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Housing "Bubble" - More guesses.

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George W Dodd

Senior Member
Joined
Jul 9, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
One thing is for sure: when all the "experts" agree then the outcome is assured --- the opposite! 8O
 

Stephen J. Vertin MAI

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
About 2 or 3 weeks ago I was watching CNN. The story reported the U.S. allowed 31 million people to immigrate into our country in 2000. It was the largest percentage population/immigration ratio in our country's history. It said it was about 20 percent larger than the last largest immigration wave during 1900-1901.

Thirty one million, that is L.A., Chicago and Dallas metro areas. I believe this current round of buying is demand driven. Simply based on population surge. I do not think it is a bubble. A lot of immigrant families are willing to pool resources. Additionally a lot of the newer immigrants are highly educated. IMHO I believe this will last a while. Property values have nearly doubled in my neighborhood since I bought my house in 1998. It is simply increditable.

Steve Vertin
 
B

Bemis Pownall

Guest
I can remember not long ago all the respected talking heads who said that the stock market would be higher by year end.

I still wonder which year they were taking about?

If the housing market resembles the DOW or Nasdaq...oh my gosh we aint ever gunna retire.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Just got off the phone with a LO with a major national company - She handles appx. 25% of the U.S. She said that her company is beginning to see 9/11 fallout. It's taken 9 months but its beginning to show up on her loans. The scenario is as follows: Major companies either lay off very significant numbers or closes down, leaving large numbers in the town unemployed. Therefore, there's no one to buy, so housing prices begin falling.... and falling. In the major cities it's less a factor unless they are heavy Telecom, Tech, etc. , but even now its showing up in some areas. However, the tax people don't believe it. Every appraisal I've done this year has been BELOW the tax appraisal value yet every tax appraisal has gone up.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Tax appeals:

AH1 A possible short term business venue :roll: :roll:
 

Stephen J. Vertin MAI

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
Ok, I will bite, what is with all the doom and gloom? A housing bubble is different than total economic collapse. If that happens we, as the human race, not just appraisers, are in big trouble. As all good appraiser know value is supply and demand driven. I agree with the Fed, immigration coupled with low interest rates is fueling a boom. Where do 31 million people live? They demand housing. Furthermore, the 31 million figure, in 2000, was only the climax of allowance. There was a build up to the number and than a gradual decline. Sure there are always pockets where problems exist but as a whole, most areas are seeing double digit appreciation. It is not magic. It is demand driven in an economy experencing record low interest rates. Throw me some facts. Why is the sky falling?


Steve Vertin
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Steve,
I care not whether the sky is falling or the grass is growing and roses bloom.... actually appraisers have historically done slightly better in downturns than booms 8O ... since the REO/Foreclosure appraisal gets followed by a sale~ :D 8) JUST Gimme ACTION/Movement in the market... ever notice the similarlity to stock-brokers :wink:

I was not commenting adversely, I merely pointed out that if the county assessors are far enough off in thier valuations as to generate work, then FINE!

I do think that in some areas there will be a serious repercussion as some highly educated (but economically ignorant) folks get the message that pink slips happen. 8O

I have friends in High Tech (particularly Communications) industries that have for YEARS called their profession/positions EFM ... [Easy (errrr) Freaking Money]
names changed to avoid embarrassment
Suzie has historically gotten 3-10% raises every year since high school, Sam has AVERAGED 20% annual raises not counting the bonuses over the last 10 years... Both are writing resumees today and previously considered other folk's financial woes to be entirely due to poor planning. Suzie and Sam both lived fairly close to the edge of their means, investing a pittance here and there, but saving nearly nothing in cash equivalents since they had golden parachutes AND THEY LIKED thier jobs! And the raises kept a comin! Weren't planning on retireing for many a year cause working was F.u.n. Well you know what? 3-6 months pay and a handshake at the door really sucks when the bills come due!

Suzie and Sam's neighbors are all in the same boat, and while there are some folks looking to move up into their yuppy houses, (poor down trodden working folks who saved some cash are moving into the yuppie equivalent buyers old homes) eventually the immagrant boom is going to falter and tho poeple keep having babies more and more are like my parents next door neighbors - living two married folks to a house to be able to pay the mortgage! Chi town may not have had quite the boom found particularly in western and some eastern states, but the ripple effect of recent economic events IS likely to have repercussions...

And the sky couldin fact fall: a ghostly voice sings "Remember the S&L?"

How about that 60% of residential loans being made by only 5 or was it 6 institutions? and to whom are they marketing? Fannie/Freddie? And of those billions of loans how many might have been a wee tad overstated in the good times, which now aren't quite so good, and another pink slip hits a desk, and a nother ones gone and...

Another US bank is coming to a town near you... (which is WAMU by another name) and so on and so on... Wells, Chase, Citi and how many local banks ARE left in your area?

point is that if the players are few, and the loss big it is gonna be the little guy who takes it in the shorts. I sorta resemble that person... I AM concerned! but whadda ya gonna do besides gripe on a forum and squawk at your state reps and senators? :roll:
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Ok, I will bite, what is with all the doom and gloom? A housing bubble is different than total economic collapse. If that happens we, as the human race, not just appraisers, are in big trouble. As all good appraiser know value is supply and demand driven. I agree with the Fed, immigration coupled with low interest rates is fueling a boom. Where do 31 million people live? They demand housing. Furthermore, the 31 million figure, in 2000, was only the climax of allowance. There was a build up to the number and than a gradual decline. Sure there are always pockets where problems exist but as a whole, most areas are seeing double digit appreciation. It is not magic. It is demand driven in an economy experencing record low interest rates. Throw me some facts. Why is the sky falling?


Steve Vertin
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Oops! Sorry Stephen.

Not sure where you live, but I'll bet it's not where all of the immigrants are going.
The influx of immigrants is not a financial boon to my area.
It's beating the crap out of wages in our service and labor industries around Denver. We're seeing those who were once established in many trades losing their shirts and out of work because they can no longer compete.
My experience is that immigrants take care of their own and tend to avoid doing much business other than what is completely necessary with those who are outside of their own circles unless there is profit to be made for themselves.
I suppose my point here is that growth due to immigration doesn't necessarily mean that it's a good thing for everyone in the areas where that type of growth is concentrated.
 
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