Do you understand what secured lending is? I think not. How about you Mike, do you understand what secured lending is? Buying a $1 house in Detroit will cost you $6000 in back taxes and $3000 per year in property taxes. Do you think a lender is going to secure a loan with a $3000 per year liability?
LOL Mike, stick to building houses, your grasp of economics and finance sucks.
No lender would bother writing a home loan for a dollar, or even for a few thousand, but it's still possible to finance the purchase of a $1 house plus costs and back taxes with either an unsecured loan like a personal loan, a credit card, or using another property as security.
Any expressed market opinion is my own and is not to be taken as financial advice
No lender would bother writing a home loan for a dollar, or even for a few thousand, but it's still possible to finance the purchase of a $1 house plus costs and back taxes with either an unsecured loan like a personal loan, a credit card, or using another property as security.
You're right peter
I've enough funds in mortgage redraw to load up on half a dozen detroit houses incl all costs with no bother, this is "free & easy credit" for me and there's lots of folk like me in same position, good credit history, type of guy banks want to do biz with
But you'd be mad to waste money on a detroit house, can't rent them even to degenerates, even the vermins don't want them
If these dudes think cheap credit can make folk want to buy detroit homes, well they should spend some time there, mad in the head, would be a real eye opener for them
Bank could give me a billion dollars I wouldn't spend a cent of it on a detroiy house
This thread is pretty thick but having just read most of it, I recommend Shadow to pull out now. You've got to know when to hold em, know when to fold em...
Glen Stevens, is he a bear? What about Luci Ellis?
All argue that the boom was caused by cheap credit and falling interest rates in the face of a supply side that couldn't possibly keep up.
Once you accept that, you will begin to understand the beating heart of the property finance complex.
No they don't -you are such a liar - it is not as if you have not been shown this over and over The RBA and Luci say it was driven by demand
Quote:
The housing and credit boom of 2002/03 was clearly demand driven,
Your causality is all wrong the DEMAND drove the housing boom and the credit boom. you just dont get the basics Veritas. I feel so so sorry for you.
Veritas does this a lot he tells lies about what is in documents as he think most people won't bother to read them. He is a bit sneaky watch out for it.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
No lender would bother writing a home loan for a dollar, or even for a few thousand, but it's still possible to finance the purchase of a $1 house plus costs and back taxes with either an unsecured loan like a personal loan, a credit card, or using another property as security.
Yes, but consumer credit isn't cheap, and it isn't the rate that Shadow posted as his 'proof' that cheap finance is available to purchase a house in Detroit.
Mike
10 Aug 2013, 12:53 AM
No please explain it to me word for word. I have no idea what secured lending is and land taxes when I currently own 13 properties, what would I know.
Please explain to all us and impart your wisdom.
You own 13 properties, or you have mortgages on 13 properties?
You are such a genius I reckon you should buy 13 more!
Guys, it does not matter if the demand is rational and sane. It is still demand. It does not matter if the supply is sane and rational. It is still supply. It all gets back to supply and demand. Demand and supply. What ever. Anything else is nonsense. Thirsty person wants a beer, publican supplies beer, person no longer in need of beer, publican can't sell him a beer. Supply and demand. So simple. Mining company gets orders for minerals, minerals rise, company needs extra workers, wages rise, workers need extra houses, houses rise, get the picture. Mining company loses orders for minerals. Well you know the rest. Peter from Perth.
No they dont -you are such a liar - it is not as if you have not been shown this over and over The RBA and Lucy say it was driven by demand
Your causality is all wrong the DEMAND drove the housing boom and the credit boom. you just dont get the basics Veritas. I feel so so sorry for you.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
Yes, but consumer credit isn't cheap, and it isn't the rate that Shadow posted as his 'proof' that cheap finance is available to purchase a house in Detroit. You own 13 properties, or you have mortgages on 13 properties?
You are such a genius I reckon you should buy 13 more!
i think Mike the rates and taxes are about to start rising. Peter from Perth
Yes, but consumer credit isn't cheap, and it isn't the rate that Shadow posted as his 'proof' that cheap finance is available to purchase a house in Detroit.
I thought that the premise was "easy credit" and what does the rate matter if the loan is only for a few thousand?
here's a question for you. What would happen if we had a choice between three cars. One was a VW for $10,000, the next was a commodore for $25,000 and the third choice was a Ferrari for $50,000.
If we had plenty of supply, would the sudden access to easy well priced credit push up the price of cars or would we all start driving Commodores and Ferrari's?
Would the median price of cars sold then increase without actually altering the cost of a base model VW or would the price of a base VW automatically increase to match our increased spending power, or would VW try to lower their price to entice more buyers?
Any expressed market opinion is my own and is not to be taken as financial advice
Where's the crash GenX? When is 'The Bubble' going to burst?
'The Bubble!'
Beware 'The Bubble!'
'The Bubble!' 'The Bubble!' 'The Bubble!' 'The Bubble!'
I don't believe I've ever used the term bubble. Maybe all of your 'bear' nemesis' are swirling around into one large amorphous mass in your mind, and you can't keep them straight. In fact it sounds like you are losing it good fellow, maybe you should take it easy this weekend.
But since you ask. The crash has already occurred in many parts of the country, some areas have dropped 40%, some nearly 50%. It's funny how most of the bears missed it, I agree, but it was mostly in places nobody really cares about. The next areas to experience a crash are mining towns like Mackay and Moranbah where they are trying to sell little boxes in the middle of the desert for 750K. Once unemployment starts rising, those poor overleveraged fools are just going to have to either sell and lose a good part of their savings, or default and go bankrupt. Either way, it won't be pretty.
But I want to reassure you that Sydney is safe. Even after the 87 stock market crash, and the 90s balance sheet recession, the most Sydney prices dropped was 15%*. So I want you to hang on to all of your properties, there is nothing to worry about. In fact, I would encourage you to buy some more, at least 5 to ride this final leg up.
* On average, some areas did go down by 30% or more, but someone as clever as you hasn't purchased in those areas. The other caveat is that private debt at that time wasn't even half of what it is now, but it's only pieces of paper, and as b_b says, we can print as many of them as we like without consequence.
peter fraser
10 Aug 2013, 01:59 AM
I thought that the premise was "easy credit" and what does the rate matter if the loan is only for a few thousand?
Oh, I thought the premise was "cheap credit". But let's go with "easy credit". I could be wrong, but I am pretty sure the FICO score requirement is not the same for secured and unsecured lending. But if you have information otherwise?
Quote:
here's a question for you. What would happen if we had a choice between three cars. One was a VW for $10,000, the next was a commodore for $25,000 and the third choice was a Ferrari for $50,000.
If we had plenty of supply, would the sudden access to easy well priced credit push up the price of cars or would we all start driving Commodores and Ferrari's?
Would the median price of cars sold then increase without actually altering the cost of a base model VW or would the price of a base VW automatically increase to match our increased spending power, or would VW try to lower their price to entice more buyers?
a) Cars do not secure loans. Auto-loans are unsecured lending, so the comparison can't be made. b) The supply of cars is elastic, even Ferrari.
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