Housing Bubble Bursting?

[Mike Simpson]

"79 pages ....Is that a record yet for longest thread???"

I was beginning to wonder the same thing Robert. I have a hard time saying this & sticking to it (I always get sucked back into the debate somehow), but I'LL TRY to make this my last post on this thread as I feel it's really going nowhere--everything is just getting rehashed & there's nothing new of substance being offered that won't just be debated for two more years. I'll also try to make it a good post.

"News is news, good or bad, positive or negative."

I'll challenge that, and say that my disagreement goes a long way to explaining why my son jokes that the mute button is worn off my channel changer. I pick up a paper anymore, and riffle through the pages..."Garbage, crap, rubbish, nonsense...oh here's something I can sink my teeth into--Equity REIT price index versus CPI" (fact not somebody elses fiction--I'll draw my own conclusions thank you).

"A competent general (field commander) wants to hear from all his officers (junior and senior), especially those who do not agree with him. At least he can say he has an informed opinion after hearing what everyone has to say."

I feel like I should salute or something! "A competent general (field commander)" will relieve of duty (FIRE) incompetent counsel after a period. 2002 - There gonna be coming up THAT road General, within the next year or two. 2003 - a couple more years...they're gonna be coming up that road General...sure as shootin...we better get ready. 2004 - I give it another two years general & WE KNOW they're comin up that road. 2005 - Well...looks like our sources were a little off General, but in another three years...they just have to come up that road. 2006 - STAY THE COURSE GENERAL...it's the only logical road they can come up.

"Can what happens in one asset market class affect value on another different asset market class? Local, regional, national?"

Sounds like a pretty open ended questions that could carry a discussion for another 79 pages. However, real estate like any other asset class, is cyclical and very location specific. As a general rule, the value of real estate goes up consistently and predictably. Real estate has a low correlation with other asset classes. Simply put, "correlation" measures the extent to which different invetment returns move together over time. In this particular cycle the stock market and the real estate market have had a very low correlation (though that's not always true...I believe it to be the norm).

"I for one enjoy reading the good, the bad, the negative, the positive, the educational, the unique, etc."

Ahhh...an open minded kinda guy...I like that. However, watch who you hang with...you know the ones that formulated a preconceived notion 4-6 years ago, and come Hell or high water are sticking to it.

Enter "No Housing Bubble" into your browser & read away. Some of the stories that come up are a little dated (but so's this discussion)...others are up to date & more current.

I'd scan the information I've collected & present it here, but what would be the point? I'd never convince the doomsayers, and I'd have to stay & defend my stance for another four years. No thank you...I'd rather spend my time more wisely & profit from what I've learned (profit = a cardinal sin amongst the Crusaders)--especially if someone else came up with an idea. Within the last two days...It's been said, 'I advocate unethical behavior & recommend people quit.'

Ridiculous?

-Mike

 

[DTB]

Along those lines Moh:

Don't move into a senior center if you want to be around young minded people.

Stay away from a hypochondriac convention if you want to stay feeling good.

And if you want to advance, stay away from people waiting for the sky to fall.

I'm sure Mike S. and I see our fair share of adversity, in our lines of work. We choose not to dwell on it.

And yes I would think the best way to avoid homelessness is to run in the more affluent circles.

Remember it wasn't "The little engine that COULDN'T".

 

[Randolph Kinney]

Well, so much for the open mind and informed opinion. Nero and Adolf didn't want to hear about the negative either.

Are asset classes in general insulated from one another? A change in value in one class has no real effect on value of another class?

Can there be dynamic coupling and decoupling of asset classes over time?

 

[Bobby Bucks]

79 pages ....Is that a record yet for longest thread???

Robert that's a good question. Bubble threads are a mile wide, but not that deep, not that many participants or readers

I think the record will be set with Austin's post today titled. "The Stuff Is About To Hit The Fan Folks"
It will bring in the active and the passive....plus once our witch hunting buddies start arguing USPAP and execution methods you can break out the popcorn and beer.

 

[Steve Owen]

People are often somewhat different than they seem on the net

"Can what happens in one asset market class affect value on another different asset market class? Local, regional, national?"

Sounds like a pretty open ended questions that could carry a discussion for another 79 pages. However, real estate like any other asset class, is cyclical and very location specific. As a general rule, the value of real estate goes up consistently and predictably. Real estate has a low correlation with other asset classes. Simply put, "correlation" measures the extent to which different invetment returns move together over time. In this particular cycle the stock market and the real estate market have had a very low correlation (though that's not always true...I believe it to be the norm).

Sometimes Mike comes off like a promoter. I suppose that is the expected result of the work he does. Appraisers cannot be advocates or promoters in most cases. I believe that is the basis for much of the apparent rancor that happens on threads about housing bubbles. However, this part of Mr. Simpson's posting proves that his point of view is not that far removed from that of the typical, competent appraiser. Having done the internet dating thing, I know that the written word, posted in a e-mail often conveys just one point and does not necessarily describe the person posting. It takes a lot of time to get any kind of valid feeling for the character of someone through the written word... there are no signs, such as body language, therefore it's a bit like doing a drive-by. Over time, I have started to feel like I "know" some of the posters on here, but you really don't... the main thing you know is whether the things they post are interesting. Please come back again, Mike... even if you don't come back to this thread.

Now, the real reason I posted was to comment on this:

Real estate has a low correlation with other asset classes.

While that is true, I suspect that the prices of improved properties have a fairly strong correlation in most markets to the prices of construction materials, and possibly a strong, although somewhat weaker correlation, to other commodities as well.

(Talk about an idea that could carry the thread off-track for another 79 pages.)

 

[Couch Potato]

Only page 20.

79 pages ....Is that a record yet for longest thread???

You will find long threads easier to read if you reset your preferences to show 40 posts per page. :new_smile-l:

 

[The Warrior Monk]

While that is true, I suspect that the prices of improved properties have a fairly strong correlation in most markets to the prices of construction materials, and possibly a strong, although somewhat weaker correlation, to other commodities as well.

The big class to keep an eye on is energy. We've been fortunate over the years to have access to inexpensive, nonrenewable energy sources. That may change in the near future, since supply will not be able to keep pace with demand. Since everything we buy, from food to clothes to electric and heat, is affected by energy prices, disposable income is reduced. It also has the effect of increasing interest rates and thus prices paid for real estate. That affects not just local markets, but national markets.

The economic effects of the lack of cheap energy sources has been very bad on the real estate market in the past.

 

[Mike Simpson]

"Please come back again, Mike... even if you don't come back to this thread."

I appreciate that Steve, and I'd like to explain why I both get sucked back into a debate & why I take my cyber ball and go home in a huff for extended periods of time.

Here's a prime example:

"Nero and Adolf (sp) didn't want to hear about the negative either."

Spineless comments like the above are the reason. In the past few days I've been back...I've been compared to Nero & Adolph by one, and it's been said by another that 'I advise people to be quitters and promote unethical behavior.'

That's not debate...that's a Chicken $#!+ full on frontal attack. It's not intelligent...it's non-productive, and it's indicative of the frustration exhibited by those who're use to being so wrong for so long (housing bubble).

More & more people seem to be becoming aware of cliques which have formed on the Forum that hold an evident hatred for anyone & everyone from other industries, and for people who disagree with them & their narrow viewpoints. Some are over the edge in this respect. In fact...I've complained about a couple Moderators in the past regarding this very subject (probably explains why they wait until I respond to an assualt before issuing the warning [I must have the record for being warned]). I think this also goes a long way to explaining why the majority of regular posters on the Forum seem to believe in a housing bubble (because, those with the most posts & keyboard control believe in a housing bubble).

However, all the caustic attacks & antagonistic remarks in the world won't change the facts...STILL NO HOUSING BUBBLE!!!

Wonder who'll be the first to post about a housing bubble in 2007? Wow...it's de-ja-vu all over again!...same story...different year (we keep going...it'll be a different decade).

-Mike

 

[The Warrior Monk]

More & more people seem to be becoming aware of cliques which have formed on the Forum that hold an evident hatred for anyone & everyone from other industries, and for people who disagree with them & their narrow viewpoints.

Mike,

I disagree with your viewpoint because you don't provide any support for it.

The only "support" that I see you throwing out is that you are making money in RE. That's nice, but it's meaningless in the question at hand. Talking about Crusaders, cliques, and other things is a nice diversion, but howsa about some hard evidence? Convince me that things like energy prices, increasing interest rates, and oversupply in major markets across the country don't have an effect on value...I'm all ears.

Continually stating there isn't a housing bubble doesn't change anything either.

 

[Mike Simpson]

"Continually stating there isn't a housing bubble doesn't change anything either."

David-

We have arrived at the point of silly repetitive nonsense.

You're telling me the fact that Bubble Brains have carried on for years-n-years about an impending bubble, and the fact it's never materialized (and probably won't) doesn't change anything?

C'MON!

Bubblist who continually warn about impending disaster run the risk of damaging their credibility as the years tick by, and their predictions never come to fruition.

Bubble Heads can bang, bash, challenge, debate, and discredit their counterparts, but as long as the BIG BUBBLE (BANG) never POP's...the damage to their reputations grows with time.

In fact, it might be said that there's a growing 'Credibility Bubble.' Reputed experts who're continuously wrong--come under greater & greater scrutiny.

The longer this debate lives on without credible results...the less Bubblanese will be taken seriously. In fact...they'll be ridiculed at in the future (six years & counting...four on the Forum).

-Mike