Hereby I will prove how the realty boomers arguments are false.

What are the boomers arguments?

1.) Buy today, houses always increase in value in the long run.
WRONG. House prices cannot increase more than incomes in the long run. This is obvious if you think about it. If house prices go up more than people can afford to pay, buying stops, like it has stopped now.
Even Warren Buffett have pointed out that houses don't increase in intrinsic value. Unless there's a bubble or a crash, house prices simply reflect current salaries and interest rates. If a house is 100 years old, it's value in sheltering you is exactly the same as it was 100 years ago. Then came the maintenance as the house didn't renovate itself. It also has taxes, and insurance - costs that always increase and never go away. The price of the house went up about as much as salaries went up.
To put this is simple perspective, vegetable were costing Rs.5-6/kg when 5 digit salary was a rarity.
Today, the prices have gone up by about 4 times but so have the salaries. So, sounds very much like the reasoning people use now when they talk about how much their father's house appreciated "in the long run" without considering that salaries rose a proportional amount.

2.) Renting is just wastage of money.
WRONG. As said before renting is now much cheaper per month than owning. If you don't rent, you either:

* Have a mortgage, in which case you are throwing away money on interest, tax, insurance, maintenance, costs that increase forever.
* Own outright, in which case you are throwing away the extra income you could get by converting your house to cash, investing in bonds, and renting a similar place to live for much less money. This extra income is sufficient for emergency expenses,retirement etc.

Either way, owners lose much more money every month than renters and that's assuming prices don't correct to very high level & everything is smooth in the economy.

3.) As a renter, you won't have any money left as you will spend them on vacations,cars & hence won't have equity/savings etc.
WRONG. Equity is just money. Renters are actually in a better position to build equity/savings through investing in anything but housing. Renters can get rich much faster than owners, just by investing in conservative stocks & bonds.

* Owners are losing every month by paying much more for interest than they would pay for rent. The tax deduction does not come close to making owing competitive with renting.
* Owners must pay taxes simply to own a house. That is not true of stocks, bonds, or any other asset that can build equity/savings. Only houses are such a guaranteed drain on cash.
* Owners must insure a house, but not most other investments.
* Owners must pay to repair a house, but not a stock or a bond.
* Owners lose their money as house prices reduce. The EMI's remain constant in spite of reduction in rates. At the end of loan tenure, they would have paid almost twice than that of current renters who will buy at logical rates. Keep interest rates in mind. Most of the EMI is not principal amount but interest.

4.) There are great tax advantages to owning a house.
WRONG. Many people believe you can just reduce your income tax by the amount you pay in interest, but they are wrong. Buyers may not deduct interest from income tax; they deduct interest from taxable income. And even then, the tax advantage is not significant compared to the large monthly loss from owning.

If you don't own a house but want to live in one, your choice is to rent a house or rent money to buy a house. To rent money is to take out a loan. A mortgage is a money-rental agreement. House renters take no risk at all, but money-renting owners take on the huge risk of falling house prices, as well as all the costs of repairs, insurance, property taxes, etc.

5.) RE is based on local factors, it's not a national phenomenon. RE of Delhi-NCR,Bangalore & rest of the cities has nothing to do with Pune RE.
WRONG. Lending rates remain the same throughout the country. ALL loans are harder to get. This will drive prices down everywhere.

6.) A rental house provides good income. So, you can rent if you have purchased as investment.
WRONG. Rental houses provide very poor income in hyped areas and certainly cannot cover mortgage payments. Remember there is almost 300% difference between EMIs & rent for the same house.

It's pointless to do the work of being a landlord if you can make more money with no risk, no work, and no state income tax by investing in assured good returns bond.

7.) If owning is a loss in monthly cash flow, but appreciation will make up for it.
WRONG. Appreciation is negative. Prices are going down. It only adds to the injury of already high EMI's.

8.) As soon as prices drop a little, the number of buyers on the sidelines willing to jump back in increases.
WRONG. There are very few buyers left, and those who do want to buy will be limited by increasing difficulty of borrowing now that many house owners are near bankrupt as they don't save anything at the end of the month due to high EMI's.
No one has to buy, but there will be more and more people who have no choice but to sell as their payments rise. That will keep driving prices downward for a long time.

9.) House prices never fall atleast in Pune.
WRONG. If you see the RE scenario of 1996, prices crashed by 50% & took a whole 7+ years to recover.
Exact 1996 scenario may not be there today but strong correction is inevitable across the city.

10.) House prices don't fall to zero like stock prices, so it's safer to invest in real estate.
WRONG. House prices won't be zero, but the equity or the principal amount you paid can be zero or even negative. What you will pay as EMIs later in actual terms is not for the principal amount but only the interest as house prices dip. So, you will be only serving the bank.

11.) Prices will soften gradually, won't crash immediately.
WRONG. Prices are falling off a cliff. No one knows exactly what will happen, but it looks like prices will continue to fall for long time. These are just more manipulation of buyer emotions, to get them to buy even while prices are falling.

12.) The bubble prices were driven by supply and demand alone.
WRONG. Prices were driven by low interest rates and risky loans & good returns for investors in initial phases of boom in 2004-05.
Prices went up, interest rates went up & buyers savings went down. So prices are violating the most basic assumptions about supply and demand.

13.) There is lack of land.
WRONG. Ample of land is available & continue to be even in future in Pune. Sales volume are down. Even in Japan (small country with less land), prices went down. Current prices here are the same as that of 23 years ago. If we really had a housing shortage, there would not be so many vacant rentals.

14.) If you don't own, you'll live in a cheap neighborhood later.
WRONG. For the any given monthly payment, you can rent a much better house than you can buy. Renters live better, not worse. There are downsides to renting, such as being told to move at the end of your lease, or having your rent raised, but since there are thousands of vacant rentals, you can take your pick and be quite happy renting during the crash. There are similar but worse problems for owners anyway, such as being fired and losing your house, or having your interest rate and property taxes adjust upward. Remember, property taxes are forever.

15.) There's always someone predicting a real estate crash.
TRUE, yet irrelevant. There are very real crashes every decade or so. Even a broken clock is right twice a day.

16.) Local incomes justify the high prices.
WRONG. The mortgage should be more than your 3 years earning. It is much higher today. Most are already in danger/red zone.

17.) You have to live somewhere.
CORRECT. But that doesn't mean you should waste your life savings on a bad investment. You can live in a better house for much less money by renting during the down slide in RE.

18.) It's not a house, it's a home.
WRONG. Wherever one lives in it is home, be it apartment, condo, bungalow , mansion or house. Calling a house a "home" is a manipulation of your emotions for profit.

19.) If you don't buy now, you'll never get another chance.
WRONG. History proves otherwise.
Here's a beautiful quote from a analyst:-
"The real issue isn't whether you will be stuck being a renter all your life, she says. Its whether you'll get so scared about being shut out that you'll buy at the market's peak and be stuck in a property you can't afford or sell."

20.) It would take major economic recession or a major earthquake that wipes out this area in order for the price to fall by over 50%.
WRONG. Even today, if the prices fall by 50%, there will still be very few people who can buy at this levels due to uncertainty in jobs & most importantly high EMIs. Also, look at the rental rates for equivalent houses. Which loss per month is larger? EMI or rent?

contd....
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  • What do you think Real the new international airport in Panvel that is so much being pushed by Praful Patel.. Won't it drive prices of Lavasa and Pune.. Panvel is as close to Mumbai as it is to Pune.. Maybe this will drive the Hinjewadi prices up....
    CommentQuote
  • Originally Posted by Sharpj
    What do you think Real the new international airport in Panvel that is so much being pushed by Praful Patel.. Won't it drive prices of Lavasa and Pune.. Panvel is as close to Mumbai as it is to Pune.. Maybe this will drive the Hinjewadi prices up....


    Don't how how it will drive up prices?
    Negatives of an international-airport near residential-property:
    1. Lots of noise-pollution 24x7.
    2. Traffic-congestion and security related issues.
    As a home-dweller I see NO value add for me. Hence would NOT buy house near an airport.
    CommentQuote
  • There was an article in TOI let paper on the FDI into RE beginning from 2005..
    If you see really when did the market go crazy.. from 2005.. Maybe this is the reason.. and what if government regulates this.. and stop FDI into this sector.. Maybe it never will considering politicians own the majority of land bank...


    FDI in real estate up 80 times in 5 years, mostly in Mumbai
    Kartikeya | TNN

    Mumbai: Owning one’s own home is the ultimate dream of almost every middle-class Indian. But if you thought it’s only Indians who are closely following our real estate market, you’re wrong. Foreign direct investment (FDI) in the country’s booming real estate and housing market has jumped 80 times between 2005 and 2010.
    Figures obtained by TOI show that in 2005, FDI in real estate was a mere Rs 171 crore. That soared to Rs 13,586 crore in 2009-10. In April and May this year alone, Rs 738 crore have been pumped into the sector through the FDI route.
    Technically speaking, under the Foreign Exchange Management Act (FEMA), foreign investment is prohibited in real estate and construction of farm houses. However, the definition of “real estate business does not include development of townships, construction of residential or commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure’’. Thus since 2005, massive amounts of FDI worth Rs 37,986 crore ($8,492 million) has come into the housing sector in India (till this May).
    It is no surprise that the largest number of building projects in which FDI is in play are in the country’s commercial capital of Mumbai. Panaji, Kochi, Kanpur also gain
    The total 1,614 projects in which foreign investors have put in money since 2005, 422 were cleared by the Reserve Bank of India’s Mumbai office, followed closely by 316 in Delhi. Other big cities like Bangalore, Hyderabad and Chennai also attracted the attention of foreign real estate investors (see chart).
    But it isn’t confined to metros and big cities alone. Since 2005, various projects have been given the green signal by RBI offices in Bhopal, Kanpur, Kochi, Jaipur and Panaji, among other places.The largest FDI over the last five years has been in the construction of a technology park at Bandra Kurla Complex —- $372 million brought in through Mauritius.
    Although FDI has come from as many 34 countries and destinations as diverse as the Netherlands, USA, Saudi Arabia and even Sudan, data available with TOI shows that the largest number of foreign investors working with Indian real estate firms were based in Mauritius, a country with which India has a double tax avoidance treaty. Firms based in USA, Cyprus, UAE and Singapore are other major players in the Indian market.
    The government currently allows 100% FDI through the automatic route for development of townships, housing, etc. There are restrictions on foreignplayers, like clauses that they cannot repatriate their original investment for a few years and are expected to comply with all local municipal norms for building projects. But given the high property rates in India and the perpetually profitable nature of the business, none of the foreign investors seem to be complaining. If anything, they are just bringing more and more money into the sector.
    CommentQuote
  • As far as FDI is concerned, it has fallen by almost 90% from 2007-08 levels, so though current nos. be more than 2005-06, it is far less than 2007-08. Again, REITS returns have been negative so everyone is running away. Man, the thing is most of the so called FDI is nothing but money coming through dummy companies set up by politicos-builder in tax free countries/havens like Mauritius. This is a good way to bring in black money in form of white & make it white rather than sending it through Hawala:bab (34):.
    Originally Posted by Sharpj
    What do you think Real the new international airport in Panvel that is so much being pushed by Praful Patel.. Won't it drive prices of Lavasa and Pune.. Panvel is as close to Mumbai as it is to Pune.. Maybe this will drive the Hinjewadi prices up....

    By this logic prices of Vimananagar should be more than Kalyaninagar:bab (35):.
    Anyways, the airport requires atleast 5,000 acres of land which is hard to get in Panvel. Hence, Navi Mumbai is doing the rounds for large amount of land but there is environmental issue. But note that if airport comes in range of 200km, then Pune will never have it's own airport:(. As far as Praful Bidiman Patel is concerned, well, the first option from their end was Baramati:D.

    At the end of the day, the local crap politicos will do what will benefit them & their chamchas, but the final decision is taken only after the feasibility where even corporates are taken into consideration. Btw, MCCIA was the local unit which had opposed Baramati airport.

    Anyways, lets not bring in this issue here coz the total time required for airport completion after all land acquisitions, clearances etc. taken is 10 yrs & the way things work in India, it can be 15 yrs as well:o.

    Btw, if you see, one needs to hover on Mumbai airport for about 1/2 hr before they can land due to heavy traffic on runways, so the airline cos are now planning a hike in tariff rates for flights operating in & out of Mumbai while it will cheaper to fly from New Delhi, thanks to T3 terminal.
    CommentQuote
  • FDI and World Weather

    Originally Posted by realacres
    As far as FDI is concerned, it has fallen by almost 90% from 2007-08 levels, so though current nos. be more than 2005-06, it is far less than 2007-08. Again, REITS returns have been negative so everyone is running away. Man, the thing is most of the so called FDI is nothing but money coming through dummy companies set up by politicos-builder in tax free countries/havens like Mauritius. This is a good way to bring in black money in form of white & make it white rather than sending it through Hawala:bab (34):.


    FDI ;)

    Here is a partial list of double-dip “probabilities” spouted out by some well-known and relatively unknown economists:


      Robert Shiller (Professor at Yale University): “The probability of that kind of double-dip is more than 50 percent.”
      Bill Gross (Founder/Managing Director at PIMCO): The New York Times described Gross’s double-dip radar with the following, “He put the probability of a recession — and of an accompanying bout of deflation — at 25 to 35 percent.”
      Mohamed El-Erian (CEO of PIMCO): “If you wonder how meaningful 25 per cent is, ask yourself the following question: if I offered you that I drive you back to work, but there’s a one in four chance that I get into a big accident, would come with me?”
      David Rosenberg (Chief Economist at Gluskin Chef): In a recent newsletter, Rosenberg has raised the odds of a double-dip recession from 45 per cent a month ago to 67 per cent currently.
      Nouriel Roubini (Professor at New York University): “As early as August 2009 I expressed concern in a Financial Times op-ed about the risk of a double-dip recession, even if my benchmark scenario characterizes the risk of a W as still a low probability event (20% probability) as opposed to a 60% probability for a U-shaped recovery.”
      Robert Reich (Former Secretary of Labor): According to Martin Fridson, Global Credit Strategist at BNP Paribas, Robert Reich has assigned a 50% probability of a double dip, even if Reich believes we are actually in one “Long Dipper.”
      Graeme Leach (Chief Economist at the Institute of Directors): “I would give a 40 per cent probability to what I call ‘one L of a recovery’, in other words a fairly weak flattish cycle over the next 12 months. A double-dip recession would get a 40 per cent probability as well.”
      Ed McKelvey (Sr. U.S. Economist at man Sachs): “We think the probability is unusually high — between 25 percent and 30 percent — but we do not see double dip as the base case.”
      Avery Shenfeld (Chief Economist at CIBC): “The probability estimate is likely more consistent with a slowdown rather than a true double-dip recession but, given the uncertainties, fiscal tightening ahead and the potential for a slow economy to be vulnerable to shocks, we will keep an eye on our new indicator nevertheless.” This guy can’t even be pinned down for a number!
      National Institute for Economic and Social Research (NIESR) : “The probability of seeing a contraction of output in 2011 as compared to 2010 has risen from 14 per cent to 19 per cent”.
      New York Fed Treasury Spread Model (see chart below): Professor Mark J. Perry notes, “For July 2010, the recession probability is only 0.06% and by a year from now in June of next year the recession probability is only slightly higher, at only 0.3137% (less than 1/3 of 1%).”



      If several smart people say there are more chances of Double-Dip
      then there are chances very much

      And wait 3 months for this US GDP ..... if comes negative then there is no double dip ..... we never left the first dip...... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur......... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur......... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur......... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur......... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur......... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur......... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur......... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur......... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur......... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur......... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur......... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur......... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur......... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur...
    CommentQuote
  • Hi frugal,

    your data is never too frugal, very ample indeed.

    More and more a feeling of deja vu is coming - just 2 years ago, we were saying India is different, it is growing, it will not be affected by US downturn which was going on - now 2 years later, we are saying the same thing all over again.

    Global imbalances are so huge, nobody can possibly predict what is going to happen.

    But any and every idiot should be able to predict that SOMETHING is definitely going to happen?

    How come nobody is scared any more?

    Ominous sign of a crash = people stop feeling fear, greed overwhelms their fear
    CommentQuote
  • Buying vs. Renting

    Good on-line calculator from Forbes:).

    This simple calculator gives a quick read on the economic viability of buying, rather than leasing, a property. If the capitalization rate is 7% or more, the buyer is probably getting an acceptable deal. This calculator is also useful for renters who are weighing the possibility of buying. Just plug in your current rent and an estimate of how much it would cost to purchase the apartment you are now renting.

    http://www.forbes.com/tools/calculator/buy_vs_rent.jhtml
    CommentQuote
  • hi

    calculator is very good.
    seems no sense in the mumbai market.
    Its not even remotely close to 7%
    CommentQuote
  • Originally Posted by spdutt72
    calculator is very good.
    seems no sense in the mumbai market.
    Its not even remotely close to 7%


    After few years...don't say calculator is very good but
    seems no sense in the Pune market.
    CommentQuote
  • CommentQuote



  • It’s surprising and simply outrageous, :bab (38):
    CommentQuote
  • He finished building in 8 months. Hopeless society we live in; God bless the deceased souls and shame on city administration; hope that thug developer is thrown behind bars at least without bail
    CommentQuote
  • No point in buying now ... this is a long term bear

    Originally Posted by frugality
    FDI ;)

    Here is a partial list of double-dip “probabilities” spouted out by some well-known and relatively unknown economists:


      Robert Shiller (Professor at Yale University): “The probability of that kind of double-dip is more than 50 percent.”
      Bill Gross (Founder/Managing Director at PIMCO): The New York Times described Gross’s double-dip radar with the following, “He put the probability of a recession — and of an accompanying bout of deflation — at 25 to 35 percent.”
      Mohamed El-Erian (CEO of PIMCO): “If you wonder how meaningful 25 per cent is, ask yourself the following question: if I offered you that I drive you back to work, but there’s a one in four chance that I get into a big accident, would come with me?”
      David Rosenberg (Chief Economist at Gluskin Chef): In a recent newsletter, Rosenberg has raised the odds of a double-dip recession from 45 per cent a month ago to 67 per cent currently.
      Nouriel Roubini (Professor at New York University): “As early as August 2009 I expressed concern in a Financial Times op-ed about the risk of a double-dip recession, even if my benchmark scenario characterizes the risk of a W as still a low probability event (20% probability) as opposed to a 60% probability for a U-shaped recovery.”
      Robert Reich (Former Secretary of Labor): According to Martin Fridson, Global Credit Strategist at BNP Paribas, Robert Reich has assigned a 50% probability of a double dip, even if Reich believes we are actually in one “Long Dipper.”
      Graeme Leach (Chief Economist at the Institute of Directors): “I would give a 40 per cent probability to what I call ‘one L of a recovery’, in other words a fairly weak flattish cycle over the next 12 months. A double-dip recession would get a 40 per cent probability as well.”
      Ed McKelvey (Sr. U.S. Economist at man Sachs): “We think the probability is unusually high — between 25 percent and 30 percent — but we do not see double dip as the base case.”
      Avery Shenfeld (Chief Economist at CIBC): “The probability estimate is likely more consistent with a slowdown rather than a true double-dip recession but, given the uncertainties, fiscal tightening ahead and the potential for a slow economy to be vulnerable to shocks, we will keep an eye on our new indicator nevertheless.” This guy can’t even be pinned down for a number!
      National Institute for Economic and Social Research (NIESR) : “The probability of seeing a contraction of output in 2011 as compared to 2010 has risen from 14 per cent to 19 per cent”.
      New York Fed Treasury Spread Model (see chart below): Professor Mark J. Perry notes, “For July 2010, the recession probability is only 0.06% and by a year from now in June of next year the recession probability is only slightly higher, at only 0.3137% (less than 1/3 of 1%).”



      If several smart people say there are more chances of Double-Dip
      then there are chances very much

      And wait 3 months for this US GDP ..... if comes negative then there is no double dip ..... we never left the first dip...... :bab (35):

      then Secular Bear market is almost declared and wait 10 more years to come out of that ......

      there lies your 50% cheaper RE ..... and "Diwali" thread will lit up once again :bab (22):

      And there are environmental factors too....
      Calamities in all our neighbours ...
      Pak, Russia , China .....

      they too will be a surprise for Bulls .... and those surprises are for Granted in the Bag just a matter of time.

      Migration in large way may occur...


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers


      Hello Frugal and Venky,

      Back in springtime, once again I looked foolish when markets seemed to be going big guns. But, once again people who bought with the notion of "it will run away and become too costly" will wonder why they didn't wait to get lower prices.

      Repeating the same consistent mantra (in the face of analysts swinging from great recession - 2008 - to great recovery - 2009 - back the double dip - 2010) I continue to maintain that we are approaching what will become a Depression and one that threatens to be bigger than the GD 1 of the 1930s at least for the US.

      We have not even neared the bottom which could be as far away as 2012 upto 2016. So, the 50% drop in prices wil probably come in this timeframe. No point in jumping the gun and buying everytime there is a stimulus-propped rally.

      The next leg down took some time happening but its probably n its way now. Expect DOW to crack previous low of 6400 and Sensx to go down to 12000 (best case) to even 8000 (bad case) in the next 9-14 months. When fear is in the market and over supply building up, expect to get great bargains in the RE market as well.

      Keeping my cash in safe investments till then.

      cheers
    CommentQuote
  • Originally Posted by spdutt72
    calculator is very good.
    seems no sense in the mumbai market.
    Its not even remotely close to 7%

    The place where I'm renting capitalization rate is 4%. Here price shud fall from 20L to 12L for me to buy this property :D
    Capitalization limit: USA = 7% (5% mortgage-rate + maintenance charges). India = 11% (10% interest + maintenance).
    CommentQuote
  • Originally Posted by hitmady
    The place where I'm renting capitalization rate is 4%.

    And my case, it comes to be 3.2%:D. Man, I am enjoying renting this place:).

    Btw, PRB, it is unfortunate that the building collapsed, not for the builder but for the buyers. Don't know whether the buyers will ever get their money back. No house, no money.....& one fine day some few thousand penalty will be imposed on the builder & matter closed :(.
    CommentQuote