The Coming Financial Holocaust

From CliveMaund.com ...

...those fortunate enough to own their own homes and other core assets, and possess a mix of quality gold mine stocks and physical gold will be amongst the few who survive this financial equivalent of a holocaust.


FIAT and CREDIT – “The coming Financial Holocaust”

The US has reached a level of debt saturation hitherto thought unimaginable and unsustainable, comprising, at its heart, mountainous mortgages and pyramiding credit card debt. More and more Americans have burdened themselves with maximum mortgages taken out with the perception of a real estate market set on an ever upwards trajectory. Most of these mortgages are at the limit that the mortgagee can support, and this sustained by ever more complex and financially dubious mortgage products increasingly designed to underwrite ARM (Adjustable Rate Mortgages) mortgages. This is little other than a horrifying scenario based on a "colossal leap of faith" in the persistence of low interest rates and economic naivety by the population at large;

This is a MUST read.

Get Gold

I said it before - get into gold ...

Housing Bubble Smack-Down

Give me 5 minutes and I’ll convince you that you should sell your house immediately and invest your life-savings in gold or a Swiss bank-account.

And More Lawsuits ...

This is going to really get ugly. I predict that in the next 6 months, there will be violence. Naive homebuyers sucked in by greedy real estate agents, sold on interest-only ARMS whose monthly payments are doubling and foreclosure looming - one of them is going to send a sleezy realtor to (in the words of Neal Boortz, radio talk show host) "take the eternal celestial dirt nap".

Mark my words - murder as a result of the housing bust will happen.

From the Arizona Republic ...

Grievances targeting agents rise

Complaints against real estate agents are on the rise, with consumers accusing them of everything from selling property without a license to cutting corners to make a sale.

As of June, the number of complaints opened with the Arizona Department of Real Estate had jumped 53 percent since 2003, the year before the housing boom took the Valley by storm. Complaints forwarded for discipline increased 150 percent in that same time.

More consumers are not only griping about the way they have been treated, but they're also alleging they have lost money in real estate deals. Agents found in violation of state laws that govern license holders can wind up paying fines or having their licenses suspended or revoked.

Housing Price Collapse Coming?

Funny, I thought the housing price collapse was well underway ...

US Stock to open lower after housing data

"The housing market is literally collapsing. Builders have already panicked, but we haven't yet seen the big collapse in prices because people believe their house is unique and they're unwilling to reduce prices to attract buyers," said Gary Shilling, president of A. Gary Shilling & Co. investment research firm in Springfield, New Jersey.

Destin Before and After

From 1964 to 2004 - What a difference four decades makes ...

Old Destin

From the Tuscaloosa, Alabama News ...

Old Destin is no more
For the last 20 years of so the name of the game down here has been real estate, "economic development," and the building boom, which has been through and couple of boom and bust cycles (it appears to be in the bust stage now, with speculators taking a well-deserved beating on all the overdevelopment), has transformed Destin ...

Amen - speculators take a beating as well they should. And it is at the expense of the speculators that I will own a condo in Destin at a reasonable price.

Good as Gold

Do your own due diligence, but I mentioned gold a few posts back. Today it broke a psychological resistance of $630 per ounce. I still think its up, up, up from here for gold (and silver too).

Gold up on firm oil prices firm, economic concerns

Chinese plans to diversify reserves into gold provides further support

Destin Prices Falling Like California Cities

Just like many California cities, Destin's prices go Boom to bust, almost overnight

2006 may well go down as the year Pluto was suddenly just another big rock, Brad and Angelina had a baby and the real estate market slid from great to miserable in a few short months.

Sales volume and prices are dropping in overpriced markets like California cities -- particularly San Diego -- some Florida cities, Northern Virginia and Las Vegas. In some markets, like Detroit, it is exceedingly difficult to sell a property at all. Prices declined in 13 of the 16 metro areas in Michigan.

Among prominent cities where second-quarter prices fell were: Boston-Cambridge, Cincinnati, Detroit, Indianapolis, Kansas City, Manchester, NH, Pittsburgh, Pa., Portland, Maine, Reno, Rochester, Minn., Toledo and Youngstown, Ohio. Prices fell in the California cities of Napa, Sacramento, Redding and San Luis Obispo, and in the Florida cities of Fort Walton Beach-Crestview-Destin and Punta Gorda.

This thing is snowballing. At one point, it looked like it might take at least a couple more years for prices to bottom out, but at this rate, we're going to see 50%+ decreases from the highs within 9 months. Will they go lower?. Whether we reach the bottom sooner or whether we reach it later, its going to take years before prices rise again. A lot of people are going to take a beating and stay down. For those of you waiting for the bottom, patience - it won't be long at this rate.

Pants on Fire

Oh that corrupt, lying NAR. Do you think they are unbiased and on your side? ....

NAR Bullish on Housing Market, Advises Consumers to Take Action Now While Conditions Remain Favorable

AR’s first-ever newspaper blitz features the headline, “It’s a great time to buy or sell a home.” The advertisement points out that interest rates have fallen seven months in a row and are near 40 year lows, inventories of existing homes are higher than they have been in decades and prices have stabilized. But the perfect conditions for buyers are likely to change as sales pick up, prices gain traction and conditions improve for sellers next year.

Liar, liar pants on fire. These guys have NOTHING on their minds but the 6% commissions that have become few and far between and will continue to dwindle as the bursting housing bubble takes 10's of thousands of them down. They deserve it after leading millions of unsuspecting buyers into financial devastation.

Lawsuits

There's going to be more and more lawsuits cropping up with everyone blaming everyone else for their real estate losses.

Its going to get very ugly. Here's a sample from Tampa, Florida ...

Lehman Bros. Sues Over Pasco Condos

TAMPA - A New York lender fears it is on the hook for millions of dollars in loans that now total more than the New Port Richey properties are worth.

Lehman Bros. Holdings, the global financial services corporation, filed suit in Tampa on Tuesday against a group of investors, title companies, a mortgage company and an appraisal company involved in potential mortgage fraud at a Pasco County condominium complex.

Sunset Bay Club has three-story triplexes that each have five bedrooms and a shared kitchen. The bedrooms, according to the lawsuit, are leased primarily to senior citizens.

Fifteen defendants used overvalued appraisals in a "scheme to defraud" the bank, according to the lawsuit. The 13 properties each were appraised for $733,000. The lawsuit says the triplexes are worth "barely one-third" of that value.

Say it ain't so. Inflated appraisals? Not only is it so, its par for the course.

The Harder They Fall

The bigger and faster the run up in prices, the bigger and faster the fall observes Linda Rawls of the Palm Beach post. What's true in Palm Beach is also true in Destin - big run up, big fall.

How well will homes sell? Opinions differ on market for new homes

The faster they rise, the harder they fall. That old saw aptly applies to new-home prices, and so it is that Palm Beach County and the Treasure Coast - two of the hottest housing markets in the nation - are now leading the retreat from a boom that saw sales skyrocket and prices soar for five consecutive record-setting years. Whether or not it's a hard fall, though, depends on whom you talk to.

"The current downturn should last two to five years," housing analyst Jack McCabe says. Bradley Hunter of Metrostudy says new-home sales will pick up in 18 months. The National Association of Home Builders says new-home prices will drop until at least 2008. David Berson of Fannie Mae says prices will perk up in 2009. And Mark Zandi of Moody's Economy.com says the worst of the downturn "is at hand."

Double Trouble

Why in the world would anybody buy a new home without first selling their current home given the state of the housing market today? Don't these people read? Here's a story about a couple who bought assuming they could quickly sell their condo and at a price higher than what this condo in a buyer's market would bring. Stories like these are more and more common. The moral of the story: sell your current home before buying a new one - don't assume a quick turnover at the price you want in this market.

Slow-market crisis: Stuck with two homes

What's more, the number of houses sold nationwide in August fell 12% from last year. For those who've just signed contracts to buy, it's less and less likely they'll be able to sell their old houses before closing on their new ones. To understand what that means, do the math: In Massachusetts, a state particularly slow for sales, it takes the average seller 114 days to find a buyer. That's almost four months of double house payments.

With a $300,000 mortgage, you'd pay about $10,000 in interest, taxes, upkeep and insurance while house No. 1 sits on the market.

'Nuff Said

U.S. Home Prices since 1975

MLS for Destin Area

This real estate site has a very usable MLS search for the Destin area ...

Destin4Me.com

This is the site I have used to track prices in Maravilla ... a complex I'm interested in buying in - when prices come down 50%.

Destin real estate prices fall off a cliff ...

Sell Your House and Buy Gold?

I fully believe gold is the place for a good portion of my money ...

Gold Rises to 7-Week High as Dollar Falls on Economy Concern

Jon Nadler, an investment-products analyst at Kitco Inc. ...

Bullion "has been largely absent from the market for the last 20 years because people have been distracted with real estate, equities and all of the hot things, but there will be a return to basics,'' Nadler said.

Real Estate Industry May Cut 15% of Workforce

Real Estate Agents had better get prepared. Some career counseling and job training may be in order ...

Can the economy survive the housing bust?

Real estate downturns have a way of leading to recessions and stock market slumps. So far the damage has been limited, but the numbers keep getting worse, says Fortune's Jon Birger.

Business is so bad for real estate brokers that Steve Murray, a realty consultant and publisher of the Real Trends newsletter, thinks the industry might end up paring 15 percent of its workforce. That equates to 200,000 agents, which is more than the total layoffs at Ford Motor Co. since 2000.

Fly to Destin

You'll soonbe able to fly to Destin from Atlanta and look at the condos in which you can reasonably invest somewhere between 1 and 5 years from now ...

Destin

"... getting Phoenix Air to the area "will give our location a great economic boost." The charter airline is running scheduled flights from the Marietta/Cobb-McCollum Airport near Atlanta directly to the Destin Airport.

New Condo Projects in Destin

From Free Market News ...

THOUGHTS ON THE HOUSING BUBBLE

Aggressive lending campaigns by Wall Street firms and mortgage brokers, who pushed variable rate and interest-only loans, fueled the fire. “Build it and they will come” became the mantra of developers. My wife and I were in the Destin, FL, area about two years ago. Noting new projects everywhere with construction cranes perched on sites like blue herons in a Koi pond, I thought, “My goodness, who is going to buy all of this stuff?”

Indeed, who will buy? No one right now. I will buy, once the dust has settled. Patience. Patience. Maybe a year, maybe two years. Maybe five years. The bottom will be reached, rental income will pay mortgage, taxes and insurance and then I will own.