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Can I ask where you get your information that this area will never go up in value, that the housing prices will remain at 160K for years and years? I'd like to know where that data came from too please.
Thanks!
Touche. I don't have any "data". All I have is the housing bubble blogs with all their information about how SWFL fits into past housing bubble models. I also have numbers such as median incomes, rental rates, and what fixed costs are now compared to 2000. So in the end, it is everyone's personal decision to make based on whatever 'data' they feel is useful.
This person's next door neighbor says SWFL prices will resume their upward march...40-50%. I say that prices will fall another 30-50% over the next 3 years and then stay flat for the next 10 plus years after that.
I will invest my money according to my beliefs, keep renting, invest in 6% CDs until I think housing makes sense to buy when compared to median incomes and rental rates.
That gentlemen who thinks prices will go up 40-50%....I would assume he plans to buy some houses next year and make a ton of money riding the prices up.
Everyone must approach SWFL housing according to their own plan. Time will tell which of us is correct.
Can I ask where you get your information that this area will never go up in value, that the housing prices will remain at 160K for years and years? I'd like to know where that data came from too please.
Thanks!
just turn NPR on and listen to what they have to say.
1. The income for the average individual is 25,000 and according to reliable sources in dade and broward (city numbers) the average house hold income is between 40,000 and 50,000
2. Mortgage or rent monthly payments should not be more than a quarter of your salary.
3. People were able to buy artificially high priced homes in south florida because credit was available. As we now know, there is a credit crunch.
4. ARMs and non verification loans are done. Back when all this was going nuts people didn't even have to put down the customary 20% down, it was no down payment, no income verification loans.
5. If people are no longer able to sell their homes for high prices up north and move here and buy another artificially high priced house with that money, then how do you suppose high prices will come back again? If people now have to actually verify that they make enough to afford a fixed rate 300,000 mortgage and the average household is making 45,000 or so then how do you expect them to pull that off?
Prices can only go as high as consumers can afford to pay. Contrary to popular belief, owning a home is not a necessity in life. Once people realize they can't afford a home on what they make they wont buy, that means prices will be pushed down. Its simple math. So unless some how, some way, pay sky rockets in south florida, the game is over. Even if people tried to push the prices back up, it will be pushed right back down because guess what? The local economy can not sustain such prices.
read up on elasticity and how that plays out on prices and income and the relationship between the two.
Touche. I don't have any "data". All I have is the housing bubble blogs with all their information about how SWFL fits into past housing bubble models. I also have numbers such as median incomes, rental rates, and what fixed costs are now compared to 2000. So in the end, it is everyone's personal decision to make based on whatever 'data' they feel is useful.
This person's next door neighbor says SWFL prices will resume their upward march...40-50%. I say that prices will fall another 30-50% over the next 3 years and then stay flat for the next 10 plus years after that.
I will invest my money according to my beliefs, keep renting, invest in 6% CDs until I think housing makes sense to buy when compared to median incomes and rental rates.
That gentlemen who thinks prices will go up 40-50%....I would assume he plans to buy some houses next year and make a ton of money riding the prices up.
Everyone must approach SWFL housing according to their own plan. Time will tell which of us is correct.
Agreed, but if everyone continues to buy a home purely as a fast track to easy cash...we'll never get out of the cycle. A home is a LONG term investment. I have friends who bought homes in Texas 21 years ago, and they could make 70K selling them today...21 years later!!! It's supposed to be a SAFE place to put your money, not just make fast cash. I think everyone is correct, for their own purposes. If you are looking to move to SWFL b/c you love it, want to raise your family there, have a job, and are in it for the long haul...it doesn't really matter what the speculatory data suggests. If you are there for investment purposes, to turn a quick dollar, and to buy cheap and sell high....it is definitely not the place to be, and probably won't be for many years.
Agreed, but if everyone continues to buy a home purely as a fast track to easy cash...we'll never get out of the cycle. A home is a LONG term investment. I have friends who bought homes in Texas 21 years ago, and they could make 70K selling them today...21 years later!!! It's supposed to be a SAFE place to put your money, not just make fast cash. I think everyone is correct, for their own purposes. If you are looking to move to SWFL b/c you love it, want to raise your family there, have a job, and are in it for the long haul...it doesn't really matter what the speculatory data suggests. If you are there for investment purposes, to turn a quick dollar, and to buy cheap and sell high....it is definitely not the place to be, and probably won't be for many years.
The problem is that the average person/family moves every 5 years or so, if I remember the national statistics correctly. Job loss, illness, transfer, divorces, marriages, kids.....what ever comes along that makes people move.
It is hard to justify buying when you can rent for much less, unless you can guarantee you will be able to live in one house for 10 plus years. How many people can do that I wonder?
just turn NPR on and listen to what they have to say.
1. The income for the average individual is 25,000 and according to reliable sources in dade and broward (city numbers) the average house hold income is between 40,000 and 50,000
2. Mortgage or rent monthly payments should not be more than a quarter of your salary.
3. People were able to buy artificially high priced homes in south florida because credit was available. As we now know, there is a credit crunch.
4. ARMs and non verification loans are done. Back when all this was going nuts people didn't even have to put down the customary 20% down, it was no down payment, no income verification loans.
5. If people are no longer able to sell their homes for high prices up north and move here and buy another artificially high priced house with that money, then how do you suppose high prices will come back again? If people now have to actually verify that they make enough to afford a fixed rate 300,000 mortgage and the average household is making 45,000 or so then how do you expect them to pull that off?
Prices can only go as high as consumers can afford to pay. Contrary to popular belief, owning a home is not a necessity in life. Once people realize they can't afford a home on what they make they wont buy, that means prices will be pushed down. Its simple math. So unless some how, some way, pay sky rockets in south florida, the game is over. Even if people tried to push the prices back up, it will be pushed right back down because guess what? The local economy can not sustain such prices.
read up on elasticity and how that plays out on prices and income and the relationship between the two.
I have to clarify. I was always referring to the OP of the housing bubble. I, in no way, intended to make people think I believe that we'll be back in the saddle making a 200% return on home in any future timeframe. I am merely saying that the degredation of the market will not last forever. The bubble will burst, and slowly fill with air again. If you look at Texas, they don't have these problems...like FL. They did, at one time, when no one could give their homes away. Now, it's been stable in terms of price for many many years. What I am saying is "I know why we are in the boat we are in, as I think everyone is" (mortgages, overspending, overpopulation, speculators, investors, etc.), but what I belive will happen is that all the "investors" and people who want to make quick cash will leave (whether we bottom out due to that or not), then the people who want to live here, and ride out a NORMAL long term investment will still move here. (it will actually benefit Florida in the long run). The northerners who make LESS money on selling their homes today, will still come south. They can choose to spend more in the "hot" markets of the Carolinas (who will be in our boat in the future), or they can buy a Florida home that now has a real value attached to it, and won't cost them an arm and leg. Saying Florida will be that surpressed for that long is like saying no one will buy an SUV b/c gas is high. People like their trucks, and people like Florida. Supply and demand will go round and round and round for eternity.
I see what your saying but the days of housing getting like how it was is never going to happen again, you mark my word on that. With out those ARMs and no verficiation loans its just impossible. Prices can not go that high again if people do not have the money to purchase at those asking prices. The only way they can get that sort of money up is 1. either have a extremely high paying job or 2. get a ARM or some other type of retarded loan, and those days are gone.
Real estate is a historically bad investment, no way around that. Only the weak economy from 1980-2007 has made it seem like a good one. Fact is that residential real estate produces nothing, and you will have to give up 2% of it's "value" every year just to lease it from the Government. Add insurance, mortgage interest (unless you are rich enough to buy cash) maintenance (mowing, cleaning,new roof every 10-20 years) you lose money. When RE prices are in line with incomes you can rent and earn an income. Once the whole economy faces reality the lending standards will become conservative. With less "funny money" the sales of Northeastern and Western bubble properties will stop and retirees will not have bundles of cash to destroy Florida with.
As for SUV's they will go the way of the muscle car in the 70's as soon as oil gets as high as it should be. Wages are stagnant and funny money is slowing down. People will have to economize as they did in the 70's and the Great Depression.
I see what your saying but the days of housing getting like how it was is never going to happen again, you mark my word on that. With out those ARMs and no verficiation loans its just impossible. Prices can not go that high again if people do not have the money to purchase at those asking prices. The only way they can get that sort of money up is 1. either have a extremely high paying job or 2. get a ARM or some other type of retarded loan, and those days are gone.
I agree. I don't ever thing that the housing prices will be that way again. Nor did I say that. Thank the Lord too for that! I think they will become stable, and rise very slowly. That will help everyone! I said that the market will become more like a standard market where people will have to live in homes more than 5 years for a profit.
Regarding CJFlorida...true, most people do move. However, most people who move that much never expect the 100K profit that the ones who moved around during the boom (early to mid 2000's.) I bet in the NE, people might disagree with you. Many many people live in their homes more than 10 years...just not in Florida (or very very hot markets that fluctuate). Ohio, Texas, New England etc. people raise they families in homes for a very long time. Where do you think the money came from in the first place. 10 years isn't that long to hang onto a home. It is if it really isn't home to begin with, and was more of an investment. Those figures of the every two year movers, are the product of the recent past market. Not reality. Every neighbor I have right now up to 5 houses down in both directions have been in their homes for 10+ years..some 20+ years.
Real estate is a historically bad investment, no way around that. Only the weak economy from 1980-2007 has made it seem like a good one. Fact is that residential real estate produces nothing, and you will have to give up 2% of it's "value" every year just to lease it from the Government. Add insurance, mortgage interest (unless you are rich enough to buy cash) maintenance (mowing, cleaning,new roof every 10-20 years) you lose money. When RE prices are in line with incomes you can rent and earn an income. Once the whole economy faces reality the lending standards will become conservative. With less "funny money" the sales of Northeastern and Western bubble properties will stop and retirees will not have bundles of cash to destroy Florida with.
As for SUV's they will go the way of the muscle car in the 70's as soon as oil gets as high as it should be. Wages are stagnant and funny money is slowing down. People will have to economize as they did in the 70's and the Great Depression.
I know we won't all agree. But an investor would shoot down this comment in a heartbeat. RE has always been one of the best investments. Just because people make poor investment decisions, doesn't make RE a bad investment. The stock market is a risky investment, unless your ride the SP500 in which you aren't getting rich quickly either. RE is historically the safest and best place to put your money. In a REAL market, you can usually estimate a 5-12% gain on your money every single year you live there. That is better than most CD's etc. An investment isn't supposed to make you rich overnight...it's putting your money where you don't stand to LOSE it. Also, your comment that you have to maintain it to make the money is silly, as it's your HOME...I am saddened that a home has become a mere house in people's minds. Perhaps that is the issue with the degredation of the morals of society...but that's a whole other post.
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