Housing prices fall 6+%

[venomous viper]

I understand Real estate real well, but I'd like input as to the financial markets etc. Thanks.

[UtahDan]

Originally Posted by MikeWaters

I would always wonder about CA and other markets (including SLC), "how do normal working people afford homes in those areas?" Mystery to me.

I guess the truth is that they couldn't/can't.

http://money.cnn.com/2007/12/26/real...ex.htm?cnn=yes

The answer is two incomes.

[8ballrollin]

Originally Posted by venomous viper

I understand Real estate real well, but I'd like input as to the financial markets etc. Thanks.

I'm not sure if this question was for me, but if you're asking for sector or position advice, I don't have any. Most of my stuff gets rebalanced every six months and with that I let it be. I do enjoy following macro policy and events, but only as a hobby.

[SteelBlue]

Originally Posted by UtahDan

The answer is two incomes.

And no kids.

[hyrum]

Originally Posted by venomous viper

I understand Real estate real well, but I'd like input as to the financial markets etc. Thanks.

Valuations of common stocks (e.g. price to earnings) relative to US Bonds, real estate and commodities are at a near record low. Those who think the housing debacle will cause the stock market to sink are not considering that. While the economy might go into recession causing trouble in the financial services areas (mortgage arena, most obviously) there are categories of common stocks that are relatively recession proof, and some international economies are doing quite well. Real estate is not as volatile as the stock market but that may forestall a recovery because it takes a LONG time to resolve valuation problems, some people are going to just sit on their property for a long time refusing to take a loss, but may eventually capitulate, creating a drawn-out period with little or no cap gains in those markets that have been most overpriced. People who want to dip their toe in a declining market might do well to study Japanese real estate prices in the 90s.

[Indy Coug]

Originally Posted by hyrum

Valuations of common stocks (e.g. price to earnings) relative to US Bonds, real estate and commodities are at a near record low. Those who think the housing debacle will cause the stock market to sink are not considering that. While the economy might go into recession causing trouble in the financial services areas (mortgage arena, most obviously) there are categories of common stocks that are relatively recession proof, and some international economies are doing quite well. Real estate is not as volatile as the stock market but that may forestall a recovery because it takes a LONG time to resolve valuation problems, some people are going to just sit on their property for a long time refusing to take a loss, but may eventually capitulate, creating a drawn-out period with little or no cap gains in those markets that have been most overpriced. People who want to dip their toe in a declining market might do well to study Japanese real estate prices in the 90s.

This is by far the best post from Hyrum I've read on this site.

[8ballrollin]

bump...

Citigroup (C, Fortune 500) could write off as much as $18.7 billion in the fourth quarter, wrote Goldman analysts William F. Tanona, Betsy Miller and Neil C. Sanyal in a note to investors late Wednesday. If it does, they say, the bank may be forced to lower its dividend by 40 percent.

Citi has about $55 billion in exposure to subprime mortgages, about $43 billion of which are collateralized debt obligations, or CDOs, that have mortgages underlying them.

"We still believe it will be a couple of quarters before the current credit crisis is fully digested by the markets," the Goldman analysts wrote.

Already, Citi has been propped up by a $7.5 billion investment from the Abu Dhabi Investment Authority, a sovereign wealth fund that in late November bought a 4.9 percent stake in the bank.

http://money.cnn.com/2007/12/27/news...ion=2007122714

[NorCal Cat]

Originally Posted by MikeWaters

I would always wonder about CA and other markets (including SLC), "how do normal working people afford homes in those areas?" Mystery to me.

I guess the truth is that they couldn't/can't.

http://money.cnn.com/2007/12/26/real...ex.htm?cnn=yes

Good thing I bought into the market over 5 years ago, huh?

Normal working people don't buy homes here (Bay Area). They buy townhomes or condos, or rent. People that buy into the market at this level here are either DINKS or a single income making 200K plus.

[8ballrollin]

Originally Posted by 8ballrollin

bump...



http://money.cnn.com/2007/12/27/news...ion=2007122714

bump...

JPMorgan’s bid of $2 a share for Bear Stearns represents a gigantic 97.5 percent discount to the $80 book value that Bear Stearns has reported, reflecting the broad view that the fallout from the credit crunch has permanently devastated Bear’s core mortgage operations

http://www.nytimes.com/2008/03/16/bu...hp&oref=slogin