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housing crash
- Thread starter silk
- Start date
re:I realized that what is happening in our areas is that the county commissions can't approve subdivisions fast enough, so there is a shortage of buildable lots in planned unit developments (PUDs) with the infrastructure already in place.
This is exactly why we see price appreciation. The process one has to go through to subdivide and develop land is time consuming and arduous. In areas with many environmentalists, and strict city planners you will find a shortage of available lots (less supply for the demand).
This is exactly why we see price appreciation. The process one has to go through to subdivide and develop land is time consuming and arduous. In areas with many environmentalists, and strict city planners you will find a shortage of available lots (less supply for the demand).
Quote from Pabst:
Hey OT. Any thoughts about the price action in IYR?
BTW: I'm not a real estate bear per se' but I'm seeing some really expensive PE's here in Chicago. Particularly in the condo market. For example I see buildings where 2bd/2bath units sell for 300k and rents are in the 1400-1700 range. Throw in the $500 monthly assessment as an owner along with 2k a year property tax and these things are renting at serious negative cashflow.
Recently in Maryland, near DC, an apartment was converted into condo. 2 bed/2 bath are selling for 400k, with condo fees about 500/month. Many people are buying them for investment. How do they cover the mortgages? I am just puzzled.
Quote from onewaypockets:
(cont)
It is true that, for the United States as a whole, real home prices were 66 percent higher in 2004 than in 1890, according to the index my research assistants and I have put together. But all of that increase occurred in two brief periods: the time right after World War II and since 1998.
66 percent probably is a typo. Should have been 660 percent.
Quote from pepper_john:
Quote from onewaypockets:
(cont)
It is true that, for the United States as a whole, real home prices were 66 percent higher in 2004 than in 1890, according to the index my research assistants and I have put together. But all of that increase occurred in two brief periods: the time right after World War II and since 1998.
66 percent probably is a typo. Should have been 660 percent.
thats compound appreciation of 1.67% annually? that wouldnt have covered inflation?
Quote from pepper_john:
Recently in Maryland, near DC, an apartment was converted into condo. 2 bed/2 bath are selling for 400k, with condo fees about 500/month. Many people are buying them for investment. How do they cover the mortgages? I am just puzzled.
You noticed those low interest rates?
Quote from pepper_john:
Recently in Maryland, near DC, an apartment was converted into condo. 2 bed/2 bath are selling for 400k, with condo fees about 500/month. Many people are buying them for investment. How do they cover the mortgages? I am just puzzled.
You've got a point there, and its been hard to be a landlord right now. There are too many amateur real estate investors hopped up on "Rich Dad, Poor Dad", trying to buy in at the wrong time.
In my neck of the woods, however, I have recently seen rents start to rise. This is something I monitor by taking an average of rents in the classified ads of my newspaper. Anyway, from the feedback I'm getting, there is also an exodus of landlords who are cashing out. The number of landlords cashing out, coupled with the knowledgeable landlords who are not buying at these high prices, seems to have more weight than the dwindling number of potential tenants and idiot landlords. The bottom line is that it seems like rents have bottomed, and they are starting to come off the lows.
SM
Quote from pepper_john:
Quote from onewaypockets:
(cont)
It is true that, for the United States as a whole, real home prices were 66 percent higher in 2004 than in 1890, according to the index my research assistants and I have put together. But all of that increase occurred in two brief periods: the time right after World War II and since 1998.
66 percent probably is a typo. Should have been 660 percent.
Well, since they said, "real" home prices, that could be plausible if you factor in that the only people who could afford to buy houses as large as the typical ones today were probably pretty rich and filled them with all kinds of fancy stuff. And were they talking about the houses, or houses and land? Back then, the average house sat on a huge lot, but today, they sit on a postage stamp, yet the home and land packagel may have still increased in price in real terms. I really don't see how you can compare them though, because houses and neighborhoods must have changed a whole bunch since then.
SM