Wednesday, December 14, 2005

A Quote

Someone sent me this quote from the book Manias, Panics, and Crashes by Charles Kindleberger that is next on my reading list:
"In the ruin of all collapsed booms is to be found the work of men who bought property at prices they knew perfectly well were fictitious, but who were willing to pay such prices simply because they knew that some greater fool could be depended on to take the property off their hands and leave them with a profit."
Sound familiar? Has Marin run out of 'greater fools' yet?

15 Comments:

Anonymous silver said...

I guess this is the game of playing music chair. Right now we are trying to figure out whether the music has stopped or not because we do not want to be the last one to hold the bag.

Dec 14, 2005, 11:28:00 AM  
Blogger ocrenter said...

Excuse me for OT, but came across this figure from the census bureau for the population trend in Marin County that may interest you.

2004 246,045
2003 246,635
2002 247,191
2001 248,399

Dec 14, 2005, 12:07:00 PM  
Blogger marin_explorer said...

Ocrenter--
Interesting, does that mean demand for Marin real estate will be dropping? Here's a breakdown of population trends by city. Note that Novato is one of the few locations showing positive growth.

Dec 14, 2005, 12:13:00 PM  
Anonymous Anonymous said...

Thank you OCrenter.

I guess the population in Marin has decreased over last 4 years. I wonder where the "demand" comes from to support such rapid rise of the housing prices.

Dec 14, 2005, 12:17:00 PM  
Blogger sf jack said...

"I wonder where the 'demand' comes from to support such rapid rise of the housing prices."

Easy money and realtorspeak(tm).

Dec 14, 2005, 12:55:00 PM  
Anonymous Anonymous said...

Anyone knows how much institutional investors involved in Marin real estate transactions. Specifically,I am talking about REIT's activities. Maybe this has to do with the discrepancies between reduction of population and rise of housing prices.

Dec 14, 2005, 1:06:00 PM  
Blogger Marinite said...

Interesting, does that mean demand for Marin real estate will be dropping?

No, because the so called "deman" is increasingly speculator driven.

Dec 14, 2005, 1:30:00 PM  
Anonymous silver said...

Speculation migrates from one assets class to another. That is why we have boom and bust cycle.

Real estate investment was not favorable in the early 1990s. It has become the "in" thing since the start of this century due to some favorable factors such as easy Fed policy, and demographic shifts.

One has to ponder whether these favorable factors will persist in the future. Especially right now the government is being recommended to implement federal tax reform to drastically reduce the mortgage interest deduction. Interest rates are going up and baby boomers are retiring. If the external factors become unfavorable, the speculation in real estate will be replaced by other asset class.

Some people believe precious metals or oil investment the start of next boom cycle. Peak oil maybe for real. The scarcity of oil supply and high gasoline and heating oil prices will have negative impact on our economy. Billionaire, Richard Rainwater, was interviewed by Fortune magazine. In this article he expressed his concerns with oil supply and investment concept.

http://www.fortune.com/fortune/investing/articles/0,15114,1139979,00.html

Dec 14, 2005, 4:32:00 PM  
Blogger marin_explorer said...

No, because the so called "demand" is increasingly speculator driven.

Unless speculator activity wanes, of course!

Dec 14, 2005, 5:26:00 PM  
Anonymous Anonymous said...

I saw the following investment recommendation from another blog:

"Canadian oil trusts:
PTF,PVX,PGH
All are paying about 10% dividends, the stocks are appreciating, and since they're Canadian, you're protected from a falling US Dollar.

Do your own due diligence, of course."

Not a bad idea?

Dec 14, 2005, 6:56:00 PM  
Anonymous rejunkie said...

I have seen the comment repeatedly that the demand is speculator-driven. Are there facts to back that up or is this pure speculation? (sorry, could not resist).

I would love to see the mix of renter-occupied versus owner-occupied housing trends over the past 10 years as well the inventory/availability of rental units.

I read a stat once (a few years ago) that the home ownership rate in Marin was 59%, which seems high given the national number is 70%. Again, can anyone verify?

Dec 14, 2005, 7:32:00 PM  
Blogger Marinite said...

Unless speculator activity wanes, of course!

Yeah, what he said. Doh!

Dec 14, 2005, 8:06:00 PM  
Blogger Marinite said...

I have seen the comment repeatedly that the demand is speculator-driven. Are there facts to back that up or is this pure speculation?

40% was the figure I was told by some realtors I know and trust. I've also seen that figure published. That does not include vacation homes. But I am not aware of a way to find out for myself other than asking the people on "the front line". Sorry. If anyone knows then tell me so I can do some research as I would also like a more quantitative estimate. But when you consider that many Marin realtors own multiple properties plus Marin's penchant for RE, plus the unsubstantiated claim that 80% of loans are of the "exotic" type, the number must be high. Well, wel'll see in time...

Dec 14, 2005, 8:20:00 PM  
Anonymous silver said...

Rejunkie -

I did some data minding of the rental properties that are for sale in Marin from April 05 to present time. The search criteria start with a minimum of 1 unit for each property.

There are 55 rental properties for sale in Marin and 11 have been sold. This represents a 20% of the rental properties inventory has been sold and the rest of 80% inventory is still available for sale. I would interpret this result as a lackluster interest in rental properties investment here in Marin this year. This might also imply that the rental market is soft.

Dec 16, 2005, 12:02:00 AM  
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Feb 5, 2009, 12:34:00 AM  

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