"The most valuable truths are the ones most people don't believe. They're like undervalued stocks. If you start with them, you'll have the whole field to yourself. So when you find an idea you know is good but most people disagree with, you should not merely ignore their objections, but push aggressively in that direction." Paul Graham
Thanks for posting that, Cory. I ran into the same video from another source. It seems that many of the experienced investors are talking about how bad Alt-A is going to be, but this sort of thing never seems to hit popular media until after it becomes a big problem.
Alt-A [and option ARM] resets will peak in 2011. Things will remain bad for quite a while. Bad for everyone else, that is, and good for those who help bring liquidity to the markets through short sales, REO purchases, and note purchases.
Addition: It typically takes about six months after an adjustable-rate mortgage resets for the bank to repossesses the property. It may then take another six months for the property to sell and six more months before the property is no longer used as a comp to lower the values of the houses around it.
There’s a year and a half between an ARM re-set and the time when the house is no longer used as a comp. The fallout from the mortgage crisis is going to be around for a couple of years.
The Fed currently isn’t doing much to “save” the markets. The swaps for T-bills aren’t inflationary (yet), since the assets have to be swapped back every 28 days. I think swaps will become inflationary when the paper stops performing while it’s being held by the Fed.
I think Bernanke is more concerned about the value of the dollar than he is with bailing out the markets. I’ve written about this before:
20-30% of the homes in the San Francisco/East Bay area have negative equity, meaning that homeowners owe more on their houses than the houses are worth.
Click below to see a full-size version of the map:
There’s a method of selling a house that helps the homeowner get out of a situation. It’s called a short sale and involves negotiating with the bank to sell the house for less than the loan balance.
According to this friendly map, there are lots opportunities for short sales in most parts of the country. We’re currently doing this in the San Fracisco Bay Area as well as Oklahoma City.
Bring me a lead and I’ll pay you $600 if we buy the house.
According to Zillow.com, U.S. real estate prices have been declining for about a year and a half. But - get this - Oklahoma City prices have been RISING for the past two years, even through the September-through-January period when the market is supposed to be slow.
There’s money moving into OKC that partly offsets the crisis in the mortgage market.
Yes, it’s slower than it used to be. Invest carefully. But don’t get scared of Oklahoma City real estate just because there’s a national real estate crash going on.
By far the largest portion of the money goes to fund public education (72%). Is that something you’re comfortable with? What does this reveal about our voters’ minds when it comes to the priority of families (vs. government) in education?
“Generally, local schools receive the largest share of the property tax. Schools are followed by city bond issues, county government, vocational-technical schools, libraries, and city-county health department. Except for those provided for in the Oklahoma Constitution, millage levies are controlled by the voters.”
Forbes has announced its annual Best Cities For Jobs list, and the South and West is where job-seekers should be looking….
Another rapid mover, Oklahoma City ranked 67th on last years list. It ranks sixth in income growth, 15th in cost of living and 25th in unemployment. Oklahoma City has been a traditional base for energy companies like Chesapeake Energy and Devon Energy, but its economic growth has partly been fueled by diversification into fields like information technology and health services.
Oklahoma City (rank: 10th) and Tulsa (rank: 6th) are the only two cities in the list that are heavily invested in energy. What will happen if we go to war with Iran and oil goes above $100/barrel? It’s above $90/barrel now, almost as high as it was in the late 1970s (adjusted for inflation).
Will we be ready to influence a rapidly growing city?
