Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 03-26-2011, 12:44 PM
 
26 posts, read 95,874 times
Reputation: 18

Advertisements

If anyone could still answer this question it would still be interesting:

"why don't all buyers purchase foreclosed homes?"


Also, if the city is going to dump a ton of money to renovate an area, I wonder whether homes in that area instantly increase in value as much as they should (factoring in the likelihood of the forecast being wrong, etc).
Reply With Quote Quick reply to this message

 
Old 03-27-2011, 01:45 AM
 
553 posts, read 1,024,900 times
Reputation: 289
If it is anywhere possible at all to predict that some area is going to appreciated faster then the others then it will be priced correspondingly and you are not getting that extra buck for free. Unless you are a big fund trust with millions of dollars that have an office whose mainly occupation is to think "how to optimize the portfolio", then the best thing to do for you is just to buy a house that you like for a fair market price to the best of your knowlege and move on with your life and focus on your day job.

Last edited by Dressy; 03-27-2011 at 02:00 AM..
Reply With Quote Quick reply to this message
 
Old 03-27-2011, 08:10 AM
 
575 posts, read 1,775,874 times
Reputation: 308
Quote:
Originally Posted by CarolinaAppraiser View Post
The biggest factors that affect real estate appreciation are the availability and cost of financing, the overall state of the economy and fluctuations in population and those factors affect all of the properties in an area.
I think this bears repeating.

I recently ran numbers on a house in my area that averaged 11% annual appreciation every year from 2001-2007. What made it so much more valuable? No prison closing or golf course opening in the area, etc. IMO the biggest factor contributing to that kind of appreciation was free flowing financing.

In 2001 the DTI in the county was 36.5%, in 2007 it was 62.5%. Crazy, yes? But I guess when people believe ownership provides a return on investment in the form of ever increasing appreciation (buy now or be priced out forever, house prices always go up you know) they can justify some crazy high debt loads (the bank would never approve a loan that didn't make sense, right?) after all, anyone with a pulse could easily extract all that new found equity by doing a re-fi and taking out a HELOC, and another, and another, and another etc, etc, etc.

Sorry, tangent over.

I concur with folks who are saying not to figure short term appreciation into your calculations.


Quote:
Originally Posted by ATLien86 View Post
If anyone could still answer this question it would still be interesting:

"why don't all buyers purchase foreclosed homes?"


Also, if the city is going to dump a ton of money to renovate an area, I wonder whether homes in that area instantly increase in value as much as they should (factoring in the likelihood of the forecast being wrong, etc).

Buying a distressed property is not a walk in the park. Yes, there are deals to be had, but you better know what you're doing or your fabulous deal could end up being your biggest nightmare.
Reply With Quote Quick reply to this message
 
Old 03-27-2011, 08:15 AM
 
Location: Union County
6,150 posts, read 9,992,918 times
Reputation: 5831
Quote:
Originally Posted by ATLien86 View Post
So, yeah, then it sounds like real estate is just like the stock markets. New info will cause home prices to rise (e.g. Microsoft or Amazon hiring tons of people to the area, or a new park being created across the street), but that will be priced into a home already and because markets are efficient, beating the market is extremely difficult.

That makes it easier for me to just buy the place I like the most as opposed to factoring in resale value really at all.

And I've used that NYTimes thing. It's good. Thanks.
Neither the stock market or housing are efficient by pure definition... I'd just like to insert that here as an important point. I believe you're coming to the correct conclusion "buying because you like it" over a financial decision, so it doesn't really matter much. Just fyi.

Efficient-market hypothesis - Wikipedia, the free encyclopedia
Reply With Quote Quick reply to this message
 
Old 03-27-2011, 09:54 AM
 
28,455 posts, read 85,157,040 times
Reputation: 18726
The evidence of folks buying homes that are in poor condition and then having the POTENTIAL to bring them closer to the standards of an otherwise desirable area are what drove "flippers" however EVEN THESE circumstances are / were largely driven by the overall economy.

Becuase of this I have seen MANY "flippers" get even more stuck with hard to sell homes as financing has become harder.

Real estate DEFIES efforts for "repeated short term profits" -- every time you "flip" or even buy , fix up , rent makes it HARDER to this again. next sale is higher. Next purchase becomes harder. Profit shrinks. Decide to sell books / courses instead
Reply With Quote Quick reply to this message
 
Old 03-27-2011, 10:06 AM
 
Location: Salem, OR
15,539 posts, read 40,308,808 times
Reputation: 17422
Quote:
Originally Posted by ATLien86 View Post
If anyone could still answer this question it would still be interesting:

"why don't all buyers purchase foreclosed homes?"

They don't buy them because they don't like them. Not everyone has the desire or skills to bring a neglected home back up to speed. People that want move in ready homes will most likely be buying from the seller and not a bank.
Reply With Quote Quick reply to this message
 
Old 03-27-2011, 10:42 AM
 
553 posts, read 1,024,900 times
Reputation: 289
http://media.cdn-redfin.com/photo/68...748724_7_3.jpg

imagine how this would look like if empty. will look like a closet.
Reply With Quote Quick reply to this message
 
Old 03-29-2011, 02:20 PM
 
Location: Albuquerque
5,548 posts, read 16,052,382 times
Reputation: 2756
Quote:
Originally Posted by MikeyKid
If your primary reason for buying a house is short term "appreciation" ...
... you're much better off investing your money elsewhere and renting.
I'd like to add that there are other ways to bet on housing appreciation.

You can buy a REIT. You can buy stock in Home Depot and Lowes. You can buy
stock in a home builder. You can buy indexes that are indirectly, but closely tied
to the housing industry. All of these things track the housing market very closely.

The beauty of buying these kinds of things is that if you are right, you can
cash in - in an instant - providing the market is open ( ... or wait till it does ).

If you are wrong, you can bail real fast.

You don't have to chase a declining housing market down. You don't need
an inspection, to repair stuff, having people traipsing through your property ...

If you want leverage, you can buy on margin, use options, etc.

It's easy to go broke each way, but if you are right ( about appreciation ) it's easier to cash in.

I'd also like to point out that if you are betting on further depreciation, you
can make money on all those things mentioned above - providing you are right.
Reply With Quote Quick reply to this message
 
Old 03-29-2011, 02:39 PM
 
Location: My House
34,937 posts, read 36,160,316 times
Reputation: 26547
Quote:
Originally Posted by Dressy View Post
http://media.cdn-redfin.com/photo/68...748724_7_3.jpg

imagine how this would look like if empty. will look like a closet.
Yep. That's because it's a horrible picture of a tiny room.
Reply With Quote Quick reply to this message
 
Old 03-29-2011, 03:15 PM
 
Location: Chicago, IL
1,300 posts, read 3,595,913 times
Reputation: 1221
I think the best thing you can do in terms of resale is buy in a good area that has appreciated consistently each year and hope for the best. Look for an area that doesn't have a lot of inventory on the market in your price range (higher priced houses are more common) and is desirable. That may change, but you can't control everything; you can only make the best decision at the time.

And most importantly don't expect that in just 5 years you are going to make tons of money! Pick a house/area that you would be comfortable living in longer than 5 years if you can't sell it.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate
Similar Threads

All times are GMT -6. The time now is 12:45 AM.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top