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06-27-2007, 11:45 AM
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#21
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,290
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Ask your listing agent to send you notices of the recent solds in the neighborhood. This will help you understand what is selling and for how much.
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For the fun of it...Keith
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06-27-2007, 11:47 AM
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#22
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,290
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Quote:
Originally Posted by Sam
Thanks. I will take a closer look at it.
Was it done to satisfy your own curiosity or were you paid by certain organization to do the research/analysis?
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It was done to formulate portfolio investment strategy. So in that sense it has paid for itself many times over.
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For the fun of it...Keith
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06-27-2007, 11:55 AM
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#23
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Posts: 3,895
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Quote:
Originally Posted by califdreamer
One explanation for the difference in median home price numbers and your actual experience is the median figures reflect the mix of homes being sold. In many housing markets today, the low end sales are drying up due to low affordability (from high prices and slightly increasing interest rates) and tighter lending standards. That leaves a higher percentage of sales in the higher end therefore raising the median price even though the value of a particular home is decreasing.
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thanx. that seems to make sense and would almost be applicable if our inherited house wasn't in the high end. on the other hand, i suppose it is at the low end of the high end so maybe that accounts for that (a $1.2mm house in a zip code which averages in at about $5mm last i checked, in a county with medium of $390k).
Quote:
Originally Posted by califdreamer
There are other indices, like the Schiller Index used in futures trading, that measure home values by isolating paired sales of particular homes thus taking out the statistical noise of variation in number of sales at different price levels.
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geez, if i could understand that sentence i'd likely have a lot more money now.
__________________
"off with their heads"~~dr. joseph-ignace guillotin
"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
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06-27-2007, 02:13 PM
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#24
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Thinks s/he gets paid by the post
Join Date: Apr 2007
Location: west bloomfield MI
Posts: 2,218
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Quote:
Originally Posted by VoyT
Unless you happen to live in a neighborhood that's seen a lot of foreclosures .... all those vacant houses are such an asset, eh?
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but the loss is only on paper until you go to sell. Like I said, the RE bubble is just noise. It is real, but the impact of it popping will only impact people which need to sell.
I live in a neighborhood which is new construction. We closed in Dec of 05 on our house for 353k. Our house is ~3400 sq feet. There is a market house across the street by same builder which listed at 329k in jan 06 with around 2900 sq ft, (a market house is one a builder makes, without a buyer, to put on open market). The asking price for that market house has dropped below 300k now. There is the same floor plan within .10 mile for sale by realtor, and they are asking 310k or so. Neither has sold within last 9 months. I am sure those people feel the bubble, I don't.
Yet the lots next to both sold for 400k since. Houses within neighborhood are being built at a much slower pace, but still selling in 300k-400k range. Prices hold steady, and even are increasing slightly (the 400k houses have less sq footage than ours).
The people selling are competing against builders and that is keeping prices in check. We have refinanced our house since, and it was appraised at 375k. I don't think we could sell it for that right now. But we only are in trouble if we sell. We both have jobs, the payment is low, and we make extra payments when we can.
__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
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06-27-2007, 02:36 PM
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#25
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Recycles dryer sheets
Join Date: Dec 2006
Location: Florida
Posts: 249
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Home-buying (and more importantly, selling them) is a big-time ego-stroking (read: fact-fornicating, spin-doctoring, and general distortion of reality) especially on the part of the realtor, who almost never has full disclosure to the buyer in his own interest. Approached with such suspicion, a paranoiac such as myself would claim that the only valid metric for what homes are worth is recent sales prices. A nice public record, hard to B.S. Why waste times with the silly asking prices? They are an optimistic fantasy, especially in the current market.
__________________
I've got nothing against an honest day's work, provided that someone else does it.
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06-27-2007, 03:09 PM
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#26
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Recycles dryer sheets
Join Date: Feb 2005
Posts: 445
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Quote:
Originally Posted by jIMOh
but the loss is only on paper until you go to sell. Like I said, the RE bubble is just noise. It is real, but the impact of it popping will only impact people which need to sell.
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Ah, but when it comes to foreclosures, the cost is far more than the finances.
Ever have to deal with the problems a vacant house can cause in a neighborhood? We've got one in my very small subdivision. House has been empty for close to 3 years while the foreclosure process has gone on. (it finally sold to some company that has it up for sale)
The neighbors periodically have to call the cops because of break-ins: Teens using it as a hangout, in one case, squatters (and since the utilities were turned off long ago, I gotta wonder about the bathrooms.)
Fortunately, the neighborhood association arranged to have the grass cut, or we'd have the problems (and the eyesore) that go along with overgrown weeds and lawns.
We're probaby lucky this is a stable neighborhood -- in some areas, vacant houses tend to draw drug dealers.
Now multiply that one house by 10 or more (and yeah, it's possible; at leat 4 ZIPcodes in my city made CNN's top 500 foreclosure list.) What happens to those neighborhoods? What happens to the folks who remain, who have jobs and played by the rules? They get trapped in a depreciating asset?
__________________
"Coffee: the finest organic suspension ever devised." -- Kathryn Janeway
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06-27-2007, 03:37 PM
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#27
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
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Quote:
Originally Posted by VoyT
They get trapped in a more rapidly depreciating asset?
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There...
__________________
Have Funds, Will Retire
...not doing anything of true substance...
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06-27-2007, 04:45 PM
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#28
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Recycles dryer sheets
Join Date: Feb 2005
Posts: 445
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That works, too ... LOL
__________________
"Coffee: the finest organic suspension ever devised." -- Kathryn Janeway
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06-27-2007, 06:08 PM
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#29
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Moderator Emeritus
Join Date: Aug 2006
Posts: 6,924
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Quote:
Originally Posted by VoyT
Ah, but when it comes to foreclosures, the cost is far more than the finances.
Ever have to deal with the problems a vacant house can cause in a neighborhood? We've got one in my very small subdivision. House has been empty for close to 3 years while the foreclosure process has gone on. (it finally sold to some company that has it up for sale)
The neighbors periodically have to call the cops because of break-ins: Teens using it as a hangout, in one case, squatters (and since the utilities were turned off long ago, I gotta wonder about the bathrooms.)
Fortunately, the neighborhood association arranged to have the grass cut, or we'd have the problems (and the eyesore) that go along with overgrown weeds and lawns.
We're probaby lucky this is a stable neighborhood -- in some areas, vacant houses tend to draw drug dealers.
Now multiply that one house by 10 or more
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You're describing Dayton Ohio. Also a big problem here with people breaking into vacant homes and stealing wire and metal pipes to sell for salvage.
__________________
"Knowin' no one nowhere's gonna miss us when we're gone..."
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06-27-2007, 07:17 PM
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#30
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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: 22,697
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Shhh...I have a vacant house. You're making me nervous.
Eh, all my neighbors are watchful and armed...
__________________
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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06-27-2007, 08:13 PM
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#31
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Recycles dryer sheets
Join Date: Dec 2005
Location: San Diego
Posts: 468
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Quote:
Originally Posted by lazygood4nothinbum
geez, if i could understand that sentence i'd likely have a lot more money now.
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What, you don't like my tortured syntax?
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06-27-2007, 09:43 PM
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#32
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Recycles dryer sheets
Join Date: Nov 2005
Posts: 355
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There is risk associated with concentrated investments. Is there a more concentrated investment than a personal residence? Anything beyond that is gambling, not investing. So realtors don't mention that location can also hurt on the downside i.e. your house won't sell because no one is buying in your county. No one can live in an index fund, but the concentrated risk is diversified away.
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06-28-2007, 05:31 AM
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#33
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Posts: 2,460
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Quote:
I did this work in December 2004 and have not updated it.
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kcowan,
Good read ... thanx for sharing! Pretty much mirrors why I've been a seller over the last few years. Sold some TOO EARLY ...... now I'll sell some TOO LATE. Did hit the peak with one sale (summer 2005) though.
Personally I believe the the next bottom will coincide with a recession. So if/when the economy slides we'll all have a couple years to take advantage of another bottom. 2010 seems a bit too soon (optimistic?) IMHO. Nice to see someone with the kaunas to take a shot at a bottom date though.
__________________
FIRE'd since 2005
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06-28-2007, 08:31 AM
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#34
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gone traveling
Join Date: May 2006
Posts: 1,036
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Quote:
Originally Posted by kcowan
- 30% gets the national prices back to their long term trend line
- 50% lets them overcorrect and drop below the line for a couple of years
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Would you explain what a "national price" is and how you used it or how someone would use it who was investing in a specific area, say Honolulu or the SF Bay area? I've always looked to the local economics. What am I missing?
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06-28-2007, 11:08 AM
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#35
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,290
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Agreed. Have a look at the paper. It shows how different the various parts of the country are. I did the work for investment planning purposes, not as a guide to buying any specific house.
BTW I found the missing charts and have updated the page here:
Cyclical Bubbles in US National House Prices
and on the subject of bubbles in general, you might be interested in my article on technology bubbles:
The Interplay of Market Bubbles and Technology
__________________
For the fun of it...Keith
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06-28-2007, 12:22 PM
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#36
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Posts: 3,895
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hi calif, sorry. i was not referring to your sentence structure which is quite in order but rather to my lack of financial comprehension. as two of my favorite writers are the james brothers (henry & william), my brain readily wraps around the most complex syntax. it is simple dollars and cents that throws me. (but i got it after i read your sentence a few more times.)
__________________
"off with their heads"~~dr. joseph-ignace guillotin
"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
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06-28-2007, 06:08 PM
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#37
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Recycles dryer sheets
Join Date: Dec 2005
Location: San Diego
Posts: 468
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No need for apology, lazy. I really did wrestle a bit with that sentence.
Speaking of the Standard & Poor/Shiller index (I misspelled it the first time), it shows Los Angeles/Orange County home prices down a few percent (latest report April 07) whereas median price from Dataquick shows slight increase in home values. Explanation given was sales mix... bigger slowdown in number of sales in lower end of market.
Lead economist on UCLA econ panel was on radio today talking about the So Cal market. His take: softness here through mid 2009, prices to drift slightly down or stagnate until that time, suggested today's homebuyer should be choosy and pick a home for the long term but not to expect any super discounted prices.
My personal take: San Diego (home values down about 6% in April 07 vs April 06 according to Shiller) will continue to see more decline in home values through 2009 then stagnate for several years. LA / Orange County will drift down some, perhaps not as much as SD, then stagnate for a while.
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06-28-2007, 06:31 PM
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#38
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Moderator Emeritus
Join Date: Dec 2005
Posts: 10,123
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There has been a house in our Phoenix neighborhood that was bought last October. There had been a sign out front saying that it was availble from the "Fix n Flips" company. I guess timing is everything since yesterday they finally decided to fix it, starting with the roof. I would think that 112 degree weather is not the best time to do this but I could be wrong. I also think that this just reinforces that the owner doesn't have a good sense of timing in general.
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06-29-2007, 01:11 PM
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#39
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Full time employment: Posting here.
Join Date: Jun 2005
Posts: 761
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Quote:
There has been a house in our Phoenix neighborhood that was bought last October. There had been a sign out front saying that it was availble from the "Fix n Flips" company. I guess timing is everything since yesterday they finally decided to fix it, starting with the roof. I would think that 112 degree weather is not the best time to do this but I could be wrong. I also think that this just reinforces that the owner doesn't have a good sense of timing in general.
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Unless he got that house for a steal his is probably already going to lose money. Holding costs can kill you in that business.
Home prices have not really decreased in eastern GA, however Atlanta is in shambles. I know a guy who bought a house for 140k that appraised for 180k in December. He put it back on the market and last I heard he has it listed for 170k which will have him breaking even if he's lucky after deducting holding costs, closing costs, relator fees, etc. Still no offers so if he reduces it anymore he's coming out of pocket.
For those interested, here is Countrywide's REO (real estate owned) list: Properties Owned by Countrywide - REO Homes
If you select GA you'll see a ton in Atlanta.
__________________
You take the blue pill - the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill - you stay in Wonderland and I show you how deep the rabbit-hole goes.
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06-29-2007, 05:38 PM
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#40
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Posts: 2,460
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Quote:
Still no offers so if he reduces it anymore he's coming out of pocket.
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Surprizing what some people will do. A neighboring property to one of my rentals was bank owned and a tear down. Didn't take much to realize that building at 150/sq foot the land was worthless ... just buy something up the street you can move into tomorrow. Weeell I bumped into a builder who was eyeing the place as "some place to park cash" ... apparently he had a LARGE capitol gain from a commercial job; he needed someplace to hide cash to delay the IRS hit. Best I can see he'll LOOSE 100k if the market stays flat. If it drops - some more - he needs to hold the place for a LONG time just to break even. Good news is he just tore the place down .. my lot has never looked better.
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FIRE'd since 2005
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