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

[LeeH]

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?

[asphaltgambler]

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

[mikester]

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.

[RickM]

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

[LeeH]

Here's the house of which I speak:

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

[Staylo]

Originally posted by LeeH
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).

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

[RickM]

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

[jmz]

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.

[motion]

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.

[Porsche-O-Phile]

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.

[RickM]

Originally posted by Porsche-O-Phile
When this market crashes (and it will) it's going to drag the rest of the economy down with it.

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.

[jmz]

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.

[indigowhale]

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)

[widebody911]

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?

[gaijindabe]

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..

[einreb]

Originally posted by asphaltgambler
"Invest in land....they ain't making any more of it"

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.

[LeeH]

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...

[Joeaksa]

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

[vash]

Originally posted by asphaltgambler
"Invest in land....they ain't making any more of it"

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

[B D]

Originally posted by vash
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.