United States Heading towards a Depression?

yeah you guys will recover a lot easier than california. The areas that went up the fastest will also be the ones that crash the hardest.

 

It's a lot harder for prices to go down than to go up. People can't sell homes for less than the mortgage so the only way for prices to adjust are short sales and forclosures.

Prices are still too high in the New York metro. More or less they are declining to 2005 levels.

It's really hard to put a value on a house. I'm thinking that you may not be able to sell a property that you bought at a lowball price even if you discounted it 20%. Just that really makes you cautious about buying.

We are just starting a recession and 2009 will probably see a 20% price decline.

If we see a deep recession who knows what will happen. The 1990 recession lasted 8 months*(July 1990-March 1991) and that was bad.

I beleive that we see a 'double dip' recession like the two year recession of 1980 *(January-July 1980 and July 1981-November 1982)

 

God, 8 months, is that it? The way the media carries on I thought they went for years.

 

That's only the months of negative growth. Unemployment peaks in the the two years following a recession. So more people lose their jobs during the recovery than the recession.

Also not all recessions are 8 months. The 1980 recession and 73-75 recession lasted 2 years with another 2 years recovery.

 

That's not that bad, decades of growth with just a few years of recession - still end up a lot further forward in the end. Guess it's a good to be a freelancer

 

I'm not going to try and predict the future as to length or time span.

The sum total of problems, across the board cuts, etc. is far larger than in 1990. On that basis I think it will be worse than that period of time.

The world economy is far larger though. China and India are becoming enormous economies. The world situation is drastically different.

Lots of different influences. I do think it is ruff, ruff, ruff.

 

Well they seem to think it has been going on for years. That said, if anything, I don't see it lasting very long at all given the fact that most people claim to feel as though they've been in it all along. The reality is, they've and we've all been in a very energy driven rape cycle that is coming to any end.

That said, I have $250/mo. in my pocket right now just from the fall of fuel. That does not include the $500/mo. my wife is saving. What would you do with an extra $750/mo.?

I sold my wireless business recently else I would have saw some $500/week in fleet vehicle use reductions. That's significant.

Energy has been the biggest money sucker in our economy, not the collapse of the housing market. That's completely secondary and in many cases only affects a small number in certain areas. Even the ripple affect is not as much of a factor as has been the ripple factor brought on by high energy costs.

Once all this stick pricey disappears and goods and services dependent on petro products follows oils mark, recession or not, the rebound will be quick and large.

 

Our exchange rate has tanked by 40%. Oil has tanked by like 60% if I'm not wrong. Yet I still pay the exact same for petrol... so someone is having a field day.

 

Its called STICKY pricing.

http://en.wikipedia.org/wiki/Price_stickiness

Gas where I am is down almost $2/gallon now. The only thing that sucks for me is I start driving a more fuel efficient vehicle this time of year and stop using the toys for recreation.

At one point it cost me $96 to fill up a Vette. That same vehicle was under $50 to fill up a couple weeks ago. It finally cost me under 10 bucks to fill up my motorcycle as well.

While we see prices down at the pump in the US, the sticky pricing is in affect where it concerns food and other services and products that have been up as the result of fuel costs.

Keep in mind the higher costs we've all paid were directly related to ENERGY!!! Not the housing market.

These too shall come down. It will just take a bit longer.

 

Most experts say its going to be worse than the early 90's recessions. I personally think that recession was fairly minor, but I was just a kid. Some experts say it will be as bad as the 1980-82 one, some say it won't be quite as bad as that one, and some say it will be almost as bad as the great depression.


In other words we are probably looking at somewhere between the great depression and at best something slightly better than the 1980 recession.


I think if barack obama gets in were headed for something worse than the 1980 depression, possibly another depression. If mccain gets elected it will be more of a 1980 style or better probably. Just my opinion.

 

The largest indicator of a recession as I see it is consumer spending going down. That is what we are seeing right now, and that is why the most recent 3rd quarter numbers are indicative of.

That said, you need to look at why they are not spending money. Is it because they do not have it? Not necessarily. Many are saving more, and spending less. But not spending, obviously if consumers are not spending money, then money is not being pumped into the economy. However, again, its not necessarily because consumers dont have money. Many are being cautious. Others are a bit turned off, fearful, or just careful. So what we are finding is that a great many of those not spending it, have it, they are just saving it.

Now, if I saw something that indicated that the primary reason for a consumer slow down in purchases was because they had no many and were also not saving, then I would feel less confident in anything but a deep, dark recession.

This does not appear to be the case as of yet. I'm not even sure that the Christmas buying season will be a good indication of what's too come because post election, depending on the candidate we elect I'm sure consumer confidence will feed off of that decision as well, whatever that might be.

 

I'll go with the reason "self interest". They're all sitting back watching their price go down and their profit margin getting bigger and bigger. What are we going to do, not fill up? They just run riot around here and the government doesn't do squat. The fact they have the EXACT same price ($1.43/L) is nothing suss, gee, no price fixing going on here

 

hmm well we started losing jobs in beginning of 08 every month. So maybe we have been in a recession since the beginning of the year. Not by the technical description based on GDP over 2 quarters, but by that board that determines what is a recession by a number of factors. I guess well have to see what they figure out. Anyone know how long it takes for them to figure things out?

 

Unemployment is now at 6.5% from 6.1 percent in September, matching the rate in March 1994. The effects of the credit freeze will cause unemployment to spike further in the coming months.

http://news.yahoo.com/s/ap/economy

You're correct that the commercial space is marginal. In this market the asking price of 340k is way too high considering that the property is a foreclosure and requires a lot of work.

Prices are still way too high. The median price in this zip code was approx 143k in 2000. An Oct 1 the median price was 340k and in the last 2 weeks has dipped to 328k.

Sales are down 27% year over year.

I believe I am going to make a lowball offer.

You are right that I'm going to have to make 20 offers to find something reasonable. I was looking at this yellow buildng the other day. It was three 2 bdrm apartments and is across the street from a monestary (quiet street)

The asking price is 384k

 

Good luck, dude. Looks like a close in suburb or one of the outer boroughs.

Wish I had bought in Hoboken 20 years ago. I like stuff close to Subways (not the food chain ) or the transit lines.

 

Actually the building is a few blocks from Hoboken and about 5 minutes from the Lincoln Tunnel. The transportation around here is incredible. Buses cost $2 to get into midtown and run every 5 minutes.

I want to get a couple of buildings. This area is taking off. Purchases in a persepective of rental space I believe are a good investment. The flippers and subprime really ruined the market.

I think that prices still have another 20-30% to come down.

Hoboken 20 years ago was a real money maker. With the financial collapse in NY prices ae soft.

 

Heheh. I love metro areas like that. Plus the region has great pizza, calzones, and overall the best Italian food in the country. !!!!!!!!!

 

This spring I'm getting a job as a local organic farm-hand. In my limited opinion I think that would be an easy place to get hired that doesn't suck, because once everyone gets laid off - Walmart and McDonald's will be full lol. Agree?

 

Government jobs and health care jobs are on the rise. Farmers and oil workers seem to be doing well due to the expense in food prices. I think more people will end up freelancing and working tech jobs online, if qualified (or even if they are under qualified).

It's scary how many stores are having great sales! I went to our local Toys R Us, and nearly all of the kids clothes were 50% off. I heard that California is dealing with so many homeless kids that the schools are having difficulty keeping up.

I'm sure we'll see another stimulus package- obviously the first one didn't do much of anything.

 

Hey Bogart:

When I saw this article on investing in real estate I thought of you.

Note the guy who made 60 offers, and thinks he'll pick up two.

LOL. As a broker I hated guys like that. As a buyer I practised the same thing.

It also references some of the types of guidelines you are using w/ that 1% or that less than 1% rule of rent versus purchase price. I never used that stuff but I suppose the math worked that way.

The people buying and attempting to buy this way are doing it Warren Buffett style

Good luck.