Housing Market

[coolhand]

http://tinyurl.com/6lob5

Some postive comments regarding the housing market.

The testimony on the hill last week may have been the needle coming out. The fed minutes come out next week. Based on the reaction of the last minutes it should be an interesting week. The surprise increase in CPI even with the Fed fuzzy math may be a signal of things to come. Just tell us what neutral is? When are you going to stop? What does measured me? Mr Bubbles has wrecked the market over and over again. His retirement is something I am looking forward too. He started talking in a way you can not understand him in the 80s. I would love a Congressman to say Could you please talk in plan English please?

[pyriel]

When I start reading something like this, it means that we are in a hump of a bubble. Everything is still hunky dory and consumers' lust for real estate will not be satiated. The Feds will try to slow it down by raising rates (they are already doing that). So, I am looking at 2007 for the bubble to happen. My last real estate purchase I will make is for this year. I will keep cash in hand for 2006 and 2007. The best bargains usually takes place on a bubble. I can't wait....

Pyriel

Yes, when you hear it is different this time...time to build some cash up because a pain is a coming. Looking for the blue light discounts!!!!

Last bubble people were mailing their keys to the bank and walking away.

I actually see the bubble to burst early 2006. Once those ARMs interest rates start kicking up along with credit card interest rates an extra $200-500 a month in interest payments are going to wreck a lot of people.

No wonder no one wanted the Fed Job...they do not want to be the one being remember for the largest financial collapse in our history...tick toc, tick toc....the bills are coming due.

[pyriel]

My friends who are appraisers and real estate agents actually wargame the possibility of 2006 being the year for the real estate. However, we gave up that notions due to the feds rate increase. They are so slow and so little at a time. The demands has not been filled andit will take at least a yearfor that to happen. This is the reason why we pushed back our timetable to 2007-2008. I'm hoping to get my mountain and oceanview house at that time.

Interesting! I have been looking around for real estate myself. Mostly land outside growing cities. Have you and your friends taking into account home equity line of credits and credit card debt? Also, people owning two, three and even 12 houses and carry trading interest rates?

I find real estate easier to figure out then the stock market especially raw land. I have cashed out of six properties this year due to raising property tax and insurance premiums. Four of the houses I did not even need to advertise. The first house I put on sale for $385,000 and it sold for $415,000 the first weekend. 30K over the asking price. Five months later the new owners (who did not even move in or stayed one night) sold it for $480,000. The did some light landscaping and repainted the walls horrible colors; purple, orange, red, green in different rooms. Really look horrible to me.

Anyway good talking to you. Where are you looking to buy? I own two houses at 3000 ft with a view of oceans...so I have two for ones. 3000ft is about perfect living I have found.

Thought this would interest you:

February 18, 2005 -- News - Wholesale prices were up 0.3 percent for January, but the so-called "core" inflation rate (minus food and energy) was up 0.8 percent, the biggest monthly rise since December 1998. On this news, the 30 year T-bond dropped a full point at the opening. After all, we're talking about an annualized inflation rate of almost 10 percent. --Richard Russell


The fuzzy math and emergency fed rate is starting to accelerate.

[pyriel]

Dr_Dubious wrote:
Interesting! I have been looking around for real estate myself. Mostly land outside growing cities. Have you and your friends taking into account home equity line of credits and credit card debt? Also, people owning two, three and even 12 houses and carry trading interest rates?

I find real estate easier to figure out then the stock market especially raw land. I have cashed out of six properties this year due to raising property tax and insurance premiums. Four of the houses I did not even need to advertise. The first house I put on sale for $385,000 and it sold for $415,000 the first weekend. 30K over the asking price. Five months later the new owners (who did not even move in or stayed one night) sold it for $480,000. The did some light landscaping and repainted the walls horrible colors; purple, orange, red, green in different rooms. Really look horrible to me.

Anyway good talking to you. Where are you looking to buy? I own two houses at 3000 ft with a view of oceans...so I have two for ones. 3000ft is about perfect living I have found.
I don't have the luxury of looking for properties outside the city since I live on an island that is only 55 miles long and 25 miles wide. I've been looking at Hawaii and California and they are all asking too much and the cash on cash return is just not there. I'm wondering if you had your houses appraised before you tried to sell them. It would have been a good idea to fix them up before selling them which by now you know that it cost you almost 100k for not doing it. I am concentrating on fixer upper right now since you can get them 65 cents to a dollar. I am also buy and hold passive income type. I was in Hawaii a couple of weeks ago and those houses are way too expensive. They are being appraised for about 350k but people are buying them for 450k. It is ridiculous. I'm always looking at newspaper, MLS listing and calling banks for their foreclosure so that I always know the median range of the real estate here. 3000 ft with a view of oceans? I like that. I don't buy land since I can't make money of them.People tell me that I could once it appreciates. To me that is not investing, that is speculating. Before I buy something I always do the numbers first and the rate of cash on cash return must be there.

Yes, after I sent the post I realized you probably were looking on staying on Guam. The Islander types do not like to get to far from home. I do not blame you one bit.

I have down fairly well with raw land. You find a fast growing city and purchase land a couple miles out and let it grow to you. I did that in Vegas, Hilton Head, San Antonio and a couple other places. The property tax is a lot lower and you do not have to worry about people breaking into your buildings. Vegas I rented the land out to a horse training place and did pretty well. I am hanging onto a couple thousand acres now but I am looking to sell to a developer.

Have you seen the futures? It appears my early 2006 predication may be spot on.

One house I have with the ocean view in the mountains is in Bateman's Bay, Australia and the other is in Costa Rica. My house in Costa Rica I can look out my master bedroom and see the Pacific Ocean on one side and the Atlantic on the other it is one of the most beautiful places on earth. I am on the Gold Coast right now looking at some land. However in Oz I need to put 70% down being a bloody Yank. I need to get some scratch together for that.

Good luck with the Guam search. I looked there a couple years ago and got hit with three typhoons in a month. Was fun. A little to humid for me thou. I welt.

[pyriel]

Hahaha 3 typhoons in one sight seeing? I believe you. I also have properties in the Philippines with great ocean and mountain view. I love San Antonio.

I got a Hong Kong Bank Branch in Manila that pays me 11.75% interest on a 1 year CD.

Their exchange rate is great for the mighty U.S. dollar. However, poverty is getting really bad and they have those dudes with dreadlocks that want to kidnap you. They have the gambit ofdisaster, typhoons, volcanoes, earthquakes, etc, etc. Iwas looking to buy in Bagio. Thatbasically got wipe out during the earthquake prior to the volcano.

I will be in Bangkok in two weeks to look around and get some clothes made.However the pollution is getting pretty bad. 15M people in a city the size of San Antonio. Americans can now purchase land there but you have to build a building within two years. Not up for that kind of commitment yet. Plus if you get a squatter then own the land after three months. Great system. No thanks. Love riding on the Tuc Tucs thou.

I own land outside Austin, damn the tech bubble (should of sold in 1998)and outside San Antonio on the North West side...the other side is gang warfare, baby. Like Charleston SC there is a good side and a very bad side. I guess that is true everywhere now that I think about it.

Think about raw land thou. Great investment. Easier to flip and less tax hassle. Had land in Lancaster, PA. Sold it to a car dealership for 450K and they turned around and sold it to Walmart 14 months later for 1.2M. Damn! Can not complain I bought the land for 98K two years prior to that.

[smiley]

Mr. D, Just curious, how do you research your out of town properties, do you actually do on-site inspections or do you have RE agents in different areas, internet????? I have just started to flip some properties, but would like to purchase some land also. Do you have any good internet sites for searching different areas? Thanks for your help, it sounds like you have done quite well. Not to mention having a wealth of knowledge!!!

Smiley

[grandma]

An interesting article "More sell homes to lock in Gains' today in Yahoo News

http://news.yahoo.com/s/usatoday/20050617/bs_usatoday/moresellhomestolockinbiggains

[pyriel]

smiley wrote:
Mr. D, Just curious, how do you research your out of town properties, do you actually do on-site inspections or do you have RE agents in different areas, internet????? I have just started to flip some properties, but would like to purchase some land also. Do you have any good internet sites for searching different areas? Thanks for your help, it sounds like you have done quite well. Not to mention having a wealth of knowledge!!!

Smiley

Mr. D actually goes out and live within the place. For him to get 11 something percent in the Philippines, he had to exchange his dollar into pesos and place them into time deposit account. I've seen 110% return within 7 years in the banking system there. However, dollar to pesos now is about P54.50 to a dollar. Buying back the dollar will run you P58.00 to a dollar. So as you can see, you may get 11% return, however, you have to spend your money there since you will lose some of the gains you made by buying the dollar back.

Just to give you a heads up, to borrow money in that place, interest rate is about 25%. Can you imagine paying paying that much interest here? That is why only the rich gets richer and the poor gets poorer there. I know, I came from there.