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View Poll Results: Opinion: When will the Real Estate market reach bottom
Late- 2006 0 0%
Early-2007 6 9.23%
Late-2007 13 20.00%
Early-2008 10 15.38%
Late-2008 11 16.92%
2009 or later 19 29.23%
never 6 9.23%
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Re: Opinion: When will the Real Estate market reach bottom
Old 08-28-2006, 03:18 PM   #21
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Re: Opinion: When will the Real Estate market reach bottom

Quote:
Originally Posted by Peter76
One question: does anyone have any info/data on the % growth of second vacation homes? As boomers retire (and people spend more of their disposable income on things like vacation homes), the number of homes will go up relative to the population/GDP, and might account for a small part (but obviously the housing bubble accounts for most of the froth vs GDP in recent years).
I would think it more likely that when someone retires, they move to their vacation home and sell their primary residence for the boost it will give their retirement portfolio.* I tend to hear of people getting rid of extra real estate when they retire rather than hanging on to multiple homes.

Just my impression based on anecdotes.

Audrey
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Re: Opinion: When will the Real Estate market reach bottom
Old 08-28-2006, 03:52 PM   #22
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Re: Opinion: When will the Real Estate market reach bottom

Quote:
Originally Posted by audreyh1
I would think it more likely that when someone retires, they move to their vacation home and sell their primary residence for the boost it will give their retirement portfolio.* I tend to here of people getting rid of extra real estate when they retire rather than hanging on to multiple homes.
That's what we did.* *We had owned two homes for the last 10 years.* *Maintaining a second house was a pain, but strong appreciation relieved the pain a bit.* *We finally sold off the main house this spring and downsized to our smallish beach house.* *There was a little bit of market timing in our decision process, but we don't miss the big old place a bit.* *Maintenance and recurring costs are reduced, and the bank account has been fattened.

Growth in second home sales has been high over the last few years, but it will probably be the first segment to fall since those homes are discretionary purchases.

recent NY Times article
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Re: Opinion: When will the Real Estate market reach bottom
Old 08-28-2006, 07:59 PM   #23
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Re: Opinion: When will the Real Estate market reach bottom

Which real estate market are you referring to? People seem to think that on a national level there is some type of huge housing bubble. But real estate is largely local. So while there may be some markets that are declining, others are still going strong (as at least a few posters have pointed out).

Aside from that point, adopting a contrarian approach usually serves one well and now is no exception....."when everyone thinks alike, everyone is bound to be wrong". Sensational news headlines about increasing inventory and declining prices has led the overwhelming majority of people to believe that no one wants to own a house any more and that soon we will see houses being given away as prizes inside boxes of Frosted Flakes. Over at fatwallet.com, some are expecting 40% declines in prices and 70% of ARM loans in foreclosure. The theory has been that all the 'flippers' will be dumping their houses on the market, but reality is that anyone who is investing in a given real estate market probably follows it quite closely and will have already listed their property. Thus, in the overheated markets, inventory has likely topped out already. Short of a major recession, the contrarian view says with such negative sentiment, now would be an appropriate time to buy into some of the declining markets.
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Re: Opinion: When will the Real Estate market reach bottom
Old 08-28-2006, 08:44 PM   #24
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Re: Opinion: When will the Real Estate market reach bottom



Here's an interesting article:


"The Biggest Slump in US Housing in the Last 40 Years"…or 53 Years?

http://www.rgemonitor.com/blog/roubini/142759


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Re: Opinion: When will the Real Estate market reach bottom
Old 08-28-2006, 08:47 PM   #25
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Re: Opinion: When will the Real Estate market reach bottom

the 2005 flippers are selling now and in the bubble markets they haven't sold everything. next year they will have competition from the first big wave of ARM loans adjusting.

you will also have the people selling that are selling due to normal life things. if a family bought a house in 2003 for $300,000 and needs to sell to move they will have no problem sellng it for $325,000 even if the neighbor flippers bought a similar house in 2004 or 2005 for $400,000 or $500,000.

This year we are just getting back to normal market conditions and the usuall panic from people who don't know anything except the RE market of the last few years. A lot of these people can't fathom the fact that it takes an average of 4-8 months to sell a home.

if there is a bubble popping, we will see it next year. it's been known for a long time that there are a lot of people who bought homes based on teaser rates with a plan to downsize.
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Re: Opinion: When will the Real Estate market reach bottom
Old 08-28-2006, 09:35 PM   #26
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Re: Opinion: When will the Real Estate market reach bottom

Quote:
Originally Posted by MileKing
Aside from that point, adopting a contrarian approach usually serves one well and now is no exception....."when everyone thinks alike, everyone is bound to be wrong".*
A true contrarian would be renting, having sold his house years ago.
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Re: Opinion: When will the Real Estate market reach bottom
Old 08-29-2006, 05:24 PM   #27
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Re: Opinion: When will the Real Estate market reach bottom

I just took a look at the Austrialian housing market.* *They had a similar run-up to the US, but their market peaked in 2003.* * Their fed believes the slowdown in housing there would have cause a recession, but they were rescued by the boom in commodities.

Anyway, prices have been slowly dropping for the last 2 years in most parts of Australia.* * I expect the US bubble to play out similarly.

It's interesting to read articles about the Australian market as sort of a look into the future of the US.* * For example, it's often argued here that people will simply keep their houses rather than sell if prices drop.* * *The psychology in Australia seems to be that people are OK with taking a loss when they upgrade, since they know the house they are buying is also being sold at a "discount."* The bigger the upgrade, the bigger the discount, so they can easily rationalize the selling decision.

Austrailia:


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Re: Opinion: When will the Real Estate market reach bottom
Old 08-29-2006, 06:39 PM   #28
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Re: Opinion: When will the Real Estate market reach bottom

Quote:
Originally Posted by wab
I just took a look at the Austrialian housing market. They had a similar run-up to the US, but their market peaked in 2003. Their fed believes the slowdown in housing there would have cause a recession, but they were rescued by the boom in commodities.

Anyway, prices have been slowly dropping for the last 2 years in most parts of Australia. I expect the US bubble to play out similarly.

It's interesting to read articles about the Australian market as sort of a look into the future of the US. For example, it's often argued here that people will simply keep their houses rather than sell if prices drop. The psychology in Australia seems to be that people are OK with taking a loss when they upgrade, since they know the house they are buying is also being sold at a "discount." The bigger the upgrade, the bigger the discount, so they can easily rationalize the selling decision.
I wonder what is the average percentage of equity for home loans in Australia. I would think that if a person had to bring a check to the closing table to sell their house that would be a deterrent to the psychology you describe.

2Cor521
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