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Old 02-04-2013, 05:46 PM
 
387 posts, read 911,573 times
Reputation: 523

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Quote:
This Is Housing Bubble 2.0: David Stockman | Daily Ticker - Yahoo! Finance
This is one of the reasons my family has decided to wait another 5 years before buying a new house. Based on the average incomes of people living in "wealthy" towns, the vast majority of residents could not afford their own towns at today's prices.

The interest rates are helping newcomers, but I agree that the number of high-income families is not sufficient to keep prices where they are. If I'm wrong, fine, I'll see that in 5 years. But for now, we're not paying a million dollars for .18 acres, an unmaintained house with choppy floor plan, but excellent schools.

Even if we won the lottery, we wouldn't pay the prices in this area for nice houses. Three million for a postage stamp with a huge old house in Newton? How about ocean front Malibu or Upper East Side Manhattan (or Westchester, for that matter). I love Boston and Cambridge, but I can find intellectuals someplace else if the prices are bad enough here.
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Old 02-05-2013, 12:08 AM
 
288 posts, read 631,015 times
Reputation: 549
Quote:
Originally Posted by 3cents View Post
Besides the financial considerations, there's also the neighborhood crime rate, the children your kids will befriend, etc. Recently, I was driving through a "family oriented" town which is frequently raved about in this forum, SFHs average $450K, and the elementary schools rank about 100th out of all 890 elementary schools in MA. I was driving slowly at night (because I am not familiar with that particular road); I rounded a bend and suddenly saw a group of teenage boys crossing the road. I saw them and slowed down, to wait for them to cross. They saw me and most hurried across, but one of them stopped to shout at me. I was very irritated because they shouldn't be crossing there in the first place.
Which town was this out of curiosity?

By the way, just don't take David Stockman's word as gospel. I do not agree with some of his other opinions. I do not know enough about the latest economic trends to critique his interview so I won't even go there. But some famous economists you might want to read up on are Case and Schiller.

Last edited by sharencare; 02-05-2013 at 12:42 AM..
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Old 02-05-2013, 08:01 AM
 
30 posts, read 68,777 times
Reputation: 68
Default Re: 3 cents

So you encountered a bunch of teen that had been drinking in the middle of the night and that stands as proof that said towns is violent? Please don't shoot anybody, Clint.

This is also the world we live in. The glass dome over the little protege in exclusive schools tends to spit out socially awkward and wimpie kids, and in the real worl, not in the SAT test room, character and resilience will serve someone better than an Ivy league degree. If you disagree, maybe you haven't lived enough yet. Trust me, the rise of the next big star of the corporation will be done once the office bully walks all over them. Seen it happen times and times again.

Sorry to bother you with the truth.
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Old 02-05-2013, 08:24 AM
 
16 posts, read 67,686 times
Reputation: 24
I said "ignorance and biased view of the world" when I referred your picking on Asian the ethnic group, you knew that ... your mama might be right, but she should have also taught you how to respect other ethic groups and people from different background.

With or without Fed's monetary policy, the market is still a market, it's still largely a function of supply and demand, of course there are other variables, but hey if there were no buyers out there, the inventory was not gonna move no matter how low the interest rate is.

I also listened to Dave Stockman's talk yesterday, well not in its entirely since my son was acting up, he has his point, but the examples he used (such as private equity firms buying tens of thousands of SFH, investors from other countries buying up properties) largely don't apply here in the Boston market. Why? because the prices are too high and the houses here are too old needing lots of up-keeping, basically the cost is too high. So here it is the first time home buyer or people upgrading to larger nicer houses who drive the market from the buying side. There are investors, but they are small individual investors who usually pick up condos as rentals, not large private equity firms like Blackstone.

You have two choices: (1) keep being angry, blame this and that, and wait until bubble 2.0 is over, or (2) just be rational, try to get the best deal out there that you can afford.




Quote:
Originally Posted by DL0299 View Post
The market, the market the market!!!

There is no free market in real estate anymore... Ignorance you said? There is the fed pushing their short term agenda and the FHA swallowing 90% of the loans in the US. What free market? You think that in a "fed-less" free market, a banker would give away 700K$ to Joe Smock with a renovated barn as a collateral?

It's like you said: ignorance and biased view of the world. Your's, that is.

Here is a link to a Dave Stockman analysis of the house bubble 2.0. His views on no first time homebuyer and no move-up buyers are right on.

Start there. But my mama always said this to me: "You can't argue with faith".

So long my friend!

This Is Housing Bubble 2.0: David Stockman | Daily Ticker - Yahoo! Finance
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Old 02-05-2013, 08:36 AM
 
387 posts, read 911,573 times
Reputation: 523
Quote:
the examples he used (such as private equity firms buying tens of thousands of SFH, investors from other countries buying up properties) largely don't apply here in the Boston market. Why? because the prices are too high and the houses here are too old needing lots of up-keeping, basically the cost is too high. So here it is the first time home buyer or people upgrading to larger nicer houses who drive the market from the buying side. There are investors, but they are small individual investors who usually pick up condos as rentals, not large private equity firms like Blackstone.
Actually, Boston has been #4 on the foreign investment list since 2010. Despite the discounts in the southwest, foreign investors have focused on the major east coast and west coast cities. The top five cities for foreign investment are New York, D.C., San Francisco, Boston, and LA.

Boston real estate popular with foreign investors - Boston Business Journal
U.S. Remains Top Choice Among Foreign Investors | CCIM Institute
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Old 02-05-2013, 08:47 AM
 
16 posts, read 67,686 times
Reputation: 24
As long as there are plenty of newcomers having high enough income, I simply don't see why the market has to tank. Low interest rate does help to fuel the market, but the fundamental cause for the bidding wars in nice towns is the job market!

You don't have to pay 1M for a crappy house in Newton, I know someone bought a recently renovated house in Newton in lower 700K a few month back. I also know someone just won the bidding for a nice Lexington SFH with the listing price of 690K. I mean, come on, you think you are the victims of the craziness, yet you are exaggerating in the public forum just to work against yourself!
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Old 02-05-2013, 08:54 AM
 
16 posts, read 67,686 times
Reputation: 24
OK, I probably should say private equity firms and foreign investors are not buying up single family houses in nice towns in large scale around Boston.

Quote:
Originally Posted by donewithpretty View Post
Actually, Boston has been #4 on the foreign investment list since 2010. Despite the discounts in the southwest, foreign investors have focused on the major east coast and west coast cities. The top five cities for foreign investment are New York, D.C., San Francisco, Boston, and LA.

Boston real estate popular with foreign investors - Boston Business Journal
U.S. Remains Top Choice Among Foreign Investors | CCIM Institute
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Old 02-05-2013, 10:02 AM
 
Location: Winchester
229 posts, read 382,340 times
Reputation: 202
Quote:
Originally Posted by DL0299 View Post
So you encountered a bunch of teen that had been drinking in the middle of the night and that stands as proof that said towns is violent?
"encountered a bunch of teen" - TRUE
"had been drinking" - did I say that?
"stands as proof" - did I say that?
"violent" - did I use this adjective?

It seems to me that in your one sentence, you are blemishing the said town quite a fair bit. Let's stay factual.
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Old 02-05-2013, 10:12 AM
 
1,768 posts, read 3,217,463 times
Reputation: 1592
Boston mini-RE bubble is mostly fueled by our own biotech/research/medical bubble. There are some very well paid people, plus some relocation folks who are buying too. Many in those fields mentioned above are doing well but no one know for how long will this last. Go to some more specific forums and you will see that many are wondering if/when other shoe will drop. Boston did dodge majority of harm in 2008, but looking at what is happening with the economy at large, we are crazy to think that this little MA party will just go on indefinitely. We have old homes, crumbling infrastructure, industrial pollution, older population, government corruption, huge COL, tons of unfunded liabilities and bad weather. Younger FTHB generation is royally screwed, and younger buyers are and will be few and far in between.
We the people, in the last 25 years, have sold the future of the US to the highest bidders. Few have more, majority has and will have far less. All those realities will eventually bite us in our rear end. Denial is an easy way out, a NIMBY way of dealing with huge issues we have as a society/country at large. Without solid/healthy foundation any market is simply house of cards now. It is up to individual to decide with how much financial exposure/debt and gamble are comfortable dealing with.
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Old 02-05-2013, 10:13 AM
 
30 posts, read 68,777 times
Reputation: 68
Default Re: Initid

Last time I tried to get the best deal I could get, I went up to 440K$ in connecticut, because the lower price tags in the 350K-375K$ range was where 80% of the buyer were, and this segment of the market was in full blown bubble. We went up to 430K following the thinking: Might as well up the budget a little bit and get more for your money.

When we had to relocate to Mass, we helplessly watched the value of our house go from 440K at it's peak to a 337K$ short sale in 12 months. We loss 120K$ total.

I see the exact same trend here happening here: The range in 600-700K$ is in full blown bubble while the upper scale house are sitting on the market. Last year alone there were 20% increase in sale combined with lower inventory. The price should have rocketed, according to the most basic of economist predictions, but it did not. It stayed flat. This is what is called by economist an "abnormality" of the market. It simply shows that the upward potential of this market segment (600-700K$) is ZERO.

My post was not meant to convince well off folks to sell more stock options to buy a house in Belmont. It was meant to warned others to be carefull not to end up underwater 5 years from now.

We are approved for around 700K now, but are shopping in the 550$ range for the reasons I mentioned.

30% of american Homeowner are underwater right now, and roughly 50% of household have been "zombified" by real estate and will remain so for a solid decade.

This is my last post. I don't do the "forum" thing usually, but when looking info about local real estate markets, I got tired or reading histerical predictions about home values in an incestuous real estate market that will get it's share of reality at some point down the road, whether you like it or not.

Cheers,
DL
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