[Marioni888]

I would like someone to explain me how is it possible for one house to cost 4 times more then one condo and they both have same size/Sq.Ft and they are in same area/zip code.

My condo in summerlin has a value of 73.000 now. It was sold in 2005 for 245.000. Thats almost 4x .
House next to our condo has same Sq.FT + backyard and its value is 240.000 now on market.Same house was sold in 2004 for about 380.000.

House is 14 years old and my condo 9 years.

So how it is possible for condos to drop in price 4 times and houses only 2x ?

For price of one house you can buy 4 condos with 2 bedrooms and bathrooms, in the heart of Summerlin, in nice area.
If you rent them you dont have even to work.

[FWPeter]

Originally Posted by Marioni888

I would like someone to explain me how is it possible for one house to cost 4 times more then one condo and they both have same size/Sq.Ft and they are in same area/zip code.

Easy.....Supply & Demand.
More people want homes than condos.

[Marioni888]

Originally Posted by FWPeter

Easy.....Supply & Demand.
More people want homes than condos.

hmm

Maybe if they want to live in them but as one investment i dont see the point.

Condos in my area rent for 900$ and houses for 1200$. Still houses cost 4 times more, they are older and have same size/sq.ft.

Renting 4 condos = 3.600 $ profit. Renting house 1200 $ !!

[WestieJeff]

Condos usually have high HOA fees (that just go higher) and lower appreciation, that's why many investors prefer homes.

Condo prices, first to drop, last to increase.

Originally Posted by Marioni888

hmm

Maybe if they want to live in them but as one investment i dont see the point.

Condos in my area rent for 900$ and houses for 1200$. Still houses cost 4 times more, they are older and have same size/sq.ft.

Renting 4 condos = 3.600 $ profit. Renting house 1200 $ !!

[newopty]

Originally Posted by Marioni888

hmm

Maybe if they want to live in them but as one investment i dont see the point.

Condos in my area rent for 900$ and houses for 1200$. Still houses cost 4 times more, they are older and have same size/sq.ft.

Renting 4 condos = 3.600 $ profit. Renting house 1200 $ !!

I question your arithmetic. First of all the rent is not pure profit. There are expenses that you would have 4 times such as closing costs. The 4 condos would have 4x the HOA. Plus numerous other expenses that would be 4x.

[Marioni888]

Originally Posted by newopty

I question your arithmetic. First of all the rent is not pure profit. There are expenses that you would have 4 times such as closing costs. The 4 condos would have 4x the HOA. Plus numerous other expenses that would be 4x.

i pay HOA 72 $ / month plus summeriln HOA which is 47 $ i think.

I doubt any house in summerlin is without HOA plus they also have to pay summerlin fee.

I dont think HOA play big difference in this.

[aardogfsu]

Originally Posted by Marioni888

hmm

Maybe if they want to live in them but as one investment i dont see the point.

Condos in my area rent for 900$ and houses for 1200$. Still houses cost 4 times more, they are older and have same size/sq.ft.

Renting 4 condos = 3.600 $ profit. Renting house 1200 $ !!

You are right, way less ROI on renting homes as opposed to condos even with a steep HOA

[Rubyww]

It is interesting that we are discussing another housing bubble. I was looking into the historic housing prices in Japan since their real estate bubble burst in the 1990s. I guess to save the market, interest rate in Japan was reduced to almost zero and with a loose monetary policy, there was a mini-recovery in the 2005 to 2007 but was short lived. The bubble burst again and as of today, the housing market in Japan still never recovers. It seems US policy mirrors what has been happening in Japan. Without real job growth, I do not see how our economy recovery or housing market recovery can be sustained.

There are speculation that there will be a recession in the upcoming months. In fact, the GDP has been slowing down in the last 2 months. In anticipation of this recession, my company which is one of the Dow Jones has announced that there will be a hiring freeze and salary freeze in our division this year. If indeed we will be in another recession, job growth, asset prices and rental income will all be negatively affected.

[Bideshi]

Originally Posted by Rubyww

If indeed we will be in another recession, job growth, asset prices and rental income will all be negatively affected.

Of this there can be no reasonable doubt.

[TomKBL]

Originally Posted by Rubyww

It is interesting that we are discussing another housing bubble. I was looking into the historic housing prices in Japan since their real estate bubble burst in the 1990s. I guess to save the market, interest rate in Japan was reduced to almost zero and with a loose monetary policy, there was a mini-recovery in the 2005 to 2007 but was short lived. The bubble burst again and as of today, the housing market in Japan still never recovers. It seems US policy mirrors what has been happening in Japan. Without real job growth, I do not see how our economy recovery or housing market recovery can be sustained.

There are speculation that there will be a recession in the upcoming months. In fact, the GDP has been slowing down in the last 2 months. In anticipation of this recession, my company which is one of the Dow Jones has announced that there will be a hiring freeze and salary freeze in our division this year. If indeed we will be in another recession, job growth, asset prices and rental income will all be negatively affected.

Here are some Japan RE market numbers:

The average price of new condominium units dropped 5.1% y-o-y to JPY691,000 (US$8,894) per square metre (sq. m.) in August 2012, based on figures released by the Land Institute of Japan. (roughly $890/Sf)

The average price of existing condominium units dropped 3.3% to JPY380,000 (US$4,891) per sq. m. during the year to August 2012, its 14 consecutive month of annual price falls. (~ $490/SF)

Guess the bubble never got burst, only become less inflated.