Neal Vanderstelt

Where Is That Mythical Housing Bottom?

And I remember Jim Cramer like it was yesterday saying that housing was not a bubble that there was only so much land available. Sure Jim Cramer and what do you say now?

Lessons from the Great Depression
-Don't buy something with leverage/credit that you could never possible afford to pay off in the future. this is what so many businesses did in the roaring 20's and the fatal yrs before the depression.
-Don't buy market slogans at market peaks of how strong the economy will continue to be or there's no end to the thriving economy. if it seems too good to be true it usually is. much like Jim Cramer quotes, quotes from analyst and politicians back in the depression, today and other economic crisis. they are paid liars nothing more. sometimes they tell the truth, sometimes half truths, and sometimes they outright lie when they have to.
-More debt creates more poverty. the more you owe the farther you have to dig out of a hole. each time you sign into something your signing your own fate away. with taxes you don't have a choice. this is why monetary policies are so important to balance an economy.
-always consider the risk not just the reward. what were the chances of the home buyers doubling their investment that baught 2yrs before the bubble collapsed? and what were the chance of them loosing it all? obviously the prices were high and rates were escalated. it may have been hard to predict that some would loose it all but the tell tail signs were surfacing.

and one of my favorite quotes:
The Light that burns twice as bright burns half as long...
and you have burned so very, very brightly

Where Is That Mythical Housing Bottom?

Hello all, (Let me try to make sense of this big mess they got us in)
Just keep in mind the complexity of the housing market. The fact that you have to go though a process of borrowing money to buy such a big ticket item and the process of selling a home requires time to find a buyer and a process to go though completing a contract when the market is illiquid for houses. Think about it - you put a sign out in front of your house and hope someone finds it no the mls. The buyer has to look at it and make all kinds of decisions of weather they should buy and if it is a good time to. When everyone is doing this at once it further complicates the matter because the asset is now in less demand. If you compare it to selling other assets you can see all the complexity of having an agent, a special contract, and what not. Selling other things are much less complicated and don't require complicated procedures. As far as jobs goes this puts all kinds of people involved in housing out of work such as builders, makers of products, those in construction trades and so on. So the big question is when will housing deflate to a reasonable value and what will fill the gap in unemployment. One would have to look back into history when the problem got out of hand (ie when house prices became overinflated) and what measures our government is doing to make put the economy on track. So then you have to consider is the government putting more cash into our pockets in one way or another to help stimulate the economy and not just feed debt. There's not only a process to selling a home but a process for the economy to rebound. If a person has less wages or no wages and has to pay a huge percentage out of pocket for the cost of living and taxes to the government the chances are slim for a recovery.