How big is the real estate bubble?

[italiandragon]

now if war is such a good thing and economy benefits ( maybe to sell some more weapons and to recover all the damages ) why don`t we let Iran bombard USA then? It will defintely help the US economy....wow genial idea Duckinla.......whatever...

How come Switzerland and Canada, Sweden, Finland and other countries who never bother to be belligerant as the United States of Angryness , are still so prospeurous?

Whatever.

 

[gmac17]

italian you make no sense.

 

[italiandragon]

italian you make no sense.

read everything before to judge me, I haven`t been the one saying wars are good for economy.

 

[WhoDatDog]

The Nasdaq went from under 1,000 to over 5,000 in just a few short years and then back to 1,000 in less than two years from the top. Very few people came out smelling like a rose at the end of that bubble. ALL people who buy Real Estate when it is the "In" thing to do are getting the worst of it.

 

[Duckinla]

Dog, there are better arguements to make your point than just saying "the fools haven't been burned yet". How about rising mortgage default notice rates?

http://www.latimes.com/business/la-fi-default3may03,1,4444967.story?coll=la-headlines-business

Up 50% in some parts of Southern California.

The real issue is that hardly anyone could default over the last 3 years. With home values rising so quickly, you could solve your financial problems by refinancing or selling the home for more than the mortgage. With rates rising and prices stagnating, that won't be an option anymore. Defaults will skyrocket over the next 24 months.

That being said, it's still hard to imagine prices dropping more than 20% without a huge increase in interest rates. There are too many buyers out there who would be happy to get in at 20% lower prices.

 

[WhoDatDog]

Duck, I have read all of the arguments and have studied bubbles all of my life. Of course, the data looks bad for housing, but it really is so simple....those who make lots of money purchasing things they are not experts in tend to be part of bubbles. The bubble becomes self fullfilling.

Remember the people who used to "day-trade" at lunch? The "house-flippers" are very similar in mindset. The key is that most of these day-traders and house-flippers had very little knowledge and experience in these markets before they started making all of this money.

The bigger problem is why I can't stop posting about it...it is costing me money. I should be digging up names.

 

[JMJ]

nice little article about houses:
http://www.freemarketnews.com/Analysis/224/5267/2006-06-12.asp?wid=224&nid=5267

This article is so on the mark it's not even funny.

 

[VioxxLawyers]

http://www.dnforum.com/f31/oil-peak-its-only-myth-thread-159275.html

This should be in the center of the debate, as we are approaching of a major depression.

Massive unemployment, high inflation, people leaving for the countryside. Exactly what happened in the 30s.

 

[Duckinla]

Will you still have internet in the countryside? If so, be sure and write us from time to time.

 

[Steen]

http://www.dnforum.com/f31/oil-peak-its-only-myth-thread-159275.html

This should be in the center of the debate, as we are approaching of a major depression.

Massive unemployment, high inflation, people leaving for the countryside. Exactly what happened in the 30s.

I have a hard time seeing "massive" unemployment and people leaving for the farms.

 

[Beachie]

Will you still have internet in the countryside? If so, be sure and write us from time to time.

We share a similar sense of humor :-D

 

[GT Web]

read everything before to judge me, I haven`t been the one saying wars are good for economy.

Except they are...do some research for once.

I love it! DNForum is being flooded by complex economic questions...and it is obvious many members of this forum have never taken a basic econ class even though they try really hard to pretend they know exactly what's going to happen.

 

[Duckinla]

I'm in the middle of a very good book right now called "Freakonomics". It mostly applies economics to study criminal behavior.

At one point criminologists noticed that there was a relationship between high crime rates and full prisons. They decided the best way to fight crime was to reduce the prison population.

The author said this was like saying when our team wins the world series the city throws a big party. The best way to win the world series is to throw a big party.