How's your neighborhood holding up? (real estate, attorney, houses)

[TinaMcG]

When we were looking at homes a few years ago, we decided to look at one that was seriously beyond our price range, but I was so intrigued by the photos, I just had to see it. It was listed at $670,000. I wasn't all that impressed with it, but we couldn't have bought it even if I fell in love with it.

That house never sold. It has been on and off the market for the past three years, and I have followed what's happening to it. I believe it was foreclosed. The price is now $345,000 -- down from $670K!!! Someone really took a bath.

[cp1969]

Lots of people have taken baths in the real estate market because they bought into the mass delusion that "there's only one way real estate prices can go!" There were even tv programs promoting this nonsense, such as Flip This House in which somebody would buy an old house, hang a ceiling fan, then try to sell it for $50,000 or $100,000 more than they paid.

The market has a way of punishing fools who pay $100,000 for a ceiling fan.

[Samantha S]

Originally Posted by TinaMcG

When we were looking at homes a few years ago, we decided to look at one that was seriously beyond our price range, but I was so intrigued by the photos, I just had to see it. It was listed at $670,000. I wasn't all that impressed with it, but we couldn't have bought it even if I fell in love with it.

That house never sold. It has been on and off the market for the past three years, and I have followed what's happening to it. I believe it was foreclosed. The price is now $345,000 -- down from $670K!!! Someone really took a bath.

I think I know the house you're talking about! 145th-ish and Mission or so? French style with the pool? (Of course it's probably not the only house in that boat )

We looked at it too. For the same reason - the pictures were great! By that time the price had fallen and we thought it might be a bargain. It was a "hot mess." Needed at least $250k in repairs and restoration and would still take years to recover that in market value. Plus it was on septic, which means you would be forced to pay major bucks in the coming years to bring in city sewer lines.

Our agent said, "There is no way you're buying this house."

[RjRobb2]

Comps basically decide the value of your home. Real estate appraiser's have a nationwide database in which they can go out and view every single house and all the information about it.

When an appraiser gets an order for an appraisal, they go out to this database and search for houses in that neighborhood that have sold in the last month, 90 days, six months, or even a year if it is required. An appraiser is required to pull 3 comps, the more recent the better. They then try to find the houses most similar to the houses they are appraising in terms of number of bedrooms, number of bathrooms, year built, type of house (ranch, split level, etc.), size of lot, etc.

They use the sale price of those homes to determine the value of the house they are appraising. This is the primary factor of the appraised value. When they go out to the house to do the physical appraisal, they already have an idea of what it is going to appraise for. Usually the appraised value will only change if there has been some recent remodels or the house is in poor shape.

For example, I did a loan for some friends that had converted their attic to a living space. No permits were obtained when doing this work so it was not in the appraisal database. This added something like 800 sq ft of living space to their home and resulted in their appraised value being $10,000 more.

On the other end of the spectrum, my aunt and uncle's house took a hit because of the house needing new flooring in the kitchen and an exterior point job. Their value decreased by about $3,000 from the comp value.

In my experience, houses almost always appraise for what the appraised determined using the comps. Most of the time they know exactly what it is going to appraise for before going to the home.

So, what your neighbors house sells for should mean a lot to you. If they sell cheap, it is going to ********* over when it comes time for you to sell or refinance.

[kcmo]

Care to break down any of what I said other than to tell me I have no idea what I'm talking about? I have obviously struck a nerve because I have brought up a lot of topics that most people will not touch with a ten foot pole.

I have nothing against suburban white people, that's still. I am glad that my kids are more easily exposed to a more diverse population now and can possibly come to come more productive conclusions themselves now that they are in a more diverse area. They learn a lot from other kids and other kids parents. They soak it all in and they have obviously soaked in some negative stereotypes concerning black youth.

There IS a difference between midwetern cities and east coast cities. Sure, all major cities have blight and ghetto and poverty and what not. But there is a obvious difference in how races interact in KC (or StLouis or Memphis etc) vs a city like DC or Boston or Atlanta or Miami.

I have a black cousin that would not live in KC for this reason. It's not a slam against KC as much as it is a reality with many cities in the midwest where a very large percentage of the black population is in a state of poverty. Of course Baltimore has problems as well. But when you compare the Baltimore/DC area to the KC area, it's really not even close. There is so much more interaction between races, so many educated and middle class black families and entire upscale city neighborhoods and suburbs that are majority black. You will find this in KC on a much much lesser scale.

My wife has taught in the KCMO SD for a very long time. I grew up on Swope Parkway and went to an all black school, In high school lived near the Bannister Mall. I have first hand experience and long term experience with race relations in KC. I studied to be an urban planner so watching the rise and fall of the Bannister Mall area was something I really got into and tried to get to the bottom of what was really going on there.

People in metro KC are afraid of Swope Park, 18th and Vine etc. You might go there, but most people would rather not.

There are a lot of cities out there just like KC. But that doesn't change the fact that KC is still the way it is.

Is the dress code right? I would say no. That was never my point. My point is that if the P&L district ever got even an ounce of a rumor started that the district was a hangout for thugs (even though young black youth wearing white Ts and baggy pants does not equal thugs), it's over for the District, it would be vacant within 2 years. Cordish knows this. That's all I'm saying. KC DOES NOT have the same tolerance level as many east coast towns and race relations in metro KC is still quite juvenile; from both whites and blacks as whites continue to flee from residential and commercial areas that blacks patronize and a too high percentage of blacks in KC carry themselves in a "thug" way, perceived or not. That's my opinion, I respect yours.

20-40% of the people shopping on the plaza, walking downtown and crown center sidewalks in suits etc should be black in KC. KC is a segregated city. Terribly segregated. Like I said, Lee's Summit is as close as it gets to most area suburbs around the DC area and it's not really even very close.

It is what it is...

[cp1969]

kcmo, did you post this in the correct thread? It looks like this belongs in the Power & White thread.

[sparksharp]

I think a lot of folks have the idea that their house is worth what they've invested in it, and that's not always the case. Some people bought in at the high end of the market back in '05 or '06 and real estate values have gone down ever since. These folks are now taking that financial bath that Tina spoke of. But...the market is what it is.

We put a bid in on a house that was this type of property ourselves. The guy had started at 485,000 and was down to 399,999. He already owed the bank more money than the house was listed for, but...we offered less than that 399,999 asking price cause the house was looking rather run down at this point. There was a cracked tile in the master bath, some grout missing, all the carpets were filthy and the entire inside needed painting. There was also some water leakage coming in around the basement door. We put in an offer of 370,000 given all the issues we saw. He countered with...get this...wait for it...399,999! ROFL!!!

The guy apparently is enjoying his financial bath and wants to soak for a while longer! The way I view it, we threw him a lifeline so he could get out. He didn't reach for it with a reasonable counter. In other words, he's still trying to get more than the house is worth in this market cause he bought at the high end of the market and lost his ass. The longer this house sits, the more in decay it will fall, until it's worth a mere pittance of what he paid...which is already pretty much the case.

Anyway...a house isn't necessarily worth what people owe on them. A house isn't necessarily worth what people have invested in it with upgrades either. The real estate market moves both ways...up and down. We're currently in a downward spiral!

PS. We wound up buying a different house in Southern Overland Park!

[RjRobb2]

A house is worth what a willing buyer and willing seller agree on. Nothing else really matters.

[lifelongMOgal]

The housing market is being artificially elevated by "stimulus" rebates to first time home buyers and other home buyers. Make no mistake, the bottom will fall-out once the rebates are withdrawn if double-digit unemployment continues to be the norm. as is likely. We have a quasi-recovery reflected by earnings reports based on employment cuts and not job creation. The evermounting debt being accumulated by our Congress cannot be sustained without serious (really serious) consequences. No one is willing to purchase U.S. Treasuries to feed the hungry beast that is our entitlement society. And yes, this does affect the housing market.

When taxes exceed the potential financial return of owning a home the "American Dream" disappears. We all become renters but who will be our landlord? China?

[cp1969]

If one stops to think about it, why should there be a financial return on owning a home?