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Title: My Housing Prediction from June, 2004
Source:
The Price of Liberty
URL Source: [None]
Published: Jan 13, 2008
Author: Bob Wallace
Post Date: 2008-01-13 21:14:12 by YertleTurtle
Keywords: None
Views: 557
Comments: 35
June 21, 2004 There are a lot of thing I don't know, but one thing I do know are houses. My father was a general contractor all his life, his father was a carpenter, all my relatives are contractors, and I built many a house starting when I was 12, and ending in my 20s when I finished college. I know houses, and because I know them, I know there is a boom right now, one that will be followed by a bust. I wouldn't be surprised if houses in some areas dropped by 90% in value. I just don't know when. Thirty-five years ago, when I was a kid, a nice middle-class house cost $25,000. Now they can cost up to $250,000, depending, of course, where you live (the three most important things for selling a house are "location, location, and location"). People have tried to tell me this increase in price is due to supply-and- demand. No, it's not. Under the free market, as demand goes up, so does the supply. As supply goes up, the price drops. Under a truly free market, you'd have stable prices that would last a century. If prices did anything, they'd drop slightly over several decades. Those brand-new $25,000 houses of 35 years ago should still cost $25,000 today, not $250,000. What caused this increase? Overwhelmingly, it's inflation-the Federal Reserve pumping billions of paper dollars into the economy. That extra money in people's hands has bid up the prices of houses. That causes a bubble. Bubbles, of course, are always followed by busts. The same thing happened during the dot com boom-bust during the 90's. All that extra money pumped into the economy went into the dot coms. Then, bam, the bust. The same thing is happening right in the housing market in some areas. All the money Greenspan is pumping into the economy is going into those markets. Sooner or later, they will blow. All the money flowing into the housing market has turned housing into a gamble. People are buying houses and hoping the value continues to go up, so they can sell and make a huge profit. This works just fine except for the last people to buy the house, when the bubble bursts and they're left with a house that is worth $200,000 less than what they paid for it. Houses are what are called "durable consumer goods." Strictly speaking, they are not investments. You generally aren't supposed to make a profit off of them, no more than you would make a profit of off an old car, unless it became the kind people wanted and bid the price up. The main reason houses become profitable investments is when inflated money pours into the market. And then it's not so much "investing" as it is gambling. And gambling's a heck of a lousy thing to base an economy on. It's certainly never the basis for a solid, long-lasting economy that provides good, high-paying jobs for people. This gambling is made worse by the Fed's dropping the interest rates to the lowest I've ever seen. People are quite rightly refinancing their houses, but if they're taking the extra money and getting deeper into debt they have no idea what they are doing. When the economy goes bad, it will all backfire on them. Pushing down the interest rates that low is a desperate attempt by the Fed to keep the economy going just a little big longer. Imagine if many people bought brand-new cars and kept hoping the price went up so they could sell them used and make a huge profit. You'd think they were nuts. The same should apply to houses, except houses last a lot longer than cars (that's why they are durable consumer goods). Whereas cars depreciate rapidly in a few years, houses should depreciate very, very slowly over several decades. Two of my friends who live in the San Franciso area-where there is a huge bubble-just sold their houses. Each probably made $100,000. I know that sounds great. It is, for them. But if you look at the long-run, it's doesn't look great at all. The housing market will blow, as will the economy in that area. Some people will lose their jobs, lose their houses, and declare bankruptcy. That is the long-term effect of inflation. My two friends made $100,000 each, but down the line lot more than two people will lose just about everything. And most of them won't have a clue what happened. What would I do if I owned a home in an area where the prices kept skyrocketing every year? I'll sell and get the heck out. I'd go someplace where prices are a lot more stable. An inflationary boom-bust cycle is something you can bet on. It's such a sure thing it's not even gambling.
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#1. To: YertleTurtle (#0)
An interesting thing is happening with respect to auto loans now. Some folks (suckers?) are selling their cars to the dealers for, say, $20,000, and they still owe, say $5000, on it and buying a new car for $28,000, and the dealer rolls the excess owed into the new loan for $33,000. Do this a few times and it turns out a lot of folks owe $45,000 on their auto loan and have a used car that is worth $20,000, maybe. My mortgage broker friend tells me this is pretty common. If I could, I'd live in a tree stump, like the man in "My Side of the Mountain".
"Satan / Cheney in "08" I live in a tree stump in the Ozarks. Currently I'm carving a walking stick from a piece of oak I found on the ground. I need a bigger knife, though. People are such fools when it comes to houses and cars.
A liberal would rather see a woman raped and strangled with her own pantyhouse than defend herself with a handgun.
the #1 growth industry in America has been lending. and the lending finances the spending by those that borrow. this plus government spending keep the economy going. this is why we have any economy at all.
1 Timothy 6:10 For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.
Were I single, I'd join you in your tree house in the Ozarks.
Join the Ron Paul Revolution Here's me with my just-completed walking staff.
A liberal would rather see a woman raped and strangled with her own pantyhouse than defend herself with a handgun.
Do this a few times and it turns out a lot of folks owe $45,000 on their auto loan and have a used car that is worth $20,000, maybe. My mortgage broker friend tells me this is pretty common. Nice, and true, post.
Honi soit qui mal y pense
My observation, which my professional mechanics agree with, is that most people might be able to afford a car, but they can't afford to maintain it properly. As for houses, seems that $1000 a year, or more needs to budgeted just to cover the depreciating costs of the water heater, roof, painting, flooring etc. I just replaced the thirty yo (I guess) stove vent in my house. I thought it would be a two hour job including clean up. O My. I ran out of cuss words and had to recycle them repeatedly. And vigorously. Duct work. Attic. Dust. Not knowing Duct work. Gad nasty stuff. But now have a well operating stainless steel hood with a fan three times the size of the old unit installed. That was a nasty job. Two hours turned into two (partial) days. Learned my lesson. Rip out ALL the duct and throw it far away, Pull out the wallet and split with $40 and put the new duct in. A lesson I'll never forget.
"Satan / Cheney in "08" Liberals are not anti-gun, at least apart from the ones who hate cigs and meat. Most of us want our guns and just don't want crackheads buying fresh Florida untraceable guns in an alley in Brooklyn for $150. Is this unreasonable, or do you want crack dealers running around with arms that outgun the cops by about 100 percent? I doubt you think about that. It's just YOUR guns that count.
Honi soit qui mal y pense
A liberal would rather see a woman raped and strangled with her own pantyhouse than defend herself with a handgun.
Those trees are going to cause problems.
"Satan / Cheney in "08" They listen to what I tell them. ;-)
A liberal would rather see a woman raped and strangled with her own pantyhouse than defend herself with a handgun.
NICE. But I don't want some 14 year old punk to be able to buy a cheap gun and kill my kid. Know what I mean? I live in a city and you guys can have all the guns you want, but I want sociopath teenagers in my area kept away from guns. Period. I saw a transaction in Tampa that was clearly a trunkful of cheap pistols headed for NYC. Totally legal, even though the buyer was undoubtedly a multiple felon. (Black guy with multiple gang tattoos.) Are you in favor of that?
Honi soit qui mal y pense
Are you in favor of that? Should have been killed on the spot. Body put in the dumpster.
"Satan / Cheney in "08" i'm amused :)
How could it be totally legal if the buyer was a felon?
Tag Line For Rent (M, 48, NY)
You're clairvoyant too? Did it say NYC or bust on the back of the car or something? Did you call the cops and tell them a multiple felon just drove off with a trunk full of guns clearly headed for NYC? Do you ever read what you write? You should. You'd be embarrassed and maybe you'd smarten up.
Tag Line For Rent (M, 48, NY)
snickering
The money you save in time is well worth it.
I almost lost my temper there for a second.
Tag Line For Rent (M, 48, NY)
Understandable. Dealing with bots and Kool-Aide drinkers will do that to you.
That "transaction", if true, violates about a half dozen major firearms laws Federally and probably close to as many for each individual state the vehicle was to pass through. Any one of them would get you at a minimum a "Misdemeanor Felony" in CA which removes your right to posess firearms for 10 years... The big two questions there are "Why does that nice tattoed young man not obey the law?" and "Why do us law abiding citizens have to have more restrictions added because he isn't?" BTW, you know that's a tagline Yurt's using right?
Government blows and that which governs least blows least...
Hmmm... I wonder what changed between the time when firearms were available with nearly no restrictions and now that also produced lots of "sociopathic teenagers"??? Hmmm... A conundrum... I bet it has a simple answer... Oh, I know it! GOVERNMENT SOCIAL ENGINEERING...
Government blows and that which governs least blows least...
Hmmm... I wonder what changed between the time when firearms were available with nearly no restrictions and now that also produced lots of "sociopathic teenagers"??? Hmmm... A conundrum... I bet it has a simple answer... Oh, I know it! GOVERNMENT SOCIAL ENGINEERING... Ding! Ding! Ding! Ding! We have a winner Johnny! "The difference between an honorable man and a moral man is that an honorable man regrets a discreditable act even when it has worked and he is in no danger of being caught." ~ H. L. Mencken
Ding! Ding! Ding! Ding! I guess that would include the war on (some) drugs. That's the big factor in making cities dangerous.
Tag Line For Rent (M, 48, NY)
It gives the kids something to do between drive by shootings - deal drugs for the CIA.
"The difference between an honorable man and a moral man is that an honorable man regrets a discreditable act even when it has worked and he is in no danger of being caught." ~ H. L. Mencken
It gives them lotsa reasons to do the drive by shootings.
Tag Line For Rent (M, 48, NY)
The Pill!
Gun show exemption. That is why they call Rte. 95 The Iron Highway. Virginia, Florida and several other states have frequent gun shows where background checks are not required. Do you think the buyers go back three days later to pick up their purchases? Additionally, parking lots at gun shows make perfect meet-ups for people who have an interest in asking no questions. A ton of stolen guns enter the underworld that way, along with corrupt pawn shops and gun shops.
Honi soit qui mal y pense
There is no gun show exemption. Quit lying.
Tag Line For Rent (M, 48, NY)
As a firearms dealer, I can't imagine how much "extra" you could sell a gun for, illegally, to make it worth the risk. I've had people ask me to sell them a gun "under the counter", and I've told them that the minimum price for that is $500,000 (which at least will let me buy my way into Switzerland). Any dealer who sells illegally for less has got rocks for brains.
Shut your whore mouth, Mr. President.
Did you report this crime?
Lying, stupid cunt. Wanna tell me again how the sale in the parking lot was illegal? You can't, you stupid liar. "Gun show loophole" is a term coined to describe the legal sale of firearms between private individuals at gun shows in states where this is legal. When these sales take place at a gun show, some perceive a "loophole" in the National Instant Criminal Background Check System (NICS), although these laws have never applied to individual-to-individual sales of personal firearms. United States federal law requires persons engaged in interstate firearm commerce, or who are in the business of selling firearms, to hold a Federal Firearms License and to perform checks prior to transferring a firearm, but there is an exemption for private sales by individuals who are "not engaged in the business" of selling firearms, or who only make "occasional" sales. Unlicensed private sellers are permitted by law to sell privately-owned guns at gun shows, or at private locations, in 24 states (as of 1998).[18]
Honi soit qui mal y pense
You call it a gun show exemption. It isn't. You are the liar. There is no gun show exemption. That is a media made up lie and you parrot it. If the sale took place in a Toys R Us parking lot, would you call it the toy store exemption?
Tag Line For Rent (M, 48, NY)
Private sales of firearms will require a NICS check in states that require secondary sales be handled through an FFL dealer. The FBI is developing special provisions for handling NICS checks at gun shows, and, in the interim, they can be conducted by phone in states where dealers contact NICS directly. Gun show sales will be subject to applicable state and local laws. The circumstances requiring a NICS check for firearm transfers from dealers will apply regardless of whether the sale is conducted from the dealer's premises.
Honi soit qui mal y pense
Notice how that little shit ran away? Snicker. Like many of the wingnuts here, not too bright and not fact-driven.
Honi soit qui mal y pense
An inflationary boom-bust cycle is something you can bet on. It's such a sure thing it's not even gambling.
#2. To: tom007 (#1)
If I could, I'd live in a tree stump, like the man in "My Side of the Mountain".
#3. To: tom007 (#1)
#4. To: YertleTurtle (#0)
What would I do if I owned a home in an area where the prices kept skyrocketing every year? I'll sell and get the heck out. I'd go someplace where prices are a lot more stable.
Freedom*Peace*Prosperity
#5. To: lodwick (#4)
Were I single, I'd join you in your tree house in the Ozarks.
#6. To: tom007 (#1)
Some folks (suckers?) are selling their cars to the dealers for, say, $20,000, and they still owe, say $5000, on it and buying a new car for $28,000, and the dealer rolls the excess owed into the new loan for $33,000.
#7. To: YertleTurtle (#2)
People are such fools when it comes to houses and cars.
#8. To: YertleTurtle (#5)
#9. To: Mekons4 (#8)
#10. To: YertleTurtle (#9)
#11. To: tom007 (#10)
Those trees are going to cause problems.
#12. To: YertleTurtle (#9)
#13. To: Mekons4 (#12)
Totally legal, even though the buyer was undoubtedly a multiple felon. (Black guy with multiple gang tattoos.)
#14. To: tom007 (#7)
O My. I ran out of cuss words and had to recycle them repeatedly. And vigorously.
#15. To: Mekons4 (#12)
Totally legal, even though the buyer was undoubtedly a multiple felon.
#16. To: Mekons4 (#12)
I saw a transaction in Tampa that was clearly a trunkful of cheap pistols headed for NYC.
#17. To: Critter (#16)
Do you ever read what you write? You should. You'd be embarrassed and maybe you'd smarten up.
My spelling is Wobbly. It's good spelling but it Wobbles, and the letters get in the wrong places. -- Winnie the Pooh
#18. To: tom007 (#7)
Learned my lesson. Rip out ALL the duct and throw it far away, Pull out the wallet and split with $40 and put the new duct in.
My spelling is Wobbly. It's good spelling but it Wobbles, and the letters get in the wrong places. -- Winnie the Pooh
#19. To: farmfriend (#17)
#20. To: Critter (#19)
I almost lost my temper there for a second.
My spelling is Wobbly. It's good spelling but it Wobbles, and the letters get in the wrong places. -- Winnie the Pooh
#21. To: Mekons4 (#12)
I saw a transaction in Tampa that was clearly a trunkful of cheap pistols headed for NYC. Totally legal, even though the buyer was undoubtedly a multiple felon.
#22. To: farmfriend, Critter (#20)
I want sociopath teenagers in my area kept away from guns.
#23. To: Axenolith, farmfriend, Critter, Mekons4, all (#22)
I want sociopath teenagers in my area kept away from guns.
Now tell him what he's won. ...
#24. To: Original_Intent, Axenolith, farmfriend, Mekons4, all (#23)
GOVERNMENT SOCIAL ENGINEERING...
#25. To: Critter (#24)
I guess that would include the war on (some) drugs. That's the big factor in making cities dangerous.
#26. To: Original_Intent (#25)
#27. To: Axenolith, Critter, Original_Intent (#22)
Hmmm... A conundrum... I bet it has a simple answer...
My spelling is Wobbly. It's good spelling but it Wobbles, and the letters get in the wrong places. -- Winnie the Pooh
#28. To: Critter (#15)
How could it be totally legal if the buyer was a felon?
#29. To: Mekons4 (#28)
Gun show exemption.
#30. To: Mekons4 (#28)
A ton of stolen guns enter the underworld that way, along with corrupt pawn shops and gun shops.
#31. To: Mekons4 (#12)
I saw a transaction in Tampa that was clearly a trunkful of cheap pistols headed for NYC. Totally legal, even though the buyer was undoubtedly a multiple felon. (Black guy with multiple gang tattoos.)
#32. To: Critter (#29)
There is no gun show exemption. Quit lying.
#33. To: Mekons4 (#32)
Wanna tell me again how the sale in the parking lot was illegal?
#34. To: Critter (#33)
From the gummint. Notice the part about state law? Did you see what I said? Virginia and Florida have virtually no restrictions.
#35. To: All (#34)
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