Course Overview
The California Crash is the most comprehensive report ever written on California
real estate market trends. Please read the outline carefully. Once you complete
this course, you will have gained valuable insights on how to profit from what is
about to occur.
For every chapter that goes into this extensive report, hundreds of pages of technical
data are studied, comparisons are made and conclusions are drawn. The picture that’s
becoming more obvious is that our downturn is likely to be much harsher than ever
before. California prices have risen far beyond reason, pushed there by the persistence
of sub 6% mortgage money. This has allowed affordability to hang in there one year
too long. What a price we are about to pay for that!
Fortunes are often made during tough financial times. Have you heard of the term
"transfer of wealth?" This happens when one person benefits from the same event
that brings others to their financial knees. In 1929, a man named Joseph Kennedy
decided stocks were too high. He shorted the market at the peak of euphoria. As
the stock market crashed, the same event that crushed others made him one of the
wealthiest men in the world. That one decision changed not only his life, but the
lives of generations of Kennedy’s to come.
THIS IS THE POWER OF MAKING CORRECT CHOICES DURING TIMES OF ECONOMIC CHANGE
To create this report; dozens of books were read, thousands were spent on data and
countless hours were spent researching and studying. Why? We’re trying to figure
out where to put OUR money, and secondly, we’re trying to benefit others by sharing
painful lessons learned in the past.
Some of the urgency we feel comes from the many calls and emails we receive from
people still unaware of what’s to come. I spoke with a top producing realtor in
San Diego in December of 2005 who had been in the business for five years. By the
end of 2005, his listings had already exploded upwards of 400%. Sales haven’t increased,
allowing many listings to expire. About 50% of these listings are already over encumbered.
About 25% of those over encumbered owners have already left the state. He has approached
the lenders with the idea of doing short sales. The lenders laugh. At the time,
economists in San Diego said the real estate market in San Diego was only leveling
off to a more "normal" and sustainable market. Real estate in San Diego is no longer
the darling it once was.
In a November 7, 2005 article, a builder doing condo conversions in a San Diego
brushed off the facts that he had so many unsold units: "I think San Diego is a
lifestyle city, and lifestyle cities over the next five years are going to grow
more than any other cities in the country. Demographics point to a long term demand
for housing. I can see nothing that can slow San Diego down."
Some areas, like San Diego, are experiencing what is in store for the rest of us.
And it’s just the beginning.
WE ARE ON BORROWED TIME!
A table included in the course manual lists the most overpriced cities in the country
from late 2005. California has 15 of the top 20! That's very dangerous. No, it's
not demographics. It's over exuberance, plain and simple. It won’t be very pleasant
if that turns out to be right – especially in California.
To be fully prepared to make the correct decisions next year, I would want to be
able to answer the following questions:
- What effect will the new bankruptcy law have on the number of properties foreclosed on by lenders?
- What effect will the new bankruptcy law have on a person’s ability to wipe out an
IRS lien resulting from a short sale?
- What are the new tax law changes being discussed and what impact would they have
on California prices?
- What is the financial stability of the recent buyers of houses? How often did they
put nothing down? How often did they get adjustable mortgage payments? What does
their monthly budget look like and can they afford the inevitable increase in monthly
payment?
- Who insures California lenders against defaults and what happens if that insurance
company goes broke? What happens when lenders take too many properties back and
are forced to close their doors?
- What long-term effects take place on interest rates and inflation when you have
price increases of oil and other commodities?
- What do national debt and foreign trade deficits have to do with the direction on interest rates?
- How stable are California builders? Do they make themselves personally liable for
debt they borrow? What events lead up to builders declaring bankruptcy?
- Is there a safe way to protect my equity position without selling my house?
- What is stagflation and could it be a reality between 2006-2010?
- What long-term effect do war and events like natural disasters have on costs of materials?
- What is the financial impact on the value of commercial real estate if cap rates go up and net incomes goes down?
If you are unsure of the answers to any of these questions, don't miss out on the
unbelievable information this course provides. The course includes 412 page full
color manual and 9 audio CDs of the live event recorded in 2006.
Please click the links above to view the table of contents, user testimonials, author
biography and company overview.
Table of Contents
Pearls from the past –– 25 years of comments from our nation's best – What the top economists say in years like 1980, 1989, and 2005 that lull us to sleep
Top Ten Reasons Why California IS Not Supposed to Have a Real Estate Downturn
- – The shortage of land
- – The shortage of land
- – The housing supply is short of demand
- – The cost of California real estate is a bargain compared to Japan
- – The diversity of California makes it impervious to a downturn
- – The demographics are perfect for the next 20 years
- – The baby boom generation
- – The eco baby boom generation
The Fate of the Top Ten California Builders After January 1990
– What happened and is history about to repeat itself?
The "Perfect Storm" Real Estate Scenario Is Upon Us
- 1997 – 2005 Positive Scenario Unfolds
- 1. The CA economy does better than U.S.
- 2. Interest rates decline
- 3. Real Estate best investment, no competition
- 4. Most under priced state
- 5. Migration positive
- 6. Loose lending policies
- 7. Few motivated sellers
- 8. Very low foreclosures
- 9. Good news spurs real estate
- 10. People gain tons of equity
- 11. People tap equity for major purchases
- 12. Minimal inventory to sell against
- 13. Easy bankruptcy laws
- 14. Positive tax law changes
- 15. Companies hire more people
- 16. Real estate is adored
- 2005 – 2010 Negative Scenario Unfolds
- 1. U.S. economy does better than CA
- 2. Interest likely to rise
- 3. Other investment choices superior
- 4. Most over priced state
- 5. Migration turning negative
- 6. Tighter lending policies
- 7. Many motivated sellers
- 8. Very high foreclosure increases
- 9. Bad news hurts real estate
- 10. People lose equity
- 11. People tapped out (sorry)
- 12. Lots of inventory to sell against
- 13. Tougher bankruptcy laws
- 14. Negative tax law changes
- 15. Companies let people go
- 16. Real estate is despised
- The Typical Buyer in 2004/2005
- – How often did they get adjustable mortgages
- – How often did they get an interest only payment with a pre–payment penalty
- – How often did they put nothing down
- – How often did they get a second to complete their purchase
- – The percentage of sub–prime mortgages
- – How do their loan payments adjust/how often/how much
- – What does their monthly budget look like
- – Is there any way they will survive if their payment adjusts
- – How many have to default to cause a real problem
- – The percentage of investor purchases
- Who Owns the Majority of the Real Estate Loans in the United States and California?
- – Who insures these loans and how stable is that entity
- – What would happen if the insurer went broke
- – The formula for bankrupting a lender
- – What percentage of delinquencies catch the Fed's eye
- – How you can find which lenders are in trouble
- Interest Rates
- – What makes interest rates move and how vital that will be in what happens to us
- – Comparison charts interest rates/inflation
- – Comparison charts interest rates/national debt total
- – Comparison charts interest rates/national debt yearly increase or decrease
- – Comparison charts interest rates/10 year t–bill/2 year t–bill
- – Comparison charts interest rates/export trade imbalance
- – Comparison charts interest rates/strength of dollar vs major currencies
- – Comparison charts interest rates/job creation
- – Comparison charts interest rates/oil prices
- – Comparison charts interest rates/gold prices
- – Comparison charts interest rates/war/non–war years
- – The potential for lower interest rates due to a serious recession
- Affordability
- – Comparing the 1989 monthly affordability chart with 2004 and 2005. Shows reaching 14% in 1989 as well
- – The impact on affordability per every 1% interest rate hike
- – The impact on affordability as earning power increases 3% per year
- – Historical affordability charts showing the significance of reaching 17% average for the year
- – How the velocity of a boom is affected by how high affordability gets
- – Why the next California boom will likely be mild in comparison
- – How the California Association of Realtors sees affordability and the problems their stance causes
- California Construction
- – The formula to bankrupt a builder
- – Personal liability when a builder borrows money
- – The liability insurance world and why it guarantees builders will continue to build even if they know the houses won't sell
- – The land purchases recently made and how they won't pencil in the future
- – The extent of price increases in percentages for major components of a house: wood, steel, concrete, roofing, electric wiring, plastic pipe, etc.
- – Historical charts on number of units built
- – How to tell when the owners of the construction companies sell their stocks
- – When auctions become necessary
- – Who's been the buyer of the new houses and how stable are they financially
- – How a decline in equity spurs more and more defaults
- Vacancies
- – How vacancies trend during low interest rate times
- – How vacancies trend during rising interest rate times
- – How vacancies trend during price increases
- – How vacancies trend during price decreases
- Unemployment and Jobs
- – The likely job loss that a real estate crash will create
- – Will these job losses spread across the country and cause a recession
- – The breakdown of how people are employed in California
- – The unemployment rate history of every major city in California
- – The shrinking retire funds of many Americans (defined benefits)
- – No place for wage increases due to cheap labor of competitor countries
- Net Migration
- – The projections from Sacramento
- – It looks like they are wrong again in their assumptions
- – What percentage of people have to exit California to cause a problem
- – The fastest way I know to see where people are headed
- – Historical charts of past California population
- – Population projections for each California county
- – Can the aging baby boom generation really afford to come here from there
- Trustee Sales
- – Why 2,500% increase is now a certainty
- – The effect of having virtually no motivated sellers
- – Trending upward finally, but too late to stop the damage
- – How long trustee sales are likely to increase
- – How investors profit from tough times
- Unsold Inventory
- – The coming explosion of unsold new houses
- – Where it has already begun and the price damage it is causing
- – Resources for updated sales information
- How Prices Decline in California
- – The decline in prices shown in dollars and percentages each quarter between 1990 and 1997
- – Areas covered:
- Berkeley
- Pasadena
- Contra Costa
- Riverside/Corona
- Long Beach
- Sacramento
- Los Angeles County
- San Bernardino
- Napa
- San Diego
- Oakland
- San Francisco
- Orange County Central
- San Mateo
- Orange County North
- Santa Clara
- Orange County South
- Simi Valley
- Oxnard/Ventura
- Sonoma
- Palmdale/Lancaster
- Upland/Rancho Cucamonga
- Palm Springs
- Westside
- Spectacular Speculation
- – The history of speculation history and their demise
- The Mindset of a Speculator
- – Speculator? Not me
- – The difference in a speculator/investor/occupant
- – The perception of the "reasonable price"
- – The assumption of "future continued benefits"
- – The concept of "Built–in excessive premiums"
- – The assumption of continued appreciation & how reason goes out the window
- – Positive cash flow? Who cares
- – I'll have a dozen each
- – Greed and inexperience
- – It's now or never
- – Just one more year please
- Charlie Dow's Theory of the Emotional Cycle of Investing
- – Emotions present during the bust cycle
- – Emotions present during the boom cycle
- – How to discipline yourself to get on the right side of the equation
- The New Bankruptcy Laws
- – Just one more straw that causes problems
- – How laws differ for purchase money and refinance money
- – The major changes in the bankruptcy code
- – How they will affect the number of homes that go back to the lender
- – How to calculate who is eligible to declare Chapter 7 BK
- – What about wiping out a federal or state tax lien
- Proposed Tax Law Changes
- – Interest deduction limitations & their impact on the typical California borrower
- – The doing away with state tax deduction and how that would pressure states to lower taxes (yeah, right)
- – The taking away of the $250,000/$500,000 tax free profits on the sale of your residence every two years
- Oil
- – The wide opinions on the subject
- – How it could change our economy
- – World import and export data
- – State energy consumption
- Monetary Policy
- – Policy history
- – Economic temperature
Update of the National Budget, Social Security, Medicare, and Trade Deficits
- The Current Financial Stability of California
- – Bond rating
- – How future income for the sate will be affected by low real estate prices and fewer transactions
- – The source of the state's income and where they may look for more revenue
Historical Events That Affected Investing by the Decade
Three Possible Price Scenarios for California's Future
The Effect of Cap Rates and Vacancies on Commercial Property Values
How to Creatively Make Money Using Shorting Techniques
What to Do If You're Retired
What to Do If You're Renting
What to Do If You Are an Investor
States Similar to California's Cycle
States with Limited Movement
States That Move Opposite of California's Cycle
The Cause of the Opposite Cycle
My Favorite States
A Short Course on 1031 Exchanges
Following 20 Properties
– Included in an annual update will be 20 properties that we will appraise for the next five years through 2010. Instead of just following median price, this will give a more accurate view of what really is occurring as we go.
Greater Buying Power Is Return on Investment
Conclusion
The California Crash
And the Statistical Evidence Behind Our Predictions
-
Author:
Bruce Norris, The Norris Group Inc.
-
Course Format:
Recorded Live Event
-
Course CD's:
9 CD's
-
Course Manual:
407 Pages - Full Color
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Course Overview
The California Crash is the most comprehensive report ever written on California
real estate market trends. Please read the outline carefully. Once you complete
this course, you will have gained valuable insights on how to profit from what is
about to occur.
For every chapter that goes into this extensive report, hundreds of pages of technical
data are studied, comparisons are made and conclusions are drawn. The picture that’s
becoming more obvious is that our downturn is likely to be much harsher than ever
before. California prices have risen far beyond reason, pushed there by the persistence
of sub 6% mortgage money. This has allowed affordability to hang in there one year
too long. What a price we are about to pay for that!
Fortunes are often made during tough financial times. Have you heard of the term
"transfer of wealth?" This happens when one person benefits from the same event
that brings others to their financial knees. In 1929, a man named Joseph Kennedy
decided stocks were too high. He shorted the market at the peak of euphoria. As
the stock market crashed, the same event that crushed others made him one of the
wealthiest men in the world. That one decision changed not only his life, but the
lives of generations of Kennedy’s to come.
THIS IS THE POWER OF MAKING CORRECT CHOICES DURING TIMES OF ECONOMIC CHANGE
To create this report; dozens of books were read, thousands were spent on data and
countless hours were spent researching and studying. Why? We’re trying to figure
out where to put OUR money, and secondly, we’re trying to benefit others by sharing
painful lessons learned in the past.
Some of the urgency we feel comes from the many calls and emails we receive from
people still unaware of what’s to come. I spoke with a top producing realtor in
San Diego in December of 2005 who had been in the business for five years. By the
end of 2005, his listings had already exploded upwards of 400%. Sales haven’t increased,
allowing many listings to expire. About 50% of these listings are already over encumbered.
About 25% of those over encumbered owners have already left the state. He has approached
the lenders with the idea of doing short sales. The lenders laugh. At the time,
economists in San Diego said the real estate market in San Diego was only leveling
off to a more "normal" and sustainable market. Real estate in San Diego is no longer
the darling it once was.
In a November 7, 2005 article, a builder doing condo conversions in a San Diego
brushed off the facts that he had so many unsold units: "I think San Diego is a
lifestyle city, and lifestyle cities over the next five years are going to grow
more than any other cities in the country. Demographics point to a long term demand
for housing. I can see nothing that can slow San Diego down."
Some areas, like San Diego, are experiencing what is in store for the rest of us.
And it’s just the beginning.
WE ARE ON BORROWED TIME!
A table included in the course manual lists the most overpriced cities in the country
from late 2005. California has 15 of the top 20! That's very dangerous. No, it's
not demographics. It's over exuberance, plain and simple. It won’t be very pleasant
if that turns out to be right – especially in California.
To be fully prepared to make the correct decisions next year, I would want to be
able to answer the following questions:
- What effect will the new bankruptcy law have on the number of properties foreclosed on by lenders?
- What effect will the new bankruptcy law have on a person’s ability to wipe out an
IRS lien resulting from a short sale?
- What are the new tax law changes being discussed and what impact would they have
on California prices?
- What is the financial stability of the recent buyers of houses? How often did they
put nothing down? How often did they get adjustable mortgage payments? What does
their monthly budget look like and can they afford the inevitable increase in monthly
payment?
- Who insures California lenders against defaults and what happens if that insurance
company goes broke? What happens when lenders take too many properties back and
are forced to close their doors?
- What long-term effects take place on interest rates and inflation when you have
price increases of oil and other commodities?
- What do national debt and foreign trade deficits have to do with the direction on interest rates?
- How stable are California builders? Do they make themselves personally liable for
debt they borrow? What events lead up to builders declaring bankruptcy?
- Is there a safe way to protect my equity position without selling my house?
- What is stagflation and could it be a reality between 2006-2010?
- What long-term effect do war and events like natural disasters have on costs of materials?
- What is the financial impact on the value of commercial real estate if cap rates go up and net incomes goes down?
If you are unsure of the answers to any of these questions, don't miss out on the
unbelievable information this course provides. The course includes 412 page full
color manual and 9 audio CDs of the live event recorded in 2006.
Please click the links above to view the table of contents, user testimonials, author
biography and company overview.