Anybody Seeing Real Estate as a Buying Opportunity in Their Locale?

[lazygood4nothinbum]

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Originally Posted by brewer12345 But in the bubble markets like Florida, Nevada, Boston, and (especially) the west coast, it ain't gonna be pretty.

recognizing i'd have a lot to lose if florida went bust--so i do question my own judgment here--i still think florida shouldn't be written-off quite so quickly.

our in-migration & immigration rates are about the highest in the country. we don't just get cheap labor floating in on rafts but also northeast and midwest equity as well as european and south american cash flying in on business class. we'll soon top new york as the third most populous state.

our unemployment rate is about the lowest in the country (3% as of april) with dade & broward counties (bubbleland) leading the state in that. granted these are not all high paying jobs. but we also have a new bio-tech industry cranking up here. assuming none of those little organisms escape and kill us off during a hurricane, we could become another silicon valley over the next 5-10 years.

our geography is limited--in south florida in particular--by the atlantic ocean to the east, keys to the south and the everglades to the west. so redevelopment is fast underway. our long beloved strip "where the boys are" has been converted from spring break mom & pop 2-story motels to 4 & 5 star condo-hotels. i don't like it, but there you have it. progress.

lastly, i would argue that florida was long undervalued. when the winds drop below 110 mph, it truly is quite beautiful here. we don't have the fear of the earth dropping out from under us, but we also are still valued at about half the price of san francisco and where do they go to the beach in the winter? i just hop on my bicycle and head east.

for the my-home-is-part-of-my-net-worth camp, it seems to my untrained eye that florida should remain a reasonably stable environment. for flippers who bought into the last year of the craze here, yeah, they might get hurt.

already we are hearing stories of people walking away from their $50k deposits. mostly these are in new complexes, overpriced from the start, where contract holders are now competing with the developer who hasn't finished building and has much deeper pockets than the flippers. as to those who thought they'd double or quadruple their money in 12 months--not to luxuriate in someone else's misfortune--it sure does make me smile to know i was not so careless with my future.

[brewer12345]

I could make the same argument about NJ (high emloyment, lots of people migrating in, little or no room to build, etc.). But I still think that the coasts are in for a rough ride. West coast markets will take the biggest beating because that is where the mortgage industry reached new heights of stupidity creativity.

[astromeria]

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Originally Posted by youbet I hope not! The last Calif real estate crash was so entertaining back here in the flatlands we could hardly stand it. Someone would bring a newspaper to lunch everyday and read stories out loud about folks upside down in their mortgages, etc. and we'd all crack up. It was like something from a comic strip. Before we're accused of just being jealous, we admit it! Seeing folks profit beyond imagination from real estate or equity bubbles does make one do the happy dance at payback time. And especially since, for most, it's just paper loses, a reversion to the mean.

Good grief--the people who lost money aren't the same (for the most part) as the ones who made money (the late sellers made a fortune, the late buyers lost it). Besides, I can't imagine feeling "entertained" by someone else's misfortune (3 stooges excepted-).

I know people on both coasts who lost or came close to losing their homes--not due to ARMs but to unemployment. It was not entertaining--these were mostly hard-working couples with kids--many Bush voters(!), and it was painful to experience their shock and sadness even secondhand. Why would this cause you & your coven friends to enjoy a happy dance :P

Be careful what you wish on others--karmic payback, dude.

[macdaddy]

I think California may be shielded a bit by proposition 13. Case in point we own a 1.5m house outside La Jolla that rents for 3300/month. Last year paid around 2800 in property taxes. This house can be passed down in the family indefinitely with no tax reassessment. Furthermore if I head back to San Diego I am told I can sell and buy a new house and take the tax exclusion on 1.5m with me. That's a sweet deal. If it weren't for this, we probably would have sold by now. Both houses next to ours are occupied by the children of the original owners (kids I grew up with), who otherwise would have been priced out. There is no efficiency in this market because people hold on to things forever, knowing if they sell they may be priced out forever. Personally I think it's an unfair law, but there you go.

[cute fuzzy bunny]

Last time we had a bubble in this area was 1988/1989. Prices shot up 30-40%, people running around with checkbooks in hand, making offers on properties from the curb, etc. Pretty much the same thing that just happened here the last two years.

From 1990 to 1996 values dropped about 5-6% a year. Nice long slow slide that put prices right back to where they were in 1987. Then they shot back up again. Now we've stopped rising and we're seeing a slow slide.

It was good to be a buyer back in 1996 when I bought my mcmansion. A lot of people had tried to wait out the slide and got killed. A lot of properties for sale, lots of foreclosures, and a whole lot of desperation.

I had a lot of sellers look me in the eye and say "PLEASE make me an offer. Anything.". Some people had been camping in the house for 4-5 years trying to sell it.

In short...its not necessarily the big drop all of a sudden that might kill ya. Its that long slow slide.

Couple of ads in the local paper show some flippers got their pants pulled down pretty good. One guy is begging for a quick offer, please look at his property. Another says he'll take cars, boats, rvs, anything at all in trade and will carry the financing cheap. Another just bought a condo and is offering to pay a large special assessment and a couple of years of the condo fees, along with a big discount.

Sniff...sniff...maybe a year or two and I might buy some property.

[youbet]

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Originally Posted by astromeria I know people on both coasts who lost or came close to losing their homes--not due to ARMs but to unemployment.

Aaaaaw astromeria, we ain't laughing at people who loose their jobs and are having a tough time making mortgage payments.* We've had enough of that out here in the rust belt to bring tears to the eyes!* What we're talking about are the greedy coasters chasing obscene profits by using unconventional, agressive financing and assuming forever skyrocketing home values.*

My post was pretty clear.* I said " Seeing folks profit beyond imagination from real estate or equity bubbles does make one do the happy dance at payback time."* I did not say we enjoyed hearing about folks losing their jobs.* That's a completely different story.

[gtmeouttahere]

I would say that I still think the Kitsap penninsula in the pacific northwest is still a good opportunity.* Reasoning...

Still low unemployment, good jobs and great location to Seattle.* A new bridge and ferry system upgrades also is quite appealing, you can commute by ferry to numerous areas.* Prices have shot up admittingly but still are a FAR cry from Seattle homes.* Also people in California are attempting to sell down there and profit (while they still can) getting jobs here and literally are paying cash for homes here.* Also the military has expanded here providing even more jobs to the area.

The area is still somewhat rural in it's feel and big country lots can still be found for privacy at a cost.* I still don't think we here will see a bottom for a while but prices should slow down as they have been incredible.* But we have a lot of catching up to do to catch up with Seattle and surrounding areas pricing.* I still think it's a good buy here but even I am a bit more cautious but always looking for a deal and keeping inventory low.*

[thefed]

YES! Prices are coming down, and thus, there's a sale on RE....

I bought my first investment property this year. I've been looking for the last 2 years...and IMHO the time is right to begin my real estate investing career....its been a lifetime dream.


My outlook is this: In the Midwest, we didnt see any more than 5-7% yearly increases for the last 5 years. Not the 20% some markets have seen. BUT perception becomes reality!!! If 20/20 does a segment on the crashing markets, it MUST be true! SO, I see investors apprehensive, I see people dropping prices as more and more jump on the selling bandwagon. Toss in the ARM's, foreclosures, and herd mentality, and I've got a recipe for cheap RE.

Every time I read/hear/see a doom n gloom about RE, I get excited....more opportunities in my horizon.

[cute fuzzy bunny]

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Originally Posted by youbet What we're talking about are the greedy coasters chasing obscene profits by using unconventional, agressive financing and assuming forever skyrocketing home values.

Agreed. Speculation <> investing and patently bad financial decisions dont automaticaly create sympathy.

Buying in after a 30-50% unsupported rise in prices on a variable rate interest only loan in hopes of flipping the property because "everyone else is making money doing it!"...dumb.

When things stop sliding around here, I'm not going to feel too many twangs of guilt when I buy that 20-30 acre parcel I've been thinking about, for about half of what it would have sold for last year...

[astromeria]

Sorry if I misinterpreted, youbet. But the people with the wild profits aren't (by and large) the same ones with the over-leveraged financing. That financing enables middle class families to buy a house within an hour or so of their jobs as well as specualtors to pick up properties. (Yes, in many cases those families shoudl remain renters, but the American Dream is a powerful force in our culture.) In any case, I see no reason to gloat. Did GE investors celebrate when Cisco investors lost their shirts? Should I begrudge you your pension/401k match/whatever else you got that I haven't got? I don't think so.

[Texas Proud]

For this... I am with CFB... if prices have started to go down.. it is not yet time to buy. It will be a long slow decline as this is not the stock market.. lots of people will 'hang on' for the price to turn until they can not hang on any longer...

CFB, where is "here"... I would not mind getting a nice 30 acre plot in a nice location at the right price.. (PS.. what is 'the right price?')

[Arif]

I'm late to this post but here's my 2 cents:
In GA prices haven't skyrocketed like the east and west coast. I primarily flip houses that are foreclosures, they are at least 30% below market value. The competition has picked up 100% but we were still able to purchase three properties thus far with a target of seven bought and sold for the year. Most of GA has experienced appreciation of 3-7% per year, definitely get rich slow. Still money to be made by making money when you buy.

I wish Santa Barbara would go on sale. I love it there. :

[cute fuzzy bunny]

Quote:

Originally Posted by Texas Proud For this... I am with CFB... if prices have started to go down.. it is not yet time to buy. It will be a long slow decline as this is not the stock market.. lots of people will 'hang on' for the price to turn until they can not hang on any longer... CFB, where is "here"... I would not mind getting a nice 30 acre plot in a nice location at the right price.. (PS.. what is 'the right price?')

Excramento...errr...Sacramento California area. Lots of open land here. Tends towards flooding and lots of bad levies, so you have to be careful about where you look.

Prices arent great right now, but if they keep dropping...

Before they went nutty, you could land 10-20 acres with a 1000-2000 square foot house that needed work, some barns/storage buildings that also needed work, off the main roads but within easy shopping driving distance...$165-210ish.

Not bad for Kalifornia...