How big is the real estate bubble? Continued

[Duckinla]

I guess if sugar land RE bubble pops, then all RE bubble pops! Please refer to the below article!

That's a Press Release! It's an advertisement.

So, if the Real Estate market crashes and pulls down the economy, how is the domain market going to fare?

 

[labrocca]

As a Vegas resident it seems like every 3rd person I meet is into real estate. However the past 6 months or more you can tell they ain't doing too well. Stuff just doesn't sell for them. They are working months on end without a single sale. Homebuilders are still building though...and still selling. My community is almost sold out (18 homes left) but that's because they continue to add incentives that are pretty good (upgraded marble and floors).

I gotta agree that the agents that made money are arrogant sons a bitches. They are so lazy it's not even funny. As you said they think they are geniuses....but they ain't even close. Just lucky people that invested in the right commodity at the right time. The geniuses are the ones that got out 18 months ago.

 

[Preoccupy]

I think the domain market maybe a little affected if the housing market brings the economy down. But I don't think that it has much relation but if it brings the whole economy down, it won't give any positive affects to the domain market.

 

[JMJ]

I think the internet will do very well over the next few years. If we do go into a few years of hard times that means more people spending more time at home in turn more time online. In addition to alot of people looking for another way to make money. Companies looking for new ways to attract business.

 

[Preoccupy]

I have respect for your opinion!

I think the internet will do very well over the next few years. If we do go into a few years of hard times that means more people spending more time at home in turn more time online. In addition to alot of people looking for another way to make money. Companies looking for new ways to attract business.

 

[GT Web]

I have respect for your opinion!

Why do you continuously make such short posts which add nothing to the discussion?

I have a feeling domains will suffer another 2000-esque dropoff in a year or two, but it wont be nearly as harsh as it was back then and the industry will bounch back quickly.

Its impossible to predict what will market will look like 5-10 years down the road. This industry is currently changing week to week, I guess that's what keeps it interesting.

 

[Preoccupy]

That was in my opinion. Do you want to ignore the freedom of speech! It is protected by the First Amendment in U.S.A. Please stop harassing me, it's against the law in U.S.A. :faint:

Please, refer to below. Where is the rule and regulation for letter limit?

1. http://www.dnforum.com/thread173656.html

Breathing?

1. http://www.dnforum.com/thread173738.html

www.namespro.ca
www.10dollar.ca

1.http://www.dnforum.com/thread173666.html

another ugly, useless WII domain.
$2.63

My 2 favorites

2.

Why do you continuously make such short posts which add nothing to the discussion?

I have a feeling domains will suffer another 2000-esque dropoff in a year or two, but it wont be nearly as harsh as it was back then and the industry will bounch back quickly.

Its impossible to predict what will market will look like 5-10 years down the road. This industry is currently changing week to week, I guess that's what keeps it interesting.

Quote:
Originally Posted by Preoccupy
I have respect for your opinion!


Why do you continuously make such short posts which add nothing to the discussion?

I have a feeling domains will suffer another 2000-esque dropoff in a year or two, but it wont be nearly as harsh as it was back then and the industry will bounch back quickly.

Its impossible to predict what will market will look like 5-10 years down the road. This industry is currently changing week to week, I guess that's what keeps it interesting.

 

[GT Web]

That was in my opinion. Do you want to ignore the freedom of speech! It is protected by the First Amendment in U.S.A. Please stop harassing me, it's against the law in U.S.A. :faint:

I don't live in America, do I?

I will stop "harassing" you when you stop making useless posts all over the forum.

Let's get back on topic please...this is a pretty intesting threads with many intelligent and interesting replies.

 

[Preoccupy]

So, you are confessing that you have harassed me! Okay, I will report you. Now back to topic!

I don't live in America, do I?

I will stop "harassing" you when you stop making useless posts all over the forum.

Let's get back on topic please...this is a pretty intesting threads with many intelligent and interesting replies.

 

[GT Web]

Note the use of quotations - that implies sarcasm, something you obviously don't understand.

Here's a question for you all...you have $100,000 sitting in the bank and you see two things for sale. The first is a premium, generic .com name with significant type in traffic. The seller wants $100,000 and you figure if you buy it you can park it and earn $1000 per month. The second item is a beach front cabin, which is also for sale for $100,000. You figure you can make $2000 per month renting it out on average.

I know this is a domain forum, so I think I know the answer...but anyway, which would you pick? Domain name or cabin?

 

[Duckinla]

The Cabin of course, even if the monthly income were exactly the same or even a little less. Real Estate rents tend to go up over time. There is no indication that a domains revenue will increase with time.
Real Estate offers the ability to finance also. $100,000 will currently cost you about $600 per month. If the cabin earns only $1,000, you are ahead $400 with no money out of pocket.

 

[JMJ]

I would buy the domain and then finance the cabin. Use the revenues from the domain to pay the notes on the cabin in addition to renting it out. If I don't have a renter I still have revenues from the domain. You can't finance a domain at a traditional bank but you can count the income from it to offset your DTI to help you qualify for that loan or any loan for that matter. And then you're not even including the maintenance costs the of the cabin. If it is a vacation rental cabin you have to have a house cleaner go in after every renter leaves say $75 a week. Electricity $75 a month. Grass cutting $25 a week for about 30 weeks depending on it location. Insurance, property taxes, so on and so on. A domain $8 a year.

 

[Creature]

I have a feeling domains will suffer another 2000-esque dropoff in a year or two, but it wont be nearly as harsh as it was back then and the industry will bounch back quickly.

Its impossible to predict what will market will look like 5-10 years down the road. This industry is currently changing week to week, I guess that's what keeps it interesting.

I am more positive about domains from a UK perspective. There seem to be an ever growing number of domains advertised on TV. Today we have been bombarded with Sky.com, MoneySupermarket.com and Match.com via the TV. I bet that the boom year for domains will be 2009. Just a feeling though.

which would you pick? Domain name or cabin?

The domain. More freedom, less hastle and the chance of a much greater return a few years later,

 

[NavySeals91]

Bigger than an electron

 

[DomainsGT]

As a licensed Real Estate Broker (in Florida) and a user of the Internet for over 25 years, I have holdings in both residential real estate and domain names built over the years. I have actually been in the position of trying to decide which would be a better use for my money. To answer the question, all things being equal - and they never are - shelter is always on the "MUST HAVE" list. Last time I checked, domains - even great ones - are on the "NICE TO HAVE" list. As a business, domaining is an exciting and potentially lucrative way to go. But if your mother in law moves in with you from another state, you can't really put her in one of your vacant domains for the month.

I do agree with the comments made about most real estate professionals. As pointed out earlier, many of them took advantage of easy credit, excellent earning power, close relations with banks and mortgage brokers, and a little knowledge to generate portfolios highly leveraged properties. Read 'flips'. I have no doubt that many of these opportunists will move on to other occupations in the near future, perhaps domaining.

Certainly the current domain landscape looks very similar to the real estate industry of five short years ago. As domain sales become more mainstream and the media picks up 'bought for a dollar sold for a million' rags-to-riches stories, we will see a huge influx of new domainers. THIS IS NOT BAD. A rising tide lifts all ships.

Bottom line real estate is a market driven for the demand for housing. Prices are a function of supply and demand. More people, more demand. Industry shakeout? Yes. Market collapse? Impossible.

 

[Duckinla]

Thank you for a little reason DomainsGT.

It is possible to be in the domain business without completly losing your objectivity. It is possible to be pessimistic about the housing market without completely losing your objectivity.

When people say they would take a $1000 per month revenue domain over a $2,000 per month revenue cabin, I start to wonder who exactly I'm talking to. The problem with domains is that literaly any name, no matter what letters and how many characters, can be developed into a goldmine. Houses are different. A house takes up an irreplaceable piece of real estate. And yes, people need to live in houses. No one truly needs your domain. Your domain is on a spectrum of options for a perspective buyer, one of those options being to reach into thin air and create an entirely new domain for $6.95.

 

[Andrew Shaw]

value of housing is not decreasing, the market is simply stabilizing. Houses that should be selling for $250,000 were selling for $450,000 in 2003. People tend to over price their homes, simply because its their home so its special. The market is correcting itself. The bubble is not going to burst, as it already has... some 2 years ago.

 

[Duckinla]

Can't lose track of the fact that it's all about the payment. The actual price of the house is not that meaningful. The monthly payment is what determines whether people will buy or not. And of course the payment is all about the interest rate.

Historically the rule of thumb was that your monthly payment would be about 1% of your mortgage. So if you had a $150,000 mortgage, your monthly payment would be $1,500. At todays low rates that has changed to about .6% of the mortgage. So a $150,000 mortgage has a $900 payment and a $250,000 mortgage has a $1,500 payment.

Low rates and creative mortgages have brought people into the home buying market that never could qualify before. That increased demand pushed prices up to where they are today. There really is a very rational explanation for the runup in home prices...it's because people can afford more than ever before without actually making a bigger monthly payment.

 

[JMJ]

I love some real estate. My entire family is involved in it in some form or fashion. Mainly building, contracting, or investment and a couple of unused realtor licenses. They also took a big dip in the drowning pool in the eighties. You can make some good money if you play your cards right. And you can lose your ass just as fast. I guess thats in just about any business/investment. The whole point in reviving the thread is the "Myth" that all is great. Interest rates are still low and things are already getting bad.

As far as making the investment is concerned. Like many decisions you would have to have all facts in front of you. The consideration of how the cabin is valued. Is it due to overinflated market values meaning am I going to lose 20k 6 months from now? Is the rental income seasonal or long term renters? Just based on what he asked. Honestly thats the way I would do it. You can't depend on always having a renter. You always have to worry about renters tearing something up and they usually do. The domain would ofcourse have to be a sound investment. But if I had to make a choice given those few parameters the maintenance free $1000 a month would be it. Then if things looked right test the cabin route.

 

[WhoDatDog]

As a licensed Real Estate Broker (in Florida) and a user of the Internet for over 25 years, I have holdings in both residential real estate and domain names built over the years. I have actually been in the position of trying to decide which would be a better use for my money. To answer the question, all things being equal - and they never are - shelter is always on the "MUST HAVE" list. Last time I checked, domains - even great ones - are on the "NICE TO HAVE" list. As a business, domaining is an exciting and potentially lucrative way to go. But if your mother in law moves in with you from another state, you can't really put her in one of your vacant domains for the month.

I do agree with the comments made about most real estate professionals. As pointed out earlier, many of them took advantage of easy credit, excellent earning power, close relations with banks and mortgage brokers, and a little knowledge to generate portfolios highly leveraged properties. Read 'flips'. I have no doubt that many of these opportunists will move on to other occupations in the near future, perhaps domaining.

Certainly the current domain landscape looks very similar to the real estate industry of five short years ago. As domain sales become more mainstream and the media picks up 'bought for a dollar sold for a million' rags-to-riches stories, we will see a huge influx of new domainers. THIS IS NOT BAD. A rising tide lifts all ships.

Bottom line real estate is a market driven for the demand for housing. Prices are a function of supply and demand. More people, more demand. Industry shakeout? Yes. Market collapse? Impossible.

I have never had to unclog the toilet on any of my domains. Never had to fix the roof, either. They are two different things. Sharp people can make money in any market, but when idiots start making lots of money like they did for many years in residential real estate then sooner or later something has to give.

A house should be "a roof over your head". People who put their money in real estate only during the up-cycles are the same who invest in stocks when everyone is talking about stocks. These people aren't really investors...they are suckers with no particular expertise in the field.

When idiots start making lots of money with domain names then it will be time for me to sell. We are a long way off from ever seeing that happen.