Unofficial Real Estate Thread

[Ski_Banker]

Ok, once and for all.

As of April 2007, where do you think the U.S. major metropolitan residential real estate market is going?

Up? Down? Sideways? Through a nasty l'il chicane and into the home stretch? :tongue:

 

[ShiftyBob]

You can't cover the entire RE market with a blanket statement. Especially throughout the US... California is going through another 90's era depression, Texas is quickly rising, Nevada is right behind CA, Florida is on the rise again, Arizona is almost as bad as CA, Utah is doing great, and most of the midwest is still ata VERY slow climb... :smile:

 

[NA1MT]

NJ Real Estate is starting to level off a bit. Up until I'd say about two years ago there were bidding wars going on for everything on the market. Then it went through the dreamers still looking for top dollar stage and I think now motivated sellers are coming 10-15% off asking price for a sale. Many builders are in trouble with multiple "spec" homes that were built and now aren't moving.

 

[NimbleSexyXquisite]

Los Angeles Metro, is definately moving up, its just people are moving slow in the sense of buying. We are going through growing pains of inflation still, but there are A LOT of local, domestic and foreign investors taking over all parts of LA Metro.

 

[awsomr1]

The latest report show home sales up 25% from Jan. to Feb. in LA county. Waiting for the March report...

 

[steveny]

The market never changed in this area of NY and won't in the future. Small increments no big jumps ever.

 

[XSNSXTC]

Florida is on the rise again.

I don't know where you get your information, but NOTHING could be further from the truth.

 

[ShiftyBob]

I don't know where you get your information, but NOTHING could be further from the truth.

I've been watching the FL market and I've been buying SFR's in FL for the last 7 years. About 30 properties so far, most of which turned 20% profit. In the last year, there hasn't been a home I've had to hold onto for more than 6 months. If you buy in SE FL, then you're not doing your homework. That's where Investors WANT to buy, but you can't do anything more than hold there right now, and the prices are too high to do that, and good luck with insurance. I'm pretty sure I know what I'm doing... :biggrin:

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[Ko-nsx]

the midwest(I'm in MO.), has really inflated price during the past 4 years. It will be interesting to see what happens. Nothing really moving over 130k

 

[DDankew]

San Francisco is still hot, especially fixer uppers and homes in nice locations. Not condos or town homes but homes are still getting overbid.

 

[DocL]

...If you buy in SE FL, then you're not doing your homework. That's where Investors WANT to buy, but you can't do anything more than hold there right now, and the prices are too high to do that, and good luck with insurance. I'm pretty sure I know what I'm doing... :biggrin:

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For some of us, the SE is where we live and work so buying somewhere else isn't an option. Right now, there are over 30,000 dwellings for sale in Palm Beach County and nothing is selling at asking price. This is a sharp contrast compared to two-three years ago when you had to offer over asking price to get a signed contract. I blame the over inflation of home prices on greedy realtors who wanted to make a quick buck, while at the same time scaring people into buying a house they couldn't afford. I know first hand, and I'm lucky that I didn't buy a million dollar home that was only worth $700,000.

 

[NSX-Stalker]

I don't know where you get your information, but NOTHING could be further from the truth [Florida].

It all depends on where you live. In my area it's coming back. I live 2 blocks from the bay. I expect it to be back to 2005 levels within 1-2 years easy. Now if you live 10 miles east of me in the same city you'll wait much longer because that's where most of the spec buyers invested plus new housing is still going up. There's maybe 6 empty lots in my area.

All about location and demand. Look at my avatar and you'll see where we watch the sunset over the bay. We can walk to there in 3 minutes.

NSX-Stalker (up 300% in 6 years)

 

[01blacks4]

AZ is slow...but values are up...unless you bought in the sticks, but then you paid too much anyway

hey Bob, i need help with getting more money, any ideas?

 

[pvmike]

I'm sure you all have heard about what's going on in Detroit:

http://realestate.msn.com/Buying/Article2.aspx?cp-documentid=4349836

Imagine buying a house to part out like a car.

 

[jimmycinla]

You can't cover the entire RE market with a blanket statement. Especially throughout the US... California is going through another 90's era depression, Texas is quickly rising, Nevada is right behind CA, Florida is on the rise again, Arizona is almost as bad as CA, Utah is doing great, and most of the midwest is still ata VERY slow climb... :smile:

Even classifying a whole state is too much of a "blanket statement" in this market, especially California. While it's not going well I don't think we'll see a total repeat of the early 90's. We keep taking hits, such as the sub prime implosion that will ultimately remove potential buyers from the market. Most economic reports have been showing an economic slowdown and we should get a nice run in mortgage rates again which will spur some buying interest as long as inflation does not run amuck. Big jobs report tomorrow .......

-j-

 

[steveny]

I'm sure you all have heard about what's going on in Detroit:

http://realestate.msn.com/Buying/Article2.aspx?cp-documentid=4349836

Imagine buying a house to part out like a car.

Ouch, One of the good points of the market here where I live is there has been no ridiculous inflation so there won't be a deflation either. The market here is good and solid and will stay the same as it has been for many years to come.

 

[Ski_Banker]

Even classifying a whole state is too much of a "blanket statement" in this market, especially California. While it's not going well I don't think we'll see a total repeat of the early 90's. We keep taking hits, such as the sub prime implosion that will ultimately remove potential buyers from the market. Most economic reports have been showing an economic slowdown and we should get a nice run in mortgage rates again which will spur some buying interest as long as inflation does not run amuck. Big jobs report tomorrow .......

-j-

You CAN categorize the major metropolitan residential market as a consolidated market in this case. Picking out neighborhoods and cities is the same as picking individual tech stocks in 2000/01. They're all going down.

Speculative demand from marginal buyers will only decline not due to rising interest rates, but due to the coming monsoon of residential real estate regulation. 'Bout damn time, frankly.

(search my old posts from 12-15 months ago re: real estate )

 

[redshift]

I blame the over inflation of home prices on greedy realtors who wanted to make a quick buck, while at the same time scaring people into buying a house they couldn't afford.

Maybe you should blame the Fed for braking too late - Realtors have always made their money from churn. In the end, I think there was just a lot of dumb money chasing the market up on the backs of inexperienced money lenders and loan originators.

AZ is crap if you bought on the outskirts - though I can't imagine why anybody would want to. Good locations took a small hit and are moving north again.

I really don't know a lot about the real estate market, but I know something about capitalism (and free markets) in general. It seems to me that we're past the big correction and now we are either moving downward slowly, sideways, or creeping up. Either way, we already fell off the cliff so I wouldn't expect any close term major correction barring any huge world event.

It is my opinion that we're going to see a leveling in the near future as consumer confidence rises. I'm have some conviction toward a rate cut in May - I know a lot of people would like to argue this. The recent unemployment data just doesn't make sense given the ridiculous recent change to the minimum wage law. It is obvious that Big Ben wants to cut, but he isn't getting a lot of support from the numbers as of late - which is good on net balance but bad for those who are suffering. In the end, I don't think he's going to want to disenfranchise all those lower middle class and poor people (oh hell, and even a lot of middle of the road middle class types) that will be sleeping in the streets if he doesn't cut. Yeah, it will be for the greater good if he holds or raises rates, but it'll probably prove too difficult to take the short term pain.

Sooo... after the cut, I think we'll see some resurgence in housing - nothing dramatic, but maybe many markets will start getting back into the black. I can tell you, as long as the gov't doesn't try to put any controls in real estate, we'll be back on track from normal growth in one or two years. That is my prediction, we'll see how I feel after May.

 

[Ski_Banker]

I should've added another option to the poll: A slow, steady, multiyear decline.

FACT: Nothing happens quickly in the real estate market.
FACT: The vast majority of NEW homeowners & speculators in the last few years (the ones that are capable of driving prices up) have less than 10% equity and low net worths.
FACT: People will not sell, unless in foreclosure, at a value below their equity. The will just sit on the property, hoping or "waiting it out." Why do you think liquidity has dried up? There are lots of buyers -- just look at the interest in RE on Prime.

These highly appreciated investment properties will change hands several times - each time the seller losing no more than his 10% equity. This process will take years, see FACT #1.

Honda would have sold many more NSXs in Japan had their real estate bubble not burst in ~1988. Prices for real estate (and Japanese stocks for that matter) are a fraction of their all time highs 20 years ago. Food for thought.

 

[steveny]

I should've added another option to the poll: A slow, steady, multiyear decline.

FACT: Nothing happens quickly in the real estate market.
FACT: The vast majority of NEW homeowners & speculators in the last few years (the ones that are capable of driving prices up) have less than 10% equity and low net worths.
FACT: People will not sell, unless in foreclosure, at a value below their equity. The will just sit on the property, hoping or "waiting it out." Why do you think liquidity has dried up? There are lots of buyers -- just look at the interest in RE on Prime.

These highly appreciated investment properties will change hands several times - each time the seller losing no more than his 10% equity. This process will take years, see FACT #1.

I agree with you and here in NY as I have said there has been a slow steady rise in RE for as long as I can remember. Each year a little appreciation. If you search the phrase hot potato you will see I have been using that phrase to describe the California market and other markets like California for a few years now. I have also said the RE market is no different than the stock market of the late 90's. As well the pockets of many people who perceived themselves as day traders were cleaned out and then the day trader rules were changed, and the bankruptcy laws as well, just as the RE game will change soon to favor the banks.

I have to say kudos to all the Prime members who have made money in the past by holding and flipping. The question I have is how, how in the Heii can you buy an investment that costs you money each month? How is that an investment? How could that ever be seen as an investment? I know, you make lots of money when you sell. But for me I need to be in a place where the property will make money no matter what happens to the market.

A lot of people are getting ready to lose their asses in RE. Here that will never happen, I can never remember a place or time where rents went down and locked in mortgages lower than rents collected went up.

 

[jimmycinla]

You CAN categorize the major metropolitan residential market as a consolidated market in this case. Picking out neighborhoods and cities is the same as picking individual tech stocks in 2000/01. They're all going down.

Speculative demand from marginal buyers will only decline not due to rising interest rates, but due to the coming monsoon of residential real estate regulation. 'Bout damn time, frankly.

(search my old posts from 12-15 months ago re: real estate )

Yea, pretty much anyone with any common sense could have predicted this slowdown 12-15 months ago and also the beginning of the regulation because 12-15 months ago is when the sub prime lenders starting having issues. Good link >> http://www.ml-implode.com/


-j-

 

[redshift]

Yea, pretty much anyone with any common sense could have predicted this slowdown 12-15 months ago and also the beginning of the regulation because 12-15 months ago is when the sub prime lenders starting having issues. Good link >> http://www.ml-implode.com/


-j-

I don't think anybody with common sense can predict the future. Sure, we all knew it was coming, but we didn't know exactly when. People with foresight that precise are billionaires because they can time markets perfectly and thus the economy. It is just way too naive to call it "common sense" in hindsight.

What we did know was that the growth rate of that small slice of time was being priced-in as the long term growth of the industry. People were even paying a high premium for that growth (as much as double). Common sense told us that the growth could not be sustained as it would require too much pullback from other domestic industries. Couple that with the problems that sub-prime was having and it could be concluded that the bull would only romp as long as sentiment stayed up - and sentiment is easy to break. So we knew it was coming, just as we know economies will continue to perpetually recede and boom, but we didn't know when the catalyst would come along to break the bull's back.

 

[jimmycinla]

I don't think anybody with common sense can predict the future. Sure, we all knew it was coming, but we didn't know exactly when. People with foresight that precise are billionaires because they can time markets perfectly and thus the economy. It is just way too naive to call it "common sense" in hindsight.
.

Agreed, "common sense" was probably the wrong "term" for the situation.

-j-

 

[Ryanmcd2]

Read this over and over and over again.... From Steve and Ski, you guys hit the nail on the head


FACT: The vast majority of NEW homeowners & speculators in the last few years (the ones that are capable of driving prices up) have less than 10% equity and low net worths.

I have also said the RE market is no different than the stock market of the late 90's

 

[Stick-e-rice]

I think it is hard to come to conclusion for the market as a whole. Real estate prices around my restaurant has continuously gone up an average of 7-9% every year because of all of the big developments around the University area.

I just purchased a house around here and I had 2 other people that were behind me with higher offers. I paid the asking price, and I was first to put in an offer and had to agree to their counter which was the original asking price. I was trying to purchase another town home before, but lost it to another buyer.

My old house I am moving out of however hasn't gone up in value at all. I'll be lucky to get what I purchased it for plus the improvements I have made to the house.