to crate train or not


By thankshousingbubble   Follow   Thu, 14 Jun 2012, 6:42pm   6,729 views   54 comments
In Hermosa Beach CA 90254   Watch (1)   Share   Quote   Permalink   Like   Dislike  


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  1. SophiesChoice


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    Danville, CA

    15   11:32pm Thu 14 Jun 2012   Share   Quote   Permalink   Like (3)   Dislike  

    Carolyn, my wife and I are in the same predicament as you (same area in fact). It's clear from you tone that you are being led by your emotions. This is never a good thing when it comes to buying a house (well, except for the seller and the real estate agents). Please take a breath and start looking at the bigger picture.

    We've been looking to buy a house since 2002 and it seems house prices always tick up around this time of year. There are a few other factors leading into the price increase you are noticing, and as we get closer to the election you will probably see some other wacky fluctuations in price.

    Point being, expect to be discouraged over the next few months, but keep watching for signs that pricing continues it's slow trend lower starting sometime in early 2013:)

  2. HEY YOU


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    16   11:43pm Thu 14 Jun 2012   Share   Quote   Permalink   Like (3)   Dislike  

    Carolyn C,
    I've been in the same situation for 19 mos. RealtyTrac & Zillow will show foreclosures. RealtyTrac shows foreclosures for sale & foreclosures that aren't on the market. You can compare these to resales through MLS in your area. Do not get upset.
    Remain persistent. A good rule to follow is: Never have an EMOTIONAL attachment to a house. Another rule:Your looking for a deal, not to make the seller or bank any money. This is business not morality.

    As far as advice from comment sections, don't take them as gospel. Including mine.

  3. Carolyn C


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    Pleasanton, CA

    17   11:56pm Thu 14 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    Thanks for the advice.

  4. SophiesChoice


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    Danville, CA

    18   12:07am Fri 15 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    E-man says

    SophiesChoice says

    but keep watching for signs that pricing continues it's slow trend lower starting sometime in early 2013:)

    So you expect these same homes to drop $50k-$100k by early next year. It would be fantastic if you're correct. What if you're wrong? Wouldn't you be better off now had you bought in 2002?

    Learn from your victory. Prosper from your failure.

    In Pleasanton, I don't know, but it could happen fairly quick in Dublin/San Ramon as 50K is just a 10% drop on a lot of the current inventory. Plus there are a lot of townhomes / condos in that area which fluctuate greatly and could put pricing pressure on the SFH's.

    Also, for me I wouldn't have been better off if I bought in 2002 although my situation is probably atypical of the average BA buyer. At the time I was too young and would have overpaid for a 2bd in a somewhat bad school district (it almost happened twice). Fast forward to 2012 and now I have 2 kids and know the added value that location can bring. If I had bought in 2002 the timing would have put us trying to sell a 2br right after the 08 crash. Might have been a wash on the sale price, but I would have lost my equity / Down payment. instead it's been investing and growing for the last 10 years.

    Like I said, I think things will start to slide in 2013 but it might be a long slow slog as we find bottom and bounce along for a decade or so.

  5. Strategic Renter


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    19   7:45am Fri 15 Jun 2012   Share   Quote   Permalink   Like (11)   Dislike  

    Everything is being thrown at housing to make prices rise. Simply wait this temporary situation out and prices will resume their fall. Mortgage rates rose this week and huge tax increases are coming in january. Time is the buyers friend.

  6. Goran_K


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    20   8:56am Fri 15 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike  

    Strategic Renter says

    Everything is being thrown at housing to make prices rise. Simply wait this temporary situation out and prices will resume their fall. Mortgage rates rose this week and huge tax increases are coming in january. Time is the buyers friend.

    This post pretty much sums up the situation, much better than the OP (with all respect of course).

  7. bigbubblemama


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    21   9:00am Fri 15 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    The fed is propping up prices with low interest and help with closing costs which make buying a house cheaper, in order to get this basicly free money you have to buy a house,

    California real estate tax incentivizes not selling your house if you have owned long term, live in huge house and sell and scale down costs actually can go up, so why hassle with selling and moving when you are doing fine as is. If they need money then they sell if they have enough they stay.

    The banks know more supply means less money so don't expect a huge tsunami of houses out of them, but you can count on a steady flow unless they sell them all to investors in bulk to rent.

    I think with rising prices there is still a good group of sellers who will get pushed onto the market. so I think there will still be a oscillation up and down in prices right now we are in the up.

  8. pazuzu


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    22   9:44am Fri 15 Jun 2012   Share   Quote   Permalink   Like (3)   Dislike  

    DEAD. CAT. BOUNCE.

  9. APOCALYPSEFUCKisShostikovitch


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    23   9:47am Fri 15 Jun 2012   Share   Quote   Permalink   Like (3)   Dislike  

    Right, when you have government, banksters and speculator community standing on a ladder and whipping the dead cat at the pavement as hard as they can, you're going to get some lively english on that pitch.

  10. APOCALYPSEFUCKisShostikovitch


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    24   9:47am Fri 15 Jun 2012   Share   Quote   Permalink   Like (3)   Dislike  

    But

    it's

    still

    a

    dead

    cat.

  11. FortWayne


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    25   10:29am Fri 15 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike  

    I think a lot of folks just remember the 06 insanity and attribute slight margin play in random markets as a sign of YTY 20% appreciation.

    Reality is that such cannot occur again. Real estate market will be a non event for a good number of years. Each market is different and all are very saturated.

    I'm sure there will be articles pumping up real estate, or whatever else since news are paid for... nothing more than sales pitches and waste of time. If you don't read into it too much you'll be fine. Just make sure you are out of debt and are comfortable with your life.

  12. bmwman91


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    26   10:36am Fri 15 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike  

    Thanks for the analysis Robert. RE is the big focus of everyone right now (and sort of always has been). Pricng seems really volatile in desirable areas (for living, or investing) since supply and demand are at historic opposites now. Add in a lot of government and bank intervention, and the whole system is just wildly unpredictable in the short term. The hard part is accepting that the longer term may seem predictable, but intervention may well make things go another direction. Many of us on here want a downward trajectory, but we might not get it. That's a bitter pill to swallow, considering the last decade or so of irrationality and in some cases, outright idiocy, that priced rational people out of the market.

    The adage that, "markets can remain irrational longer than you can remain solvent" sort of comes to mind. While remaining a renter really isn't going to lead to insolvency if the individual is smart about saving/investing, it does sort of serve as a reminder that markets can remain irrational for a really long time, despite loads of logical reasons for why they shouldn't. A year or two I, and probably many people here, were feeling very optimistic about housing prices dropping and dropping. As of now, at least in the areas most of us live in and want to remain in, that optimism is fading in light of this year's RE performance. We are all looking for reasons why, since it sort of sucks to have your hopes trounced.

    But, that is life. There are all sorts of places in the world where a middle class person or couple has no hope of ever purchasing anything more than a slummy 400SF flat in some highrise. We all think that we are different because we live in America. We are promised homeownership from the day we are born, and I think that a lot of us see it almost as a right to do so. Well, that promise may just be a lie in this day and age. RE ownership may be becoming a thing for the super wealthy (or the super irresponsible, in the hear future - FHA loans), and they will rent land out to everyone else. It wouldn't be the first place or time in history where that was the case. Just because we THINK it is different here, does not mean that it is. History has a tendency to repeat itself.

    None of this means that you should "buy now or be priced out forever" though. If you aren't comfortable with the price now, then so what if you are MORE uncomfortable with it later. You either can afford it now, or you can't. Frankly, the options are renting or moving. America may well become a place where people are forced to make choices they don't like and live with them. It wasn't that long ago that the economy was forcing people to make those types of choices just to stay fed.

  13. CrazyMan


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    27   10:56am Fri 15 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    Nice summary bmw. This spike has gotten me to re-think my strategy, though I suppose I'm lucky in that I have multiple choices.

    Current: Keep renting and see if one of my startups pays off (lol). See what happens to the market over the winter and into next year.

    Other: Move to another state (OR or WA).

    Other: Move back to Santa Cruz and get a low stress job, as my housing outflow would be ~$800 A YEAR =/

    The last option is looking more and more likely.

  14. bmwman91


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    28   11:13am Fri 15 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    CrazyMan, I think you are CRAZY to not be taking that last option. Hell, why deal with the SV rate race & douchebaggery competition when you could move to SC for $800 a year?! Yeah, SC has its own "special" vibe to contend with, but for that price who cares?

  15. CL


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    29   11:20am Fri 15 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike  

    HEY YOU says

    As far as advice from comment sections, don't take them as gospel. Including mine.

    Those are words to live by. I take them as Gospel! :)

  16. CrazyMan


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    30   11:24am Fri 15 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike  

    Yeah, I know I probably am crazy :)

    I grew up in and then inherited that house and while I'll never let it out of the family, I've always wanted "my own" place. As a matter of fact that's why I've been saving for the past 15 years.

    I certainly could afford to buy a house in Santa Clara/Campbell (I have a couple hundred K in cash I need to do something with) but I'm just not sure I want to deal with the rat race (indeed) for the next 30 years to pay it off.

    So yeah, the 3rd option is certainly the smart and conservative move. Luckily my girlfriend is open to the idea as well.

  17. edvard2


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    31   11:26am Fri 15 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    As someone who recently bought and went through the whole buying experience, I too can attest to the fact that "things are different" from what they were even 6 months ago. I have a few humble opinions about it.

    There seems to be a few things happening at once. First of all, there seems to be a generally improved outlook amongst many in regards to the Bay Area economy: Things are improving and people are less scared of the idea of buying. So demand has probably picked up. That opinion seems to have spread like wildfire and now many are like : " we gotta buy now!" Perhaps because the memories of the recent housing bubble are all too fresh in people's minds. I'd be willing to assume many of these same people probably also patiently sat out the bubble, have saved up, and been very careful. But lo and behold the market turned a corner and perhaps many feel that they'll sure as heck not get "priced out" again. Whether this is true or not or whether the current situation is a fluke I have no clue.

    As constantly mentioned, inventory has fallen. That's an understatement. There are literally only about 40% of the homes for sale in our town as there was last year. Of those, it seems like there is very little within the "reasonable" ( by Bay Area standards) range. The weird, really crappy, or bad location houses sit. So there is a lot of competition for the "good stuff".

    Secondly, as also mentioned interest rates are ridiculously low. In other words money has gotten cheap to borrow again. Doing the math, there isn't a whole hell of a lot of difference between buying a 500k and a 600k house: The rates are so low that we're not talking about a huge delta in monthly payments.

    At the same time rents have gone up, and especially for rental houses. There are very few homes for rent in our area at this point and if you do find one the rent is pretty high. We were lucky in that the landlord never raised the rent on us. But if we had had to find another similar home the cost of renting would be more than what we now pay for the mortgage. When we first moved into our rented house there was about a 60% delta between the cost of renting and buying in our area. Now its about even or even slightly more to rent the same thing.

    At least from my experience I very shortly found that bidding on foreclosures, short sales, and whatnot was a useless endeavor: Not only were the houses nearly impossible to see, but more often than not investors would swoop in at the last minute. So I didn't even bother to look at them.

  18. PockyClipsNow


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    32   11:45am Fri 15 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    Wild card is future interest rates. But todays buyers will still be 'sitting pretty' if rates rise - even if they have to move or lose job its not like they are paid cash.

    Only risk is downpayment AND you can easily get back your downpayment by squatting for 3 years before the foreclosure.

    Lets remember CA is still non recourse state so a 3.5% downpayment is NOT at risk. Buying is risk free financially (unless u refi, then you can alwasy declare BK)

  19. kt1652


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    33   12:09pm Fri 15 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike  

    BMWman
    The 4 decades of a technical professional:
    20-30 Go wherever, do whatever it takes to gain the edge.
    30-40 You are gold. They will recruit you.
    40-50 Hang on or move up.
    >50 Jump off or be kicked off.

  20. clambo


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    34   12:24pm Fri 15 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike (2)  

    I'll pass on the joys of being a landlord in *Phoenix* which rhymes with "fucked".

  21. thomas.wong1986


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    35   7:39pm Fri 15 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike  

    Roberto is lucky, he had the HUGE media focus on foreclosures in Phoenix plus all the overbuilding and very little hype in the aftermath of the bubble imploding. On the other hand SFBA still has the aftermath hype in full motion. Heck, his area may well start seeing more jobs migrate to Phoenix due to high costs. Not what I want to see, but certainly when cost of living is lower, its more attractive.

  22. thomas.wong1986


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    36   8:16pm Sun 17 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike  

    Fred Flintstone says

    And Cinncinati has a lower cost of living.

    Why lie for a liar??

    Remind me again why Silicon Valley companies shut down operations and moved it to Arizona, upper New York, Colorado, Texas and other lower costs regions. All due to higher home costs. Not something im cheering about.. but at least the jobs are going to Americans.

  23. everything


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    37   6:24am Mon 18 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike  

    Reversal = investors with shitpiles of money/easy credit, just like OP, so they can live/ride off the backs of ordinary working Americans. Nothing wrong with that, it's the American way.

  24. YesYNot


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    38   6:40am Mon 18 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike  

    RobertoAribas is perfectly credible IMO. He got a little lucky that he was living in an area where there were good buying opportunities and was smart enough to see it for what it was. I appreciate his highly localized but interesting info.

  25. David9


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    39   8:26am Mon 18 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike  

    YesYNot says

    RobertoAribas is perfectly credible IMO. He got a little lucky that he was living in an area where there were good buying opportunities and was smart enough to see it for what it was. I appreciate his highly localized but interesting info.

    Agree. I think many people on this site wish we had similiar opportunities where we live, thus, more inclined to hopefully jokingly give him a hard time.

  26. pazuzu


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    40   9:57am Mon 18 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike  

    hehe, by the end of the decade there will be a widespread awakening to Arizona's water future AND peak oil. The double whammy will make houses much less desirable in that desert, and everywhere really. But in the desert they are going to be worth dogshit.

    Prices may be bumping there now, but the coming crash will make what's happened so far look mild.

    Get ready for the end of growth homies.

  27. APOCALYPSEFUCKisShostikovitch


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    41   10:07am Mon 18 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    BRACE for Cannibal Anarchy!

  28. PockyClipsNow


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    42   11:26am Mon 18 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)  

    Global warming and peak oil are hoaxes created to get $ out of suckers and pass agendas/power grabs.

    Jim Kunslter is a hack writer who only starting making real $ by pandering doomsday books to the global warming religion IMO.

    There are probably 500 different doomsdays you can choose to believe in. I'm choosing zombie apocalyspe - its the most fun.

  29. pazuzu


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    43   12:44pm Mon 18 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike  

    Peak Oil a hoax? Zombie needs to eat more brains.

    As for the butt pulling Realtor, he's sticking his head in the desert sand

  30. EBGuy


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    44   1:13pm Mon 18 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    But lo and behold the market turned a corner and perhaps many feel that they'll sure as heck not get "priced out" again.
    I know of a couple of young families in the Bay Area who are in that boat and bought earlier this year. That said, I was talking to a friend recently about some of his work colleagues. The highlights included one that was 'well off' but sold his two houses (one primary and one rental) at a loss. He did, though, take his remaining equity and bought a nice place east of the hills. Another had an ARM resetting and was trying a short sale on a million dollar home. Yikes.

  31. YesYNot


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    45   1:26pm Mon 18 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    http://www.wired.com/science/planetearth/magazine/16-05/ff_peakwater?currentPage=all

    Intel is stockpiling water in Arizona. Maybe Robert can get himself an aquifer :).

    Seriously, the above article has a good discussion of the two big water projects for Pheonix. It would be silly to write it off as a non-issue.

  32. Michinaga


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    46   1:47pm Mon 18 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    PockyClipsNow says

    Jim Kunslter is a hack writer

    His "Geography of Nowhere" and "Home from Nowhere" are excellent reading and well worth the time of anyone interested in city planning.

  33. PockyClipsNow


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    47   1:52pm Mon 18 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    All Kunstler does is bash everything and promote mixed use development and local everything (due to oil will run out). same message forever. He predicted TEOTWAKI back from the y2k scare days. (lots of IT work for that, not so much for peak oil/global warming scare mongering)

  34. EBGuy


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    48   11:30am Wed 20 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    Phoenix is one of those places where they ripped off the bandaid quickly (due to non-judicial foreclosures). Extremely painful initially, but why delay the agony? From the WSJ today:
    Nearly 94% of Phoenix ZIP Codes and 90% of Denver ZIP Codes saw values rise during the three-month period ending in April, up from 5% and 6% a year ago, respectively.

  35. Melissa


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    49   7:34am Thu 21 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    CrazyMan says

    I certainly could afford to buy a house in Santa Clara/Campbell (I have a couple hundred K in cash I need to do something with) but I'm just not sure I want to deal with the rat race (indeed) for the next 30 years to pay it off.

    How about a remodel in SC? Cheaper than buying and would make it "your house."

    I am soooo with you on the rat race. I am 47 and looking at essentially retiring in the next 3-5 years to a more laid back, "work when I want to" sort of job, doing something that I really enjoy. My career has lost a lot of the fun in the past couple years. Three years ago, I imagined I'd work in this field "forever" because I was having fun.

  36. rooemoore


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    50   7:53am Thu 21 Jun 2012   Share   Quote   Permalink   Like   Dislike  

    PockyClipsNow says

    Global warming and peak oil are hoaxes created to get $ out of suckers and pass agendas/power grabs.

    Holy fucking cow. You're gullible.

  37. Call it Crazy


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    51   8:11am Thu 21 Jun 2012   Share   Quote   Permalink   Like   Dislike (2)  

    EBGuy says

    Phoenix is one of those places where they ripped off the bandaid quickly (due to non-judicial foreclosures). Extremely painful initially, but why delay the agony? From the WSJ today:

    Nearly 94% of Phoenix ZIP Codes and 90% of Denver ZIP Codes saw values rise during the three-month period ending in April, up from 5% and 6% a year ago, respectively.

    Well, that's a start in the right direction, but this is after a decline of like 75%, so it's got a long way to go..

  38. True Real House Sheriff


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    52   7:40am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (7)  

    APOCALYPSEFUCK is Shostakovich says

    But

    it's

    still

    a

    dead

    cat.

    How can you be so sure..... We'll only know in hindsight. But yeah, I do agree with this (in theory) or rather, I wish this were true -- thanks for the succinct perspective, Strategic Renter (like your name btw):

    "Everything is being thrown at housing to make prices rise. Simply wait this temporary situation out and prices will resume their fall. Mortgage rates rose this week and huge tax increases are coming in january. Time is the buyers friend."

  39. True Real House Sheriff


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    53   7:40am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (7)  

    It may be worth it to see how things go during the traditional "slow" season for real estate especially in the year that many sources are now declaring as the housing bottom. Will the end of the year witness sustained (higher) prices or will things reverse? As a buyer, I have taken myself out of the market temporarily to see what happens.... at least till later in the year or till any improvement in inventory, whichever happens earlier.

  40. True Real House Sheriff


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    54   7:40am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (7)  

    RobertoAribas,

    I don't mind a healthy, intellectual debate on these matters and welcome opposing views, arguments and such. But I agree that the trolls are completely useless and bring nothing but noise to these threads. Glad I blocked them all too.

    I'll add some other reasons for the market reversal. There are other threads explaining the tight inventory and low supply. But allow me to posit where I'm seeing the source of the extra demand --

    - foreign money coming in after fear of global slowdown or European debt crisis coming to fruition. This is a "flight to safety" in a way. U.S. real estate appears much better priced now, so foreigners are wanting to shovel their money here to escape the uncertainty elsewhere.

    - Strong stock market in early 2012 with people unloading liquid assets and now needing to put it somewhere else.

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