Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Please post your local house search updates, MLS finds, on-topic ideas, and links here.
CNN: Foreclosure fiasco: Add 2.1 million houses to the glut:There's a large number of homes, either already repossessed by lenders or very seriously delinquent, that are poised to be added to the already glutted regular supply of homes on the market.This "shadow inventory" jumped 10% during the past year, to an eight-month supply at the current rate of home sales, according to a report issued Monday.
newbie-This article from calculated risk has some good graphs. Shadow inventory is up from a year ago, but it has been falling for ~9 months. shadow inventory Contrarian-I know you will just ignore this, but it looks the amount of assets in troubled banks continues to fall. The number of banks increased, but the larger more important banks are becoming stronger. problem banks
HBhow can we tell? The markets themselves are corrupt.Goldman front runs things.Look at the Flash Crash, what wasthe deal there. how can the market drop 4000 points in 90 minutes and bounce back?Look at the Level 3 assets at Wells, BofA, etc.Look at all the screwed up Deeds of Trust because of MERS.Can you tell me the markets are solid?
http://franklymls.com/FX7450365appraised at 310, sold at 254K inImmunifax.
Pat-In the flash crash the market fell by less than 1000 points not 4000. Although this is obviously a ton, percentage wise it is no where near as bad the 1987 crash (which had nothing to do with high speed traders). In addition the 87 crash took months to recover not hours. I am not sure how Goldman front running people has anything to do with whether banks are solvent. Solvency has to do with capital levels and bad loan ratios. None of these are impacted by Goldman's trading of stocks or bonds. I have done significant amounts of consulting for many of the largest banks. The way they are marking level 3 assets is fairly reasonable. Also if you look capital is up, non-performing loans, and level 3 assets are down, so the banks are clearly better off than they were last year or a couple of years ago.I agree the MERS system has issues, but I will be shocked if the government lets bad documents take down the banking system. I am with VA_I in thinking it will blow over.Finally, I don't think the bankying system is solid yet, although they are in much better shape than a year ago. I will not claim that banks are safe until capital levels (Tier 1/ TCE) are up an additional 2-3% and we are further away from a double dip. It will also take another few years before the banks get rid of most of their bad loans made in 06-08
Thanks, HB, interesting info.
It looks like new home sales continue be bumping along at some of the lowest rates in decades new homes article The only good news for the economy is at least new home builders have reduced inventory dramatically so the months of supply is not that crazy. I am curious if Nova is getting a disproportional number of the new homes because our housing market is much healthier than most parts of the county.
Contrarian-Most of the banks are using 10-20x leverage not 30-40. Goldman's balance sheet If you notice they have $76B equity and 909 of assets, which is ~12x leverage. In addition about 1/3 of their assets are cash or cash equivalents, where the price can not move. So If you ignore these assets they are running at less than 10x leverage.As for the stress test, the fed stropped allowing banks to pay big dividends when it gave them TARP money. The main point of this stress test is for the FDIC to figure out how much extra capital these banks have so it can start allowing some of the healthier banks like JP Morgan and Goldman to pay higher dividends if the banks want. So yes this is what you would expect the FDIC to do if banks were getting healthier.I think all the numbers you are using are based on 2008 and you are ignoring the steps these banks have taken since then to repair their balance sheets.
HBAs I started this, I'll throw in my comments.1) Flash Crash: Confused my crashes, but a 90 minutes 10% drop in the middle of the day says the markets are wildly unstable, and that small disturbances can cause chaotic behaviour. A 4 billion dollar trade trips off a trillion dollar ripple? What happens if South Korea liquidates $20 Billion because they need to prep for a shooting war? 2) Goldman front running their clients has much to do with bank solvency. When a bank becomes solvent by stealing from their clients, they aren't a business, they are a criminal enterprise.The Bonnano crime family, holds a great deal of profits and assets, they aren't a business deserving to be in the common market.3) Repo 105 undermines confidence in the banks. Sure, the banks hold trasuries, how many are Repo's through Bernanke's trillion dollar in liquidity? Can you tell me that the banks won't see crap coming back on their balance sheets?All those iffy MBS, and SPV's?Where do the merry go rounds stop?you say the Level 3 assets are well marked? Really? Did you say that about Enron? How about Lehman? Bear?And if 10% of the Level three are off, what does that do to Bank Equity?Bush, Paulesn, Obama, Geithner, bernanke have been crazy trying to stuff rags into the banks.Where are the interconnections between WFand Allied Irish?
Contrarian-The 600B of QE2 is being used to buy treasuries. They are not buying junk assets to help banks. If you look you can see the Fed's balance sheet and how it is changing as they buy the assets.Pat-First, I am not sure why you single out Goldman so much. Their actions are very similar to the rest of Wall Street (although this is not an important point).Second, they make very little money from front running clients (sure maybe its a couple hundred million a year, but this is not of consequence.) They also make money on all of their legitimate business. They continue to make their clients money, so this should be between Goldman and their clients. Front running their clients does not hurt you or me. Third, if you look at banks average vs. EoY/EoQ assets they are very close. Repo 105s are much less common now than they were a couple of years ago.Fourth, I was in high school when Enron failed so I didn't have anything to say about its balance sheet. As for Lehman Bear... yes I was saying it is crazy that they were holding MBS at 100. There is a reason why I did not buy private label MBS from these banks at these prices. Now that prices have fallen and are being marked accordingly I have bought MBS and they have been great investments. In addition there are also many Level 3 assets being held way below FMV. Many of the major banks have large stakes in Chinese banks that are being held at less than half of FMV.
contrarian and pat,What are you two doing differently to prepare yourselves for this impending bank meltdown? What should we all do to shore up our finances after the collapse? I just don't understand your repetition of all the fear-mongering websites with no legitimate plan of action. No one bothers to think of ways to survive such an event because it is so improbable as to not be worth the time.
OHHHH GOOD -- Contrarian you are back!!!Hey, just a quick question since you suddenly disappeared the other day and may have missed this. Anyhoo, it looks to me like you were lying the other day, but perhaps you just "misremembered", so again, quickly, did you say this:___________________________________"Contrarian said...The Anonymous, are you naive enough to believe that at this time next year the market will not be lower than it was back in March (2009)?9/30/09 11:33 AM"http://novabubblefallout.blogspot.com/2009/09/northern-virginia-bits-bucket-9282009.html#comment-2463858820118826913___________________________________Its a simple yes or no question. Did you say this, yes or no???
HB"First, I am not sure why you single out Goldman so much. Their actions are very similar to the rest of Wall Street "And that in a nutshell is my problem.Look to you it's just "business". To me it's corruption and criminal enterprise.To me all of wall street is wildly corrupt. To you, they are just smart businessmen. Just Like Tony Soprano. Look at how much money Tony makes hauling garbage.Honestly you sound like one of these Randian Sociopaths. "What Goldman does is between them and their clients".Dude. Goldman doesn't have clients, they have Counterparties.That means they merely have people on the other end of a trade.And what Goldman does to their counterparties means a lot to me and has a lot to do with my future.Goldmans counterparties are my employers pension fund, my Mutual Fund, My state employee pension fund. To you, these are all wisenheimers deserving of a skinning. To me, these are customers who deserve an honest deal.What Goldman does is demolish trust in the markets. After all if they have to pay you to hype their quality, they have brand damage.I suppose you think Halliburton is a great company, after all, they only occasionally rip off the DoD?
Pat-How can Goldman being front running someone if they don't have clients. Also prop trading is a fairly small part of all of these firms ~10% or less of revenue and profits. I agree with Jeremy that you are just repeating the fear mongering websites, without any real understanding of what these banks do, how they make money, and how risky they really are. Sure there is some corruption in Wall Street, but I am not sure that is worse than the corruption in the government, energy companies, pharma companies, mining companies, tech companies... Its unfortunate that our society isn't perfect, but I just get confused why to you banks are the villain rather than just about any other industry/government
Contrarian-I do agree with you that Shilling's book is probably useful (I haven't read it). He is very intelligent and has a lot of good ideas, and is well grounded in reality. Prechter is a little nutty for me and has been wrong too many times for me to trust his ideas.
OK Contrarian, you want to go back to the beginning, I would LOOOOOVE that. To the beginning then.This all stems from the thread dated 3/5/09 2 or 3 days before the Dow Bottoms out in the 6400 range. MM is in awe as the Dow drops to 6652 (the absolute low was 6400). Here is your response VERBATIM to him:________________________________Contrarian said:"Are you surprised?I guess denial is a wonderful coping tool, eh MM? BTW, the Dow was up around 9000 at that time.Others also suggested I was way off base.The question now, is:At what point, if ever, will TedK, The Anonymous, MM, etc., accept the obvious?And, if for some reason it has not become obvious, why not? :-)Have you all thought about starting a 12 step program and calling it A-D-D Anonymous? Members would include those who chose to simply sit there during the greatest collapse of wealth in history and watch their Assets Deflate Daily. Sad, but true. So sad. People choose to be victims, martyrs, instead of dealing with life on life's terms. Truly amazing.3/5/09 4:47 PM"__________________________________So there it is Contrarian, TELL ME, TELL US ALL, what you were saying to MM at that time. Specifically:What would one do, on 3/5/09 to "Accept the obvious" as you say???What would one do, on 3/5/09 to no longer be a member of "Assets Deflate Daily (ADD) Anonymous"???What would one do, on 3/5/09 to no longer "choose to be victims", and to "deal with life on life's terms"???
Contrarian What a Thanksgiving treat, you are back crazier than ever and with Pat as your cheerleader. Kudos to HB and Anon for the notes of rationality and concrete info.
WTF is your point?My point is you are a lying POS is my point. 2 days ago you said.________________________________contrarian said...I never said we were going lower in March 2009, in fact I knew we were near a bottom. But, I also knew it was only a temporary bottom in a much larger collapse. Your claim that I said we were going lower in 2009 is a complete fabrication of the facts.11/22/10 3:53 PM________________________________OH BULLSHIT. If you "knew" we were near a bottom you wouldnt have launched into that beratement of MM on 3/5/09.Instead after that rant wondering when if ever he would "accept the obvious", you would have followed up with something like this..."But its not a good time to sell now MM (you blew that chance at 9,000). As it so happens, bearish sentiment is so high right now, that we are due for a countertrend rally. In fact, it may be a massive, 18+ month rally where the Dow goes from where we are now (6,652) to 10,000 or more. Its best to hold on til then and then become an ex member of Assets Deflate Daily Anonymous"You never said ANYTHING like this. Instead, you just continued to spew daily doses of doom...at dow 9,000, at 7,500, at 6,652, back up to 8,000, then 9,500 and now 11,000. NOT ONCE did you say we may be due for a countertrend rally, instead it was all doom doom doom.
Also, my point is you are so desperate to NEVER EVER admit you were wrong that you will evade, spin, attack, run away, lie, etc.For example, lets try this again. When in Sept 2009 I first called you out for berating MM on 3/5/09, it is my contention that you replied to me by saying:_________________________________"Contrarian said...The Anonymous, are you naive enough to believe that at this time next year the market will not be lower than it was back in March (2009)?9/30/09 11:33 AM"http://novabubblefallout.blogspot.com/2009/09/northern-virginia-bits-bucket-9282009.html#comment-2463858820118826913__________________________________So again, for the Nth time, did you say this, yes or no?BTW you may notice by now that I do not play nice with those who are flat out liars. For example, "Pat" and I are pretty much diametrically opposed in our views, and while we may snipe at each other from time to time, it never gets to this point, largely because Pat has never, to my knowledge, lied about what he said in the past. Thus, if you are interested in maintaining a more cordial relationship vis a vis myself and Pat, why dont you stop all the lying, and all the deletions, and come clean.Heres your chance Contrarian... did you say what I am contending you said on 9/30/09, yes or no?
HBThe problem is one of mixed expectations. To people who do business with Goldman, they think they are clients, while to Goldman, they are merely Counter-parties.A client believes they are entitled to honest services and fiduciary duty, while Goldman believes they should leave them just enough skin that they will return tomorrow for another flensing. I expect the groecry store to buy wholesale and sell retail. I do not expect them to sell Sour Milk as Grade A or to see me enter the store and raise prices on the computer as I head to the checkout.As for the hazards of these banks, i will note 400 hedge funds collapsed in 2008, not even a blink, but Lehman went down and the entire system went into V-Fib. If you think that's a good thing, well, then Stand up.as for Goldman, they are merely the most obvious. Putting their people into Government so that they can more effectively steal from me.You can name-call all you want, but, people are outraged.And if you want to see rioting in the streets? Dump 10 million formerly middle class types onto the curbs.This country has had open rioting before. What was the Bonus Army?Blowhards like Limbaugh will seek to con people, but, when some meals get skipped?As for what to do? Heck if i know. I can say what not to do.Stocks? don't be in, the market is corrupt. Somebody engineers a flash crash, executes limit orders at the bottom, and then picks up a trillion dollars? How many 401Ks took hits there? If you can't execute limit orders and you get front run going in, stay out.Bonds. Equally troublesome. Long term rates are in the sewer, a 2% rise in long term rates, and the bonds eat 16% in price. That's a decade before you recover from that.Can rates rise? Sure, ask the irish, the greeks, the protuguese.So what does that leave?Real estate and Commodities.I hate commodities, no place for a speculator.Real estate? Boom. I'm here. But the problem is we are still coming off a terrible bubble.We need to clear inventory, and get to a market stable condition.when 23% of national mortgages are underwater, what's the future downside risk? when the Feds are doing everything they can to pump air into this market? but that doesn't mean there aren't good deals, you need to look around.outer mongolia is looking quite nice. If you like PW, that's not bad. If you think your career is here, look for a value purchase.I'm not suggesting Gold or Silver, I think those are in a bubble also, but, you should try and isolate yourself from market shocks.I'd suggest pay off all debt except a low mortgage. If you can and keep your powder dry looking for opportunities.Me, I'm renting a 2 BR apt in Arlington for $1K/month. So, my housing needs are covered. I hate condos and i'm no fan of townhouses.I'm looking at deals and for deals, and you see me post the ones on my tracker list routinely.consider what your needs are at a fundamental basis.Shelter, Food, hygiene, social exchange.Then try and tie yourself to that.I like south Arlington because i've been renting here a long time and gotten very fond of the neighbors.Although if DC goes through with Medical Marijuana, i sure wouldn't mind life in DC. :-)
Pat-I can understand your dislike of stocks, although as long as you don't sell (have stop losses/have margin calls) during a flash crash you are not hurt. Sure my stocks showed large intra-day losses, but in the long run the fundamentals win out. Goldman can only win if you are trading regularly. If you own a stock for the long term like an investor should they are not making any money off of you. You could also look into investing in countries that have better prospects and pick up higher yielding bonds or stocks although then you have exchange rate risk.Personally I hate gold and silver, because I don't think they have much real worth (you can't eat them, burn them, use them...) so it is pure speculation.I agree with you about real estate, but you could also look into MLP/REITs. You probably wouldn't like housing related REITs, but you can get some that are related to hospitals and similarly safe buildings...I think maybe I am just more skeptical about the world. When I go to a car place I expect them to be thinking about their bottom line not mine. The same is true when I shop for most products. Wall Street definitely is more worried about its bottom line than mine, I know this and expect this out of them. Because this is true I avoid going head to head with them in places where there advantages matter. I invest in ETFs instead of mutual funds, I limit my trading, and think long term about investments.
"Now, you're claiming I should have told people that a bottom was in and a counter-tend rally?"Well if you KNEW that a counter-trend rally was in, why did you choose a multi year bottom to berate MM about being a member of "Assets Deflate Daily Anonymous"? Why did you choose that moment, near the multi year bottom to ask him "when, if ever, he would accept the obvious"?Why then Contrarian? Why?
"Contrarian said...After all, what does Prechter know, anyway, huh? Maybe you should try subscribing to his newsletter in addition to reading his books. You would probably learn something."Actually, thanks to you, I have learned quite a bit about your precious Bob Prechter. Since we're citing quotes of his, let me supplement, and contrast your quote of his with another quote of his that I found...On July 17, 2007, Prechter stated: "Aggressive speculators should return to a fully leveraged short position now. We may be a few weeks early, but..." On June 11, 1993, Prechter Stated: "The market will most likely hit 3,600 to 3,700 on the Dow sometime this summer, the 44-year-old Prechter says. But soon after that, a bear market of monumental proportions will begin, he says, coincident with a devastating depression."GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG,GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG!!!Oh, and you have a nice weekend too. I will see you monday to check up on some questions you left unanswered. Happy thanksgiving!!!
http://franklymls.com/dynamicHtmlGen.aspx?Id=AR7460525assessed at 475K, listing floating between 355 and 399K, North Immunington, but, Immunington never goes down.
HBit's a question of what you think the market fundamentals are, vs, what happens with the Fed pumping trillions into the Market and the banks.Consider Fannie/Freddie?I was in treasuries, AAA, Good as Gold, I wasn't in Fannie/Freddie because i saw Real estate as rotten.so the Treasury guarantees fannie freddie. That's Socialism. Socialism for the Rich. I passed on 125 basis points of income, where's my offset for income?That was Goldman raiding the treasury because they had a fannie position.as for skeptical, I didn't like it when GM sold me a car with a defective brake rotor, or intel was selling chips with a defective arithmetic processor.however, I can go to a dealerscream at the service maanger and make them repair the car. Intel produced new chips and gave them out.What's Goldman done about defective MBS they've sold?
Contrarian-I actually didn't realize that Buffet felt that way about gold, but yes it appears I agree with him. In general I agree with most of his opinions about investing.Pat-The relationship between Fannie/Freddie has always been interesting. The government has effectively always guaranteed their debt. I agree it wasn't explicit, until the crisis, but if you looked at the yield of their debt it was always assuming a high likely hood that it was government backed. These companies are a huge disaster and by far the most expensive part of any bailout. The only good thing about the bailout is at least their stock holders and preferred stock holders are getting whipped out. In the long run hopefully the government can figure out how to get out of these companies without destroying the housing market.As for Goldmans bad MBS, they have been sued and have settled many of the cases by paying hundreds of millions in fines. I agree with you that Goldman should have been more honest about what they thought of MBS, but the buyers of these securities should have done some research too. Who buys billions in a security with no idea of how it works. With any research it was pretty clear that Moody's & S&P should not have rated them as AAA and that investor were going to take big losses.Happy Thanksgiving all. I hope everyone has a nice relaxing day and gets some delicious good :)
Happy Thanksgiving from deep in the Shenandoah Valley. We are miles from the nearest blip on a map, near the top of a hill (won't say mountain) and right on the edge of 3G service as long as I hold my Blackberry just right by the back porch.Interesting little community experiment here. Small cabins on the side of the mountain. We counted nearly 40 lots for sale. Only three were built on, including this one. The RE signs have for the most part, been overtaken by vegetation. All seems frozen in 2007 here from what I can tell.The only shadow inventory here is what the trees make...Happy Turkey day...(we're eating duck).:)
Oh and by the way....am reading "Decision Points" by Bush 43.Just finished the book (2nd read) and I can tell you from my experience, what he says transpired behind the scenes for TARP and the bailouts is pretty much completely different what every talking head was saying on the various news outlets wasn't or would not happen.I've always believed that people fall into three categories:1. Those that know what will happen or make it happen.2. Those that think they know what happens or will happen.3. Those that deny what could happen or isn't happening.The 1's rarely advertise what they do because it's pointless. If you have the power to make things happen, just do it.The rest of use (2's and 3's) just watch the train of 1's roll by.Pat & Contranian both have salient points about folks behind the scenes using their positions to safeguard a system that has transformed into one that protects and defends a market run for the benefit of a few rather than a true laissez faire system. Bush says as much in the chapter covering the bailout. To his credit, he wanted the market to make the decisions and deliver the consequences, but he didn't. Shame.The book was a real eye opener for me. Makes me wish I had a do-over for 2000 and 2004.
http://franklymls.com/AR7424185assessed at 440K, sat for 84 days,now U/C somewhere are 379K, butImmunington never goes down.15% below assessed.
HB"While we are a Congressionally-chartered enterprise, the U.S. government does not guarantee , directly or indirectly, our securities or other obligations. We are a stockholder-owned corporation, and our business is self-sustaining and funded exclusively with private capital."That was the language on the front of every Fannie Mae Instrument, so where was it said "These bonds are implicitly guaranteed".What it was is the Chinese rolled up, and explained to Cheney in no uncertain words they were going to torture his dyke daughters with hot irons if they didn't cover that paper. Why do you think Paulson was puking so much.?
TNSorry you voted for GW.Me I hated him because of his last name. If his last name had been Walker, he'd have been a joke. seriously, Alcoholic, Coke addict, D student. Mean. Reckless. Foolish.Say what you want about Gore, Gore spent his life prepping to be president. Bright student, hard worker, intellectual, dedicated. Al would have made mistakes, but,I think he'd have been a good president.
Pat: Just curious why you always always mention dumpy properties in dumpy areas as proof that the Arlington housing market is going down. One house is a foreclosure and pretty much a mess, and one house is a dump in a part of Arlington loaded with dumps. Of course, they are not going to keep their value and are probably over-assessed relative to better properties in the areas. Do you ever look at properties (including those you always mention in DC) which are normal houses in normal neighborhoods and find that they are selling way below the assessed value and way below the comps. There is one person here (can't remember her handle) but she is always mentioning that she missed this or that house in a good neighborhood. Do you really think the 2 houses you cited are representative of the entire Arlington housing market?
Blogger pat said... What it was is the Chinese rolled up, and explained to Cheney in no uncertain words they were going to torture his dyke daughters with hot irons if they didn't cover that paper. Why do you think Paulson was puking so much.?Pat,No offense, but Dick Cheney? C'mon. Dick is the torture master, not the other way round. you can't have it both ways. Either is is Darth Vader or Princess Penny, but not both. If the Chinese looked sideways at Cheney he would have waterboarded them with water from the Yellow River, just to make it homey. LOL. Al would have made mistakes, but, I think he'd have been a good president.Well you don't have to be snippy about it! (in-joke, read the book).LOL. That sealed it for me for Gore.I want a do over to chose someone else besides Gore or Bush. Gore is a trainwreck IMHO. I think the 3rd party development is more indicative of folks who have decided that Gore or Bush were not options they could live with.The Republic moves on...
Pat-As I said it was an implicit not explicit backing. The government only made it explicit after the crisis. In the past Fannie clearly said they were not backed, but if you looked at their debt and the way it traded everyone was clearly assuming a backing. The way congress dealt with Fannie/Freddie was also like a government arm not a private company.So I fully agree that it was not an explicit backing, but everyone assumed that they two GSEs would be backed. Thus the implicit backing.
pat and tn,I'm going to stay away from politics that don't relate directly to the economy. I will say that I think Pat crossed the line in some comments that were completely irrelevant. Nobody is a saint and personal lifestyles are just that.We've entered the winter season. It will be interesting to follow inventory over the next 2 or 3 months. We have seen an unnatual (imo) drop during the past 2 winters.I'd have to believe that distress sales would make up a bulk of any increase (or even be the cause of any flatness). Traditionally there is little movement this time of year and it's long been thought that only desperate seller's are on the market.I'm waiting to see if we have a spring rush and, if so, to what extent. Much of the 8K has been given up on the low-end (of course location, once again, is key). Some areas have continued their climb, while others have fallen (but not back to the lows of late 2008 and 2009).Rates are creeping up, but are still extremely low. My experience has been that the rental market is still quite healthy. I heard recently that commercial rents in the Reston area have climbed decently. This, I find encouraging.
HBSo you. Are okay with Goldman selling AAA securities that were implicitly K rated garbage and Fannie selling AA securities that were implicitly AAA?I suppose you were okay with overnight investment banks raiding FDIC?Sorry, I view that as corrupt.And I don't care about crossing personal lifestyle issues.Bush is an alcoholic and an addict. It says something that every republican voted for him.They could dhave had McCain in 2000 or Lugar or any of. Adozen other serious people.
TNCheney is like many bullies, quite willing to be cruel to people weaker then him, but quite cowardly in situations of personal risk.He's glad to have his little fascists torturing people, but terrified of any personal risk to himself.Remember the year he spent cowering in a hole in the ground after 9/11?Bush too.Bush had to hide for 2 days before he could steal himself to go see his tremendous errors in person.
BM (Sorry, that's how your Initials work out)Why do I post dumpy houses?1) they are more reasonably priced.2) I regard them as the canaries.Absolutely gorgeous fairy tale houses, those stay high. It's the kind of ugly, ones that show rationality fast.Ugly ones are purchased by investors.Ugly ones are priced solely on $/SF.ugly ones are priced on Cap Rate and Yield.People will justify overpaying for a house with a turret and a pony in the yard. They have a much harder time rationalizing an ugly puke colored rambler, with scratched up floors.My house in Oklahoma was Ugly. Looked like a barn, inside was bilous green and snot yellow. Dark, dingy. Ugly.2 new gable windows, 6 solatubes, paint job, and a floor job. It was gorgeous.
So was kinda surprised that this house in Springfield I mentioned a while back went for nearly $390K including the seller subsidy.Now I'm wondering about this house in Rose Hill. Over $400/sq ft given this area and that dated kitchen? Am I missing something?I have never been a fan of split levels, but I must say these funky angled roof homes in this neighborhood are curiously compelling to me!
I haven't posted in a long time. But I'm finally buying a house. I close on Mon. Not in Nova (thankfully). < 60k 2000 sqft, .4 acre, late 60s, all brick, well taken care of, new roof, tile and hardwoods. I just need to buy some appliances.Some places I think are almost too cheap (and I was a big housing bubble believer). DC heh not so much, but I don't care too much about DC anymore . . . more of intrigue.As for gold and silver . . . well keep believing it's a bubble because that just tells me it will go up quite a bit more. My average buyin is $13 an ounce. I think it will hit 30 collapse this spring, I'll pick up some more and we'll go from there. I do find it interesting how many believe the same old crud about how you can't use it, etc. It's a store of wealth and security. If you could eat it like wheat that would destroy it's purpose as a store of wealth. When silver hits > 100 and gold > 2500 then we can start to talk about a bubble. But it just depends on what it is relative to other items. Compared to all other asset classes (except possibly real estate in select areas) gold and silver are still incredibly cheap. Price is irrelevant (it's just a #) it's how much something is valued compared to other assets currently and how it is historically valued. Housing was way overvalued historically and fundamentally in 2005. Gold/Silver will get there and I'm sure they will be in a bubble . . . but they aren't there yet.Some of you guys really need to read some economic books.If you want to understand what the Fed will do read:Making sure It won't happen here by Ben Bernanke in 2002. It lays out exactly what he would do to fight the natural inclinations of the market in a debt deflation. And he has followed it religiously.Next up is manipulation of the dollar to a lower exchange rate.If you want to understand the Fed read:The Case Against the Fed.If you want to understand banking read:The Mystery of BankingMind = blownQE1 and QE2 were/are about MBS purchases, i.e. saving the banks and other financial institutions from the bad bets they made on the housing market. Basically the Fed is creating electronic money and buying MBS at full face value to save the banks. The Fed exists by and for the banks. It only exists because the banks want it to exist. The Fed could care less about the economy. It only cares because banks need to make money and they only make money by lending out money they don't have using fractional reserve banking. No economy = no lending = bad for banks.
gte-Congrats on the house. Also good luck with your gold & silver position. I never said it was a bubble and I agree with you that many people think it is a store of value (which makes it a store of value), I personally think it is pretty useless and don't like owning things for speculation on price rather than for their income producing potential. I agree that gold could easily double, but I doubt it would do much more than this. Historically the Dow ranges between ~3-40 times the price of gold. So at ~8x it is closer to the bottom of the range, but could still double and stay in the range. Personally I think the better way to invest in metal prices is through stocks that produce metals like FCX. If prices of gold/copper go up the stock will go up, and even if prices stay similar it will make you money over time. I owned some a few months back when it was ~8x earnings, but got out in early October as it is a little expensive for me at these levels.
Pat-The ratings were total junk. Moody's, S&P, and Fitch are pretty useless companies. This is why I think people should do their own due diligence, before buying.
hb,Will you be my financial advisor? Seriously, I think you are super smart.
GTEYou bought a 2000 SF house for 60K?seriously? with 0.4 Acre land?Where? At least county wise?I'm not much on the sticks, but, a deal like that may be worth it as a test bed house. Put in Photo Voltaics, Solar HWH, Seal it up and have a barn as a workshop.
VA-Thanks for the compliment. For non-compete reasons I can't be an actual adviser, but if you ever have specific questions I have no issue giving my advice as long as it doesn't interfere with anything I can't say because of my job.
Pat: Maybe I am wrong but the type of houses you are posting in Arlington are those that might appeal more to investors or buyers who, like you, are willing to transform houses. For those who are just looking for a decent house without the turret and the pony (even if zoning allowed ponies), I believe there is a different part of the market which comprises most home buyers in Arlington. If you look at the basically entry level Arlington Forest market which spans both N and S Arlington and has some houses on busy Carlin Springs Rd and even busier Arlington Blvd, Redfin shows 21 houses sold there this year and they sold about 2.5% off the list price at about a $550K average price. Most of them sold in well under a month. There are 5 houses under contract there now in about the same average price range and another 4 for sale. To me this looks like a fairly typical market for Arlington. When you talk about the ugly houses, I get that they are likely to be bought by investors or others who may or may not have the money to do work to a house. I also get that they may have an effect on assessments by pulling down prices in some less-than-desirable areas, but I don't think they represent the Arlington market. I just see too many friends getting decent houses while others are hanging back waiting for a big downturn that I don't see coming.
Buyer Maybe - I (like I suspect many of us) share your plight.For the vast majority of us who are not looking in Pat's price point, the Arlington market is far far different than what he makes it out to be. Still, he seems to enjoy combatting the strawman argument of yore, (that Arlington "never" goes down), ignoring the argument proven here again and again, that Arlington, will suffer less than its outer county bretheren.It all seems harmless enough though. And if it makes him feel better, I say, just let him have his fun.
BM"For those who are just looking for a decent house without the turret and the pony (even if zoning allowed ponies), I believe there is a different part of the market which comprises most home buyers in Arlington"if it makes you happy drop a half million buy a place. me i think the laws of physics and economics still apply.
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