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  #31  
Old 10-02-2007, 09:27 AM
jaydub jaydub is offline
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Default Re: If you can afford to buy a house/condo should you do it to avoid r

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Umm... I just did respond with facts.


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Not really but we'll get to that.

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You've made several incorrect generalizations previously about real estate in general and are continuing with this trend.


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Examples? It's ironic that you claim I make such generalizations while acting like a complete shill parroting NAR bullet points.

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You listed a ton of major metropolitan areas that would be easily recognized as non-qualifiers. I then specified the gulf coast


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Actually no I believe the complete content of your post was

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Gulf?


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I somehow failed to parse that into the discussed zips and supporting data. My bad.

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but since you want more specifics since I assume you have a wealth of real estate research tools at your finger tips to accurately gauge these things. You can check out Ono Island and Silverhill, both in AL. Maybe a decade ago v today?

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This is what you come up with to justify the statement:

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Some markets have been almost completely flat with normal 1-3% appreciation over the last decade, while other places have boomed. Frequently these places are within 50 miles of each other.


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Silverhill with a population of 616 people vs. a moderately well known private resort community and still no actual data, not like with a population of 616 that it would mean dick?

Glad I didn't hold my breath.

J
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  #32  
Old 10-02-2007, 09:28 AM
Fishhead24 Fishhead24 is offline
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Default Re: If you can afford to buy a house/condo should you do it to avoid r

Housing as an investment is vastly overrated.......it is more of a natural savings plan than investment.
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  #33  
Old 10-02-2007, 10:31 AM
DesertCat DesertCat is offline
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Default Re: If you can afford to buy a house/condo should you do it to avoid r

I think buying can make a lot of sense, just not now. There were too many 2 year ARMs written in 2005/2006 to owners who can't afford a reset, for properties at prices they can only longer be sold for. As those ARMs reset this year and next, more than the usual amount of properties are getting dumped on the market or foreclosed. Many speculators from that era are going to run out of cash trying to rent properties they intended to flip at rents way below their carrying costs.

It's the primary driver of this years market and it's still going to drive next years market. I am hoping to buy a bigger house next fall as the market bottoms.
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  #34  
Old 10-02-2007, 11:05 AM
spex x spex x is offline
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Default Re: If you can afford to buy a house/condo should you do it to avoid r

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I think buying can make a lot of sense, just not now. There were too many 2 year ARMs written in 2005/2006 to owners who can't afford a reset, for properties at prices they can only longer be sold for. As those ARMs reset this year and next, more than the usual amount of properties are getting dumped on the market or foreclosed. Many speculators from that era are going to run out of cash trying to rent properties they intended to flip at rents way below their carrying costs.

It's the primary driver of this years market and it's still going to drive next years market. I am hoping to buy a bigger house next fall as the market bottoms.

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I do understand this logic. I really do. But I feel that the BEST way to make money in REI is to take good deals when they come, and NOT wait for a better deal tomorrow. There are ALWAYS more deals.

In my area the market has not responded too poorly to all the recent slumps in the housing market. Prices have declined somewhat and there are more foreclosures to choose from. Overall, that has not had a major negative effect on my market. The average time on market for single family homes right now is 4 months. Same as last year. Prices seem to be maybe 5% or so lower than what they'd have brought last year.

Now some markets are in a serious slump. My mom lives in Vegas and wants to sell her house. I've heard that average time on market is 12 months and many realtors are turning away listings.

Markets are local. Most of the decision to invest should be based on your local market rather than the hype of national trends. If you're not sure about your market, go to a local REI club and ask someone. Or you could go the your local Board of Realtors and get sales data for the last few years and compare.
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  #35  
Old 10-02-2007, 01:49 PM
Thremp Thremp is offline
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Default Re: If you can afford to buy a house/condo should you do it to avoid r

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What's an example of a flat and a boom within 50 miles over the specified decade?

J

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Yawn. Nice straw man response.
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  #36  
Old 10-02-2007, 02:43 PM
DesertCat DesertCat is offline
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Default Re: If you can afford to buy a house/condo should you do it to avoid r

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Markets are local. Most of the decision to invest should be based on your local market rather than the hype of national trends.

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I agree with some of this, but more specifically, all decisions to invest should be based on the economics of the specific deal. If you can buy a rental that's immediately cash flow positive enough to offer a decent return on your time/equity, then you can probably ignore the larger trends. You have the luxury of time to hold and benefit from eventual appreciation.

But if you are buying properties based on the expectation that appreciation will soon bail you out of a negative cash flow situation before you run out of cash, then this isn't the market for you.

If you are going to live on the property, a simple buy vs. rent analysis should guide your decision. How much more will it cost to own, and are the benefits of ownership worth it? Paying an extra $10k a year over renting to own a property that won't likely appreciate for three years means you are $30k in the hole before appreciation can start helping you catch up.

Edit: And one other factor to consider is that price appreciation is likely to be dramatically lower the next twenty five years than the last twenty five years. The last twenty five years benefited from a dramatic reduction in interest rates which increased property values, and led to a bubble that grew prices well past values. It's extremely unlikely we'll see substantially lower interest rates and may even suffer from higher rates in the future.

Over the long run real estate can't appreciate faster than incomes, or no one will be able to afford a house. 4-5% per year is all we can see over the very long run.
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  #37  
Old 10-02-2007, 04:19 PM
Phone Booth Phone Booth is offline
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Default Re: If you can afford to buy a house/condo should you do it to avoid r

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Markets are so local in real estate its absurd. Zoning regulations, city improvements etc etc etc matter infinitely more than any national news, swongs etc. I don't know if I can be more clear about this. You need to do the numbers for your own market, the specific properties you're looking at and the utility each option has for you (perhaps renting despite losing a shade of money means a nicer location, less stress etc etc).

Some markets have been almost completely flat with normal 1-3% appreciation over the last decade, while other places have boomed. Frequently these places are within 50 miles of each other.

jono,

Actually I'd say the national trends are more indicative of the smallest portions of the housing markets. The coastal areas and a few metros. Most of America isn't in these markets. And even within those markets I'm sure there are pockets that defy national trends. National trends are created from the summation of local markets, not vice versa.

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Can't you say this about everything? Clearly, no one is saying that prices of housing all over the US move exactly together, just that there are cyclical trends that may exert downward pricing pressure on all housing, much as there was an upward pressure until 2005 or so.

Also, because of the importance of capital markets on the housing market this time around, correlation will be higher than ever before. Consider, for instance, the correlation among national housing markets in the past and what's going on right now . That is not to say there aren't going to be exceptions (just as there are stocks that perform well even during crashes) but even completely unrelated asset prices become correlated when they are funded through a similar mechanism and/or held by the same entity or similar entities. Think MBS, homebuilders, REOs and speculators. Furthermore, the implied discount yields (annual implied/imputed/actual rent divided by price) fundamentally must be highly correlated and the substitution effect of housing is real at least on a large time scale.
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  #38  
Old 10-02-2007, 04:26 PM
ahnuld ahnuld is offline
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Default Re: If you can afford to buy a house/condo should you do it to avoid r

surprised nobody talked about the advantages of rent control in some cities. If you lease the same place for many years the savings you will see are huge.
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  #39  
Old 10-02-2007, 05:12 PM
spex x spex x is offline
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Default Re: If you can afford to buy a house/condo should you do it to avoid r

[ QUOTE ]


Can't you say this about everything? Clearly, no one is saying that prices of housing all over the US move exactly together, just that there are cyclical trends that may exert downward pricing pressure on all housing, much as there was an upward pressure until 2005 or so.

Also, because of the importance of capital markets on the housing market this time around, correlation will be higher than ever before. Consider, for instance, the correlation among national housing markets in the past and what's going on right now . That is not to say there aren't going to be exceptions (just as there are stocks that perform well even during crashes) but even completely unrelated asset prices become correlated when they are funded through a similar mechanism and/or held by the same entity or similar entities. Think MBS, homebuilders, REOs and speculators. Furthermore, the implied discount yields (annual implied/imputed/actual rent divided by price) fundamentally must be highly correlated and the substitution effect of housing is real at least on a large time scale.

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All of this may be true. I'm not really smart enough to follow all of this jargon. But I can say that neither I nor any other sucessful, professional RE investor that I know (and I know a few) try to time the RE market. We buy good deals. Period. Right now there are lots of good deals to be had, and that is sweet. In the last month I've bought two properties and didn't have a hard time getting credit extended to me. I do know some RE investors that have had trouble with getting credit. I also know a lot of investors that are buying as much property as they can and passing on lots of deals that they'd have snapped up 6 months ago. NOW is the time to BUY. Don't wait.
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  #40  
Old 10-02-2007, 05:35 PM
ahnuld ahnuld is offline
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Default Re: If you can afford to buy a house/condo should you do it to avoid r

spex, what about those real estate futures markets? They all indicate that the prices should come down at least another 20% on average in some major american cities.
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