bostonbubble.com

[GenXer]

Anything can be 'explained' while looking in the rearview mirror. Try predicting something like that given what we know today. The answer is, we can not. We can but guess, and be wrong most of the time. The point is that to those people, reality changed on a dime before they realized that they were out of options. That is why one should never discount such examples as outliers. In MA, the dynamics may be different, but the end result may be the same. The only question is when and by how much. Our taxes will go up. We will not follow CA's path down, but we will follow a path. Nobody knows how deep and how long it will take, but in the end, something has to give. The debt of this state is tremendous and so are the liabilities. The money has to come from somewhere, and the printing press is working overtime, ensuring that in the future we'll have huge inflation. There are bigger factors in play here than seasonal house buying. I'm sure that in CA there was plenty of buying just as the prices were about to collapse 50% or more. This is a fact of life - most people miss the boat. The rest simply got lucky.

[balor123]

[mpr]

[GenXer]

This is exactly why I post here. People think that just because they have all of the information at their fingertips that they would be able to make the right decision. Unfortunately what I see is that people mistake noise for information. My argument is that it does not matter what the market does, but it matters more what the individual does. Your decision to buy should not hinge on what the market will do, but rather on whether you can afford to buy and at what level.

This is what I've been warning about all this time - you don't just go out and pick the best house on the market at the time. Rather, you want to first do the math and figure out what is a house you can afford, and THEN you wait until you can afford to buy such a house. Any other approach which tries to guess the future will invariably fail, which is exactly what happened in CA and many other places.

[GenXer]

Buying a house should not depend on the market, simply because this is the only way to minimize the fallout from the market risk. When buying stocks, one needs to buy 1000 stocks to have a reasonably balanced portfolio. We do not have the luxury with houses. Do you want to depend on a single stock to carry your retirement portfolio? Well, in effect, this is what people are doing by depending on their house purchase to multiply (or at least to not significantly diminish) their assets.

For all possible scenarios, market risk has to be minimized. This is part of a solid financial plan, and this is what everybody should go for, nothing less. Unfortunately people prefer to take their chances - and majority gets screwed in the process. Had they known it would happen, they may have done someting different. But the lucky ones never look back, that is, until the next time they take a chance. Living a life of taking risks which can be mitigated is not very appealing. The longer you play this game, the more likely you are to get unlucky.

[john p]

I think that there is a phenomena in the market where people will crowd onto thin ice and just keep piling on. It's almost like if they all believe that the ice will hold it will. The funny thing is that a Ponzi scheme can last quite some time so long as nobody says anything.

The political component seems to be that one party might try to maintain a bubble while the other party wants to pop a hole in it. It is a bit disingenuous for the Republicans to say that nobody read the Stimulus Bill and it was rushed while they pretty much rushed the whole Iraq deal. Obama is disingenuous because he said he wouldn't rush things and would hover over every dollar spent and wouldn't tax anyone making under $250k "in any form".......

We even have regulatory ponzi schemes. We have reverse racism, we don't enforce certain laws so people assume that they don't matter. The SEC was asleep at the wheel and now they're going to get more power??? Chris Dodd and Barney Frank were totally on the wrong side of this subprime mess and Dodd gets political points for coming up with the remedy? People just want to know what the playing rules are. It is surreal for most and it is hard to apply rationality to a surreal world with leaders who say "Together We Can" and "Yes We Can" and you see these blind lemmings crying saying that they won't have to pay their mortgages anymore because Obama will be President. Obama lies about not having lobbyists in his Administration, about taxing, about not signing a budget with earmarks, etc. etc. etc. and he just sails down the line and nobody calls him on it. That is so surreal to people who pay attention.

Normally, different perspectives don't vary much, but the basis for the current tidal wave of change is totally flawed. Obama and the Democrats are acting upon the basis that the rich took all the money from the working class in this country during the Bush years and that their job is to counter the forces of capitalism with democracy and tilt the playing field back to balance things out. They have data that they point to to suggest this, but the forces that caused these statistics aren't what they think. The real basis as I see it is that the money went to emerging markets and we became a consumer, debtor nation. We let our labor get too expensive and it went overseas. We loved our Unions so much that we overfed them and they priced themselves out of a global market. So basically we're taxing the wealthy who are investing in global companies and spreading that wealth to other non tax paying citizens. The problem is that this method doesn't have a good end game. To give you a sense of how perverted the current powers are, they are actually thinking about taxing health benefits after skewering John McCain in the campaign for suggesting to do so, and MAKING THE UNIONS EXEMPT! I mean this is absolutely absurd and this leaves such a polluted, parasitic footprint of ideology. It is a basis that we can't build a society on. If these parasites get too strong and aggressive they will eat through everything and then go looking for more and if they are polluted with delusion they will be agressive and more selfish and that will be dangerous for our nation.

I find that peaceloving people tend to be self sufficient because they don't need to be takers. Takers need to build a delusional rationale to justify their selfish actions. We need to nip the delusions in the bud.

[mpr]

[GenXer]

If you needed a house and could buy at the height of the bubble, there was no reason not to buy. A lot of people could not afford it, and bought anyway. From what I understand, very few people could afford to buy, and those who could are doing just fine.

Yes, it is impossible to time the house market. Some people simply get lucky. Try doing that more than once (the more the better), and you'll see that luck plays a bigger role than people realize.

Even though I believe that prices will go down, I'm not predicting that it will happen soon. It may happen. It may not. I don't make decisions based on such 'predictions' which are to be taken with a grain of salt.

Market dynamics based on observations which are not statistical are nothing more than anecdotes. I often like to read about stuff that happens in the market (just like everybody here), but I always caution that to use such anecdotes to predict major trends is not a good idea. We can talk about it, but taking these 'trends' seriously is not very smart, especially if you are to buld up your understanding of the market dynamics based on noise. I think our money supply, national debt, debt to assets ratio and the Chinese buying treasures have more impact on market dynamics than some of the items discussed in this thread.

[melonrightcoast]

balor123:

I didn't write some of those quotes you attributed to me... I think WestCoastXPlant wrote some of them.

That said, I disagree that it isn't possible to save $$$ on a single income. We are actually banking over $1500/mo, some of which goes to 401K/IRA, and some to savings. That said, we live WAY below our means compared to most of our friends.

And almost all couples are DINKs ... until they have kids .

As for the stock option cash-out at the right time ... well, let's just say my husband knows way too many people that did just that and have a very comfortable life now because of it. I think it is rather annoying, actually, as I think he will always chase/create start-ups on the hope of making a ton of money like many of his college buddies did.

When I say bankers, I'm also grouping private equity and VC into that category. And there is quite a bit of those industries here ... no where near NYC or SF levels, but I'd guess Boston is third place (I'm sure there is a stat on this somewhere).

All in all, I think that prices will continue to fall, but likely not as much as I want. And, I think prices will fall very slowly, especially in our immune town .
_________________
melonrightcoast ... are you?

[WestCoastXPlant]

[john p]

Gen X-er said:

[melonrightcoast]

WestCoastXPlant wrote:

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