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.
So therein lies my points. Housing should never be considered liquid. You can't cut a corner off to pay for unexpected large expenses, or to invest in a second home. You, yourself, are the ones who have to remain liquid in your own investments so you can put your hands on the cash if you need it. By doing 100% or even 90% mortgages, folks are pretty much free to walk away if they made a bad decision or bad deal, paid too much, etc. This is the main reason for the number of foreclosures, short sales and so forth. Combine that with loss of jobs + loss of income, and you have disaster looming. It happens cyclically, and it happens by market area. That is why I take no credence in these "lists". #2 here, #5 there... good grief. Lists are set up to sell magazines, and get online hits. Every expert has a different list.
You have to make your own decisions and treat your house as a home. First time buyers have to educate themselves on the financial aspects of home ownership and have a vested interest in the house and want to stay there long term, until they need to move. I believe I said that by eliminating all the problem buyers and sellers that bought and sold for the wrong reasons, the statistics would change.
That's about it folks, it's a great time to buy if you can afford it. Too many couldn't afford to buy, and look at the mess that was created. Add to that an inept administration that was told ad nauseum that spending your way out of debt was folly. They didn't listen either.
Before I get in over my head.... here's a quick question before we get too far off track on the Keynesians and the Austrians.
Would you purchase a home in this market or advise a friend or family member to do so, realizing that no one can predict where the bottom is, and it would be prudent to buy when the combination of prices and low interest is financially favorable to find a great deal. Even if your new house doesn't appreciate at 10% a year, will you be happy with your decision even if the market remains at let's say a slow but steady 2% appreciation for the next 5 to 8 years? (Recognizing that this scenario would best apply to first time buyers, and retirees looking to downsize.)
Or are you more interested in your house "making money" for you?
I don't see a house as an investment. My view of that would be depend on whether the person could truly afford the house, based on traditional rules of thumb, how stable their job and earnings are, etc. Right now, all things consider, in many cases that would mean renting is the best idea until things settle down.
People not paying attention to those things are why foreclosure rates are alarming and predicted to be higher this year than last.
Yes Mule; that's pretty much what I reiterated above; and added the more topical note regarding why there are so many foreclosures and short sales ... it wasn't the average Joe Homeowner paying on his home that he put down 20 or 30 percent or more on 10 years ago. The mess we are in is due to the banks lending to folks who either knew they couldn't afford the homes and have no vested interest in the home. That is the key, having a vested interest in your property. Nite now.
You're right Quilter people need to have a vested interest in their homes, but I get back to my question earlier in the thread. How many of the looming foreclosures in the Asheville market are coming as a result of malinvestment by housing speculators? Again spring is coming as a former Realtor will there be more or less houses for sale than are on the market at the current time? We have a 17 month supply of homes on the market as of January.
(By the way this guy is in commercial real estate and talks his book too much. There is pain in store for the residential market, but things are looking rosy for the commercial market in Asheville? Hahahaha.)
We have a foreclosure crisis looming not just in Asheville but in many markets across the country. What should happen to prices when supply overshoots demand by this great a margin? This is basic economics.
Should some one buy a home in the Asheville or WNC market at this time?
Not if you view it as an investment. Not if you still own a home in another market and move here reliant on that home selling to purchase a new home (I know two families in the S. Buncombe county area that this happened to, both were forced to move back. Both in construction related jobs. One rented a huge home, the other built a huge home. Both sitting on the market in the 400-500 price range which is not moving). You should not buy a home in this area if you are a low income earner, you have no margin for error. You should buy if you've done your research, go in knowing the risks, and can afford to weather any future downturns in your personal investments. In other words only buy if you're prepared and have a back up plan.
Last edited by Green Irish Eyes; 02-04-2011 at 07:28 AM..
Reason: Deleted off-topic/non-local comments
Getting back to Asheville, it's mostly driven by people bringing in money they earned elsewhere (retirees, tourists). If the economy is bad elsewhere, then Asheville can't escape unscathed.
Last edited by Green Irish Eyes; 02-04-2011 at 07:29 AM..
Reason: Deleted off-topic/non-local comments
You all need to go back and read the original OP's link about the young couple who have been struggling with looming foreclosure. My heart goes out to them, naturally.
They are victims of what I've been talking about. I was simply trying to make a point here that WNC is not anywhere near #1 in foreclosure rates. Foreclosure rates have been growing all over the country. (2011 may see much lower figures according to the article). Why did it happen? people took adjustable rate mortgages to "make the payment fit" their pocketbooks. They were not educated by the banks, and maybe not even by their r/e agent, that an ARM is not a secure way to purchase property. Plus, as you read the article you will see they had no equity in the house. They were literally scr**** by the bank or mtg. company and their payment went up $300 when they couldn't afford the original payment to begin with. That scenario is repeated over and over, and is why the foreclosure rate is so high everywhere.
The real estate market is local, in every area of the country. Prices vary according to market value in the county, state, country. The exact same house in San Diego will be 2X what it is in Asheville, and maybe 3X what it would be in Slidell LA.
I rest my case.
Last edited by Green Irish Eyes; 02-04-2011 at 07:29 AM..
Reason: Deleted off-topic/non-local comments
Several realtors in Asheville have told me we are past the bottom now and they are seeing sales increasing. But I cannot reconcile that with increasing foreclosures. The foreclosures are a sign that the debt bubble is still unwinding and will probably take 4-7 years to completely wind down. That may be considered a pessimistic view but I think it is a realistic one. I work with foreign investment companies and for them it is a given that deleveraging has still a long way to go in the US.
If I thought I'd have to settle for 2-3% appreciation over the next decade I would be overjoyed but I cannot see that happening, not unless the banks are allowed to re-inflate the bubble, and that's not likely.
Will there be real estate bubbles again? For sure, when today becomes a distant memory and a new generation is at the helm. There have always been bubbles in the past, greed is nothing new. Look at the first Florida land bubble in the 20's. Many similarities to this past decade. It took until WWII to recover.
We still think we should be able to sell our homes and at least break even, maybe make a profit. We are not past the denial phase yet. I don't think now is a good time to buy a home. Even less land.
What is going to give this economy a boost will be when we start to see a little bit of inflation. Yes, inflation. An uptick in the interest rates will do it, even slightly. The housing market runs the economy with tentacles that go out in every direction. Everything that goes into a house needs to be produced, purchased, installed, taxed, those homes bought and sold over and over, and on and on.
When folks who've been sitting on the sidelines "waiting for the bottom" realize that the bottom passed them by, and they start to see an upward curve (it always happens), they will jump on board and there will be not only a renewed interest in primary residences by folks who had no choice but to rent, but there will be a huge pent up demand.
I doubt there will ever be another bubble like we had in 2005/2006, but that's okay, as long as the economy gets rolling along, things will be just fine.
The Doomers and the Gloomers have been around forever.
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.
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.
