How's real estate market in your area?

Here in the Washington DC area of Maryland, there's been a spate of "for sale" signs going up for the last year. The apparent time on market for these houses is pretty long and I've begun seeing "price reduced" on some now.

I would have moved a couple of years ago when I sensed things overheating but I have teenaged kids which are notoriously hard to move. One disadvantage of home ownership as an investment is that your investment is also where you live. It's hard to be dispassionate about it.
 
Quote from privateisland:

Domestic,

Where was the condo located? I'm from So. California and know many of these "speculators". After the real estate market "peaked" they would fly to places like Washington, Texas etc and try to "flip" there. For some reason they thought it'd never end....
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southern, ct.
even better point i forgot: i also received a 40ft boat slip , separate title for nothing. others paid up to 50k. i originally rented the slip out until i discovered i needed for myself. i still own it. recently the value reached 15k. it will never ever be near those old high again imo. anyway , i need it for my boat.
 
Quote from Lights:

most people mortgage vs. cash.. therefore.....

tho home prices may fall, rates are set to continue to rise on what could very well be a new inflationary cycle.
.....

therefore housing cannot crash unless the nation's economy crumbled to dust.
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These 2 sentences do not gel.
85% of home buyers in socal are using ARM+interest only loans and are leveraged 10:1. Imagine couples with 50K jobs each buying 1 MILLION dollar homes on ARM+interest only loans, and you will understand what has happened here in the last few years.

If rates continue to rise, thats all it will take. These people have mortgages that are going from $4000 a month to $5000+ a month and continue to go higher.

They are already stretched beyond thin. A few more clicks and the big wash out will begin.

San Diego is already above ALL TIME HIGH inventories, even when adjusted for population. The last time this happened, homes took a 40-50% dip in prices. This time, we are over extended by 3X of the last housing crash here.
 
Greed is going to be burn these stubborn sellers who wont lower their prices. Its herd psychology at play.

Imagine being in the position of buying a home in san diego recently, after everyone you have spoken to who has already bought and has "made so much money", and coming to the realization that you could be the first person to LOSE MONEY on the sale of a home here.

How embarassing. So you hold out, and hope someone will hit your idiotic ask price. Then prices drop a bit more, and pray and pray and pray. People under cut you more, and now its too late.

Interest rates click up and youre already spending your spouses entire take home pay on the mortgage and its eating into yours too now.

Click click, the interest only loan part resets, another $300 a month. ARM clicks up, more pain.

You try to refinance, but the bank wont let you because your home appraises too low now.

You are now F****D. Welcome to the next SoCal crash.
 
So many people here are very pessimistic about the real estate market.

I'm the guy that said 20% depreciation is probably the worst-cast scenario for my area.

The reason I'm not worried is because:

1) SF Bay Area has always had inflated housing prices, but people still live here because it's one of the best places in the whole country to live. Prices have never "tanked" in this area for single family homes even when the tech bust happened. (I don't know much about condo prices, but I do know that they are more volatile) Unlike SoCal, where LA area experienced some severe pullbacks in late 80s and early 90s, NorCal has not had severe pullback. We are talking 10-15% at most in the recent history going back about 50 years....

2) I have locked up my mortgage at 5.125% for 30-years. I lucked out when I bought the house as the rates were very low.

3) I don't plan on selling my house in the near future, so I can certainly deal with price fluctuations that will inevitably come in the near future.

What's the big deal? Unlike stocks, real estate never "tank" fast. It never has and most likely, it never will.

Comparing single family home real estate market to Enron/Worldcom is beyond idiotic. It's plain stupid.

People are making too big of a deal with this real estate stuff....
 
Most (not all) of these RE bears on ET live either in their momma's basement or rent a studio somewhere to trade the emini's. OK, certain number of bad loans (not fixed mortgages will wipe out the credit "challanged" morons who had no business to buy a home with a FICA rating of 550 anyway.
CA in my area is ok for single family low end, that is 300k-350k - high end luxury stuff is harder (500k-1 mill)
Condoes will suck wind cause the rising assoc fees and basically they are just glamorous apartments....
Quote from sunggong:

So many people here are very pessimistic about the real estate market.

I'm the guy that said 20% depreciation is probably the worst-cast scenario for my area.

The reason I'm not worried is because:

1) SF Bay Area has always had inflated housing prices, but people still live here because it's one of the best places in the whole country to live. Prices have never "tanked" in this area for single family homes even when the tech bust happened. (I don't know much about condo prices, but I do know that they are more volatile) Unlike SoCal, where LA area experienced some severe pullbacks in late 80s and early 90s, NorCal has not had severe pullback. We are talking 10-15% at most in the recent history going back about 50 years....

2) I have locked up my mortgage at 5.125% for 30-years. I lucked out when I bought the house as the rates were very low.

3) I don't plan on selling my house in the near future, so I can certainly deal with price fluctuations that will inevitably come in the near future.

What's the big deal? Unlike stocks, real estate never "tank" fast. It never has and most likely, it never will.

Comparing single family home real estate market to Enron/Worldcom is beyond idiotic. It's plain stupid.

People are making too big of a deal with this real estate stuff....
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Quote from domestic:

in 1988 fresh out of college, my parents sent me to a condo auction. i bought a $325,000 for $150,00. living there for 11 years, side by side everyday with those who paid over 300k was very interesting. i remember saying to myself....it was never worth that much, why did the people pay that?
shortly after selling in 1999 for 160k, they rocketed up to 300k. now, they are all sitting, just like 1988. exact same historical scenario. it is truly amazing how these things happen over and over and people think they are geniuses until they realize they were just pigs to the slaughter. oh, by the way... most of those people who paid in my time over 300k, sold for 150 to 170k. , very few stayed for the next upturn.
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The thing is, very, very few people who bought into the latest real-estate hype were in the market back in the '80s. They don't have any historical experience, but rather will quote "experts" in the field, such as real-estate agents, bankers and title-company officers. Gee... who's interest would it be in to hype up the market and keep the ponzi pyramid scheme going? Unfortuantely, once you're the last player getting into the game buying at the top hoping for the next sucker, guess who's left holding the ball when everyone leaves?

I had money in the market back in '87 when it crashed. I had money in real-estate in the late-'80s as well. It took me over 8-years to break-even and even then, with inflation, that meant my house was really worth 1/2 of what it was when I bought it, I was one of your condo neighbors who bought retail. Not making that mistake again...
 
Any real trader willing to pay this kind of premium in SoCal isnt much of a trader.

The potential of a crash here could make Enron look like a joke. Houses dont crash like stocks? No, they take longer, but look at japan, where some homes lost 80-90% of their value over 10 years.

Dont fool yourself. A 30%-40, maybe 50% (if there is a panic) dip here is very possible, and a perfect storm is brewing. Give it 2 years after most of the ARMs have reset and the interest only loans have converted. Double whamy.

Lets see how many of these couples, making a combined salary of 100K can make the $5500 a month mortgage payment, while paying for 2 kids and 2 cars.
 
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