David Fischer

Over-Correction in the Phoenix Housing Market

This summer since spring has been the time to buy, right now for 70 k gets you an 1800 to 2100 sq foot home built during this century, their cash flow positive. There is alot of demand for renters, and though I think the rents will likely drop a little in the possibly 10 to 20 % range to adjust for so many investors piling back in the market.
Prices have been indeed slammed by foreclosures, and now prices will rise off of this artificial bottom, just like a parabolic sell off in the stock market, prices are artificially squashed due to too many bank owned properties. If you look at the cost of building one of these homes right now, they are possibly 80 k undervalued to current building prices. No new homes will be built until prices of these homes climb from here. Smart real estate investors are buying up these homes like crazy, now is the time, buy buy buy. 70 k homes renting for 800 per month, are you kidding me? Even if rents dropped to 550 per month, they would still be worth buying.

Canada: The Industrialized Market for the Coming Decade

I disagree with much said in the article. Aside from the obvious commodities go up when USD goes down, but that is not to say these prices have to stay high due to this fact. Canada's western provinces from Manitoba to BC have not seen any downturn yet and have remained high, but not because of real demand, but rather delayed demand and a low USD. Many smart real estate investors in Canada are starting to sell their Canadian holdings and buying inexpensive foreclosures en masse in Florida, California and Arizona, 70 k for a 2000 square foot newer home, compared to 400 to 700 k in most of the western provinces. Hmm easy to do the math on this one. Most of the growth in Manitoba for instance was delayed growth from large investments, but those investments have fallen off a cliff this summer, and this will be noticed soon. Smart money will leave Canada for the US, of course the doom and gloom is still on the table, and many are not even looking in their own back yard for investments. These homes are cash flow positive, find me one cash flow positive real estate investment in western Canada, maybe in the repressed industrial areas in Ontario, but not in the west. And commodities demand will only continue to slow and supply will increase, real demand is dropping for energy in the US, and 120 oil? But I like the optimism none the less.

Over-Correction in the Phoenix Housing Market

Housing overshot up, and now will overshoot on the downside. Fair value? What and how can anyone especially this guy dertermine is fair value? If it were only that easy then we would all be so rich. The fact is foreclosures to add to dropping prices, the fact he retorts this is plain dumb logic.

Usually after bubbles of that magnitude, the overshoot the other way can be huge. One only has to look at the Naz or any other bubble that has occurred. Real estate in Phoenix, Florida and especially Las Vegas have a ways to go still to the downside.

Too many clowns get stomped on trying to call bottoms. If you cant handle a 10% drop in prices from here or more, then why try to catch a falling knife.

Just Say No to Commercial Real Estate Beggars

Bang on! I am glad some form of capitalism survives in this country. It's amazing how few understand the devistating consequences of the government owning more and more privately held assets. That is comunism or at least socialism. So when the government forcloses on these companies because they are well below debt value and cash flow cannot sustain the debt payments, what then? Folks will be screaming about the government intervention and bullying. This backing of assets leads to the government owning all assets which is comunism. Backing these assets in the hopes they don't go down in value is rediculous. I

The first step in backing loans is one thing, looks harmless. But the next obvious results that would come later when these companies owe billions and need to be taken back is the phase which would enlighten investors to what is really going on. The day the loans are called if things gets worse is a day of reveoution. When there is no clear line in the sand between what the government owns and can take from you and what you think is yours.

Capitalism has a downside which is recession/depression, this needs to be undertaken, but the government wants votes, so all those senators give in. But that only delays the recession for years to come, as savvy investors stay on the sidelines unwilling to buy unless values reflect reality in valuations.

Most of these reits should be gone as their models of payouts are rediculous. These company strategies only work when times are good and asset values continue to go up, but not during pullbacks in values.

And this crisis is a crisis because knowone has any money any more, so it is warranted. Such a rediculous notion that is somehow an anomoly due to some quasi event, and not real. It is real, all asset values are plummeting, so don't loan. That is the motto of banks, wait it out, stay afloat until this is over.

The government didn't save housing, and its' a good thing, look at the tsunami of refi's to come with no takers. The same is just beginning in reits. The model does not work, they need to be purged and values reset.

How to Trade This 'Bear' Market - Barron's

Sorry, but never to late to sell. So far we have only seen the unwinding of some of the massive derrivative bubble, the most obvious subprime mortgage and some prime. The bottom won't come until your neighbor hands back the keys to the Mercedes, gets his diners club card cut at that customery friday night fine dining establishment, and the wife is selling Gucci hand bags at garage sales to raise money to pay the mortgage.
We are not even close. The game is only in the 3 rd inning. Too much trust was put in the current system, that the old sayings of paying cash, etc, are coming back to haunt those who trusted Wall street and the fed in this creative pyrmid scheme. This debt bubble won't be solved with more debt unfortunately. So unlike 2000, this one will have to be slow and painful. No superman cape will help the damage done here.