Housing Bubble Bursting?

[Mike Simpson]

Drums keep pounding a rhythm to the brain...

And the beat goes on, the beat goes on.
Drums keep pounding a rhythm to the brain.
La de da de de, la de da de da

HI EVERYBODY!...miss me?

It's good to see some things just never change! (Except ole George...who seems to be gettin more cantankerous!). It's good to know in this big ole world of change...you can just count on some things never changing (Hi Dee Dee...long time, no correspond!).

Yup, somethings just never change...except the old Icons--I sure miss those--these aren't nearly as fun!

No Bobby...I wasn't out collecting rent (it comes to me). I've been analyzing what areas are HOT, not what areas ARE NOT! I'm out looking for opportunity...not disparity! Explains my absence.

Unlike some...I don't have an allergy to money. Though I was raised by Bible-Belters...I don't equate making money & pursuing the American Dream with evil. I'm not a Socialist--Comrades (Hi Pam!...congratulations on your promotion to AF Hostess..."any Realtor that prefers to tell it like it is is more than welcome here)."

Reminds me...what happended to my 'Crusader' post?...it was funny!...musta hit a nerve.

Well...I'd love to stay & perform free review appraisals, but I gotta run. Just wanted to stop in to see if my predications last year would come to pass, and I can see they have (Bubble Drum keeps pounding through '06'). My future as a psychic is secure! I'd like to make another prediction as I depart...Bubble Mania on the Forum will remain alive & well right through to '07'.

Alf Wienersaying!

-Mike

 

[George Hatch]

Still got nothing, huh?

 

[Randolph Kinney]

Mike, Roger, good news for all those gamblers (investors) who want to lay off risk of owning a house. Why sell and move? Why buy and move? Someone has come up with real estate derivatives to spread or hedge the risk of owning real estate.

"Macro Securities Research, a company affiliated with Robert J. Shiller, the Yale economist, has reached an agreement with the Chicago Mercantile Exchange to list pairs of derivative instruments that are essentially index funds linked to home prices in certain markets. One instrument in each pair will rise as its market index rises; the other will rise as the same index falls. That will let investors bet on the direction of housing prices. Similar, but less sensitive, vehicles are being offered by HedgeStreet, a firm in San Mateo, Calif., that offers small-scale derivatives speculation online. "

Futures Contracts for Ten U.S. Cities to Be Based on Case-Shiller Indexes®
CHICAGO, Sept. 27, 2005 – CME, the world’s largest and most diversified futures exchange, today announced that it has signed a licensing agreement with MACRO Securities Research, LLC (MSR), a financial innovations firm located in Madison, New Jersey, dedicated to the creation of instruments designed to unlock liquidity in new asset classes, to launch derivatives based on ten of the Case-Shiller Indexes® (CSIs), published by Fiserv, CSW Inc. (CSW), representing movements in housing price values. These futures contracts are scheduled to launch in the second quarter of 2006.

The ten cities include Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York Commuter Index, San Diego, San Francisco and Washington D.C. CME will also list a composite index of the ten cities for trading. The contracts will be settled in cash based on the value of the CSIs for housing.


I really like this idea. You don't have to pay the cost associated with real estate or its transaction (buying and selling and moving). Now you can truly say, "Put your money where your mouth is."

Now that you can play real estate like any commodity or financial vehicle, you can truly say, "The trend is your friend."

 

[Randolph Kinney]

Home Price Forecast for San Diego

Wow! According to Case-Shiller-Weiss, the forecast for the San Diego market area is going down! See attached PDF.

 

[JSmith43]

You gotta love the market. It almost makes me want to get a securities license and go selling derivatives door the door in CA and FL!

 

[DTB]

I AM NOT LOOKING TO LAY OFF ANY RISK.

This is an investment for those who are convinced Lawrence Welk is coming to their town.

Let's here how the bubblers are cleaning up with these.

a von and a two

 

[JSmith43]

I could see how a derivative balanced mortgage portfolio based upon home values in certain cities would be a smart strategy for an investor in a prosperous area hooked strongly to one industry or resource.

Not so much any more, but the fortunes of Boeing could still create positive and negative ripples, if not shock waves in the NW.

 

[Randolph Kinney]

Mike:

I AM NOT LOOKING TO LAY OFF ANY RISK.

Hmmm, why buy or sell if you are not influenced by risk? You keep challenging the "bubblers" insisting they should sell to avoid the risk of losing some of their equity, did you not?

2 ECONOMIC choices.
1. Liquidate, invest 600K elsewhere and rent.
2. Stay and ride your 600K down to 510K using the agreed upon definition of a bubble.

It does seem silly, doesn't it?

My premise which Roger stated better than I did, asks isn't there a time when renting is preferable to owning and vice versa. Economically speaking.

Appraisers who see the peak, could sell, transition into an equivalent rental at lower overall costs and preserve their capital.

Appraisers who see the run up coming could move back in at a lower price point and ride the run up.

Emotions of home ownership aside, it is akin to a play on a rolling stock. the opposite is buying at 100K, watch the runup to 600K, and staying on the ride bact down to 400k and celebrating how well they did.

It seems to me Mike, you are arguing to buy and sell based upon your firm belief that the price of your home is going up or down and renting or not renting.

All I am doing now is showing you that the investors, mortgage companies, banks, hedge funds, etc., all have a way to play specific real estate markets for housing. Who knows, maybe Fannie and Freddie will be purchasers of this product since they have enormous portfolios of mortgages, which they have created derivatives themselves and sold them to investors.

You too can play the game of risk management with the "big boys" Mike!:new_popcornsmiley:

 

[george foster]

Not a matter of "if" anymore...

Go read the posts on TheHousingBubble.com blog...

It's not a matter of "if" anymore...

Checkin' that declining value box has gotta be a b*tch for Skippie.

 

[Mike Simpson]

"The Gambler"

Mike, Roger, good news for all those gamblers (investors) who want to lay off risk of owning a house. Why sell and move? Why buy and move? Someone has come up with real estate derivatives to spread or hedge the risk of owning real estate.

Old news...I posted something similar more than a year ago & invited Bubblicans to put their rent money where their mouth was.

"Still got nothing, huh?"

I'm loaded Baby! One investment (gamble...psych) made me $60k last year, and all I did was mow the lawn & clean the inside.

One investment is making us better than $1,000 a week (again...we did very little...except buy in the path of progress).

Yet another has made us better than $125k (that's takin some elbow grease though).

We have 8-12 transactions in the pipeline @ any given time.

Not bad for a "gambler" huh? Has nothing to do with intelligence, with education, with one's ability to read the markets, with talent. NOooo...just put your money on black, red, or green & LET ER RIDE!.

And while my clients have already made more than a million in combined equity...I shouldn't be bragging (least not here). I'll be accused of "caring about nothing but money," or be admonished (again) for "giving dangerous advice" (actually recommending people buy a home).

I like Otis' signature..."just because you have a license doesn't make you an appraiser." I'd just go one step further...'just because you have a license...doesn't mean you understand the housing markets.'

-Mike