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Real Estate Speculation – Boom – Bust – Just Insanity

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Posted by Martin Armstrong - Armstrong Economics

on Tuesday, 18 April 2017 07:32

Barlow-AdQuestion: What if you find yourself as I do with real estate being the MAJORITY of your portfolio?

Answer:

""If you have the bulk of your assets in real estate, then one way to keep them is to run out and get a 30-year FIXED mortgage now while you can. You have sold the risk to a third party and it is now their problem. You have the cash and wisely use for investment into other movable areas."

"Real estate depends on how far down the rabbit hole we go. If government does not blink and it just keeps raising taxes trying to support a system that is unsustainable, then we end up in the full crash and burn and you are compelled to walk away from real estate. Hopefully, with education understanding the past, we can for once avoid the same outcome and advance in this learning curve of civilization.

Vacation properties are the worst to survive. I bought such a place to live in at about 50% of its 2007 high. So while high-end properties in cities were rising, vacation spots on the beach declined. I wanted beach front. So understanding the cycle helps tremendously for entry and exit points.

The risk of mortgages declining is real. As governments get in trouble, long-term confidence starts to decline...."

...more in this comphrensive article by Martin HERE

 

...related:

Michael Campbell & Ozzie Jurock more short term: Hot Properties: A Normal Spring Market?

 



Real Estate

Toronto Home Prices Just Jumped Another 33%

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Posted by Bloomberg

on Wednesday, 05 April 2017 06:59

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Toronto’s residential housing market showed no signs of cooling last month, with the average sale price soaring a record 33 percent from a year ago, pushing the cost of a detached home in the heart of the city to almost C$1.6 million ($1.2 million). In Toronto and surrounding suburbs prices climbed by a third in every major housing category, including townhouses and condominiums, as demand rose and listings failed to keep pace, according to figures from the Toronto Real Estate Board.

...read more HERE



Real Estate

People Migrating South & Are Smarter than You Think

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Posted by Martin Armstrong - Armstrong Economics

on Thursday, 30 March 2017 08:10

MigrationBirds are not the only creatures migrating south. In the United States, more and more people are leaving the highest taxes state and moving to lower tax states. One of the states that has seen large scale migration outward has been Illinois, where taxes are going insane and the there is no end in sight. Florida seems to be the number one destination. Housing prices are rising because of the net migration leaving the higher taxed states in the North. Within Europe, the youth have been migrating from Greece and Spain northward in search of jobs.

Likewise, we are also starting to see a surge in real estate in some areas driven by the first upticks in interest rates. Contrary to what the pundits believe that higher interest rates would cause the economy to turn down along with the stock market, they are being proven wrong every time because people are not as stupid as the pundits. Why buy a house and rush to lock in a low interest rate when they keep moving lower? As soon as mortgage rates began to rise, that’s when people spend because they KNOW it will cost them more to now wait.

The same thing happened in Japan. The month before a big imposition of sales tax was to hit, everyone ran out and bought whatever they contemplated. The surge one month before the tax increase made people think the economy recovered overnight.

Plain an simple, the average person responds to what they see. They do not understand the financial news nor do they even bother to watch it. I remembered that lesson from the peak in interest rates in 1981. My mother and her sister ran out and bought 10 year CDs at the bank locking in 20%. They picked the high and never watched a single TV show on markets. They did not ask me. They just did it.

Gold and the stock market will take off when people realize that government is in trouble. When they lose confidence, that is when they will start to pour into tangible assets.

...also from Martin:

Banks Secretly Report All Cash Transactions to the Police



Real Estate

Hot Properties: A Global Perspective

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Posted by Michael Campbell & Ozzie Jurock

on Monday, 27 March 2017 06:58

Real estate is moving in many spots around the globe. You'll never guess where the hottest European real estate market can be found. Where the money is headed. Is there still be an elimination of the tax exemption for a home office?

...also from Michael: The Key To Keystone's Great Stock Market Success

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Real Estate

Guessing Game

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Posted by Brian Ripley's Canadian Real Estate Charts

on Wednesday, 22 March 2017 07:06

 
price-guess origOn the way up in price it was easy. Make an offer higher than list price with few conditions if any and provide the vendor with everything they wanted and voilà, you own the asset if you managed to out-guess the competitive bidders lined up on their phones. 
​Liabilities were an unimportant consideration because in a few days, a similar property would sell for even more and your balance sheet then became even more credit worthy; check and check.

On the way down, guessing the price that a vendor will agree to is still a requirement; is the vendor holding a property with too little of his own equity and perhaps reluctant to take a loss at this time, or is the property being offered for the first time in let's say the last decade? A single family detached house in Vancouver has increased in price by over 120% in the last 10 years (over 160% in Toronto). The vendor's equity position is an important clue in the guessing game.

Is the vendor attempting to sell in order to repurchase in the same market? That would suggest an end price is required CLICK IMAGE TO ENLARGE



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