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Most Recent Articles: .. .. Deflation with Inflation: No Recession, but Depression? "06.15.08 .. in order to survive, we will be forced to become a fascist aggressor or a socialist state. With the failure of Iraq, the latter seems more likely..."
.. Oil and war speculation "..the markets have reacted to oil price surges driven solely by speculators, and a preemptive strike possibility that has not even occurred...."
.. Bank of America & Countrywide: A signal of a housing bottom? The lender will once again have the position of strength.... ..
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Featuring San Diego Commercial, San Diego Industrial, San Diego Homes, San Diego MLS, and San Diego Real Estate! .. Ongoing Articles:
Next for the Economy: The Greatest Bull Run in History? An analysis of the stock market and economy since the Bear Stearns incident in March '08...
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No Recession, but Deflation? The March '08 UCLA economic report so far is 'right on target.... .... .. ..
The UCLA Anderson Forecast Highly Recommended! ... Most Recent Articles: .. The Schizophrenic FED Gambit .. Bearish on Housing, Bullish on Stocks ..
Analysis of California Bank Earnings Highly Recommended!
. Q2 2008 5-17-08:- Bearish on Housing: Bullish on Stocks Home Page
Update 06.15.08: Read the following article before continuing---> Regarding current sentiment: Deflation with Inflation: No Recession, but Depression?9/11/2008 Update: I am avoiding stocks and real estate investments at this time; more attractive prices may be down the road. Possible continued dollar strength and deflationary trend. hyperinflation is still expected with all the bailouts and debt our country has; and this is the long term outlook. Additionally, when the fed finally takes action, they may overcompensate its reaction to adverse dollar resilience. The markets today are not in any way logical or make sense; no one can predict what will happen, no matter what their credentials. In this type on environment, it seems wise to stay uncommitted and readily liquid until the hyperinflation makes itself apparent. Consult your financial professional; not investment advice (see disclaimer below).
A couple updates on the housing market:
UPDATE 5.14.08 US foreclosures have surged 65% from a year ago in April. California, Nevada, Florida, Arizona are the hardest hit.
Combined with gas prices and inflation, this spells more price pressure on California housing. No signs of trend reversal at this time.
UPDATE 5.16.08 On 5.16.08 report says new home construction up in April, the highest in two years.
Without a reduction in current inventory or increased sales, this just means more product hitting the market. Currently at 11 months of inventory, possibly going to 18 months inventory.
It seems like once upon a time, owning a home was a good thing: but the 'fixed fee phenomenon' makes housing a real dog with fleas without equity appreciation. People in the business, the government, and corporations have found too many ways to live off your investment dollars in housing. Additionally, most of these added 'dummy' expenses are regulated in such a way that you have to pay them, or your title becomes vulnerable. Government taxation. HOA's. Insurance. Adding the 6% commission on every sales transaction.I would much rather invest in the stock market today than buy a house. There is far more equitable appreciation to expect in stocks now. It's hard to imagine another run up in housing like we saw before any time soon. Why? There simply wont be a buyer pool like before. Damaged credit scores, tighter banks, and reluctant speculators will keep prices down for a decade or more. What will be there to drive up housing prices again like before? Couldn't tell ya, but I do know once bitten, twice shy.
Stocks, on the other hand, have a ton of money waiting on the sidelines, waiting to re-enter the market. This is the direction the FED chose to take, and we will see its effects very soon. When they lowered rates, they basically gave a green light for money to exit safety (CD's) and enter risk (stocks). As this happened, these vast sums of money rushed into commodities for safety, and into cash. Now this cash is starting to depart some commodities, or pushing others (like oil), and buying on the dips in the stock market. Oil will eventually drop, and some percentage of that money will enter the market. The herd rushed to tech in '99-2000, real estate in '03'-04., then here in 07-08, commodities. What next? Dare I say, the greatest stock market bull run in history.
Interestingly, and counter intuitively, to buy a house today is MORE RISKY than buying quality stocks. Newspapers spin housing as an investment and recovering when they can; probably because significant dollars are spent to advertise in these papers. Again, the difference between stock equity and housing equity are the fees and liquidity. Stock trading fees are nominal, and most importantly, stocks are liquid.
"But I live in my house. A significant basic necessity is addressed." True. But in today's market (which has a low probability of recovering soon) it would be roughly 50% less expensive to just rent...not to mention not having a mortgage hanging over your head that may or may not be lower than the homes worth. So you end up paying a premium on living expenses for the privilege of home ownership. I have taken losses in this market, like many people, and I can only conclude that calling housing an 'investment' is an exaggeration of the truth.
If you are torn between what to invest in, make sure the fees don't eat away at whatever gains you may earn. In today's marketplace, considering fee costs and positive equity expectation, the stock market is the place to be, hands down.Written by: The Sniper
. © 2008 Realtech Partners, Inc. All Rights Reserved. Email.
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Click here for quick California bank earnings and foreclosure rate updates ---> Analysis of California Bank Earnings---->For info on the author of this blog: the party animal turned economist! Home Page
**ARTICLES** Most recent listed last
. Q1-Feb 10 '08: - The Perfect Storm of Economic Downfall Q2- '08: So what do we do now? . .. Q1-Feb 21 '08:- The Counter Intuitive Market Force: But Housing is the Exception Q2- '08: Analysis of CA Bank Earnings . ... Q1-Feb 21 '08:- The 5% Income Rule Q2- '08: Riverside-San Bernardino tops the list... . ... Q1-Feb 21 '08:- A Compelling Argument for Alternative Investments Q2 '08: - Oil and war speculation . ... Q1-Feb 26 '08: True Market Analysis, or Self Interest? Q2 '08:- Bank of America & Countrywide: A signal of a housing bottom? . ... Q1- '08: No Recession, but Deflation? Q2 2008: Deflation with Inflation: No Recession, but Depression? . 3.17.08: Next for the Economy: The Greatest Bull Run in History? Q2- '08: The Schizophrenic FED Gambit .. Q2- '08: Bearish on Housing, Bullish on Stocks
Realtech Partners, Inc. - © 2008. All Rights Reserved. Email
DISCLAIMER: Not associated with any city, county, civil entity, or government body. No warranties are stated or implied. Use at own risk. External web sites are not endorsed. Users agree to all terms. These articles merely reflect the opinions of this author and are by no means a guarantee of future economic conditions. Though the author strives to provide accurate and relevant data, he sometimes relies on external sources and cannot assure the reader of the accuracy contained within. These articles are provided for information purposes only and are not meant to provide investment advice to anyone. Please consult with your professional financial planner for investment advice.
...................................... Recent Articles: .. Bearish on Housing.... Bullish on Stocks Stock rally, housing folly ... The Schizophrenic FED Gambit The FED rut .. Analysis of CA Bank Earnings Highly Recommended! .. Other Articles .. San Diego Commercial San Diego Industrial San Diego Homes San Diego MLS San Diego Real Estate .. Visit the housing time bomb blog. Highly Recommended!
.. ... California Foreclosures Highly Recommended! ...
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