31% of U.S. housing market "extremely overvalued": new study - Tilted Forum Project Discussion Community

raveneye · 08-18-2005, 04:31 AM

http://www.usatoday.com/money/perfi/...valuations.htm

My guess is that these markets have been "extremely overvalued" for at least a couple years in most cases, some like Miami going on 5 years.

We're considering selling and moving to a lower market area, and waiting for prices to drop to move again to another high market area like Portland or Seattle.

Anyone else considering this?

maleficent · 08-18-2005, 04:58 AM

I wish I could..

I know where I am currently living, in North Jersey, about 20 minutes from NYC, in a very blue collar area, with a pretty weak public education system (There is a waiting list for the parochial high school the public school is so bad) 3 bedroom houses, on property so small that it can't be defined in acreage, it'd be rare to have a driveway, houses start at 350K for one that owuld need a lot of work.

I make a decent salary, but I swear i don't understand how people who i know make less than i do, can afford these houses - -unless they are mortgaged to their eyeballs...

Where I'm moving to, the housing market is just as bad...

StanT · 08-18-2005, 05:28 AM

No, buying a house is somehing I hope to never do again.

My house is a fairly modest log home on a not so modest lot. It was over priced when I bought it and has gone through the roof in the last six years. As the housing market skyrockets, the perimeter of what is considered a "reasonable" commute expands. My home is on the edge of this perimeter and the property values have been extremely volatile.

I never want to move again, I never want to go through the home buying/selling process again. My wife and I plan on moving out of this house horizontally.

raeanna74 · 08-18-2005, 05:50 AM

Hubby and I just purchased a home in the town where I grew up. Hubby works in another town nearby - about 25 min drive to work. We did not choose that town and tolerate the commute because that town is higher priced and less safe. Our town is relatively safe - meaning - my parents have never locked their doors and have never had trouble. Our neighbors are mostly two parent homes. The schools are not good in their quality of education but not terrible and this is coming from an educator that has volunteered in those schools as well as attended them as a student. There are several parochial schools as well as a Montessori school only 20 min away. Our house was purchased for 47k. It is a 4 bedroom with a separate formal dining room on a 1/4 acre. It is only blocks from a firestation and one block from a park and swimming hole. Merrill, Wisconsin is an inexpensive place to live. The work market in town is not GREAT but Wausau nearby offers a LOT of employment opportunities with only a 20-40min drive depending on where in the Wausau area you work. That drive is highway driving mostly with very RARELY any slow traffic (usually only if there's a large wreck or something). I think our location is perfect. The price of housing is rising in the area but not terribly fast.

maleficent · 08-18-2005, 06:36 AM

Quote:

Originally Posted by raeanna74

Our house was purchased for 47k..

I'm moving to Wisconsin...

47K wouldn't get you a cardboard box in a druginfested neighborhood in downtown Newark...

That's amazing that property can be purchased so inexpensively...

RogueHunter65 · 08-18-2005, 07:47 AM

Housing is going up like crazy on the cape. The house next door to me sold for 125k around 7-8 years ago, now its worth 375k.

I think it would be a good idea to sell and wait for the prices to crash. But, in my case, there is only so much space in Mass. so I think housing will never go down. They can only build so many houses. Maybe if the demand changed the prices would go down.

raeanna74 · 08-18-2005, 08:38 AM

Just a block away I'll even show you are large 4 bedroom home with two bathrooms, one car garage, and all the appliances. The large bedroom upstairs is 24'x30' or so with a vaulted ceiling.(I'd love to turn it into a dance/entertainment room and put a bar in there). There are crystal chandeliers and ceiling fans, white kitchen, and it has been so totally renovated that it's basically all new. Even the plumbing, windows, siding, and furnace are new. It's being offered for something around 100k. It's on about 1/3 acre. The most amazing thing is that it's STILL overpriced for our area - people can buy housing for about the same payments as we'd pay for rent.

Hey if you move up here I'll even introduce you to two of my neighbors who are TFPrs.

raveneye · 08-18-2005, 08:54 AM

Quote:

Originally Posted by raeanna74

Just a block away I'll even show you are large 4 bedroom home with two bathrooms, one car garage, and all the appliances.
....
It's being offered for something around 100k. It's on about 1/3 acre. The most amazing thing is that it's STILL overpriced for our area - people can buy housing for about the same payments as we'd pay for rent.

Unbelievable....when I saw that $47K I thought it must be a typo, she must have meant $470K. Any number of people would pay 10x what you paid in cash for that house here in Miami.

So we could sell our stratospherically overpriced house, and buy two or three very nice places in Merrill for cash and still have money left over, or we could sit here and pay a mortgage every month....

Merrill looks like a cozy little town, if you could survive the climate. A place on the river might be very nice.

http://maps.google.com/maps?q=merril...7811&t=h&hl=en

maleficent · 08-18-2005, 09:10 AM

Quote:

Originally Posted by roguehunter65

Housing is going up like crazy on the cape. The house next door to me sold for 125k around 7-8 years ago, now its worth 375k.

I think it would be a good idea to sell and wait for the prices to crash. But, in my case, there is only so much space in Mass. so I think housing will never go down. They can only build so many houses. Maybe if the demand changed the prices would go down.

NJ is the same problem - -I think latest census records showed it to be the third most populous state, and no where near third in size... There is no place l eft for them to build houses... so prices are at a premium.

In my parents area... people are buying houses at 500K plus - basically for the property - -in most cases - these houses they are buying are older - and being ripped down to the foundation and rebuilt... it's absolutely insane... I had been looking for an affordable house in North Jersey for over 2 years (and by affordable I was going for under 300K without having to do a lot of work) it was unfindable...

raeanna74 · 08-18-2005, 01:03 PM

Quote:

Originally Posted by raveneye

Unbelievable....when I saw that $47K I thought it must be a typo, she must have meant $470K. Any number of people would pay 10x what you paid in cash for that house here in Miami.

So we could sell our stratospherically overpriced house, and buy two or three very nice places in Merrill for cash and still have money left over, or we could sit here and pay a mortgage every month....

Merrill looks like a cozy little town, if you could survive the climate. A place on the river might be very nice.

http://maps.google.com/maps?q=merril...7811&t=h&hl=en

Yup you could do that. You could even rent out two of them for about $6-700/mo as well. Taxes for our 1/4 acre were about $1200 last year so you'd be able to pay the taxes on them in only two months rent.

I love this town. I've lived here since about 1983. As for living on the river - you're never far away. We're only a block away (in fact we're right in the middle of that one big upper loop on the west side of the map). I can leisurely ride my bicycle from one end of town to the other in only 45 minutes. We have 2 grocery stores and a Walmart. Plus MANY small private stores all over town.

If you look at this thread you can see what kind of house sells for under 70k. In fact that's OURS.

As for the climate - So long as you don't mind snow you'll be fine. Up here even grownups get a few snow days each winter. Who wouldn't want that?

Grasshopper Green · 08-18-2005, 03:52 PM

That house would go for at least 150K here...and that would be in the scary part of town to boot. On the east side (nicer side of town), it would be 200K+. Housing here is ridiculous..and it's nothing compared to other areas of the country. Hubby finally got it through his thick skull today that we wouldn't be buying our first house in the city; the tiny, old brick house next to our apartment complex is going for 300K. And he wonders why I keep mentioning moving to the "burbs"

dogzilla · 08-18-2005, 03:55 PM

I was surprised to see the city next to where I live listed as a metropolitan area, let alone on the overvalued property list. Real estate values in the Hudson valley have been steadily climbing the last few years as people move out of the NYC area.

It's kind of nice for my property to be building equity, which hopefully it will hold if the market cools off. My wife and I aren't moving though. We have a nice home which has been paid for for a number of years.

Now if only the NYC peeps would stay in NYC, it wouldn't be getting so crowded here.

maleficent · 08-18-2005, 04:06 PM

Came across this site: http://www.relocateamerica.com/ - -my area, it's not overly accurate because housing costs they take into consideration lots and commercial property, but other areas it's pretty accurate.. .Kinda interesting to fantasize about where you want to move to..

ngdawg · 08-18-2005, 10:17 PM

I live in the oldest section of our town. Across the street are two warehouses seperated by a plot of treed land-fenced in. My block was originally owned by a family and we live in their first house, built about 1915.
Two houses up from us, directly across from the first warehouse, a house built about 1930 is on the market for $284,900. It has 3 bedrooms, no AC, a fireplace and a 2 car garage. We have no sidewalks and most of the houses are less than 20ft off the street edge-ours is about 10 feet off. Taxes run over 4 grand a year, most plots are 50x100ft and ours are the cheapest taxes in town.
I hate it here.....it's congested, it's noisy with everyone on top of each other, we can't afford to live here and can't afford to move because if we were to get even $250,000 for this shithole, we couldn't afford anything remotely better. We bought this house 20 years ago for $95,000 and my family thought we were out or our minds paying that.

NoSoup · 08-18-2005, 11:42 PM

It says that Green Bay may be overvalued by 6%...

I feel pretty comfortable, though - I negotiated like a beast when I bought my house. The sellers were in quite a pinch when they were trying to sell it, and I actually picked it up for less than the fair market value.

Too bad my taxes are still ridiculously high - nearly $7000.00 / year...

Catdaddy33 · 08-22-2005, 03:25 AM

I live in an under-valued city (Nashville), I'm surprised that we're undervalued. We built a home last year and the same style of home we built went up 3 times before they finished ours, and prices continue to rise...

Rodney · 08-27-2005, 07:25 AM

I live on the California coast and yes, I'd say that housing is 'way overvalued. My backfence neighbor just put her 2 BR, 1000 square foot home on the market for near $700K. She bought it for $180K five years ago and probably sunk about $100K into improvements plus a lot of her own work; it _is_ a cool house. But I suspect that for a lot of you, even the $180K for a 1000 square foot house would be considered obscene even now. A nothing-special 30-year-old 3-br ranch house here has gone up from the low 400s to the low 700s in five years.

See, we're just over the hill from San Jose in a resort community, and the easy money from the dotcom boom ran up prices in the late '90s. And just as prices started to fall, the low interest rates arrived, fueling speculation again. And a lot of Silicon Valley types switched their investments from stock to real estate.

We own our house outright, and could make a killing if we sold and moved. But we're rooted here; we'd have to move 150 miles or more to find houses that aren't overvalued by some standard. There are cheap houses in new developments out on the hinterlands of the SF Bay Area, but one of the reasons they're cheaper is because they're a 50-mile commute to where most of the jobs are. And most of the buyers are commuting those distances. If commuting costs rise, the desirability of those houses will fall.

It's all mucked up. Our house currently would sell for perhaps four times as much as we paid 15 years ago. If the market price drops by half, we're still all right, and still living in a community that is very desirable and will continue to be even in hard times (we're a beach town with a big public university). Easy come, easy go.

On the other hand, we know a couple nearing retirement age who need to sell their very desirable house to fund their retirement years, pay for medical care, and so forth. They're selling their house right now and moving directly to Portland. Even though Portland is overvalued, it isn't anywhere near as overvalued as our area. And they'll trade down from their large house to a nice condo in a good neighborhood. So they should still clear a good chunk of change on the deal after all the properties have been sold and bought.

raveneye · 08-27-2005, 08:00 AM

Quote:

Originally Posted by Rodney

On the other hand, we know a couple nearing retirement age who need to sell their very desirable house to fund their retirement years, pay for medical care, and so forth. They're selling their house right now and moving directly to Portland. Even though Portland is overvalued, it isn't anywhere near as overvalued as our area. And they'll trade down from their large house to a nice condo in a good neighborhood. So they should still clear a good chunk of change on the deal after all the properties have been sold and bought.

That's exactly what's driving up the prices in Portland -- that and pure speculation from California. People are buying and selling 6 months later, all over western Oregon and Washington.

Quote:

the easy money from the dotcom boom ran up prices in the late '90s. And just as prices started to fall, the low interest rates arrived, fueling speculation again. And a lot of Silicon Valley types switched their investments from stock to real estate.

That makes a lot of sense . . . and it implies that as the interest rates inevitably start to rise, the prices will fall there and everywhere else that is dependent on those California prices and speculation. Some markets will stay stable for sure, but southern California I think is at the top of the heap, and I think they will be the first to feel the bubble.

We're actually thinking seriously about moving to Croatia (from Miami) right now -- we have family in Zadar and Berlin, and could set ourselves up very nicely near the Adriatic; possibly also keep an apartment in the states, probably Portland, so that we can come back if necessary. But Croatia is at the beginning of a boom right now, very safe, and beautiful, and cheap, because still not part of the EU.

Rodney · 08-27-2005, 02:43 PM

Quote:

Originally Posted by raveneye

That makes a lot of sense . . . and it implies that as the interest rates inevitably start to rise, the prices will fall there and everywhere else that is dependent on those California prices and speculation. Some markets will stay stable for sure, but southern California I think is at the top of the heap, and I think they will be the first to feel the bubble.

Yeah. Saw a report on the real estate boom on PBS last night; it's getting to the point where most people buying in the "hot" areas are coming in with five-year interest-only loans which configure as regular loans (sounded like mostly with variable interest rates). Some people do it because it's the only way they can get into the market, and they think it's their last chance. Others do it to buy as much house as they possibly can, because they think that'll bring 'em more money when they "trade up" in a few years.

Such strategies presupposes continued low interest rates for years, and I think that this is a very shaky assumption. I do know that, privately, real estate agents in my area are urging older homeowners to _sell now_ to get the most out of their house before the market turns, at the same time that they tell younger buyers to _buy now_ to get into the market before it moves out of reach forever. Nice guys, I tell ya. But their job is to move houses, and that they do. One of my neighbors is a financial advisor for well-heeled Silicon Valley types, and she tells me that most of them still have a blind faith in real estate as the ultimate safe investment because "you never lose money." And that's really not true.

At any rate, a lot of very expensive houses have just come on the market in the past month around here; there are "for sale" signs all over, where several months ago hardly anything was for sale. And in my neighborhood, several of these are homes that were just bought in the last five years or so, and then remodeled. The smart money -- which is to say, people who already have money and property and/or have speculated -- are cashing in on the housing boom and getting out before it goes bust. Someone else will be left holding the bag.

Quote:

We're actually thinking seriously about moving to Croatia (from Miami) right now -- we have family in Zadar and Berlin, and could set ourselves up very nicely near the Adriatic; possibly also keep an apartment in the states, probably Portland, so that we can come back if necessary. But Croatia is at the beginning of a boom right now, very safe, and beautiful, and cheap, because still not part of the EU.

Well, that's sure taking yourself out of the equation. Are you going to move your money into euros while you're there? Could be wise.

sashime76 · 09-02-2005, 11:36 AM

We sold a home in San Diego in the Fall of 2000. Bought a newly built home just outside of suburb and we had a 30 yr mortgage or $280K loan at 6.5%. We didn't get to stay long (8 months after moving in) before my wife got a relo offer to move to Indy.

We were flown in to Indy twice, first to tour around the city, second, house hunting. We gained just over $70G for selling our home in S. Cal. Since it was a relocation, the gain wasn't taxed. On top of that, all realtor fees were paid for by my wife's company. Plus the incentive of 3% of the selling price since we sold it instead of the company acquiring it. All our new home doc fees were also paid for.

Now we have a 15 yr loan @ 5.65% with a loan amount of $60G. I think we saved well over half a mil moving from San Diego to Indy. Granted, the weather can't be beat in S. Cal. We could make a lot of trips visiting friends and families in the years to come from the mortgage we will have saved.

Lebell · 09-02-2005, 07:38 PM

My ex and I sold our house in Denver in December 2001.

After paying off our mortgage and splitting the proceeds, I lived on my share for 3 years while I went to a rather pricey private University.

Now I couldn't afford to live in my old neighborhood.

Rodney · 09-02-2005, 09:30 PM

Just read an article about how the price of housing has gone up by over 100 percent in four years in Bakersfield, CA. Anybody who lives on the coast knows there ain't nothing happening in Bakersfield -- not much in the way of jobs, terrible heat, ugly surroundings. It's not even _near_ anything good, and there's plenty of empty (and ugly) land nearby. So why has the average price of a decent tract house gone up from $160K in 2000 to $375K today?

Answer: there is no good reason. Just speculation, greed, and (temporarily) low interest rates that encourage speculation.

intecel · 09-04-2005, 10:34 AM

Here in Orlando, you can't find a house for under $230k. I bought my house in March 2004 for $140k, and it is valued at $240k just 1 1/2 years later...

(that is, if you can even find a house in Orlando for sale)

raveneye · 09-06-2005, 07:06 AM

I know a couple mortgage brokers here in Miami, and they tell me that absolutely nobody in the business thinks this is a bubble. They all think the prices are here to stay forever, and still going up. I was at a party last night where a broker friend said: "How can the prices in south Florida be too high, when you can't get a house in San Francisco for under $600K? It's cheap here!"

It's starting to happen in Europe too, in Zagreb Croatia prices are about the same as in Miami right now, and going up fast.

aswo · 09-06-2005, 03:08 PM

Its only a bubble if people stop being able to afford the homes they continue to purchase which is about to happen, i am in the mortgage business and in all honesty 95% of the loans i do for people in a year or two they wil not be able to afford it

08-18-2005, 04:31 AM	#1 (permalink)
raveneye Born Against	31% of U.S. housing market "extremely overvalued": new study http://www.usatoday.com/money/perfi/...valuations.htm My guess is that these markets have been "extremely overvalued" for at least a couple years in most cases, some like Miami going on 5 years. We're considering selling and moving to a lower market area, and waiting for prices to drop to move again to another high market area like Portland or Seattle. Anyone else considering this?

08-18-2005, 04:58 AM	#2 (permalink)
maleficent Junkie Moderator Emeritus Location: Chicago	I wish I could.. I know where I am currently living, in North Jersey, about 20 minutes from NYC, in a very blue collar area, with a pretty weak public education system (There is a waiting list for the parochial high school the public school is so bad) 3 bedroom houses, on property so small that it can't be defined in acreage, it'd be rare to have a driveway, houses start at 350K for one that owuld need a lot of work. I make a decent salary, but I swear i don't understand how people who i know make less than i do, can afford these houses - -unless they are mortgaged to their eyeballs... Where I'm moving to, the housing market is just as bad... __________________ Free your heart from hatred. Free your mind from worries. Live simply. Give more. Expect less.

08-18-2005, 05:50 AM	#4 (permalink)
raeanna74 I'm not a blonde! I'm knot! I'm knot! I'm knot! Location: Upper Michigan	Hubby and I just purchased a home in the town where I grew up. Hubby works in another town nearby - about 25 min drive to work. We did not choose that town and tolerate the commute because that town is higher priced and less safe. Our town is relatively safe - meaning - my parents have never locked their doors and have never had trouble. Our neighbors are mostly two parent homes. The schools are not good in their quality of education but not terrible and this is coming from an educator that has volunteered in those schools as well as attended them as a student. There are several parochial schools as well as a Montessori school only 20 min away. Our house was purchased for 47k. It is a 4 bedroom with a separate formal dining room on a 1/4 acre. It is only blocks from a firestation and one block from a park and swimming hole. Merrill, Wisconsin is an inexpensive place to live. The work market in town is not GREAT but Wausau nearby offers a LOT of employment opportunities with only a 20-40min drive depending on where in the Wausau area you work. That drive is highway driving mostly with very RARELY any slow traffic (usually only if there's a large wreck or something). I think our location is perfect. The price of housing is rising in the area but not terribly fast. __________________ "Always learn the rules so that you can break them properly." Dalai Lama My Karma just ran over your Dogma.

08-18-2005, 07:47 AM	#6 (permalink)
RogueHunter65 Insane Location: Boston, MA	Housing is going up like crazy on the cape. The house next door to me sold for 125k around 7-8 years ago, now its worth 375k. I think it would be a good idea to sell and wait for the prices to crash. But, in my case, there is only so much space in Mass. so I think housing will never go down. They can only build so many houses. Maybe if the demand changed the prices would go down. __________________ I suffer from amnesia and deja vu at the same time... I think I have forgotten this before

08-18-2005, 08:38 AM	#7 (permalink)
raeanna74 I'm not a blonde! I'm knot! I'm knot! I'm knot! Location: Upper Michigan	Just a block away I'll even show you are large 4 bedroom home with two bathrooms, one car garage, and all the appliances. The large bedroom upstairs is 24'x30' or so with a vaulted ceiling.(I'd love to turn it into a dance/entertainment room and put a bar in there). There are crystal chandeliers and ceiling fans, white kitchen, and it has been so totally renovated that it's basically all new. Even the plumbing, windows, siding, and furnace are new. It's being offered for something around 100k. It's on about 1/3 acre. The most amazing thing is that it's STILL overpriced for our area - people can buy housing for about the same payments as we'd pay for rent. Hey if you move up here I'll even introduce you to two of my neighbors who are TFPrs. __________________ "Always learn the rules so that you can break them properly." Dalai Lama My Karma just ran over your Dogma.

08-18-2005, 05:28 AM	#3 (permalink)
StanT © Location: Colorado	No, buying a house is somehing I hope to never do again. My house is a fairly modest log home on a not so modest lot. It was over priced when I bought it and has gone through the roof in the last six years. As the housing market skyrockets, the perimeter of what is considered a "reasonable" commute expands. My home is on the edge of this perimeter and the property values have been extremely volatile. I never want to move again, I never want to go through the home buying/selling process again. My wife and I plan on moving out of this house horizontally.

08-18-2005, 03:52 PM	#11 (permalink)
Grasshopper Green ...is a comical chap Location: Where morons reign supreme	That house would go for at least 150K here...and that would be in the scary part of town to boot. On the east side (nicer side of town), it would be 200K+. Housing here is ridiculous..and it's nothing compared to other areas of the country. Hubby finally got it through his thick skull today that we wouldn't be buying our first house in the city; the tiny, old brick house next to our apartment complex is going for 300K. And he wonders why I keep mentioning moving to the "burbs" __________________ "They say that patriotism is the last refuge to which a scoundrel clings; steal a little and they throw you in jail, steal a lot and they make you king" Formerly Medusa

08-18-2005, 03:55 PM	#12 (permalink)
dogzilla Junkie Location: New York	I was surprised to see the city next to where I live listed as a metropolitan area, let alone on the overvalued property list. Real estate values in the Hudson valley have been steadily climbing the last few years as people move out of the NYC area. It's kind of nice for my property to be building equity, which hopefully it will hold if the market cools off. My wife and I aren't moving though. We have a nice home which has been paid for for a number of years. Now if only the NYC peeps would stay in NYC, it wouldn't be getting so crowded here.

08-18-2005, 04:06 PM	#13 (permalink)
maleficent Junkie Moderator Emeritus Location: Chicago	Came across this site: http://www.relocateamerica.com/ - -my area, it's not overly accurate because housing costs they take into consideration lots and commercial property, but other areas it's pretty accurate.. .Kinda interesting to fantasize about where you want to move to.. __________________ Free your heart from hatred. Free your mind from worries. Live simply. Give more. Expect less.

08-18-2005, 10:17 PM	#14 (permalink)
ngdawg peekaboo Location: on the back, bitch	I live in the oldest section of our town. Across the street are two warehouses seperated by a plot of treed land-fenced in. My block was originally owned by a family and we live in their first house, built about 1915. Two houses up from us, directly across from the first warehouse, a house built about 1930 is on the market for $284,900. It has 3 bedrooms, no AC, a fireplace and a 2 car garage. We have no sidewalks and most of the houses are less than 20ft off the street edge-ours is about 10 feet off. Taxes run over 4 grand a year, most plots are 50x100ft and ours are the cheapest taxes in town. I hate it here.....it's congested, it's noisy with everyone on top of each other, we can't afford to live here and can't afford to move because if we were to get even $250,000 for this shithole, we couldn't afford anything remotely better. We bought this house 20 years ago for $95,000 and my family thought we were out or our minds paying that. __________________ Don't blame me. I didn't vote for either of'em.

08-18-2005, 11:42 PM	#15 (permalink)
NoSoup Non-Rookie Location: Green Bay, WI	It says that Green Bay may be overvalued by 6%... I feel pretty comfortable, though - I negotiated like a beast when I bought my house. The sellers were in quite a pinch when they were trying to sell it, and I actually picked it up for less than the fair market value. Too bad my taxes are still ridiculously high - nearly $7000.00 / year... __________________ I have an aura of reliability and good judgement. Just in case you were wondering...

08-22-2005, 03:25 AM	#16 (permalink)
Catdaddy33 Psycho Location: TN	I live in an under-valued city (Nashville), I'm surprised that we're undervalued. We built a home last year and the same style of home we built went up 3 times before they finished ours, and prices continue to rise...

08-27-2005, 07:25 AM	#17 (permalink)
Rodney Observant Ruminant Location: Rich Wannabe Hippie Town	I live on the California coast and yes, I'd say that housing is 'way overvalued. My backfence neighbor just put her 2 BR, 1000 square foot home on the market for near $700K. She bought it for $180K five years ago and probably sunk about $100K into improvements plus a lot of her own work; it _is_ a cool house. But I suspect that for a lot of you, even the $180K for a 1000 square foot house would be considered obscene even now. A nothing-special 30-year-old 3-br ranch house here has gone up from the low 400s to the low 700s in five years. See, we're just over the hill from San Jose in a resort community, and the easy money from the dotcom boom ran up prices in the late '90s. And just as prices started to fall, the low interest rates arrived, fueling speculation again. And a lot of Silicon Valley types switched their investments from stock to real estate. We own our house outright, and could make a killing if we sold and moved. But we're rooted here; we'd have to move 150 miles or more to find houses that aren't overvalued by some standard. There are cheap houses in new developments out on the hinterlands of the SF Bay Area, but one of the reasons they're cheaper is because they're a 50-mile commute to where most of the jobs are. And most of the buyers are commuting those distances. If commuting costs rise, the desirability of those houses will fall. It's all mucked up. Our house currently would sell for perhaps four times as much as we paid 15 years ago. If the market price drops by half, we're still all right, and still living in a community that is very desirable and will continue to be even in hard times (we're a beach town with a big public university). Easy come, easy go. On the other hand, we know a couple nearing retirement age who need to sell their very desirable house to fund their retirement years, pay for medical care, and so forth. They're selling their house right now and moving directly to Portland. Even though Portland is overvalued, it isn't anywhere near as overvalued as our area. And they'll trade down from their large house to a nice condo in a good neighborhood. So they should still clear a good chunk of change on the deal after all the properties have been sold and bought.

09-02-2005, 11:36 AM	#20 (permalink)
sashime76 Addict Location: Hoosier State	We sold a home in San Diego in the Fall of 2000. Bought a newly built home just outside of suburb and we had a 30 yr mortgage or $280K loan at 6.5%. We didn't get to stay long (8 months after moving in) before my wife got a relo offer to move to Indy. We were flown in to Indy twice, first to tour around the city, second, house hunting. We gained just over $70G for selling our home in S. Cal. Since it was a relocation, the gain wasn't taxed. On top of that, all realtor fees were paid for by my wife's company. Plus the incentive of 3% of the selling price since we sold it instead of the company acquiring it. All our new home doc fees were also paid for. Now we have a 15 yr loan @ 5.65% with a loan amount of $60G. I think we saved well over half a mil moving from San Diego to Indy. Granted, the weather can't be beat in S. Cal. We could make a lot of trips visiting friends and families in the years to come from the mortgage we will have saved.

09-02-2005, 07:38 PM	#21 (permalink)
Lebell Cracking the Whip Location: Sexymama's arms...	My ex and I sold our house in Denver in December 2001. After paying off our mortgage and splitting the proceeds, I lived on my share for 3 years while I went to a rather pricey private University. Now I couldn't afford to live in my old neighborhood. __________________ "Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience." – C. S. Lewis The ONLY sponsors we have are YOU! Please Donate!

09-02-2005, 09:30 PM	#22 (permalink)
Rodney Observant Ruminant Location: Rich Wannabe Hippie Town	Just read an article about how the price of housing has gone up by over 100 percent in four years in Bakersfield, CA. Anybody who lives on the coast knows there ain't nothing happening in Bakersfield -- not much in the way of jobs, terrible heat, ugly surroundings. It's not even _near_ anything good, and there's plenty of empty (and ugly) land nearby. So why has the average price of a decent tract house gone up from $160K in 2000 to $375K today? Answer: there is no good reason. Just speculation, greed, and (temporarily) low interest rates that encourage speculation.

09-04-2005, 10:34 AM	#23 (permalink)
intecel Psycho	Here in Orlando, you can't find a house for under $230k. I bought my house in March 2004 for $140k, and it is valued at $240k just 1 1/2 years later... (that is, if you can even find a house in Orlando for sale)

09-06-2005, 07:06 AM	#24 (permalink)
raveneye Born Against	I know a couple mortgage brokers here in Miami, and they tell me that absolutely nobody in the business thinks this is a bubble. They all think the prices are here to stay forever, and still going up. I was at a party last night where a broker friend said: "How can the prices in south Florida be too high, when you can't get a house in San Francisco for under $600K? It's cheap here!" It's starting to happen in Europe too, in Zagreb Croatia prices are about the same as in Miami right now, and going up fast.

09-06-2005, 03:08 PM	#25 (permalink)
aswo Crazy	Its only a bubble if people stop being able to afford the homes they continue to purchase which is about to happen, i am in the mortgage business and in all honesty 95% of the loans i do for people in a year or two they wil not be able to afford it __________________ People who love people