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01-14-2008, 09:08 AM
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#41
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Dryer sheet aficionado
Join Date: Jan 2008
Posts: 42
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danm, it took me 2 years to get my PhD and so I respect that your 2 years of studying this subject gives you a solid claim to understanding this issue.
I live in Michigan and anyone claiming housing has never gone below the building cost is definitely misinformed. And as several posters above have attested it happened in many places in the 80's.
I bought here in 2003 and could have sold in 2005 at a moderate gain but it appears that if I desire to move I will take a significant hit. Your information and insight is much appreciated as I ponder a good selling strategy.
And yes, if someone is living in their home and has no intent to sell this whole issue is irrelevant. But I do hear less owners bragging these days or at least their success stories get even less believeable.
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01-14-2008, 09:20 AM
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#42
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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Quote:
Originally Posted by TBPu
I live in Michigan...
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Lord Howe Island is now in Michigan!?
Damn global warming...
__________________
Numbers is hard
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01-14-2008, 10:02 AM
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#43
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Thinks s/he gets paid by the post
Join Date: Aug 2002
Posts: 1,322
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Quote:
Originally Posted by TBPu
danm, it took me 2 years to get my PhD and so I respect that your 2 years of studying this subject gives you a solid claim to understanding this issue.
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I spent two years studying piano, still can't play a lick.
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01-14-2008, 10:41 AM
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#44
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: Independence
Posts: 7,298
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Quote:
Originally Posted by SoonToRetire
I spent two years studying piano, still can't play a lick.
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And to be fair, degrees do not assure infallibility just as lack of a degree does not guaranty lack of understanding.
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01-14-2008, 10:46 AM
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#45
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Dryer sheet aficionado
Join Date: Jan 2008
Posts: 42
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Actually Lord Howe Island is where I live. A 38 ft. lake boat 5280 ft from Pt. Betsie Light at the moment. My house is rented. I'm making a killing, YEAH RIGHT.
Too bad about the piano study but didn't you know to quit after the first year?
calmloki, very true but the OPs 2 years of study and the evidence presented do tend to trump a lot of anecdotal chest thumping with little study at all, or maybe not.
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01-14-2008, 10:59 AM
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#46
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Thinks s/he gets paid by the post
Join Date: Aug 2002
Posts: 1,322
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Quote:
Originally Posted by TBPu
Too bad about the piano study but didn't you know to quit after the first year?
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I thought I played pretty well after a year, and after two years. It's only with hindsight that I realize I can't play the piano.
Hey, living on a houseboat, many people would think that was pretty cool -- no pun intended. I do.
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01-14-2008, 11:07 AM
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#47
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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What isn't being said is whether this is the exception or the rule, to the extent it's accurate.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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01-14-2008, 11:12 AM
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#48
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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Lets get back to that original point, which wasnt whether housing can fall below construction cost. It can and does in small regional areas and severely depressed areas for short periods of time.
The particular point in question was that the markets would "overshoot as much below the mean as they did above it", and that such a condition would happen on a national scale.
Since housing in many areas doubled and tripled, that would mean prices at half to one third what they were at "the mean". US wide.
I think we need another few years of studying on this one if thats the finding.
My thinking, based on 20 years of studying the real estate markets, is that prices will drop to just about what they were in 2000-2002 (nationally), there will be some bad spots and bad properties. I mean, I've been looking at it for 10x longer, so my opinion must be 10x better, right? :
The assertion that we'll see broad based drops to pricing levels not seen since the early 1970's is ridiculous.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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01-14-2008, 11:18 AM
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#49
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gone traveling
Join Date: May 2006
Posts: 1,036
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Quote:
Originally Posted by TBPu
the OPs 2 years of study and the evidence presented do tend to trump a lot of anecdotal chest thumping with little study at all, or maybe not.
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All this talk about years of research and "evidence" , yet in three pages of posts not one confirmed resale at a lower value. I'm sure values are down somewhere but all my confirmed resales in my area have been at 10%+ increase over "bubble years" prior sales.
Just curious why no one posts an actual resale at a lower value when they make their claims.
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01-14-2008, 11:27 AM
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#50
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Thinks s/he gets paid by the post
Join Date: Aug 2002
Posts: 1,322
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Quote:
Originally Posted by honobob
All this talk about years of research and "evidence" , yet in three pages of posts not one confirmed resale at a lower value.
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Can't help you there, but here is my personal Northen Virginia experience, all within 30 miles of downtown DC.
Bought house #1 in 1992 for 295k , walk to metro (bad market)
Sold house #1 in 2001 for 400k (thining the top was here).
Bought house #2 in 2001 for 225k (further away, but on a lake with private dock)
Offered 480k in 2005 (declined it, liked the house)
Neighbor sold similar house for 530k in 2006, nutso.
Sales came to a halt in 2007, last sale (similar houses) around 430k
So I can either say I'm down 50k, or I'm up 205k. I prefer to not say anything, since I'm not in the market to either buy or sell. For my house to decline as a resale, I would have to sell for under 225k. Not gonna happen.
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01-14-2008, 11:39 AM
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#51
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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Based on my extensive, nearly professorial experience in the matter, its my finding that you've made a bunch of money on your homes.
My old neighborhood was always in the top 5 nationally for overpriced real estate and percentage shifts for no valid reasons.
Homes there sold for $150-175k for most of the 90's through 2001
2002: 250
2003: 325
2004: 375
2005: 350
2006: 350
2007: 300
Current: about 260-270.
A lot of folks up there pissed about what they missed, but unless they bought since 2002, they're all still up about 100k.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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01-14-2008, 12:02 PM
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#52
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Dryer sheet aficionado
Join Date: Jan 2008
Posts: 42
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CFB, uh yeah, I missed the overshoot part. Thought it was "a house will never fall below it's construction cost."
And yeah 20 years of studying the housing market is a lot. Almost too much. Any hobbies or anything? All day, everyday? 20 years that is a lot.
honobob, the real issue might be that there are indeed very few re-sales to report. In Michigan there are (using anecdotal comments) many people who cannot sell their home at any price and decided to take the ugly signs down. If they can sit tight for several years then maybe it was a good investment. But I'm going to be surprised if a home sells in Frankfort in 2008, at any reasonable offer. Many have been for sell since late 2006, and I mean MANY.
And based on my experience (professorial for real), you ain't made a dime till you've sold it. For years my ex bragged to her sisters (renters) about how much money she was gonna get from her share of this home when it sells, well she's a lot quieter these day.
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01-14-2008, 12:03 PM
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#53
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gone traveling
Join Date: May 2006
Posts: 1,036
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Here's another actual resale in San Francisco.
Sold 8/05 for $760,000
Sold 10/07 for $$970,000
1880 Steiner Street #104, a nice 1300sf 2bed/2bath.
Now that is EVIDENCE of the market in San Francisco.
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01-14-2008, 12:08 PM
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#54
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Dryer sheet aficionado
Join Date: Jan 2008
Posts: 42
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Nice cherry picking, probably SF and NYC are limited land or something like that. Bet ya can't find a good Cleveland example!
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01-14-2008, 12:08 PM
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#55
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gone traveling
Join Date: May 2006
Posts: 1,036
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Quote:
Originally Posted by TBPu
honobob, the real issue might be that there are indeed very few re-sales to report. In Michigan there are (using anecdotal comments) many people who cannot sell their home at any price and decided to take the ugly signs down. If they can sit tight for several years then maybe it was a good investment. But I'm going to be surprised if a home sells in Frankfort in 2008, at any reasonable offer. Many have been for sell since late 2006,
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I only asked for one, but any way, maybe the value hasn't gone down but the marketing period has lengthened.
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01-14-2008, 12:12 PM
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#56
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gone traveling
Join Date: May 2006
Posts: 1,036
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Actually it was the first one I looked at. Honobob is all about full disclosure. If you research my previous posts you'll see plenty more like that. Wasn't trying to convince you of what my local market was. Just wanted to show you what real evidence looked like.
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01-14-2008, 12:20 PM
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#57
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gone traveling
Join Date: May 2006
Posts: 1,036
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Number 2 sale in a different neighborhood.
1965 Clay Street. A nice 964sf 1bed/1bath.
sold 8/06 $700,000
Resold 8/07 $825,000
Sale one up over 12% for each year.
Sale Two up almost 18% in one year!!
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01-14-2008, 01:06 PM
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#58
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Thinks s/he gets paid by the post
Join Date: Aug 2002
Posts: 1,322
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OK, folks, I finally found a recent resale in Manassas Virginia -- the same town that had the highest dropped price on the blog list, something like 76% down. I didn't cherry pick, either, this is the first recent resale I found, the others had sales 10+ years apart. Here it is, right off the Prince William County tax site:
9808 Greenview Lane
8/1979 $76,450
9/1984 $101,000
11/2004 $400,000
6/2006 $464,900
4/2007 $525,000
This doesn't look like a great depression scenario to me. But what do I know, I can't even play the piano. As my daddy used to say, though, don't go by the price of a repossessed house full of mold when estimating average house values.
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01-14-2008, 01:31 PM
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#59
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gone traveling
Join Date: May 2006
Posts: 1,036
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Quote:
Originally Posted by SoonToRetire
9808 Greenview Lane
8/1979 $76,450
9/1984 $101,000
11/2004 $400,000
6/2006 $464,900
4/2007 $525,000
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I thought we were trying to find lower resales to support the end of the world. So looks like slightly over 7% annual appreciation. Is this where we Northerners had the Battle of Bull Run? Is there limited land or something like that?
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01-14-2008, 01:34 PM
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#60
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Thinks s/he gets paid by the post
Join Date: Dec 2007
Posts: 4,764
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Location location location
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