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Former Arlingtonian



Joined: 23 Oct 2013
Posts: 141

PostPosted: Wed Nov 02, 2016 8:26 pm GMT    Post subject: Ways to protect your Home investment Reply with quote

R,

There are ways to make money from the fall in real estate prices - and there by insure your equity in your home.

For example , in the last 3-4 months I'm building short position in home builder stocks and a safer way might be to investigate out of the money PUTs that expire in 1-2 years on Toll Bros or Lennar.

Money will be made from housing falling from the current high.

Enjoy the new home .

Best Regards
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PostPosted: Thu Nov 03, 2016 1:51 pm GMT    Post subject: Re: No - it has been very risky to own Reply with quote

Former Arlingtonian wrote:
Yes, when R/E prices are going up or staying up everyone says - "see no risk".

The tough part arrives without warning and a nice little family is living in a Condo the bought with a mortgage. The nice little family had better not miss their Mortgage payment, their HOA payment, and the property tax payment.

If the nice little family misses any one of these three monthly obilgations - then all hell will break loose. What percentage of Condo owners who bought in the last 10 years can go without income for 1-3 years?????

Kind regards

Yep. That's why I keep $100K cash in the bank. My monthly PITI is about $2800. On a 2500 SF single family house in Arlington.
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Guest






PostPosted: Wed Nov 09, 2016 4:26 pm GMT    Post subject: Reply with quote

And now today, incredibly, inexplicably, the country has elected Donald Trump as President of the United States.

Any predictions what this means for real estate prices in MA?

So far, no stock market crash as was predicted on election night...
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admin
Site Admin


Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston

PostPosted: Wed Nov 09, 2016 4:41 pm GMT    Post subject: Reply with quote

Anonymous wrote:
And now today, incredibly, inexplicably, the country has elected Donald Trump as President of the United States.

Any predictions what this means for real estate prices in MA?

So far, no stock market crash as was predicted on election night...


Treasury yields are up sharply today. That will make mortgages more expensive. However, yields are still only ~2% whereas they've been as high as ~3% (off the top of my head) during the recent run up in house prices, so that's probably not enough to matter, yet. So I don't see an immediate change is sight, unless yields keep climbing for awhile.

That said, we're about due for another recession, which would probably happen with or without Trump, but a trade war would hasten it. Given that the stock markets recovered from their overnight futures shock, the markets may be pricing in that he won't follow through on that part of his rhetoric. So there may be no Trump-specific change there either.

I'm drawing a blank on what other pertinent side effects there might be.

- admin
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PostPosted: Wed Nov 09, 2016 5:22 pm GMT    Post subject: Reply with quote

It's hard to say. Just stay diversified. No one knows WTF is going to happen.
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PostPosted: Wed Nov 09, 2016 11:25 pm GMT    Post subject: Reply with quote

Geez, it's so hard to know when to buy. I'm looking at closing on a place in the low 500s in Waltham, and it seems reasonably priced based on comps, but now everyone is talking about a recession.

My kids are growing up, I don't really want to rent for another 5-6 years, but I don't want to get screwed by falling house prices. On the flip side, maybe Trump jacks up the economy in the short term, and inflation goes up and boosts house prices to where I can't afford them at all.
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PostPosted: Thu Nov 10, 2016 7:38 pm GMT    Post subject: Reply with quote

Quote:
My kids are growing up, I don't really want to rent for another 5-6 years, but I don't want to get screwed by falling house prices. On the flip side, maybe Trump jacks up the economy in the short term, and inflation goes up and boosts house prices to where I can't afford them at all.


First of all, you won't get screwed by falling house prices, unless you sell at the bottom. If you only want a place to stay for a long while, so your kids can grow up in that area, then most likely you should buy. But if that area is not ideal for you kids, then you should reconsider.


Secondly, I don't think even Trump himself has an clear idea of what he is going to do with the economy. A lot of his campaign promises are hard to execute, if not impossible to execute. House price is already as high as it is, any interest rate hike will upset the market at this point. Yet you have to ask yourself, why would Trump want to raise interest rate? Wouldn't that hurts his real estate kingdom the most?
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admin
Site Admin


Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston

PostPosted: Thu Nov 10, 2016 7:44 pm GMT    Post subject: Reply with quote

Anonymous wrote:

Secondly, I don't think even Trump himself has an clear idea of what he is going to do with the economy. A lot of his campaign promises are hard to execute, if not impossible to execute. House price is already as high as it is, any interest rate hike will upset the market at this point. Yet you have to ask yourself, why would Trump want to raise interest rate? Wouldn't that hurts his real estate kingdom the most?


He's got rather limited control over keeping rates down (though he could inadvertently send them higher if he defaulted on US debt, as he actually suggested). The Fed, which ostensibly operates independently, has some control. Markets have the most control.

- admin
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PostPosted: Thu Nov 10, 2016 8:46 pm GMT    Post subject: Reply with quote

Quote:
He's got rather limited control over keeping rates down (though he could inadvertently send them higher if he defaulted on US debt, as he actually suggested). The Fed, which ostensibly operates independently, has some control. Markets have the most control.


This is what should happen in the perfect world, when political influence is not added to the market.
But really admin? You still believed in this type of crap at this point?
You think Yellen holding back rising interest rate is because it would do great good for the public?
You think the FBI was doing its job all alone, and just accidentally found new evidences couple weeks ago?

I really want to see how Trump default the US debt, as this will kill US dollar, which is the one and only thing that make U.S. the world leading super power. We lose the green back as internal reserved currency, we lost it all.

What we should look at and think about is, who is in power, and what outcome would benefit those in power. Then try not to get run over by standing on the wrong side of the road.
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admin
Site Admin


Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston

PostPosted: Thu Nov 10, 2016 9:35 pm GMT    Post subject: Reply with quote

Anonymous wrote:

This is what should happen in the perfect world, when political influence is not added to the market.
But really admin? You still believed in this type of crap at this point?


I was saying the market is the dominant factor in keeping rates low. It isn't the only factor, and sure, political influence is another factor, but the market's influence is stronger. To wit, foreign holdings of US debt are quite large, and Yellen doesn't have much ability to manipulate that: http://ticdata.treasury.gov/Publish/mfh.txt

- admin
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victorgbishop



Joined: 03 Oct 2016
Posts: 25

PostPosted: Wed Nov 16, 2016 4:19 pm GMT    Post subject: Might relief be coming??? Reply with quote

I went to an showing in 02136 last night and the property (total gut and rehab) was sitting on the market for 30 days at an inflated price of 480K. on Sunday it was dropped to 415K due to the fact that its a SFH in a good neighborhood and the house flippers want to get rid of it. I see this as a good sign as prices may start to come down because they have been sitting for a while.
However prices are still ridiculous in 02131, where new construction of a 2 family that's been condo-ized (2 separate entrances) is going for a whopping 629K - which is totally inflated.
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PostPosted: Thu Nov 17, 2016 6:18 pm GMT    Post subject: Reply with quote

Wake me up when you see that shit happening in high-demand zips like 02138. Then we'll talk bubbles.
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PostPosted: Fri Nov 18, 2016 2:00 am GMT    Post subject: Reply with quote

If you don't think prices can soften in 02138, then you would think it's a good investment.
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PostPosted: Fri Nov 18, 2016 7:25 pm GMT    Post subject: Reply with quote

Guest wrote:
If you don't think prices can soften in 02138, then you would think it's a good investment.


All depends on how much upside you're seeking. Meffa is probably a way better buy.
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 234
Location: Cambridge, MA

PostPosted: Wed Nov 23, 2016 12:12 am GMT    Post subject: Reply with quote

Have BostonBubble readers seen local and national press about the housing market correction that is unfolding, pre-interest rate change and pre-Trump?

10/31/16: Trick or Treat, Rents in Boston falling: 1BR down 6%, 2BR off 2%
http://bit.ly/HeckRents

11/15/16: 9.5 month backlog of unsold listings in Weston = six figure price negotiation leverage in our experience as buyer agents
http://bit.ly/UnSoldBosRE

11/14/16: Median prices down 7.7% YOY in upscale MetroWest suburb
http://bit.ly/WaylandFalling

11/21/16: MUST READ list of why Bubble 2.0 more dangerous than Bubble 1.0
http://bit.ly/Bubble2SF

BUBBLE HOUR: Anyone want to meet offline to discuss, deconstruct the articles appearing daily with forecasts about real estate in the Trump era?
_________________
Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com/blog
http://twitter.com/RealEstateCafe
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