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Have any of you noticed in your area that housing prices are being forced back to 2007 bubble prices? Searching around on zillow/realtor I see things like Sale 1995 150k, Sale 2005 695k, Sale 2008 450k, Listed 700k. Not just listings either but closings as well. My neighbors house just sold for 265k, I bought my comparable house in 2013 for 233k.
Force back?
Real estate is local down to the price point, zip code, neighborhood, block and in the case of a condo, the building, floor and exposure/ view.
The market in my area remains flat as a pancake in my neck of the woods. What on paper may look like appreciation often means the owners made substantial and recent improvements and it's unlikely they will recover anywhere near their investment.
Nearby areas with a concentration of entry level homes are seeing brisk sales. Price points matter.
Because you live in northern Ohio on the shores of Lake Erie.
Cleveland's population peaked at 915K in 1950 and has been sliding downhill since then to 390K now. That kind of population loss does not lead to increased demand for housing.
Because you live in Ohio.
Where the state's population has only increased 300K in the last 15 years.
Contrast that with Colorado with a gain of 1200K in the same period.
Because you live in Ohio.
Where it rains 43 inches a year. Everywhere. That means that you can live anywhere and build anywhere.
Contrast that with Colorado's Front Range where it rains 14 inches a year. This means you can only build where you can tap into a water supply. And the tap fees can $10+K.
No. Prices are way above 2007 levels. Prices shot past the previous bubble high reached in July 2007 close to 2 years ago depending on the neighborhood. There was no "creep back up" instead we had several years of back to back double digit gains. Those of us that bought at the bottom of the market in 2011/2012 have seen 40%+ gains. It all happened very quickly.
It's most apparent on homes that were newly built around the bubble pop. Those homes are now 8-10 years old are typically selling for at minimum 20% above the bubble peak without any updates. Often substantially more.
Seattle is not a reflection of the national market. I suspect some neighborhoods in Seattle are appreciating faster than others. Seattle did not experience as sharp a downturn that occurred in many other areas and there has been no shortage of high skill/ high paying jobs, thus more buyers ready, willing and able to pay more.
What might sell for say $ 1 million in a hog neighborhood in Seattle might sell for $259,000
In another state.
I just watched the movie "The big short" Very sad and frightening. All I can say is get ready for history to repeat itself.
The independent credit rating agencies are not likely going to rate private label mortgage- backed securities backed by serious sub prime mortgages as AAA investment grade. Therefore institutional investors are not going to buy them, thus there is no funding available to give a minimum wage worker a mortgage on a $500,000 home.
There have always been localized bubbles and busts in some markets that have nothing to do with the credit markets.
Can you please give me some references for this? I was under the impression that little had changed in the area of regulation. And as far as new home building being down.....I do not see it in my area.....there are houses going up on literally every .21 acre parcel.
No one is buying the junk mortgages so there is no pipeline to fund junk mortgages. This means if a lender wanted to give a $ 500,000 loan to a Minimum Wage earner with no other assets, the lender will be stuck with the cosequences. This is a very different dynamic than that which existed during the peak for the last bubble.
I view houses as being akin to cars: buy them at hopefully a reasonable price, ideally for cash, and consume their useful value. When done, donate them, or throw them away. Housing isn't a viable storehouse of value, any more than is a used car.
I tend to agree. Which is why I don't understand why more people don't buy manufactured homes and demand that they be allowed in more areas. A well-kept manufactured home can be just as nice as a sitck-built.
It's hard to believe that just 5-7 years ago people thought the world was coming to and end and swore off owning homes. Now they're paying through the nose and there's no end in sight.
My feelings exactly...
I was telling my coworkers what a great time it was to buy 4 years ago and the most enthusiastic response was a yawn... they are are the same ones that said they were priced out in 2007.
I guess when the item you want is on sale it is no longer as desirable?
I view houses as being akin to cars: buy them at hopefully a reasonable price, ideally for cash, and consume their useful value. When done, donate them, or throw them away. Housing isn't a viable storehouse of value, any more than is a used car.
I do too and that is why I have never realized a loss in either.
I tend to buy cheap cars and drive them forever... my $800 car in High School I drove for 20 years... turned down $2500 for it with original engine, trans, etc... just normal tires, brake shoes, oil changes.
Money for my down payment actually came from a car I restored... a 1968 Camaro Z28... spent many hours on that car and it was my pride and joy... a collector bought it and flew out from the midwest to California to drive it home...
Buying right applies to just about anything...
Last edited by Ultrarunner; 03-05-2016 at 06:31 PM..
Folks are correct in that even in places like California there is a great range, divide really, in terms of real estate appreciation and bubble/economic recovery or lack there of. Coastal areas in/near cities and the Bay Area in general are a whole other animal compared to inland suburbia and rural areas. Places like Merced are still amongst the worst areas in the country struggling to claw its way back anywhere close to bubble prices. But around these parts it is polar opposite to places like Ohio with "throw away" house prices.
Close in neighborhoods close to downtown and the coast are definitely above bubble pricing around here, all the nice, but modest sized houses on city lots in this neighborhood are selling for $800k-$1.1M. We bought our place for $178k in late 1996, and that was actually less than it was valued 10 years earlier (the past bubble), and now it is valued over $1M, so I won't be giving my place away anytime soon. Of course with inflation considered it is not near the appreciation one might hope, but it still seems to be a worthwhile investment so far.
Too bad I love my house, neighborhood and city so much I can't see ever moving to cash in my chips as it were. But it's nice to know that I could if I had to (of course it would only then make sense to move to a distinctly cheaper area in the country- and they are cheaper for a reason).
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