Going Up! Real estate prices - where does it end... does it matter?
 

The price of houses in our area just keep going up. A neighbor listed her house last week for $350K. If I recall, she paid $230K or so two years ago. Multiple buyers started bidding and it was put under contract that day for $370K (3br 2ba, 2000 sq ft., hillside lot, pool).

Other than pumping up our daughter's inheritance it seems like this paper wealth just doesn't matter unless we move to a quieter housing market. We're not moving anytime soon, so is there anything to get excited about? Californians?

"Invest in land....they ain't making any more of it"

Apparently they are working on connection Pheonix to Tuscon. My Mother-in-law lives out there and that's what she says...

Apparently a lot of CA residents moved to AZ to get away from high home prices - seems like they took them with.

Shoot, $350 is a bargain for a condo around here. CA isn't the only place with out-of-sight prices.

Here's the house of which I speak:

http://www.amysellsaz.com/Phoenix/Arizona/Homes/501-AhwatukeePhoenix/Foothills/Agent/Listing_193976.html

Re: Going Up! Real estate prices - where does it end... does it matter?
 

Sounds good to me.
I'm looking at having to pay that x2.25 for the same (less pool).
:mad: (I'd really love a pool....)
On the bright side, CA just joined the mega millions! :D

Wow, that's a beautiful house for $350k. But even better for $230.

Houston is the same way. I have been in the housing market recently. I noticed houses that were 350K 7 yrs ago when I bought mine b/c I couldn't spend 350K are now 650-750K. My house has gained about 150K in the same time.

Lee - My advice: Take some money out of your home and buy an investment home or two in Phoenix. Sell it in a year or so when the market cools and pocket the hundred Gs. Homes over on the west-side can be had for $200k new. They should be worth $300k in another year.

Housing prices are ridiculously overvalued right now. When this market crashes (and it will) it's going to drag the rest of the economy down with it. It reminds me a LOT of the dot-com boom of the 90s. Those that play it smart and know when to cash out will do fine - others will lose their shirts. I bet in 3-4 years there are a TON of people in places they owe LOTS of money on, far more than the market value, and have virtually zero equity since they've been paying only interest or against the over value.

I saw a piece of **** one story, two bedroom house in Burbank (a total hole) last week for over $600K. Ridiculous.

If anything, I'll get a condo, but I'm not planning on moving for quite some time if I do. Even so, you're lucky to find one for under $350K.

I agree that prices are very high but how long have we been hearing about a crash. I think it will cool down and level off but I doubt it will crash.

The earlier you get into the market the better. Even if on the high end of a cycle you will eventually recover and profit. Better to be in this situation if you're there long term...obviously.

Two years ago many were saying that $230K was high and the market would dump...now look where it's at.

I worry too about a bubble bursting. If rates go up too much it could happen. However, there are unique situations. With traffic becoming more and more of a problem in big cities the desirable, finite amount of houses close in or in other desirable areas is just that finite. Thus, supply an demand come into play.

People complain about the economy but the truth amongst myself an my other mid 30s friends is that incomes are generally very high allowing the crazy prices of homes to be supported.

How about a starter single family home in Fairfax County, nothing fancy, just average stuff about 30 years old. A bargain at----ready for this?-------------

$625,000.00 (plus about $5,500 / year in tax)

http://forums.pelicanparts.com/uploa...1108153650.jpg

Here's a question - since the last post mentioned $5500/year in taxes:

What happens to the tax base when the 'correction' comes, be it a crash or a jolt. The state/county has been getting this property tax windfall due to exaggerated home values; it's a given that government spending increases to absorb all available revenue (and then some). So when these houses start selling for less, how will they cope?

They will cope by not recognising the lower market values, then folks will sue to lower their own individual tax bill, then the rates will go up.

Nobody has bothered to learn the lessons of the original suburbia - Long Island, NY

We are making the same mistakes all over the country. You can run, you just cant hide..

Everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 25% yearly price increase.

Renters, and anybody born in a future generation, will not be able to afford a $5,000,000 starter home in 15 years. They will live in tent cities, and hondas.

This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.

Richard - your plan sounds good, but I just read that 1 out of every 4 home sales in Phoenix is to an investor. That' a scary number.

Our house is similar to the $370K house except we have a three car garage where hers is a two car garage.

It's funny (well sort of), but my business used to do work for builders that were out of my price range in Atlanta. We could buy some seriously nice houses in Atlanta now.

This one is in the same zip code where we lived in Atlanta, is "only" $340,000 in a neighborhood of 1/2 to 2 acre lots, full basement...

http://forums.pelicanparts.com/uploa...1108162614.jpg

Lee,

You have been to my house. The one behind it is 400 sq feet smaller but otherwise about the same. They are getting ready to list it for $300k and are already getting calls from the realtor from people ready to buy for another $20-30k.

We just had one sell in this area for $390k or so. It listed for $355k and was bid up from there...

Glad I own a house in this area. Next one I get will be in the mountains and with a 4 car garage...

JoeA

wait a second, i think the volcano in hawaii is still "making" new land.

Yes, but very slowly I was just there a month ago. Also in another 50,000 years a new island will form but the Japanese already bought it.



http://forums.pelicanparts.com/uploa...1108165498.jpg

Richard, you've done your homework and bought in that area. I've read that new home builders are really putting the clamps on out-of-state investors. What areas (over on the west-side) are you talking about? What builders are the most favored? Internet presence?

Thanks.

In my development there are 11 houses for sale out of 172....2100 sq just closed for 400K....just dirt for the backyard....one across the stret just like it is for sale at 450K....3000 sq fters are 525K to 600 + K with furniture....3700 sq is 605K to 649K which for the most part are reduced in price...the holidays are not a good time to be selling and the latest one put up for sale is 4000 sq with 1/2 acre and pool and gorgeous bkyd...(backs a 4 lane street) 800K....which is 50K more than the last one of the same size sold for last summer.

All the builders new home projects in my area say from the low 600's for 3000 sq plus homes....

I drove through a new home development and was astonished by the number of new homes that are vacant with for sale signs..that means investors rather than home owners....

On the other side of the coin....a large tract of land near me was just auctioned off by the BLM for 298K an acre undeveloped...with infrastructure it comes to about 600K an acre....which is up for a tract of land in Henderson that was sold last spring for 289K an acre...so prices have stabilized and show that the LV market is still viable at these price levels..

David,

Yep, its really impossible to buy now as a pure investor. That goes not only for Phoenix, but also California and Utah as well. Builders simply will not sell to investors any more. In Phoenix, DR Horton is the only investor-firendly builder left, and they are getting a mandatory $20k "lot premium" for all investor purchases. To buy one, you need to buy it as your "second home". You can probably get away with buying a couple this way, but that's it. The good old days for investors are over.

I bought mine in Litchfield Park.

Tabs - I hate to say this.... but I think the gig is up in LV. I saw this coming a long time ago.. and I really don't even know what the hell I'm doing. It will happen in Phoenix also, in about a year or so.

I talked with Mother today, she said it usually take 5 rate hikes to effect the mortgage market..we've had 4 so far.....HOme prices are undoubtly leveling off..yet the home market analysts think we are at the begining of a bubble not the end of one, with certain geographical areas in CA being overpriced....Chico, Stockton, Santa Barbara being the 3 that I can remember...simply because it wasn't what one would expect... They expect LV to remain viable....

I have become very conscience of how money flows over the past few years....one class of assets will do very well while another languishes in the doldrums.....when that one area becomes overpriced money will come out of that area and seek a place that is considered to be undervalued....lately I have noticed that the financial gurus are talking about a bounce in the stock market by as much as 40%....where is that smiling face thingy when you need it....

There are NO More easy picken in LV, the market has matured...aka it has become expensive...yet like CA will it crash and burn? I came just in time to make some money....remember if LV crashes so will CA.....

And DR Horton is the Builder my Construction Defect Attorney says is the worst builder he has to deal with....they had 6 attorneys on a case against him and lost, it was the largest singlefamily home award in NV at 280K....part of the deal was they had to buy the family a new home....

My Builder...Rhodes Homes has the reputation of being a drug addict scum bag...who btw contributed money to Dem Sen Harry Reids (Senate Minority Leader) political campaign illegally...low level Rhodes emplyees donating money when they don't even have a history of voting....also I believe I read in the Newspaper that Rhodes was the contractor that built his home in Search LIght, NV...Hmmmmm

To be fair and balanced Jim Rhodes is registered as a Repblican...but seems to donate money to Dem political canidates that help him with his land deals...

Ummm, is that property held for investment or speculation?

U better plan on it being an investment....anything else down't make sense especially at this stage in the market cycle...

Long term is always best, Jurgen. But I think there's still large money to be made in Phoenix speculating. Geez, I can't believe I just said that. Its worked for an idiot like me, so I don't see why it can't work for others. The party won't last forever, but why not get in while things are still hot? I believe that Phoenix/Tucson are still undervalued (at least compared to LV).

I just got back from the mailbox. An agent sent out a card bragging about selling a house up the street from us for $348K in one day. I used to have a real estate license and it seems to me that if your listings sell in one day, you probably left some cash on the table.

As long as you realize the risks, run with it. It's crazy how some guys can make $20-200k without lifting a finger, but the reward matches the risk.

Carry on! SmileWavy

Yep thats how the ole Trust Fund works..... Mother just says stay the fk away and leave me alone....that if she let me run things I'd just muck them up.....So all I do is drink, gamble and buffet all day everyday.....not bad work if you can get it I say....

Stupid question, but how the hell are people affording the down payments on these places nowadays? All I have for "real" money is a 401K - and a crapload of student loan debt.

Starts out small. Family A wants to sell their starter home. Family B gets a 103% mortgage despite the fact they have a credit score of only 550. Family B buys the starter home. Family A takes the equity from their old home and uses it as a down payment on a larger home. This effect works up the food chain.

Relaxed lending rules and low mortgage rates are the primary cause for this gold rush. More buyers are fighting for the properties. It is classic supply and demand.
Jürgen

If you're FICO is high enough, who needs a down? If your scores are high enough you don't even need to prove your income or assets.

I'm not joking. My buddy who makes $2400 /mo on paper just got approved for a -0- down loan for $205K which puts the stroke over 50% of his earnings. We just had to state an appropiate (inflated to qualify) monthly income on the loan. NO proof necessary. He hustles side jobs for extra money and also moved in a friend who pays rent to help him. I'm closing a deal in HI where the borrower has a $9.00 / hr job + tips she doesn't claim and she's $193K into her $450K house and the payment legitimately 100% of her pretax earnings - and she's bought at 5.25% on a 5/1 ARM - stated income, stated assets.

If it wasn't for their FICO scores both of these deals would've been dead.

Other programs are doing that as well as allowing interest only payments and the qualification ratios are based on those artifically low payments. Also, up to 50% of Pretax debt for the house payment is OK - 55% with some lenders.

rjp

i think the new comers are taking out TWO loans. a regular one at a nice decent interest rate. then a second at a higher rate, but a smaller loan, just to cover the 20% down. that way you dont have to buy that extra mortgage insurance. then when the house appreciates, you refi, and lump both loans together. voila! at least that is what i think. me? i bought a small turd of a house that i cleaned and fixed up. still beotching about the one car garage tho. it took bascially all my life for me to save the 20% down. i still hug my tyranical mother for making me save since birth.

cliff

One of my neighbors has a Interest Only loan.....

Interest only loans..batting on massive increases in value. A gamble I, in LV, would not be willing to take. These are only for the truly ignorant OR for those with extremely high risk tolerance.

Then again, I am a very conservative investor.

My neighbor has nearly doubled the value of his home since he moved in....August 2003....actually so have I....these dam trailers just seem to keep going up in value....

Money I too was a conservative investor...till I met Mother...she has a penchant for using money to highest and best use....now ohhh my Gawd.....