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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-07-2006, 09:50 AM   #21
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Re: Psychology of the Housing Bubble (and its collapse)

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Originally Posted by Brat
I think this is really location specific. To the consternation of many the markets in the Seattle and Portland metro areas are flat.
Very big ripple effects though, the area we moved to has slowed, north carolina near raleigh, people who want to move to the area from the northeast are not able to sell their homes thus a large number of new homes are now on the market.
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-07-2006, 01:15 PM   #22
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Re: Psychology of the Housing Bubble (and its collapse)

In my area prices are still rising, but I think they will moderate over the next couple of years then drop slightly.
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-07-2006, 05:30 PM   #23
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Re: Psychology of the Housing Bubble (and its collapse)

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Originally Posted by justin
Has anyone noticed the absence of new posters bragging about their huge equity in their houses.
They have been replaced with "modest" talk of recent portfolio gains well above the averages and my personal favorite, the occasional "I have $4M saved from my modest job, can I retire?" posts. :P Maybe a little boasting but I enjoy reading it all.
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-08-2006, 07:33 PM   #24
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Re: Psychology of the Housing Bubble (and its collapse)

Yep, my california real estate has been horrible! I only made a 615,000% return. Dang, I shoulda just bought an index fund at vanguard......
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-09-2006, 01:30 AM   #25
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Re: Psychology of the Housing Bubble (and its collapse)

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Originally Posted by newguy888
It seems as though inventory is low because people have taken homes off the market instead of reducing prices.

Many do not have to move, however it is beginning to look as though the run up in equity is now gone poof, many are not going to be hurt by this unless they took out home equity lines of credit. OOps 70 % in some markets have done just that.

I believe we really are in the beginnings of a real bear in the housing market, in markets where there is land like the carolinas and vegas houston etc home prices will stay lower, areas that saw the big run up are dead in the water. The NYC NJ market is very slow, and prices listing prices are close to 25% down in many counties. Those 600,000 dollar homes are now listing in the 490 range the 500,000 homes are listing close to 400.

Interesting.
Sales may slow down a lot, but people will always want to own a place. Prices have fallen back to 2002 levels BUT rents have risen 20%+ since 2002. I have my eye on some more condos in Boston that I would not have dreamed of in the last 12 months. They have fallen from 400k to 350k to 335k. At 300k I am a buyer. They sold for 300k in 2001-2002 when rents were $1250/unit. Now rents are $1650/unit. We may see a little bit of an over-correction (I hope!)... similarly in other markets around the country such as San Diego and NYC, rents have been up since 2002, and up strongly in the last 12 months. At some point rising rents (e.g. inflation) will act as a net to catch falling prices. I think we're close to that point...
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-10-2006, 04:03 PM   #26
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Re: Psychology of the Housing Bubble (and its collapse)

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Originally Posted by Alex
Yep, my california real estate has been horrible! I only made a 615,000% return.
So what did you buy at what price and what's it worth now? How did you get a 615000% return?
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-11-2006, 01:25 PM   #27
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Re: Psychology of the Housing Bubble (and its collapse)

I bought my first home in California with $1.00 down thanks to the VA. Do the math.
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-11-2006, 02:01 PM   #28
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Re: Psychology of the Housing Bubble (and its collapse)

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Originally Posted by Alex
I bought my first home in California with $1.00 down thanks to the VA. Do the math.
Oh, that kind of math!!! So using this system of mathematics, I've made 10000000000000000000000% returns before where my basis was zero. Example - the cisco stock I bought in 1999 on margin and then had it double. I paid zero down for it, and then it made me 10000000000000000000000%+ return on my initial investment. Or the time I made $5000 in a year from arbitraging 0% interest credit card balance transfer money. Zero invested, $5000 returns = 10000000000000000000000%+ rate of return.

Seriously, I thought maybe you had bought a teardown in a declining neighborhood for, say, $1000 30-40 years ago and then sold it recently for $6.15 million (mostly land value). Say, if some big luxury development wanted to build and your property happened to be within their desired building footprint and they bought you out.
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-11-2006, 02:25 PM   #29
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Re: Psychology of the Housing Bubble (and its collapse)

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Originally Posted by justin
Oh, that kind of math!!! So using this system of mathematics, I've made 10000000000000000000000% returns before where my basis was zero. Example - the cisco stock I bought in 1999 on margin and then had it double. I paid zero down for it, and then it made me 10000000000000000000000%+ return on my initial investment. Or the time I made $5000 in a year from arbitraging 0% interest credit card balance transfer money. Zero invested, $5000 returns = 10000000000000000000000%+ rate of return.

Seriously, I thought maybe you had bought a teardown in a declining neighborhood for, say, $1000 30-40 years ago and then sold it recently for $6.15 million (mostly land value). Say, if some big luxury development wanted to build and your property happened to be within their desired building footprint and they bought you out.
well, math is math. So if you have ZERO invested in an investment, you have made infinite returns as soon as you make a penny! - bravo to you. In my case, owning california real estate has made me very lucrative returns that are nothing to scoff at. There is more than one road to wealth.
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-11-2006, 03:10 PM   #30
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Re: Psychology of the Housing Bubble (and its collapse)

Quote:
Originally Posted by Alex
well, math is math. So if you have ZERO invested in an investment, you have made infinite returns as soon as you make a penny! - bravo to you. In my case, owning california real estate has made me very lucrative returns that are nothing to scoff at. There is more than one road to wealth.
I am confused are you telling me that you didn't put any additional payments on this house? Just $1?
What you made as of today is really [today's value - all previous payments - remaining loan], not [today's value - downpayment].

But of course I think you know that.
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-11-2006, 03:36 PM   #31
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Re: Psychology of the Housing Bubble (and its collapse)

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Originally Posted by perinova
I am confused are you telling me that you didn't put any additional payments on this house? Just $1?
What you made as of today is really [today's value - all previous payments - remaining loan], not [today's value - downpayment].

But of course I think you know that.
As Alex says, "Well, math is math." As computer users know, garbage in, garbage out.

Alex also has a maintenance free house and a property tax exemption and never paid any insurance bills on this house. I've always heard California was nice, but I never knew it was this nice.
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-11-2006, 03:46 PM   #32
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Re: Psychology of the Housing Bubble (and its collapse)

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Originally Posted by justin
As Alex says, "Well, math is math." As computer users know, garbage in, garbage out.

Alex also has a maintenance free house and a property tax exemption and never paid any insurance bills on this house. I've always heard California was nice, but I never knew it was this nice.
You have to live somewhere, don't you? I figure that if I paid rent for an equivalent house over all these years it would have worked out to a wash at the worst case. It may have been slightly more expensive in the first few years, but over twenty years rent has increased dramatically. By contrast, my real estate taxes and mortgage payment are fixed. Maintenance has been very very minor. Oh, Did I mention I have been writing off the mortgage interest on my loan all of these years? I think that oughta more than cover the maintenance and insurance. . So yeah, I put a buck in the house.
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-19-2006, 11:04 PM   #33
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Re: Psychology of the Housing Bubble (and its collapse)

south florida reporting in...

at i believe it was justin's suggestion on another post, i'm studying the bogleheads' guide to investing and learning lots. copyrighted 2006, page 20 reads "for example, a move from newport beach, calif, to almost any florida coastal city will lower your cost of living by more than 50%". so perhaps all hope is not yet lost.

we have, however, lost some equity which i was planning to retire on. i'll know how badly i miscalculated when (if?) the inherited house sells. my worst case scenario is having learned a better lesson for less money than a different 4-year college degree would have gained me and a luxury apartment in thailand. not so terrible when your finances force into a life of adventure.

my area around fort lauderdale seems to be holding its own. sales have been going down for a while and prices are also down a few points for past two months in a row (last drop was 2%). neighbor on corner thought he had house sold for $620k but lost contract and is now trying to get $590k. the guy next door to that is trying for $550k. the house across from me will probably try to get $1mm after they finish adding 2 bedrms/2 baths. after the turndown two realtors quoted my dump at about $425k. i am certain the $550k is not worth $125k more than mine.

unless finances force, i won't be selling for about 5 years as my retirement was rather premature and the costs to live here are still very low, $844/month including even all utilities, so, while i've already put in my time here since high school, i'm rather stuck in paradise until it makes more financial sense to leave.

i've been tracking home asking prices in my area and mom's for a year now on realtor.com. in my area, in january there were 33 houses for sale with medium asking price of $680k. in november there were 41 for sale asking medium price of $590k.

in mom's area in january there were 40 houses for sale asking medium price of $4.8mm. in november there were 22 houses for sale asking medium price of $5mm. there are only three tear downs including ours for sale in that immediate area. one (owned by my neighbor who doesn't have to sell) with 80 ft of seawall asking and so far holding firm at $1.425, a flip with 40 ft of seawall (and facing a 4-story condo on the water--a tough sale) asking $1.2 and ours with 60 ft of seawall asking $1.3. we dropped price from $1.4 when the $1.2 dropped from $1.375. there's just a by owner sign on ours for now. will list with a realtor in january and see what happens. even if we sell at 1.2 i'll hardly notice the difference. if it sells under $1mm i'll consider selling my house as well and start my adventure early. (and you thought i was gonna say i'll just have to go back to work).

you'll know what happens later because by then i'll be asking you all, hey, what the hell am i supposed to do with all this cash.
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-20-2006, 09:10 AM   #34
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Re: Psychology of the Housing Bubble (and its collapse)

The 2 markets I am closest to (North of Boston and Southern VT) are down 20% in the last year.

Realtors say the market has returned to where it was ~2 years ago. If I had my way, I'ld dump 2 of the 6 I have (I am not niave enough to think RE can't drop) .... can't seem to get a vacancy. Raising rents when I can ... tenants smile n'pay. Now with a new england winter setting in ... I'll wait till spring.

At the risk of repeating myself, it'll take a deep recession to find a real bottom. We've got time.
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-21-2006, 03:23 PM   #35
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Re: Psychology of the Housing Bubble (and its collapse)

online pic of backyard view of abovementioned house asking $1.2

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File Type: jpg 1 point 2 house.jpg (50.5 KB, 54 views)
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File Type: jpg_thumb 1 point 2 house.jpg_thumb (33.0 KB, 1 views)
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-22-2006, 02:34 PM   #36
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Re: Psychology of the Housing Bubble (and its collapse)

An update... it took me by complete surprise but everything I have been following in Boston seems to have sold in the last two weeks. Even some less than perfect units in "bad" locations (in an overall nice area). Once prices hit 2003 levels they were snatched up. Maybe this is a bottom?
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-22-2006, 02:54 PM   #37
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Re: Psychology of the Housing Bubble (and its collapse)

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Originally Posted by macdaddy
Once prices hit 2003 levels they were snatched up. Maybe this is a bottom?
Or a dead cat bounce. Once wage growth catches up with housing price growth (or vice versa), we should be close to a bottom.
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-22-2006, 04:31 PM   #38
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Re: Psychology of the Housing Bubble (and its collapse)

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Originally Posted by macdaddy
An update... it took me by complete surprise but everything I have been following in Boston seems to have sold in the last two weeks. Even some less than perfect units in "bad" locations (in an overall nice area). Once prices hit 2003 levels they were snatched up. Maybe this is a bottom?
many of those homes were taken off the market and have not sold. That has happened here in NJ.
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-22-2006, 04:43 PM   #39
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Re: Psychology of the Housing Bubble (and its collapse)

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Originally Posted by newguy888
many of those homes were taken off the market and have not sold. That has happened here in NJ.
I also noticed limited amount of for-sale signs.
IYHO why do you think this is?
I can just think of those possible reasons:
- A holiday reprieve?
- Will be rental Units?
- Did they refi?
- People will stay put?
- Do they think (wrongly or not) that the market will pick up steam?
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Re: Psychology of the Housing Bubble (and its collapse)
Old 12-22-2006, 05:12 PM   #40
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Re: Psychology of the Housing Bubble (and its collapse)

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Originally Posted by perinova
I also noticed limited amount of for-sale signs.
IYHO why do you think this is?
I can just think of those possible reasons:
- A holiday reprieve?
- Will be rental Units?
- Did they refi?
- People will stay put?
- Do they think (wrongly or not) that the market will pick up steam?
People I spoke with are staying put. They all thought they were gonna make a killing last spring and then may 1 came and the market went flat, down 20 25% in NJ.

So unless they had to move which some did home prices had dropped in our old neighborhood from 520K to 440K and then there was some action, which I might add if they were the original owner they still did fine they were bought in the 250K range 10 years ago new.

I am still amazed that I timed the market right, or maybe I was just lucky. We sold the last week of april.
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