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Old 05-09-2018, 01:48 AM
 
Location: Los Angeles (Native)
24,151 posts, read 13,668,407 times
Reputation: 11364

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Thought this was pretty interesting .

Hard to not think about the famous Buffett quote , “Be Fearful when others are greedy and greedy when others are fearful.”

Prices could go up higher who knows but nothing lasts forever and it seems like we are getting back to the point where people think “real estate never goes down “ or “it’s different this time “ .

It’s unlikely there will be a crash as bad as next time but a downturn is enviable , just a matter of when .

—-
House prices are soaring and, despite warnings from some analysts, most Americans believe they will continue to soar.

A majority of U.S. adults (64%) continue to believe home prices in their local area will increase over the next year, a survey released Monday by polling firm Gallup concluded. That’s up nine percentage points over the past two years and is the highest percentage since before the housing market crash and Great Recession in the mid-2000s.

The level of optimism is edging closer to the 70% of adults in 2005 who said prices would continue rising. That, of course, was less than one year before the peak of the housing market bubble in early 2006, which was largely fueled by a wave of subprime lending. (Roughly one-quarter of respondents in both 2005 and 2018 said they believed house prices would remain the same.)

https://www.marketwatch.com/story/am...ash-2018-05-07
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Old 05-09-2018, 06:58 AM
 
5,600 posts, read 4,206,197 times
Reputation: 10557
The "crash" had nothing to do with high prices for housing. It was all about subprime lending and financial institutions playing Russian Roulette with bad loans.


You can count on housing prices going up and down with the economy. As a trend you can also count on housing prices continuing to rise. Prices are going up because there was a shortage of construction for a great many years following the start of the Great Recession. Prices are going up because more people are moving to densely populated urban areas where cost are high and housing is limited. If you want cheap housing, there are endless opportunities in poor rural areas that have been left behind as our economy changes.
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Old 05-09-2018, 08:20 PM
 
Location: Boston
5,097 posts, read 1,453,831 times
Reputation: 3734
Quote:
Originally Posted by jm1982 View Post
Thought this was pretty interesting .

Hard to not think about the famous Buffett quote , “Be Fearful when others are greedy and greedy when others are fearful.”

Prices could go up higher who knows but nothing lasts forever and it seems like we are getting back to the point where people think “real estate never goes down “ or “it’s different this time “ .

It’s unlikely there will be a crash as bad as next time but a downturn is enviable , just a matter of when .

—-
House prices are soaring and, despite warnings from some analysts, most Americans believe they will continue to soar.

A majority of U.S. adults (64%) continue to believe home prices in their local area will increase over the next year, a survey released Monday by polling firm Gallup concluded. That’s up nine percentage points over the past two years and is the highest percentage since before the housing market crash and Great Recession in the mid-2000s.

The level of optimism is edging closer to the 70% of adults in 2005 who said prices would continue rising. That, of course, was less than one year before the peak of the housing market bubble in early 2006, which was largely fueled by a wave of subprime lending. (Roughly one-quarter of respondents in both 2005 and 2018 said they believed house prices would remain the same.)

https://www.marketwatch.com/story/am...ash-2018-05-07
maybe where you live, very small appreciation in other areas, take a broader view.
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Old 05-10-2018, 12:34 AM
 
Location: USA
16,564 posts, read 16,220,686 times
Reputation: 12523
Difference is buyers are actually qualified this time unlike last time where people could state their income etc.
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Old 05-10-2018, 06:13 AM
 
Location: Kuwait
3,038 posts, read 1,179,326 times
Reputation: 2326
Quote:
Originally Posted by jm1982 View Post
Thought this was pretty interesting .

Hard to not think about the famous Buffett quote , “Be Fearful when others are greedy and greedy when others are fearful.”

Prices could go up higher who knows but nothing lasts forever and it seems like we are getting back to the point where people think “real estate never goes down “ or “it’s different this time “ .

It’s unlikely there will be a crash as bad as next time but a downturn is enviable , just a matter of when .

—-
House prices are soaring and, despite warnings from some analysts, most Americans believe they will continue to soar.

A majority of U.S. adults (64%) continue to believe home prices in their local area will increase over the next year, a survey released Monday by polling firm Gallup concluded. That’s up nine percentage points over the past two years and is the highest percentage since before the housing market crash and Great Recession in the mid-2000s.

The level of optimism is edging closer to the 70% of adults in 2005 who said prices would continue rising. That, of course, was less than one year before the peak of the housing market bubble in early 2006, which was largely fueled by a wave of subprime lending. (Roughly one-quarter of respondents in both 2005 and 2018 said they believed house prices would remain the same.)

https://www.marketwatch.com/story/am...ash-2018-05-07
Others have mentioned about the problem with loans causing the crash so I won't mention that but that was the root cause of the last crash. I do think there will be a major correction in some areas when interest rates rise above a certain point. In general, the places that will have the biggest correction will be the places that had the biggest escalation. Which is why I would caution anyone from buying big now in Seattle, Denver, Austin, SF.
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Old 05-10-2018, 06:42 AM
 
5,600 posts, read 4,206,197 times
Reputation: 10557
Quote:
Originally Posted by American Expat View Post
...... In general, the places that will have the biggest correction will be the places that had the biggest escalation. Which is why I would caution anyone from buying big now in Seattle, Denver, Austin, SF.
History shows that is not likely. People have been talking about the high housing costs in California for many decades. There have been some ups and downs but the downs have been minimal and the ups just keep growing. The areas mentioned are attracting people because of the strong economies and well paying jobs. The same thing is happening in many other major urban centers.


If you think renting is a more attractive option, think again. Rents are very high in those areas.
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Old 05-10-2018, 08:45 AM
 
Location: Lower East Side, NYC
1,837 posts, read 1,086,754 times
Reputation: 1290
Rent here at least, or at least my rent, has been far eclipsed by even the cheapest property in my neighborhood. I'm content to keep renting with high wage. Thinking that buying and retiring in another country is a better option at this point. Particularly, I can't get what I want in America at a reasonable price, but it seems available very easily in other places.


Now to figure out the annoying expat process.
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Old 05-10-2018, 08:52 AM
 
5,600 posts, read 4,206,197 times
Reputation: 10557
Quote:
Originally Posted by Javawood View Post
Rent here at least, or at least my rent, has been far eclipsed by even the cheapest property in my neighborhood. I'm content to keep renting with high wage. Thinking that buying and retiring in another country is a better option at this point. Particularly, I can't get what I want in America at a reasonable price, but it seems available very easily in other places.


Now to figure out the annoying expat process.
Here at least is NYC. NYC has highly restrictive rent controls. That is not the case in most of the country. Rents are often to the point that the monthly costs are much higher than the cost of ownership. Rent controls and other laws restricting landlords often aggravate the problem. Being a landlord has too many downsides, hence fewer landlords, fewer apartments for rent, higher prices.
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Old 05-10-2018, 09:17 AM
 
Location: Los Angeles (Native)
24,151 posts, read 13,668,407 times
Reputation: 11364
Quote:
Originally Posted by jrkliny View Post
Here at least is NYC. NYC has highly restrictive rent controls. That is not the case in most of the country. Rents are often to the point that the monthly costs are much higher than the cost of ownership. Rent controls and other laws restricting landlords often aggravate the problem. Being a landlord has too many downsides, hence fewer landlords, fewer apartments for rent, higher prices.
Yeah in cities like NYC or L.A the tenant has a lot more rights and power versus the landlord. No doubt that rent control keeps market rents high . This is bad for young people or newcomers to an area . A lot of people living in these cities just because they rent is lower than it would be most other places .

In California there are a lot of people including the Mayor of L.A trying to expand rent control to apply to all housing . Including single family homes . Now it’s limited to multi family units built prior to 1978 but that’s still most rental housing in L.A

Long term it’s definitely paid off to own property in cities like L. A or NYC .

Even if renters are investing the “extra “ money they are saying . I bet few have beat the returns or equity they would of gained from owning especially when you take leverage into consideration when buying real estate which almost none of the “stock market versus real estate investing “ articles take into consideration .
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Old 05-10-2018, 09:23 AM
 
Location: Los Angeles (Native)
24,151 posts, read 13,668,407 times
Reputation: 11364
Quote:
Originally Posted by jrkliny View Post
History shows that is not likely. People have been talking about the high housing costs in California for many decades. There have been some ups and downs but the downs have been minimal and the ups just keep growing. The areas mentioned are attracting people because of the strong economies and well paying jobs. The same thing is happening in many other major urban centers.


If you think renting is a more attractive option, think again. Rents are very high in those areas.
The last down was pretty drastic although it varied depending on the city or even specific neighborhood.

The most prime areas , like property by the beach didn’t go down too much because many of those owners had their homes paid off or they had other assets they could sell or they could just afford to rent out the house until the market turned around which many did.

Loans of course were easy to get back then , the stated income /Liar loans and there has been reform in that regard but still doesn’t guarantee there won’t be a downturn .
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