Quote of the Day
I pick cereal very quickly thank you very much. Just don’t want to pay a crazy price when I am literally seeing price cuts in the hundreds of thousands for some properties we’ve looked at (but rejected for other criteria). There is basically unanimity that prices will go down in 2009, and possibly through to…
I pick cereal very quickly thank you very much. Just don’t want to pay a crazy price when I am literally seeing price cuts in the hundreds of thousands for some properties we’ve looked at (but rejected for other criteria). There is basically unanimity that prices will go down in 2009, and possibly through to 2010 and beyond. We only sold a few months ago, and the meltdown happened, so we’re just actively looking, but not rushing. We have a list of flexible criteria for the property we’re seeking, of which price is just one element – but since price impacts so many other parts of our lives – esp time spent with our kids! (big mortgage = more hours working to pay the bills), price is a major criteria, esp in an environment when prices are headed down.
— by Miss Muffett in Last Week’s Biggest Sales
Please change name to Ms. Run-on.
Huh? Schiff was right for three years, and now because stocks have popped back to where they were ten years ago, you think you have the right to cut on Schiff? Some people are headed for the bread line.
But Dave, it’s not a trade. ZIRP did nothing to keep the Japan property bubble inflated in the 90s; and now the Fed is totally out of bullets. If this cut doesn’t stave off deflation, we all just sit and watch as prices slide, slide, slide. Also, if I buy now with government-mandated low rates, what happens to the price of my house when rates rise? (Hint: ouch.)
Ahh the Peter Schiff congregation…
He got it right on what went down, but he is losing a lot of money because he was wrong what went up.
Makes a nice Youtube video montage though!
I think the future may actually be different from a financing point of view. When banks and appraisers will not appraise houses for these ridiculous prices and buyers will have to come up with the entire difference in cash, sellers will either have to just enjoy living there the rest of their lives or capitulate and sell for what it should be. All the foreclosures that are happening now and will continue to happen into the next several years will set the comps. So ask a million all you want, but if your neighborhood comps are $200K your house will appraise for $200K, and banks will finance for 80% of that. Good luck getting a buyer to cough up an extra $840K in cash for your overpriced house just because you are being greedy. Should have sold it when banks, buyers, and government underwriting and oversight was being stupid. New lending laws and general sanity back in the banks because of the $700B bailout will prevent this from ever occurring again. Bye bye bubble.
May I say… Good.
I’m mildly happy that this is happening in the real estate market. And I’m glad NYC hasn’t been immune to the huge deflation. Of course, the market won’t learn any lessons and Bkny, above, will try in a couple years to sell their property for an enormous profit that has no grounding in reality… and someone will pay the money… and we will be back here in another decade or so.
What happened in Miami Beach can definitely happen here too.
Miami Beach was, and is, hot. But the bubble burst.
The duplex I was looking to buy in a very hot section of Miami 2 years ago for $420K just relisted for $95K in an entire neighborhood of $75-$95 K also on the market now. Everyone is upside down. It can happen here too.
The Chicken;
During the 90’s, the Bank of Japan set interest rates to zero. It did not stop the long deflationary cycle there.