Inventing a Crisis

[Dinner]

Originally posted by Ramo
Until the California real estate market crashes. Seriously, how long can such growth be sustained?

50 years and counting.

[Japher]

I was rebutting the statement that reitrees would get out of RE, when they never really do... REITs give a rather steady yield, which is what a reitred person wants.

[Dinner]

Originally posted by el freako
Also investing in housing for your retirement is a bad strategy because when the baby boomers retire together there will be a large influx of people trading-down, selling investment properties and letting such properties out.

Perhaphes in most of the country but in California we have a relatively high birth rate and a low age population plus we remain the largest state to recieve immigration. Thus our population continues to rise but the supply of new houses continues to go down due to ever tightening eviromental laws. Nearly half of the "new" developments in San Diego are redevelopment projects in existing urban areas. Meaning old single family homes in run down areas like the East Village (which used to be truly blighted) are converted into new multiuse high rises.

Multiuse means the the first story is used as office or retail space while the other four stories are used for apartments or condos with underground parking beneith the building. Thus the supply of single family homes is actually decreasing while the population demanding single family homes is increasing. I'm on the right side of the demographic trend in this one.

BTW rents are averaging a 8% raise per year which doesn't cover everything for the first few years but after three years or so you should show a monthly net profit from rents. Also as the value of the home rises your costs don't rise as you still only owe the remaining cost of the intial loan. You don't get access to the capital until you sell or refinance but it's still increasing your net worth and is a good way to fund a good chunk of retirement.

[Dinner]

Originally posted by Japher
I was rebutting the statement that reitrees would get out of RE, when they never really do... REITs give a rather steady yield, which is what a reitred person wants.

Ok, that's true.

[el freako]

Originally posted by Oerdin

Perhaphes in most of the country but in California we have a relatively high birth rate and a low age population plus we remain the largest state to recieve immigration.

Well California is the largest state by population so you would expect that - how does california compare with other states when using immigrants/population?

Originally posted by Oerdin
Thus our population continues to rise but the supply of new houses continues to go down due to ever tightening eviromental laws.

Well being on the right side of a government buggered-up market will certainly help you reap unusual profits.

Originally posted by Oerdin
Thus the supply of single family homes is actually decreasing while the population demanding single family homes is increasing.

BTW rents are averaging a 8% raise per year

Well be carefull, it sounds like housing costs are outpacing incomes - and that situation is not sustainable long-term.
How much of the property market is driven by people such as yourself who are using this as a retirement vehicle? and what will happen to prices when they have finished making their investments?

Originally posted by Oerdin
You don't get access to the capital until you sell or refinance but it's still increasing your net worth and is a good way to fund a good chunk of retirement.

Well be aware that a lot of other baby-boomers have the same idea as you, when they start to sell up then prices are likely to fall - of course if you plan to live off the rental income and leave the property to your descendants then you don't have to worry about that.

[DanS]

Like it or not we're stuck.

That's BS. We have wide freedom of movement to help ameliorate this problem right now.

[GePap]

Originally posted by Lawrence of Arabia


well i want my own money. i worked for it, so i deserve it. isnt this america? will america keep its promise to me?

Your money? what the hell are you talking about?

When you begin to work you know beforehand you will have to pay payroll taxes-the money that was taken was never going to be "your money" in the first place.

I find it rather crazy to claim as your money you were never entitled to get in the first place.

[GePap]

Originally posted by Ogie Oglethorpe


Krugman has the credentials but also the hate of the current admin to make me question almost everything he writes.

Partisan doesn't begin to describe him.

Edit - Damn need to read to the end of the thread. What Drake said.

Says someone who quotes from the National Review or the WSJ Editorial page and other such rags

Krugman is partisan- so what? Unless you can challenge the numbers, you got no case.

[DanS]

Krugman dances around the issue a lot, so if you don't read carefully, you will be misled about what he is really saying.

Privatizing Social Security - replacing the current system, in whole or in part, with personal investment accounts - won't do anything to strengthen the system's finances.

It won't strengthen the Social Security system's finances, but it will strengthen our collective retirement finances.

If anything, it will make things worse.

The "things" he is talking about is solely the Social Security system. Not our retirement finances in general. By replacing the system, our federal debt might go up (we're paying on this at 3% real), but our gains will go up too (our accounts will be paid 5.5% real or whatever).

Nonetheless, the politics of privatization depend crucially on convincing the public that the system is in imminent danger of collapse, that we must destroy Social Security in order to save it.

This is a strawman, because the reformers want to replace the Social Security system with a system designed to more adequately finance retirement. They neither want to "save" nor "destroy" the Social Security system.

[Tingkai]

Originally posted by DanS
It won't strengthen the Social Security system's finances, but it will strengthen our collective retirement finances.

The Bush plans creates major problems for the U.S. economy, it will leave poor people worse off, it creates massive problems in the future. and there's no pressing need to change the Social Security system.

[DanS]

The Bush plans creates major problems for the U.S. economy

How so?

it will leave poor people worse off

How so?

[Al B. Sure!]

Lawrence:

half a million plus my property that i can sell in the city for a few million (real estate always goes up)

huh? real estate in the city always goes up? it's been falling dramatically for the past 50+ years. and that's not even mentioning the inverse relationship between real estate values and property taxes. In a city like Philadelphia, real estate values have been plumeting continuously for decades in all but the gentrifying neighbourhoods all while property taxes have been raised to restore the balance.

[chequita guevara]

Originally posted by Albert Speer
In a city like Philadelphia,

You keep forgetting that Philly is a pit.

[GePap]

Reasl Estate values in NYC are through the roof.

Average cost of a new apartment in Manhattan is 1 million dollars. The Median is probably around 800,000, thought that number I am not sure about.

[Al B. Sure!]

i assume Baltimore, Detriot, Chicago, Dallas, Houston, Oakland, etc. all face similiar problems as Philadelphia.

And Manhatten, Gepap? you're mentioning Manhatten? apples and oranges. of course there's some gentrifying or already wealthy areas where real estate values continually rise but for much of america, real estate has been plummeting for decades.