Herd About the Housing Bubble?
Yesterday econ/real estate guru Robert Schiller penned an article for the Times examining why Greenspan, market experts and individual investors didn’t see warning signs of the disastrous housing bubble: The failure to recognize the housing bubble is the core reason for the collapsing house of cards we are seeing in financial markets in the United…
Yesterday econ/real estate guru Robert Schiller penned an article for the Times examining why Greenspan, market experts and individual investors didn’t see warning signs of the disastrous housing bubble:
The failure to recognize the housing bubble is the core reason for the collapsing house of cards we are seeing in financial markets in the United States and around the world. If people do not see any risk, and see only the prospect of outsized investment returns, they will pursue those returns with disregard for the risks. Were all these people stupid? It can’t be. We have to consider the possibility that perfectly rational people can get caught up in a bubble.
Schiller concludes that the lack of foresight about the bubble has to do with “herd behavior” and “information cascade,” whereby rational investors’ individual decisions add up based on incomplete info. The phenomenon helps explain why an entire nation would be under the thrall of the notion that housing=a great investment. A cascade is possible when a whole country buys into the same belief despite individual analysis that refutes prevailing wisdom. The result? Rising prices and a big bad bubble. So what’s next? “It is now possible that a downward cascade will develop — in which rational individuals become excessively pessimistic as they see others bidding down home prices to abnormally low levels,” writes Schiller.
How a Bubble Stayed Under the Radar [NY Times]
Collage by Amy Jaz.
there’s hundreds of possibilities… I say congrats to the poster and one day I hope to be rolling like him.
someone that can’t spell “warrior” shouldn’t be allowed to own eight properties in NYC.
I just got a $10,000 raise last week!!!
Who said incomes aren’t going up.
– 30 something in the arts
“Who cares if NYC real estate is holding steady when the entire economy slows to a crawl because of unsound loans across the country. When Wall St. & banking layoffs start happening, and if stocks keep going down even NYC RE will be affected. When you lose your job and have to sell, whose going to be left to buy it at these prices?”
The same exact statement has been said over and over again for the past several years. Stilling waiting for the mass wall street layoffs, and we are still waiting for the hit to NYC real estate.
a 1031 does not require a trade up. It only requires that the like proprty is of EQUAL or greater value.
Also there are stipulations about carrying forward an equal amont of debt. However he did say that he sold for $1.7 and had a $300K mortgage on the property.
Under the clause he can take that 300K pay the debt and not have to carry the mortgage forward.
also with a 1031, the seller can take some cash out, and pay the taxes, or even split the proceeds from a sales between 3 properties.
Also why is everyone attacking the poster? Maybe he rolled $1.3 of the proceeds into the purchase, paid the difference in cash or a took a small equity loan.
“Herd About the Housing Bubble?”
The What, heard how to spell?”
See stupid, I copy and paste from the topic of this discussion. I know you have a old 486 but, learn to fucking look. BITCH!!
The What
Someday this war is gonna end..
If you people can’t see how this is effecting the economy as a whole your dumber than I thought.
Who cares if NYC real estate is holding steady when the entire economy slows to a crawl because of unsound loans across the country. When Wall St. & banking layoffs start happening, and if stocks keep going down even NYC RE will be affected. When you lose your job and have to sell, whose going to be left to buy it at these prices?
“Herd About the Housing Bubble?”
The What, heard how to spell?
11.34;
I repeat: the man is FOS. Take a look at some of the facts:
-As you state, a 1031 requires a trade-up. “Carlton Sheets Jr.” is claiming that he sold a Manhattan duplex for $1.7M, and then bought a Nevada property for $1.4M. Where is the trade-up?
-He said nothing about renting out this place until I called him on his characterization of a 1031 property as a vacation house.
Let’s have some serious discussions of real estate on this board, not posts from would-be Carlton Sheets.