Real Estate Crash thread

[ill-advised strategy]

True, but I was hoping to buy a dumpy house and fix it up. So I'd have to be living near it.

But maybe buying a semi-decent house in SLC, that only needs a lil' work would be easier. I already thought of buying in Bozeman because I didn't like the JH market, but SLC is way cheaper, and almost the same distance. Good thinking, MD9.

money plan: buy 2 or 3 bedroom house. Rent house to Maggots who save 1 of the bedrooms for your fanny heat when it's in town.

[Benny Profane]

Immigration haters - this is why the Bronx stopped burning:


http://www.nytimes.com/2006/09/10/re...ef=keymagazine

[P_McPoser]

Still enjoying a little boom out here in BFE tied to the price of gold. Just had my house appraised today for a home equity loan to stick it to my credit card company.....house went from purchase price of 95,000 (appraisal value) in Feb 2005 to 138,000 as of yesterday! W00t! Definately not super huge gain, but FKNA 43k in almost 2 years is fine with me.

[hev]

we got a thirty year fixed here at 4.2%.

..damn good rate! I somehow got 4.25 with 20% down and minimal credit but unfortunately I adjust in 2 years. It looks like I'll have outgrown my condo by then and a little sweat equity should help my resale be at least level cus things are definatly down in my area. It seems like trying to seriously time the market with your main residence is pretty risky and difficult.

[rideit]

We have gone from $239 to $459 in four years...

[Spats]

Housing is an investment, just like buying a stock in the stock market.

There are bull markets and bear markets. It's possible to lose money in bull markets, and make money in bear markets, but it's a lot more difficult than swimming with the tide.

There are factors that affect only a local market (such as development policies, existing housing stock, local employment picture, and trendiness of a town or neighborhood) and factors that affect the nationwide market (such as interest rates and inflation).

Right now the national factors, which have been strongly positive over the previous ten years (declining interest rates, low inflation, strong economy) have become less positive. Interest rates are rising, inflation is increasing, and salaries are not keeping pace. However, there are still places where local factors are enough to overcome this.

How bad will the national factors get, and will the local positive factors overcome them? I don't have that answer.

[lemon boy]

I haven't followed this thread at all but here's a little data for it:
Foreclosures Up 53% over Aug 05 and 24% over July 06

[Core Shot]

Wow.

Mass foreclosed-home auction in Michigan
Homeowners in so-called 'auto-wreck' states have trouble keeping up with payments; region leads nation in foreclosures.
By Les Christie, CNNMoney.com staff writer
September 12 2006
NEW YORK (CNNMoney.com) -- More than 250 bank-owned single-family homes, condos and duplexes in Michigan are going to hit the auction block en masse in late September, according to Hudson & Marshall, the company handling the auction.

http://www.hudsonandmarshall.com/auctionInfo.asp?auctionName=Michigan+%2D+200%2B+Properties&auctionID=303

[Tin Woodsman]

spats speaks the truth. But for those of you who think RE will never go down b/c "they're not making any more land" (might be the stupidest argument I've heard since "Why wear a condom? I'm never going back to Haiti!"), check out this chart from Yale economist Robert Schiller (you know, the guy who was ringing the alarm bells about the tech bubble in the late 90s):



Edit: Why is it all messed up? The image I linked from is clear as a bell.

[Cono Este]

Its like anything else, stocks, whatever. People try to sell you on the idea that you will make some historical average return. Its probably true, but they dont tell you about the volatility inbetween, losing your job etc.. whatever.

add gold and oil stocks to the heap of sucker plays this year.

[iceman]

Procrastination has been a solid play for me again this year.

[shmerham]

I have a problem with this chart. This chart should start post 1920, because mass-production is a unique event that changed the market for good. Prior to mass-production, the house was worth multiple times more than the land it was built on. Post mass-production, such has not been the case. Land was hardly a function of the market prior to 1920. People weren't moving to the suburbs because there was no room in the city. It looks like 1890 was arbitrarily chosen as a start date because it "works" with Schiller's theory. …and how can you look at a jump that's 5 times bigger than any other jump before it and say it's going to correct like the smaller ones did?

If we look at the period where the index has generally stayed around 100 it's only from 1950 to 1996. That's not a long time. To me, it's an insufficient sample size.

The only way the index returns to 100 is if they start mass-producing land. Haven't seen any talks of that happening. It's that or the major businesses and universities in big cities start moving to South Dakota or we start building supertrains. As the price of oil goes up, there's no way most people can expect to commute more than an hour each way. In 25 years there won't be any place to build a house within an hour of a city center.

[rideit]

In 25 years there won't be any place to build a house within an hour of a city center.

Except on reclaimed dumps and waterways...manufactured land, in essence. San Francisco and NYC are good examples of manufacturing land as well.

[cj001f]

Except on reclaimed dumps and waterways...manufactured land, in essence. San Francisco and NYC are good examples of manufacturing land as well.

The Japanese have excelled at it building entire airports on reclaimed land

[rideit]

cripey, look to Holland and Venice for fine, fine examples. New Orleans, on the other hand....not working out so well.