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"new Lyons ... more like Aspen"

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Re: "new Lyons ... more like Aspen"

Postby larkinrx2 » Wed Sep 25, 2013 11:14 am

ajkagy wrote:
wrxpilot wrote:Do you think a correction is in our future?


eventually the bubble in equities, the crushing US debt and fed pumping 85 billion dollars a month into bonds/mortgage backed securities will end badly. The economy will go into recession/depression again, rates will sky rocket when no one no longer wants to buy our debt and QE doesn't work, and our fiat currency is de-valued from the rabid money printing


so would the value go up or down?
if the price would go down but it takes more to earn said money then in effect it went up?

i think we are all in agreement that the rates will rise, which is definately an increase in price to the end consumer at the enjoyment of the banks

so do you want to owe say 250K at 5% for 30 yrs, or 100K at 15% for 30 yrs?

233k interest versus 355k interest!
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Re: "new Lyons ... more like Aspen"

Postby ajkagy » Wed Sep 25, 2013 12:18 pm

larkinrx2 wrote:
ajkagy wrote:
wrxpilot wrote:Do you think a correction is in our future?


eventually the bubble in equities, the crushing US debt and fed pumping 85 billion dollars a month into bonds/mortgage backed securities will end badly. The economy will go into recession/depression again, rates will sky rocket when no one no longer wants to buy our debt and QE doesn't work, and our fiat currency is de-valued from the rabid money printing


so would the value go up or down?
if the price would go down but it takes more to earn said money then in effect it went up?

i think we are all in agreement that the rates will rise, which is definately an increase in price to the end consumer at the enjoyment of the banks

so do you want to owe say 250K at 5% for 30 yrs, or 100K at 15% for 30 yrs?

233k interest versus 355k interest!


I would agree with that, if rates go up, price will go down as the consumer will be able to afford less. However, eventually the QE money will get into the system and the US govt will have to cause rapid inflation so we can afford the interest payments on our debt which in turn might cause prices to rise in a bad way though. One way or another inflation is coming.
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Re: "new Lyons ... more like Aspen"

Postby SchralpTheGnar » Wed Sep 25, 2013 12:22 pm

Hyperstagflation

Re: "new Lyons ... more like Aspen"

Postby Somewhat of a Prick » Wed Sep 25, 2013 12:29 pm

tlongpine wrote:Compared to DC, NYC and San Fran Denver real estate is a bargain. I've lived in 3 of the 4, and would choose Denver 10 days out of 10.


Yep. I moved from Chicago and what I pay in rent for an apartment downtown Denver wouldn't even get you a tool shed in Chicago.

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Re: "new Lyons ... more like Aspen"

Postby rickinco123 » Wed Sep 25, 2013 3:30 pm

ajkagy wrote:
I would agree with that, if rates go up, price will go down as the consumer will be able to afford less. However, eventually the QE money will get into the system and the US govt will have to cause rapid inflation so we can afford the interest payments on our debt which in turn might cause prices to rise in a bad way though. One way or another inflation is coming.


You forgot to mention the coming real estate crash. I love how we are experiencing a real estate boom at the same we have high unemployment and record low job participation rates. I'm sure a real estate agent could tell you how it all makes perfect sense.

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Re: "new Lyons ... more like Aspen"

Postby PaliKona » Wed Sep 25, 2013 3:43 pm

Somewhat of a Prick wrote:
tlongpine wrote:Compared to DC, NYC and San Fran Denver real estate is a bargain. I've lived in 3 of the 4, and would choose Denver 10 days out of 10.


Yep. I moved from Chicago and what I pay in rent for an apartment downtown Denver wouldn't even get you a tool shed in Chicago.



agree - prices in Denver have gone up since I moved here 8 years ago, but having lived in DC, Boston and NYC, it's still unbelievably affordable. I had a 340 sf apt in NYC (Upper West Side) that cost $500,000!

My question is: why is change bad? That is, if that change is done well (not by greedy, insensitive developers).

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Re: "new Lyons ... more like Aspen"

Postby TallGrass » Wed Sep 25, 2013 5:03 pm

PaliKona wrote:My question is: why is change bad? That is, if that change is done well ...

"Who's gonna flip your burger?"

Silicon Valley ran into this when housing prices spread so high and so far that there was a labor shortage in service industries. That's fine, if the people making 6 and 7 figures don't mind sacking their own groceries, checking themselves out, stocking the shelves, sweeping the aisles, cleaning the restrooms, making their own skinny mocha lattes, running their order back to the cook, cooking their order, doing their own dry cleaning, putting out their own fires, arrest criminals themselves, manage their own wastewater, mowing their own lawn, delivering their own papers, sweeping their own streets, etc. There was talk of creating a system to bus them in at one point. The need for mixed income living is nothing new -- a considerable portion of the Vanderbilt mansion (which was fairly remote in its day) is/was dedicated just for staff that kept it running (e.g. living quarters, dining hall).
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Re: "new Lyons ... more like Aspen"

Postby ajkagy » Wed Sep 25, 2013 5:07 pm

rickinco123 wrote:
ajkagy wrote:
I would agree with that, if rates go up, price will go down as the consumer will be able to afford less. However, eventually the QE money will get into the system and the US govt will have to cause rapid inflation so we can afford the interest payments on our debt which in turn might cause prices to rise in a bad way though. One way or another inflation is coming.


You forgot to mention the coming real estate crash. I love how we are experiencing a real estate boom at the same we have high unemployment and record low job participation rates. I'm sure a real estate agent could tell you how it all makes perfect sense.


yea no idea how that works. I imagine people are buying because of 1. low interest rates make stuff more affordable. 2. easy access to credit (banks are doing the same thing as before the last crisis). 3. record numbers on welfare/food stamps and other govt subsidies propping them up financially. There's also the anomaly areas like resort towns and cities that have no more room to build like Boulder.
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Re: "new Lyons ... more like Aspen"

Postby Brian Thomas » Wed Sep 25, 2013 6:13 pm

wrxpilot wrote:Do you think a correction is in our future?

As wishful as I am for a correction, I don't expect it. I believe metro Denver prices will level out close to where they are now, which is at an unaffordable (but not excessively so as compared to coastal bubble markets) level.

The Case-Shiller historical index tracks price increases nationally at an average of 2% annually since the 1890's. "Affordable" housing is traditionally what can be purchased with a 30-year fixed-rate mortgage at a ratio of price 2-3x annual income. Prices should naturally adjust inverse to interest rates, i.e. how much can house buyers afford for a monthly payment. The funny-money days of last decade aren't coming back. The banks are still sitting on millions of vacant units, and trickling them out slowly. Underwater (owing more on the mortgage than the value of the house) homeowners are slowly getting drawn back into the market to sell as prices rise. The best advice I can give is to keep your powder dry, and buy when the time is right for you.

The National Association of Realtors is a corrupt and unethical organization. Realtors are not your friends. They are not a regulated financial profession like attorneys or CPAs, any high school dropout can become a Realtor and print up some business cards and make themselves a glossy website. The correct definition of a Realtor is "Used House Salesman", they do not have the best interests of house buyers in mind, all they care about is their commission check.
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Re: "new Lyons ... more like Aspen"

Postby wrxpilot » Wed Sep 25, 2013 8:05 pm

Thanks for the info Brian.

Any thoughts on the website "TheHousingBubbleBlog.com"? Just wondering if it's mostly crackpots or not.

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Re: "new Lyons ... more like Aspen"

Postby Jim Davies » Wed Sep 25, 2013 9:37 pm

TallGrass wrote:"Who's gonna flip your burger?"

Silicon Valley ran into this when housing prices spread so high and so far that there was a labor shortage in service industries.

This is already a problem in the high-end resort towns like Vail and Aspen. Service workers can't afford to live there, so they commute from Leadville or Basalt, or they're imported from Australia. Here's a story about the problem from 13 years ago:
http://www.nytimes.com/2000/10/12/us/aspen-journal-ski-resorts-struggle-to-lure-workers.html
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Re: "new Lyons ... more like Aspen"

Postby Shawnee Bob » Wed Sep 25, 2013 10:16 pm

I see a couple of things here. Haven't lived in CO for some time, but I looked at moving there when my own job went south a few years ago.

In the Denver metro and east slope, strong economies and quality of life have driven up prices in general. It's a desirable place to live, and that will jack prices.

Different deal in the mountain towns. Those places are being gentrified by rich out-of-staters. Developers get their hands on large tracts, subdivide them into acreages and sell them to rich people at huge prices. This drives up land values in these little towns and prices out the little guy. Happened in CB awhile back. Then So. CB. Workers were/are commuting from Gunnison, but now even that town is getting too pricey for working-class types.

Nut sure what can be done, but it's sad when folks who want to live and work full time in the mountains cannot afford it because they've been priced out by fatcats who buy up land, build big and only live there for a fraction of the year.

Where I live, there is a housing boom in our downtown, but the apartments and condos are too pricey for most of the people who work at the clubs, bars and restaurants that are beginning the flourish. However, some smart developers are buying buildings and attaching rents that the service workers can afford. In return, we're getting a sustainable neighborhood where your commute is measured in how far you walk. Hope to see more of this type of planning.
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