Like three blind men describing an elephant...
This woman at a party asked me what I did. I told her about the 70 acres I just bought up in Woodstock, NY and how I planned to build 20 stables and rental cottages... She then cut me off and said she's going to a real estate seminar next week talking about the impending real estate bubble.
I said "if you feel the impending bubble is about to burst then you should sell me your apartment at a 30% discount to market before it becomes worthless." She said she rented and was looking to buy when the bubble burst.
I said since my day job is to recruit finance and technology people on Wall Street, I know that there are a lot of jobs and business is booming (check out my Job listings on www.cassworld.com). She said "Not everyone is on Wall St."
So let's do a survey. What's your opinion on in the job market? Do you feel the real estate market is going, up, down or sideways? and why? Please post your comments below!
posted by CassWorldNYC @ 12:23 PM
8 Comments:
12 billion in bonuses dished out on Wall street ....so that is money sloshing around that has to find a home & its inevtable that some of it comes into real estate or home improvements that will help increase equity , but in the end all real estate is regionally specific and each market has its own characteristic, as far as that woman renting to wait for the bubble to burst ......Good luck they're a dime a dozen out there . My 2 cents FWIW
Markets definitely on the way down. Right now is not the time to buy anything. I'd say by then end of 2006, prices will be 20% lower
If interest rates keep creeping up, Its going down in flames! 20-30%. BOOM! Tons of wealth destroyed in just a few months.
But give us a nice dose of Avian flu, and you can expect a nice 30-40% hit.
The dollar must continue to be accepted worldwide. The whole of US prosperity depends on the rest of the world accepting dollars for their goods and services. So far, I see no hints that the dollar is in trouble. The Dollar Index has been in a trading range. As a matter of fact, yesterday, following a period of minor weakness, the Dollar Index rose above its 50-day moving average.
The fact that the dollar continues to be accepted is remarkable when we examine the facts. Over the last year the US has "created" roughly $850 billion additional dollars, an enormous amount. Yet the world continues to take these dollars in -- in return for the world's goods and services. It's a case of "they sell us the goods, and we pretend to pay them." How long can this go on? That's a question for history to answer -- I'm amazed that it's gone on this far.
The second "must" in the picture is that US housing must hold together. The upside of housing, the rising prices, may now be hitting a wall, but housing must not be allowed to fall apart. Housing is where Americans have really been successful as far as gaining wealth is concerned. The average US family has not done well in the stock market as you can see from the article below. But Americans have done very well in housing, and their feeling of "wealth and security" is closely tied to the rise in the price of their homes. If home and condo prices head down, it's going to be a different story. If that happens, consumers will cut back on their spending, and the US could quickly sink into recession.
To offset such an outcome, the Fed is creating massive liquidity. Fed chief Bernanke is an expert on the Great Depression of the '30s, and he believes the Depression could have been avoided if the Fed had greatly increased liquidity. It follows, I believe, that Bernanke will make every effort to ward off a major correction in US housing.
In the year 2000 the great stock market bull market topped out. The first down-wave of the bear market took the Dow into the 7000s in late-2002. In reaction, the Fed opened the floodgates of liquidity and dropped short rates to 1 percent. That halted the bear market, through the greatest creation of liquidity ever seen, plus rates driven to generational lows. Even so, now six years later, the Dow has not been able to match its bull market high of January 2000.
Now Bernanke faces what could be the end of the bull market in housing. His greatest fear must be that housing will correct or worse -- sink into a bear market. Therefore, my opinion is that the Fed will go all-out in creating liquidity. The Fed will try to hide what it is doing. The Fed will also try to hide any inflation results. I believe we're going to see an amazing period ahead of us in which the Fed is going to battle with the normal forces of correction and deflation.
How do you fight correction and deflation? You fight them with increased liquidity and negative real interest rates -- in other words, you keep interest rates below the inflation rates, thus making borrowing an attractive course of action.
R.R
Mortgage rates are going up so the asking prices will come down slightly so you will pay virtually the same price for an apt. unless you pay cash. 2bd, 2bth in Manhattan is 1.2 or 1.3 mil. Second home sales will be sluggish unless it's a unique property (waterfront, etc.)
Up, Down & Sidways are all Correct. So many varibles, so many marktes. All goes and depends, buy a home if you want to own and can take a 15% down cycle. Big deal, still a decent investment and improve your quality of life.
You bought 20 acres at already high prices in
Woodstock. You must have money to burn and really
believe the market there is still going up.
I totally agree with that woman. You are very smug and
and in rich fantasy land. Prices for food, etc, and
other bascis everything are going up and will probably
continue to do so. But companies aren't giving out
money, but retaining profits.
The job market sucks in
NYC in marketing, PR, etc., unless you in you 20s to
early 30s and wiling to work 24/7 for not much bucks.
But you are doing well. Congrats.But that woman is
much more grounded than you are.
Dan
I went to Israel 14 times in 3 years for business and every time I went, people were telling me "this is the WORST time to go to Israel". Of course, I always had an amazing time and gained invaluable experiences. You just need to follow common sense and avoid obvious dangers.
The same logic and experience of mine applies to real estate. I bought a 2br/2.5bth condo on UES for $599K in 2002. It was VERY expensive at that time, compared to the alternatives (e.g. you could get a huge house in Manhasset for that price; or an identical apartment layout in Edgewater for half price).
Bottom line, I don't believe in sitting and waiting and speculating if this is the worst time to do anything. If you can afford to buy - be smart, do your research, trust your instinct and think long term in real estate.
And Cass, I think your investment idea in Woodstock is great. If you have a demand for what you build and offer on your property, and if you can reach your target market effectively, you make money.
Simone
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