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Wednesday, August 02, 2006

Coming Next Week! How to buy real estate 30-50% off!

They're baaaaack!

Here they come folks! When the market is hot the real estate gurus on the hotel circuit start buying full page ads in the papers. You know the type: Carlton Sheets, David Allen's "Creating Wealth....Seminars", Bobby Blair Systems, William McCorkle (federal prison now) and the all the others...

When the market is turning, here they come again—changing their spin. Inferring that the market is getting tough and there are bargains to be found, today's Seattle Times full page ad on the back side of the business section states:
"How to find real estate for 30%-50% below market value." - ad for J.G. Banks, legendary probate investor.
Everyone is invited. It's free!

In my very best impression in the sarcastic tone of comedian Dennis Miller, "how to find real estate for 30-50% off? How about looking out the window at your neighbors house in about twelve months." Especially in markets thoughout California. Ouch. Ok, please keep the tomato throwing at me to a minimum. :)

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Anonymous said...

The current state of the economy is appalling.
We have a substantial national dept.
We have a negative personal savings rate.
We have a credit bubble that has given us a housing price bubble.
We have a declining GDP.
We have inflation on the rise and we have a fully inverted yield curve.

Just how do we get out of this situation?

One scenario is for the Fed to raise interest rates to stem inflation.
This however will collapse the housing bubble. Not that it is not collapsing on its own.

Another scenario is for the Fed to allow for increased inflation. Simply pausing on further interest rate hikes will accomplish this. This however will collapse the dollar and may induce foreign holders to dump their dollar reserves. This would be devastating.

Yet another scenario may play out.
This is where an increase in the price of oil is encouraged, along with a pause in interest rate hikes with further Fed tightening in the future. A pause on August 8 will prop up the GDP and stocks and would be the politically correct action coming into this year’s elections. This will put pressure on the dollar, but an increase in the price of oil will force dollar reserves to be maintained. This is the scenario I think the Fed is attempting to orchestrate. Why take the blame for collapsing the housing bubble when you can blame economic hardships on foreign oil.

I do believe that the housing bubble is doomed no matter what path is taken.
If you have any thoughts on how this may all play out, please share your thoughts, as I enjoy being enlightened by other points of view.

Perhaps all the real estate gurus should recommend the purchase of oil stocks or gold. I think they stand a much better chance of yielding 30% to 50% gains over the next couple of years.

Anonymous said...

Even David Lereah, head of the NAR said yesterday in an interview on a morning TV show (Good Morning America or one of those) that RE could go down by 10, 20, or even 30%.

It's starting, it was an unhealthy economic development that's turned us all into idiots and now it's going to reverse.

And I agree Anon, lowering or pausing interest rates is not going to stop it.

There are just too many people out there who are beginning to realize it was all a big credit bubble. Period.

Eleua said...

Ladies and Gentlemen, Boys and Girls, on behalf of Seattle Bubble, let me introduce the greatest, most compelling, and the singular most thoroughly ludicrous real estate infomercial series in world history.

Yes, this is a blast-from-the-past, a gem from the grooveyard of forgotten favorites...

What can it possibly be?

Remember the real estate craze in the late-80s and early-90s...

Remember yachts...

Remember scads of bikini clad beauties...

Remember a short Vietnamese guy being spoon-fed and fanned by dozens of young white chicks...

Ladies and Gentlemen, a man that should need no introduction...TOM VU!!!!

Anonymous said...

These get rich quick yoho’s are just targeting Seattle because the rest of the country is in melt down and they probably fear being tarred, feathered and run out of town.

You are correct, and from the looks of the size and scope of this credit bubble, we are looking at two back to back recessions with a good quarter pumped in between so that we cant say we had another depression.

For the last two years I have been watching this all unfold. It is like watching a train wreck in slow motion. I am still theorizing how it will work itself out. I just can’t see how we will pass through the economic digestive system without a whole bunch of stink.
Get ready for 10 years of economic hardship.


Anonymous said...

"These get rich quick yoho’s are just targeting Seattle because the rest of the country is in melt down and they probably fear being tarred, feathered and run out of town"

When a ship is going down, all the rats end up crowded onto the last part of the ship still above water....welcome to Seattle.

Anonymous said...

These get rich quick yoho’s are just targeting Seattle because the rest of the country is in melt down...

No doubt Seattle was targeted by investors due to greater perceived return than places like SF or SD (cough). So guess how many drone "investors" read glowing articles on waterfront RE and turned their eyes to Seattle and around the sound? Seattle isn't immune from the monkey business we've seen southward down the Pacific to Mexico. For investors to keep "winning," they need support from money rates and local buyer/owner perceptions. Yes--all the nonsense that locals and media spout about their unstoppable home values actually attracts more speculation.

Something I'd like to see are actual stats on the "investor" segment around Seattle--and broken out by investor location. That could be very enlightening. S-Crow, The Tim--anyone have those figures?

Anonymous said...

You don't need no stinkin' money!

Anonymous said...

I'd love to see stats on the amount of investor activity.

The only indication I've had so far is when I was checking the county records for "sold" prices last winter and spring.

A surprising number of homes had been sold to this or that LLC.

I suppose that might be the tip of the iceburg? People who were buying multiple properties and not just one or two?

Anonymous said...

Looks like we have our oil shortage that will drive up the price of oil and enable the Fed to pause, as predicted