Second Shoe Drops on Housing

[dummass]

Increasing interest rates puts additional pressure on home sales. As predicted by iTulip.

http://www.fieldcheckgroup.com/blog/

[flintlock]

Re: Second Shoe Drops on Housing

Think an 8% Jumbo rate won't but the kabosh on already weak McMansion sales? Tried to explain that to my brother the home builder last year. Dump it I said. "Nah, things will be better in the spring".

[ASH]

Re: Second Shoe Drops on Housing

Think an 8% Jumbo rate won't but the kabosh on already weak McMansion sales? Tried to explain that to my brother the home builder last year. Dump it I said. "Nah, things will be better in the spring".

At a Memorial Day picnic, I met a young lady who was thinking about stretching to buy a house, in order to reap the $8k tax credit. I tried to dissuade her... later sent some charts from iTulip.

[flintlock]

Re: Second Shoe Drops on Housing

I'm trying to talk a good friend out of making what I think would be a huge mistake in buying an overpriced, run down 45 year old house in Atlanta. For some reason, his wife has it in her head that it is a steal, despite the fact its about to go into foreclosure and its been on the market for 2 years sitting empty. They'd have to do a short sale and I don't think it will ever happen thank goodness. They aren't exactly the kind who pay attention to what is going on in the world if you know what I mean? They aren't on Itulip.com every night. He is on the verge of losing his job and yet she still wants to buy the house.:eek: People get so wrapped up in the emotion of buying a house sometimes they lose all reason. I tried to explain to her that many think the bottom hasn't hit yet in the housing market. She looked at me like I was wearing a diaper on my head.

[drumminj]

Re: Second Shoe Drops on Housing

At a Memorial Day picnic, I met a young lady who was thinking about stretching to buy a house, in order to reap the $8k tax credit. I tried to dissuade her... later sent some charts from iTulip.

I had a 'first date' tonight with a girl who mentioned this - wanting to buy by the end of the year for the credit.

The *smart* thing to do would be to just smile and nod, but, well....I felt I had to say something. Is there a concise, bomb-proof way to knock some sense into such people without losing the opportunity for a future date?

[aaron]

Re: Second Shoe Drops on Housing

The company I work for is a public company. The stock is up. The economy has turned. Co-workers are back to buying shit on their credit cards. Life is good. YOU DID NOT GET THE MEMO

It is unbelievable - People do not care and/or are oblivious to the economy beyond their personal situation. The U.S. consumer will not go away quietly. People with jobs are still consuming. In fact, several co-workers have refinanced and now can buy more shit!

OK. Originally we had 90% of the country working. Now we have 86%. In other words, MOST consumers are still fine, and they have worked down some credit card balances in the meanwhile. Now they are no longer scared. They cannot buy cars or houses because of credit, but everything that can fit on a credit card is fair game. Obama called the stock market bottom, and He will bring our economy out of recession, if we are not out already.

[metalman]

Re: Second Shoe Drops on Housing

I had a 'first date' tonight with a girl who mentioned this - wanting to buy by the end of the year for the credit.

The *smart* thing to do would be to just smile and nod, but, well....I felt I had to say something. Is there a concise, bomb-proof way to knock some sense into such people without losing the opportunity for a future date?

no. a man or woman with a mind set on losing money will do so. nothing you can do. worse thing is warning them... lost 1/2 my friends warning them about this economy and markets. if they don't listen, it's your fault. if they do, they thought of it themselves.

smile and nod, smile and nod.

whatever you do, don't send them here... they'll never get it.



have fun on your next date...

[ASH]

Re: Second Shoe Drops on Housing

I had a 'first date' tonight with a girl who mentioned this - wanting to buy by the end of the year for the credit.

The *smart* thing to do would be to just smile and nod, but, well....I felt I had to say something. Is there a concise, bomb-proof way to knock some sense into such people without losing the opportunity for a future date?

Don't make them feel dumb, and don't make them think you think they are dumb. Also, it's really best not to subject them to a lecture on fractional reserve lending, fiat money, or any of our normal preoccupations around here. My guess is that the thing to do is make a few casual remarks to the effect of:

• an $8k freebie from Uncle Sam might be nice, but only if one is really sure that the value of the home won't drop by more than $8k
• right now, home prices are in free-fall, so the likelihood that a home purchased today will shortly be worth $8k less is pretty good
• besides, home prices are tied strongly to employment, and folks are still losing their jobs
• ... and if you are reassured by the official projections that the economy will start to recover later this year, reflect upon the prior official projections that nothing remotely like this crash would occur (the point being not that the officials are corrupt -- don't say that, even if you personally believe it -- nor that they are necessarily incompetent, but rather that there is uncertainty; folks who aren't ready for the full iTulip treatment will still probably accept the proposition that the future course of the economy is uncertain, and that makes buying a house while home prices are dropping a risky proposition

Oddly, in view of Flintlock's comment about diapers, I was holding my baby daughter aloft during this conversation. She might or might not have added to my credibility. On the one hand, family men might seem responsible and stable. On the other hand, my wife (something of a gold bug herself) relishes making us out to be as eccentric as possible (in the gold/guns-hoarding sense), to get a rise out of the staid, vaguely liberal professional types we normally socialize with, and that can't help things.

[aaron]

Re: Second Shoe Drops on Housing

In short, no. You are destroying her hopes and dreams. But, you might get a second date in a couple years when she is homeless and broke.

[drumminj]

Re: Second Shoe Drops on Housing

no. a man or woman with a mind set on losing money will do so. nothing you can do. worse thing is warning them... lost 1/2 my friends warning them about this economy and markets. if they don't listen, it's your fault. if they do, they thought of it themselves.

smile and nod, smile and nod.

whatever you do, don't send them here... they'll never get it.

For the record, I did talk an ex (she was a current dating prospect at the time) out of buying a condo in Long Beach, CA. I'm happy about that one.

Ash, thanks for the pointers. Yes, it's very much about not belittling or judging them in any way...I simply brought up that houses in my neighborhood are $700k..asked how many people could afford that (answer: not many), and thus posited that prices are thus likely to fall.

Needless to say I have to follow-up and "apologize" for getting into it. I just can't in good conscience let the NAR PR-frenzy go on unchallenged.

[ThePythonicCow]

Re: Second Shoe Drops on Housing

I had a 'first date' tonight with a girl who mentioned this - wanting to buy by the end of the year for the credit.

The *smart* thing to do would be to just smile and nod, but, well....I felt I had to say something. Is there a concise, bomb-proof way to knock some sense into such people without losing the opportunity for a future date?

I would encourage you to avoid any financial arrangements (e.g., marriage) with her, ever.

[drumminj]

Re: Second Shoe Drops on Housing

I would encourage you to avoid any financial arrangements (e.g., marriage) with her, ever.

Damn, and that was going to be date number two - the Star Trek themed wedding in Vegas.... ;)

[ThePythonicCow]

Re: Second Shoe Drops on Housing

I had a 'first date' tonight with a girl who mentioned this - wanting to buy by the end of the year for the credit.

The *smart* thing to do would be to just smile and nod, but, well....I felt I had to say something. Is there a concise, bomb-proof way to knock some sense into such people without losing the opportunity for a future date?

On the more generic subject of presenting information to people who likely don't want to hear it, I find I have good luck being a bit of a self-amused kook about it. I just present what I think, with a bit of self-deprecating humor. I pay seemingly only marginal attention to what they think. This allows them to play with alternative and conflicting information without risk of being attacked. As soon as people get the slightest bit defensive, their input channels shut down. At the same time, the self-deprecation gives them license to happily disagree with whatever I said.

The key behind the above is not really caring whether the other person agrees or not. People quickly sense when someone else is emotionally invested in convincing them of something; they quickly become reactive.

Finding a common point of agreement, repeating back a perceptive touch of what they've said, and a touch of flattery all help add that spoonful of sugar which helps the medicine go down.

(On the other hand, my dating life is so abysmal, you'd best pay no mind to my blatherings ...;))

[grapejelly]

Re: Second Shoe Drops on Housing

signed a lease last night. It's year to year but we are locked in at the initial lease monthly for 3 years for a gorgeous house with owners that love it and will spare no expense to maintain it while they are away living overseas.

People think we are crazy not to buy. But it just makes no sense to put in a six digit down payment, and pay huge taxes and maintenance and principal and interest, for an asset that is declining in value.

Still, if things turn miraculously around, we can get out at the one or two year anniversary and buy something again.

Sold at the top of the market in 2005 and am very glad to have banked a good number of clams. Cashing out of the FIRE economy is frowned upon and good thing cuz if more people did it, that would be the end, truly.

[Tybee Island]

Re: Second Shoe Drops on Housing

Think of all the good looking gals that are soon to be homeless.....It gives a whole new meaning to, "would you like to go back to my place." In the absence of them having a "place" you are going to be beating them off with a stick!

Think of variations such as "Need a bath?" or "Eaten anything lately, I have a refrigerator."

Wheeeeee, this dating stuff is going to be so easy, I envy the future of you single guys....a c'est la vie, c'est la vie.