America's Descent Into a Third World Country Has Begun.

Everyone knows it gets cold in January. How cold? No one knows for sure, but fundamentals tell us that January will be cold and July will be hot.

That's a far cry from completely random weather, day-to-day, throughout the year.

 

Thats what you get when people flock to these "great cities" they are not prepared for the costs. These cities are overrated and if you can't afford to pay for a house dont get one!

theres also a huge problem where first time buyers think there getting great deals on houses for like 60% less than normal pricing then to find out the next year the payments increase by almost 40% only to keep rising and they don't expect this because they don't do there homework. A lot of uneducated people in the housing market, go move to wyoming or montana, you can get a 2 bed room 2 bath apartment for 450$ a month.

 

This is the absolute truth, and this is a great post Killafawk. The coastal American cities are not really good places to live, they have a high standard of living, they are crowded, and in the case of Miami, you've got hurricanes to worry about, and in the case of New York, it would be a target for a Mega tsunami if one was generated due to volcanic activity in the Canary Islands.

Then you've got San Francisco, a Big Brother city where hand guns are banned, and you have to be rich just to rent an apartment or buy a home. And of course, Frisco is also located on a fault line, and there is a huge chance(I don't remember the percentage), that a major earthquake will occur in the city before 2032.

The best places to live in the U.S. are the landlocked states. The Midwest is very affordable, and if you can tolerate the backwards South, then you can also save a bunch of money there to. I went to a wealth seminar once where one of the Millionaires who was featured on the stage said he lived in Wyoming.............and he is a real smart guy.

You are also right about the uneducated people in the housing market. Since millions of Americans today don't read and get the facts before they go looking for a home, they are fair prey for well informed lenders and banking interests that are looking to rip them off.

As Sun Tzu said in the Art of War: "The more you read and learn, the less your adversary will know."

Unfortunately, over 60% of the people in this country get their information off television, rather than in a book. Another reason why I would not want to live in Major cities like LA, New York, Chicago, Seattle, of Frisco is the simple fact that if the "you know what hits the fan," and we either have a national emergency, or the president declares martial law, I want to be in a medium sized town like Eugene Oregon or someplace like that, where the population is no more than 200,000.

Hurricane Katrina is a great example of why I don't want to live in Big Cities, and why you should be smart about where you live. Anyone living in coastal cities is fair game, I wouldn't move to California unless I was offered a very lucrative form of employment, and even then, I probably wouldn't move.

 

That just shows you how messes up the system is. Prices go up 100% and when we have a 6.7% the goverment is out there bailing people out with taxpayer money.

You have a good deal even if the price goes down a little.

It can be hard to make a buck in the South or Midwest. Illegal immigration is also picking up in States like Tennesse and North Carolina.

 

lol, yeah because the ocean and beaches just suck, who would want to live by them

that and financial and cultural hubs of the country are on the coasts, along with the higher paying jobs

There is a reason they are affordable

 

my girl friend sold a condo a year ago in Miami for 150k , 2 bedroom 2 bath about 760 sq feet, identical condos now are list on the MLS a year later for 100k

That is 33% drop in price in 1 year, its freaking amazing

 

What's the rent on the condo minus fees? The subprime money drove the prices up. The historic value of a mome is 10x rent.

The same thing happended wiith tech stocks in 2001. Cisco was at $200 and dropped to $5

 

you can rent the unit for like $800-$900

when they were built during the run up you could get them pro-construction for about 80k

of course as they sink and value and there are tons of vacant units, which attract derelicts so the rents might go lower

actually spoke to soon, they are listed at 98k now

 

80k is probably what they are worth

Simple law of supply and demand

Subprime and flippers ate up the supply and drove up prices.

 

First of all, great posts and thanks to Tesla for starting such engaging discussions. I beg to differ with on several points made here.

1. Sub Prime Crisis
This is media at its best in terms of fear mongering. They know good news won't sell so they constantly are looking for any stories to scare. The truth of the matter is that although there are some serious issues here, we will get through the sub prime mess. The total bank credit in this country as of October 2007 was about $9 trillion of which banks have taken $80 billion in write-downs. Strictly by the numbers it is less than one-tenth of 1 percent of credit. And the 9 trillion does not include bonds, just bank credit. So, stop worrying about housing as it is not worth discussing. In fact, I am glad as more first time buyers will now be able to enter the market rather than speculators.

2. Strong Euro vs. Weak Dollar.
Again, the myth the media would like us to believe is that strong euro = strong economy and weak dollar = weak US ecomony. WRONG! The fact is the US GDP per capita has far outpaced the eurozone and the gap is widening. Currently we are at about $45000 vs $30000 for the Europeans. Their unemployment rate hovers between 8 and 10 percent. The Europeans simply can't compete with Americans and I don't see that changing anytime soon. So why is their currency higher? There are several factors but interest rates have a lot to do with that. Investors are putting their money in Euros as the ECB is expected to raise interest rates to keep inflation in check.

3. Credit
Credit is the basis for any good economy. I do agree that We, as Americans borrow way too much and hopefully the sub-prime mess has give banks a kick in the arse to wake them up. But I think without good management of credit, we would not have an economy. We should get our savings rate up but if everyone simple decides to stop spending we would most certainly dip into a recession. It's a fine balance.

4. Wealth
Wealth is relative. If you don't own a house, car, have no debt and have 1 million in the bank, are you really rich or wealthy? Only if you exist in the economy we have today. First of all, you need to eat, sleep, and live somewhere and you wouldn't be able to do that without all the American economy provides. And you need that 1 million to produce a good income for you. So what are you going to do with it? LEND! You need to lend it to someone to buy things like houses and companies so you can earn a good rate. How can you lend without the support of an economy? We all better be prepared to live in a feudal system if we don't believe in our economy.

We are most certainly not slipping into a third world nation. I know, I came from one and believe me, it can get a whole lot worse than a tent-city.

 

40% of the homes sold in the bubble were second homes for people buying them and sell them.

 

Right now is a horrible time for the housing market. I'm really not worried about it. This happens every single year. Fall and Winter the housing market begins to tumble, around March and April people begin buying with their tax money again. Those that make poor decisions suffer.

Also, i've had my home for 6 years now. It has appreciated about 20% in the time i've had it. I'm in a lower cost of living area, central US where things affect us later than others and far less drastically. However, as a general rule of thumb houses will never get too much cheaper than they already are. It simply is a buyer's market at the moment. People needing to sell becuase they bought something they can't afford are in a bind at the moment.

 

Very valid points. You are referring to SIVs (Structured Investment Vehicles). The problem is that because these things contained sub-prime mortgages, no one can properly value these things and that causes a credibility issue. Banks need to restore faith and then we will be fine. This process has already begun. Compared to the wealth that was wiped in the dot com crash, this crisis is minor.

The deficit is one of many factors in valuating currency. The fed policies of lower interest rates and increasing money supply have more to do with the value than deficit. Also, there is a very large supply of dollars in the world whereas the euro is mostly held in Europe. If the fed were to start limiting the supply, the dollar would rise.

The national debt in itself is not a bad thing. Currently, our total debt, something like 9 trillion, is 65% of our GDP. We owe this to ourselves, corps, and foreigners. The problem for us is when it rises to a level where our payments start making up a big chunk of our budget and that leaves less for other important things like entitlement programs. There are two schools of thought on this. One, increase GDP so we can afford more or two, start paying it down. Those against paying it down say if we pay it down, that leaves less money for everyone to borrow thereby stunting growth. Those for paying it down say the payments will become unfordable. My own opinion is that we need to start paying it down a bit but this will call on some sacrifices by Americans. I hope our next leader is able to do this.

 

in 10-20 years if global warming continues you won't even have a house near the beach your house will be under water.

One big earthquake that is already over due will destroy california. More than half the cities in cali are gang infested ghettos.

Unless you live near the beach theres nothing really nice about it that you can't find anywhere else. It has nice weather and a beach but when the beach and the weather could be your worst enemy in 10-20 years its a horrible investment to buy a house there.



Now look at the mid-west / southwest kinda. I ll use my state as an example.

Where i live is a average 70-85 degrees weather. The highest it gets in the summer time barley over the 100s if its lucky (new mexico). We got forests to the north, great plains of the midwest to to our east, mesas to our west and desert to our south. We don't have earthquakes, we don't have tornadoes, we don't have floods,etc etc, we are probably one of the safest place as far as natural disasters goes. We have a lot of options here.


Now Albuquerque the city i live in, the average price for a home here for the middle-high class is like 125-170k for a nice 4 bd 2-3ba house. Most of our water comes from underground and we have the rio grande so even if the rio grande dried up we have a huge underground "water tank" type thing where water is stored up and is expected to last 10 years if something should happen and this city population is about 700,000-800,000.

Albuquerque is ranked number 1 in the market for a place to start a new business if thats what you need. We have about 5 casinos around the city if you like that kind of thing there very nice.

Now what i don't understand about these uneducated fools who think they can just jump into any old house in california because its "cool place to live" are the ones who end up living in the gang land of Cali or simply cant afford a house in the first place. Theres nothing cool about that. And unless you went to college and got a degree or you make bank online with steady income, don't plan on moving to cali anytime soon.

What you can do and what is more intelligent thing to do is buy a nice home in the midwest for dirt cheap a nice home. pay it off in 10 years and then buy a vacation home else where or even just go vacation to these places with all the extra money you have. Nobody said once you buy a home your stuck there. If you got money to spend and a home base location you can travel the world and come home just to rest up until the next vaction whcih could be every month.

 

Umm, nobody ever said that the ocean and beaches suck, and that they are not beautiful. I never even implied that. But just because something is beautiful doesn't mean it is not dangerous. Columbia is a very beautiful country, but would you like to go there and take a trek in the Andes mountain while FARC and other groups are roaming the jungles? While Columbia is one of the most beautiful nations in the Western Hemisphere, it is also one of the most dangerous.

In addition to this, what you didn't point out is that you've got to be a multi-millionaire to get a nice house in many of these coastal cities, and the fact of the matter is that most of the people who live in these areas can't afford it, and they just end up living in ghettos, or at the very best, they live paycheck to paycheck in a nicer neighborhood.

Another thing you didn't point out is the simple historical and geographical fact that most of the world's major cities and financial hubs are located near bodies of water. It doesn't take a genius to figure out why. When these were first built, we didn't have the irrigation technology to either get water from underground safely, or bring water into remote regions, and without water, we can't live. So it is logical that London, Paris, New York, Shanghai, Tokyo, and Los Angeles would sit near bodies of water.

With advances in technology, it isn't necessary for everyone to pile up on the coasts anymore. Water can be brought into remote regions, you can ever create man made lakes if you want.

Ferret, another thing that you may want to research is Smart Growth. There is a move in this country right now to heard the population into Urban areas, away from the wide open areas. Highway systems in the United States are now being designed to cut off access to smaller towns, weakening their industries and forcing them out.

This is all part of a larger plan by global elitist to remove people from small to medium sized towns, and herd them into large cities where they can be tracked, placed under surveillance, and made to submit to Big Brother like laws.

Think about it. In San Francisco you can't carry handguns, and they are banning a bunch of other stuff. Chicago is one of the most big brother cities in the country, and New York has banned drinking on the sidewalks, and any gun you own must be dismantled and locked away. The largest cities in the United States are also the most Big Brother, which is precisely why I'm resistant to living there.

Even a college degree is no longer a guarantee that you will get a high paying job when you graduate. Trust me, I know because I've got friends who just graduated from the University this year, and those high paying jobs aren't rolling in like they expected. This comes from globalization, and the decline of the American manufacturing base, but a lot of people also get degrees in fields that have no high income potential, like history or literature. There is nothing wrong with these subjects, but a lot of people don't pay attention to the type of degrees they get, and the demand for jobs in those fields.

They ultimately end of with a degree that may be worthless, and if they are in debt for that degree due to student loans(every person I know who has went to college has lots of student loans), they will now have to spend the next decade paying a portion of their annual income to pay back the loans they got along with interest.

As time goes on, it seems that getting a degree is becoming more and more of a gamble, because almost everything is fair game for outsourcing. I should also not that the Federal government is starting to question the effectiveness of College education. Tests conducted on college students(both Ivy League and State College), showed that many of them don't even understand basic concepts.

 

wealthy people always hyper inflate every asset they fall over each other to acquire and in the process makes life difficult for ordinary individual.......

 

2 Trillion Dollars for $3 gas. How much oil would that have bought?

 

In regards to the point made about education, I have two bachelor degrees right now. Granted, they are not from some high profile college as I am one of the poor. I have had to do some here and there because I am poor.

I have an electronics/telecommunications, computer repair, computer programming, LAN, HVAC, locksmithing, safecracker, ethical hacking, private investigator ... etc. certificates.

I am a master electrician, hvacr license holder in two states so far.

I am back in school for webmastering.

I also am a member of the International Hi IQ society.

Did I mention that I am poor?

 

Stories like this one probably don't help