Share prices

Discussion in 'Business & Economics' started by Xelasnave.1947, Mar 11, 2020.

  1. Seattle Valued Senior Member

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    6,008
    Where I live there haven't been many down years in real estate. I bought a house for about $120k, it went up to $320k and we had our only down period (which lasted for about 1 1/2 years) and my house went down to about $220k. Since then it's only gone up and is currently at about $520k. So it's never been below what I paid.

    Easy to make money (when you sell) but hard if you are waiting for a down period. When people flip houses (here) they just find below market houses that need remodeling. The bigger problem now is that I think it's hard to justify those prices if you are looking for rental property. Rents are high but sales prices are even higher.

    I suspect commercial real estate is the better choice for an investor, in this area at the moment.
     
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  3. Xelasnave.1947 Valued Senior Member

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    In addition to buying in a down turn.

    My rules.
    Only buy if the house has been on the market 12 months.
    It came on too high no one will even make an offer, it goes stale, the price drops but it's stale buyers are suspicious and won't touch it. You come along and by now the vendor will negotiate when most time it has dropped to a good price but won't sell because buyers become suspicious..

    Next. It should have a major objection that you can fix..main road put in double glazing a private wall and a turning circle...there is usually something in addition to a unrealistic price that will see the listing go stale.

    Last visualise how the area will be in 20 years..often that twenty years arrives overnight.

    Obviously a good way is getting one you easily increase the rent and justify a higher price via a higher return. These are common...often an owner dies, the tenant has been in the shop for years the rent does not get adjusted. Or buy a shop where the tenant has little left on the lease and agree to a long lease at a high rent so they have a business to sell with no fear of having to negotiate a new lease..Good for their asset so they go for it.

    Long term..buy a development site say that will give you say six blocks..don't develop it as folk expect and sit on it for ten years...with the purchase of one you get gain on six with the prospect in ten years you may get ten blocks because of zoning change..blocks get smaller etc.
    Alex
     
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  5. Seattle Valued Senior Member

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    6,008
    Interesting.
    I don't think there are any houses on the market here for a year but I think they must have overpriced my house initially in the spring. It didn't sell so they poured a patio, built a raised deck but didn't do anything with the landscaping. It didn't sell so they put in all new carpeting but left other ugly cosmetic features in the house (it had been a rental).

    Basically after it stayed on the market though the summer, people just quit looking and as the owners fixed up things they kept the price the same. I didn't notice the house until late fall when it was dark and raining a lot.

    I put in an offer but there was already an offer in. Mine was a backup offer. It turned out the buyers just got out of medical school, were trying to finance with a VA loan but they were behind with their medical school loan so they were rejected.

    That how I got the house. After I had an inspection done I got it reduced by another couple of thousand so by the time I paid an electrican and plumber about $4k to upgrade everything I could have resold it for at least $25k more so I felt good about the price and not having to worry too much about buying at the top of a bubble or something.

    Usually houses sell within a few weeks around here unless someone just has no clue how to put a house on the market.

    I like your idea of putting a turn around circle in the yard of a house on a busy street. Many people would add a fence like you mentioned but they would still have difficulty getting out sometimes.
     
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  7. Xelasnave.1947 Valued Senior Member

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    Usually your old world charmer is on a busy road..cause it wasn't busy way back when...the objection usually is the busy road...busy road problems.. access, noise pet and children safety...fix those and you can deliver the dream.

    Most places on a busy road sees you backing into traffic..providing a safe exit indeed entry goes a long way to making it desirable.

    Funny thing..I would have folk come in wanting an old world charmer..I would take them five suburbs North and sell them a new contemporary house...chalk and cheese? Well yes but you need to look at their need..old world charmer says they want something different..a new contempt satisfies that need.

    Back in the day we had multiple listings and all agents talked to one another..so I would sell folk a contemporary house and my agent mates would ring me..I showed them fifty oldies (all main road of course) and they buy that new place inxxsuburb..why? As if it's my fault..I looked to satisfy that inner need..never told the others though.

    I loved selling. You helped folk get a home which for me was just so satisfying.

    And vendors..my area was well to do..professionals..I had the head dude of Jaguar as a tenant..big time stuff..and outside their field most were babes in the wood and I loved it that they chose me over sometimes fifteen others to handle their listing.

    Folk trusted me and I never betrayed one of them..that gave me a reputation...it was great.
    Cause of my legal background I had a different approach to all the others.

    I had real estate agents who had left the business call me to give me their listing of their home.
    Folk would have me review their extention plans before building.

    The best was where you had two up there folk separating..how would you like to be the third person at that table..they would argue..I would sit back until finally they would turn to me and say..Alex what would you do.
    Knowing someone trusts you and is dependant on your expertise is most satisfying...for me.

    In law I was a finance expert, I could get anyone into a house, so that was the main reason I went into real estate..the irony was in my whole career I never created a finance set up for anybody.

    Alex
     
  8. Seattle Valued Senior Member

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    6,008
    People say they love those old style bathrooms with the claw foot tubs and the funky plumbing but when it comes down to it, they like to look at those bathrooms but in their houses they usually prefer more modern bathrooms.

    They might buy a hundred year old farmhouse but then they tear everything out down to the framing and modernize most of it. I would to however. An old larger farmhouse or Craftsman style home with modern features is hard to beat.

    What is a "finance set up" that you never did in your real estate career? Are you talking about the kind of thing a mortgage broker or banker would do here? Line up and help qualify for the mortgage?

    Why would someone go to a legal office for help getting a mortgage? Just different ways of doing things in Australia?
     
  9. Xelasnave.1947 Valued Senior Member

    Messages:
    7,900
    Back then a bank required 40 % deposit on their valuation which usually met fifty percent mortgage when related to purchase price.

    We had building societies that lent a higher percentage but still one needed say forty percent of purchase price.

    I ran a legal office and was responsible for lending clients money on first mortgage and those ran at sixty percent of purchase price in most cases.
    So I had control of large sums and agents would send me clients to finance.

    Take them to their bank, take them to the building society...that part was like a brooker today.
    I had huge cred with finance companies so if I sent them folk could get personal loans ...

    Why agents came to me was because I in effect ran a small bank firstly but could arrange personal loans from multiple sources and various combinations that were new for the day...so I could get you into a house with only 10 percent...today that's no big deal today but back then I was one of the few who handled small deposit financing in my area.

    So I formed the impression that my ability would see me go well in selling.really well as I in effect held the purse strings..or as I thought.....but I started in a well to do suburb where the buyers had bought and sold two or three times and they had equity and bank backing so my finance ability was never needed...that was my surprise...what turned out to be my asset for selling was just being honest..people know and support you..friend tells friend, the coffee shop recommends you, even the bank, the guys in the post office...

    Alex
     
  10. Xelasnave.1947 Valued Senior Member

    Messages:
    7,900
    Today's report..
    Up up up..down, up down, up up up up , down down down, up up , down...up....up..down down .
    Clearly the market is normal ...whatever that means.

    I heard today folk won't take cash ..only plastic...fortunately I have sea shells..
    Alex
     
  11. Seattle Valued Senior Member

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    6,008
    How is that imaginary trading going?
     
  12. Xelasnave.1947 Valued Senior Member

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    7,900
    I went for a 1% profit yesterday to play it safe and bagged it But really could have done a lot better over the last two days if I was more courageous but I am trying to be realistic and play it as I would if there was real cash in the game.

    Even though it's pretend I am not playing today or tomorrow, I am cashed out and will watch until Monday and place my next bet on Tuesday if I get a feeling.

    I have thought of playing a game where my decisions are made by a coin toss as I read somewhere that monkeys throwing darts to select shares paid better than top punters.

    And maybe a system of backing both ways..sell if it goes up 2 or down 1...I haven't worked it out properly but develop some rule that takes out emotion.

    I am thinking this way because well say yesterday and the day before I was tempted to ride it longer based on my feeling, which although right as it turned out, has more chance of bringing you undone...it starts going up and you start to think it will reach its past all time high sort of thing.

    It's got me thinking real estate...I think, here, we can expect a back off, although that is not certain as with house sales if folk don't get their price ( which strongly figures in their decision to sell in the first place) they often withdraw or if they have to move rent out their home and rent where they move to..say like a job move.

    Anyways it should at least pause I feel and when things get back to business as usual the overseas money will probably come in a rush and we could see a mini boom.

    What folk don't realise is prices take off almost over night.

    We had two houses for sale ..identical for the purpose of pricing, one private treaty we put on at what we thought was 25k over market (185,000)..well it was based on recent comparable sales, it sold at asking price and we thought we were very clever indeed...the other was for auction six weeks later and sold at 237500 ...by that time the boom was over but still with people trying to get on the boat but it had sailed and from then on that sort of house sold for around 230/240 for the next couple of years..my point is it happened so fast even being at the coal face we did not see it until it was over...like shares.
    Alex
     
    Last edited: Apr 2, 2020
  13. Xelasnave.1947 Valued Senior Member

    Messages:
    7,900
    Thinking about it based on my experience and assuming this crisis ends reasonably soon if there is going to a mini boom I predict next March...March and Octber were always the most sales made in the year...October.. spring nesting thing..March those who should have bought have left it too late kids are going to a new school and its that rush I think that sees March with high numbers.
    So demand should build up plans to move in spring may be put off and at some point, say March, the demand will get down to buying...folk won't list cause there is little point..so high demand minimal supply.
    Be interesting to see how it goes.
    Alex
     
  14. Seattle Valued Senior Member

    Messages:
    6,008
    To make the pretend stock market thing more realistic limit your money. At some point you have to sell to be able to buy any more.

    People also underestimate the pain of taking actual loses. It's easy to do in a game, harder in reality. There's also transaction costs. Tax implications. Making a gamble and then the market changes over night and you can't get out without heavy loses, etc.

    The real estate market here does react so fast but when things start going down it goes that way for a way and takes a longer while to come back up. I'm speaking for generally good economy kind of places.

    All bets are off when talking about the "rust belt" states. Houses are free in some areas and expensive in much smaller and safer areas nearby.
     
  15. Xelasnave.1947 Valued Senior Member

    Messages:
    7,900
    My game is rather simplistic but I am developing rules... sell before the end of the day...I sold once at a loss thinking it would drop further, which it did, and bought back lower and happily made up for that small loss.
    When I get motivated again I will be too busy with astronomy but with the clouds I just have been slack.

    I notice over your way a decline in real estate in some areas you don't see here.
    Alex
     
  16. Seattle Valued Senior Member

    Messages:
    6,008
    There are areas, mainly in the mid-west, where heavy manufacturing used to be. When that left there weren't high paying jobs to replace those that were lost. People left for greener pastures. Those that stayed are poor, on drugs, living with high crime and therefore house prices collapsed in those areas.

    Everything else prices mainly just go up but relative values are different since some economies are stronger than other.
     
  17. Xelasnave.1947 Valued Senior Member

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    7,900
    It seems our poor are pretty well off because of the dole.. a couple ( not married) pull about eight hundred a week...free health if you are not insured.
    Alex
     
  18. Seattle Valued Senior Member

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    6,008
    Not here. Of course the upside is that most people leave and go to where they can be productive.
     
  19. Xelasnave.1947 Valued Senior Member

    Messages:
    7,900
    Share price very stable today 59.68 low 62.29 high not seeing wild swings.
    Alex
     
  20. sculptor Valued Senior Member

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    6,884
    Some days:
    It seems that the reaction to the virus(much like a body's immune system overreacting) is artificially depressing the stocks and the economy. Most at risk of death, the old and the infirm, from the virus ain't part of the workforce.
    I get the feeling that stocks are being depressed, something like pushing down on a spring, and, if/when(?) people get back to work this thing is going to jump, much like removing a weight from a spring.
    ............................
    but, then again
    I have been wrong before.
     
  21. billvon Valued Senior Member

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    18,273
    Well, except the economy is cyclic. We've been artificially high for quite a while now. We are due for a correction. This will start it.
     
  22. sculptor Valued Senior Member

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    6,884
    distinct possibility
    .....................
    Is the current government largess going to lead to inflation?
     
  23. Seattle Valued Senior Member

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    6,008
    Since we don't have an economy at full production, probably not.
    Regarding the "old" people. The stock market isn't crashing because of the economy result of losing old people in the workforce. It's crashing (in part) because of losing everyone else in the workforce for a period of time.
     

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