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I think the major cause of the last crash was reckless lending, not necessarily overpriced homes.
And I don't see any evidence that lenders are lending money irresponsibly, or that there is any trend showing buyers are not paying their mortgages. The economy is doing pretty good and people have money to buy homes. That's why home values are going up. Will it level off or go down? Probably? Usually, these things are cyclical, always have been before. Hopefully not today, and hopefully not too deep, but that's how these things work, we need to expect it.
Your totally right, reckless lending caused homes to be overpriced, but the actual cause was lending practices.
Here in the front range of Colorado the prices can be ridiculous! A typical, newer 4bdrm/3bth home will run you 600k to 800k+ in most areas. Some pockets (ie, mountain views) will be much more (near 1M).
With that said, I am starting to see a cooling off in non-commute friendly areas; areas within a reasonable drive of Downtown Denver, DTC (Denver Tech Center) and Boulder (UC-Bo) will always be more. But the subdivisions built in 2014-2016 on the front range (might have views but NO trees) are flat out "cold" and builders - and smart homeowners - are dropping their prices like bricks. We're currently in a townhome apartment and are waiting for the prices to "level out" because no way are we paying nearly 1M for a 4k sf home with a tiny, non-existent lot that is literally within 3 feet of your neighbors on each side.
I do see great real estate deals in the Ohio Valley though. We're keeping our eye on the North Georgia/South Tennessee area (Smoky Mtn Range). Great homes at great prices out there.
I think most of you folks have a car or truck in your garage that is worth more than my west Texas 20 acre hobby farm. Only the county tax office seems to think that rural real estate out here is going up in value. That's okay by me though since it's my millennial daughter who will have to deal with either selling or keeping the farm. After living in what always seemed to be highly populated staging areas in order to make a living, I bought this old place for peace of mind in retirement and a feeling of home that it has given me.
But on the OP's topic, I never expect a real estate crash out in rural west Texas since it's impossible to fall from the lowest point. Rural west Texas land and property prices have only creeped up over the past 50-odd years that I have been in and out of the area and mostly due to the depreciation of the U.S. dollar. Oil booms and busts in the Permian Basin to our south seem to stir up folks a little around Lubbock, and to some extent Amarillo, but out here in the Texas "toolies", life moves at a snail's pace and realtors and lawyers are as numerous as trees on the Texas South Plains.
Last edited by High_Plains_Retired; 12-11-2018 at 01:59 PM..
To me anything and everything is worth what someone is willing to pay for it. There's a property near me that was built for something like 60 million Dollars, a couple years ago it sold for 2 Million. It's not an area with super huge houses, the house isn't a style that caters to the masses, its ridiculously large and the upkeep would be insane. There's a small pool of buyers so when the last buyer bougth it it was worth 2 million.
Same could be said of rare collectibles and whatever else. People can appraise something for 10k but if nobody is willing to pay 10k its not worth 10k
Did you mean $6M or $60M? Can't think of anything in this area that would have cost that much to build, not even the Parillo mansion in Lincoln Park.
There are also some demographic pressures going on in RE right now. Millennials with kids are moving to the suburbs for better schools and affordable real estate. On the other side of the ledger, the Baby Boomers are retiring in droves and this is putting pressure in retirement areas. Despite the recent rise in interest rates (around 4.5% fixed for 30 years today), rates still remain historically low. This is also driving sales as buyer want to buy before rates get even higher.
I do not see any crash in the near future. Higher interest rates will have a cooling effect, but it is hard to predict when this happens.
I think most of you folks have a car or truck in your garage that is worth more than my west Texas 20 acre hobby farm. Only the county tax office seems to think that rural real estate out here is going up in value. That's okay by me though since it's my millennial daughter who will have to deal with either selling or keeping the farm. After living in what always seemed to be highly populated staging areas in order to make a living, I bought this old place for peace of mind in retirement and a feeling of home that it has given me.
But on the OP's topic, I never expect a real estate crash out in rural west Texas since it's impossible to fall from the lowest point. Rural west Texas land and property prices have only creeped up over the past 50-odd years that I have been in and out of the area and mostly due to the depreciation of the U.S. dollar. Oil booms and busts in the Permian Basin to our south seem to stir up folks a little around Lubbock, and to some extent Amarillo, but out here in the Texas "toolies", life moves at a snail's pace and realtors and lawyers are as numerous as trees on the Texas South Plains.
The area around Alpine and Ft. Davis has seen quite a bit of RE price appreciation, so not all of west TX is in a funk. I never could figure how taxes are set for "ag" versus residential properties. Some counties set aside one acre for the house and treat the rest as grazing land while others convert the whole thing to residential tax rates the minute a shovel of dirt is turned. And down in Terlingua, don't they just hang the appraisers?
Last year, I bought a lovely home in a good area, and I had to outbid two other buyers to get it. I'm told that this year, the market is even hotter, and that houses are being sold within hours of being listed.
I've got a couple friends that are Realtors, and they're telling me that the market is super-heated right now with no sign of cooling off.
Have we come to the end of another real estate cycle? Are prices going to drop off a cliff soon?
read all 3 articles. pretty much junk (click bait) to get people like yourself worked up.
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