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Right, that's why I said - "location, location, location." Or did you missed that after I repeated it about five times? Obviously, the appreciating is going to be much less twenty years from now for someone buying today in Mobile, AL vs someone buying in NY, NY. That's why in real estate they say the three most important things are: location, location, location. Did you not know that?
Location may dictate relative value, however it does not necessarily predict appreciation.
Sure a studio on Park Ave in the Big Apple may command 10x more than a similar property in Mobile. But that does not mean it is going to appreciate more in 20 years. Expensive markets tend to be more volatile so if the market swings the wrong way the NY buyer may lose out.
Last edited by Count David; 06-26-2013 at 08:18 PM..
Exactly... the question is no one has a crystal ball and unless you are in the market you will always be on the outside looking in.
As to the example commented on... back in the early 80's people were paying as much as 17% mortgage interest... some would say now with lowest in a lifetime interest is a great time... I just refied at 2.75%. Never would I ever have believed I would have a rate like this... EVER!
I bought my first home in East Oakland the same year I got my engineering degree.
The home was scheduled for condemnation hearing... it did have the utilities still on.
Every person tried to talk me out of it... even my step grandfathered told my grandmother he didn't have the heart to tell me I would be better to simply walk away.
Over the years the home increased many many times and then the bubble burst... it is still worth about 4x times what I paid and double what I have in it...
I can't wait until 17% -20% interest rates return. That means today's inflated house prices will come back down significantly.
What we need in this country is Deflation but the Banks and the Rich are afraid of Deflation and asset price collapse. Raise the interest rates toward 17% and homes will be on sale for a half price.
Make our dollar expensive, let indebted individuals and companies default or pay the debt quickly.
Time to reward the responsible savers not speculators who took more debt.
But Ben Bernanake who servers his Masters ( Banks and the Rich ) is afraid of depression so he is printing billions of dollars to prevent Deflation and spark another inflation. After all those programs, QE1, QE2, QE3/4, ZIRP and etc our economy is not growing.
Remember, the best time to buy a house is when interest rates are at all time high, that means you are getting the lowest possible purchase price, and that is what you want to capture.
You keep altering your point to attempt to be correct. You I really said 2009-2012 which for the most part has only seen moderate increases. Your first post was very general and only after people pointed out examples of just SF can't be applied broadly you've then since become more specific.
I said if someone had bought between 2009 to early 2012, they would have enjoyed very good appreciation NOW. You can go back and re-read if you have to.
You took that to mean: only appreciation from 2009 to 2012, which is not the case and doesn't even make sense - why would I only count the appreciation between 2009 to 2012? What's the point in that when we're talking about RE today?
I became more specific because apparently some people (you) takes a fact regarding a general market and tried to apply it to a very specific local market. I talked about the US market in general, which has seen significant appreciation in recent years, that's a fact. Backed up by numerous news articles. You tried to debunk that by only using observation from your local market, which makes no sense; hence the need to point out that the facts were based on major US cities but not on your specific neighborhood.
I'm not sure why you keep arguing that US RE market hasn't gone up significantly, not just in one place but in many places. If you're right then a lot of news organizations and US statistics are wrong. You can't argue against facts. Why do you keep dwelling on this?
Location may dictate relative value, however it does not necessarily predict appreciation.
Sure a studio on Park Ave in the Big Apple may command 10x more than a similar property in Mobile. But that does not mean it is going to appreciate more in 20 years. Expensive markets tend to be more volatile so if the market swings the wrong way the NY buyer may lose out.
Where did you get that expensive market tends to be more volatile? It's not as simple as ___ market is more volatile. All markets go up and down of course but there are different types. Some markets are much less volatile but they don't appreciates. Some markets are bust and boom. Some appreciates steadily. Some appreciates a lot in short period of time and then steadies. Some are actually depreciating.
All real estate is local. There is no broad stroke that covers every market. But I do now that that studio in Manhattan will appreciate more in 20 yrs than a similarly priced house in Mobile, AL. That's doesn't mean Mobile is not a good place to live, but if we're only talking about appreciation then Manhattan beats Mobile.
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Where did you get that expensive market tends to be more volatile? My experience has always been the reverse - cheaper, less desirable markets tend to be more volatile (see Las Vegas, Stockton, etc) while expensive ones tend to be less volatile (see NY, SF, LA, etc). Yes, all real estate goes up and down but some markets tend to fall faster, further, and recovers slower than other markets and vice versa; and how a market behaves is generally not a secret.
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My posterior...
The same place you got the idea that location dictates appreciation.
I said if someone had bought between 2009 to early 2012, they would have enjoyed very good appreciation NOW. You can go back and re-read if you have to.
You took that to mean: only appreciation from 2009 to 2012, which is not the case and doesn't even make sense - why would I only count the appreciation between 2009 to 2012? What's the point in that when we're talking about RE today?
I became more specific because apparently some people (you) takes a fact regarding a general market and tried to apply it to a very specific local market. I talked about the US market in general, which has seen significant appreciation in recent years, that's a fact. Backed up by numerous news articles. You tried to debunk that by only using observation from your local market, which makes no sense; hence the need to point out that the facts were based on major US cities but not on your specific neighborhood.
I'm not sure why you keep arguing that US RE market hasn't gone up significantly, not just in one place but in many places. If you're right then a lot of news organizations and US statistics are wrong. You can't argue against facts. Why do you keep dwelling on this?
No. December 2009 until April 2013 is 4%. It is around 6% on average from 2009 until present day. Hardly the great return you suggested but you were referencing your knowledge of SF.
I bought a house in 2006/sold in 2008 and made 15k. I bought a forclosure in 2009 and it has increased 10%. I'm not disagreeing with you because I am bitter about real estate. It simply is just not as easy and risk adverse as your first post claimed.
I always wonder how do people (in general) afford such high price homes and where do they get the down payment money??
LOL! You actually cannot buy much of anything here in Southern California for $400,000...that will barely get you a very small 2bd condo in a good area like Irvine. An entry level home of decent size (2000 sqft) is upwards of $700,000. So if you think $400k is high you will be shocked when you see prices in Southern California.
Well, people just shrug and pay the prices. Some people are high dual income earners ($100,000+ each) so they can afford it. Others use government programs like FHA that allow 50% DTIs and 3.5% downpayments to lower monthly payments. Some others are investors with all cash.
There are also many young Asian buyers in SoCal who get a lot of money from parents for a downpayment. For instance I know this couple, one makes $75k, the other makes $65k so joint income is $140,000. They have $50,000 saved up and the parents will give them $50,000 for a down as a gift. The rest they are borrowing from their 401k. They have no debt. They are buying a $650,000 house with 20% down. So, this is a very common scenario.
No. December 2009 until April 2013 is 4%. It is around 6% on average from 2009 until present day. Hardly the great return you suggested but you were referencing your knowledge of SF.
I bought a house in 2006/sold in 2008 and made 15k. I bought a forclosure in 2009 and it has increased 10%. I'm not disagreeing with you because I am bitter about real estate. It simply is just not as easy and risk adverse as your first post claimed.
Ok, let's check the median home price in mid-2009 and mid-2013 according to NAR.
Quote:
5/12/2009
The median U.S. single-family house price in the first quarter fell 14% from a year earlier to $169,000, the National Association of Realtors reported on Tuesday.
The same place you got the idea that location dictates appreciation.
In that case, your idea should be flushed down the toilet just like all the other stuff that comes out of your posterior.
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