[Westy]

I wonder if the current state of the market is tied to the popularity of Zillow and Redfin?

Owners now have a price that for the most part they don't feel that they should ever sell below. Buyers are seeing the same numbers and know that they have to pretty much meet or exceed to purchase. As long as demand marginally exceeds supply this creates a positive feedback loop that will generally see prices steadily climb. Until they don't...

Neither service offered information when/where I sold my house in Virginia. I listed it for what I thought was a reasonable price, someone offered slightly less and I said sure.

 

[Nick]

I did pretty well this year, in our stupid local market.

 

[SkaredShtles]

When they start paying the mortgage then they get a say. Otherwise STFU!

My wife keeps this on the hutch. None of the smartasses have caught the misspelling yet.

 

[jimmydean]

The neighbor who bought the child molesters house has split from his lady and I think a realtor was there yesterday getting info for a listing. He bought it 2 years ago, it will be interesting what he lists it at.

Sold on 09/15/15 for $263,000

Homeboy bought it at auction for $178k, spent less than $10k to flip. Zillow says it's $298k. If he gets $300k, we might sell ours.

 

[Westy]

The neighbor who bought the child molesters house has split from his lady and I think a realtor was there yesterday getting info for a listing. He bought it 2 years ago, it will be interesting what he lists it at.



Homeboy bought it at auction for $178k, spent less than $10k to flip. Zillow says it's $298k. If he gets $300k, we might sell ours.

You should get into flipping jimmydeaning houses.

 

[Pesqueeb]

development taking place by the old Rocky Flats plant

This is how we get zombies.

 

[jimmydean]

You should get into flipping jimmydeaning houses.

I talked to him about it. He has made a lot of money in recent years, but lost his ass in the downturn. He has 5 different crews and has at least 3 houses in process at a time. He averages about $50k take home per house, so about $300k a year the last few. Good money, but it takes capital to start and effort.

I made out better with the car.

 

[ALEXIS_DH]

I talked to him about it. He has made a lot of money in recent years, but lost his ass in the downturn. He has 5 different crews and has at least 3 houses in process at a time. He averages about $50k take home per house, so about $300k a year the last few. Good money, but it takes capital to start and effort.

I made out better with the car.

3 houses at under $200k each... its less then $600k in "stock"; with an inventory turnover of 2.
for a return of $300k per year?
thats an insanely good business. even if you loose half 50% of your capital in 3 flips in a row every few years; you are way ahead.

which reminds me, my famliy was looking at property in south florida a years ago, ended up buying property in another country because of tax reasons.... now I see prices have climbed over 50% in less than 4 years in so-florida.
you guys are down for a new crash anytime now. that kind of return is just insanity; and its not just the US

price-to-earning on property in Lima is about ~22.. thats a fricking 4.5% gross margin, befores taxes and renovations, when banks are paying 7.5% on insured CDs; and mortgage rates are over 9%.....

i have lost all faith in the finance industry. I firmly believe its just a worldwide scam.
so much worthless paper being pumped by central banks; housing bubbles are just "covert" inflation imho....

 

[Pesqueeb]

I got two of those "We will pay cash for your house and close in less than 24 hours!" things in the mail today. This house, just a couple doors down, sold in 3 hours. A coworker bought this place just around the corner for $15000 over asking price. I'm dying for someone to explain to me how any of this is rational.

 

[SkaredShtles]

I got two of those "We will pay cash for your house and close in less than 24 hours!" things in the mail today. This house, just a couple doors down, sold in 3 hours. A coworker bought this place just around the corner for $15000 over asking price. I'm dying for someone to explain to me how any of this is rational.

You're looking for rational in human behavior? Good luck, senor!!

 

[Pesqueeb]

You're looking for rational in human behavior? Good luck, senor!!

Actually, what I'm looking for is for someone to explain to me how I can be making money off these idiots.

 

[SkaredShtles]

Actually, what I'm looking for is for someone to explain to me how I can be making money off these idiots.

Lie to them and TAKE THEY MONEY!!

 

[stoney]

Actually, what I'm looking for is for someone to explain to me how I can be making money off these idiots.

Sell your house for profit. Rent. Wait for *boom goes the dynamite*. Buy new house.

 

[Pesqueeb]

Sell your house for profit. Rent. Wait for *boom goes the dynamite*. Buy new house.

I don't have a strong enough constitution to try and time the market. Besides, the only thing dumber than the real estate market down here is the rental market.

 

[stoney]

I don't have a strong enough constitution to try and time the market. Besides, the only thing dumber than the real estate market down here is the rental market.

Well, there you go.

 

[ALEXIS_DH]

I got two of those "We will pay cash for your house and close in less than 24 hours!" things in the mail today. This house, just a couple doors down, sold in 3 hours. A coworker bought this place just around the corner for $15000 over asking price. I'm dying for someone to explain to me how any of this is rational.

we are too far down on the feeding chain to benefit from that. crumb snatching is the most we can aspire to.

alexis_dh´s current theory of real world macroeconomics:

1) central banks pump voracious amounts of cash under the pretense of dynamizing the economy.

2) financial gymnastics and a system of perverse (for those outside the cartel) incentives get the money allocated not to the productive economy; but to the financial "industry".

3) housing prices are not counted for inflation purposes; thus central banks keep pumping cash while nominal inflation is still in check. cash gets allocated to the housing market where pumped cash becomes newly created "wealth" instead of actual inflation.
carefully timed operators short the market and convert the newly created "wealth/cash" into less developed (and future valuable land) or other financial instruments/positions/leverages.

4) wage-earning idiots mortgage their souls for a piece of the newly acquired "wealth" in the form of overpriced housing; since "nominal" inflation appears to be lower than the housing prices increase (before market corrections). which actually is a perfectly rational decision, given the uncertainty and lack of complete information.

5) the market stays irrational long after most people can stay liquid. careful operators know how to time the market and collect their profits, clean and tidy and free from further scrutiny.
operators in the cartel who are not careful enough, get bailed by the goverment in the worst case scenario.

rinse and repeat.

moral of the story. should have gone to finance school in the states, and get a job at a central bank instead of engineering and working peddling cars for mercedes-benz for single digit bottom lines.
central banks and investment banks; thats where the magic of farsical wealth creation and comission extortion happens.

 

[jonKranked]

I got two of those "We will pay cash for your house and close in less than 24 hours!" things in the mail today. This house, just a couple doors down, sold in 3 hours. A coworker bought this place just around the corner for $15000 over asking price. I'm dying for someone to explain to me how any of this is rational.

i always thought the "houses for cash" were generally people looking for houses to rehab/flip

 

[SkaredShtles]

<snip>
moral of the story. should have gone to finance school in the states, and get a job at a central bank

I did the 1st part and received a degree in Finance. But realized about 1/2 way through my junior year of university that I wanted NOTHING to do with an industry in which it was normal to wear a suit.

 

[Pesqueeb]

i always thought the "houses for cash" were generally people looking for houses to rehab/flip

Oh, they are shifty as fuck, for sure. I just remember we would get metric shit tons of these things in the mail last time the market got stupid. I suppose they are looking to prey on desperate people who are in over their heads.
The other metric I like is how many under 30 somethings I know with, or getting, real estate licenses. That number is also on the rise near as I can tell based on anecdotal evidence.

 

[ALEXIS_DH]

I got two of those "We will pay cash for your house and close in less than 24 hours!" things in the mail today. This house, just a couple doors down, sold in 3 hours. A coworker bought this place just around the corner for $15000 over asking price. I'm dying for someone to explain to me how any of this is rational.

its not that bad actually

asking price for this run down house (lot is under 2000sq ft) in the slums in Lima is $385K, in a neighborhood where the average income is well under $5k per year.
http://urbania.pe/ficha-web/venta-de-casa-en-la-victoria-lima-5-a-mas-dormitorios-3824587

Salaries are 1/3 of those in the states. Adjusted for purchasing parity, that crackhouse would be over $1million in the states

Once the market crashed 10 years ago in the US/Europe; hordes of newly minted money came to shore in developing markets... once we crash and burn; the money will flow back to the states/europe.

 

[rideit]

I imagine that will affect Mercedes sales in La Molina...

 

[DaveW]

@ALEXIS_DH that's no worse than down here in NZ.
Auckland the average house price is now over the million dollar mark at (in august last year) $1,013,632
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11704671

The average income is $48,800.
https://www.careers.govt.nz/jobs-database/whats-happening-in-the-job-market/who-earns-what/

For 5 times the average income you now cannot even get a studio apartment unless you get very very lucky.
Of course if you don't already have a heap of cash for a deposit you are screwed for trying to save for a deposit, rents have gone through the roof as well, with people on average income or less now spending an average of 54% of the take home pay on rent.......

 

[Toshi]

Sounds like Boulder. Or Seattle. Or the Bay Area 10 years ago (worse now)...

 

[ALEXIS_DH]

@ALEXIS_DH that's no worse than down here in NZ.
Auckland the average house price is now over the million dollar mark at (in august last year) $1,013,632
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11704671

The average income is $48,800.
https://www.careers.govt.nz/jobs-database/whats-happening-in-the-job-market/who-earns-what/

For 5 times the average income you now cannot even get a studio apartment unless you get very very lucky.
Of course if you don't already have a heap of cash for a deposit you are screwed for trying to save for a deposit, rents have gone through the roof as well, with people on average income or less now spending an average of 54% of the take home pay on rent.......

that´s inflation, not called inflation.

 

[Pesqueeb]

"All of this has happened before, and all of this will happen again"

 

[rideit]

Not quite sure what the takeaway is to that article. It is basically saying "we may be doomed, but it might be OK"...

 

[Westy]

Not quite sure what the takeaway is to that article. It is basically saying "we may be doomed, but it might be OK"...

Things are like they were before, but in a completely different way.

 

[Mo(n)arch]

Does someone know a guy like Michael Burry? Like when is the time to do the next big short?

 

[SkaredShtles]

Does someone know a guy like Michael Burry? Like when is the time to do the next big short?

Never try to time the market. That's a fool's errand.

 

[Adventurous]

Things are like they were before, but in a completely different way.

We are going to get fucked in a new way this time.

 

[Mo(n)arch]

Never try to time the market. That's a fool's errand.

I know.
All you can do is trying to have no mortgages or investments when the crash happens and then try to ride the way up until the next crash.

 

[jimmydean]

I have a feeling the housing market might crash before the used car market, but it is a close race at this point. With the neighbors house on the market, it will be interesting to see where it lands. He bought it barely a year ago for $268k, he has it listed for $310K hoping for a $300k+ sale. Not bad for only living in it a year and have done NOTHING to it.

 

[kidwoo]

I don't know what you guys are so worried about. In 2007/2008 the lending climate was created by a chief executive who was a born rich frat boy who got credit for being a business man even though everything he touched turned to shit. He didn't understand that letting the markets run wild came with consequences.


It's a totally different oversight environment these days.

 

[SkaredShtles]

I know.
All you can do is trying to have no mortgages or investments when the crash happens and then try to ride the way up until the next crash.

That's exactly the definition of timing the market. And it's a fool's errand. If your timeline is not long term and you haven't got the guts for it, just get out of the market and DON'T LOOK AT IT ANY MORE.

 

[jimmydean]

That's exactly the definition of timing the market. And it's a fool's errand. If your timeline is not long term and you haven't got the guts for it, just get out of the market and DON'T LOOK AT IT ANY MORE.

I failed at it twice. Bought high ('00), sold low ('03). Bought low ('09), sold lowerer ('10).

 

[Adventurous]

That's exactly the definition of timing the market. And it's a fool's errand. If your timeline is not long term and you haven't got the guts for it, just get out of the market and DON'T LOOK AT IT ANY MORE.

I failed at it twice. Bought high ('00), sold low ('03). Bought low ('09), sold lowerer ('10).

You don't need to time the market, you just need to time @jimmydean. Whatever he does, do the opposite.

 

[SkaredShtles]

You don't need to time the market, you just need to time @jimmydean. Whatever he does, do the opposite.

I think this could apply to a lot of other topics, too.

Just do the opposite of @jimmydean. I like it.

 

[jimmydean]

You don't need to time the market, you just need to time @jimmydean. Whatever he does, do the opposite.

The first one was impulse (never a good choice) and the second would have worked out in the long run, but I sold it when we split since she couldn't afford it when I left.

<edit> Bought @ $176k in '09, sold for $155k in '10, Zestimate®:$288,306



<edit2> Sold on 03/27/15 for $220,000, was built in '06 and sold for $235k new. Interesting fluctuation in that townhouse.

 

[SkaredShtles]

The first one was impulse (never a good choice) and the second would have worked out in the long run, but I sold it when we split since she couldn't afford it when I left.

Case closed.

 

[Mo(n)arch]

That's exactly the definition of timing the market. And it's a fool's errand. If your timeline is not long term and you haven't got the guts for it, just get out of the market and DON'T LOOK AT IT ANY MORE.

Well, I didn't mean shorting anything, but maybe you can educate me a little.
My idea is the following:
I will not get into the share or real estate market in the next time as it seems like we are getting closer to the next bubble and I don't have enough money to get into, especially real estate.
But after the bubble bursts, the market should start to raise again. It could obviously fall even more, but in the long term it should rise again.
What is the definition of long term anyway? 10 years?

Or am I completely wrong?