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Re: Sizing the Housing Bubble
Old 08-02-2006, 07:35 PM   #361
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Re: Sizing the Housing Bubble

Out of curiosity, i've been tracking the the house I sold this past April using zillion.com. By June, it was up about 3.5%. I just checked it again. It dropped and is only up a little over 2%. Right now, the property remains unoccupied so he's losing money with his high monthly mortgage and lost income from his 25% down payment.
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Re: Sizing the Housing Bubble
Old 08-02-2006, 08:15 PM   #362
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Re: Sizing the Housing Bubble

Quote:
Originally Posted by ShokWaveRider
I seem to remember last time this happened. not sure when but something like this

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Exactly!
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Re: Sizing the Housing Bubble
Old 08-02-2006, 08:41 PM   #363
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Re: Sizing the Housing Bubble

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Originally Posted by vagabond
so he's losing money
If he's up 2%+ on a say $400K house with a 25% down payment then he's up $8,000 on his $100K investment in only 3 months! If the house is empty it's because he's not working (to get it rented/used by himself) I'd say the house is doing it's job. Some people should not buy a house anytime!
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Re: Sizing the Housing Bubble
Old 08-02-2006, 08:47 PM   #364
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Re: Sizing the Housing Bubble

Quote:
Originally Posted by vagabond
Out of curiosity, i've been tracking the the house I sold this past April using zillion.com. By June, it was up about 3.5%. I just checked it again. It dropped and is only up a little over 2%. Right now, the property remains unoccupied so he's losing money with his high monthly mortgage and lost income from his 25% down payment.
Do you mean zillow.com?
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Re: Sizing the Housing Bubble
Old 08-02-2006, 10:36 PM   #365
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Re: Sizing the Housing Bubble

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Originally Posted by Rich_in_Tampa
Do you mean zillow.com?
Yes.
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Re: Sizing the Housing Bubble
Old 08-02-2006, 10:54 PM   #366
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Re: Sizing the Housing Bubble

Quote:
Originally Posted by honobob
If he's up 2%+ on a say $400K house with a 25% down payment then he's up $8,000 on his $100K investment in only 3 months! If the house is empty it's because he's not working (to get it rented/used by himself) I'd say the house is doing it's job. Some people should not buy a house anytime!
The house was in NYC so your price $400k is way off. But let's say his mortgage on $300k would be $1400 a month, plus $600 in house expenses (RE tax, insurance etc.), plus $500 in lost income on $100k, so he has put out $2500 * 4 months or $10k. Granted most these expenses will be tax deductable. Looks like he may be losing money.
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Re: Sizing the Housing Bubble
Old 08-02-2006, 11:27 PM   #367
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Re: Sizing the Housing Bubble

Quote:
Originally Posted by vagabond
Looks like he may be losing money.*
I agree that if you buy property to sit empty you may not be giving Donald Trump worries.* So ya can't rent a place in NYC?* Again I think the problem is with the investor not the investment.
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Re: Sizing the Housing Bubble
Old 08-03-2006, 12:27 AM   #368
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Re: Sizing the Housing Bubble

Quote:
Originally Posted by wab
I really don't know much about that market, and I'm too lazy to look it up. But, let's say that the median household income there is $80K/year. The median house costs $660K, so that's an income multiple of 8.25x. The historical multiple for the US is around 3x. So, either home prices need to get cut in half, or incomes need to more than double for things to get back to normal.

Now, it's valid to ask "why be normal?" What's magic about an income multiple of 3x?

For that median income family to buy that median price house, they'd need to come up with a down payment $66,000. That's a chunk of cash. And that would give them PITI payments of nearly $5000/mo. That's $60,000/year for a family earning $80,000/year.

Either these prices are unsustainable, or incomes are going to the moon.
The median was only $39,050 in 2005.
http://homes.point2.com/Neighborhood...ographics.aspx
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Re: Sizing the Housing Bubble
Old 08-03-2006, 06:52 PM   #369
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Re: Sizing the Housing Bubble

Any of you in LA - Orange County area know the % price decline necessary to revert to the mean? Mortgage defaults have already hit a record high (since data collection began in 1992), and there's over 6 months worth of inventory piling up. Its only the beginning. How low will prices go?
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Re: Sizing the Housing Bubble
Old 08-03-2006, 07:21 PM   #370
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Re: Sizing the Housing Bubble

There was an article in today's newspaper indicating that foreclosures here in Sonoma County are running at double last years rate, although they are still below historical highs.
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Re: Sizing the Housing Bubble
Old 08-04-2006, 12:01 AM   #371
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Re: Sizing the Housing Bubble

The HNL market is not just local. Condos in particular are purchased by US and CN retirees and Pacific rim residents. To figure out what is happening in that market one must slice and dice.
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Re: Sizing the Housing Bubble
Old 08-04-2006, 10:17 AM   #372
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Re: Sizing the Housing Bubble

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Originally Posted by Brat
The HNL market is not just local.* Condos in particular are purchased by US and CN retirees and Pacific rim residents.* To figure out what is happening in that market one must slice and dice.
Wouldn't that logic apply to just about any market?

It's either being caused by the local realtors or by those darn out-of-town absentee-landlord Internet-using investors...
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Re: Sizing the Housing Bubble
Old 08-04-2006, 10:30 AM   #373
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Re: Sizing the Housing Bubble

My parents were HNL out-of-town retirees. I don't think that market competes for family housing, but it does distort the one/two-bedroom with view realestate.

There are a limited number of other cities/states similarly positioned. FL comes to mind.
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Re: Sizing the Housing Bubble
Old 08-04-2006, 12:30 PM   #374
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Re: Sizing the Housing Bubble

Quote:
Originally Posted by Nords
Wouldn't that logic apply to just about any market?

It's either being caused by the local realtors or by those darn out-of-town absentee-landlord Internet-using investors...
DEFLECTION ALERT

Nords* I have it on good authority (see Ohau Craigslist Rants and Raves below) that it's the fault of the Military. But I'm not positive he's right.

listen carefully! the housing bubble has finally burst! interest rates are back up...do you know what that means?? I'm gonna pay your tax lein and kick your ass out of your house!! buahahaha, move back on base sucka!! or better yet, please RENT my house with that military housing waiver and subsidy you got there. pay my mortgage bitch! can you say parade of f o r e c l o s u r e s??
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Re: Sizing the Housing Bubble
Old 08-04-2006, 12:33 PM   #375
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Re: Sizing the Housing Bubble

Quote:
Originally Posted by Brat
The HNL market is not just local.* Condos in particular are purchased by US and CN retirees and Pacific rim residents.* To figure out what is happening in that market one must slice and dice.
interesting, i'd suspected as much but i hadn't looked at this closely before. does slicing & dicing separate the froth from the beer?

unlike many other areas of florida (including here but west of i-95), we did not have any large tracts of single family developed during the boom, but rather new condos along the beach, new townhouses infilling canal & dry lots and redevelopment of older single family homes as renovations or newly built mcmansions. we are not miami, we are not naples, we are not port st lucie.

according to realtor.com the fort lauderdale coastal area (encompassing 6 towns in the zone east of i-95, from just south of pompano beach to just north of hollywood) shows 1475 single family houses for sale but 3,168 condominium units for sale. many condos are sold to the foreign market. it seems most single family are owner occupy and many of these are long term residents.

dicing further to downtown fort lauderdale i find only 188 single family houses for sale but 608 condos and townhouses offered. and in my area just outside of downtown, i find on realtor.com 341 condos & townhouses for sale but only 175 houses for sale.

these online searches very much reflect my real life walks through town where i see many more "for sale" signs outside condo & townhome buildings, but actually very few signs on the front lawns of our houses.

most of the neighbors i have now are the very same neighbors i had 10 years ago. so i have to wonder, whenever which of you stir the bubble bubble toil & trouble cauldron, do you ever add such ingredients?

does anyone know what percentage of what market changed hands over the past five years? of that, does anyone know what percentage of those people will be in financial trouble? how small of an eye of newt does it take to topple an entire market?

"double, double. toil and trouble. fire burn and cauldron bubble."~~ shakespeare's macbeth
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Re: Sizing the Housing Bubble
Old 08-04-2006, 04:07 PM   #376
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Re: Sizing the Housing Bubble

Quote:
Originally Posted by Veritasophia
Any of you in LA - Orange County area know the % price decline necessary to revert to the mean?* Mortgage defaults have already hit a record high (since data collection began in 1992), and there's over 6 months worth of inventory piling up.* Its only the beginning.* How low will prices go?
I've been watching OC for a while. Inventory is up 140% YoY, sales down 26%, and prices are just starting to plateau (slight drop over the last month). So, yeah, it's still early.

Prices could drop nearly 50% if they revert to the mean, but that could take a *long* time, and inflation would take care of some of the erosion. I was there for the last bubble, and if things play out the same way this time, Riverside, condos, and high-end homes will lead the way down.

Riverside has already had a huge increase in foreclosurers. Up 104% YoY.

Here's an OC Register reporter with a pretty balanced blog.
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Re: Sizing the Housing Bubble
Old 08-04-2006, 07:14 PM   #377
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Re: Sizing the Housing Bubble

Thanks Wab, nice blog.

Quote:
Originally Posted by wab
Prices could drop nearly 50% if they revert to the mean, but that could take a *long* time, and inflation would take care of some of the erosion.
I hope a *long* time won't mean following in Japan's footsteps. The housing burst of 1990 took approximately 5 years before showing a recovery. According to the data, this bubble seems much worse. So you are probably right, it will take a long time.
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Re: Sizing the Housing Bubble
Old 08-04-2006, 07:17 PM   #378
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Re: Sizing the Housing Bubble

Quote:
Originally Posted by Veritasophia
I hope a *long* time won't mean following in Japan's footsteps.* The housing burst of 1990 took approximately 5 years before showing a recovery.* According to the data, this bubble seems much worse.* So you are probably right, it will take a long time.
Don't forget, last time we were fighting a war in Iraq and inflation was taking off and the new Fed chairman didn't have a lot of experience in the job so they overtightened and... uhm...

... never mind.
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Re: Sizing the Housing Bubble
Old 08-05-2006, 11:22 AM   #379
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Re: Sizing the Housing Bubble

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Originally Posted by Nords
Don't forget, last time we were fighting a war in Iraq and inflation was taking off and the new Fed chairman didn't have a lot of experience in the job so they overtightened and...* uhm...
... never mind.
Love it! Is there an echo in here?
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Re: Sizing the Housing Bubble
Old 08-05-2006, 08:07 PM   #380
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Re: Sizing the Housing Bubble

Quote:
Originally Posted by Nords
Don't forget, last time we were fighting a war in Iraq and inflation was taking off and the new Fed chairman didn't have a lot of experience in the job so they overtightened and...* uhm...
Nice try, but the 1990-1991 recession started before Iraq invaded Kuwait
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