| Real Estate bubble
Posted: 10/3/2006 5:58:48 AM | | Is the unprecedented rise in the price of real-estate in the process of bursting? | |
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| Real Estate bubble
Posted: 10/3/2006 6:33:03 AM | According to the us market that i watch, i have seen a sharp decrease in the price of commercial and residential property. i also own a few of each here in wpg and noticed that the market is slowing down. not only the amount of property for sale, but when people are bidding on properties the bidding wars between prospective buyers has also subsided. Generaly the USA drops we follow, as the price of gas follows, Just my 2cents. Gene. | |
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| Real Estate bubble
Posted: 10/3/2006 7:31:35 AM | | real estate will always ultimately increase in value. It's about supply and demand. The only reason the demand is down is because of our funky economy; but in the long run:it's one thing we can't make any more of. | |
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| Real Estate bubble
Posted: 10/3/2006 8:38:28 AM | Bubble bubble toil and trouble.....
I figure we are less then five years from the brust. Interest rates (at least in Canada) have been at a low and a lot people have taken the oportunity to get into a house.
Now the market softens (every one has bought what they wanted) and prices drop back down a bit. And then your mortgage comes up for renewal and the rates are of course higher. Now you find your $200,000 house is only worth about $180,000 and you still owe $170,000 and a first mortage will only cover 80% of the house's worth. So you need a second mortage (at a higher rate of course) to cover the rest.
But those who were already straining their cash flow will now find they owe more then they own.
Can you say "foreclosure"? | |
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| Real Estate bubble
Posted: 10/3/2006 12:11:13 PM | | ^^^...I have to agree with Trewq36....it's inevitable....we are seeing this trend in California starting now. | |
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| Real Estate bubble
Posted: 10/3/2006 5:37:45 PM | Anticon wrote: "but in the long run:it's one thing we can't make any more of"
Sort of true. In 65,000,000 years we will have replaced our oil stocks and the prices of homes in suburbs and our cheap gas life style will again become desirable. In the interim, buy a bike.
Other than a blatant mouthing of the obvious, great post. | |
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| Real Estate bubble
Posted: 10/11/2006 3:38:20 PM | Well is it obvious though, people make weird assumptions, right now we are talking more about a slow down, not the prices dropping out beneath us. Real Estate has been unstably hot for the last few years, isn't it typical that it come back down to reality? That need not imply a collapse i think. I think people over react in the inclination of their desires. I have often said their are two kinds of people when it comes to real estate and their interests are opposite based on their greed; those are people who own real-estate and people who do not.
They obviously each desire that real-estate goes in opposite directions. | |
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e-wok
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Joined: 9/25/2006
Msg: 8 | |
| Real Estate bubble
Posted: 10/12/2006 6:58:34 PM | The 1980's should be a reminder to us what can happen. It destroyed so
many people who dared to get greedy with home buying. Everybody knows
there's a cycle and everybody is gambling there savings to bet more greedy.
Get out while you can. | |
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| Real Estate bubble
Posted: 10/13/2006 4:29:50 AM |
Well is it obvious though, people make weird assumptions, right now we are talking more about a slow down, not the prices dropping out beneath us. Real Estate has been unstably hot for the last few years, isn't it typical that it come back down to reality? That need not imply a collapse i think. I think people over react in the inclination of their desires. I have often said their are two kinds of people when it comes to real estate and their interests are opposite based on their greed; those are people who own real-estate and people who do not.
They obviously each desire that real-estate goes in opposite directions.
Good post. I've been watching the market, waiting to get in. Naturally someone in my position would want a collapse, but I don't think this situation mirrors the situation in '89. It will slow down - it already has - but it won't crash.
The market will stabilize itself. It's already bottlenecked young professionals like me out of it, and there are a lot of those like me who are wanting to but their first home, have good income and good jobs, but can't buy. | |
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| Real Estate bubble
Posted: 10/13/2006 5:52:01 AM | Here in Ohio the market is really soft and we are seeing the price of houses list at one price one day and drop up $20,000.00 by the next day. There are also homes that have been on the market for months, (and a few have broken the year barrier), because the owners or investment company refuses to lower their prices by as much as a couple thousand dollars. I also see people asking unrealistic prices for homes here.
We just put our bid in on another house on Wednesday afternoon, we are still waiting for official acceptance of the bid. The realtor is telling us that it has been unofficially accepted. The house was originally listed at 20,000.00 more than we bid and has been on the market for a little over 2 months. | |
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| Real Estate bubble
Posted: 10/13/2006 6:10:17 AM | Home values have other effects, In a state which home values are linked to taxes. You are going to see shortfalls in school taxes and programs, which will cause another round of tax rate increases.
The best thing to do is hang on to what you have and ride it out, property value will again rise, but not this year. | |
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| Real Estate bubble
Posted: 10/13/2006 6:25:21 AM | | That would be a big YES. My job consist of selling REO properties and what that has to do with is selling a house or a piece of land after it has been foreclosed on and repurchased by the bank I work for. We have been kind of flat for the past six months or so but we are all preparing for the next couple of months when our inventory should be tripling according to most estimates. | |
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| Real Estate bubble
Posted: 10/13/2006 7:07:30 AM | | The bubble has been ready to burst for the last few months ... the only thing that's been stopping it.. IMHO .. is the pending election ... watch closely .. housing is going to tumble.. in a big way .. after the new year .. housing is way over priced verses it's true value .. and a huge correction is coming soon ... interest rates will jump .. young families and others that jumped into the market when it was Hot and used creative financing will be forced to refinance ( if they can) or face the prospect of losing their homes .. the rate of foreclosure here in Miami is staggering .. over 30,000 homes a month ... | |
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| Real Estate bubble
Posted: 10/13/2006 9:21:02 AM | | It's starting to turn around here in the SF bay area. I know some real estate people who say they're getting offers again. Drop interest rates abit, and stuff moves. | |
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| Real Estate bubble
Posted: 10/13/2006 10:14:51 AM |
When will the tsunami of foreclosures hit?
With millions of adjustable-rate mortgages about to reset this fall, experts expect a wave of foreclosures by Americans in every income bracket. Here's why they could soar in late 2006 and beyond.
By Charles DuBow, BusinessWeek
Slideshow: Cities with the highest foreclosure rates
Slideshow: 10 competitive cities
On Money: Facing foreclosure? 9 options
Those easy-mortgage chickens are coming home to roost.
This fall the adjustable-rate mortgages (ARMs) that millions of Americans took out during the recent housing boom will be reset, and many homeowners will see their monthly mortgage payments shoot up by as much as 20%. According to the Mortgage Bankers Association, of all mortgages financed in 2005, 36% were ARMs -- the highest ever.
This is a matter of concern because ARMs are typically initially made at a lower rate and then increase after a fixed period of time, usually one, three, five, seven or 10 years, after which the rate will more closely reflect current rates. As interest rates increase, mortgage payments increase. Between $400 billion and $500 billion in ARMs are due to be reset by the end of 2006. The following year will be even more dramatic, when more than $1.5 trillion will be reset.
For many Americans, this is scary news, if hardly unexpected. Everyone who took out an ARM or another equally appealing low-rate mortgage over the past few years to buy a house, at times beyond their means, knew that someday their payments could balloon. Those home buyers may have thought they would be able to flip their houses quickly and avoid the rise in their mortgage payments. But now, many of them are finding themselves stuck in a house they may soon no longer be able to afford, and, as the real estate market peters out, there's little they can do about it.
http://realestate.msn.com/buying/Articlebusweek.aspx?cp-documentid=808749 | |
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| Real Estate bubble
Posted: 10/13/2006 11:46:12 AM | | The real question is...what the heck are most americans, already way in debt, going to do when China calls in its paper...they own most of your housing...scary thought kiddies | |
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LL3
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Joined: 9/10/2005
Msg: 17 | |
| Real Estate bubble
Posted: 10/13/2006 3:02:05 PM | I kinda liked the post on the "creative ways of financing"..
I'm here in Southern Ontario where the market for some reason is way out of whack with reality. There is no way that some of the cheaply built houses around are worth what people are paying for them. Also, the whole idea that people are walking into brand new 275+ homes with 0 down is absurd!
What is going to happen when as happens in the market, the houses become worth less than you paid for them? The interest rates rise to levels where affording your starter or dream home becomes unaffordable, the whole panic of lack of new starts on houses makes everyone tremble with fear of an impending recession? What happens? A lot of people lose their shirts, their credit ratings, their jobs, their marriages and some take their lives.
I think I live in the last untapped market in Southern Ontario where for the combined price of 200,000 I have two houses. One I live in, the other I rent. Hell, there is no other place one can go to find a 3000 sq.ft. home for 140,000. I searched for 2 years to find the first one. THis one I'm in now, I lucked into. Because of things not done to the home, I was able to talk buddy down 40,000G to where it was worth my while and a few years of living in a house that was not done to what I like. I bought what I could afford and what I can afford. I didn't do like I see so often where people are extended well beyond their means.
In the next few years, that is really going to hurt a lot of people, but hopefully, they'll learn from that mistake and move forward properly.
The bubble will burst and it's going to happen quickly(not today, but when it does...). How well people are prepared for it is going to determine how well the markets and the economy.
do....
I"ll have my dream home, but not for another 15 years or so when I know that I can afford it and enjoy it...... Till then, live within my means...... Barely, but I'm hangin' on.
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| Real Estate bubble
Posted: 10/13/2006 3:10:27 PM | Interdemensional: what do you mean "calls in it's paper"?
They're getting paid interest every day. Their paper is our paper. They surely don't want the US economy to default. Their bonds would be worthless. They're making a MINT off us with all Bush's deficit spending and borrowing against bond indebtedness! Why would they kill the goose that lays their golden eggs? | |
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| Real Estate bubble
Posted: 10/13/2006 3:35:43 PM | | ^^^^^^I have heard, and not that i know it for fact that there are those who beleive that part of China's long term plan is to defeat the united States through economic destruction. They buy all the debt...they actually hold a great majority of the debt owed in housing right now and if they decided it was worth it in the future they could topple the economy...but of course this would hurt them as well...but who knows...there are many types of warfare my friend. Just some thoughts. | |
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| Real Estate bubble
Posted: 1/27/2007 9:02:45 PM | | Meh, and really, we all floated along alright haven't we, the sky has not fallen has it? | |
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| Real Estate bubble
Posted: 1/27/2007 9:08:11 PM | As I see it they sure aren't making any more of it...buy what you can | |
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| Real Estate bubble
Posted: 1/27/2007 9:15:17 PM | it's not 30k homes a month in Miami. At that rate, 360k homes would change hands in one year. There is about 30k condos stuck on the market in Miami at this moment. By the way, I like the drop. I like finding homes or a home on the water at 40% discount!!!!!!!!!! Actually a little more. | |
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| Real Estate bubble
Posted: 6/12/2007 6:43:54 AM | | Yea it is starting to get pretty obvious in Canada now. Threat of interest hikes has the real-estate market trembling. Pretty much the most common transaction in a bank these days seems to be locking in interest rates. | |
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| Real Estate bubble
Posted: 6/12/2007 6:53:17 AM | ^^^trembling? you're in ontario...where do you see it trembling in Ontario?
rather than reprint it all, there's a nation wide summary as of a couple of weeks ago here:
http://forums.plentyoffish.com/datingPosts7404317.aspx
packleader and a couple of other posters show a different picture, much bleaker right now in the U.s, though...there you could say it's trembling... | |
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Pucks
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Joined: 10/14/2006
Msg: 25 | |
| Real Estate bubble
Posted: 6/12/2007 7:46:21 AM | I think it depends on your area really.
In Western Canada there is no sign of the market bursting. It has been increasing for the past few years. At record highs. Multiple bids on properties are common and there is no sign of things slowing down.
Interest make buying attractive and new mortgage options (40 yrs loans etc) continue to bring in new people into the market.
With the economy booming, employment rates low in western Canada there is no end in sight to real estate stopping it rise. Sure there may be some market fluctuations and things might stabalize a bit but a huge decline in prices are unlikely in my opinion.
Vancouver is also hosting the 2010 olympic games even more people will be coming to western Canada with there investing money.
It really depends on what is happening in your province/state and economic factors as well. | |
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