Real estate is lousy here in the north east . New construction appears to be okay in commercial as far as ground being broken but its a head fake. My opinion , there is a lot of ZIRP driven malinvestment on commercial property . Lateral moves you might call them. For instance , a new Walmart is going up all alone on a great big well situated corner lot . It looks like a positive but actually a walmart 5 miles away will close and that one is an anchor store of a 30 year old plaza . Net gain is what? Somewhat more square footage for walmart and they own the land now instead of leasing thats a plus for them but the other place loses its main draw and will wither and die . Dead plaza in the center of town replaced by a new single store on the outskirts is a net loss for the community , its short sighted and its stupid.
The plaza Walmart left had been its home for 15 years , it was about 35 or 40 years old. Walmart did not want to go , the management company told walmart when the lease was up they were going to have to pay double so they left BOOM just like that. Walmart is strong enough to build a new store. In a nearby mall , the management tried the same thing with Sears and Sears also left but did not build a new store. Sears probably won't build many new stores anywhere. Indoor malls without anchor stores are just stupid who would negotiate themselves into such a position ? The malls are dying anyway a blind man can see that , but they are built and paid for . The right glide path could wring another decade out of that space with very little extra spending. Loose a few tenants , the next lease up double it and lose 10 more ?
Residential construction is warped too. Overly fancy starter houses being placed in the wrong neighborhoods is a trend lately. Style but no substance , prices inflated because of location and worthless amenities , plus its tougher for first time buyers to get loans . The loans they do get are with hardly any down payment so there is no equity. A moderate downtrend puts all these fools underwater and these developments will all look like Detroit.
<< <i>Let's realize none of us has a crystal ball and all of us have made prognostication mistakes. I value of you guys input and enjoy reading these threads except when it gets ugly. I try to avoid that and hope you do to.
As a side note a took a day trip on the old Chicago Great Western Railway trail and had to chuckle when I ran into this town about 25 miles due west of Rockford, IL.
>>
Awesome! The "i" is included often enough that it's a valid alternate spelling. I've got some very good friends that live just outside of Rockford IL.
Actually, my screen name is a tribute to the character Elijah Baley, the protagonist in Isaac Asimov's The Caves of Steel and The Naked Sun
<< <i>Text its tougher for first time buyers to get loans . The loans they do get are with hardly any down payment
So you're saying if you have no down payment you can get a loan but if you but money down you cant? Did you miswrite something?
Detroit? So your town is based on an industry that suffered from no investment for future growth and relied heavily on over compensated employees?
If you expect such calamity then why do you stay there? >>
I'm talking about these FHA 3% down loans. When you utilize them you are just unwittingly joining the FFCA no down payment , no equity, when prices go down it hits the marginal buyers first the weak links walk and that drags down prices more , which puts people with a little equity underwater next its a domino effect. How many empty houses in a row before the whole neighborhood is a basket case?A.k.a. Detroit
How many empty houses in a row before the whole neighborhood is a basket case?A.k.a. Detroit
You're making his point for him. For years on here, folks made fun of the 'villes in which houses sell quickly with multiple offers, and residents get unsolicited letters in the mail from potential buyers and investors.
The houses in those other areas of the city, state, or country are a "bargain" for a reason. Same with the "quality" of coins, of art, antiques, and artifacts "you get what you pay for" risks/rewards and all.
<< <i>How many empty houses in a row before the whole neighborhood is a basket case?A.k.a. Detroit
You're making his point for him. For years on here, folks made fun of the 'villes in which houses sell quickly with multiple offers, and residents get unsolicited letters in the mail from potential buyers and investors.
The houses in those other areas of the city, state, or country are a "bargain" for a reason. Same with the "quality" of coins, of art, antiques, and artifacts "you get what you pay for" risks/rewards and all. >>
I'm not talking about older houses though , these are brand new developments in nice towns . They are tailored to these low income buyers and /or loan challenged buyers and they are not viable from the start. It's like watching a car crash in slow motion .
The local governments have stolen the builders profits before the sale with huge increases in permitting fees , regulations that add cost without any benefits and by delaying projects for no reason .
Every town or city in this blue state is well accomplished at killing those golden egg laying gooses
<< <i>I'm not talking about older houses though , these are brand new developments in nice towns . They are tailored to these low income buyers and /or loan challenged buyers and they are not viable from the start. It's like watching a car crash in slow motion. >>
I'd like to know what you mean by low-income and loan-challenged buyers. For the most part, mortgage qualifications are still fairly strict. What caused the housing bubble and where the problems start is when there is a prevalence of no or low-doc (liar) loans being issued with little money down. I don't think this is happening. FHA guidelines for the 3 or 3.5% down programs are still pretty rigorous especially for income verification.
These 3 and 2.5% programs really do help home ownership. I myself used one of these loans for my first purchase. It can take years to save up a 5% or even 20% down payment even for folks with "good" incomes. In a lot of cases and particularly here in Phoenix, a rent payment is not that far off from a mortgage payment. So if they can afford rent, they can afford a mortgage. And as long as the market remains healthy and the borrower remains employed, there are no problems. And typically in a few years in a normal market they will be at 10% or greater equity and the lender's risk lowers dramatically.
<< <i>The local governments have stolen the builders profits before the sale with huge increases in permitting fees , regulations that add cost without any benefits and by delaying projects for no reason .
Every town or city in this blue state is well accomplished at killing those golden egg laying gooses >>
I don't know that the increase in permitting fees have "stolen" any profits. These are costs that are known up-front and are passed along to the home buyers. There's no reason a smart builder can't do the math and that they don't know their margins and the final sale price (and whether anyone will pay it) before they start construction. In a lot of ways I think the higher permitting fees do make sense as every new home unit requires incrementally more city support services and infrastructure. At least these fees do make sense for why they are necessary. How high they should be is another matter. I agree that there are some building codes and regulations that can add a lot of unnecessary cost and expense though. California is awful in this department. California won't be happy until they shut down all construction and development and drive away all forms of business and economy with its regulations, fees, and taxes.
<< <i>How many empty houses in a row before the whole neighborhood is a basket case?A.k.a. Detroit
You're making his point for him. For years on here, folks made fun of the 'villes in which houses sell quickly with multiple offers, and residents get unsolicited letters in the mail from potential buyers and investors.
The houses in those other areas of the city, state, or country are a "bargain" for a reason. Same with the "quality" of coins, of art, antiques, and artifacts "you get what you pay for" risks/rewards and all. >>
So what you're saying is that the top 5% of real estate in the country can keep the RE market afloat just like the top 5% of coins are doing for the coin market? How long can the top 5% of investments support the other 95%?
The problem is the buyers buying starter homes should be a perfect match for these loans and they are not. The new version starter houses aren't really starter houses. To me a starter house is a 32x 24 cape full shed dormer maybe a small garrison or split level ranch with an unfinished basement . Those are north east style homes but every part of the country has its version the words are different but the idea is the same. Builders are building $450,000 houses that have no more space than a starter house and consequently have no market. People that have money walk through and know right away there is nothing to the place and people with no money thankfully can't get a loan. It has a too small 2 car garage on the end and a false gable maybe a farmers porch but those things don't equate to living space. Its all fluff that doesn't amount to anything.
Those 3% buyers are all wrestling over mid 90's era houses and seeing that they can get in but they need to start working on them right away. By definition they have no money though so when that 25 year old boiler goes they are reaching for the credit card. Needs a new roof in 3 years , needs a deck in 2 , there's no money in the bank for any of it.
My niece is one of those 3% shoppers and shes had me look at 5 places for her so far and shes getting pissed because I'm picking everyone of them apart. The last one failed its septic so the seller had to redo it but the yard is graded wrong now and its pitched towards the house. With the 10 feet of snow we had this year that put a foot of water in the basement whoops. I told her run don't walk away from that one but some sucker will buy it I'm sure.
Of course her and her husband both have the latest iphones and they are both leasing cars and they hit Vegas twice a year so its a given they are never going to have more than 3% to put down anywhere.
Now if they got flip phones , skipped a few vacations , and settled for a beer in front of the TV instead of going out every week for maybe 2 years it would be a whole different thing but thats not going to happen.
My niece is one of those 3% shoppers and shes had me look at 5 places for her so far and shes getting pissed because I'm picking everyone of them apart. The last one failed its septic so the seller had to redo it but the yard is graded wrong now and its pitched towards the house. With the 10 feet of snow we had this year that put a foot of water in the basement whoops. I told her run don't walk away from that one but some sucker will buy it I'm sure.
That's what I'm talking about. Those folks should move.
Of course her and her husband both have the latest iphones and they are both leasing cars and they hit Vegas twice a year so its a given they are never going to have more than 3% to put down anywhere.
That's what I'm talking about. Those folks should spend differently.
Bronco and I are now singing the same song. Kumbaya
Text Builders are building $450,000 houses that have no more space than a starter house and consequently have no market.
OK so then those houses don't sell and the builder goes out of business. What's the problem?
I just flew over Orlando and Houston. Saw broken ground everywhere. Why? Because folks in the northeast of tired of the crappy weather and moving south. That 25 yr old home in CT can buy a new home in Orlando and still have $200k left over. Its a no brainer. So yes, complain about NY, NJ, CT, MA--states with declining populations (there's that damn demographic thing again ), or smile at the growth in Florida, texas, California, Arizona. The choice is yours...God bless America.
<< <i>Text Builders are building $450,000 houses that have no more space than a starter house and consequently have no market.
OK so then those houses don't sell and the builder goes out of business. What's the problem?
I just flew over Orlando and Houston. Saw broken ground everywhere. Why? Because folks in the northeast of tired of the crappy weather and moving south. That 25 yr old home in CT can buy a new home in Orlando and still have $200k left over. Its a no brainer. So yes, complain about NY, NJ, CT, MA--states with declining populations (there's that damn demographic thing again ), or smile at the growth in Florida, texas, California, Arizona. The choice is yours...God bless America. >>
The builders are constrained on the lower end because they overpaid for the lots and need to put a certain dollar amount on the lots to make money. I think its partly an issue of stubbornness on their part , government actions that inflated costs and just the market in general. The actual problem though is the way those builders go out of business is by filing bankruptcy , stiffing everyone they owe and start new companies and repeating the process. usually their wife owns the new company
I agree with the declining population but its nice here. If my other choice is to move somewhere where the sky is dirt brown and its 100 degrees i'll opt to skip a few meals and stick it out as long as I can. Besides those hot spots might be increasing population now but watch what happens when the water pinch hits them. Arizona can't support even a million people without the Colorado river so at least 5 million are going to be redundant in the foreseeable future. People worry about water in Cali but at least it actually rains there
<< <i>The builders are constrained on the lower end because they overpaid for the lots...[/a] I don't know if that's true so much anymore. For every builder that may have overpriced land from the boom on their books, there's another builder that got a smoking deal when overpriced land got foreclosed on.
Entry level new homes are usually townhomes or condos. The majority of new homes are targeted at the middle or upper end of the market for practical reasons rather than anything else. Entry level homes aren't supposed to be big & fancy, and there's less profit in them. That's why almost all new homes are going to be priced above the local median price.
<< <i>Text Builders are building $450,000 houses that have no more space than a starter house and consequently have no market.
OK so then those houses don't sell and the builder goes out of business. What's the problem?
I just flew over Orlando and Houston. Saw broken ground everywhere. Why? Because folks in the northeast of tired of the crappy weather and moving south. That 25 yr old home in CT can buy a new home in Orlando and still have $200k left over. Its a no brainer. So yes, complain about NY, NJ, CT, MA--states with declining populations (there's that damn demographic thing again ), or smile at the growth in Florida, texas, California, Arizona. The choice is yours...God bless America. >>
The builders are constrained on the lower end because they overpaid for the lots and need to put a certain dollar amount on the lots to make money. I think its partly an issue of stubbornness on their part , government actions that inflated costs and just the market in general. The actual problem though is the way those builders go out of business is by filing bankruptcy , stiffing everyone they owe and start new companies and repeating the process. usually their wife owns the new company God bless America
I agree with the declining population but its nice here. If my other choice is to move somewhere where the sky is dirt brown and its 100 degrees i'll opt to skip a few meals and stick it out as long as I can. Besides those hot spots might be increasing population now but watch what happens when the water pinch hits them. Arizona can't support even a million people without the Colorado river so at least 5 million are going to be redundant in the foreseeable future. People worry about water in Cali but at least it actually rains there >>
Agreed bronco. Arizona would be last of my sunbelt choices...far and away last, and the decline in the baby boomer migration beginning in about 15 years will be felt there first.
And a talk with any of the mega-builders will confirm your thoughts on cheap land. Builders have a hard time keeping costs down due to lack of affordable land.
22-Apr-15 10:22 ET In Play Existing Home Sales Show Improved Demand Conditions : Existing home sales increased 6.1% in March to 5.19 mln SAAR from an upwardly revised 4.89 mln SAAR (from 4.88 mln SAAR) in February. The Briefing.com Consensus expected existing home sales to increase to 5.05 mln.
Throughout the report, the underlying conditions in March showed an improving buying season.
Sales transitioned from investors to homeowners. All-cash sales dropped to 24% in March from 26% in February. Individual investor sales accounted for 14% of total existing home sales for a second consecutive month.
More importantly, first-time homebuyers -- which are needed to keep home sales expanding -- edged up to 30% from 29% in February. That is still below the 40% that first-time buyers typically buy during a normal housing market, but the trend is moving in the correct direction.
Sales demand was widespread as all areas of the country reported positive month-over-month and year-over-year sales growth.
Altogether, March sales were the strongest since the same number of units were sold in September 2013
Supply remains a problem and will likely keep sales growth constrained. Inventories increased 5.1% to 2.00 mln, but at the current sales rate, there is only 4.6 months' supply. That is down from a 4.7 months' supply in February and well under the 6 months' supply that realtors are looking for.
The median existing home prices increased 7.8% y/y to $240,500.
<< <i>Altogether, March sales were the strongest since the same number of units were sold in September 2013 >>
Don't get too excited yet. The average annual sales for the 80's was 609M. For the 90's it was 698M. For 2010-2014 the average is a paltry 372M with 2013 and 2014 coming in at 429M and 436M, respectively. Woop dee doo! Call me when home sales volume goes up 40% to match the 1980s. You know, when interest rates were double digits? We have interest rates under 5% and a much bigger population and we can't even come close.
<< <i>Supply remains a problem and will likely keep sales growth constrained. Inventories increased 5.1% to 2.00 mln, but at the current sales rate, there is only 4.6 months' supply. That is down from a 4.7 months' supply in February and well under the 6 months' supply that realtors are looking for. >>
At 4.5 or 4.6 months' supply there are plenty of homes for sale. 3 months is a seller's market. 6 months is a buyer's market. Still a balanced market. Woop dee doo!
<< <i>The median existing home prices increased 7.8% y/y to $240,500. >>
So there is no inflation? Or inflation for homes is good, everything else bad? The fact remains that wages did NOT increase 7.8% y/y, so fewer people can now afford a home.
<< <i>For years, you have stated that the hyperinflation is coming to the US and that we should look at Zimbabwe and Weimar as examples. Of course a hyperinflationary event in the US would cause difficulties for many, but without a severe disruption to our economy and infrastructure and political system, it aint gonna happen.
I wish I had been to Zimbabwe in 2005 so I could compare it to today, but I was in Poland about 10 years after their hyperinflation and that country was much better off than a few years before hyperinflation. Hyperinflation "cleanses". While this country has some dirty spots, it is far from needing a deep cleansing.
Jmski, CA needs to raise its real estate tax. While of course it wouldnt go over big, almost all could afford it and it would solve many of CA's debt problems. The problem lies in states like NJ or NY where real estate taxes are already high and have declining populations. CA's population is growing, thus demand for real estate grows. And its sunny, people like the sun. NY, NJ, CT do not have that luxury. Watch for an exodus of people to move from the NE to Florida. >>
Hey, I just bought a house in California 16 months ago so I'm fully priced in tax wise. But you are correct that the Cali system is flawed in how they assess taxes. I was shocked when I was going through the buying process. Prop 13 is the mother of all grand father clauses. Talk about a knee jerk law.
Mark
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>Something in Dallas,Tx must be different than the rest of the country. My great niece just bought a $800,000 "starter" home.
Now how does a young 25 couple get approved for that?
Both fresh out of college,both have college loans to pay off, and both come from blue collar families(in different states)? >>
$800K in Texas? Good Lord. I have had friends who live in Texas tell me houses are usually cheaper there because property taxes run about 3% of the price of the house. That would be $24000 per year on that house! You may be able to borrow the $800K to "buy" the house but you have to pay the taxes with real money from this archaic thing called wages.
There is nothing more regional than real estate. Aggregate statistics are not very useful when discussing specific people and properties, and zooming back and forth makes for a disjointed discussion.
The states the cities and towns on the local level are driving higher house prices with endless regulations.
For instance Ufer grounding here being phased in but its totally unneeded. We don't have soil that warrants it. That one copper cable adds a half ton of rebar to a job that wouldn't have needed it at all plus an electrician visit gets mixed in to the foundation and an extra inspector visit before concrete gets poured . Between labor , materials and delays it could easily add a few thousand to a job. Permit fees go up and extra town employees with coffee cups in hand go on the books with healthcare and pensions of course . The funny thing about the extra money is no one person can actually lay claim to it because it just sort of disappears into the world in a cloud of invisible GDP .
The form guy is making extra trips to a job for no extra money. The electrician has to pull a guy off a real job to clip a wire and he probably eats that too. The inspection has to be scheduled and the inspectors whine if they come out to do only one thing so they want to bundle inspections . It always adds a week to the form crews time on the job. Which pushes the framing crew back a week , then sidewallers , painters, plumbers , electricians . It's getting to be all stop start stop start . Nobody wants to go to a friggin job and setup then leave after 5 hours. The workers get screwed out of 8 hour days because its not productive to head to a different job at 1 o'clock .
Technology should allow us to have more and more efficient processes and it does. Look at a framing crew now compared to a framing crew from 1975. Nailing guns , lulls for lifting materials , hi tech materials that are stronger , cheaper , less destruction of forests , less waste . The government steps in and renders half of the gains in productivity back into waste.
Every time the towns and cities add an employee its forever . Every time a fee is instituted its forever. Every tax is forever . Every thing you interact with the government on takes more time and is more intrusive.
There is a limit to how much cost you can pass on to buyers whose wages are not going up.
<< <i>Altogether, March sales were the strongest since the same number of units were sold in September 2013 >>
Don't get too excited yet. The average annual sales for the 80's was 609M. For the 90's it was 698M. For 2010-2014 the average is a paltry 372M with 2013 and 2014 coming in at 429M and 436M, respectively. Woop dee doo! Call me when home sales volume goes up 40% to match the 1980s. You know, when interest rates were double digits? We have interest rates under 5% and a much bigger population and we can't even come close. >>
For your 1980 figure I assume you are using a new homes stat as the article linked above states 749,000 new homes sold in 1986. This year the pace is about 500,000. If you knew anything about economics and demographics you would realize why the difference. Think huge population bulge entering their family formation years.
But lets read further into the report. In 1986 3.6 million existing homes were sold compared to a 5.2 million rate this year. Clearly people are buying more homes than you would like us to believe. And to be quite honest, I dont want sales exceeding previous peaks as that would mean the glory days would be behind us. There is still lots of growth ahead.
But lets use your logic....read further into the report. 688,000 new homes sold in 1985, vs 819,000 sold in 1977. The economy must certainly be in the dumps because less new homes were sold in 1985 than in 1977, right? I think history has certainly that logic faulty.
I beginning to think you are not really a realtor. I think you are just a salesman for one of the large tract homes builders sitting in a model home waiting for the door to open. I believe if you were a boots on the ground multi-spectrum realtor you would have a much different view.
Everyone formulates an opinion based upon the world in which they live. For some people that world consists of a 100 mile (or less) radius. For others that world is measured in 1000s of miles or spanning continents. Dont let your home town views extrapolate into a global , or even countrywide perspective. The world is much bigger than any of us realize.
<< The median existing home prices increased 7.8% y/y to $240,500. >>
So there is no inflation? Or inflation for homes is good, everything else bad? The fact remains that wages did NOT increase 7.8% y/y, so fewer people can now afford a home.
A month over month or even year over year comparison is useless. The median existing price today is the same as it was in 2005.
My great niece just bought a $800,000 "starter" home. Now how does a young 25 couple get approved for that?
It's nice to have a rich uncle for backup. Either that, or I can see some serious trouble on the horizon if housing takes a dip - which is entirely likely.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>Something in Dallas,Tx must be different than the rest of the country. My great niece just bought a $800,000 "starter" home.
Now how does a young 25 couple get approved for that?
Both fresh out of college,both have college loans to pay off, and both come from blue collar families(in different states)? >>
$800K in Texas? Good Lord. I have had friends who live in Texas tell me houses are usually cheaper there because property taxes run about 3% of the price of the house. That would be $24000 per year on that house! You may be able to borrow the $800K to "buy" the house but you have to pay the taxes with real money from this archaic thing called wages. >>
Assuming they have the 3% ($24k) down payment and $150k combined annual income they should be fine. Rolling the property taxes/insurance into their payment they're looking at ~$6500/month for 30 years. This is a common scenario for millions of young Americans in the south/southwest/west. Student loans will be a$1,000/month for 10 years for many of them - chump change.
<< <i>There are very few Californians enjoying tax relief under 1978 valuations. 1%+ bonds and assessments(±1.25%) is more than adequate for the STATE.
In the old days pre 1978, HO would get hit with a burden when your neighbor sold his house for more and they reassessed.
We pay a heck of a lot of taxes, fees and assessments out here. The other 49 states have it relatively easy in that dept. >>
You havent lived in NY, NJ or CT.
Here is a house outside cold, snowy, depressed Syracuse NY, priced at $385,000.....taxes are $19,000.
Home owners in CA dont know how good they have it.
With a disparity this pronounced, there will continue to be massive migration from the Northeast to Florida and California. Declining population equals poor economy while growing population equals good economy.
<< <i>My great niece just bought a $800,000 "starter" home. Now how does a young 25 couple get approved for that?
>>
Here is a $759,000 house in Arlington, TX just outside Dallas. This clearly is not a "starter" home and taxes run about 1/2 what has been mentioned in this thread.
<< <i>My great niece just bought a $800,000 "starter" home. Now how does a young 25 couple get approved for that?
>>
Here is a $759,000 house in Arlington, TX just outside Dallas. This clearly is not a "starter" home and taxes run about 1/2 what has been mentioned in this thread.
I am looking to get a house in San Diego with a granny flat that will pay almost half of the mortgage. I am waiting until this winter when they will be a lot less buyers.
<< <i>I am looking to get a house in San Diego with a granny flat that will pay almost half of the mortgage. I am waiting until this winter when they will be a lot less buyers. >>
Sorry about that mate, you will need a special permit for your granny flat. I'm afraid there are only a set number of those your name will be placed on a waiting list.
<< <i>My great niece just bought a $800,000 "starter" home. Now how does a young 25 couple get approved for that?
>>
Here is a $759,000 house in Arlington, TX just outside Dallas. This clearly is not a "starter" home and taxes run about 1/2 what has been mentioned in this thread.
Whats the point of 4 bedrooms and 4.5 baths? Thats the first issue The other issue is price 760k Z estimate 696k . Some part of me believes that z estimate is a lagging indicator with $90 oil built in.
Whats the Z estimate at $35 a barrel? Do we have to wait a year to find out? Oops
Nice place though going by the pics , be neat to sit there amongst the wine racks and drink yourself stupid while watching your equity and your property value approach each other .
Zillow estimates are notoriously inaccurate. And that house has been listed for sale several times in the last 2 years at the same price without a buyer.
Fact is, that house in many areas of the Northeast would be priced double and taxes would be quadruple. That house will never sell under $500,000 unless its infested.
For years, all ive heard on these boards is that money printing will lead to inflation. Now this has been abandoned for deflation. Many of you are allowing yourselves to be whipsawed. Truth is there will be inflation, your calls were just way premature. Real estate prices are not going to drop 50% again, because first they are not nearly as overvalued as 8 years ago, and second because there is too much money floating around. The FED (and other central banks) has indeed created a floor on asset prices by running those presses 24/7. That elevated floor is the inflation and it wont be lowered unless there is less money to go around. Anyone see that happening?
There is not going to be a massive asset price collapse.
Coho, I've lived in IMHO the nicest areas of the Bay Area and SoCal. I luv the Bay but would not consider moving back at this time.
IMHO opinion the Newport coast south to Rancho Santa Fe is the nicest place to live in the 50 states.
Cal central valley? Folsom? It may be heaven to some but not to me. _________________________________________________________
"There is not going to be a massive asset price collapse."
-------------------------until there is. 2008 RE anyone? NASDAQ? Anyone? Even the president of the stockbrokers Hall of Fame, Mr. Jamie Dimon hisself, says it's coming.
A lot of RE and many individual stocks and many many bonds are currently overpriced and ripe for an adjustment.
Comments
Real estate is lousy here in the north east . New construction appears to be okay in commercial as far as ground being broken but its a head fake. My opinion , there is a lot of ZIRP driven malinvestment on commercial property . Lateral moves you might call them. For instance , a new Walmart is going up all alone on a great big well situated corner lot . It looks like a positive but actually a walmart 5 miles away will close and that one is an anchor store of a 30 year old plaza . Net gain is what? Somewhat more square footage for walmart and they own the land now instead of leasing thats a plus for them but the other place loses its main draw and will wither and die . Dead plaza in the center of town replaced by a new single store on the outskirts is a net loss for the community , its short sighted and its stupid.
The plaza Walmart left had been its home for 15 years , it was about 35 or 40 years old. Walmart did not want to go , the management company told walmart when the lease was up they were going to have to pay double so they left BOOM just like that. Walmart is strong enough to build a new store. In a nearby mall , the management tried the same thing with Sears and Sears also left but did not build a new store. Sears probably won't build many new stores anywhere. Indoor malls without anchor stores are just stupid who would negotiate themselves into such a position ? The malls are dying anyway a blind man can see that , but they are built and paid for . The right glide path could wring another decade out of that space with very little extra spending. Loose a few tenants , the next lease up double it and lose 10 more ?
Residential construction is warped too. Overly fancy starter houses being placed in the wrong neighborhoods is a trend lately. Style but no substance , prices inflated because of location and worthless amenities , plus its tougher for first time buyers to get loans . The loans they do get are with hardly any down payment so there is no equity. A moderate downtrend puts all these fools underwater and these developments will all look like Detroit.
So you're saying if you have no down payment you can get a loan but if you but money down you cant? Did you miswrite something?
Detroit? So your town is based on an industry that suffered from no investment for future growth and relied heavily on over compensated employees?
If you expect such calamity then why do you stay there?
Knowledge is the enemy of fear
Knowledge is the enemy of fear
<< <i>Let's realize none of us has a crystal ball and all of us have made prognostication mistakes. I value of you guys input and enjoy reading these threads except when it gets ugly. I try to avoid that and hope you do to.
As a side note a took a day trip on the old Chicago Great Western Railway trail and had to chuckle when I ran into this town about 25 miles due west of Rockford, IL.
Awesome! The "i" is included often enough that it's a valid alternate spelling. I've got some very good friends that live just outside of Rockford IL.
Actually, my screen name is a tribute to the character Elijah Baley, the protagonist in Isaac Asimov's The Caves of Steel and The Naked Sun
Liberty: Parent of Science & Industry
<< <i>PC, my vision shows in my posts in 2010, 2011, 2012, 2013, 2014, as does yours. Sorry you don't see that. >>
You didn't read what I wrote. I said nothing about your "vision."
<< <i>Text its tougher for first time buyers to get loans . The loans they do get are with hardly any down payment
So you're saying if you have no down payment you can get a loan but if you but money down you cant? Did you miswrite something?
Detroit? So your town is based on an industry that suffered from no investment for future growth and relied heavily on over compensated employees?
If you expect such calamity then why do you stay there? >>
I'm talking about these FHA 3% down loans. When you utilize them you are just unwittingly joining the FFCA
You're making his point for him. For years on here, folks made fun of the 'villes in which houses sell quickly with multiple offers, and residents get unsolicited letters in the mail from potential buyers and investors.
The houses in those other areas of the city, state, or country are a "bargain" for a reason. Same with the "quality" of coins, of art, antiques, and artifacts "you get what you pay for" risks/rewards and all.
Liberty: Parent of Science & Industry
<< <i>How many empty houses in a row before the whole neighborhood is a basket case?A.k.a. Detroit
You're making his point for him. For years on here, folks made fun of the 'villes in which houses sell quickly with multiple offers, and residents get unsolicited letters in the mail from potential buyers and investors.
The houses in those other areas of the city, state, or country are a "bargain" for a reason. Same with the "quality" of coins, of art, antiques, and artifacts "you get what you pay for" risks/rewards and all. >>
I'm not talking about older houses though , these are brand new developments in nice towns . They are tailored to these low income buyers and /or loan challenged buyers and they are not viable from the start. It's like watching a car crash in slow motion .
The local governments have stolen the builders profits before the sale with huge increases in permitting fees , regulations that add cost without any benefits and by delaying projects for no reason .
Every town or city in this blue state is well accomplished at killing those golden egg laying gooses
<< <i>I'm not talking about older houses though , these are brand new developments in nice towns . They are tailored to these low income buyers and /or loan challenged buyers and they are not viable from the start. It's like watching a car crash in slow motion. >>
I'd like to know what you mean by low-income and loan-challenged buyers. For the most part, mortgage qualifications are still fairly strict. What caused the housing bubble and where the problems start is when there is a prevalence of no or low-doc (liar) loans being issued with little money down. I don't think this is happening. FHA guidelines for the 3 or 3.5% down programs are still pretty rigorous especially for income verification.
These 3 and 2.5% programs really do help home ownership. I myself used one of these loans for my first purchase. It can take years to save up a 5% or even 20% down payment even for folks with "good" incomes. In a lot of cases and particularly here in Phoenix, a rent payment is not that far off from a mortgage payment. So if they can afford rent, they can afford a mortgage. And as long as the market remains healthy and the borrower remains employed, there are no problems. And typically in a few years in a normal market they will be at 10% or greater equity and the lender's risk lowers dramatically.
<< <i>The local governments have stolen the builders profits before the sale with huge increases in permitting fees , regulations that add cost without any benefits and by delaying projects for no reason .
Every town or city in this blue state is well accomplished at killing those golden egg laying gooses >>
I don't know that the increase in permitting fees have "stolen" any profits. These are costs that are known up-front and are passed along to the home buyers. There's no reason a smart builder can't do the math and that they don't know their margins and the final sale price (and whether anyone will pay it) before they start construction. In a lot of ways I think the higher permitting fees do make sense as every new home unit requires incrementally more city support services and infrastructure. At least these fees do make sense for why they are necessary. How high they should be is another matter. I agree that there are some building codes and regulations that can add a lot of unnecessary cost and expense though. California is awful in this department. California won't be happy until they shut down all construction and development and drive away all forms of business and economy with its regulations, fees, and taxes.
<< <i>How many empty houses in a row before the whole neighborhood is a basket case?A.k.a. Detroit
You're making his point for him. For years on here, folks made fun of the 'villes in which houses sell quickly with multiple offers, and residents get unsolicited letters in the mail from potential buyers and investors.
The houses in those other areas of the city, state, or country are a "bargain" for a reason. Same with the "quality" of coins, of art, antiques, and artifacts "you get what you pay for" risks/rewards and all. >>
So what you're saying is that the top 5% of real estate in the country can keep the RE market afloat just like the top 5% of coins are doing for the coin market? How long can the top 5% of investments support the other 95%?
The problem is the buyers buying starter homes should be a perfect match for these loans and they are not. The new version starter houses aren't really starter houses. To me a starter house is a 32x 24 cape full shed dormer maybe a small garrison or split level ranch with an unfinished basement . Those are north east style homes but every part of the country has its version the words are different but the idea is the same. Builders are building $450,000 houses that have no more space than a starter house and consequently have no market. People that have money walk through and know right away there is nothing to the place and people with no money thankfully can't get a loan. It has a too small 2 car garage on the end and a false gable maybe a farmers porch but those things don't equate to living space. Its all fluff that doesn't amount to anything.
Those 3% buyers are all wrestling over mid 90's era houses and seeing that they can get in but they need to start working on them right away. By definition they have no money though so when that 25 year old boiler goes they are reaching for the credit card. Needs a new roof in 3 years , needs a deck in 2 , there's no money in the bank for any of it.
My niece is one of those 3% shoppers and shes had me look at 5 places for her so far and shes getting pissed because I'm picking everyone of them apart. The last one failed its septic so the seller had to redo it but the yard is graded wrong now and its pitched towards the house. With the 10 feet of snow we had this year that put a foot of water in the basement whoops. I told her run don't walk away from that one but some sucker will buy it I'm sure.
Of course her and her husband both have the latest iphones and they are both leasing cars and they hit Vegas twice a year so its a given they are never going to have more than 3% to put down anywhere.
Now if they got flip phones , skipped a few vacations , and settled for a beer in front of the TV instead of going out every week for maybe 2 years it would be a whole different thing but thats not going to happen.
Liberty: Parent of Science & Industry
That's what I'm talking about. Those folks should move.
Of course her and her husband both have the latest iphones and they are both leasing cars and they hit Vegas twice a year so its a given they are never going to have more than 3% to put down anywhere.
That's what I'm talking about. Those folks should spend differently.
Bronco and I are now singing the same song. Kumbaya
Liberty: Parent of Science & Industry
OK so then those houses don't sell and the builder goes out of business. What's the problem?
I just flew over Orlando and Houston. Saw broken ground everywhere. Why? Because folks in the northeast of tired of the crappy weather and moving south. That 25 yr old home in CT can buy a new home in Orlando and still have $200k left over. Its a no brainer. So yes, complain about NY, NJ, CT, MA--states with declining populations (there's that damn demographic thing again
Knowledge is the enemy of fear
<< <i>Text Builders are building $450,000 houses that have no more space than a starter house and consequently have no market.
OK so then those houses don't sell and the builder goes out of business. What's the problem?
I just flew over Orlando and Houston. Saw broken ground everywhere. Why? Because folks in the northeast of tired of the crappy weather and moving south. That 25 yr old home in CT can buy a new home in Orlando and still have $200k left over. Its a no brainer. So yes, complain about NY, NJ, CT, MA--states with declining populations (there's that damn demographic thing again
The builders are constrained on the lower end because they overpaid for the lots and need to put a certain dollar amount on the lots to make money. I think its partly an issue of stubbornness on their part , government actions that inflated costs and just the market in general. The actual problem though is the way those builders go out of business is by filing bankruptcy , stiffing everyone they owe and start new companies and repeating the process. usually their wife owns the new company
I agree with the declining population but its nice here. If my other choice is to move somewhere where the sky is dirt brown and its 100 degrees i'll opt to skip a few meals and stick it out as long as I can. Besides those hot spots might be increasing population now but watch what happens when the water pinch hits them. Arizona can't support even a million people without the Colorado river so at least 5 million are going to be redundant in the foreseeable future. People worry about water in Cali but at least it actually rains there
<< <i>The builders are constrained on the lower end because they overpaid for the lots...[/a]
I don't know if that's true so much anymore. For every builder that may have overpriced land from the boom on their books, there's another builder that got a smoking deal when overpriced land got foreclosed on.
Entry level new homes are usually townhomes or condos. The majority of new homes are targeted at the middle or upper end of the market for practical reasons rather than anything else. Entry level homes aren't supposed to be big & fancy, and there's less profit in them. That's why almost all new homes are going to be priced above the local median price.
<< <i>
<< <i>Text Builders are building $450,000 houses that have no more space than a starter house and consequently have no market.
OK so then those houses don't sell and the builder goes out of business. What's the problem?
I just flew over Orlando and Houston. Saw broken ground everywhere. Why? Because folks in the northeast of tired of the crappy weather and moving south. That 25 yr old home in CT can buy a new home in Orlando and still have $200k left over. Its a no brainer. So yes, complain about NY, NJ, CT, MA--states with declining populations (there's that damn demographic thing again
The builders are constrained on the lower end because they overpaid for the lots and need to put a certain dollar amount on the lots to make money. I think its partly an issue of stubbornness on their part , government actions that inflated costs and just the market in general. The actual problem though is the way those builders go out of business is by filing bankruptcy , stiffing everyone they owe and start new companies and repeating the process. usually their wife owns the new company
I agree with the declining population but its nice here. If my other choice is to move somewhere where the sky is dirt brown and its 100 degrees i'll opt to skip a few meals and stick it out as long as I can. Besides those hot spots might be increasing population now but watch what happens when the water pinch hits them. Arizona can't support even a million people without the Colorado river so at least 5 million are going to be redundant in the foreseeable future. People worry about water in Cali but at least it actually rains there
there fixed your post...
And a talk with any of the mega-builders will confirm your thoughts on cheap land. Builders have a hard time keeping costs down due to lack of affordable land.
Knowledge is the enemy of fear
<< <i>God bless America
there fixed your post... >>
Throughout the report, the underlying conditions in March showed an improving buying season.
Sales transitioned from investors to homeowners. All-cash sales dropped to 24% in March from 26% in February. Individual investor sales accounted for 14% of total existing home sales for a second consecutive month.
More importantly, first-time homebuyers -- which are needed to keep home sales expanding -- edged up to 30% from 29% in February. That is still below the 40% that first-time buyers typically buy during a normal housing market, but the trend is moving in the correct direction.
Sales demand was widespread as all areas of the country reported positive month-over-month and year-over-year sales growth.
Altogether, March sales were the strongest since the same number of units were sold in September 2013
Supply remains a problem and will likely keep sales growth constrained. Inventories increased 5.1% to 2.00 mln, but at the current sales rate, there is only 4.6 months' supply. That is down from a 4.7 months' supply in February and well under the 6 months' supply that realtors are looking for.
The median existing home prices increased 7.8% y/y to $240,500.
Read more: http://www.briefing.com/GeneralContent/Platinum/Active/TickerSearch/QuickSearch.aspx#ixzz3Y6BYMTsc
Knowledge is the enemy of fear
<< <i>Altogether, March sales were the strongest since the same number of units were sold in September 2013 >>
Don't get too excited yet. The average annual sales for the 80's was 609M. For the 90's it was 698M. For 2010-2014 the average is a paltry 372M with 2013 and 2014 coming in at 429M and 436M, respectively. Woop dee doo! Call me when home sales volume goes up 40% to match the 1980s. You know, when interest rates were double digits? We have interest rates under 5% and a much bigger population and we can't even come close.
<< <i>Supply remains a problem and will likely keep sales growth constrained. Inventories increased 5.1% to 2.00 mln, but at the current sales rate, there is only 4.6 months' supply. That is down from a 4.7 months' supply in February and well under the 6 months' supply that realtors are looking for. >>
At 4.5 or 4.6 months' supply there are plenty of homes for sale. 3 months is a seller's market. 6 months is a buyer's market. Still a balanced market. Woop dee doo!
<< <i>The median existing home prices increased 7.8% y/y to $240,500. >>
So there is no inflation?
Or inflation for homes is good, everything else bad?
The fact remains that wages did NOT increase 7.8% y/y, so fewer people can now afford a home.
<< <i>For years, you have stated that the hyperinflation is coming to the US and that we should look at Zimbabwe and Weimar as examples. Of course a hyperinflationary event in the US would cause difficulties for many, but without a severe disruption to our economy and infrastructure and political system, it aint gonna happen.
I wish I had been to Zimbabwe in 2005 so I could compare it to today, but I was in Poland about 10 years after their hyperinflation and that country was much better off than a few years before hyperinflation. Hyperinflation "cleanses". While this country has some dirty spots, it is far from needing a deep cleansing.
Jmski, CA needs to raise its real estate tax. While of course it wouldnt go over big, almost all could afford it and it would solve many of CA's debt problems. The problem lies in states like NJ or NY where real estate taxes are already high and have declining populations. CA's population is growing, thus demand for real estate grows. And its sunny, people like the sun. NY, NJ, CT do not have that luxury. Watch for an exodus of people to move from the NE to Florida. >>
Hey, I just bought a house in California 16 months ago so I'm fully priced in tax wise. But you are correct that the Cali system is flawed in how they assess taxes. I was shocked when I was going through the buying process. Prop 13 is the mother of all grand father clauses. Talk about a knee jerk law.
Mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Median doesn't imply inflation, only that higher priced homes sold ...
<< <i>Jeesh Proof how can anyone take you serious???
Median doesn't imply inflation, only that higher priced homes sold ... >>
If you reviewed the rest of the data the mean sale price was up 5.1%. Doesn't change anything I said.
Now how does a young 25 couple get approved for that?
Both fresh out of college,both have college loans to pay off, and both come from blue collar families(in different states)?
<< <i>Something in Dallas,Tx must be different than the rest of the country. My great niece just bought a $800,000 "starter" home.
Now how does a young 25 couple get approved for that?
Both fresh out of college,both have college loans to pay off, and both come from blue collar families(in different states)? >>
$800K in Texas? Good Lord. I have had friends who live in Texas tell me houses are usually cheaper there because property taxes run about 3% of the price of the house. That would be $24000 per year on that house! You may be able to borrow the $800K to "buy" the house but you have to pay the taxes with real money from this archaic thing called wages.
Liberty: Parent of Science & Industry
The states the cities and towns on the local level are driving higher house prices with endless regulations.
For instance Ufer grounding here being phased in but its totally unneeded. We don't have soil that warrants it. That one copper cable adds a half ton of rebar to a job that wouldn't have needed it at all plus an electrician visit gets mixed in to the foundation and an extra inspector visit before concrete gets poured . Between labor , materials and delays it could easily add a few thousand to a job. Permit fees go up and extra town employees with coffee cups in hand go on the books with healthcare and pensions of course . The funny thing about the extra money is no one person can actually lay claim to it because it just sort of disappears into the world in a cloud of invisible GDP .
The form guy is making extra trips to a job for no extra money. The electrician has to pull a guy off a real job to clip a wire and he probably eats that too. The inspection has to be scheduled and the inspectors whine if they come out to do only one thing so they want to bundle inspections . It always adds a week to the form crews time on the job. Which pushes the framing crew back a week , then sidewallers , painters, plumbers , electricians . It's getting to be all stop start stop start . Nobody wants to go to a friggin job and setup then leave after 5 hours. The workers get screwed out of 8 hour days because its not productive to head to a different job at 1 o'clock .
Technology should allow us to have more and more efficient processes and it does. Look at a framing crew now compared to a framing crew from 1975. Nailing guns , lulls for lifting materials , hi tech materials that are stronger , cheaper , less destruction of forests , less waste . The government steps in and renders half of the gains in productivity back into waste.
Every time the towns and cities add an employee its forever . Every time a fee is instituted its forever. Every tax is forever . Every thing you interact with the government on takes more time and is more intrusive.
There is a limit to how much cost you can pass on to buyers whose wages are not going up.
<< <i>
<< <i>Altogether, March sales were the strongest since the same number of units were sold in September 2013 >>
Don't get too excited yet. The average annual sales for the 80's was 609M. For the 90's it was 698M. For 2010-2014 the average is a paltry 372M with 2013 and 2014 coming in at 429M and 436M, respectively. Woop dee doo! Call me when home sales volume goes up 40% to match the 1980s. You know, when interest rates were double digits? We have interest rates under 5% and a much bigger population and we can't even come close.
>>
I had to read what you wrote several times because it seriously made no sense. Here is a new article from Feb 1987 concerning home sales in 1986. http://www.nytimes.com/1987/02/04/business/sales-of-new-and-existing-homes-climbed-in-86.html
For your 1980 figure I assume you are using a new homes stat as the article linked above states 749,000 new homes sold in 1986. This year the pace is about 500,000. If you knew anything about economics and demographics you would realize why the difference. Think huge population bulge entering their family formation years.
But lets read further into the report. In 1986 3.6 million existing homes were sold compared to a 5.2 million rate this year. Clearly people are buying more homes than you would like us to believe. And to be quite honest, I dont want sales exceeding previous peaks as that would mean the glory days would be behind us. There is still lots of growth ahead.
But lets use your logic....read further into the report. 688,000 new homes sold in 1985, vs 819,000 sold in 1977. The economy must certainly be in the dumps because less new homes were sold in 1985 than in 1977, right? I think history has certainly that logic faulty.
I beginning to think you are not really a realtor. I think you are just a salesman for one of the large tract homes builders sitting in a model home waiting for the door to open. I believe if you were a boots on the ground multi-spectrum realtor you would have a much different view.
Everyone formulates an opinion based upon the world in which they live. For some people that world consists of a 100 mile (or less) radius. For others that world is measured in 1000s of miles or spanning continents. Dont let your home town views extrapolate into a global , or even countrywide perspective. The world is much bigger than any of us realize.
Knowledge is the enemy of fear
So there is no inflation?
Or inflation for homes is good, everything else bad?
The fact remains that wages did NOT increase 7.8% y/y, so fewer people can now afford a home.
A month over month or even year over year comparison is useless. The median existing price today is the same as it was in 2005.
https://research.stlouisfed.org/fred2/series/HOSMEDUSM052N
Wages are higher than in 2005. http://www.ssa.gov/oact/cola/central.html
Homes are more affordable today than in 2005.
I hope you notice I posted some links.
Knowledge is the enemy of fear
It's nice to have a rich uncle for backup.
I knew it would happen.
the STATE.
In the old days pre 1978, HO would get hit with a burden when your neighbor sold his house for more and they reassessed.
We pay a heck of a lot of taxes, fees and assessments out here. The other 49 states have it relatively easy in that dept.
<< <i>
<< <i>Something in Dallas,Tx must be different than the rest of the country. My great niece just bought a $800,000 "starter" home.
Now how does a young 25 couple get approved for that?
Both fresh out of college,both have college loans to pay off, and both come from blue collar families(in different states)? >>
$800K in Texas? Good Lord. I have had friends who live in Texas tell me houses are usually cheaper there because property taxes run about 3% of the price of the house. That would be $24000 per year on that house! You may be able to borrow the $800K to "buy" the house but you have to pay the taxes with real money from this archaic thing called wages. >>
Assuming they have the 3% ($24k) down payment and $150k combined annual income they should be fine.
<< <i>There are very few Californians enjoying tax relief under 1978 valuations. 1%+ bonds and assessments(±1.25%) is more than adequate for
the STATE.
In the old days pre 1978, HO would get hit with a burden when your neighbor sold his house for more and they reassessed.
We pay a heck of a lot of taxes, fees and assessments out here. The other 49 states have it relatively easy in that dept. >>
You havent lived in NY, NJ or CT.
Here is a house outside cold, snowy, depressed Syracuse NY, priced at $385,000.....taxes are $19,000.
http://www.zillow.com/homes/for_sale/89602122_zpid/days_sort/43.192818,-76.245503,43.139043,-76.336484_rect/13_zm/?view=map
This house in a good section of southern NJ is priced at $360,000...taxes almost $9000.
http://www.zillow.com/homes/for_sale/54675116_zpid/days_sort/39.949556,-74.831743,39.836421,-75.013704_rect/12_zm/?view=map
Here is a house in sunny and growing Folsom, CA priced at $390,000....taxes are $4200.
http://www.zillow.com/homes/for_sale/Folsom-CA/82884897_zpid/11462_rid/days_sort/38.693348,-121.100707,38.63578,-121.191688_rect/13_zm/?view=map
Here is a house in sunny (mini silicon valley) Lake Mary, FL priced at $375,000....taxes under $4000.
http://www.zillow.com/homes/for_sale/Lake-Mary-FL/54471615_zpid/32390_rid/days_sort/28.789927,-81.311231,28.725292,-81.402211_rect/13_zm/?view=map
Home owners in CA dont know how good they have it.
With a disparity this pronounced, there will continue to be massive migration from the Northeast to Florida and California. Declining population equals poor economy while growing population equals good economy.
Knowledge is the enemy of fear
<< <i>My great niece just bought a $800,000 "starter" home. Now how does a young 25 couple get approved for that?
>>
Here is a $759,000 house in Arlington, TX just outside Dallas. This clearly is not a "starter" home and taxes run about 1/2 what has been mentioned in this thread.
http://www.zillow.com/homes/for_sale/79959088_zpid/days_sort/32.722418,-97.121673,32.660369,-97.212653_rect/13_zm/?view=map
Knowledge is the enemy of fear
Yogurt has an active culture.
Edit: speeling.
Humidity and heat from hell, torrential rain, wind and ice storms.
Knowledge is the enemy of fear
<< <i>
<< <i>My great niece just bought a $800,000 "starter" home. Now how does a young 25 couple get approved for that?
>>
Here is a $759,000 house in Arlington, TX just outside Dallas. This clearly is not a "starter" home and taxes run about 1/2 what has been mentioned in this thread.
http://www.zillow.com/homes/for_sale/79959088_zpid/days_sort/32.722418,-97.121673,32.660369,-97.212653_rect/13_zm/?view=map >>
Tax there is 2.64 %... Not including minor homestead, etc...
<< <i>I am looking to get a house in San Diego with a granny flat that will pay almost half of the mortgage. I am waiting until this winter when they will be a lot less buyers. >>
Sorry about that mate, you will need a special permit for your granny flat. I'm afraid there are only a set number of those your name will be placed on a waiting list.
<< <i>
double post
<< <i>
<< <i>My great niece just bought a $800,000 "starter" home. Now how does a young 25 couple get approved for that?
>>
Here is a $759,000 house in Arlington, TX just outside Dallas. This clearly is not a "starter" home and taxes run about 1/2 what has been mentioned in this thread.
http://www.zillow.com/homes/for_sale/79959088_zpid/days_sort/32.722418,-97.121673,32.660369,-97.212653_rect/13_zm/?view=map >>
Whats the point of 4 bedrooms and 4.5 baths? Thats the first issue The other issue is price 760k Z estimate 696k . Some part of me believes that z estimate is a lagging indicator with $90 oil built in.
Whats the Z estimate at $35 a barrel? Do we have to wait a year to find out? Oops
Nice place though going by the pics , be neat to sit there amongst the wine racks and drink yourself stupid while watching your equity and your property value approach each other .
Fact is, that house in many areas of the Northeast would be priced double and taxes would be quadruple. That house will never sell under $500,000 unless its infested.
For years, all ive heard on these boards is that money printing will lead to inflation. Now this has been abandoned for deflation. Many of you are allowing yourselves to be whipsawed. Truth is there will be inflation, your calls were just way premature. Real estate prices are not going to drop 50% again, because first they are not nearly as overvalued as 8 years ago, and second because there is too much money floating around. The FED (and other central banks) has indeed created a floor on asset prices by running those presses 24/7. That elevated floor is the inflation and it wont be lowered unless there is less money to go around. Anyone see that happening?
There is not going to be a massive asset price collapse.
Knowledge is the enemy of fear
I've lived in IMHO the nicest areas of the Bay Area and SoCal. I luv the Bay but would not consider moving back at this time.
IMHO opinion the Newport coast south to Rancho Santa Fe is the nicest place to live in the 50 states.
Cal central valley? Folsom?
_________________________________________________________
"There is not going to be a massive asset price collapse."
-------------------------until there is. 2008 RE anyone? NASDAQ? Anyone? Even the president of the stockbrokers Hall of Fame, Mr. Jamie Dimon hisself, says it's coming.
A lot of RE and many individual stocks and many many bonds are currently overpriced and ripe for an adjustment.