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Old 02-29-2008, 01:51 PM
 
Location: Heartland Florida
8,459 posts, read 16,317,896 times
Reputation: 3943

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Take a look at this income data from 1960-2

http://www2.census.gov/prod2/popscan/p60-037.pdf

Now you could buy a decent middle-class home for 16,000 back then. If a homeowner had an average income of 5-6,000.00 a year and that was growing at a faster rate than "inflation". The same home today, used-up, rotted and termite eaten was selling for 300,000.00 - while average incomes were around 30-40,000.00 per year. Even if home values jumped by 10 times since 1960, that would only be 160,000.00 for that new home. Salaries have only gone up 8 times max. Is there anyone foolish enough to see that Miami has a long way to go before the excesses of the real estate bubble evaporate?
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Old 02-29-2008, 01:58 PM
 
Location: Miami
6,455 posts, read 12,974,234 times
Reputation: 2486
OHH, OHH, I know!
Maybe some commissioners downtown!
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Old 02-29-2008, 03:55 PM
 
Location: western East Roman Empire
3,809 posts, read 6,022,794 times
Reputation: 2449
I agree. Even with a six-figure income, the equilibrium price is in the $180k-220k range.

You have to also consider property taxes, insurance, in some cases HOA fees, car insurance, increasingly health insurance (fewer companies offer it, the self-employed definitely have to pay out-of-pocket), rising utility, gas, and food costs, if you have children, possibly private education, not to mention saving for retirement.

Did I leave anything out?

Oh yeah, the specter of rising federal taxes going forward.

And how about the current 12% or so inflation rate and the risk of hyperinflation going forward.

So even a six-figure income nowadays is no guarantee of anything.
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Old 02-29-2008, 04:59 PM
 
2,743 posts, read 5,714,790 times
Reputation: 2191
Well, did you all hear about the lunatic developers who want to build two of Miami's soon to be tallest skyscrapers at something like 90 stories high? They are convinced that Miami is soooo hot that we have to stack 90 floors on top of eachother. I mean I am all for density in certain areas, but that is ridiculous. But it is this idea that is so far removed from reality that this is some promise land and that so many people want to live here. I mean, people do want to live here, but this idea of overbuilding is about making money and creating an artificial demand. So as long as we have these developers, I think we will see artificially high homeprices...
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Old 03-08-2008, 05:32 PM
 
Location: On the beach, miami beach!
55 posts, read 143,360 times
Reputation: 34
A property is only worth as much as someone is willing to pay for it. If people would stop paying these crazy prices, then the market would be forced to come down to a more reasonable level!
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Old 03-08-2008, 07:38 PM
 
Location: Houston, Tx
3,644 posts, read 3,613,119 times
Reputation: 1585
Quote:
Originally Posted by pondjc View Post
A property is only worth as much as someone is willing to pay for it. If people would stop paying these crazy prices, then the market would be forced to come down to a more reasonable level!
The same thing can be said about medical costs. If there was no medical insurance then hospitals couldn't charge $35,000 for an overnight stay. Because insurance companies can pay those prices it drives up the cost for everyone else.
The same is true for house prices. If enough people are willing to pay a high price then the price will go up. I know prices will come down some more but there are people who still consider Miami to be paradise and their 'buy' price is above the 'buy' price for most of the people who are already down here. That means that the prices will never drop to the point people here believe they should really be at (because those people are adding in a false 'paradise' surcharge they are willing to pay). Until those people realize the truth or are unable to get the funds to finance their dream of paradise, prices won't come down as far as you think.
--Disclaimer: it is a weekend and I've already had a few so none of this may make much since in the morning.
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Old 03-08-2008, 07:42 PM
 
Location: Miami
6,455 posts, read 12,974,234 times
Reputation: 2486
Bingo.........

Quote:
Originally Posted by Chelito23 View Post
So as long as we have these developers, I think we will see artificially high homeprices...
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Old 03-08-2008, 07:55 PM
 
Location: 43.55N 69.58W
3,231 posts, read 4,816,672 times
Reputation: 2926
Quote:
Originally Posted by rogerbacon View Post
The same thing can be said about medical costs. If there was no medical insurance then hospitals couldn't charge $35,000 for an overnight stay. Because insurance companies can pay those prices it drives up the cost for everyone else.
The same is true for house prices. If enough people are willing to pay a high price then the price will go up. I know prices will come down some more but there are people who still consider Miami to be paradise and their 'buy' price is above the 'buy' price for most of the people who are already down here. That means that the prices will never drop to the point people here believe they should really be at (because those people are adding in a false 'paradise' surcharge they are willing to pay). Until those people realize the truth or are unable to get the funds to finance their dream of paradise, prices won't come down as far as you think.
--Disclaimer: it is a weekend and I've already had a few so none of this may make much since in the morning.

You're doing fine Roger, party on!
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