I agree with you chairman. But my biggest fear is that all of us will be unemployed, so then we can't buy a house. Are there any architects out there who survived the 89-91 recession?? If so, were you practicing architecture...or living off of your savings??
interesting article in the sunday nytimes magazine about a corporate builder and thier outlook. it's not pretty - although a bubble is the least of it. they talk about housing costs doubling or tripling - to european levels. unfortunately it's behind the new nyt pay site...but worth reading if you can find it.
the housing bubble will be messy. with the change in the bankruptcy codes (actually from a lawyer friend its about 1600+ pages of small print), when the bubble bursts it will most probably quash the economy flat as a pancake.
look at the scenario of loosing something back to a creditor. A friend just had a car repo'd. It doesn't matter if you are mr. nice and turn it back in when you cannot make the payments. The creditor sells it. They don't have to sell it at a profit. They generally sell it at a big loss. The original creditor gets sent a bill for the difference. In this case a truck with a value of about 11.5k sold for 3k at auction. The friend got the bill for the difference. Extrapolate that back into the mortgage market.
Back in the previous reiteration of Iraq, the real estate market tanked, along with every expression of disposable income for about 18 -24 months. People sat on their wallets in their back pockets if they had something in it. They just stopped spending.
When the banks had all their extended credit to clients in the housing market go south, they eventually dumped everything in their bad loan portfolios at very substantial losses. The banks sucked it up. There was a 6000sq foot 4 plex that sold for 175k. It was on the cliffs at the beach in Los Angeles. They had sat on the building for over 3.5 years before they cut it loose.
From what I can gleen of all that loose and easy credit that has been artificially keeping the economy afloat (and money exchanging between hands) - partnered with people refinancing and pulling money out of their houses to live and buy, buy and live............ Add Walmarts flush with products from China, and we have not been supporting our next door neighbors who we do business with.
Add the new bankruptcy codes.............. basically if you can afford about $25 a month in payments - those with assets that they are letting go of or loosing............ well, they will never be off the hook for a great many winters. When the banks get the houses and sell them at a loss, the original loan holder will most probably get sent the bill like they do with cars that are repo'd.
The effect will be to decimate what is left. Bubble will let forth a flood that chills into a slow moving glacier........ damage going in every direction and into every industry section. The industry keeps alive by people having reasonable credit and the money moving around. The new laws were designed to protect the bank & credit industries who see what is coming down the pike and if they can get someone else to keep paying the piper so that they don't take it in the shorts -oh, they just did.
Have a second set of job skills handy. It is going to be flat for a while. Single proprietor professional practices might be back in vogue - Lean and mean to survive. People's general expectations are about to lower.
no, j, the price of the bottle of water has nothing to do with it. this flu virus is very dangerous and could hurt all of us that drink water whether we payed alot of money for it or not. this is very serious stuff and apparently the evil swiss company (roche) that invented it, also controls all the antidotes called tamiflu and they are only selling it too certain people.
it is very possible that many of those who drink evian but work jobs like construction will not be saved. it might kill 100 million people and that means that many houses will be left over.
The housing bubble is of dramatic concern but it's much bigger than just the recent rapid growth in housing prices.
Currently the US savings rate has officially dipped to a negative rate. 60% of the US economy is based upon the consumer and consumption. People have been using rising home values to consumer, thus becoming the crutch of the economy. Globally the world depends on the US consumer to buy their goods. Then the profits are invested in US treasury bonds to keep the US economy going. It's a cycle.
Right now the Fed is backed into a corner. They housing bubble was created by lowering interest rates. If they raise them too fast they can trigger the bursting of the bubble. The same low interest rates, along with rampant dollar printing, has devalued the dollar. In order to keep the entire economy afloat, interest rates must rise to stabilize the currency and keep foreign investment flowing in.
So, if rates go higher, where they need to be the housing market could cool off too fast. If rates don't go up China might decide to invest somewhere else and send the economy into chaos. Oh, and throw in high energy and commodity prices. Yeah, the shit is going to hit the fan sooner than later.
We're looking straight onto 1970's like stagflation. It'll be nothing like 1991. I'm less concerned with getting a sweet house when the prices lower. I'm more worried what architects will do to each other as the construction market cools off and there is 1/2 as much demand for architects.
i still concerned about the evian thing too...that's what i make my ice cubes out of since there's no way tap water is touching my expensive booze...speaking of which, it's time for another scotch
from what I've read, most think there will be a soft landing. Most think, again, from what I've read, that some markets, like LA, NY, Miami, will plummet, but others will self correct and level off.
That's fine with me, as long as our economy keeps getting stronger.
we are already in a housing bubble. i've been tracking the MLS for the past year. prices are dropping steadily. i have friends who are dropping their price on their property. look at the playa vista development. 12 months ago, their were only 2 or 3 properties selling. now their are around 22 and they are not selling. i've seen the same properties on there for at least 2 months. the same goes for the playa del rey area.
if you're thinking about buying, wait 6 months. i've read so many articles about the housing market coming down. their isn't one single positive article about the housing economy.
this will result in a slow economy. i doubt it'll be bad as the early 90's, but i think things will just keep steady like the east coast (exception of D.C. and Miami>.
Oct 24, 05 10:20 pm ·
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The Housing Bubble???
The housing bubble...lets talk about it. Does anyone else feel that we, as architects will be facing a similar situation as in 1989-1991?
I hope so, then we might all be able to buy a house really cheaply....
I agree with you chairman. But my biggest fear is that all of us will be unemployed, so then we can't buy a house. Are there any architects out there who survived the 89-91 recession?? If so, were you practicing architecture...or living off of your savings??
the 78-83 recession was 100% worse
interesting article in the sunday nytimes magazine about a corporate builder and thier outlook. it's not pretty - although a bubble is the least of it. they talk about housing costs doubling or tripling - to european levels. unfortunately it's behind the new nyt pay site...but worth reading if you can find it.
after this evian flu hits there will be too much housing, hence the bubble
the housing bubble will be messy. with the change in the bankruptcy codes (actually from a lawyer friend its about 1600+ pages of small print), when the bubble bursts it will most probably quash the economy flat as a pancake.
look at the scenario of loosing something back to a creditor. A friend just had a car repo'd. It doesn't matter if you are mr. nice and turn it back in when you cannot make the payments. The creditor sells it. They don't have to sell it at a profit. They generally sell it at a big loss. The original creditor gets sent a bill for the difference. In this case a truck with a value of about 11.5k sold for 3k at auction. The friend got the bill for the difference. Extrapolate that back into the mortgage market.
Back in the previous reiteration of Iraq, the real estate market tanked, along with every expression of disposable income for about 18 -24 months. People sat on their wallets in their back pockets if they had something in it. They just stopped spending.
When the banks had all their extended credit to clients in the housing market go south, they eventually dumped everything in their bad loan portfolios at very substantial losses. The banks sucked it up. There was a 6000sq foot 4 plex that sold for 175k. It was on the cliffs at the beach in Los Angeles. They had sat on the building for over 3.5 years before they cut it loose.
From what I can gleen of all that loose and easy credit that has been artificially keeping the economy afloat (and money exchanging between hands) - partnered with people refinancing and pulling money out of their houses to live and buy, buy and live............ Add Walmarts flush with products from China, and we have not been supporting our next door neighbors who we do business with.
Add the new bankruptcy codes.............. basically if you can afford about $25 a month in payments - those with assets that they are letting go of or loosing............ well, they will never be off the hook for a great many winters. When the banks get the houses and sell them at a loss, the original loan holder will most probably get sent the bill like they do with cars that are repo'd.
The effect will be to decimate what is left. Bubble will let forth a flood that chills into a slow moving glacier........ damage going in every direction and into every industry section. The industry keeps alive by people having reasonable credit and the money moving around. The new laws were designed to protect the bank & credit industries who see what is coming down the pike and if they can get someone else to keep paying the piper so that they don't take it in the shorts -oh, they just did.
Have a second set of job skills handy. It is going to be flat for a while. Single proprietor professional practices might be back in vogue - Lean and mean to survive. People's general expectations are about to lower.
no, j, the price of the bottle of water has nothing to do with it. this flu virus is very dangerous and could hurt all of us that drink water whether we payed alot of money for it or not. this is very serious stuff and apparently the evil swiss company (roche) that invented it, also controls all the antidotes called tamiflu and they are only selling it too certain people.
it is very possible that many of those who drink evian but work jobs like construction will not be saved. it might kill 100 million people and that means that many houses will be left over.
The housing bubble is of dramatic concern but it's much bigger than just the recent rapid growth in housing prices.
Currently the US savings rate has officially dipped to a negative rate. 60% of the US economy is based upon the consumer and consumption. People have been using rising home values to consumer, thus becoming the crutch of the economy. Globally the world depends on the US consumer to buy their goods. Then the profits are invested in US treasury bonds to keep the US economy going. It's a cycle.
Right now the Fed is backed into a corner. They housing bubble was created by lowering interest rates. If they raise them too fast they can trigger the bursting of the bubble. The same low interest rates, along with rampant dollar printing, has devalued the dollar. In order to keep the entire economy afloat, interest rates must rise to stabilize the currency and keep foreign investment flowing in.
So, if rates go higher, where they need to be the housing market could cool off too fast. If rates don't go up China might decide to invest somewhere else and send the economy into chaos. Oh, and throw in high energy and commodity prices. Yeah, the shit is going to hit the fan sooner than later.
We're looking straight onto 1970's like stagflation. It'll be nothing like 1991. I'm less concerned with getting a sweet house when the prices lower. I'm more worried what architects will do to each other as the construction market cools off and there is 1/2 as much demand for architects.
i am stuck on evian vs. avian...funny how minor spelling mistakes can change the thought processes....
i still concerned about the evian thing too...that's what i make my ice cubes out of since there's no way tap water is touching my expensive booze...speaking of which, it's time for another scotch
The UK bubble is more a hot air balloon. I’m holding out for a bargain repossession acquired from auction. I’ve been waiting for 4 years.
I saw this on the general world trend.
link
from what I've read, most think there will be a soft landing. Most think, again, from what I've read, that some markets, like LA, NY, Miami, will plummet, but others will self correct and level off.
That's fine with me, as long as our economy keeps getting stronger.
plz crash hard k thks
'tis farther and further away each day
I MISSED THE BOAT
*drinks scotch w/ puddles*
we are already in a housing bubble. i've been tracking the MLS for the past year. prices are dropping steadily. i have friends who are dropping their price on their property. look at the playa vista development. 12 months ago, their were only 2 or 3 properties selling. now their are around 22 and they are not selling. i've seen the same properties on there for at least 2 months. the same goes for the playa del rey area.
if you're thinking about buying, wait 6 months. i've read so many articles about the housing market coming down. their isn't one single positive article about the housing economy.
this will result in a slow economy. i doubt it'll be bad as the early 90's, but i think things will just keep steady like the east coast (exception of D.C. and Miami>.
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