what's going on with real estate?
- Thread starter lasner
- Start date
Very interesting report, particularly the affordability stats (median prices divided by median income).
I'm a bit suprised by the median home price in my hometown, since my impression is that houses are a fair bit more expensive than the report lists. The median income for my area was also quite a bit higher than I expected.
I'm a bit suprised by the median home price in my hometown, since my impression is that houses are a fair bit more expensive than the report lists. The median income for my area was also quite a bit higher than I expected.
I'll tell you who is buying in NYC, rich parents who figure a nice starter condo is a good "investment" for their 27-year old children who only make 40K/yr and can't afford to pay their rent on their one bedroom apt. Well, that 800K one bedroom condo is a nice gift, but it's just a matter of time before the parents and children realize that a CD would have been a better investment than the downpayment and mortgage bills and condo fees and taxes and maintainence bills...
Everyone is biased.
Demographia definitely blames the steep increase in housing prices on government "smart-growth" policies causing land scarcity.
I don't agree with that as the sole cause but it doesn't change the reality of the survey statistics they report. Which confirms what many people have already noticed - housing prices have increased far faster than incomes. It isn't just an issue in the US but a global trend. Actually the US is much better off than many countries where a majority of the major metro areas (or all of them) are unaffordable.
I wish they had more data (I would like to see 30 or 50 year charts).
The good news is that the problem seems to be localized to certain markets. Maybe it will resolve itself with flat housing prices and increasing incomes over the next 5 to 10 years (the soft landing) in those markets. It might resolve itself thru steep price declines (inversely related to interest rate increases).
It just seems safer to me to watch from the sidelines right now rather than participate in the speculation. But I know Joe Sixpack can't resist the lure of easy money. Until it isn't: http://www.reviewjournal.com/lvrj_home/2005/Jul-22-Fri-2005/business/2597431.html
Or maybe "this time it's different".
Demographia definitely blames the steep increase in housing prices on government "smart-growth" policies causing land scarcity.
I don't agree with that as the sole cause but it doesn't change the reality of the survey statistics they report. Which confirms what many people have already noticed - housing prices have increased far faster than incomes. It isn't just an issue in the US but a global trend. Actually the US is much better off than many countries where a majority of the major metro areas (or all of them) are unaffordable.
I wish they had more data (I would like to see 30 or 50 year charts).
The good news is that the problem seems to be localized to certain markets. Maybe it will resolve itself with flat housing prices and increasing incomes over the next 5 to 10 years (the soft landing) in those markets. It might resolve itself thru steep price declines (inversely related to interest rate increases).
It just seems safer to me to watch from the sidelines right now rather than participate in the speculation. But I know Joe Sixpack can't resist the lure of easy money. Until it isn't: http://www.reviewjournal.com/lvrj_home/2005/Jul-22-Fri-2005/business/2597431.html
Or maybe "this time it's different".
I gotta agree...
:eek: Condo fees, taxes, maintainence bills, insurance. You're looking at well over $2,000 a month and that's before you even factor in the mortgage.
Even if we assume appreciation to be at 3%, the ROE is minimal, if not negative.
I'm willing to pay top dollar to live in Manhattan, but not $800,000!! Let alone condo fees have to be kept to a minimal! $1000+ dollars a month for building cleaning and a concierge is just outrageous.
Too funny, my wife works for Pulte, but handles mortgages in Ill, not NV.
I am sorry, no I am not, but it serves these speculators right. These are the same dummies that bought high in the tech bubble and now want to blame their broker.
A savy investor could have driven around neighborhoods I bet and seen the surplus of inventory.
Here is a tip for your speculators, when the incentives seem to good to be true say, 40k for a SFR, that's a whisper that inventory is building. My wife has seen it a few times already in the ILL market throughout 2005.
I am sorry, no I am not, but it serves these speculators right. These are the same dummies that bought high in the tech bubble and now want to blame their broker.
A savy investor could have driven around neighborhoods I bet and seen the surplus of inventory.
Here is a tip for your speculators, when the incentives seem to good to be true say, 40k for a SFR, that's a whisper that inventory is building. My wife has seen it a few times already in the ILL market throughout 2005.