next year or two. I don’t understand why so many of you are so negative on NYC market when in reality I’m sure many of you also know people who have a lot of money right now they don’t know what to do with. These people = demand. Nothing is trading right now because everyone is in wait and see mode, but don’t confuse wait and see mode with the preamble to a cataclysmic decline in prices. It might not happen. I am much more bearish on the financial markets and the national real estate market than on NYC market.
— by setancre in Front Page Forum: Walk Away from Downpayment?
Polemicist,
I am referring to all home loans, even those in the suburbs.
If it’s impossible to rent homes in the “suburbs” as you claim, those homes are theoretically worthless, except as scrap and raw land. . . Rochester, NY comes to mind.
I disagree that homes in the suburbs can’t be rented. But certainly they can only rent for a fraction of what their mortgage payments would have been in the last last several years — hence the market implosion which we are not witnessing.
If banks had limited mortgages to equivalent hypothetical market rents, we would not be experiencing any of the bank failures and much of the economic turmoil we are today. If homeowners couldn’t make their mortgage payments, banks could just repossess the homes, rent them out, and lose nothing.
Instead they loaned way too much on the pretense that the latest sales comparable reflected on the true worth of the underlying home, and look where we are now!
SnarkSlope – somehow I feel I might never move out from the ground floor, on that plan!
cwbuecheler – might I interest you in my new, “can’t lose” investment product? A little thing I call Mattress Backed Securities? Come, take a walk with me, and I can tell you how to get in on the ground floor…
WATCH OUT BELOOOOOWWW
I am intrigued by this “pile of cash” concept and would like to know how I get me one of them!
lethacal
I honestly do not think you have two quarters to rub together.
But if I am wrong, then this would be an excellent time for you to make a donation to a worthy charity.
Don’t gloat. It’s bad karma.
I should add that of course I didn’t lose a penny on the down payment money that I didn’t cycle back into the market last year (which as I said is sitting in CDs).
FatLenny: Overall (excluding the cash I have set aside for down payment) my equity portfolio is down about 10% in the past few trading days. It may go down more, which is fine. If it does, I will buy more.
My cash is sitting in CDs earning a boring 4% or so.
Bear in mind that my equity holdings are unlevered, so my 10% drop is equivalent to a 2% drop in real estate for someone who put 20% down. What happens when real estate goes down 10%? The levered buyer loses 50% of his equity. I sure as hell ain’t down anywhere near 50%.
Ezra Pound was a real dingbat wasn’t he?
The more one knows about him, the nuttier he seems.