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I can find homes that sold new in 1999 and today they arent worth much more than what they sold for in 1999. What does that tell you? .....
That sounds about right. At the macro level, average household income, adjusted for inflation, is around 1997 levels. (IMO, its probably lower than that now) It goes to follow the true value of homes would eventually fall to this level too. Homes can't be worth more than society's ability to pay for them.
I don't know that tells you, but it certainly doesn't tell me that the market started falling apart in 1999.
It also doesn't tell me that they were cheaply made(although that's probably true) or that they are falling apart.
Im not saying the market was failing 10 years ago. Im just sujesting there were definite signs of big problems ahead for folks thinking they were making solid investments. For example one new sub division had strick HMO rules that put the neighborhood on the up scale side only to have homes that were first listed for 100k end up beside HUD homes when the builder pulled out. Then the Hoa rules that people had paid extra for and wanted were abolished and in came the junker cars, boats, and cloths lines where you could leave anything on your lawn...This still happins today.
To be fair, The Palisades is not "in the middle of nowhere" with "no restaurants or retail around it" (quoting from OP). It is in a developing area and within 4 miles there is a shopping center with a SuperTarget, Home Depot, Best Buy, Old Navy, CVS, as well as several restaurants. Directly across the street is Harris Teeter, BiLo, Blockbuster, Five Guys, two nail salons, two hair places, two chinese places, a brand new Exxon station, two pizza places and Hickory Tavern. Oh, I forgot the new CMC Steele Creek just across 160 from Rivergate (the SuperTarget shopping center), not to mention dentists, insurance agents, family doctors and other offices in the different plazas.
Excellent point coastalgirl. We live basically several miles straight up Tryon from the Palisades and there is a LOT that we drive by between there and our community. In addition to all of the places you mentioned, development continues to be ongoing, with new restaurants, stores and houses continuing to crop up. The Palisades is its own, separate development that goes back a good ways off of Tryon, but its hardly in the middle of nowhere.
Its a shame to hear about some of the issues the Palisades is having. We actually drove through there several months ago and toured a few houses and we really liked that community a lot. Unfortunately, I think what is hurting that development the most is the price of the houses. All of the foreclosures makes me suspect a number of people that bought there did so by really going to the extreme top of their budget, and it came back to bite them (for any number of reasons). And with the way the market is, I think a lot more people are simply opting for less expensive houses. For example, up here in Ayrsley, new construction houses are running between $150k-$250k - granted mostly townhouses, not single family homes - but in the year or so since we've moved in, this community has continued to grow at a decent pace: new houses are selling and being built and new businesses are coming in.
Sir you must not have read my post because this has nothing to do with what I posted in that quote. You keep using a few personnel anecdotes to make general statements about the market and calling people wrong and incorrect because of it. This is where you are making your error. Just because your "uncle joe" had a bad experience, doesn't make it a general proof this is what is happening to everyone. Nobody has said that house prices won't go down. In fact if you read my post you would have concluded they have to go down. This has nothing to do with a person's ability to pay the loan they originally committed to.
You said that people like me are not the people in trouble. I'm suggesting that you are basing your comments on anecdotes. I'm offering you another perspective.
At the end of this thread, it all comes down to a human experience. I still think that many are quick to think certain buyers were "dumb" or a bad risk or bought more than they could afford..... so who cares that they are losing their homes, investments, life's savings, etc... I think a little more empathy is due a large number of folks.
You said that people like me are not the people in trouble. I'm suggesting that you are basing your comments on anecdotes. I'm offering you another perspective.
At the end of this thread, it all comes down to a human experience. I still think that many are quick to think certain buyers were "dumb" or a bad risk or bought more than they could afford..... so who cares that they are losing their homes, investments, life's savings, etc... I think a little more empathy is due a large number of folks.
Well, those decisions by a large number of people (buying more than you can afford and using your home as an ATM) ruined it for the people who played by the rules.
Agreed...with the above and your earlier comment about people not being able to price their homes to sell because they are unable to cover the short-fall that such a selling price would create. The simple truth is that, in large part, if people bought a house with an ARM, then they bought more house than they could realistically afford to begin with.
Well, those decisions by a large number of people (buying more than you can afford and using your home as an ATM) ruined it for the people who played by the rules.
Well, those decisions by a large number of people (buying more than you can afford and using your home as an ATM) ruined it for the people who played by the rules.
Exactly!
The biggest single factor which contributed to the housing "crisis" (or whatever you want to call it) in this country, was not the banks, the government or anyone else other than too many people financially biting off more than they could chew.
Well, those decisions by a large number of people (buying more than you can afford and using your home as an ATM) ruined it for the people who played by the rules.
This sounds soapboxish (I made that word up I think) and gets you thumbs ups and agreements - very cool... But, I'm curious - what did these "people" ruin for somebody who played by the "rules"?
If you bought well within your means on a conventional loan, I don't see where you're impacted today at all. In fact, you're probably enjoying a super low interest rate right now. The only possible down side is if you need to sell your home - but not being able to sell it at some fairy tale number isn't the fault of the people you're talking about.
Disregarding the predatory lending, the wild investment derivatives, sub prime nightmare, and general state of the economy to blame "buying more than you can afford and using your home as an ATM" is rather silly. Unless of course you honestly believe those people are to blame for the housing bubble and record unemployment - which I would disagree with whole heartedly.
Mikeykid is correct.....if you bought within your means and didn't encounter a job loss then you shouldn't be impacted by the drop in property values. And I know it is really harsh to hear what CouponJack is saying, but he is correct as well. When median home price was 6 times the median income here in Arizona, it should have been really obvious that we were headed for a massive crash. I had 5 properties and sold 4 in 2006....not because I was smart but because the math was really really simple. Sign number 2 that we were headed for a crash? They were giving multiple loans to every 24 yr old uneducated "investor" with a pulse.
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You hit the nail on the head.
