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Old 07-30-2008, 08:26 PM   #21
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I think things are picking up in my neighborhood this summer, due to the high gas prices. Some of those who moved way across the lake are getting tired of paying for their extra-long commutes each day. At least that is what the news media are saying. If that is true, homes closer in like mine might be in a little greater demand.

Seems like there aren't as many "For Sale" signs, just subjectively. Maybe that is wishful thinking.
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Old 07-30-2008, 08:51 PM   #22
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Thats how its working in my old neighborhood, only in reverse. A lot of people ran away from the $600k homes in sacramento to buy $300k homes up north a 45 minute drive away, and those 300k homes turned into 450k homes. Now they're 250k homes because nobody wants to pay $4 gas and drive a 90 minute commute.

We lucked out and got out just in time. We made a nice profit on the house. Right now we'd sell it at a loss if we could sell it at all.
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Old 07-30-2008, 09:19 PM   #23
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How much do the demographics of the baby boomers play into the real-estate boom and bust cycle? We are the pig in the python.

Us boomers have moved markets from blue jeans to VWs to big screen TVs and homes.

I am no real-estate expert, but I have often questioned who is going to buy all of these homes? I do not believe we can import enough people to cover the amount of homes that are going to continue to be on the market. And the population behind the boomers is about of the size. So where are the buyers going to come from?

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Old 07-30-2008, 09:26 PM   #24
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How much do the demographics of the baby boomers play into the real-estate boom and bust cycle? We are the pig in the python.

Us boomers have moved markets from blue jeans to VWs to big screen TVs and homes.

I am no real-estate expert, but I have often questioned who is going to buy all of these homes? I do not believe we can import enough people to cover the amount of homes that are going to continue to be on the market. And the population behind the boomers is about of the size. So where are the buyers going to come from?

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I do think a lot of the population increase will come from immigration, and I believe (but haven't checked) that the generation 2 ranks (genY?) behind us is bigger than the genXers. They will be buying soon, moving up from their starter condos and townhouses. So I do think the market will recover to "normal" levels, just not the crazy thang we just went through.
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Old 07-30-2008, 09:55 PM   #25
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Waitaminnitwaitaminnitwaitaminnit.......so you convinced the assessor that your property was worth not quite $30,000 less than what you paid for it a few years back? So what is that, about a 10% drop on a $300,000 house or a 5% drop on a $600,000 McMansion in the Sacretomato area? Hawaii won't even let you appeal if the difference isn't more than 5%. Ten % drop in value over a couple of years!! The horror! Although it does pretty well match up with my 9% drop in the early nineties when everybody was crying the end of real estate again.

Actually in Hawaii the property has to be off by 10% to file an appeal.
I filed my claim back in Jan 2007, I am still waiting (after several phone calls) for a date for a hearing.

Amazed that anything in CA can be handled with a 3 minute phone call.
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Old 07-30-2008, 10:34 PM   #26
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Bay area properties are still expensive!
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Old 07-30-2008, 10:49 PM   #27
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And this affected me? How?

Not in the sense that it makes a difference in my investments.
Well, you are very unusual then. Do you own an S&P index? A bank?
A REIT? A home furnishings retailer or Home Depot? How about almost any retailer in the world? Maybe a home builder or a carpet maker or forest products company? An auto company? A finance company?

Any company in any business that has had to pay up for its borrowings? The list of unaffected businesss is pretty short.

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Old 07-30-2008, 11:12 PM   #28
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Well, you are very unusual then. Do you own an S&P index? A bank?
A REIT? A home furnishings retailer or Home Depot? How about almost any retailer in the world? Maybe a home builder or a carpet maker or forest products company? An auto company? A finance company?

Any company in any business that has had to pay up for its borrowings? The list of unaffected businesss is pretty short.

Ha
Ha This was his/her stated parameters. I don't think it is so unusual. I think it's a good reason not to be invested in the stock market. I'm affected now because I'm trying to do some real estate financing and the rules are changing by the minute just because of some perceived problem! Otherwise, I don't see a positive or negative effect except for the little bit I'm in the market, but I'm buying at a discount, right? And I do realize that in the big picture, blah, blah blah but if it wasn't this wouldn't it be something else? I'm curious.

And this affected me? How?

Not in the sense that it makes a difference in my investments.

Assume I hold 100% cash, I own my own home, and I have no plans to sell in the immediate future (e.g. 20 years).
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Old 07-30-2008, 11:25 PM   #29
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And this affected me? How?

Not in the sense that it makes a difference in my investments.

Assume I hold 100% cash, I own my own home, and I have no plans to sell in the immediate future (e.g. 20 years).
Even this imaginary person who has perfect control over his life is nevertheless affected. His real interst rates are negative, due to the panicky attempts of the Fed to keep rates low to prop up tottering lending institutions.

Ha
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Old 07-30-2008, 11:26 PM   #30
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Actually in Hawaii the property has to be off by 10% to file an appeal.
I filed my claim back in Jan 2007, I am still waiting (after several phone calls) for a date for a hearing.

Amazed that anything in CA can be handled with a 3 minute phone call.
Thanks for the correction. I'd looked for a friend awhile back and thought it was 5 or 10% but 10% seemed unreasonable.

CA is usually pretty lenient in giving Prop 8 reductions as they are only good for a year and if someone calls in with reasonable comps it's cost efficient to grant a reasonable reduction. Remember that even in a bad market all the underassessed propertied under Prop 13 are going to increase by 2% that year so it's a win/win for revenue.

Now I'm really curious why you think you are more than 10% over assessed! I've watched the market for Waikiki and Diamond Head and made several offers but have seen the market as maybe flat but definitely not decreasing. I've always wondered what the dynamics are between the resort and the residential areas. Do you think that there is a growing gap between the values?
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Old 07-31-2008, 02:19 AM   #31
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I live at the top of St. Louis heights, very nice lot, great diamond head view, culda sac, bordering on a state watershed, below a park. The house is ok but not updated much since it was built in 1960. It is 2100' house made of cinder block which given the big termite problem in Hawaii I like but it is not an architectural masterpiece.

Back in the summer of 2006, my ex-girlfriend and I were splitting up and need to agree on a price for me to buy her 1/2 share out. We had a couple of realtor's give us marketing presentation and they suggested listing in the low-mid 900s.

The house next to door, smaller worse location went on the market in the summer of 2005 for $1,050,000. It finally sold May of 2006 for $760K. Per the purchase contract my girlfriend and I agreed to we hired two independent appraiser to come up with a fair value. One said the house was worth $825K based a lot on our neighbors the other said it was worth $935K based on earlier sales in the neighborhood, we split the difference I bought her 1/2 for $880K in July 2006.


In 2006, the City said the house was appraised at 1,020K as June 2006. In June of 2007 the new appraisal had dropped $832K. I think I have very strong case that 2006 appraisal was out of line,and I think the 2007 is probably accurate, and I would guess 2008 should be below $800K . The city of course is in no hurry to refund my excess property tax.

FYI, for you Zillow basher it said the house was worth 880K at the time more accurate than any of the humans IMO>
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Old 07-31-2008, 04:46 AM   #32
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Well, you are very unusual then.
Ha
U R correct; I'm quite "unique" ...

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Old 07-31-2008, 06:51 AM   #33
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Just got our property tax appeal back

Taxes went from $8500 to $6300. Count me in as thrilled for this pull back in housing prices! (Yes, I still feel bad for the people who have lost their homes or life savings in housing)
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Old 07-31-2008, 07:46 AM   #34
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The drops in our area have taken a cut of my wad. What most aren't considering is the recovery time. Last time (early 90's) it took 12 years for prices to turn right side up. That's a long time to be "stuck" upside down OR unable to sell OR unable re-fi OR in a negative cash flow. And the payments on that mortgage or adjustable HELOC will turn your stomach.
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Old 07-31-2008, 07:46 AM   #35
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I do think a lot of the population increase will come from immigration, and I believe (but haven't checked) that the generation 2 ranks (genY?) behind us is bigger than the genXers. They will be buying soon, moving up from their starter condos and townhouses. So I do think the market will recover to "normal" levels, just not the crazy thang we just went through.
Here is immigration data I found;
2006 data Origin country Number Total 1,266,264 Mexico 173,753 China, People's Republic 87,345 Philippines 74,607 India 61,369 Cuba 45,614 Colombia 43,151 Dominican Republic 38,069 El Salvador 31,783 Vietnam 30,695 Jamaica 24,976 All other countries 654,902

These data represent persons admitted for legal permanent residence during the twelve-month fiscal year ending in October of the year designated. Many of the individuals admitted actually arrived in the United States in earlier years.

I have a tough time seeing Mexicans buying 3-5 bedroom homes in the gated communities. I hope you are correct about this. I know the Gen Y'ers are larger but there's a pretty good time gap before they buy these McMansions too.

So, IMO, this is going to take years to play out. That's not to say RE prices will continue to fall, but when I look at supply and demand I do not see a quick fix. Then again, I am no real-estate expert.

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Old 07-31-2008, 07:47 AM   #36
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First home buyers are drooling too... *come on, give me 3 years market, just give me 3*
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Old 07-31-2008, 07:59 AM   #37
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We live 90m west of NYC. There have been a total of five homes within a block of me for sale, the longest being on the market a bit over a year (BTW, three are due to divorce).

Within the last two weeks, three of those homes have been sold. One of the homes has already had their actual sale price posted to the on-line county records, and it sold for $2k less than the original asking price.

I'll assume the other sales were driven by adjusting the asking price a bit lower. BTW, in our case, Zillow seems to be fairly accurate in what they are showing. I realize that this may not be so in those parts of the country that Zillow is not tracking, or those areas that have little turnover.

Not to "prove" anything - just to add to the discussion.

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Old 07-31-2008, 08:50 AM   #38
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Assume I hold 100% cash, I own my own home, and I have no plans to sell in the immediate future (e.g. 20 years).
With these assumptions, you have almost guaranteed not keeping up with inflation. This is the "insurance premium" extracted by a flight to "safety."
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Old 07-31-2008, 08:50 AM   #39
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And even if you do sell - if you buy a house of equal (depressed) value, what difference does it make? If you are going to downsize, or rent, then yes....

And this means bargains are out there for first time home buyers, or people moving up.


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Time on the market will be the big effect for those moving sideways. If you're moving out of town, chances are greater you'll be stuck with two mortgages for awhile in a tough market.
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Old 08-01-2008, 02:28 AM   #40
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I have a tough time seeing Mexicans buying 3-5 bedroom homes in the gated communities.
Not to worry. Instead of 2 adults and 2 kids, there will be a landlord with 8 adult male renters. Plenty of cashflo to handle the mortgage.

Even though this is against municipal codes in most places, I see it happening every day.

Ha
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