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Deflation with Inflation: No Recession, but Depression? "06.15.08 .. in order to survive, we will be forced to become a fascist aggressor or a socialist state. With the failure of Iraq, the latter seems more likely..."
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Bank of America & Countrywide: A signal of a housing bottom? The lender will once again have the position of strength....
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Next for the Economy: The Greatest Bull Run in History? An analysis of the stock market and economy since the Bear Stearns incident in March '08...
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No Recession, but Deflation? The March '08 UCLA economic report so far is 'right on target.... .... .. ...
Commercial Properties 30 acres freeway frontage
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Office Space for Lease: 12,625 Sq Ft divisible ..
The UCLA Anderson Forecast Highly Recommended! ... Most Recent Articles: .. The Schizophrenic FED Gambit .. Bearish on Housing, Bullish on Stocks ..
Analysis of California Bank Earnings Highly Recommended!
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. Q1 2008 2-21-08:- The Counter Intuitive Market Force: But Housing is the Exception Home Page
9/11/2008 Update: I am avoiding stocks and real estate investments at this time; more attractive prices may be down the road. Possible continued dollar strength and deflationary trend. Hyperinflation is still expected with all the bailouts and debt our country has; and this is the long term outlook. Additionally, when the fed finally takes action, they may overcompensate its reaction to adverse dollar resilience. The markets today are not in any way logical or make sense; no one can predict what will happen, no matter what their credentials. In this type on environment, it seems wise to stay uncommitted and readily liquid until the hyperinflation makes itself apparent. Consult your financial professional; not investment advice (see disclaimer below).
Many markets, like stocks and commodities, are counter intuitive. They seem to run the opposite direction of the general public's 'group think, consumer realization' sentiment. So one could reason that NOW is the housing bottom, and time to buy, because of all the recession and crisis talk, right? Unfortunately, Housing may be the exception to that apparent phenomenon, because housing is really a liability. State taxes, Insurance, utility fees, mortgage interest, etc. added to sales commissions make it hard to profit long term. It only makes sense to buy a house as an investment if the equity is going to appreciate more than costs and expenses to carry it. Brings to mind the old saying: "Never invest in something you have to feed or needs repainting".
Today, there is a negative equity expectation; and housing prices are still being propped up at pre 'consumer realization' levels. Prices are not based on the declining market sales comparisons, but by agent 'positive speculation' and 'adding on the commission', and 'seller denial'....therefore, housing remains unattractive. However, housing as an investment does become attractive if you can acquire it at a good below market price, and can get past the 'blue sky' retail. In this event, the 5% income rule is less important as equitable appreciation, because there can actually be some expectation. Basically, Sellers are going to have to "blink" first, and bring down prices in this showdown.
There does seem to be a negative correlation in today's market with respect to dollars: as the stock market and housing goes down: raw cash value goes up (See Article: No Recession, but Deflation?). And, of course in the premise of counter intuitivity, we are getting inflationary market reports now in early 2008. This will mean means no more rate cuts, and the FED continuing to be in a quagmire about economic direction. It also means a bear stock market, and continued lack of buyers in housing as the populace realizes, once again, that cash is king. Savings rates and CD's returns remain unattractive. Commercial and income producing real estate, or real estate bought as investment, must provide sufficient income to justify its ownership: a simple concept that many investors miss. If the property does not produce ample income, then there must be a positive equity appreciation marketplace, which we do not have now.One could predict there will be an anomaly of sorts, when the populace has attempted to adapt to the market, like a flock of birds, and hoarded too much cash...causing prices on housing and possibly stocks to come down. The question is whether there will be a recovery from this decline. There will be opportunities to buy in housing once we get down to the 1999-2000 price levels, so things can pencil out. Commercial land can be attractive long term only if in areas where the the appreciation for commercial land did not correlate with that of the local housing. i.e. Commercial land remained constant while housing over appreciated. These can be real buy areas, because even with the housing downturn, there is still room for a positive equity expectation for the land.
All articles written by The Sniper
© 2008 Realtech Partners, Inc. All Rights Reserved. Email
Click here for quick California bank earnings and foreclosure rate updates ---> Analysis of California Bank Earnings
**ARTICLES** Most recent listed last
. Q1-Feb 10 '08: - The Perfect Storm of Economic Downfall Q2- '08: So what do we do now? . .. Q1-Feb 21 '08:- The Counter Intuitive Market Force: But Housing is the Exception Q2- '08: Analysis of CA Bank Earnings . ... Q1-Feb 21 '08:- The 5% Income Rule Q2- '08: Riverside-San Bernardino tops the list... . ... Q1-Feb 21 '08:- A Compelling Argument for Alternative Investments Q2-'08: Bank of America & Countrywide: A signal of a housing bottom? . ... Q1-Feb 26 '08: True Market Analysis, or Self Interest? Q2 2008: Deflation with Inflation: No Recession, but Depression? . Q1- '08: No Recession, but Deflation? . 3.17.08: Next for the Economy: The Greatest Bull Run in History? Q2- '08: The Schizophrenic FED Gambit .. Q2- '08: Bearish on Housing, Bullish on Stocks
Realtech Partners, Inc. - © 2008. All Rights Reserved. Email
DISCLAIMER: Not associated with any city, county, civil entity, or government body. No warranties are stated or implied. Use at own risk. External web sites are not endorsed. Users agree to all terms. These articles merely reflect the opinions of this author and are by no means a guarantee of future economic conditions. Though the author strives to provide accurate and relevant data, he sometimes relies on external sources and cannot assure the reader of the accuracy contained within. Additionally, these articles are provided for information purposes only and are not meant to provide investment advice to anyone. Please consult with your professional financial planner for investment advice.
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Featuring Riverside County Commercial Riverside County homes Riverside County MLS Riverside County land and Riverside County real estate ..
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