Why be cautious about buying a home in today's market?

[Anonymous]

This is for the lurker out there who is thinking about buying a home.  Here is an article posted today that might give you pause to reconsider your decision.  (And please note that NONE of this information even takes into consideration Dave Ramsey's siren call for everyone to get out of debt.)

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http://www.theglobeandmail.com/servlet/story/LAC.20080729.RHEINZL29/TPStory/Business

MARKET MOVES: PETER SCHIFF: 'AMERICA IS FINISHED'

When Dr. Doom speaks, we should listen

JOHN HEINZL

(Edited article - sorry I missed the beginning of this earlier.  -Peas)

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And to those cheerleaders who believe that the stock market is basically sound, consider that the ups-and-downs of the stock market during July should be a big WARNING SIGN that something is fundamentally wrong with the US economy.  If everything were OK, then the stock market would be posting small gains or small losses on a consistent basis, not the schizophrenic performance we have now:  up 150, down 200, up 150, etc.  In fact, there is one reason, and one reason only, why the stock market is experiencing these hiccups:  large investors are moving their money in and out of the oil market depending upon the performance of oil each day.  When oil goes up, investors take their money out of the stock market and put it in oil.  When oil goes down, these same investors are trying to recoup their losses on Wall Street by buying stocks (always planning to sell when oil goes up).  And if you think the downward spiral of oil is here to stay, consider that almost 100% of Maine's heating requirements are for oil -- and when this winter (which promises to be a bear of a winter) starts requiring Maine's residents to purchase home heating oil beginning in October, you are going to see oil prices go sky high.  Expect $200 a barrell by Thanksgiving.   

There's plenty of information on the internet for those who are interested in learning the truth.  YOU CANNOT TRUST THE U.S. GOVT. TO TELL YOU THE TRUTH ABOUT THE ECONOMY.  This is the same group of jokers who claim that they can tell you what the rate of inflation is without factoring in energy or food prices.

And if you especially want to learn about the housing market, check out doctorhousingblog.com.

Other good sites to look at would be London newspapers. 

Message Edited by WhirledPeasPlease on 07-30-2008 10:44 PM

[Anonymous]

"This is for the lurker out there who is thinking about buying a home.  Here is an article posted today that might give you pause to reconsider your decision.  (And please note that NONE of this information even takes into consideration Dave Ramsey's siren call for everyone to get out of debt.)"

Okay... I listen to Dave Ramsey too but I don't take all of what he says as "the gospel". He goes a little over the edge on some things, he's a salesman first and foremost after all. Let's keep things in perspective, and stop the "sky is falling" mentality.

Message Edited by AvionicsEngineer on 07-29-2008 10:51 AM

Message Edited by AvionicsEngineer on 07-29-2008 10:52 AM

[Anonymous]

Not everyone even needs to worry SO MUCH about the economy. Me, for instance, I work in healthcare, no matter what people will always need therapy so I don't stress. Gas prices stink, food prices stink, but most of us will always complain about these things until they are free. Some housing markets suck, some don't. So to each there own, right?!?!

[DallasLoanGuy]

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AvionicsEngineer wrote:

"This is for the lurker out there who is thinking about buying a home.  Here is an article posted today that might give you pause to reconsider your decision.  (And please note that NONE of this information even takes into consideration Dave Ramsey's siren call for everyone to get out of debt.)"

Okay... I listen to Dave Ramsey too but I don't take all of what he says as "the gospel". He goes a little over the edge on some things, he's a salesman first and foremost after all. Let's keep things in perspective, and stop the "sky is falling" mentality.

Message Edited by AvionicsEngineer on 07-29-2008 10:52 AM

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LOL..... he charges money to access his plan to get out of debt.

I bet he is laughing his rear off at the irony.

[Anonymous]

I don't really understand what point you're trying to make here -- unless it's to scare the crap out of people!! o_O

Are we in an economic tizzy? Yep.

Is this the first time? Nope. Even your cite proclaims that, loud and clear. If that's not good enough, I think we all remember reading about the Stock Market Crash of the '20s.

Do we ALWAYS rebound afterward? Yep. History proves it.

Is the nature of economy, considering WHAT economy is, to fluctuate, sometimes wildly, up and down? Yep.

Economy is, at it's very basic, its distilled base, driven solely by human beings. In the words of "K's" character in Men In Black (dontcha love my cite?): "A person is smart. People are dumb, panicky dangerous animals and you know it.

Or how 'bout "David's" quote from "The Mist" (to be a bit more contemporary): "Sure, as long as the machines are working and you can dial 911. But you take those things away, you throw people in the dark, you scare the **bleep** out of them - no more rules."

Or "Ollie's" character: "As a species, we're fundamentally insane."

My point? Although my quotes deal more with horrifying situations like aliens destroying the world or other-dimensional creatures whole-sale slaughtering innocent grocery shoppers, it's a insight into the basic nature of human beings (and yes, if you want non-Hollywood quotes and studies done on the science of "fear," I got'em).

We react to stimuli and stressors. I think we can agree that the threat of an economic blow-out qualifies as stimulus and most certainly a "stressor." Economy seems wonky, we start pulling money out of the banks and start hoarding cash, gold and food. So if you have one pundit that screams the sky is falling, you're going to have fifty more screaming the same durn thing within an hour.

Does it mean that the situation WARRANTS panic and hoarding of reserves? Nope. Does it mean that the world as we know it is over and the looting should now being? Nope.

If everyone just keeps a clear head and says "this, too, shall pass" we'll be fine. If people make SAFE and SMART decisions as re their finances, living situation, etc, they'll be fine.

But, IMO, it's people that run around screaming that the sky is falling that do the MOST damage. What they're doing (and I AM talking about the very people you're quoting) is tantamount to screaming "Fire!" in a crowded movie theater with only one exit.

If the world ends, it will be because of THOSE people. Not the economy.

[Anonymous]

The more people are shouting that things are falling apart, the more likely it is that we are nearing the bottom. The opposite was true a few years ago, when everybody seemed to think that the housing market was invulnerable. That was the number one sign that the bubble was ready to burst. My wife and I are going to be buying a home before the snow flies, hopefully. But we are going to go on the conservative side pricewise so that if something bad happens to one of our jobs, we will still be able to make all payments without too much stress.

[Anonymous]

I'll try not to be mean to this guy since he's new. On the other hand, his pure stupidity is a little bit infuriating. It's pretty clear that he stumbled across some article written by someone with decent rhetorical skills and a severe Chicken Little complex and decided to make it his gospel.

"There's plenty of information on the internet for those who are interested in learning the truth. YOU CANNOT TRUST THE U.S. GOVT. TO TELL YOU THE TRUTH ABOUT THE ECONOMY. This is the same group of jokers who claim that they can tell you what the rate of inflation is without factoring in energy or food prices."

Let me first address the above comment. The reason why energy and food prices aren't considered in the CPI is because inflations effect on them pales in comparison to the effects of supply and demand on them. Hurricane hits oil refineries? Less oil is refined. There is a shortage. Demand remains constant. Supply tanks. Prices go sky high. Such a price increase has nothing to do with inflation. The same goes for what recently happened with speculative buyers driving up the price of oil due to concerns of rising demand and supply shortages.

As for keeping money in stocks. Historically, gold is a terrible investment in comparison to stocks, bonds, real estate, etc. Yes, over the past 5 years gold has had about a 17% annualized return. Unfortunately for that moron who decides only to rent and invest his money in gold, when the economy bounces back (And it will--it always does), the price of gold will drop and stocks will soar, making any mid-to-long-term gold investor a fool.

Is it smart to put all of your money in the U.S. economy? No. Other economies in other parts of the world, especially emerging markets, have the potential to grow exponentially over the next several decades, whereas the U.S. is much more of an established economy that probably won't experience that kind of explosive growth. The U.S. however, is an excellent place to put a good chunk of money because its economy will continue to grow throughout the 21st century, as the U.S. provides an excellent environment for companies to grow and thrive.

"There's plenty of information on the internet for those who are interested in learning the truth."

This is true. Rather than listening to some guy who gets his information from the conspiracy theorist's economy magazine, find out for yourself what exactly happened with the economy by look at reputable sources (The Washington Post, Money Magazine, CNN). We're where we are right now because of lack of regulation, irresponsible lending (And borrowing), a housing bubble (Look it up if you don't know what it is), and risky lending practices on the part of financial institutions.

Everything will bottom out. Hopefully we'll have learned a lesson. And without a doubt, the country and its economy will continue to thrive.

[Anonymous]

Jay, dammit. You owe me a new monitor!!!!

OMGosh, I nearly wet myself over the " decent rhetorical skills and a severe Chicken Little complex and decided to make it his gospel" comment. Seriously.

Needless to say, IAWTP!!

I swear, if I hear another anchorman (or 'Net pundit) make the joke about the "Queen of England pawning the Crown Jewels" or maniacally warn of impending economic doom, I'm going to lose it. Really.

The average American has enough to worry about without hovering economic disaster over their heads.

And personally, I FIRMLY believe, if the economic situation DOES end the world as we know it, it'll be because of loons screaming and whipping everyone into a panic - not the economy itself. Sort of like a bunch of stampeding wildebeasts being driven by a deranged circus monkey on crack.

[Junejer]

Heck, the way I see it, is that housing is on sale. I want to buy as much as I can right now, not run away from it (but, I am a contrarian).

[Anonymous]

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ByrdMan wrote:
Heck, the way I see it, is that housing is on sale. I want to buy as much as I can right now, not run away from it (but, I am a contrarian).

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And you're also right! Same goes for stocks right now. There are some good, solid companies that have lost 5%-10% even though they are continuing to grow in this poor economic climate and will continue to grow even more as we recover from this...recession, slowdown, whatever you want to call it.

And if someone is reading this and skipped over my previous, longer post, I don't blame you. It's long.

But if you started reading the first post on this thread and it infuriated you and you thought to yourself, "I wish someone would tell this guy off!". Just know that's it's been taken care of.