EN GENERAL

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Un investissement immobilier avec un prêt hypothécaire est 
un levier à sens unique et il est très dangereux !

In real estate investment, real property is often valued according to projected capitalization rates used as investment criteria. This is done by algebraic manipulation of the formula below:

Capital Cost (asset price) = Net Operating Income/ Capitalization Rate.

For example, in valuing the projected sale price of an apartment building that produces a net operating income of $10,000, if we set a projected capitalization rate at 7%, then the asset value (or price we would pay to own it) is $142,857 (142,857 = 10,000 / .07).This is often referred to as direct capitalization, and is commonly used for valuing income generating property in a real estate appraisal.
 
One advantage of capitalization rate valuation is that it is separate from a "market-comparables" approach to an appraisal (which compares 3 valuations: what other similar properties have sold for based on a comparison of physical, location and economic characteristics, actual replacement cost to re-build the structure in addition to the cost of the land and capitalization rates).

Given the inefficiency of real estate markets, multiple approaches are generally preferred when valuing a real estate asset.

Capitalization rates for similar properties, and particularly for "pure" income properties, are usually compared to ensure that estimated revenue is being properly valued. click here for more

Un toit coûte toujours de l'argent, que vous louiez ou que vous achetiez (en y investissant des capitaux que vous ne pourrez pas utiliser pour d'autres objectifs.)

Les marchés boursiers peuvent chuter rapidement et perdre 50% en quelques semaines seulement. En général, ils se remettent vite (souvent en moins de 6 mois). Historiquement, les marchés immobiliers ont besoin de 26 ans pour se remettre. Dans certains cas, comme en Floride, ils ne se remettent jamais.

Cycle immobiliers

Par définition, les cycles immobiliers sont des cycles à long terme (+76 ans). Au cous de leur vie, la plupart des gens n'en connaîtront qu'un seul. C'est pourquoi il est extrêmement important de situer chaque sous-cycle dans la tendance haussière ou baissière à long terme. Les tendances à long terme durent jusque 75 ans. Quand je vois la désolation qui frappe le marché immobilier et que je fais le lien avec les taux d'intérêt historiquement bas, je retiens mon souffle en réalisant ce qui se passera quand les taux d'intérêt se mettront à remonter sous la pression de l'(hyper)inflation.

Il est clair que la tendance haussière à long terme est terminée et l'euphorie de la bulle que l'on observe partout dans le monde finira dans les livres d'Histoire. La tendance baissière à long terme pour l'immobilier est réelle et la situation empire chaque mois.

Jusqu'où vont chuter les prix de l'immobilier ?

Quand on a acheté une maison et que le remboursement mensuel du crédit hypothécaire égale le double du loyer que débourse le locataire d'à-côté, on est certain que quelque chose ne va pas.

Je ne suis pas du tout d'accord avec les beaux parleurs selon lesquels nous ne traversons aujourd'hui qu'une réaction sans importance et que, dans les 3 années à venir, Boucles d'or reviendra prendre l'immobilier par la main. Il faut comprendre le potentiel catastrophique des conséquences d'un marché baissier à long terme qui a commencé à un moment où le niveau général des taux d'intérêt dans le monde entier est BAS. Lorsque les taux d'intérêt remontent (c'est déjà le cas pour certaines économies plus faibles), et ils le feront, sous la pression de l'inflation, l'immobilier ne pourra que baisser.

Si l'on observe les prix dans le temps (y compris au Japon), l'immobilier tend en moyenne à perdre entre 75% et 80% du pic au creux.

En général, on dit qu'après un hausse parabolique, les prix retombent toujours sur ou sous le niveau de départ de celle-ci.  La situation au Japon entre 1990 et 1993 ne fait que le confirmer. Une autre règle veut que les prix de l'immobilier baisseront jusqu'à ce que la valeur nominale égale 100 fois le loyer mensuel. En d'autres termes, si le loyer nominal est de 1000 $/€ par mois, la valeur du bien retombera à 100 000 $/€.

Avec 150 000 €, 130 000 £ ou 200 000 $, vous achetez un logement neuf de 300 m²

 4 chambres/4 salles de bain, garage 2 voitures, cuisine équipée, électricité, chauffage central,
tout-à-l’égout, jardin, zone de marché intéressante...pour en savoir plus 

Une maison à quelques pas de l'océan ?

L'immobilier est un bien d'ordre supérieur et sera touché négativement par la dépression économique, la sur-offre, la hausse des taux d'intérêt, une baisse des revenus réels et le vieillissement des baby-boomers... mais toute crise offre son lot d'opportunités, comme lorsque vous pouvez acheter un bien NEUF pour la moitié du prix que coûterait sa construction aujourd'hui... ET l'immobilier est une meilleure option que la monnaie fiduciaire et les bons du Trésor.

Achetez un appartement sous le soleil de Floride pour 50 000 € ou une maison unifamiliale pour 149 000 € !
PGA Village	The Lakes	Tradition

Posté le 18 août 2011

Un cycle immobilier dure 76 ans. L'immobilier est un bien d'ordre supérieur et le niveau de prix de ce type de biens diminue toujours pendant une dépression hyperinflationniste. Il est intéressant de constater que la bulle immobilière a commencé par se dégonfler aux États-Unis entraînant une réaction en chaîne dans les pays où la guerre n'avait fait que peu ou pas de ravages: Grande-Bretagne (Angleterre), Irlande, Espagne, Portugal et Grèce. Jusqu'à présent, dans les pays activement impliqués dans la Première et la Seconde Guerre mondiale comme les Pays-Bas, l'Allemagne, la Belgique et la France, le secteur de l'immobilier vient seulement de se figer. Le marché s'est tari, mais il n'y a pas encore eu de véritable crash. En Grèce en revanche, les prix  de l'immobilier ont commencé à chuter sérieusement lorsque le marché obligataire local s'est effondré. On peut s'attendre à des scénarios similaires en Italie, au Portugal, et dès 2012 aussi en France et en Belgique.

Les prix de l'immobilier ont augmenté grâce aux taux d'intérêt artificiellement bas qui rendent les crédits hypothécaires bon marché. La dette trop bon marché stimule anormalement la consommation et sanctionne anormalement les épargnants. L'épargne réelle (capital), lien vital de la société, est détruite et se fait chasser.

Alors que l'économie se détériore, les autorités augmentent les impôts et comme l'immobilier ne peut être déplacé, il devient la cible fiscale privilégiée: impôt sur les plus-values et impôt sur la fortune (qui s'ils ne sont pas appliqués par le gouvernement, le seront par le FMI et la BCE).

Une imposition accrue et des crédits hypothécaires chers et difficiles à obtenir ajoutent une pression supplémentaire sur un marché qui souffre déjà d'une demande plus faible à cause d'une baisse des revenus réels, et d'une augmentation de l'offre à cause de la bulle immobilière et des baby-boomers qui atteignent l'âge de la retraite.

Pendant l'hyperinflation de Weimar, un loyer mensuel valait à peine le prix d'un pain. Beaucoup de gens ont tendance à oublier que l'immobilier (surtout un logement) s'use, vieillit, est mal isolé... Pendant les récessions et les dépressions, les autorités font tout pour maintenir les loyers les plus bas possibles (le logement fait partie de l'indice d'inflation) et, en général, bloquent les loyers en période d'hyperinflation. Par conséquent, les propriétaires terriens voient leurs revenus et leurs droits amputés, les revenus de leurs biens s'évaporent et ils essaient de vendre.

Posted August 1, 2011

My parents bought a small three-bedroom house in Texas in 1960 for the seven of us in the family. My brother and I shared one bedroom, my parents had the center bedroom and my three sisters shared the back bedroom. The house cost about $12,000. Today it’s probably worth $120,000. My parents put down about 15%, that’s all they could afford on a 15-year mortgage.

They didn’t look at it as an investment. At best they may have considered it a sort of savings plan. Owning a house was viewed as an expense just like operating a car. You might need shelter but painting and small repairs were constant. If someone had gone to them and suggested it was a great investment because housing could only go up, they would have looked at him like a goat with three heads. Housing an investment? Are you kidding? At best you might break even and it would take 18 months to sell.

Posted January 20, 2011 -

Home price drop in the USA exceeds the Great Depression. Home prices have fallen 26 percent since their peak in 2006, exceeding the 25.9 percent drop registered in the five years between 1928 and 1933, the housing data company said in a report on Monday. Prices fell 0.8 percent over the month...more

Updated December 2010 [November 27, 2009] - This is the REAL PRICE evolution of Real Estate...

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US Home price expressed in Real Money	US Gold price - Gold ratio

Updated July 6, 2010 -

The main difference between Real Estate and Stocks is that it usually takes a generation before real estate losses are recovered. Stock market losses occur more frequently, can be severe (-50% in 2008), but recovery of all losses often happen in less than a year time.

Previous Tops & Bottoms in Real Estate:

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• Whatever is written and said all over the world, we expect Real Estate prices to continue to slide down in 2010 and 2011. A small correction is however possible in 2012 but then the slide will resume until 2033. Real Estate is a High Order Capital good and it will be definition be affected by the recession and depression.
• A young  couple with excellent credit and a solid income who bought an average three-bedroom house for $ 585,000 in 2006 is paying $ 4,300 per month. Because of the bursting Real Estate bubble, their house is now worth only $ 187,000 - though they till own $ 560,000 on their mortgage. Just to recover the equity will take 60 years!
• Underwater homeowners can either continue to pay $ 4,300 a month. Or they could go into foreclosure, rent a place for $ 1,000 a month, and in a few years buy a home at a pre-bubble price of $ 180,000 with monthly payments of $ 1,200."

Posted November 2010

How to dig a financial hole of $/€ 600,000!? Amazing is that many Europeans refuse to LEARN from what happened in the USA and Spain and still BELIEVE what the Authorities say...In 2005 RIGHT BEFORE the American Real Estate busted, Bernanke himself testified that there was no Real Estate Bubble and that it was safe to buy property. In 2006 the bubble busted and today somebody who bought a house in 2006 at  $ 500,000 and made a $ 100,000 down payment has a debt of $ 800,000 (capital plus interest). His house however is worth ONLY $ 200,000.  The end result is that instead of being better off by buying a property, those people digged a financial hole of $ 600,000 ! Those who have the guts to watch the clip to the end will understand what we are talking about...

September 23, 2009

A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose – on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound...click here for more...

May 22, 2009 - With this huge supply of new homes, there is no room for improvement

May 1st, 2009 - Danger as we move out of the Eye of the storm into the 2nd Wave!

More bad news for Real Estate. The number of foreclosures in the US keeps going up. What people are looking at is the schedule of mortgage resets for option ARM loans [also called liar loans]. These will begin to reset in a couple of months and the process will not peak before 2011.

April 22, 2009 : in the USA 600,000 foreclosed houses are kept off the market by the lenders.

“’We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market,’ said Rick Sharga, vice president of RealtyTrac, which compiles nationwide statistics on foreclosures. ‘California probably represents 80,000 of those homes. It could be disastrous if the banks suddenly flooded the market with those distressed properties. You’d have further depreciation and carnage.’

According to the Wall Street Journal: “Ronald Temple, co-director of research at Lazard Asset Management, expects home prices to fall 22% to 27% from their January levels. More than 2.1 million homes will be lost this year because borrowers can’t meet their loan payments, up from about 1.7 million in 2008.” (Ruth Simon, “The housing crisis is about to take center stage once again,” Wall Street Journal)

A similar pattern is used by Spanish banks. (Spanish banks over invested in Real Estate as they were sure trees would grow all the way into heaven)

April 17, 2009 - the next shoe to drop is Commercial Real Estate -

Updated March 31, 2009

This is a very interesting long term chart of Real Estate. To see just how unusual recent price activity has been, take a look at Yale economist Robert Shiller's inflation-adjusted housing chart, going back more than a century.

The chart makes it crystal clear that the current overvaluation of real estate in real terms grossly exceeds the one during the 1920s. The coming correction in real estate will be protracted and gut-wrenching, with an expected cumulative effect that is much worse than the Great Depression.

Posted March 31, 2009

The Real Estate Boom was nothing more than a desert mirage. The direct result of fractional reserve banking and the creation of money out of thin air.

• The Real Estate crisis and the freefall of home prices is expanding to commercial properties. Other countries like the UK, Spain, France, Belgium, Morocco, Canada, Costa Rica, Belize, Austria and East European countries have joined the USA as their real estate bubbles also are deflating.
• Trees nor Real Estate grow all the way into Heaven!  I understand that for many it is extremely hard to understand what is happening right now as a Real Estate cycle is in most cases a 'once in a lifetime experience' and they saw nothing else than rising prices (apart from some short term corrections).  Even the Paradise of Real estate: the city of London, Manhattan and the paradise resorts in the Gulf petro-monarchies are becoming a real estate hell.
• The real estate crisis has become a self feeding monster.  The Real Estate crisis is amplified because banks keep reducing the number of mortgages and real estate loans to potential buyers.
• As a rule of thumb, in a secular real estate bear market Real Estate prices fall until the price equals 100 times the rent.
• Another rule is that a Home should cost no more than three times annual household income
• Purchasing a house creates dead capital. It does not create jobs once the construction is terminated, but consumes capital through the financing.
• The wealth created by Real Estate is mainly an illusion created by currency movements. (South Africans bought automobiles, drove them a couple of years and sold them at a profit because the Rand used to be so weak).
• The harder it gets to borrow money to buy a home, the harder Real Estate prices will fall
• Best case scenario, the Debt crisis and the US-Real Estate won't bottom until 2011 and probably 2017. For the EU and other countries, as the crisis started with a delay, expect to see the bottom with the same delay. For the EU this could well be 2014-2020.
• When the Argentinean Real Estate sector bottomed it had become impossible to get a mortgage to buy property (it still is).
• Real Estate is a LEVERAGED good. Hence it's general price level is directly affected by the level of interest rates.

Monetary inflation is even more deceptive - or dangerous - when it is working with asset deflation.

What happens when monetary inflation meets asset deflation is not understood by most of the population. Hidden within the convergence of those two fundamental forces will be the likely "solution" to the current housing crisis, as well as opportunities for astute individuals to protect and even increase their net worth during a time of falling real home prices."

Posted January 9, 2009

When I discussed the imminent  crash of the Japanese Real Estate and Stock market in 1989, experts said I was crazy. Japan was an overpopulated island and for this reason alone a Real Estate crash would and could never occur. And yet, 15 years later, a house selling for 220,000 yen in 1989 can be bought for 80,000 yen. Not only has Japanese real estate crashed, but the Yen has also...a terrible shock for all 1989 non-believers. Today similar conditions occur for British real estate owners: on top of sliding British real estate prices, the Pound is also crashing.

People are so naive to believe that what happened in Japan would never occur in the United States, Australia, the City of London, the Costa del Sol in Spain or Belgium...and yet it is happening in all of these countries!

Stock markets can come down swiftly and loose 50% in only weeks time. Traditionally, they recover quickly (often in less than 6 months' time). Historically, Real Estate markets need about 75 years to recover. In some cases, like Florida, they never recover.

Posted December 22, 2008

December 2008, the commercial Real Estate bubble is - as expected - bursting. In November analysts at Credit Suisse said two big commercial mortgages that had been packaged into securities in the past year were likely to default. The rapid deterioration of these loans fed worries that the weakening economy and higher unemployment rate would drag down the $800 billion market for commercial-mortgage-backed securities, or CMBS, which so far has withstood the credit crisis with low delinquency rates.

Updated March 17, 2009

"You don't get rich by buying a house!  You get rich by investing your money wisely.  By buying a house in today's market, you could even get poor!"

"What asset or Real Estate deflation (in inflation-adjusted terms) and monetary inflation have in common is that they are complementary (not opposing) forces of financial destruction. Asset deflation destroys the purchasing power of your assets even as monetary inflation destroys the purchasing power of your money".

Today one can buy Real Estate below $ 10,000. Some of these opportunities are wise investments! The housing market for the next several years will undoubtedly take a severe hit. In the end the torrential flood of homes that come to market for sale will be bought at much lower prices by my children as well as yours at prices which are affordable. Those who count on 'a dip' in the market will be amazed how deep the Real Estate market can slip!

Posted July 23, 2008

Only $ 5,000 for a three-bedroom house! This is a foretaste of what Spanish builders may expect in the near future.

July 23 (Bloomberg) -- Fannie Mae, the largest U.S. mortgage finance company, couldn't find a buyer who would pay $6,900 for the three-bedroom house at 1916 Prospect St. in Flint, Michigan. So broker Raymond Megie, who is handling the foreclosure sale, advised cutting the price to $5,000.

Megie still couldn't sell it. ``There's oversupply,'' he said. The home sold in 2005 for $110,000.  Click here for more...

There are also some people out there -- and I know at least one of them -- who decided not to put their money in the stock market but rather base their retirement portfolio on rental properties, typically a very safe and responsible that. Nonetheless, the recession has now gotten so bad that even these types of investors are suffering.

Anecdotally, the story I heard from one poor soul is that three of four of his rental tenants are least three months in arrears on their rent, and this has put him in arrears on his mortgage payments. It would be a tragedy for someone like this to wind up in bankruptcy and without retirement money because of the ripple effects of this recession.

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