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You see this in the desirable parts of L.A too , mostly the Westside or areas close to the beach .
Santa Monica is actually over $2 million now for one of those modest little houses .
Even with a big decline those homes won't be affordable for the vast majority .
I find it fascinating, but people will live with their parents indefinitely to enjoy 70 and sunny 330 days a year.
There is no way there is that much income to support those prices without outside money coming in.
But I remember back when the Japanese actually did that! Back in the early/mid 90's the Japanese economy was roaring. A Japanese executive even referred to America as "Japan's subcontractor"; I saw a young lady on TV who was outraged at America and reminded the TV audience that America worked for Japan.
And Japan DID buy real estate! Homes, golf courses, businesses........
And then the decades long recession hit Japan. Don't hear much from Japan these days.
There's a lesson, I guess....
Well the Chinese probably wouldn't freak out if the doorknobs are the wrong color like American buyers do. If this keeps up I'll rent my house for some crazy amount even with all its imperfections. Don't want to because landlording sucks but most buyers are silly now.
I can clearly see changes in the way the market works compared to the last bubble, the millennials coming in have their unique perspective and it isn't positive for many of us outside of certain market areas. I don't want to be part of the problem but being pushed to a wall. Rental market is tight and high, sales stagnant for lower/mid priced single family homes. I could get twenty potential renters fighting over the property, while buyers pick and sneer at every minute thing, and realtors try to give it away or force a granite kitchen renovation. Because HGTV. Who could blame the homeowner turning the home into an income producing rental. Do not complain prices are too high when passing up decent homes, do not complain about lower priced homes turned into rentals since no one except We Pay Cash for Houses wants them.
I am looking at buying a home and can tell you people are getting stupid again. Prices are going up and its become a sellers market. People never learn.
Bu, bu, bu, but... Doesn't real estate always go up?
Home prices are going up as wages stay where they were 15 years ago. So again things set to create a bubble. We may not be there yet but we are on our way. The Tranch and sub prime are back. My financial friends are saying its all back but the NINJA loans. They can not be that far behind. I am seeing prices go up and wages not moving. Not buying we are in some return to the good old days.
Actually, I think 1995 prices are more realistic. That's when the real estate bubble began, and that's where prices will return to as sure as reversion to the mean is a law of nature.
I am looking at buying a home and can tell you people are getting stupid again. Prices are going up and its become a sellers market. People never learn.
Count this poster as one that agrees with you. I'm starting to notice that it's getting stupid again, and from what I can tell, these homes are nowhere near worth what they're asking. And I can tell when it's just a simple case of supply and demand...that's not what's going on in my neck of the woods. There are so many for sale signs on homes down here that it looks like a mass auction going on...yet these home prices in Southern Arizona are retarded!! It ain't making any sense.
I'm like, whatever. Glad that my house is only a few years from being paid off. One thing I know for sure...I've seen my recent home values, and anyone that would give me that much for this house is a damn fool.
Actually, I think 1995 prices are more realistic. That's when the real estate bubble began, and that's where prices will return to as sure as reversion to the mean is a law of nature.
I really don't see prices going to those levels at least in L.A . They didn't even drop that much during the housing crash or any other time in history.
You'd be talking homes going down to a third of their value or less.
$1.2 million homes going back to $400,000 or less.
Actually today there is a shortage of housing in most major cities, and few buyers are getting the same kind of loans that they were getting prior to 2008.
I really don't see prices going to those levels at least in L.A . They didn't even drop that much during the housing crash or any other time in history.
You'd be talking homes going down to a third of their value or less.
$1.2 million homes going back to $400,000 or less.
Or $600,000 homes going to $200,000 or less.
Exactly. That's all they are objectively worth, because that's all they brought when lending standards were reasonable.
Credit drives up prices. For two reasons. First, it allows people to afford things that they cannot otherwise afford. this creates an incentive for builders in the case of housing, to build bigger and more expensive houses. Secondly, is that mortgage obligations, which are debt instruments, are packaged into financial instruments which function as money in the economy. To the point that these debt instruments, or bonds, far exceed the money supply and sovereign debt of countries, even of large countries like the US. More money in circulation means inflation which means higher prices.
In 2008 private debt was seven or eight times what the US debt was. When it crashed the government tried desperately to soften the blow through quantitative easing, or creating money. This inflationary measure was a desperate attempt to fight off the massive deflation created by all of the private debt going bad, private debt which functioned as money in the economy. In effect, money was being destroyed as debts went bad. The money supply was contracting.
Most housing markets in the US are still overpriced. And a 1/3 drop in price is not unusual. Look what happened to poor old Phoenix in 2009. Houses built in 2005 which sold for $200,000 plus when new, were selling for $50,000, to $80,000 in 2009. I looked at hundreds of those houses on Realtor.com and would have bought one had I been able to bring my bitchy old lady on board with the idea. I could have easily gone to work in Phoenix and had a nice house that was paid for.
Actually, I think 1995 prices are more realistic. That's when the real estate bubble began, and that's where prices will return to as sure as reversion to the mean is a law of nature.
That's dreaming. Think rents are going to plummet too? The days of living wherever you want are over.
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
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Quote:
Originally Posted by Crosstimbers Okie
Exactly. That's all they are objectively worth, because that's all they brought when lending standards were reasonable.
Credit drives up prices. For two reasons. First, it allows people to afford things that they cannot otherwise afford. this creates an incentive for builders in the case of housing, to build bigger and more expensive houses. Secondly, is that mortgage obligations, which are debt instruments, are packaged into financial instruments which function as money in the economy. To the point that these debt instruments, or bonds, far exceed the money supply and sovereign debt of countries, even of large countries like the US. More money in circulation means inflation which means higher prices.
In 2008 private debt was seven or eight times what the US debt was. When it crashed the government tried desperately to soften the blow through quantitative easing, or creating money. This inflationary measure was a desperate attempt to fight off the massive deflation created by all of the private debt going bad, private debt which functioned as money in the economy. In effect, money was being destroyed as debts went bad. The money supply was contracting.
Most housing markets in the US are still overpriced. And a 1/3 drop in price is not unusual. Look what happened to poor old Phoenix in 2009. Houses built in 2005 which sold for $200,000 plus when new, were selling for $50,000, to $80,000 in 2009. I looked at hundreds of those houses on Realtor.com and would have bought one had I been able to bring my bitchy old lady on board with the idea. I could have easily gone to work in Phoenix and had a nice house that was paid for.
Hate to tell you, but Phoenix prices are back to bubble levels, and rents are higher than bubble era. Apartments that rented for $750/month in 2007 downtown are $1,500/month now for the same apartment in the same complex
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Don't hear much from Japan these days.
