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It's not really the economy, but the job market. More and more people with college degrees are forced to work low paying jobs because they cannot find a job in their field.
That is true - I wish we stopped funneling everyone towards colleges. A college education is great but it's not for everyone (or there are affordable/smarter ways of going that route that doesn't involve 240K in student loans)
That is true - I wish we stopped funneling everyone towards colleges. A college education is great but it's not for everyone (or there are affordable/smarter ways of going that route that doesn't involve 240K in student loans)
Yup. I taught freshmen classes while I was working on my masters. Out of a class of 25, usually 5 were gone by December.
Seems like with you being a realtor, you should be educating us on this matter rather than begging to be educated. This isn't even one I referred to before, it's one of the first hits that came up in a Google search. I really, really recommend you learn about search engines sometime in the near future.
to the extent that you're a client of mine, I do tell you my experienced and professional opinion on super-sized tract built homes. it mirrors the idea of the article - if you buy big and brand new today, when you go to sell in 5-6 years, the same buyers also want new and are likely to not want your home.
Upon reading the article, I'm struck by the very simplistic conclusions of the young author who graduated J-school in 2011, after the McMansions noted were built, and after the recession had crushed the housing economy.
What the conclusion drawn is that larger homes don't appreciate as QUICKLY as smaller homes. That's always been true. If you can explain this quote from the article to me, I'd really appreciate it:
Quote:
But the return on investment has dropped like a stone. The additional cash that buyers should be willing to part with to get a McMansion fell in 85 of the 100 largest U.S. metropolitan areas. For example, four years ago a typical McMansion in Fort Lauderdale was valued at $477,000, a 274 percent premium over all other homes in the area. This year, those McMansions are worth about $611,000, or 190 percent more than the rest the homes on the market.
So if a house went from 477 to 611K in 4 years, that's 33% a year. Awful return I tell you - it "dropped like a stone". Then again, he compares "all other homes in the area" 4 years ago to "homes on the market" today. Do you see how, whether by different data sets or even the language chosen - they're completely different things?
to the extent that you're a client of mine, I do tell you my experienced and professional opinion on super-sized tract built homes. it mirrors the idea of the article - if you buy big and brand new today, when you go to sell in 5-6 years, the same buyers also want new and are likely to not want your home.
Upon reading the article, I'm struck by the very simplistic conclusions of the young author who graduated J-school in 2011, after the McMansions noted were built, and after the recession had crushed the housing economy.
What the conclusion drawn is that larger homes don't appreciate as QUICKLY as smaller homes. That's always been true. If you can explain this quote from the article to me, I'd really appreciate it:
So if a house went from 477 to 611K in 4 years, that's 33% a year. Awful return I tell you - it "dropped like a stone". Then again, he compares "all other homes in the area" 4 years ago to "homes on the market" today. Do you see how, whether by different data sets or even the language chosen - they're completely different things?
Umm that's like a 6% increase per year, not 33% a year.
What the conclusion drawn is that larger homes don't appreciate as QUICKLY as smaller homes. That's always been true. If you can explain this quote from the article to me, I'd really appreciate it:
By dropped, he means the return on investment is lower as a percentage, I assume. Now one could say that a lower percent return on a higher valued property might still end up amounting to more actual cash at the end of a sale than a higher return on a lower property, but that's kind of a rabbit hole because maintaining and improving the larger home will cost more too, in the long run.
What I think he's trying to say here and may have not done a great job of is alluding to the relatively poor liquidity (on average) of a large home. People start wanting to sell their home when the economy dips or the job market is astir, and that's right about the time future buyers get nervous about spending more than they need to. There is a "sweet spot" for fast selling homes that I'm sure as a realtor you're aware of -- for example selling a home right now in the Triangle area for $300k is going to be generally easier than getting rid of an $800k home. I don't have numbers to compare the average days on market for both price ranges (and with the market the way it is right now, it's perhaps not the best time period for illustration), but I'm sure you could probably post them here to demonstrate my point if you wanted.
Quote:
Originally Posted by pierretong1991
Umm that's like a 6% increase per year, not 33% a year.
Hey, quiet over there, we have an experienced and professional opinion going here
that doesn't seem to be the point that the author was making, but you're certainly correct - it has (almost) always been easier to sell a less-expensive home anywhere than a more expensive home. Maybe not at the beach (or similar distinguishing geographic feature), where an oceanfront large home will sell faster and appreciate greater than a small, old, 4th row house.
It's not really the economy, but the job market. More and more people with college degrees are forced to work low paying jobs because they cannot find a job in their field.
Indeed "economy" and "job market" are not one in the same. The economy can be doing well (growing GDP) if investments are up but that doesn't always translate into more jobs or especially well-paying jobs.
Indeed "economy" and "job market" are not one in the same. The economy can be doing well (growing GDP) if investments are up but that doesn't always translate into more jobs or especially well-paying jobs.
Absolutely. In fact, cutting jobs can oftentimes lead to jumps in stock prices and increased profitability.
Umm that's like a 6% increase per year, not 33% a year.
...and great point on your follow post earlier, pierre. Thanks for watchdogging these experts.
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