I sold my commercial building to man who happens to have bought a house in my neighborhood, 4 years ago he began the project, hit some rooting structures, had to almost tear down the enitre house, cost addt'l $250K he paid $710K.
He has doubled size of home to around 8,000 sq ft, outside mostly done, inside needs everything HVAC, plumbing, electrical...and the rest...ending value near $2 M making it far and away most expensive house in area..when done (it sits on 2 big lots, one doesn't perk...7 acres maybe)
I ran into him today in old warehouse which we now rent back 1/2 of it. He told me of all the issues, he runs a restoration business, best I can he's doing OK, but the rest of work he has to SUB OUT.
He sounded VERY frustrated, he CANNOT GET BANK LOAN TO FINISH HOME....he must pay as he goes out of pocket....."because of what happened with the banks, they won't lend..." he added.
I'll say it again, the stock market rally (and it may have further and longer to go than most imagine or think reasonable) is built on gov and fed manipulation IMHO and the failed policies that are not growing economy are enriching the top 10% and BANKSTERS.
Sales of new homes sit at a generational low.....all that after TRILLIONS given away, GOV stimulus and incentives....lowest cost of home ownership in decades....housing the #1 FUEL for economy.....carpet....applainces, glass, blacktop, wood products, + jobs.
There may be a level of business we have fallen to, not one we are growing to which will bring us our of this morass.
FAILED policies continue, MINISCULE jobs bill will do little but make politicians look like they're doing something.
When you saw the INSANE action during internut bubble boom....companies did open, buy computers, rent space and hire people.
Housing bubble BOOM companies built things, people bought homes and stuff, companies rented space added employees....home equity loans added $1 TRILLION spending to economy...it was false yet real.
BOTH times the BOOM?BUBBLE was created by FED policies first with ASSHOLE GREENSPAN now bad bald buffoon BERNANKE....and the end result was ugly...then uglier....and we keep getting less bang for buck.
Bank branches are quiet, the door doesn't even swing open much on FRIDAY, PAY DAY....banks wont ledn, people dont borrow.....FED pays on excess reserves....cycle will continue.
WHAT HAPPENS good when MANIPULATION and interference with FREE MARKETS (WTF IS THAT?) attract capital in a one side one way overbalanced way?
Stay thirtsy my friends for the truth, do not take everything at face value....just like the other 2 mirages in last 10 years (WAY TO GO!!!) without coherent and free market policies that don't just benefit the connected few.....#3 being built as we speak.
I HOPE I AM WRONG, the more I talk to the man on the street the less hope I have.
D
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Many people of our generation do not even understand the history of US home Pricing. Rober Shiller does. This Q and A is taken from his mid term exam in 2008. Your neighbor may not want to read this.
Solutions to Midterm Exam #2
Economics 252 Financial Markets
Prof. Robert Shiller
April 1, 2008
PART I: 6 points each
1. ACCORDING TO SHILLER (“IRRATIONAL EXUBERANCE”, 2005), WHAT HAS BEEN THE LONG-TERM TREND IN REAL HOME PRICES IN US AND HOW DOES IT RELATE TO TRENDS IN POPULATION, BUILDING COSTS, AND INTEREST RATES?
• There is no obvious pattern in the long term trend of real home price. The long term real home prices were generally declining from 1890 to 1940 with a sharp fall after the World War I. We saw no boom during the 1920s despite the sharply rising stock market during that period. Nor did we see a drop in home prices after the stock market crashed in 1929. The housing market rose sharply after the World War II and was steadier from 1950s to 1970s. There were two regional booms before the recent housing boom, one in the late 1970s and one in the late 1980s. Starting from 1997, there has been a “rocket-taking off in real home prices and the ascent of home prices has been robust and steady. (3 points)
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