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At least in many areas? Proves again no one has a Crystal ball!
So I'm just curious... did anyone here savvy in this sort of thing see this coming or was this a surprise?
We almost jumped in when the prices were low here in Orange County, Ca. in spite of having some debt we were still paying off, but a financial planner who we consulted with persuaded us not to and to have everything paid off and a 20% down saved up.
He told us his wife, who's been a mortgage broker for many years, that prices would be flat for many years because of this mess. Ah whoops!
Oh well... it sounded reasonable at the time...but now prices are crazy again and we don't want to spend 300K on an apartment conversion condo.
So anyone see all the Chinese and other investors coming or was this a big surprise? Just curious.
BTW, we're still renting in our cheap but comfy apartment, and putting more in our 401K.
Cramer advised people to start buying real estate in early 2010.
Mid-2011 is when Palo Alto/Mountain View officially became a seller's market again.
That's when I knew prices will explode within a year for the rest of the Bay Area. I was surprised by the speed of the recovery but once the hub of the Silicon Valley turned around the writing was on the wall.
As for Chinese investor, no surprise there. They snapped up a lot of Manhattan real estate soon after 911. They are astute investors. The surprise is that they kept buying even now that prices have gone up so much, but that's likely due to lack of favorable deals elsewhere.
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Cramer advised people to start buying real estate in early 2010.
Mid-2011 is when Palo Alto/Mountain View officially became a seller's market again.
That's when I knew prices will explode within a year for the rest of the Bay Area. I was surprised by the speed of the recovery but once the hub of the Silicon Valley turned around the writing was on the wall.
As for Chinese investor, no surprise there. They snapped up a lot of Manhattan real estate soon after 911. They are astute investors. The surprise is that they kept buying even now that prices have gone up so much, but that's likely due to lack of favorable deals elsewhere.
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Wow! Shoulda listened to that Cramer guy I guess...
I think another thing why we didn't go for it was just basic trust of real estate agents. (no offense to real estate agents) I mean even during the bubble it was always a "good time to buy", and I worked with a lady who "got in! Whew!" on an adjustable mortgage then she and her husband lost their house. So then I get the earful of "never trust real estate agents! They'll tell you it's fine, and it's not!" Sure buyer beware, but many buyers are usually just regular folks wanting to buy a home and depended on "the professional".
Anyway, that's why we went to a financial adviser, and then got the standard lecture.
Maybe should have listened to the agent after all.
I think a sudden rise in prices was very predictable, but hard to predict when. Everyone was waiting for the bottom. But it takes a while for everyone to believe the bottom is here. So when it was clear that the bottom hit and prices were starting to come up, and interest rates were still crazy low, everyone jumped in at once creating multiple offers and a quick rise in prices.
Here our prices hit bottom early 2012. During the year they rose slowly but steadily by about 4%. People recognized it early in 2013, and prices went up 20-25% during the year. They have been rising slowly since then with the seasonal ups and downs.
Don't blame the realtors. We are not economists. And even economists are wrong. Often. Clearly your investment guy was wrong too. Buy when you want to buy, and you can afford to buy.
I've seen a slowdown in chinese buyers recently. In the previous 2 years, they were snapping up new mcmansions here. Now they're just not selling as fast.
Where is OC are the chinese buying besides Irvine?
From a quick search of tax records of purchases after mid-2014, it's rare to see a Chinese name in the list. Usually they're easy to discern because they usually have X Y and Z in their names. Zhang, Xiong, Xu.... etc
So it's just the regular people now being suckers and overbidding
What was surprising was how quickly markets went from having a huge surplus of inventory to record low inventory. It seems what we have now are a bunch of areas that fully recovered with very few underwater properties or distress sales, and other areas where half the owners still owe more than the homes are worth.
I expected with how tight lending was 3 years ago that the price recovery would be slow going. Instead the pent up demand far exceeded supply in areas with little build-able land.
My area bounced up about 40% after falling around 25% during the crash. None of the demand is coming from China - it's not a popular neighborhood for Chinese buyers. Investor demand is all tear downs and renovations which are quickly turned for 2-4 times the purchase price.
We had two high-priced condos at the peak of the market and were able to get out of one within about 25-percent of the peak (well ahead of what we paid). The other went into a slide and we got out at only about 40-percent of the high. But, we had purchased it before the crazy upswing, and were still able to get out for more than we paid.
We then moved into another higher priced market, and spent about 6-months to figure it out. Initially, we had an amazing short-sale ... but, the bank wanted to close within a week - and I wasn't ready. (That unit has since increased several hundred thousand dollars). We were able to get into another condo at what turned-out to be pretty close to the bottom (about 30-percent of what the buyer had paid 4-5-years earlier). This one has now increased in value about 30-percent over the past 3-years.
The bottom line is that we haven't done as well as some, but, have done significantly better than most. IMO, the difference is that we haven't tried to 'time the markets' or 'get rich quick' by flipping properties.
A lot of people knew that prices would rise sharply. The mystery was when.
I've told a lot of people, better buy now while prices are so low and interest rates are such a bargain. Every one of them replied that they were going to wait for prices to go down more, and every one of them now can't afford a house because when the market turned it moved rapidly and they are now priced out of the market.
Another thing is that during the housing bottom, the inventory was crap! Most things on the market were either foreclosures where the houses were usually trashed, short sale (probably the best kind of inventory) with long wait and headache, or dungeons located in crappy locations. A lot of people who really wanted to sell were holding on to the houses.
People wouldn't sell unless they absolutely had to. And there was no incentive to fix or renovate anything. 9 out of 10 listings were just crap that most people wouldn't want to buy. The rare good listings get multiple bids.
With the price what it is, I'm seeing much better quality compared to a few years ago.
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