I just bought a real fixer upper in the Bay Area for around $650K and the doom and gloom merchants are telling me it will be worth about $350K 12 months from now.
Anyone else living in fear of the bubble bursting?
I just bought a real fixer upper in the Bay Area for around $650K and the doom and gloom merchants are telling me it will be worth about $350K 12 months from now.
Anyone else living in fear of the bubble bursting?
Monmouth County, NJ
I currently own a “vacation” home in Michigan. Real estate above 400K is just not moving. There was never a bubble, but somehow it’s gotten worse. Surely, we won’t have to carry two mortgages (and two homeowners’ insurance policies; two electric bills; two gas bills; etc.) forever???
Anyway, have fun with your new home.
I don’t think I’ve ever seen the cost of homes decline for any length of time on the west coast anywhere. In a generally desirable area like SF you might see a hiccup but, over the long run, real property has always been upward.
I just bought a real fixer upper in the Bay Area for around $650K and the doom and gloom merchants are telling me it will be worth about $350K 12 months from now.
Anyone else living in fear of the bubble bursting?
Housing has been very reasonable here for years, but that’s starting to change. I bought a 1900sf house on a 100x200’ lot in 1993 for $93k (probably would’ve gone for 250-300k on the west coast at that time). It appears to be worth $190-210k now. Of course, any gains I’d make from selling it would just get wrapped up in a replacement house, but it sure looks nice on paper! Since hurricane Ivan, people have been buying lots with destroyed homes on them for more than they were worth before the storm, then paying to tear down the old structure and build a new house. I figure we are about mid-bubble right now because (a) there’s a drastic housing shortage due to Ivan and (b) people are clamoring for “deals” as other people decide to move away from waterfront.
Norman, OK - one the least expensive places in the country…
newer, excellent condition, nice design, 3bd with 2 ACRES of trees - $150K.
I figure in San Diego it would be worth about $750K in Seattle maybe $400K, maybe more due to the lot size.
The good news is this area is growing quickly and the economy is excellent. Should be good years ahead.
I’m your neighbor 90 miles to the east in Placer County. No bubble here. In fact I think we are leading the state in outrageousness. Bought my house new for 360 and change a year ago. It’s now worth 500+. The new houses start at 470 now but the SQ footage is much less then I have so I got a great deal. Another year I will sell again and move up again. Capital gains tax is the only thing keeping me in this house now. On second thought maybe I’ll rent this house and use the escrow to buy the next house…
I bought a house in San Ramon at $455,000. It worth $850,000 five years later and that is with one down turn in the market. If there is a correction I do not expect prices on my house to drop more that $100,000.
Life in the OC - 2 years ago in at mid 500’s. Now the same is selling (if you can find one, that is) in the mid 800’s. I don’t think we’ll ever be upside down in the loan on this one, especially with the down payment. We’re planning on paying it off.
Life before the OC - 3.5 years ago north of the OC - in at the 130’s, still in at the low 300’s. We’re planning on paying it off.
I hope there’s no bubble, but even if there is…we’ve got a long way to fall before we bottom out.
As an added, bonus to the thread, the WSJ reported that the Silicon Valley is an upcoming area for aparments to be built, due to the shortage of RE in the area and the rebound of the employment outlook…
I guess I don’t understand the math. If you sell your house for $500+K and then want to move up, won’t any house worth moving up to cost more than $500K potentially a lot more.
Chicago’s doesn’t seem that bad, but there is ALOT of new construction going on the market.
Also, there are coversions of 40+ story rental apartments to condos (roughly 500 units each) - apparently the owners of these buildings (who should know more about real estate than I do) feel that now is the time to get out.
I was in Western Michigan a few weeks ago - tons of “for sale” signs. In many cases, a farmer had carved out a lot next to his house and built a house and was selling that.
I live in NYC, which has gone up like a rocket for the last 10 years.
I think it has elements of a bubble here, but the housing market here is very unusual, probably not dissimilar in some ways from San Francisco, but I think only SF and NYC are like that in the US. That is, since Manhattan is an island, they’re not making any more land (except for Battery Park City in 1970). And since housing stock can’t really increase here measurably, that has a real impact on prices. In addition, the demand side of the equation is so screwy compared to the rest of the country, the housing market elsewhere could blow up, but NYC could be fine. That’s because we’re so reliant on Wall Street bonus money, the fact that crime has been really low for awhile now, and that we’re also a magnet for foreign investment money. Also, as the NYT pointed out yesterday, Manhattan has an unusually large percentage of owner/occupiers, because we have so many co-ops here versus condos.
Living on an island is a pain, but I guess it has its advantages. My place has quadrupled in value in 10 years, which makes me nervous. But like I said, I’ve come to realize that living in Manhattan is like living in a different country, on a number of levels, including the fact that our economic base is unlike any other in the country. SF is probably similar given how little high-rise construction there is, and may be possible I suspect given its seismic issues. I find the prices in the city there high, but not nearly as scary as out in Palo Alto or Los Altos Hills. That makes Greenwich and Westchester here look relatively affordable.
Yes and No…
Fort McMurray, AB, Canada. We mine oil from sand and the Oil companies are literally spending multi-billions of dollars a year expanding their operations. Expansion requires construction workers and new oil production facilities require new employees. To state that there is a housing shortage is a significant understatement.
We bought 6 years ago at $165K CDN and thought that that was somewhat high. By the end of 2004 it was worth $320K and we needed a bigger house so we pulled the equity out and bought another house at just over $400K. (The rental income from the 1st house is comfortably paying the mortgage payments on the 2nd house.) Since then the city has announced that they have no more room in the sewer or water systems so they will not be releasing any more land for development (at least in the near future). So, as best we can estimate from comparable real estate listings, the value of our houses has jumped 20% in the last 5 months.
We’re not sure what to think. I know that we’re not going to lose in this deal, as the worst case scenario is that we’ll end up with what we started with: a house to live in… But every year for the past 5 years we’ve looked at the rising house prices and said to ourselves that they can’t possibly keep going up. What I’ve learned is that somehow they will keep going up and up and up.
Ultimately I’m giving it 3 or 4 more years - at which point I want to liquidate and arrange a company paid move to another location (likely Calgary) closer to family and with a moderately more stable real estate market! (Well, maybe it’s not more reasonable or more stable, but at least there’s a greater selection of houses on the market to choose from!)
So, am I in a housing bubble: definitely “Yes”; but all clues indicate that the bubble is made out of extra stretchy bubble gum that’s got lots of life left in it!
Clay
Yes , If you sell you need to move , to a cheaper location
In southern Ca. home prices decreased in the mid 90s about 30% for a few years. With most average homes in southern Ca. at the 450 - 650K , insane . You can drive east a few hundred miles .New Homes starting the mid 100s to 220K, you just have to live the 110 degree heat.
Don’t worry about bubbles unless your a speculator , buy / sell in a few type.
Bubble? Maybe, but you gotta live somewhere. Other options are not really options. I probably wouldn’t invest in spec real estate around here (Basking Ridge, NJ), but I bought a house last December since I didn’t want to live in a rental…if the value goes down, it only hurts if you gotta sell. Sucks, but what can you do?
I just bought a real fixer upper in the Bay Area for around $650K and the doom and gloom merchants are telling me it will be worth about $350K 12 months from now.
Anyone else living in fear of the bubble bursting?
Montgomery County, Maryland - I don’t fear the bubble bursting since I bought my house 4 years ago for $235,000 and could sell it tomorrow for $575,000. I’m glad I live in the affordable part of the county.
Orlando, our small condo near downtown has been getting unsolicited offers for almost 2x the price we paid 4 years ago.
Don’t think I live in a bubble but I feel very fortunate. Bought my house in VA for $115k and put about $20k into it…3BR 2ba brick cape, 1750 sq ft…built in 1948…all brick, stucco walls, hardwood floors throughout and tile bathrooms. In a good school district and I’m getting postcards in my mail offering $225k for it…
Have thought about selling it but for me to move to an equal or better house I’d have to pay more money or otherwise move into a cheaply built new house with vinyl siding, doors, and vinyl floors.
I’m on the east coast of Florida and property values are skyrocketing in the past two years… However housing is still pretty reasonable (nice 3 bed 2 bath with good sq footage for 120-200K). So I think at least in this area things have got a long way to go be a “bubble”
I’ve been hearing that nonsense ever since I bought my first house (just east of 101 and a block south of Coyote Point) for $23,500 in December of 1969. Heard it from a guy from New Jersey in 1987 when I was selling 3/2 houses in Los Altos for $325-375,000 and he thought they were worth about half that, because of the pricing on the east coast.
Most expensive RE in the USA is SF Bay Area, primarily because of prices in SF and on the peninsula. They’ve run out of land, so prices are skyrocketing and will continue to do so, barring a 10.5 earthquake or nuclear war.