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Old 10-02-2016, 08:11 AM
 
8,228 posts, read 14,158,646 times
Reputation: 11226

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I've been looking at online real estate in one location for several years.
Without doing any hard core spreadsheets or anything I've been getting the
uneasy feeling that real estate might be heading toward the high end of a bubble.
Then today I got an email shared to me of a market report from Zillow that
seems to confirm it.

49696 Home Prices & Home Values | Zillow


Now the last time I owned a house I bought and sold within a few years due to
family issues. So I was looking in 2005 and told my realtor, you know this just
doesn't seem sustainable. Oh No its all fine. Well then look at what happened.

Do feel that realtors either can't or won't see bubbles that can't be sustaned?
They are human and many humans will convince themselves
that nothing bad is coming in all sorts of scenarios.
Or won't talk about them? Because, well, it would hurt sales.
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Old 10-02-2016, 08:25 AM
 
12,016 posts, read 12,638,678 times
Reputation: 13420
There was no bubble, there is no bubble, there were fraudulent mortgages written for people who could not afford the homes, it was tied to the stock market where bad loans were sold as good ones. What happened before won't happen again any time soon. The market is correcting itself. Some areas are overpriced but that does not mean there is a magical "bubble" that will pop. it's supply and demand, depending on location.

There are still people underwater in many areas of the county and many areas have homes that are selling for a lot less than they did in 2006 to 2008.
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Old 10-02-2016, 08:40 AM
 
Location: Raleigh, NC
19,368 posts, read 27,593,685 times
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The link you provide is useless (no surpise since it's zillow).

Among other things, the linked page includes this gem of gibberish :
Quote:
Mortgage delinquency is the first step in the foreclosure process. This is when a homeowner fails to make a mortgage payment. The percent of delinquent mortgages in 49696 is 0.0%, which is lower than the national value of 0.0%. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of 49696 homeowners underwater on their mortgage is 0.0%.
As for the OP's question, sure, some realtors will believe we're not in a bubble. That's the definition of an optimist, and that's a personality trait that imho is a requirement for success in commissioned sales. But nobody has a crystal ball. If you're thinking it's an organized plot among thr Real Estate profession to lie tp consumers, I'd suggest that you might be a bit of a conspiracy theorist.

Anywho, this article probably explains what's going on in Traverse City, MI much better than zillow.

http://michiganradio.org/post/popula...roots#stream/0

Last edited by Jkgourmet; 10-02-2016 at 08:49 AM..
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Old 10-02-2016, 09:16 AM
 
8,005 posts, read 7,125,717 times
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Quote:
Originally Posted by Giesela View Post

Do feel that realtors either can't or won't see bubbles that can't be sustaned?
They are human and many humans will convince themselves
that nothing bad is coming in all sorts of scenarios.
Or won't talk about them? Because, well, it would hurt sales.
As an agent I can say with fair certainty that agents are not qualified to spot bubbles based on their almost unanimous failure to predict the biggest one to ever exist last decade. The conditions that caused that one don't exist today but that doesn't mean that property values can't go down again. Zillow is probably going to be worse than a newly licensed Glamor Shot agent at predicting the future. If you're worried you're probably better off asking the Long Island Medium.
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Old 10-02-2016, 11:35 AM
 
Location: Sector 001
15,932 posts, read 12,188,685 times
Reputation: 16097
Our realtors all acknowledge that pricing in my particular town is on the high side if you get candid with them. It's no big secret. It wasn't a bubble so much as it was a supply shortage, which still exists but is not as bad as it used to be. Nonetheless prices are above 2008 levels here.
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Old 10-02-2016, 12:48 PM
 
Location: North Idaho
32,499 posts, read 47,478,646 times
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You are giving realtors too much credit. They don't have any magic crystal ball that gives them the real secret about what is going to happen to the economy.

Always in the past, real estate prices have gone up and down in a cycle-- just like the prices of just about any other commodity. That does not mean there is a bubble; it is normal economic fluctuation. Right now prices might possibly be on the high end of a cycle, but there is no way to know what prices will be next year or the year after, or the year after that. It's possible that this is just the start of a price build-up. Or maybe not.

If you are buying and think that prices are too high and will go down, then take the gamble and wait it out. Maybe that will work for you, maybe it won't.

I'm seeing the banks are starting to give some stupid mortgages and no money down mortgages to people who really should not buy a home, but there is no telling where that will lead this time, and I suspect that it is the federal government interfering again and requiring low income mortgages. That didn't work well last time around, but at least there are no stated income mortgages so far this time.
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Old 10-02-2016, 01:39 PM
 
Location: Salem, OR
15,498 posts, read 40,206,742 times
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So here are my thoughts. It is really hard to predict a national bubble when your job is to focus on local real estate. I can tell a home buyer or seller what the local dynamics are for my particular market and why I think prices are being driven up.
I can tell you that lack of water has created huge demand in Oregon from CA home buyers. Is that a bubble? Will CA continue to have water issues over the years? That driver of demand here locally has nothing to do with Wall Street. So some agents, that take the time to learn, can tell you what is driving their local housing higher. Then it is up to you to decide if you want to participate in that or not. So the area you referenced in your Zillow link is likely not impacted by CA water woes, but the demand is being fed by something else, maybe retirees. I think the important thing is to focus on the context of the demand that is causing the real estate prices to go up so that you understand what you are getting into when you enter that particular real estate market.

I don't have time to read everything I need to about local developments, zoning changes, proposed revitalization areas, loan requirements etc and read about what other cities might be in bubbles and which ones aren't.
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Old 10-02-2016, 02:47 PM
 
3,478 posts, read 3,163,413 times
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Yes there IS a real estate bubble. Based on the several (widely spaced) places I have been looking at for about 5 years, there are several reasons. First off, mortgage rates are low. Way low. That alone drives prices up. Secondly, many have recovered at least a down payment since the crash. It's been 8 years you know. Thirdly, location has become awesomely important. If you are looking in a desireable area (and that definition has changed recently) you'll find values have increased over 30% in just two years. Example: Real estate located greater than 25 miles outside Detroit's boundaries are going for Manhattan prices compared to what they were worth, relatively, just 5 years ago. Meanwhile, Grosse Pointe St Clair Shores, and Royal Oak have seen only modest price increases. "Too close to Detroit" is the mantra there. Other factors are increased demand in "retiree" areas as boomers retire by the millions (high demand), and areas designated as especially desireable for certain demographic groups - well, in such developments, you just name the price.


Loose money, a down payment in the bank, and people clammering to get way out of town (so to speak) have gotten real estate in some areas back to pre-crash bubble, even higher in some areas. Add to that new concepts in housing development for specific types who'll pay whatever it takes.

Last edited by TwinbrookNine; 10-02-2016 at 03:01 PM..
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Old 10-02-2016, 03:19 PM
 
Location: Fort Lauderdale, Florida
11,936 posts, read 13,007,368 times
Reputation: 27076
As an agent, I don't have a crystal ball to look into and tell you whether or not the market will crash.

All I know is that people keep walking into my office wanting to buy and prices are holding steady.
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Old 10-02-2016, 04:12 PM
 
8,228 posts, read 14,158,646 times
Reputation: 11226
I suppose I'm sort of mashing two questions together, national or regional or local bubble and local overpricing. Maybe I'm not using bubble correctly, maybe I mean overpriced. Or the top of a cycle. Some of this is just semantics. Buy too high and when the market corrects you are stuck if you need to sell. That's what I'm worried about and that's one of the things I don't think realtors want to tell you. I would hope a realtor who had been working the same market for 20 years would be able to tell if the markt was overheated and price was too high and bound to come down again.
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