Home values keep sinking

[OrlandoCityNet]

All markets go up and then down.This time it's more of a correction than some thought.

[JJR]

During the housing boom, it was not only the buyers, sellers, and real estate agents who went crazy. Even the long-time residents over extended themselves when they took out Home Equity Loans (HELs, funny huh) to live out champagne wishes and cavier dreams lifestyles. Middle class America consumer spending was out of control during the housing boom. Especially when you consider how many people saw their home values increase by double-digit percentages while their paycheck maybe only increased by 3%.

Are TV shows like Flip that House still around??

[Hamburger]

Lamar wrote:

<quoted text>
Unions ARE the free market solution.

Sure, if the solution is to drive all production jobs out of the U.S.

[Upbeat]

JJR wrote:

During the housing boom, it was not only the buyers, sellers, and real estate agents who went crazy. Even the long-time residents over extended themselves when they took out Home Equity Loans (HELs, funny huh) to live out champagne wishes and cavier dreams lifestyles. Middle class America consumer spending was out of control during the housing boom. Especially when you consider how many people saw their home values increase by double-digit percentages while their paycheck maybe only increased by 3%.
Are TV shows like Flip that House still around??

No, that show has been canceled__but___you are correct, the real problem for the nations lenders lies in the rush to re-fi. One day, if we're lucky, this newspaper and others will quit playing around with the "wire" figures and report on the damage done by those who borrowed equity that never really existed. Very observant post!

[Michael Corleone]

JJR wrote:

During the housing boom, it was not only the buyers, sellers, and real estate agents who went crazy. Even the long-time residents over extended themselves when they took out Home Equity Loans (HELs, funny huh) to live out champagne wishes and cavier dreams lifestyles. Middle class America consumer spending was out of control during the housing boom. Especially when you consider how many people saw their home values increase by double-digit percentages while their paycheck maybe only increased by 3%.
Are TV shows like Flip that House still around??

Not sure about that one, but today the show "Sweat Equity" was on on two seperate networks, DIY and A&E.
On this show, a homeowner does some work, and spends, say $20,000 on some improvements, whereupon some realtor marches in and declares that their home is now "worth" $50,000 more that it was.

All of these types of programs perpetuate the idea that homes are cash cows, and ATM's for the owners, and that money can be manufactures out of thin air somehow.

A home, or any thing else for that matter, is only "worth" what the next buyer is wiling to pay.

Any other measure of value is meaningless, irrational and speculative.

If one graphs the increase in home prices over time, for the past 100 years, the increase in values closely match the rate of inflation, except for the period since 2001.

Until the values return the the trend line from which they diverged in 2001, the market has not yet fully corrected.

During any bubble, whether in is dotcom stocks in the 1990's or Tulip bulbs in the Netherlands in the 1600's, or homes in the recent past, the operating principle is no longer based on rational appraisal of value, but on what is known as "The Bigger Fool" theory.
Pay whatever the going price is and then just find a bigger fool than yourself to sell to.

http://en.wikipedia.org/wiki/Tulip_mania

[Lamar]

Hamburger wrote:

<quoted text>
Sure, if the solution is to drive all production jobs out of the U.S.

I didn't say that unions were good. I just said that they are a free market solution, i.e., not a government solution. Besides, there are plenty of right to work states. That's why car manufacturers set up shop in southern states instead of overseas. Union or no union, Americans aren't going to work for $2 an hour.

[Orlando]

Lamar wrote:

<quoted text>
Unions ARE the free market solution.

Yeah that was a typo. Instead of Unions I meant govt.

[Lookin to buy]

It's definitely a buyers market right now but I don't think it will last much longer. I have been outbid by investors on several offers I have made in College Park.

[Lamar]

Lookin to buy wrote:

It's definitely a buyers market right now but I don't think it will last much longer. I have been outbid by investors on several offers I have made in College Park.

Ultimately, investors have to sell it to somebody, that's what investing means. Of course, if they end up renting the houses, that certainly won't raise the neighborhood values.

[Hamburger]

Lookin to buy wrote:

It's definitely a buyers market right now but I don't think it will last much longer. I have been outbid by investors on several offers I have made in College Park.

Why would you want a house in College Park? Isn't that right next to Pine Hills?

[doug]

Hamburger wrote:

<quoted text>
Why would you want a house in College Park? Isn't that right next to Pine Hills?

college park is a nice neihborhood and its not close to pine hills. Problem is the prices there are still too high but it is a nice area good schools and close to I4.

[Lamar]

College Park is a renter's neighborhood.

[Hamburger]

doug wrote:

<quoted text>college park is a nice neihborhood and its not close to pine hills. Problem is the prices there are still too high but it is a nice area good schools and close to I4.

If you head west on Princeton doesn't that essentially turn into Silver Star? That's certainly no more than 3 miles from College Park.
As we know, the crime problems from Pine Hills have been spreading outwards. Frankly, I can think of much better places to live.