^ Don't "hope" when money's on the line. Have some green tea, exhale, and coolly observe as if you're a anthropologist viewing a primitive tribe.

Today's local rag newspaper says that prices in my area are up 10% from this time last year, and inventory is low.

My SIL lives in NJ and says that all of her coworkers who retired lately moved to Florida. She says there are a lot of homes for sale in her area of NJ and prices are low and being reduced.

Good thing I DON'T want to buy in this town. If we stay in FL, it will not be in this area. I'm just not feeling it.

Here is the chart for the 1200 sf starter home(central NJ) I bought in 98- property taxes are now 6k a year. Were 3500 when I bought it.

Time to buy?

Time to buy? Depends on your income and monthly rent vs. monthly mortgage payment.

And your tolerance for risk as you leverage your down payment, with huge transaction costs.

If you plan on living there for 10 years plus and assume that prices may well decline more for years and make peace with that, then I see no reason not to.

If you lose your job and cannot walk away without the powers that be coming after your savings it is not a prudent decision to make. And I don't care what happened thirty years ago. Signing up for long term debt with no ability to walk away from said debt is absolutely stupid.

Not in the DC area. But one of the bubbles that has to burst is the gov bubble. When it does you won't want to own a McMansion in Alexandria.

gen, i really don't see the US Government ever going through a slimming down process where it would affect property values in DC. If anything, if Iran heats up it will go the other direction.

Government payrolls won't go down from here...not in the next 20 years at least....10 at the most optimistic. While we all wish .gov would pay themselves less and do more as working for the government is less risk than private enterprise....i am skeptical

if i had to develop something somewhere in the US it would be in DC/va (on a 7 year proforma of course).

Uh huh... don't stop.... believing.......

KD, this is for you:

http://www.zerohedge.com/news/greenspan-....

From Bill Buckler of The Privateer

The Great Falsification

On February 4, the Wall Street Journal ran an article with the title: Investors Place Their Money On Fed.

The gist of the article is that the markets in the US - and everywhere else to a greater or lesser degree - are still willing to bet on two things. One is that the Fed will come out with a new round of stimulus spending or “quantitative easing” sometime between now and the end of June this year. The focus of this reliance at present is on the mortgage paper backed by the US Government Sponsored Agencies (GSEs). They are certainly betting on “help” here. In the month since January 3, the rate on 30-year Fannie May mortgage “securities” has plummeted from 2.96 to 2.66 percent. Meanwhile, the various “guesses” for the size of the next tranche of QE range from $US 400 Billion to $US 1 TRILLION or more.

The great blow-out in the Fed’s balance sheet which began in September/October 2008 was largely driven by their actions to monetise the mortgage-backed securities which had fed the real estate bubble. Now, the markets expect the Fed to come “full circle” and start that all over again. Why? According to one US investment firm, the answer is simple: “We know they’re not going to take their foot off the accelerator. We know that they’re not going to want to purchase more Treasuries because they’re running out of Treasuries to purchase. So that leaves mortgages.”

With $US 1 TRILLION plus annual deficits stretching out into the indefinite future, the Fed is certainly not going to “run out of Treasuries to purchase”. On top of that, there is the $US 2.8 TRILLION of maturing Treasury debt which must be rolled over this year. The simple truth of the matter is that ever since they were rescued by QE1 back in March 2009, the markets have become used to the idea that the financial “powers that be” will not let the concept of “risk” return to sully the rewards they now expect.

The “Greenspan put” has turned into a “Bernanke guarantee”. Ben Bernanke reminded the world that the government does have such a thing as a “printing press” way back in 2002. Since he became Fed Chairman, he has left world markets in no doubt of that fact. And that is what they are relying on.

For those of you who haven't read it yet:

http://www.federalreserve.gov/boarddocs/....

I don't think he's changed his mind since he wrote this:

Quote:

Although a policy of intervening to affect the exchange value of the dollar is nowhere on the horizon today, it's worth noting that there have been times when exchange rate policy has been an effective weapon against deflation. A striking example from U.S. history is Franklin Roosevelt's 40 percent devaluation of the dollar against gold in 1933-34, enforced by a program of gold purchases and domestic money creation. The devaluation and the rapid increase in money supply it permitted ended the U.S. deflation remarkably quickly. Indeed, consumer price inflation in the United States, year on year, went from -10.3 percent in 1932 to -5.1 percent in 1933 to 3.4 percent in 1934.17 The economy grew strongly, and by the way, 1934 was one of the best years of the century for the stock market. If nothing else, the episode illustrates that monetary actions can have powerful effects on the economy, even when the nominal interest rate is at or near zero, as was the case at the time of Roosevelt's devaluation.

It's crazy to think that you could devalue the dollar when international trade is so huge.

Also, in 1935, imports were 2 billion out of GDP of 73 billion. Now, imports are 2.5T out of a GDP of 15T.

Maybe you can devalue the currency when only 2.5% of GDP is imported. Try it when 17% of GDP is imported and see how that works out for you.

BTW, I searched Google to find out the US trade balance for 1934, and I got a newspaper scanned in from 1936:
http://news.google.com/newspapers?nid=95....

Wow! That's really amazing.

M1 is less than 1. QEing again will cause serious damage to the agregate of US denominated assets. That is to say QEing will directly accelerate deflation.

Commodities ramp real estate loans inversely fall.

Just like our esteemed medical establishment, all these guys are doing is treating the symptoms and not the disease. Its pain management. Period.

Lemon- I agree but defaults and delinquencies have been declining a tad. Not sure about student loans however.

That newspaper is awesome -- anyone see the old-school Viagra ad in the personals? LOL!