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I own in Killington Vermont at a ski resort and South Dartmouth Massachusetts on the coast. I’m about to sell the Killington place I’ve owned for 28 years. The realtor report says the town is up 30% year over year. In my coastal village, it’s up about 25% and anything oceanfront or behind a gate in a resort community is up about 40%. Both places are desirable and prices are much lower than the high cost of living cities and inner suburbs. It’s telecommuters driving the prices up. There is no inventory at all and any listing sells quickly unless there is something really wrong with it. Even things that I wouldn’t touch have sold without taking a big price cut.
We’re trying to buy in Vail. It’s equally nuts there.
Low inventory, low rates, stock market at all time highs, foreclosure moratorium
I would think that "speculation" would also have to figure in.
Can somebody educate a novice? In places like LA, where land value has been historically high since before the dinosaurs roamed the earth, how can low-income neighborhoods exist? I'm specifically thinking of Watts in L.A., Oakland in S.F., there's gotta be a slum in Seattle, etc.. Why haven't these neighborhoods been gentrified out of existence yet, simply through market forces? It seems kind of silly that prime (most desirable) real estate could be full of Section 8 housing, when there is so much available land in lower cost states (AR, MS, AL, LA, etc.). How is it that low-income people can afford to live in areas where the cost of living is so high? I understand the homeless, because they essentially squat on public land and don't pay rent. I'm talking about people who have lived in Watts since the riots.
With respect to places like Phoenix, count me as someone who would like to live there, but not as much as the folks currently paying $500K for something they could have purchased for $300K a few years ago - to me, "The rent is too danged high". I mean, the weather sucks in Chicago, but it doesn't suck THAT bad, where I'll trade mosquitos for scorpions. I'm simply not interested on getting in on the wrong end of a bubble, if that is what it is. And even if it's not.
Watts that is selling at $400/sqft with basically no pictures?
I guess those that have owned since the riots don't owe anything except depressed property taxes, so their cost of living is low. Rent looks to be ~1,700 for a 1 BR, $2300 for a 2BR. I don't know if they have any rent control or not.
I would think that "speculation" would also have to figure in.
Can somebody educate a novice? In places like LA, where land value has been historically high since before the dinosaurs roamed the earth, how can low-income neighborhoods exist? I'm specifically thinking of Watts in L.A., Oakland in S.F., there's gotta be a slum in Seattle, etc.. Why haven't these neighborhoods been gentrified out of existence yet, simply through market forces? It seems kind of silly that prime (most desirable) real estate could be full of Section 8 housing, when there is so much available land in lower cost states (AR, MS, AL, LA, etc.). How is it that low-income people can afford to live in areas where the cost of living is so high? I understand the homeless, because they essentially squat on public land and don't pay rent. I'm talking about people who have lived in Watts since the riots.
With respect to places like Phoenix, count me as someone who would like to live there, but not as much as the folks currently paying $500K for something they could have purchased for $300K a few years ago - to me, "The rent is too danged high". I mean, the weather sucks in Chicago, but it doesn't suck THAT bad, where I'll trade mosquitos for scorpions. I'm simply not interested on getting in on the wrong end of a bubble, if that is what it is. And even if it's not.
Scary thing about phoenix is we cannot support those prices with the economy here, it has diversified since a decade ago but it is still not on par with other large cities. Still very dependent on growth, we lack a large corporate presence. So when growth is hot, it does well here, but if there is a true downturn it will be worse than the rest of the country. The fact I know so many people who are "Real estate agents" all of a sudden says a lot.
I would think that "speculation" would also have to figure in.
Can somebody educate a novice? In places like LA, where land value has been historically high since before the dinosaurs roamed the earth, how can low-income neighborhoods exist? I'm specifically thinking of Watts in L.A., Oakland in S.F., there's gotta be a slum in Seattle, etc.. Why haven't these neighborhoods been gentrified out of existence yet, simply through market forces? It seems kind of silly that prime (most desirable) real estate could be full of Section 8 housing, when there is so much available land in lower cost states (AR, MS, AL, LA, etc.). How is it that low-income people can afford to live in areas where the cost of living is so high? I understand the homeless, because they essentially squat on public land and don't pay rent. I'm talking about people who have lived in Watts since the riots.
With respect to places like Phoenix, count me as someone who would like to live there, but not as much as the folks currently paying $500K for something they could have purchased for $300K a few years ago - to me, "The rent is too danged high". I mean, the weather sucks in Chicago, but it doesn't suck THAT bad, where I'll trade mosquitos for scorpions. I'm simply not interested on getting in on the wrong end of a bubble, if that is what it is. And even if it's not.
With regards to SF most of the city has been gentrified. However, there are still pockets of low-income residents which have lived in the area for decades. Well before housing prices/rents exploded. However, crime is often an issue and anyone paying over a million for a house doesn't want to get robbed and have their car broken into.
I sold my SF property which was located in the Sunset district. I read the postings on the Next-door website by locals upset over the poor city services as well as an increase in vagrants moving into the area. The couple who bought my property will be paying 20 grand a year in property tax. I don't see it. Yes, SF has mild summers/winters and you don't need a car to get around. But 1.7 million for a home in the Sunset district? Sure it's a nice house and close to 19th ave but with all the "issues" the City has I don't think so.
However, there are buyers who do... the question for how long? I don't think the house I bought in 1998 for 250 grand will ever fall below 500 grand.
But I can see the value dropping to around a million in the near future.
In the 60's there was a lot of White flight out of Oakland, in the 70's people simply abandoned homes and city was selling these for $1
No where to go but up and prices did and then reset...
All of Oakland sold for record prices as late as 2007 and some dropped 80% by 2009.
Now those neighborhoods around $750k
In the span of 45 years from $1 to 750k
In the span of 12 years from 100k to 750k
Nice work if you can get it...
In my puny mind, the only way these prices can be supported is by so many people making very large amounts of money, many of whom thinking that three hundred $K per year is "normal". When the gravy train takes a breather (and eventually, everything reverts to the mean, if history is any guide), there HAS to be a retraction. The question is, when the music stops, who has a chair, and who is holding a $500K mortgage that no one else wants to assume? So, they either do a 2008 and walk away, or....?
There is an old joke about two neighboring farmers who sell a horse back and forth for years, with each sale occurring for an ever-increasing price. Eventually the horse is struck by lightning, and over their fence, they lament his death, and one says, "Man, this is such a shame, we both made a lot of money on that horse".
Any time that housing prices cannot be supported either by local wages. or from a reliable stream of "new money" (transplants) moving to the area, the stage is set for a bubble. There will always be a "base cost" of a house (basically, the cost to replace it should it burn down), anything above that is land value. But even the base can change, depending on how fat (or hungry) builders get, or how high materials become.
Looked at sold prices in the old neighborhood for the last 60 days and people are making bank in the local lingo.
I recognize some from the 2009-12 era and can’t help but wonder what happened to those that walked away then?
Not a block in Oakland was spared.
Of course cash buyers are not stuck.
Also many with rock bottom rates that are fixed are not in the same as those that couldn’t refi.
The elephant in the room is property tax revenues keep increasing.
Million dollar home = 16k?
Also building materials off the charts and it’s not the small growers seeing the windfall.
A friend's cousin and her husband were speculating heavily in (rental) houses in San Diego in the early 2000's. When the music stopped in about 2008, they walked away, and the banks took back the properties they were grossly underwater on. I thought it was a bit unjust, because the properties were still producing income from renters, and they may have been able to keep them, albeit being underwater for years to come.
As far as I know, they didn't have to go bankrupt afterward, but I may be mistaken, since I'm not close to them (I knew her well as a kid, when she lived in Chicago). I do know that they had a lot of financial hardship in the subsequent years, until her Dad passed in about 2012 and she inherited probably a half-mil or more. It would be interesting to know the final outcome, maybe CA has a public database for court proceedings (WI has one of those). Or, I can ask my Buddy's brother, I still see him regularly. You're right, it would be very interesting to know exactly what happened to those, especially the speculators, who Walked Away.
In the case of our state/area (Austin MSA), the Californian/New York/Northeast/Etc. bombardment, coupled with less inventory due to a number of factors has translated into nauseating high purchase prices so that first time buyers are finding it hard to find anything. Even cookie cutter homes in cookie cutter new build neighborhoods are having ”wait lists” and ”lot auctions” (wtf?).... it wasn't like this a year and one half ago that's for sure. You could easily walk into a sales office and pick out a lot and a home. Many of the relocatees have money..quite a bit of money too.
Thanks to telecommuting, the suburbs...you know the places people derided as being the next ghettos....are becoming increasingly unaffordable for many, including all of the wannabe urbanites who feel that they are ”settling”. They're having a hard time finding a home in the inner-ring suburbs and find themselves having to move out to the outer rings because the out of staters are snapping up the closer in suburban real estate.
Heck, Opendoor upped its ”offering price” for our home to 700k...go figure.
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