Friday, April 21, 2006

Thought Process of a Housing True-believer?

The thought process of a housing true-believer?

passthebubbly said:
There is no housing bubble because it’s impossible to have housing bubbles and real estate never goes down and there’s never ever been a housing bubble so why should there be one now and everyone needs to live somewhere and look at all the immigrants coming in and they’re not making any more land and the baby boomers are all buying second homes and we have entered an entirely new valuation model and this is the ownership society and there are all kinds of innovative financing methods that help people buy houses and renting is throwing money away and people who don’t buy now will be priced out forever and real estate has always been the best investment ever so therefore there is no housing bubble. And even if there is a housing bubble which is a stupid thing to think in the first place it will pop in other places but not where MY house is because where MY house is is the absolutely PERFECT place to live and MY house will keep going up just not as fast.

...

california has no housing bubble because california is special and everyone wants to live in california and texas has no housing bubble because texas is special and everyone wants to live in texas and utah has no housing bubble because utah is special and everyone wants to live in utah and new york has no housing bubble because new york is special and everyone wants to live in new york and new jersey has no housing bubble because although new jersey isn’t that special at least it’s next to new york and some of new york’s specialness rubs off on new jersey and everyone wants to live in new jersey and chicago has no housing bubble because chicago is special and the economist said chicago was cool and no one is smarter than them and now everyone will really really want to live in chicago and western nebraska has no housing bubble because well um western nebraska is at least equidistant from new york and california and that has to count for something

11 Comments:

Blogger Rob Dawg said...

The single largest investment of your life.
Highly illiquid.
Huge transaction costs.
Exposure exceeding investment.
Large carrying costs.

There's no reasoning involved here. People today aren't buying housing rationally.

Apr 21, 2006, 11:54:00 AM  
Blogger arv18 said...

Actually, New York State as a whole is not experiencing a housing bubble. The Greater New York City area, the Hudson River Valley, and the Capital Region are. But once you look at western and northern New York, you'll see that the housing bubble burst 20-30 years ago and still has not recovered. Sure there are pockets of prosperity, but prices have not been irrationally inflated, but undervalued (700k will buy you 5 or 6ksf.) Both gubernatorial candidates Spitzer and Weld declared that swaths of upstate have an Appalachia feel.

Apr 21, 2006, 1:12:00 PM  
Blogger Rob Dawg said...

I look at Rochester and such and I see opportunity. I've mentioned before my intent to purchase dozens of houses and strip them of their hardwood flooors and architectual elements for transfer to California. NYS is experiencing a housing bubble. The weight of NYC masks the diaster Upstate.

Apr 21, 2006, 1:39:00 PM  
Blogger Athena said...

There are no housing bubbles anywhere... we are just the idle rich who are happy and fat with all our gains and making second careers out of our blogging about the bubble to affect public perception and drive the market down so as to protect all our gains and not allow anyone else in to our real estate prosperity club. ;-)

Apr 21, 2006, 2:16:00 PM  
Blogger Marinite said...

athena -

You must be a Marin transplant. That exclusionary ramble just sounds so familiar.

Apr 21, 2006, 2:53:00 PM  
Blogger Bubble-X said...

Arv- the areas that you said have a bubble in NY state ARE NY state from a financial perspective (and I LOVE the countryside). Northern NY is, uh, basically Canada. :-)

Robert- That's pretty funny.

Apr 21, 2006, 3:10:00 PM  
Blogger Athena said...

LOL... ;-) I did my time living in marin... the indoctrination was complete, and I figured it was time to come clean with the real reason we are all blogging about the bubble. ;-)

Apr 21, 2006, 4:05:00 PM  
Blogger fredtobik said...

"we are just the idle rich who are happy and fat with all our gains and making second careers out of our blogging about the bubble to affect public perception and drive the market down so as to protect all our gains and not allow anyone else in to our real estate prosperity club. ;-)"

I thought someone posted that you guys are really just bitter boomers, because junior and his sis can't live next door?

Apr 21, 2006, 5:17:00 PM  
Blogger Athena said...

bahahaha!!! Fred! ;-D I am the first born of boomers... classic boomers at that. the 1947 version... and they fit ALL the stereotypes that SurferX rants about. ;-D I even remember the days when my parents had lovebeads instead of doors in the house... so bitter boomers... that one isn't me. I also am not really idly rich, and my company makes me earn every red cent they pay me... but I can play one on the web! ;-)

Apr 21, 2006, 8:57:00 PM  
Blogger moonvalley said...

Athena,
didn't think you were a Boomer. I am, though I don't fit any of the stereotypes..and I have friends all along the age chain. Unfortunately most of the flippers I've run into up here could fit a dictionary definiton of Boomer, alas.
Did you hit any open houses today? The hiuse on W Spain went from Sold to Sale Pending..what do you think that means?

Apr 23, 2006, 7:37:00 PM  
Blogger Athena said...

I missed out on the open houses today. We ended up having some family pop in and couldn't find a way to sneak out and head to the houses we had marked in the paper to visit. There is this one on Lucas that I swear is on the foreclosure list just a sitting and a waiting... and they had an open house today. Sorry I missed that one. Something interesting though, is I wonder if it is already back with the bank fully? And... how long will the bank just keep it for sale hoping to get the full amount of the loan? I mean, at what point do the lenders feel pressured to dispose of the properties for a much lower price than the loan they hold?

For example- the lucas ave. house is empty. Has been empty for months, and has also been on the market for months and months. It has had one price reduction of only $15k... for how long can this continue?

Apr 23, 2006, 10:51:00 PM  

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