Doubtful. The cost basis in my stuff is low and its all in fixed notes. My tenants need a place to live and they pay more than the mortgage to stay.
SM
New Home Sales Plunge 17% - Most In 4 Years
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Doubtful. The cost basis in my stuff is low and its all in fixed notes. My tenants need a place to live and they pay more than the mortgage to stay.
SM
it's all about cash flow... problem arises for those that paid a premium for a rental property and have no tenants or somebody to flip the property to.
not so much a bear on real estate -- for either high end premium locations or low end... it's the upper middle market that got too far ahead of itself.
not so much a bear on real estate -- for either high end premium locations or low end... it's the upper middle market that got too far ahead of itself.
interesting..I lived in Gloucester county back in the day. My family moved in October 1986.
It looks to me from the chart in the youdovoodoo report I provided, that median prices peaked in 1988. They then appeared to drop a quick 25% in 3 years then flatlined until 1998. It took time to clean out the failed banks and all of the foreclosure auction supply while median incomes grew. So it wouldn't surprise me that Q2 2006 will end up being the peak and prices will drop 25% during next 3 years. We need incomes to start to grow again. It appears,from the chart,that they are still at 1999-2000 levels .I wouldn't be surprised if the median NJ home prices in 2012 is still $411 k.
Even within an area, real estate is still local.
In san diego, a tiny # of area are up year over year, like 2%
But some areas are down 26% year over year :eek:
Over 90% of the areas are down though.
Were just getting started.
In san diego, a tiny # of area are up year over year, like 2%
But some areas are down 26% year over year :eek:
Over 90% of the areas are down though.
Were just getting started.
Prices in NJ need to come down 50% or more.
I love these doomsday real estate forums, LOL...
First: New homebuilders are NOT in the real estate business....they are in the manufacturing business....just like GM and DELL....inventory builds up....they stop producing product till inventory is reduced.....classic business sense...
Most, if not all, public homebuilders MAKE PROFIT....it may not be as much as two years ago, but they still are very profitable....
As Smart Money pointed out....they produce a product that people NEED......
Someone buys a house in 1998 for $175,000 and list it for sale in Jan this year for $400,000 but takes $375,000 and you guys say he LOST $25,000 on his house.....comical
It is tough to trade them because there is such a broad array of exactly same company....different locations, different price points etc etc....but basically the same....
I do not know of another industry that has that characteristic about it.....usually have 2 or 3 strong leaders with 3 or 4 in second tier....
Just my two cents worth
SteveD
First: New homebuilders are NOT in the real estate business....they are in the manufacturing business....just like GM and DELL....inventory builds up....they stop producing product till inventory is reduced.....classic business sense...
Most, if not all, public homebuilders MAKE PROFIT....it may not be as much as two years ago, but they still are very profitable....
As Smart Money pointed out....they produce a product that people NEED......
Someone buys a house in 1998 for $175,000 and list it for sale in Jan this year for $400,000 but takes $375,000 and you guys say he LOST $25,000 on his house.....comical
It is tough to trade them because there is such a broad array of exactly same company....different locations, different price points etc etc....but basically the same....
I do not know of another industry that has that characteristic about it.....usually have 2 or 3 strong leaders with 3 or 4 in second tier....
Just my two cents worth
SteveD
You have a valid point...but you leave out a BIG key to this..
A guy buys a home for 175k in 1998...in 2004, he takes out 150k in equity to buy a great investment peice on the other side of town...he then takes out 50k to 'consolidate' his debt.....now in 2007, the ARMs are raised dramatically on the 200k he took out so he has to sell...in order to make what he wants he lists it at 400k last fall....but thousands of other homes are out there as well...so he waits...and waits...and all the while, the value is going down and the banks raise the ARMs and he can't afford the payment....so he drastically reduces the price ..and waits..and waits .....ya get the picture? forclosures are sky rocketing for a reason.
He also left out carrying costs, which realtors always do.
Property taxes, insurance and maintenance can add up to anywhere from 3,000 to 30,000 per year.
Property taxes, insurance and maintenance can add up to anywhere from 3,000 to 30,000 per year.