Housing bubble? What does W.Buffet say?

[Kenazo]

Originally posted by: JS80

Originally posted by: libs0n

Originally posted by: JS80

Weaker dollar will not significantly affect american individuals. A rise in euro means BMW and MBZ corporate will make less euros. A rise in Yen will mean Japanese electronics makers will make less yens. If anything it will increase demand for american goods.

Well, I can see one place where a falling dollar will hurt americans: oil. If I'm not mistaken, the import of oil accounts for the largest portion of the american trade deficit, and the one that's been increasing most in size and will continue to do so; trinkets from china et al being overhyped as the sole problem.

Although I understand that it is one of the factors contributing to the rise in the price of a barrel of crude, I've always been curious, but never done the legwork to find out, how much of the increase can be accounted for in the decline of the American dollar. Perhaps someone can point me in the right direction to find what the price of oil has been in euros, or ounces of gold, compared with dollars over the years; if not I'll ask in the next open thread at oil drum about it.

On Buffet, guy pulled out too soon. 7% decline in 5 months? Man, those printing presses must be churning them out.

Oil is traded in dollars, so a drop in the dollar would not affect Americans. If Oil was traded in euros, then yes, a drop in the dollar would make oil more expensive. But Oil is traded in US dollars.

However, I think Iran is trading their oil in Euros now. US doesn't buy iranian oil so I'm not quite sure the full effects of that.

Of course a drop in the dollar will affect the American purchasing power when it comes to oil. Mr. Joe Kuwait is only going to sell at a price that makes sense for him. If the American dollar is down the crapper he's not going to sell to you at the same amount of american dollars.

 

[Maximin]

If the rates keep going up like this, things will get uglier than most people expect. Grap your helmet, if your fixed rate period will end soon.

 

[dirtboy]

Originally posted by: b0mbrman
To those expecting to jump on rapidly dropped prices, good luck. Real estate booms cool, but the bottom rarely falls out from under them in the same manner as the tech sector imploded...

In developed nations worldwide, historically prices fall an average of 40% over a 4 year period following the peak.

It will fall, just not as fast as the tech stocks.

Interesting enough, this recent run up is by far the largest rise in real estate in history, so the fall should set records as well.

 

[dirtboy]

Originally posted by: JS80
You guys are delusional if you think most homebuyers are ~$65k income with 1 year ARMs and overstretched. I've been hearing the housing market bubble story for the last 3 years. And guess what? Prices have been going up. When it comes down to it, it's simple supply and demand; supply of real estate is (relatively) fixed, while demand increases.

For all you that are saying there will be forclosures and prices will crash, let me tell you the worst scenario for the housing market. So the chump who bought a $500k house on a 5 year arm in 2002 at 3-4% will see his payment go up by 50%. By now that $500k house is worth $1 million, so he puts it on the market a few months before his new payments are due. But let's say everyone and his dog is in the same situation and decides to sell their $500k house which is now worth $1 million. OMG THE HOUSING BUBBLE HERE IT IS IT'S GOING TO POP IT's GOING DOWN 20%!!!!!! OK......20% drop is $800k, the a$$hole still made 60% plus he doesn't pay any taxes on the gain.

There may or may not be a housing bubble, but the only way prices will fall is if people are willing to sell it for a lower price. A 20% drop in housing prices isn't going to cause the sky to fall, but even then don't be hopefuly you'll be able to get in at that price, because even then it's 60% higher than the beginning of the "housing bubble" hype.

But most of all, there are so many cheapos like you who have been waiting for the last 4 years for the bubble to pop it will keep demand for housing (and consequently prices) high.

LOL

You don't know anything about real estate. Look back 5 years and think you're an expert... reminds me of all those people who said the stock market would never go down and 30% per year was the norm.

Whoops.