Guns and Food. Thats all that matters in the end
Our economy. Where is it heading? Real estate values. Which way are they going? Should we care? Is there anything we can do?
Folks, I value homes for lenders. Its called BPO or Brokers Price Opinions. I do them by the hundreds. Almost 7 days a week, month after month. Ive done the single largest, most expensive home in my state all the way down to an R.V (with motor and tires) that had fake walls built around it like a movie set. In that case a local big name bank loan officer passed it just to get commission. She used to brag (after she left the bank) about how she passed every application and worked with a relative appraiser.
Anyway, Ive worked for most of the nations largest BPO portal companies. I do not work directly for any bank and in most cases dont know who the lender is. OK, so what? Well, these companies, especially the huge Corelogic, do statistical analysis. They have access to lenders records about the types of loans still out, when the ARMS are going to adjust up and recast, etc. They know how many people have gone back into default after doing a lender work out, etc. They have a good handle on how many more properties will be going to auction and/or short sale. Its in the MILLIONS. The lenders are becoming the worlds biggest landlords.
It used to be that I would have to use a short sale here or an REO there as a comp. Normal sales are called FAIR MARKET. It started to change and now its rare that I can do any house value without more than half to all being REO or shorts.Â Im seeing about an 15% difference on average between initial asking and final sales price on these distressed sales. Of course the sales become the new norm, and the next round of sales are approx 15% less than THOSE, etc. This gets down to a certain point where investors can buy and get a nice ROI based on greatly increasing rents vs lower interest rates and prices. Once that graph crosses, investors start in. Currently, thats the main reason for most increases in most parts of our countries normal markets. This cant go on forever. Its a HICCUP.Â The lenders are immune from losses thanks to our corrupt, lying cheating (you can add whatever else you like) government that wont let the banking systems fail no matter what happens to the citizens.They will continue to take lower prices to clear inventory. They are guaranteed against loss. Also, their are reasons why they want to foreclose. They do NOT WANT TO MODIFY. If they modified a loan, it would stay on their books and they would be forced to take theÂ profits over the full term. This continued selling of 'Shadow Inventory' will keep prices falling. I predict more than 2 years of future loss. Probably another 15 to 18% on average for average areas.
Our economy is in much worse shape than many of you imagine. We are teetering on the brink of full collapse. What can we do? Your VOTE can help this year but in the mean time, take a lesson I learned in California in 1989. I was in the epicenter of the bay area Loma Prieta earthquake. It knocked the office down around me and I had to live in my truck for days while the after shocks kept cracking up houses. On the 2rd morning I drove to a local sporting goods staore to try and get white gas for my camping stove. There were hundreds of people in lines. As each customer came out,the crowd looked to see if the buyer had more than one of anything. Those few who did were screamed at and threatened. The crowd didnt think it was fair because there wasnt enough to go around.
As I stood there wondering how ugly things would become, a man came walking up the lines. He was yellingÂ 'BULLETS!'Â 'BULLETS!'Â I'll pay anything for ammunition."Â "I have cash and gold". Now, that was a stupid thing to tell an ugly crowd.Â I had bullets at home. About 3,000 rounds of assorted and I propably could have made a killing off the fool but all of a sudden it occured to me that his gold was WORTHLESS to me. How could I use it? How much gold was fair for a loaf of bread and what would the seller do with the gold? No one took the guy up on it.
I felt secure in my ownership of thousands of rounds and quite a bigÂ personal gun collection. I had some water and freeze dried food but not a lot.Â Now, the town of Santa Cruz was cut off from all ingress/egress and we only had one small radio station that we could get due to being inside a valley. We didnt know how bad everything was.Â My main lesson was this: In emergencies, all humans care about is FOOD and a way to KEEP OTHERS FROM GETTING THEIR FOOD.
We have never been so close to full economic disaster. Prepare yourselves.Â Rid yourselves of debt.Â If you have already lost your home then try to co-op buy with others in the same boat. Hoard your pennies. Is this the best time to buy real estate?Â If its an isolated 100 acres with good growing land and a water source then HECK YEAH! Otherwise consider each area. Where will it be heading? What keeps the local economy going? What are projected population numbers? This may not be the 'best time to buy', which is a funny thing for a real estate sales person to say, dont you think?Â In a mjaor collapse, will it matter if you have a mortgage? Who will be there to try and foreclose on you? Working toward owning a home free and clear has always been a sound plan but do we have enough time now to do that? Maybe. Maybe not.Â DONT FORGET TO VOTE