National market in a recession? 27 posts by 15 users

Posted: 01/02/2008 at 11:52PM

I think that the market has been spiraling into recession well over the last three or four quarters. Technically, I believe we are in a recession now but the media is keeping it quiet. The holiday shopping,GDP decrease,energy costs, dollar strenght has all been down for a while. Is it a recession now or only on it's way?

Posted: 01/03/2008 at 03:55PM

More than 2/3 of Americans believe we are in a recession or will be in recession in 2008:

http://online.wsj.com/article/SB118600572789185278.html

It will be some time before it is " officially" declared but I'd say we are in it right now.

Posted: 01/07/2008 at 10:21AM

So would you all say that now is not a good time to get started in the flipping business?

Posted: 01/08/2008 at 02:06PM

This is a great time to get into flipping. When people are worried is when you get the really good prices.

When people are worried, you can buy cosmetic fixers for cheap enough to make them worth your time.

Buy cosmetic fixers, buy them cheap, and get them back on the market immediately, before prices have time to drop more. Underprice them so you can sell fast.

You should be able to do paint, carpet, and re-do the landscaping in no more than a week, if you are a good worker.

When prices are going up and the market is strong, it is very difficult to get a good enough price on a cosmetic fixer, so the fix and flip investor is left with properties that need serious work.

I wouldn't buy a place that needed a gut renovation and structural work in a market that is going down. It takes too long to get them back onto the market, and all that time the prices might be falling, and you don't know how much they are going to go down.

One additional benefit of fix and flip in a weak market is that you can actually get the best workmen to come and do small jobs. When the market is strong, you'll be lucky to get anyone, and you can just about forget about the workers who do quality work. They are busy with the big contractors who have lots of work for them.

Posted: 01/11/2008 at 03:29PM

We are in a recession and have been for the past 8 years. The housing bubble was created to mask the recession, but you cannot escape or increase the problem. Home equity is at an all time low in the country, stocks are decreasing at an incredible pace to the dollar's value, and we are in a big bout of trouble.

We have no backbone of manufacturing the only thing keeping us afloat is the dollar being traded in the Middle East (which is now changing). The politics since 1913 have created this mess, and we've just been increasing a mess of huge proportions.

Ask yourself what would happen if China wanted to collect on it's debt: oil over $200/barrel, depression, and a complete bankrupting of the nation. The only thing stopping them from doing this is soaking us up for more money and when the gig is over watch what happens.

Our markets are running on foreign investments by Bernanke's own admission in the last congressional oversight committee. Think about that... our economy is only continuing to exist because we are being bought out by foreigners.

Watch this video to understand what's happening:
http://www.youtube.com/watch?v=XaxdUPNYj2s&feature=related

Posted: 02/27/2008 at 01:09AM

The recession started in 2001. The Fed dropped the rate to stop a full-out recession at the time and allowed the market to correct. The market has had negative growth for the past 8 years if you factor in inflation, real wage growth, stability of our market, consumption vs. production, spending vs. savings, and many other factors.

If you want to believe Keynesian economics as the country becomes poorer and poorer be my guest. 70% of our GDP is consumption not production, we are surviving on the buy-outs by foreign investments of U.S assets, and the injection of capital into the country is from the outside. Bernake admitted this to the congressional board so don't think it's just me. We've lost 8 million manufacturing jobs over the last 8 years.

There are ways of covering up a poor market with artificially low interest rates, injection of capital which causes inflation, and other little tricks. This isn't the mid-80's where manufacturing was growing, we had a positive trade balance, and there were actually goods made in the U.S.

Equity is at an all-time low, savings are at an all-time low, and our consumption based economy is based solely on the trading of our dollar for oil. This didn't start 6 months ago no matter what bone-headed economist tells you to deceive people from the sham that is happening and most don't understand or realizes it.

Perfect example: stocks rallied 130 points 2 months ago in one day, but our dollar lost huge traction in the global markets. To the ordinary guy they will say, " See, stocks went up, GDP increased!!" A true economist would say, " Stocks went down and we actually lost money if you compare it to Canadian, Europian, and oriental currencies and true values compared in any commodity."

" Don't pay attention to the man behind the curtain" I believe was the line from the Wizard of Oz. If foreigners stop buying our assets from away from us just to keep the economy going (a sign of complete weakness) than a depression would happen. Foreigners don't want a depression of the U.S. Not yet at least.

Want to study a true economist? Peter Schiff... youtube him and what he has said past, present, and for the future.

Posted: 02/27/2008 at 07:48AM

This is starting to feel like a discussion that belongs in the off-topic forum. Almost political or close to the macro economics.

Based on the recent posts the housing market is but a drop in the bucket of fiat money, monetary policy and the evils of governments in control of the economy.

As RE investors how do people expect to make money even if they believe most of what has been said so far? Obviously Mike and some others are still investing in the US even if the paper they collect from the tenants is not worth anything.

Do we want to bring this back around to RE investing or do people want to continue the macro level discussion?

Mike - I would guess you have heard of the Austrian School of Economics plus the Ludwig von Mises Institute. Have you read much of their materials?

Posted: 02/27/2008 at 09:36AM

Mike,

I was not saying that something belonging in the off-topic areas is not important. Sorry if you were confused by my suggestion. No offense was implied by saying we are getting pretty far from the main focus of the forum.

Tell me how a recession will impact OH? When was OH as a state doing really well? The 2000 elections features OH a lot as there were so many unemployed.

In some ways OH missed the boom so could it be that a recession will have much less of an impact. If the central bankers were the ones pumping up the economy and causing the housing boom how did some parts of the US miss out?

Detroit started down years ago. Long before any recession. Charlotte NC, Seattle WA and Portland OR are all up according to the Case Shiller index. Their economies were not all that strong earlier in the century so they are still rising (all of 2007).

My point is a recession is not evenly felt. There was a recession in 2001 in the US. Much of the US hardly noticed while other parts (Portland and Charlotte for two) felt it a lot. Similar for Silicon Valley.

The last US recession did not impact the UK or many other countries. Maybe it was just too small of a recession in the US.

If we want to debate central banks and fiat money we can do so but that would not be a discussion really on topic.

As someone who thinks there are serious problems yet is aggressively expanding your RE portfolio what are you doing to hedge or otherwise protect your position? As you focus in a specific area of the US would you vary your strategy if you lived and owned property in another market?

Posted: 02/27/2008 at 05:06PM

not even need for that. i'm a diligent and detail oriented analyst: i have been observing one of neighborhood big supermarkets dumpster ( this one is foreign based and does not invest in compactors) - the higher unemployment in area, and the gloomier economic news on teevee, the more fresh food is being thrown in the dumpster: they dump hundreds of loaves of good to eat bread daily, let alone other good quality food items....not only food, though----------------------------------
recently they disposed of a $ 300 photo printer because someone returned it due to....... ink cartridge running out of ink

Posted: 02/28/2008 at 08:38AM

Who cares if we are in a recession or not? The difference between zero growth and 0.5% negative growth is marginal.

The fact is that the economy is not growing as it used to and that has consequences. The question whether it is called a rescission or not is beside the point.