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Charles has a good question about why LA, LV and not HSV.
My take on it:
HSV has gone up, if you look from 2005 onward, we are 50% above those prices. HSV did have "investors" coming in on real estate bus tours after BRAC was announced (remember the news hoopla about this). But bubbles build on themselves and since price appreciation was faster there, more capital moved in to make a self reinforcing feedback loop. Still, I don't know entirely why other areas were more bubbly than ours.
Second point on bubbles is that like all bubbles (from tulip bulbs onward), asset bubbles thrive when credit is growing. Securitization made vast amounts of credit available for homes this time around. Globalized capital flows make "hot money" pour into areas chasing a return which can't support the investment, then the money washes out quickly on the downside leaving destruction in it's wake. Look at the Asian crisis in 98 and we have the same thing here, IMHO. Whether it's mutual funds, houses, or mortgage backeds - money flows in while the bubble is appreciating, then it peaks and money runs away. As a renter, I'm waiting for the speculative money to go away when these housing speculators can't meet their margin call. Looks like I may have to wait a while longer.
As for BRAC, I don't think ppl realize how small a percentage it is of HSV. There will never be a grand parade of people coming from VA with their checkbooks, just a silent trickle.
When I lived in Nashville, I had investors flying in from California on a regular basis. I remember 3 investors buying in Murfreesboro, then heading to Huntsville to tour the market for investment property. Money was easy to get, TOO easy. Homes were affordable, with decent appreciation rates at the time. Seemed like a no brainer, then.
Here's what some people think. We've sort have been through the subprime mess, but the next one on the horizon will affect the higher end of the housing market as those are more associated with the Alt-A, option ARM loans.
We're in the eye of the hurricane right now (see the graphic below the YouTube link), between the subprime (last year) and the Alt-A Option Arms, which are predicted to hit the higher end neighborhoods in the next couple years.
DanInHSV - "As for BRAC, I don't think ppl realize how small a percentage it is of HSV. There will never be a grand parade of people coming from VA with their checkbooks, just a silent trickle."
I actually had a builder tell me that he couldn't wait for the BRAC people to come so that he could make up the money he has lost in the past two years.
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DanInHSV - "As for BRAC, I don't think ppl realize how small a percentage it is of HSV. There will never be a grand parade of people coming from VA with their checkbooks, just a silent trickle."
I actually had a builder tell me that he couldn't wait for the BRAC people to come so that he could make up the money he has lost in the past two years.
This is why I posted a thread about the HOA documents yesterday--the builders are hurting and they are passing on their pain to the silent trickle of folks who are here or coming here in the future. Only 30% of one section of the BRAC are coming here. Only 30 of 150 up in the MDA office are coming here--and how motivated will they be to buy those new houses in the new developments if the builders have HOA documents holding the mortgagee under their control till every lot is sold or till 10-15 years past the origination of the docs?
Can a short sale be used as a comparable? Say you find a home listed for $250K and you see houses which compare to it (location, amenities, size, etc) and one of these houses sold, as a short sale, recently for $200K, can that $200K home be used as a comparable?
Can a short sale be used as a comparable? Say you find a home listed for $250K and you see houses which compare to it (location, amenities, size, etc) and one of these houses sold, as a short sale, recently for $200K, can that $200K home be used as a comparable?
The short sale is on the market like all the other homes for sale and the sales price is the price that the market could bear whether the sellers were distressed or not. If it was artificially lower than market price then other buyers would have stepped in and paid more for it. I would think the sales price is the price and that is why they say foreclosures bring down the price of homes in the same neighborhood. Just my $0.02.. Curious what the real answer is from an appraiser.
The short sale is on the market like all the other homes for sale and the sales price is the price that the market could bear whether the sellers were distressed or not. If it was artificially lower than market price then other buyers would have stepped in and paid more for it. I would think the sales price is the price and that is why they say foreclosures bring down the price of homes in the same neighborhood. Just my $0.02.. Curious what the real answer is from an appraiser.
The short sale is still priced/valued by the seller (owner), he's not only emotionally attached to the house, but also financially trying to get the most bang for the house with the foreclosure rope dangling over his head. At this point he's a gambler: a smart owner would just walk away from the property at any price he could possibly get due to market conditions, a not so smart owner would price a short sale accordingly (dumb), and risk a foreclosure eventually if the price wasn't right. I've seen it in Madison: the short sale didn't materialize at the price asked by a not so savvy (greedy) owner, and the bank has the house now at a price lower than the short-sale.
The foreclosure price is even sweeter: it's supposed to be the price the bank is still owed (residual loan) for the property + some admin/legal fees. The banks are supposedly not in the real-estate business. However, these days, some banks hired RE professionals to help them get the most money for especially the nice, good-looking houses.
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