42% hit in house values, my guess is that would be bad..

[bigq]

Although the numbers make sense it seems that would be devistating for CA economy.
The LA Times has this on the Califorian housing market. "Housing starts dropped sharply in November in most of the state's major metropolitan areas, led by steep declines in single-family home construction, the California Building Industry Assn. said Tuesday. Single-family home construction, which accounts for the bulk of California's new housing activity, fell 17.2% statewide in November compared with October, and tumbled 18% from a year earlier."
"Single-family housing starts fell 23.3% in the Inland Empire in November from October, 23.8% in Orange County and 24.1% in the San Diego region. However, the Los Angeles-Long Beach metropolitan area posted a 3.3% increase for the month. Including the construction of multifamily units, housing starts in California totaled 14,021 in November, down 5.3% from October, and off 23.6% from a year earlier."
"Local prices in the resale housing market have leveled off in recent months, and that has prompted many sellers to pull their homes off the market. As a result, new-home builders are 'very cautious,' said Alan Nevin, chief economist for the state building association. One reason builders in California were reluctant to start many single-family projects last month was because there was an ample supply of unsold homes, Nevin said."
One California market analyst is turning pessimistic. "Robert Campbell says that his biggest concern about the California housing market is creative financing. Campbell writes, 'Creative financing can be very dangerous when the price of the asset loses significance. People start believing that it doesn't matter whether a home sells for $200,000 or $400,000 because the monthly payment is the same. Sorry, but when mortgage loans are based on fictional values as opposed to true values that are supported by economic fundamentals, financial bubbles can develop that eventually implodes.'"
"Markets are mean-reverting, which he says explains why booms are followed by busts. Prices will fall and revert back to true economic value if they have become overvalued in a boom. California homes are overvalued, he says. 'In September 2005, the median price of a CA home was $544,000 and the median household income was $60,300. This puts the P/E ratio at 9.4, which is a level of extreme overvaluation based on 26-year norms. From 1996 to 2005, CA home prices rose by $366,000, a phenomenal 305 percent rise, while CA incomes rose by $17,000, a 40 percent rise.'"
"To calculate how housing prices would fall if they were to revert back to the 26-year average for the P/E ratio, Campbell multiplies $60,300 by the average P/E ratio of 5.2. If the market reverts to the mean, housing in California should cost about $314,000, which makes it susceptible to a stomach-lurching 42 percent drop."
"'Pushed to extreme levels of overvaluation by greed and easy money,' writes Campbell, the California real estate market is now a bubble. When a bubble bursts, history shows that, at a minimum, prices will retreat back to levels that are consistent with long-term norms. Sometimes, however, over-inflated asset prices fall to P/E ratios that are below the long-term norms, when this happens, the stage is set for the next great buying opportunity."

[Jyruiz]

That would suck for a lot of people.

[AZKC]

Time to get the check book ready :skull:

[Cole Trickle]

Never going to happen....
Drops yes but 42% would be highly unlikely.(I will keep my fingers crossed as I will be ready to buy several investment properties )
Also where are all of these new start homes in OC/LB?
I know of less than a handfull of new homes being built in Orange County.(Land is becoming harder nd harder to find here)

[76ANTHONY]

Never going to happen....
Drops yes but 42% would be highly unlikely.(I will keep my fingers crossed as I will be ready to buy several investment properties )
Also where are all of these new start homes in OC/LB?
I know of less than a handfull of new homes being built in Orange County.(Land is becoming harder nd harder to find here)
yep, i got two in mind also, whats all this gonna mean to me??

[Kilrtoy]

Who knows.......
it climbed thru the roof, it can fall right back in just as quick

[Doin' Time]

no way no how.......people keep breeding and they keep jumping borders..housing will always be at a premium......i just hope some of ya didnt take a second or third out on the house to buy a boat, :rollside:

[bigq]

no way no how.......people keep breeding and they keep jumping borders..housing will always be at a premium......i just hope some of ya didnt take a second or third out on the house to buy a boat, :rollside:
If it just kept going up why not use the house? Contradiction? :)

[Kilrtoy]

...i just hope some of ya didnt take a second or third out on the house to buy a boat, :rollside:
Im sure NO-ONE on here would ever think of doing that.....
Everyone is Rich just ask them

[Cole Trickle]

I better hurry up and refi so I can order a F29 before the market crashes!!!(I have 250K worth of equite burning a hole in my pocket)
Hopefully it will turnaound again before my interest only 5 year arm blows up. :p

[wsuwrhr]

So there IS hope I can finally rent this house and afford to move back to Upland.
Brian

[MACHINEHEAD]

Its goin to happen. And I am ready. UPLAND for sure $350k watch.

[wsuwrhr]

Its goin to happen. And I am ready. UPLAND for sure $350k watch.
I had to go out to San Bernardino to be able to afford a home.
The house I was renting in Upland sold for 600K, two years before that, they were 300K, too bad I didn't have the income to buy it then or I would have.
Brian

[SummitKarl]

Im sure NO-ONE on here would ever think of doing that.....
Everyone is Rich just ask them
Cough!!!!! excuse me just clearing my throat :)

[wsuwrhr]

If the bubble bursts like I think it will.
Without a doubt, I will be back in Upland.
Brian

[YeLLowBoaT]

I would love for the market to go down 40% ... yes it would suck for alot of ppl... but hell I would work like 20 hr a week... make that payment and still have money for gas for a day or two at the lake...

[Bellababes]

I don't see it happening. It may level off, but not burst. Especially here in the OC. This is such a nice place to live and not a lot of new housing available. Supply and demand with keep it going.

[bigq]

I don't see it happening. It may level off, but not burst. Especially here in the OC. This is such a nice place to live and not a lot of new housing available. Supply and demand with keep it going.
Demand? er...did you see the number for OC?

[bigq]

I would love for the market to go down 40% ... yes it would suck for alot of ppl... but hell I would work like 20 hr a week... make that payment and still have money for gas for a day or two at the lake...
Even at 40% people that purchased in 2001 would probably still have a gain. :cool:

[C-2]

And it will be a long time...
a looooooooooooooonnnnnnnnnnnggggggggg time before foreclosures become good deals.
What, you think a bank is gonna foreclose on a $500K note and turn around sell it for $100K? Yeah, I see that informercial every weekend too!
How about $200, 300, even $450K...not gonna happen. REO inventories will have to grow to astronimcal numbers before they will even consider letting them go for below note value. Just like the early 90's - it took several years before foreclosures became good deals.

[RiverToysJas]

I think it's time to sell my house, move back in with my parents, and use the money to buy a bunch of new toys! That'd be the smart move right now!!! ;)
RTJas :D

[Jeanyus]

If you are waiting for real estate prices to come down, my advice would be don't hold your breath.

[wsuwrhr]

So you guys are saying I am stuck in San Bernardino?
Thanks for bursting MY bubble.
Brian

[YeLLowBoaT]

And it will be a long time...
a looooooooooooooonnnnnnnnnnnggggggggg time before foreclosures become good deals.
What, you think a bank is gonna foreclose on a $500K note and turn around sell it for $100K? Yeah, I see that informercial every weekend too!
How about $200, 300, even $450K...not gonna happen. REO inventories will have to grow to astronimcal numbers before they will even consider letting them go for below note value. Just like the early 90's - it took several years before foreclosures became good deals.
Its happend b4...
I know a sub division here in town that had about 75% of some 3500 ish homes defualt...Most of those were vacent for 3+ years. Banks ended up selling them for about 50% of what the notes were. People still were not buying.
I really don't see the "bubble brusting" I do see a small decline happning( 5-20%) that or go back to the 1-3% year increase.

[MagicMtnDan]

Demand? er...did you see the number for OC?
What number, the number of housing starts? That doesn't reflect resale conditions or market value. How much open land is available in OC (or LA) county?

[Boa1277]

Look what happened to Temecula back in the late 80s early 90s it took a big crap, now it came back, but alot of people took a big hit. I think the LA, OC housing market is going to take a hit but it will eventually come back just like the stock market, houses are long term investments and if you look at it that way you will be fine, if you purchased your home and planned on using the equity to fund your toys, and vacations, and maybe float a few payments every year just so you could afford the home in the first place you are screwed, sorry to say that but you are screwed that I will guarantee you. The prices in AZ are a joke right now also so when Cali. pops AZ is going to be right behind you... who the hell would believe a 3000 square ft home in Tucson AZ is selling for 600grand in a nice neighborhood, it is a joke, it is Tucson for christs sake, the middle of the f-in desert.... Ah it feels good to vent sometimes for not jumping on the bandwagon and making a grip like everyone else did, but at least I own my home or close enough and the payment is less than 800 bucks a month...

[Ultrafied]

It runs in cycles. Seen it over the last 30 years. Prices increase, prices fall. People need creative financing in the middle of the rise because they can not afford the home in real money. When the bubble gets a hole in it, prices fall. Prices fall farther. The decline lasts between 7-10 years, little ups but usually downs. Early on it was balloon payments, this time it was neg. am's and interest only's. These people usually bust and fuels the market decline. Anywhere from 25% - 45%.
But .... eventually, the market begins to fuel itself and housing values start to go up. How much? Hasn't been as consistent as falling except for this time. You have to remember that when the housing market exploded, interest rates were being lowered and held down by Greenspan to help Bush's economy after Clinton left. You don't usually see interest rates at 5% or lower. These rates were not market driven but artificial to help the economy, which it did. The price we will pay is yet to be seen.
Remember .... nothing is forever :D

[bigq]

What number, the number of housing starts? That doesn't reflect resale conditions or market value. How much open land is available in OC (or LA) county?
You're right, it reflects housing starts. :rolleyes:
That number is for a month drop.

[cc322]

Never going to happen....
Drops yes but 42% would be highly unlikely.(I will keep my fingers crossed as I will be ready to buy several investment properties )
Also where are all of these new start homes in OC/LB?
I know of less than a handfull of new homes being built in Orange County.(Land is becoming harder nd harder to find here)
There are so many new tracks going up in Irvine it would blow your mind, new communities galore. I work for the city and I see it everyday tons of new construction. And the funny thing is every house that gets built is allready sold. From Newport coast, to Portola Hills. The Irvine Ranch land is still being developed very heavily

[Cole Trickle]

There are so many new tracks going up in Irvine it would blow your mind, new communities galore. I work for the city and I see it everyday tons of new construction. And the funny thing is every house that gets built is allready sold. From Newport coast, to Portola Hills. The Irvine Ranch land is still being developed very heavily
That was what I was thinking.
I have seen the developments over off the toll road and 405 and they are currently cutting hills over at Jeffery/Portola but al of those homes are mega dollar builds.I have had a couple clients get in on the first phase of the homes built off Bryan/Jeffery and they were lucky to pay 800K+ and before they were completed apraised for over a million.
As far as I know there are very little if any homes being built for the first time homes buyer in OC.
My area peaked about a year and a half ago but has been holding steady once numbers dropped to realistic numbers.(Portola Hills)

[Jeanyus]

They say the real estate market is fueling the economy. If thats the case, then things are going strong as ever. I had to wait in liine to get in the parking lot at the mall this year.
I have been building houses in Ca since the early 70s, the bubble deflated in the 70s seems like it lasted about 4 years, it deflated in the late 80s, it lasted about 1 1/2 years. Real estate slowed down for about 3 weeks in December, that is probably the buble burst everyone is talking about, things are active again.
Supply and demand, where do you think all those people in line at the mall are going to live?

[Mrs. casean]

As far as I know there are very little if any homes being built for the first time homes buyer in OC.
That's for sure! I grew up in OC but we couldn't afford a house (that's worth living in considering the area) for our first home so we are "over the hill" as I always say... in Temecula :D Now most of these homes are around half a million! Nuts! It's amazing that a new home around OC is not less than $700k-$800k! I couldn't imagine spending money on a house for that much. But many do. My dad sells homes in Ladera Ranch and sold one to Warren G and now Snoop Dog (it's funny!) is looking at the houses! But these houses are around 2 million! Crazy!

[dirty old man]

I use the same phylosophy (sp) in stocks and RE: buy lo, sell hi

[Havasu Cig]

It runs in cycles. Seen it over the last 30 years. Prices increase, prices fall. People need creative financing in the middle of the rise because they can not afford the home in real money. When the bubble gets a hole in it, prices fall. Prices fall farther. The decline lasts between 7-10 years, little ups but usually downs. Early on it was balloon payments, this time it was neg. am's and interest only's. These people usually bust and fuels the market decline. Anywhere from 25% - 45%.
But .... eventually, the market begins to fuel itself and housing values start to go up. How much? Hasn't been as consistent as falling except for this time. You have to remember that when the housing market exploded, interest rates were being lowered and held down by Greenspan to help Bush's economy after Clinton left. You don't usually see interest rates at 5% or lower. These rates were not market driven but artificial to help the economy, which it did. The price we will pay is yet to be seen.
Remember .... nothing is forever :D
The rates are the main reason that real estate has been doing as well as it has, along with creative financing and fraud in the mortgage industry IMO. The rates were lowered and held at such low rates after 9/11 to save the economy. Now the rates are climbing and need to do so in order to curb inflation. A lot of people bought a payment on an ARM and are going to be screwed when they have to Re-Fi. They did not look at the cost of the house, just if they could swing the payment for the next few years.
Anybody that thinks real estate is going to keep climbing is crazy. My father was a developer and lost a lot of $$$ when the market crashed in the late 80's and early 90's. A lot of people were trying to get out of the homes they had bought from us because of the drop in the market, and filed construction defect suits. He did not lose one case, but the lawyers fee's were in the millions. On top of that he ended up hanging on to some stuff we built for years until he could sell it for a reasonable price. He actually does not think it will be as bad this time, but I think it could be worse. At least in those days people were actually puting real cash down and if they walked away they would lose it. Today a lot of people are going 0 down which IMO makes it easier to walk away.
There are a lot of people out there that are 100% financed (or more) with interest only loans and a lot of those loans were obtained on stated income. This is where the fraud comes in. I personally know people that own several homes on paper, but don't actually own anything. They think equity is money in the bank and are spending it like it does not have to be payed back. We own a House here in San Diego, A house in havasu, and an interest in a water front cabin on Lake tahoe. My total debt against those three properties is about 300k and the value is about 3 million. I could have went out and cashed equity like everybody else, but I would rather have my stuff payed off 15 years from now and not have to work. I think A lot of people are not looking down the road when they are paying interest only on a 30-40 year loan. Do you want to work until the day you drop dead? For the people that are buying boats, cars etc...with equity, I think they are even worse. My.02.

[4DAY4PLAY]

The rates are the main reason that real estate has been doing as well as it has, along with creative financing and fraud in the mortgage industry IMO. The rates were lowered and held at such low rates after 9/11 to save the economy. Now the rates are climbing and need to do so in order to curb inflation. A lot of people bought a payment on an ARM and are going to be screwed when they have to Re-Fi. They did not look at the cost of the house, just if they could swing the payment for the next few years.
Anybody that thinks real estate is going to keep climbing is crazy. My father was a developer and lost a lot of $$$ when the market crashed in the late 80's and early 90's. A lot of people were trying to get out of the homes they had bought from us because of the drop in the market, and filed construction defect suits. He did not lose one case, but the lawyers fee's were in the millions. On top of that he ended up hanging on to some stuff we built for years until he could sell it for a reasonable price. He actually does not think it will be as bad this time, but I think it could be worse. At least in those days people were actually puting real cash down and if they walked away they would lose it. Today a lot of people are going 0 down which IMO makes it easier to walk away.
There are a lot of people out there that are 100% financed (or more) with interest only loans and a lot of those loans were obtained on stated income. This is where the fraud comes in. I personally know people that own several homes on paper, but don't actually own anything. They think equity is money in the bank and are spending it like it does not have to be payed back. We own a House here in San Diego, A house in havasu, and an interest in a water front cabin on Lake tahoe. My total debt against those three properties is about 300k and the value is about 3 million. I could have went out and cashed equity like everybody else, but I would rather have my stuff payed off 15 years from now and not have to work. I think A lot of people are not looking down the road when they are paying interest only on a 30-40 year loan. Do you want to work until the day you drop dead? For the people that are buying boats, cars etc...with equity, I think they are even worse. My.02.
Yes i do......im a fireman i love my job! And if im tired or sick, i will retire at 50 years old with a 100% pension.....thanks Gray Davis.

[HighRoller]

It's amazing how people have lost their minds because of the housing market being good. Even if you make twice the median income in Cali, which would be $120K, you still shouldn't even think about buying a $550K house according to a 30% maximum income/payment ratio. Anyone who can use a calculator and read can see that "affordability" loans are financial suicide! The crash that is coming (and financial indicators show that a slowdown is coming) will start with a modest decline. But those with garbage loans will sink under even modest pressure because they are over-leveraged and have no savings. We all know what happens once a snowballl starts rolling downhill...
And as far as Havasu and other neighboring states, people who have used their equity to buy a second home who are faced with being suddenly upside down in their first will dump the second home to save their asses. Yes, rational thought tells us that if you hold on to your assets the market will eventually recover. But the stock market and real estate market crashes of the past tell us that rational thought takes a back seat to panic when it hits the fan.
You can argue whether a correction is coming or not. But face it; we are all talking about it already. That's how changes come about. Talk turns to action (or inaction) and the snowball starts rolling very slowly...

[totenhosen]

You can argue whether a correction is coming or not. But face it; we are all talking about it already. That's how changes come about. Talk turns to action (or inaction) and the snowball starts rolling very slowly...
Agreed! Like I said the one intangible to keep the market going is the public's perception. And it seems perception is changing.

[superdave013]

well all I know is that if it drops 42% and I sold on that very day......................................
I would still be WAY ahead. :)

[HM]

It was in the LA Times....so take it with a grain of salt. Yes, the sky is falling.
The last big artice from the L.A. Times on mortgages talked about the all the people getting into the Neg Am loan because they couldn't afford a regular loan.....which is not what is happening. If they can't afford for a regular loan, then they DON'T qualify for the Neg AM as the borrower has to qualify based on the internal rate, not the minimum payment rate. The real problem is all the fraud being committed by loan officers who are stating thier income higher so that they qualify.
HighRoller: DTI range from 36% - 45% on A/Alt A paper loans and go as high as 60% on Subprime. And, there are ton's of loan products that don't even look at DTI. Don't know where you got 30% from.

[HighRoller]

I was talking 30% as in mortgage payment only, not total debt. Personally, I guage affordability on "take home" pay and would never have a payment higher than 25-30% of take home. But I'm conservative and I know lenders nowadays are willing to go further out on a limb to get people financed. You're right about fraudulent lending practices. But in the end, they will reap what they sow. They got the commission up front, but they'll get the house back one day in return when the owner defaults.

[HM]

I was talking 30% as in mortgage payment only, not total debt.
Still not sure where you get 30% from as no lender requires that - usually referred to as the top ratio, and the total debt ratio is the bottom ratio. Lenders use the 36%-60% range even if the only debt is a mortgage - they are only interested in the bottom ratio. And there are a ton of "No Ratio" products out there that don't even look at DTI, along with "No Income" products.
Real estate will be fine. Sure there will be an adjustment...who knows how big, but it is only temporary. It will come back, it always does. My brother's house dropped 37% in Huntington Beach in 1991. Even if the 42% drop happens now, that house would be worth $1.45 Million, and it was worth $500K after the last adjustment of 37%, and he bought it for $800K...still $750K ahead assuming the "BIG" adjustment hits.

[SummitKarl]

Still not sure where you get 30% from as no lender requires that - usually referred to as the top ratio, and the total debt ratio is the bottom ratio. Lenders use the 36%-60% range even if the only debt is a mortgage - they are only interested in the bottom ratio. And there are a ton of "No Ratio" products out there that don't even look at DTI, along with "No Income" products.
Real estate will be fine. Sure there will be an adjustment...who knows how big, but it is only temporary. It will come back, it always does. My brother's house dropped 37% in Huntington Beach in 1991. Even if the 42% drop happens now, that house would be worth $1.45 Million, and it was worth $500K after the last adjustment of 37%, and he bought it for $800K...still $750K ahead assuming the "BIG" adjustment hits.
as usual HM your right on the money

[totenhosen]

You're right about fraudulent lending practices. But in the end, they will reap what they sow. They got the commission up front, but they'll get the house back one day in return when the owner defaults.
That is the problem. Majority of the loans are sold as mortgage back securities (MBS's). Lenders aren't holding the paper on these loans so they could care less about ratios etc. Sorry but 60% hell even 50% DTI ratio is jsut insane even if that is fully amortizing P&I loan. If they have one hiccup in their income they are in a world of hurt.

[callbob4homes]

so I guess the prudent thing is to lay in the curb, look up at the sky and hope you don't get hit? There are plenty of people upside down in boats and cars as well, one breakdown away from repo. Stupid people aren't relegated to just real estate, and smart people don't panic and rush for the door. If you are prudent in your financial life, what are you worring about. Seems to me there are alot of folks on here just wanting something to happen so they can gloat. If the "experts" on here KNEW what is about to happen, can you help me out on picking lotto numbers? Nostradamas (sp) where are you?

[totenhosen]

so I guess the prudent thing is to lay in the curb, look up at the sky and hope you don't get hit? There are plenty of people upside down in boats and cars as well, one breakdown away from repo. Stupid people aren't relegated to just real estate, and smart people don't panic and rush for the door. If you are prudent in your financial life, what are you worring about. Seems to me there are alot of folks on here just wanting something to happen so they can gloat. If the "experts" on here KNEW what is about to happen, can you help me out on picking lotto numbers? Nostradamas (sp) where are you?
very true Bob. At this point one has to look at R/E as a long term investment and not bank on short term appreciation.
I guess it would go along with all the people gloating about how much money they made over the last 5 years.

[callbob4homes]

RE should always be treated as an investment, not an atm card to fund toys. I still don't get the point of all the chicken littles. Only sure thing is dying and nobody knows anything about that either. or do they..............................

[totenhosen]

RE should always be treated as an investment, not an atm card to fund toys. I still don't get the point of all the chicken littles. Only sure thing is dying and nobody knows anything about that either. or do they..............................
I think the Hindu's are not letting us in on their secret.

[HighRoller]

Looking at indicators and past history does not make one a "chicken little". On the other hand, if you think people with 60-100K of income who borrow 500-600K are financially "stable", well.....maybe only if they have a lot of money in the bank and not a lot of debt. But if they did, they wouldn't need an "affordability loan".
All I'm saying is that people are buying houses they cannot afford. Period. Just because a lender used some accounting tricks to lower their payment did not make it affordable. Nobody has explained to me how someone who is over their head in a house is going to survive when the market corrects itself. And it WILL correct itself, because history has proven the economy and real estate to be cyclical in nature. I guess it's easy to say the good times will never end when you're sitting on top of the heap. That's what everyone said about the DOTCOM bubble as well..... :cool:

[Cole Trickle]

Looking at indicators and past history does not make one a "chicken little". On the other hand, if you think people with 60-100K of income who borrow 500-600K are financially "stable", well.....maybe only if they have a lot of money in the bank and not a lot of debt. But if they did, they wouldn't need an "affordability loan".
All I'm saying is that people are buying houses they cannot afford. Period. Just because a lender used some accounting tricks to lower their payment did not make it affordable. Nobody has explained to me how someone who is over their head in a house is going to survive when the market corrects itself. And it WILL correct itself, because history has proven the economy and real estate to be cyclical in nature. I guess it's easy to say the good times will never end when you're sitting on top of the heap. That's what everyone said about the DOTCOM bubble as well..... :cool:
Sadly most of Southern California has to live pay check to pay check to afford a home.I make a good living and live within my means but by no means is my mortgage 25% of my income.Most people in my age bracket (29yo) are still living at home with there parents let alone buying homes.It is my impeccable credit and good money managment that allows me to unfortunatley live over my head.I purchased my Condo 2.5 years ago and am sitting on 200K+ worth of equity.(I went with a 30 year fixed)I would never refi my home for toys and do not believe in being in debt.
I have thought long and hard about that 30 year fixed and I think it might have been a bad choice as I knew I would be out of the house in under 5 years and payed an extra XXX a month that ended up going toward interest anyways.
I am going to be listing my Condo right after the first of the year and stepping into a house.I am only taking about a 50K step as I am moving from South OC to Corona but I am still wrestling with what loan to go after. I will be putting half of my equity towards the new home and I was going to use the other 100K to invest in property.(I will not blow it on toys)
My Mortgage broker who is a good family friend knows what I am looking for and has suggested a 10 year fixed interest only loan.(Tricky Arms scare me) I am thinking of doing this because there is no way in the world I will keep the home for over 10 years.also if the market was going to drop chances are it would be back in 7-10 years.

[Havasu Cig]

so I guess the prudent thing is to lay in the curb, look up at the sky and hope you don't get hit? There are plenty of people upside down in boats and cars as well, one breakdown away from repo. Stupid people aren't relegated to just real estate, and smart people don't panic and rush for the door. If you are prudent in your financial life, what are you worring about. Seems to me there are alot of folks on here just wanting something to happen so they can gloat. If the "experts" on here KNEW what is about to happen, can you help me out on picking lotto numbers? Nostradamas (sp) where are you?
Getting your car or boat repo'd is one thing, losing your home is a lot more serious IMO. Notice I said "HOME" and not house, condo etc... We are conservative with all our properties, but even is I was more risky I would never leverage my HOME to buy other properties, cars, boats etc... I know many people that are doing this though banking on the market increasing. If the market declines, like it always does, they are in trouble.
You don't have to be Nostradamas to predict a decline in the market because everything cycles. Six years ago we were making a killing in the stock market and then it declined (some would say crashed). Since the stock market decline real estate has been good. I think we are seeing the begining of a shift in the market.
If you think anyone predicting a real estate decline is a "chicken little" I guess you think the same thing about the analyst that are predicting the same. With you being in the business though I would not expect you to say anything else, at least not publicly. The friends I have that are in the business are already telling me their business is slowing down.
I could care less either way. We have money in both real estate and stocks, bonds etc... If real estate keeps increasing in value great, if it declines then I will look for some deals.

[callbob4homes]

Cig I think you are missing my point. Yes things are slowing down, even here in the east valley of Phoenix. I happen to think it is a good thing especially dealing with buyers. I hate telling a client that they have 15 minutes to make the largest financial decision of their life (for most people) and they better come in over the asking price and not worry about the appraisal if they want the home. That is exactly what was happening here. Prices are definately leveling off and market time increasing. people can now negotiate the selling price. Does this mean I will lose my job? Hell no. Does this mean some will? You betcha. Hopefully it will be the non professional people that just show up at an occupied residence wanting to show it without having any knowledge of what they are showing. Does the slowdown mean an end to appreciation? No, it will go back to a reasonable amount, not the 40+% we were seeing here. Del Webb Anthem is building 4500 homes and other builders are bringing the total to almost 9K between Queen Creek and Florence Az. Sales will start in Feb. Don't know where that is? You will. What is Calif. doing? I don't care, because most of my buyers are from there. Market analysts? Just like real estate agents, a dime a dozen and more opinions than the moles on Larry the Cablemans sister. I just closed a deal on a new home for a couple from Downey. They sold the 870 sq. ft. 2 bed 1 bath home they had lived in for 27 years for 360K!!! Paid cash for 1650 sq. ft. 3/2/2 in Power Ranch, Gilbert area for under 300K. Real Estate market bubble burst? My thinking is more like a correction, and that's not a bad thing. Like I said before, if you have a solid financial plan that does not include using your "equity" to finance toys, you have nothing to fear. Interest only loans? Depends on what your plan is. Neg am loans? Unless your home is paid for and you are 75 years old, I can't see the advantage there. and just as an aside, I sold homes in Havasu also and 98% of my buyers were from California. Not all RE agents are out for the quick buck, some of us do this because we enjoy the changing market and conditions, not to mention selling a home to people that we know they can afford and will bring repeat business our way because we didn't try to sell them on something they can't afford. Timing is everything and when you are paying attention to whatever your investment strategy or portfolio is, you make the decision you have to make. Blanket assumptions don't cover the whole bed sometimes. Anybody need a golf course home? I have 3 listed right now.
(sneak that in there)

[GHT]

Isn't this what always happens? The economy is like a sign wave... It is reactive to many things.. Buckle down (for those whom know how) hang on and the decreases will pass... No big deal.. Unless you did something stupid with your equity..

[77charger]

the ones who buy a house now are the ones who are going to take a bigger hit.They will be paying prop taxes for the purchase amount no matter what the house is worth,ones with int only loans or adj.might see a big increase in a payment they can barely afford now.IMO.There area lot of high dollar toys bought with equity and they have to paid someday the ones i talk too who bought like this say they aint worried the market is strong and wont go down.
I bought my house in 4-2000 and it was 190k then for a 1200 sf 3 bedroom.It is now just over 500k.I have refid but only for 250k (new pay off) pay off debt,boat,toyhauler,motorcycle.I plan on being here a lonnggg time so i aint worried and my payment now is what i was paying originally 8 percent vs 6.6%intrst rates.Alot of overpriced homes in OC if you ask me including mine!!
It does go in cycles if you hold on long enough you really wont lose but makin the payment is another game.When it burst there will be some big losses

[MONEYFURNOTHIN]

It seems obvious a correction is coming. If the median family income is 60k, well they definatly cant buy a home. I make about double that and would be scraping buy if i chose to buy an extremely overpriced averarge home (550k range) without "creative financing". Anyone who thinks it wont is very optomistic. If the market doesnt correct say goodbye to the american dream, because the average or even above average income family will not be able to buy there first home! If this is the case maybe i should invest in trailer parks since thats all the new generation will be able to afford!!

[MACHINEHEAD]

Raised in rancho 27yrs. ALWAYS looking for an opportunity.I just want to stop renting in Pomona.But 425k in upland for 766 sq/ft built in 1950 somthing, please. Its just doesnt make sense, Ill need to take home like 6500 a month. This house and all the others like it will be 320k, still rediculous, but affordable. And I will be able to pick and choose like the old days.

[FLOJO]

I Feel Sorry For The Suckers That Paid 500,000 To Live In Pacus (pacioma).

[Focker]

This thread is crazy
First if u can afford something and ya want it buy it
will real estate go up and down -----yes
do boat prices go down --- not in my life so far
will real estate prices in LHC go down--- not a focken chance
lake property in LHC will always be in demand
will the prices in LHC grow as they have recently-- not right away as money in California is getting tighter.
If ya can buy a sled for 75k plus ya better believe most will want a weekend stay toy.
Summit Karl is right as long as ya can buy a lot or build a house in LHC it will happen
Now if ya need help please call me. I am now entering the 5th season TAX SEASON call me if ya need help
ps HAPPY FOCKEN NEW YEAR
FOCKER, CPA

[Havasu Cig]

CB, I can agree with most of your last post...
Focker, Talk to me a year or two from know and we will see what the market in LHC is doing. Like I said before, as California goes so will Havasu. Prices are already seeing a decline here in So.Cal. A lot of people are living off equity and will be able to stretch it for a while so I think it might take that long for some people to be hurt. I don't think a lot of those people though will be able to stretch it until the market cycles again. My.02

[Havasu Cig]

On a similar subject, I think a lot of people (more than most could imagine) are using their equity to buy depreciating assets such as boats. When I bought my first Mach 26 in early 2000 it was a big deal to have a 100k boat. Roll up in the same boat now and people won't even take a second look at you. I don't think everyone all of a sudden started making the income to afford these toys, rather i think they have cashed equity like it was a bank account. When their ARM's are up and they have to re-fi at a higher rate they are going to be in trouble.
Same goes for the vacation homes. I bought my place out there in early 2000 and at the time I only knew two other people that owned vacation homes. You would be hanging at the sandbar and people would ask what hotel you were staying in. Now everyone ask where your house is. Some of the people I know that have bought homes out there can't afford them and are hoping for the market to keep going up and are living on equity from their California homes right now. I think you will see a lot of changes at the lake in the next few years...
Happy New Years!!!

[Charley]

On a similar subject, I think a lot of people (more than most could imagine) are using their equity to buy depreciating assets such as boats. When I bought my first Mach 26 in early 2000 it was a big deal to have a 100k boat. Roll up in the same boat now and people won't even take a second look at you. I don't think evryone all of a sudden started making the income to afford these toys, rather i think they have cashed equity like it was a bank account. I think you will see a lot of changes at the lake in the next few years...
Chris, I completely agree with this post...I'm guessing we will see a drastic change at the lake over the next few years...blower motors will be less prevelant, 200k-500k boats will be fewer and hopefully insurance prices will drop too, they better or I'm buying a deck boat or worse... a V ;)

[Havasu Cig]

Hey I love my Pontoon, nothing wrong with a deck boat... :)

[framer1]

Chris, I completely agree with this post...I'm guessing we will see a drastic change at the lake over the next few years...blower motors will be less prevelant, 200k-500k boats will be fewer and hopefully insurance prices will drop too, they better or I'm buying a deck boat or worse... a V ;)
I believe the boating industry is going to take a hit just like the real estate market. I remember years ago when all the big boats were owned by doctors than it was the dot-com guys. Now it's the construction bussiness with the high end boats, I think these things just goes in cycles. As for ins. that a whole other story. My ins. Co. just sent me a letter about renewing my ins. it pretty much says they are going to raise my rates. Here's the last line in the letter" We thank you for your business and look forward to considering your policy renewal" Gee thanks! No claims or tickets already pay 4849.00 I guess that not enough. A deckboat is sounding good :)

[77charger]

When we bought our house in 2000 the basic rule of thumb was that a house should be no more than 1.5-2 times your income.Now i see people who are buying homes 4 times the amount they make.
This creative finacing is what is going to kill the market when the real money is due(int only loans,adj rates,etc)I could get myself in hole real fast with equity take out alot go buy brand new boat,moho,sandrail and worry about payment later.Scary part is there is probably a lender who will give me the loan no problem.They will be far upside down a loan for 700k and a home worth say 350k.
For now i am happy with my house,12 year old 21ft boat,standard travel buggy,and budget toyhauler.I still have just as much fun as anyone else with more expensive toys and will do so for a long time knowing my house payment will reamin the same and able to afford it.

[al cole'holic]

Southland home sales strong, prices hit new peak
December 15, 2005
La Jolla,CA----Southern California home sales remained at near- record levels last month as prices continued their climb to new heights, the result of continued demand and the expectation that mortgage interest rates will continue to increase, a real estate information service reported.
A total of 27,637 new and resale homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 3.0 percent from 28,489 in October, and up 0.6 percent from 27,459 for November last year, according to DataQuick Information Systems.
A decline from October to November is normal for the season. The strongest November in DataQuick's statistics was in 1988 when 29,303 homes were sold. The slowest November was in 1991 when 13,537 homes were sold. So far this year 326,746 Southland homes have been sold, virtually unchanged from 326,880 for the first eleven months of last year.
"Potential buyers typically get off the fence when interest rates are on the rise, that may account for part of last month's high sales count. Additionally, more homes are on the market these days, giving buyers more choice than they had a few months ago," said Marshall Prentice, DataQuick president.
The median price paid for a Southern California home was $479,000 last month, a new record. That was up 1.3 percent from $473,000 in October, and up 15.4 percent from $415,000 for November 2004. Annual price increases have been in the mid teens since April.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.
The typical monthly mortgage payment that Southland buyers committed themselves to paying was $2,238 last month, up from $2,169 for the previous month, and up from $1,830 for November a year ago. Adjusted for inflation, current payments are about the same as they were in the spring of 1989, at the peak of the prior real estate cycle.
Indicators of market distress are still largely absent. Foreclosure activity is edging up from its bottom, but is still low. Down payment sizes are stable, as are flipping rates and non-owner occupied buying activity , DataQuick reported.
.... :rolleyes:

[totenhosen]

A decline from October to November is normal for the season. The strongest November in DataQuick's statistics was in 1988 when 29,303 homes were sold. The slowest November was in 1991 when 13,537 homes were sold. So far this year 326,746 Southland homes have been sold, virtually unchanged from 326,880 for the first eleven months of last year. :
Little bit of a contradiction there, don't you think? Past few years there has been no real slow period.
"Potential buyers typically get off the fence when interest rates are on the rise, that may account for part of last month's high sales count. Additionally, more homes are on the market these days, giving buyers more choice than they had a few months ago," said Marshall Prentice, DataQuick president.
The typical monthly mortgage payment that Southland buyers committed themselves to paying was $2,238 last month, up from $2,169 for the previous month, and up from $1,830 for November a year ago. Adjusted for inflation, current payments are about the same as they were in the spring of 1989, at the peak of the prior real estate cycle.
.... :rolleyes:
I wonder if you even read what you posted? Really nothing to cheerlead about. I bolded an especially telling sign. Do you know what happened after that???

[al cole'holic]

...dumbass, I posted this latest article from DataQuick (the largest housing info source in the US) to show this argument is a double edge sword...btw, yes there has been a slow period each and every year, it's this time every year when you crackpots anxiously await the right time to buy, yet it never comes :)

[Froggystyle]

A deckboat is sounding good :)
I know someone you should call then... ;)

[NorCal Gameshow]

regardless of what the market does short term, you have a payment...
either you can pay it or you can't...

[bigq]

regardless of what the market does short term, you have a payment...
either you can pay it or you can't...
That right there should be a quote in a sig line, lol. :D :D

[totenhosen]

...dumbass, I posted this latest article from DataQuick (the largest housing info source in the US) to show this argument is a double edge sword...btw, yes there has been a slow period each and every year, it's this time every year when you crackpots anxiously await the right time to buy, yet it never comes :)
Like the majority of dumbass realtors you can't actually comprehend a basic newspaper article. Again did you read the article and can you understand what they are saying??? Than again what do I expect from someone working in a field that if you have a college degree you are considered highly educated. I'll take my financial advice from real economists/analyst instead of the skewed info NAR and CAR puts out. Are you even able to form your own opinions or do you just repeat everything that is told to you by the NAR? DUH DUH DUH.
Have you ever even taken a finance or economics course before? Can you explain what a cap rate is and why investing in income properties in the LA area makes little to no sense right now?
Than again you must be all knowing since you have three years worth of R/E experience.

[al cole'holic]

Like the majority of dumbass realtors you can't actually comprehend a basic newspaper article. Again did you read the article and can you understand what they are saying??? Than again what do I expect from someone working in a field that if you have a college degree you are considered highly educated. I'll take my financial advice from real economists/analyst instead of the skewed info NAR and CAR puts out. Are you even able to form your own opinions or do you just repeat everything that is told to you by the NAR? DUH DUH DUH.
Have you ever even taken a finance or economics course before? Can you explain what a cap rate is and why investing in income properties in the LA area makes little to no sense right now?
Than again you must be all knowing since you have three years worth of R/E experience.
..douche bag, where did 3 years worth of R/E experience come from??
There is no indication of a turn, a bubble burst, or whatever you wanna call it. Also, when did we start talking about investing in income properties?? I was under the impression we are talking about the general homeownership. I have said for the past 3+ years, anyone who does not own a home it's getting further and further away from you....this year I say this, anyone who still does not own a home for god sakes buy something anywhere even out of state if you have to! Just my .02....anyway, investors who have $$ know where to put it :rolleyes:

[totenhosen]

..douche bag, where did 3 years worth of R/E experience come from?? :
Interesting comment from someone who makes their living as someone who is viewed as on par with a used car salesman. Easy from your R/E license profile. Well almost 4 years. Licensed since 03/02. That is a wealth of experience!!!
..
There is no indication of a turn, a bubble burst, or whatever you wanna call it. Also, when did we start talking about investing in income properties?? I was under the impression we are talking about the general homeownership. I have said for the past 3+ years, anyone who does not own a home it's getting further and further away from you....this year I say this, anyone who still does not own a home for god sakes buy something anywhere even out of state if you have to! Just my .02....anyway, investors who have $$ know where to put it :rolleyes:
Interesting comment considering even the NAR and CAR is backpedaling and saying that there are signs of a slowdown. As they like to call it a "soft landing" in certain markets. How long before they say oops are soft landing was wrong?
I made the cap rate comment to show that you have little to no actual finance concepts so it is to be expected that even a possible slowdown in R/E is a difficult concept for you to grasp.
Hurry buy a house before it is too late even if it is in another state, because we all know house prices can only go up up up!!! :rolleyes: (Find another sucker for the current pyramid scheme.) Maybe in your 3+ year of experience you might recall what happened in the prior decade and the prior decade before that.

[al cole'holic]

Interesting comment from someone who makes their living as someone who is viewed as on par with a used car salesman. Easy from your R/E license profile. Well almost 4 years. Licensed since 03/02. That is a wealth of experience!!!
Interesting comment considering even the NAR and CAR is backpedaling and saying that there are signs of a slowdown. As they like to call it a "soft landing" in certain markets. How long before they say oops are soft landing was wrong?
I made the cap rate comment to show that you have little to no actual finance concepts so it is to be expected that even a possible slowdown in R/E is a difficult concept for you to grasp.
Hurry buy a house before it is too late even if it is in another state, because we all know house prices can only go up up up!!! :rolleyes: (Find another sucker for the current pyramid scheme.) Maybe in your 3+ year of experience you might recall what happened in the prior decade and the prior decade before that.
..oh you must be talking about Eddy, my other half's partner douche!! I guess he did get his license in '02..wow, he's done better than I thought in that time considering on his own he has nailed down a gross close to $250k as of last Friday, and owns 2 homes here in Simi..not bad for a used car equivalent :cool:
As for us, 2 sisters, and mom we own 7 properties....and of course always looking to buy another :)
As for the stupid pyramid scheme comment, I have never really even SPAM'd or fished for anyone on here as a client.....except for a custom chopper maybe :)

[NashvilleBound]

I cant wait.....I hope it happens.... now before I get greif from some dork thats in a negative loan, let me ask you...WHAT WERE YOU THINKING? You have to be a real tard not to see thats a problem(negative, zero down, int only)...but its a good thing for me. I love the dominoing foreclosure market.....We are way over due for a correction. I hate to see people have problems but that is what makes the world go 'round....all you investors should be ready, now is when you can make your difference for the rest generations to come. Nothing personal, just business.

[totenhosen]

..oh you must be talking about Eddy, my other half's partner douche!! I guess he did get his license in '02..wow, he's done better than I thought in that time considering on his own he has nailed down a gross close to $250k as of last Friday, and owns 2 homes here in Simi..not bad for a used car equivalent :cool:
As for us, 2 sisters, and mom we own 7 properties....and of course always looking to buy another :)
As for the stupid pyramid scheme comment, I have never really even SPAM'd or fished for anyone on here as a client.....except for a custom chopper maybe :)
Wow, you have such an expansive vocabulary! Is that the best you can come up with? Grown-ups are having a debate here which involves actually posting ones opinion and being able to back it up.
Since you own so many properties you surely know what a cap rate is. Or does your wife and family tell you what a good investment is and that R/E always goes up? I bet you bought all those investment properties with an ARM and/or Interest only loans. Hopefully you at least cash flow with that. Just keep skirting basic economic fundamentals/prinicipals.
For your sake I would pray hard that the R/E market doesn't go down and that your family has to soley rely on your wit/common sense to make a living.

[totenhosen]

..
As for the stupid pyramid scheme comment, I have never really even SPAM'd or fished for anyone on here as a client.....except for a custom chopper maybe :)
That comment had to do with part of the reason why housing continues to do what it is doing is because of the philsophy of a pyramid scheme. There has to be dumb people on the top end of it to buy into the whole notion that house appreciation will continue at its current rate. Thus the cycle (stupidity) continues for a short time.

[totenhosen]

I cant wait.....I hope it happens.... now before I get greif from some dork thats in a negative loan, let me ask you...WHAT WERE YOU THINKING? You have to be a real tard not to see thats a problem(negative, zero down, int only)...but its a good thing for me. I love the dominoing foreclosure market.....We are way over due for a correction. I hate to see people have problems but that is what makes the world go 'round....all you investors should be ready, now is when you can make your difference for the rest generations to come. Nothing personal, just business.
Amen! You make money when you buy and not when you sell! If you don't understand that concept than there is no point in explaining it. (Al-Cole-holic I'm looking at you.)

[al cole'holic]

Wow, you have such an expansive vocabulary! Is that the best you can come up with? Grown-ups are having a debate here which involves actually posting ones opinion and being able to back it up.
Since you own so many properties you surely know what a cap rate is. Or does your wife and family tell you what a good investment is and that R/E always goes up? I bet you bought all those investment properties with an ARM and/or Interest only loans. Hopefully you at least cash flow with that. Just keep skirting basic economic fundamentals/prinicipals.
For your sake I would pray hard that the R/E market doesn't go down and that your family has to soley rely on your wit/common sense to make a living.
Alright, alright.....this started out as another one of the many real estate threads, and the opinions are starting to get offensive. Yet another year has gone by, this topic will be going back and forth another year..just remember these threads the end of this year :D ..now, I have a dying fish to tend to.

[NashvilleBound]

Amen! You make money when you buy and not when you sell! If you don't understand that concept than there is no point in explaining it. (Al-Cole-holic I'm looking at you.)
A little clearer picture.....I own a development company, wife runs our realty company and every house I buy is with cash.....(as in no loan for the challenged).....and then I put a LOC on each one of them for emergency credit(keyword). I could never imagine buying a house for an interest only loan...or neg am....or shoot, they are talking about 40 year loans now.....what happened to the american dream of actually owning a home...once again for the challenged, that means its paid for. I think people are too busy keeping up with the Jones'...

[DCBDaytona]

A little clearer picture.....I own a development company, wife runs our realty company and every house I buy is with cash.....(as in no loan for the challenged).....and then I put a LOC on each one of them for emergency credit(keyword). I could never imagine buying a house for an interest only loan...or neg am....or shoot, they are talking about 40 year loans now.....what happened to the american dream of actually owning a home...once again for the challenged, that means its paid for. I think people are too busy keeping up with the Jones'...
Very well put! I'll take a stab in the dark and guess that you are also one of the few on the boards that actually OWNS their boat too? It's the same philosophy...everybody is trying to keep up with the Jones'.

[NashvilleBound]

Very well put! I'll take a stab in the dark and guess that you are also one of the few on the boards that actually OWNS their boat too? It's the same philosophy...everybody is trying to keep up with the Jones'.
It's paid for.....I dont want to seem to be rubbing anything in to someone that might be on the verge of a hardship....but people need some education. Speaking of the Jones', when i was in San Diego we worked in the coastal communities and they would reach to buy a 850k home(both parents working...thats a whole 'nother problem).....then the beamers and such but have home depot paper blinds or sheets in the windows for years. Why cant people just be satisfied with having a lifeand make FAMILY the priority? My philosiphy is....I work to live, not live to work. Big difference.

[DCBDaytona]

It's paid for.....I dont want to seem to be rubbing anything in to someone that might be on the verge of a hardship....but people need some education. Speaking of the Jones', when i was in San Diego we worked in the coastal communities and they would reach to buy a 850k home(both parents working...thats a whole 'nother problem).....then the beamers and such but have home depot paper blinds or sheets in the windows for years. Why cant people just be satisfied with having a lifeand make FAMILY the priority? My philosiphy is....I work to live, not live to work. Big difference.
I hear ya...It just seems that our philosophy is not liked much around here. I'm a recent college grad, having grown up with a father with the same philosophy. He's always paid cash for boats, most recently his DCB F-29. My little Daytona is also paid for, but it's not nearly on the scale of money as your deck or dad's tunnel. It's always a bit weird when I see "kids" my age (22) with $100K+ boats! My dad and I just laugh...We seem to think that on an average summer weekend in Havasu about 5% of the boats are owned. I guess the payments wouldn't be too bad over 20 years :rollside:

[canuck1]

It's paid for.....I dont want to seem to be rubbing anything in to someone that might be on the verge of a hardship....but people need some education. Speaking of the Jones', when i was in San Diego we worked in the coastal communities and they would reach to buy a 850k home(both parents working...thats a whole 'nother problem).....then the beamers and such but have home depot paper blinds or sheets in the windows for years. Why cant people just be satisfied with having a lifeand make FAMILY the priority? My philosiphy is....I work to live, not live to work. Big difference.
Paid for? In todays world that means with a credit card right? :rollside:
I wonder how many people on this board could survive without an income for a month or two or longer without changing the way they live and not selling anything to do it.

[wsuwrhr]

I hear ya...It just seems that our philosophy is not liked much around here. I'm a recent college grad, having grown up with a father with the same philosophy. He's always paid cash for boats, most recently his DCB F-29. My little Daytona is also paid for, but it's not nearly on the scale of money as your deck or dad's tunnel. It's always a bit weird when I see "kids" my age (22) with $100K+ boats! My dad and I just laugh...We seem to think that on an average summer weekend in Havasu about 5% of the boats are owned. I guess the payments wouldn't be too bad over 20 years :rollside:
I've always paid cash for my toys too. Well at least within the last 5-7 years anyway. Course we are talking about $2-5000 toys. Not a 100K+ boat.
The only thing I owe on is one car and my house. I did the zero-down thing on the house though, but I bought the house three years ago in the middle of the upswing, so I will still be OK with equity as long as the house remains standing.
Damn Nashville, buying houses(PLURAL) with cash. "I am the Jones" You weren't kiddin.
Wishyourwerenoblingblinghere

[wsuwrhr]

I wonder how many people on this board could survive without an income for a month or two or longer without changing the way they live and not selling anything to do it.
I could, but after two months I would be at your doorstep looking for handouts.
Course I would have to borrow a warm jacket to be able to make it to Canada.
Brian

[callbob4homes]

[QUOTE=totenhosen]Like the majority of dumbass realtors QUOTE
Stefan, where do you get off with that kind of comment? Why do you have a RE license? You called me more than once for information re your condo dealio in Tempe. If you know so goddamn much about this biz, why didn't you just handle it yourself? I kind of thought you might be fairly intelligent from our conversations, but you come across with some of these comments that just quite frankly chap my ass. RE investments are like anything else regarding money. You can read all the books, listen to all the "experts", suck down all the rhetoric from every "analyst" there is, and still not have the real life knowledge or street smarts if you will, to play the game. many subjects are getting crossed over here. Buying ones own home is a far cry from investing in RE. Cap rates have nothing to do with buying a second home for an investment. Buying apartments or condo's or some other rental property? Then talk cap rates. Is there going to be a glut of foreclosures soon? Maybe, maybe not, but I am not going to hold my breath waiting for it. Granted the market here is way different than the Cal market, but for every newspaper article (here or there) that predicts the "bust", there are just as many talking about the building going on. I don't copy and paste articles from the paper here because most of the stuff is not accurate (one way or the other) and is just written to sell papers IMO. As for saying RE agents are just out to make a quick buck (don't remeber who said it and don't care) you can't sell something to someone that doesn't want to buy. Some people make it sound like we go hijack people off the street and force them to sign on the dotted line. Anybody out there ever been forced to buy a home? Sorry about the rant, and if I have offended anyone...............well tuff sh!t, because I have read quite of bit of crap on this subject that has offended me.
I usually enjoy these RE discussions because of the different opinions and viewpoints, and every now and then I learn something. This one has turned into a pissing match and I'm done.

[cdog]

The reality is that it's all a bunch of BS. Some can boast about how all their crap is paid for, others are into credit up to their necks. There's tax advantages to having a mortgage on a home. None for a boat (unless it's got a crapper). Every situation is diff. There's no one correct answer for everyone.

[cdog]

I've met more greedy A-hole sellers over the last 5 years in this biz than "Dumb ass Realtors".
It must be tough to be stuck in a Job Mon thru Friday, when you're true gift in life is real estate insight. Mabey you should change professions.

[DCBDaytona]

The reality is that it's all a bunch of BS. Some can boast about how all their crap is paid for, others are into credit up to their necks. There's tax advantages to having a mortgage on a home. None for a boat (unless it's got a crapper). Every situation is diff. There's no one correct answer for everyone.
It is all BS. But the people with "credit up to their necks" SHOULD NOT be living the lifestyle they do. They are living in a fantasy world that at any moment could end in misery. Anybody with an honest financial background would agree...And it's evident that many do not have Financial Planners.

[canuck1]

[QUOTE=callbob4homesover
Anybody out there ever been forced to buy a home? [/QUOTE]
Yes as a matter of fact.

[canuck1]

I could, but after two months I would be at your doorstep looking for handouts.
Course I would have to borrow a warm jacket to be able to make it to Canada.
Brian
You can go to the Sun City house. just wait out back......I'll be there soon......Honest :rollside:

[canuck1]

It is all BS. But the people with "credit up to their necks" SHOULD NOT be living the lifestyle they do. They are living in a fantasy world that at any moment could end in misery. Anybody with an honest financial background would agree...And it's evident that many do not have Financial Planners.
And that is NB's whole point

[cdog]

It is all BS. But the people with "credit up to their necks" SHOULD NOT be living the lifestyle they do. They are living in a fantasy world that at any moment could end in misery. Anybody with an honest financial background would agree...And it's evident that many do not have Financial Planners.
We agree. But you can't have the good without the bad. Yin and Yang. If peeps were'nt out buying shit they could'nt afford there would'nt be another Hud market in a couple years and smart folks with cash would be out on investments. You see it's a cycle that's gone on in the US since the first North Easterners left to tame the west.

[NashvilleBound]

DCB: Sounds like you and I have some of the same philosiphies.....I cant say it has always been like this but I learn pretty quick;)
Canuck: Credit Card....uh, no. I know you kidding;) The beer thing...any time. Tho I dont know where your at..... I wonder the same thing about the income sometimes.....its pretty scary....or at least should be for them.
wsuwrhr: lol...... just a small time shmuck trying to make a living..... oh, and have a life at the same time!!!!!!!!!!! Very important!
CalBob: I always thought RE agents we the biggest idiots and theives. Now that I am in the industry, and educated(I think) my veiwpoint is very different. There are still the idiots (like any industry)but all my agents are very responsible.....we check and double check every thing they do.....making sure BOTH parties are cared for even if its the "other" side. Its what makes us stand out. Do the right thing????...imagine that;)
cdog: tax advantages?? we need to talk. But your right....no one correct answer for everyone.

[callbob4homes]

[QUOTE=callbob4homesover
Anybody out there ever been forced to buy a home?
Yes as a matter of fact.[/QUOTE]
I wasn't referring to be forced to at the point of punanny, or divorce court. :cry:

[canuck1]

I wasn't referring to be forced to at the point of punanny, or divorce court. :cry:
Oh :rollside: I was

[riverroyal]

It's paid for.....I dont want to seem to be rubbing anything in to someone that might be on the verge of a hardship....but people need some education. Speaking of the Jones', when i was in San Diego we worked in the coastal communities and they would reach to buy a 850k home(both parents working...thats a whole 'nother problem).....then the beamers and such but have home depot paper blinds or sheets in the windows for years. Why cant people just be satisfied with having a lifeand make FAMILY the priority? My philosiphy is....I work to live, not live to work. Big difference.
you look through my sheets into my house?

[NashvilleBound]

I guarantee that some people that are on here talking about how fiscally sound they are, have a wife out spending more than my boat payment per month at the mall. I'd rather have a boat than my wife having new shoes every week.
And some can do both and still be fine.......My wife is not like that but we have friends who are.

[NashvilleBound]

you look through my sheets into my house?
No Junior, you never called when I was out there........ not that I would have looked then tho;)

[riverroyal]

No Junior, you never called when I was out there........ not that I would have looked then tho;)
my kids are outta school,we were heading to the desert,blah blah,,,you know,same ol shait...Did you miss any part of socal while you were here?

[riverroyal]

both,but if times get bad,all the toys are gone.Home will be fine.I might be bored for a few years but we can always buy more stuff someday :cry:

[canuck1]

[QUOTE=ShockwaveBob
Buying a big, new, blingy boat, even with cash, is not fiscally sound.[/QUOTE]
You gotta explain this one to me

[totenhosen]

where do you get off with that kind of comment?
The majority are dumbasses. Very few are worth their weight in gold. Ease of entry into the field. The high amount of turnover in the industry. I believe you said the other day that 75% of new licensees are out of the biz in two years. What does that tell you? (I don't know why you would take it personally.)
Why do you have a RE license?
I got my license because I was tired of forking over 4%+ commissions. I also like it when I buy a place I have that extra sellers commisssion to play with. Took one class signed up for the test and passed. So why wouldn't I have my license when it is so simple to get.
You called me more than once for information re your condo dealio in Tempe. If you know so goddamn much about this biz, why didn't you just handle it yourself?
Like you said in our conversation things in AZ are done differently. Did I have that knowledge? No, but you informed me and because of how you dealt with the situation I would have relisted the property with you. I needed an unbiased opinion which you gave me. You acted in a professional manner and didn't expect anything in return and I apprecaited that.
I kind of thought you might be fairly intelligent from our conversations, but you come across with some of these comments that just quite frankly chap my ass. RE investments are like anything else regarding money. You can read all the books, listen to all the "experts", suck down all the rhetoric from every "analyst" there is, and still not have the real life knowledge or street smarts if you will, to play the game. many subjects are getting crossed over here. Buying ones own home is a far cry from investing in RE. Cap rates have nothing to do with buying a second home for an investment. Buying apartments or condo's or some other rental property? Then talk cap rates.
Of course they do if you are buying any kind of property as an investment. If you are talking vacation home than no.
I usually enjoy these RE discussions because of the different opinions and viewpoints, and every now and then I learn something. This one has turned into a pissing match and I'm done.
You seem to be taking the things I say to others personally. You should ignore that pissing match as it is not directed towards you. Having said that I still think you are a good guy and would have no hesitation to refer you.

[wantacat]

Because, for the most part, buying a new boat is a very unsound financial move. I'm sure any two bit financial adviser could find a better use for $150k cash. Like I said, we all have different priorities. I, obviously, like many people on this board, have a priority to have a boat, so I'm definately not preaching to anyone not to buy a boat. At the same time, I know that my money could be better spent somewhere else, from a purely financial well being standpoint.
I agree.

[C-2]

Because, for the most part, buying a new boat is a very unsound financial move. I'm sure any two bit financial adviser could find a better use for $150k cash. Like I said, we all have different priorities. I, obviously, like many people on this board, have a priority to have a boat, so I'm definately not preaching to anyone not to buy a boat. At the same time, I know that my money could be better spent somewhere else, from a purely financial well being standpoint.
We will never buy a new boat again. Used, all cash, seems to be the ticket. Let somebody else take the hit on initial depreciation. BTW, from what i've been following, used big boats aren't selling right now. I've been following a few and have seen prices drop from $130K down to $95K..that's a big drop and the boats still aren't selling. Buying new at $250K, only to sell 5 years later at $75K...that's gotta hurt!
------------------
I think totenhosen offers some pretty good words of wisdom. I too agree following these RE threads is usually pretty interesting (always good points raised), so sans the pissing match guys. :)

[canuck1]

Because, for the most part, buying a new boat is a very unsound financial move. I'm sure any two bit financial adviser could find a better use for $150k cash. Like I said, we all have different priorities. I, obviously, like many people on this board, have a priority to have a boat, so I'm definately not preaching to anyone not to buy a boat. At the same time, I know that my money could be better spent somewhere else, from a purely financial well being standpoint.
The key words in your reply are Priorities and I. Being that boating is a personal priority for you(and Me) that would make it a sound financial move.
My twisted logic:
If boating takes stress away it should make you a more productive person at work so you should make more $ than you would spend on your hobby...
Maybe???? My accountant doesn't agree but fukk him I pay the bills

[NashvilleBound]

my kids are outta school,we were heading to the desert,blah blah,,,you know,same ol shait...Did you miss any part of socal while you were here?
:(( Whatever.......... after you didnt call I got a flight home the next day.... igured you couldnt come out and play so I was goin home.;) Dont miss anything except friends and 'some' family....if you know what I mean.
Bob.....to each his own according to thier financial situation. For me I have no debt on anything.....including my subdivisions.....(truth, I have one mortgage on a commercial building where my RE biz is) I hate to think I will hurt your feelings when I get a new sled next year.......without a loan.
Hey, Where did ya'll go???????????

[4DAY4PLAY]

The key words in your reply are Priorities and I. Being that boating is a personal priority for you(and Me) that would make it a sound financial move.
My twisted logic:
If boating takes stress away it should make you a more productive person at work so you should make more $ than you would spend on your hobby...
Maybe???? My accountant doesn't agree but fukk him I pay the bills
I believe my neighbors who spend 7K for their family of 5 to go to Hawaii for one week a year is a bad financial move.......but they call it vacation, same as my 4k a year boat payment..think about it.

[Sherpa]

There is little/no slowdown in home pricing in the san jose area.
homes are listed longer though.
the only problems I would foresee in the immediate timeframe would be
selling low to "get out" of your home..... but it certainly isn't going to
benefit you if you are buying another property.
the biggest laugh is those who "cash-out" some equity to buy toys,
pay off credit cards, take a vacation, etc.... you gotta understand
that all you have done is convert a short term loan, to A 30 YEAR LOAN.
can anyone even remember what they bought on a credit card 2 years
ago? let alone 30 FRICKEN YEARS AGO.
I plan on paying off my house. I'm damn close with 5 years left on a
15 year note. even coming in about 3 years early. refi-? forget that
shit. I rathole money like no other......
the only legitimate way I see doing something with my home's equity
would be if I sold the place, then take some of THAT money to buy
toys with............... anything else is just plain nuts.
--Sherpa ...........my stupid rant........

[superdave013]

with out reading the rest of this thread.......
I was walking my dogs last night and noticed a house one block down that is for sale. So I stopped and picked up a flyer.
Now this house is just a tad smaller then mine. It looked nice and very tidy.
Located on Indiana street in Anaheim it's under 1,500 s.f. with 3 br, dinning room, living room and 1.5 bath and detached 2 car in the back. To me that's just a small modest house. Nothing more, nothing less.
Now just to compare mine is close to the same but I have an extra half of a lot. (guy next door has the other half) and I have a second 2 car with a nice driveway in the front sitting on that area. So I have a 2 car in the back and a 2 car in the front as well. :D I have over double the back yard too.
I paid 184K 6 years ago (prolly an extra 10 ~ 15K for the extra land & 2 car at the time). Well this place down the street is listed for over 630K!!! Now I understand that's what it's listed at and it could sell for less. But I bet it's not much less. Now it that's showing a 42% drop I can live with it!

[bigq]

More Numbers:
Business Week reports on the shrinking mortgage business. "Sometime during the last quarter of 2005, the housing boom peaked. The proof is in the paperwork. Applications for purchase mortgages in early November fell below their 2004 level for the first time in six months, after a 5% drop from September to October, according to the Mortgage Bankers Assn. (MBA). By late December, applications had plunged to June, 2002 levels. The MBA expects mortgage originations to fall by 18.6% in 2006."
"Even the industry's boosters are getting nervous. 'There's no doubt that we're transitioning to a more challenging environment,' says Richard H. Wohl, CEO at IndyMac Mortgage Bank. Lenders' earnings have already begun to fall. 'Profitability in the industry is down, and over time that will take its toll,' says Doug Duncan, chief economist at the MBA."
"During the past few years, the industry built up enough capacity to pump out $3 trillion worth of loans a year. Now retrenchment is in the air. The first real whiffs came in November. The nation's largest mortgage bank, Countrywide Financial Corp. closed two loan-processing centers and eliminated 300 jobs. National City Corp. trimmed 70 workers at its mortgage business and hinted at more to come. Ameriquest Capital Corp. cut 1,500 people."
"The trouble is, the spread between short-term and long-term rates is narrowing. In fact, on Dec. 27, the yield of the 10-year Treasury note briefly dipped below that of the two-year Treasury bill; a year ago, about two percentage points separated the two. The smaller the spread between the two rates, the harder it is for lenders to make a profit."
"It gets worse. As mortgage demand has slowed, price competition among lenders has heated up. 'There are some competitors who are pricing irrationally,' says Stephen J. Rotella, chief operating officer at Seattle's Washington Mutual Inc."
"The result of these forces: a shrinking pie of less-profitable loans. In October, National City said third-quarter home-loan profits tumbled 91% from last year, to $13 million. In November, tax preparer H&R Block, blamed a $72 million loss in its fiscal second quarter (since revised to an $86.3 million loss) on a 44% annual drop in pretax income at its mortgage unit."
"At especially high risk: lenders that have sold lots of mortgages to so-called subprime borrowers with spotty credit records or unstable incomes. Some of these borrowers have escaped default in recent years only by refinancing at higher home values and lower interest rates. 'If real estate stops going up, the opportunity to refinance because of a higher value is going to go away,' says Michael Moskowitz. 'That's going to hurt companies that were doing bad business.'"
"Some lenders also face the consequences of the exotic-mortgage binge that has intoxicated borrowers for the past few years. Problems with option mortgages are already arising. In the third quarter of 2005, the amount of such mortgages available for sale to institutional investors from New York's MortgageIT Holdings Inc. swelled to about 30% of the company's total inventory."
"Those mortgages carry a low introductory rate of 1% in their first month, which is usually how long MortgageIT owns them before selling them. That 1% rate brings in less money than it costs the company to finance the loans with short-term borrowing. Yields on loans held for sale fell during the third quarter, costing MortgageIT about $18.3 million. If short-term rates keep climbing, yields could drop further."

[totenhosen]

Business Week reports on the shrinking mortgage business. "Sometime during the last quarter of 2005, the housing boom peaked. The proof is in the paperwork. Applications for purchase mortgages in early November fell below their 2004 level for the first time in six months, after a 5% drop from September to October, according to the Mortgage Bankers Assn. (MBA). By late December, applications had plunged to June, 2002 levels. The MBA expects mortgage originations to fall by 18.6% in 2006."
"Even the industry's boosters are getting nervous. 'There's no doubt that we're transitioning to a more challenging environment,' says Richard H. Wohl, CEO at IndyMac Mortgage Bank. Lenders' earnings have already begun to fall. 'Profitability in the industry is down, and over time that will take its toll,' says Doug Duncan, chief economist at the MBA."
"During the past few years, the industry built up enough capacity to pump out $3 trillion worth of loans a year. Now retrenchment is in the air. The first real whiffs came in November. The nation's largest mortgage bank, Countrywide Financial Corp. closed two loan-processing centers and eliminated 300 jobs. National City Corp. trimmed 70 workers at its mortgage business and hinted at more to come. Ameriquest Capital Corp. cut 1,500 people."
"The trouble is, the spread between short-term and long-term rates is narrowing. In fact, on Dec. 27, the yield of the 10-year Treasury note briefly dipped below that of the two-year Treasury bill; a year ago, about two percentage points separated the two. The smaller the spread between the two rates, the harder it is for lenders to make a profit."
"It gets worse. As mortgage demand has slowed, price competition among lenders has heated up. 'There are some competitors who are pricing irrationally,' says Stephen J. Rotella, chief operating officer at Seattle's Washington Mutual Inc."
"The result of these forces: a shrinking pie of less-profitable loans. In October, National City said third-quarter home-loan profits tumbled 91% from last year, to $13 million. In November, tax preparer H&R Block, blamed a $72 million loss in its fiscal second quarter (since revised to an $86.3 million loss) on a 44% annual drop in pretax income at its mortgage unit."
"At especially high risk: lenders that have sold lots of mortgages to so-called subprime borrowers with spotty credit records or unstable incomes. Some of these borrowers have escaped default in recent years only by refinancing at higher home values and lower interest rates. 'If real estate stops going up, the opportunity to refinance because of a higher value is going to go away,' says Michael Moskowitz. 'That's going to hurt companies that were doing bad business.'"
"Some lenders also face the consequences of the exotic-mortgage binge that has intoxicated borrowers for the past few years. Problems with option mortgages are already arising. In the third quarter of 2005, the amount of such mortgages available for sale to institutional investors from New York's MortgageIT Holdings Inc. swelled to about 30% of the company's total inventory."
"Those mortgages carry a low introductory rate of 1% in their first month, which is usually how long MortgageIT owns them before selling them. That 1% rate brings in less money than it costs the company to finance the loans with short-term borrowing. Yields on loans held for sale fell during the third quarter, costing MortgageIT about $18.3 million. If short-term rates keep climbing, yields could drop further."

[bigq]

with out reading the rest of this thread.......
I was walking my dogs last night and noticed a house one block down that is for sale. So I stopped and picked up a flyer.
Now this house is just a tad smaller then mine. It looked nice and very tidy.
Located on Indiana street in Anaheim it's under 1,500 s.f. with 3 br, dinning room, living room and 1.5 bath and detached 2 car in the back. To me that's just a small modest house. Nothing more, nothing less.
Now just to compare mine is close to the same but I have an extra half of a lot. (guy next door has the other half) and I have a second 2 car with a nice driveway in the front sitting on that area. So I have a 2 car in the back and a 2 car in the front as well. :D I have over double the back yard too.
I paid 184K 6 years ago (prolly an extra 10 ~ 15K for the extra land & 2 car at the time). Well this place down the street is listed for over 630K!!! Now I understand that's what it's listed at and it could sell for less. But I bet it's not much less. Now it that's showing a 42% drop I can live with it!
I think your kidding, but 42% is the drop it should take to be inline with income and normal appreciation. The drop has not happen yet and some think it won't. At that price I would guess someone needs to be making close to 175k a year and that is just above the so called median price? Even a 42% drop is still around 360k for that house, which is still a nice appreciation considering what you paid 6 years ago.
So when you moving up SD?

[Big Warlock]

I guess the first issue is the original source of info. Was it the LA Times? Take the source.
2) If there is a bubble burst, it will occur in California. I just spent the New Year Holiday over there and princes seem to be going in one direction.......up. Is there a bubble? Maybe. Indicators have changed and inmproved over the years. Demand to live in Ca. has been exceptionally strong over teh past 20 years and the population continues to grow despite tales of those leaving for Arizona and other places east.
3) Short term interest rates have nothing to do with mortgage rates. Treasury bills. Especially 15 year bills. The system is pretty simple. They borrow and then lend it out. They keep rates low by an unbelievable low overhead and computers allow for that.
4) The population of people over the age of 60 conitnues to grow and fuel a transfer of people from the midwest and east coast to teh west. That isn't going to stop.
5) There is an additional 20 years of growth going to happen in Az., Ca. and Nv. Enjoy it while you can.
6) ROI on a vacation for $7K or a boat for $4 / year in payments is priceless.
7) Some debt is good. Without debt, you are paying additonal taxes to the government instead of utilizing your debt and equity to create additonal opportunities in Capital investments and appreciation of said property.
My .02 worth

[superdave013]

I think your kidding, but 42% is the drop it should take to be inline with income and normal appreciation. The drop has not happen yet and some think it won't. At that price I would guess someone needs to be making close to 175k a year and that is just above the so called median price? Even a 42% drop is still around 360k for that house, which is still a nice appreciation considering what you paid 6 years ago.
So when you moving up SD?
I was not kidding about one thing in that post. Now I don't know squat about the RE market other then what I learned from buying ONE house and making that monthly payment.
With that said I don't know how I could move up unless I move out of the area. Sure I could sell for a tidy profit but then what? I'll just stay put with my modest house, used and 100% paid in cash Schiada and just enjoy life the best I can. I hear ya about that 175K. But then again when I moved to Anaheim it was because I was just like all the other first time buyers on my street. (4 of us moved here the same year) All of us bought in Anaheim because Fullerton and Orange was out of reach. Now I hear (and see) that Anaheim is out of reach and first time buyers like me are moving to La Habra now.

[NashvilleBound]

As much as these clowns dont mention my subdivision(political games I do not play) our market is still going up....every day.... But of more interest to you West Coasters....check out our pricing.....
Housing boom
New home construction continues at torrid pace in county
By ERIN EDGEMON
edgemon@dnj.com
But he now expects he will end up settling in the Blackman or Cason Lane area. Big Fella said he can get more house for his buck in those areas than in northern Murfreesboro.
"I just found what I was looking for in my price range," said Big Fella, also known as Willie Sims Jr.
He especially liked what he saw in Blackman Farms. "That is the place to be," he said.
Actually, there are quite a few places where folks want to be in Rutherford County. Home building across the county reached record highs in 2005 despite rising construction costs, property prices and mortgage rates for buyers.
"The market is growing on an annual basis, and it is producing more homes now than it ever has," said Edsel Charles, president of Marketgraphics, a Brentwood-based market research company.
Through October, building permits issued for single family homes were up 6 percent over the previous year. Likewise, sales of new and pre-owned homes were up 13.4 percent over last year through November. Construction of multifamily units dropped 16 percent from the previous year.
Almost every single home built by the largest home builders in Rutherford County is sold before construction is finished. The average home sold in Murfreesboro through November was 1,830 square feet and sold for $161,317, according to the Middle Tennessee Association of Realtors.
"There are still many people moving to Rutherford County," said Mike Lilly, senior vice president of development at Ole South Properties.
Newcomers are attracted to the county due to its 7 percent job growth, low property taxes, affordability of homes, good school systems and proximity to Nashville and major interstate systems, said local officials, even though the price of homes went up about 15 percent during the year due to rising land, development and construction costs.
Experts expect home building to remain strong next year as long as interest rates stay low into 2006.
Home building continues to be strong, said Scott Mason, real estate agent with Bob Parks Realty, simply because people keep moving here. They are moving, he said, because Rutherford County is centrally located within the state and the rest of the country and is close to major interstates. Additionally, new jobs keep being created and the cost of living here is significantly lower than in Williamson and Davidson counties.
Vermont native Lisa Welch started looking for a home in Middle Tennessee in May so she could be close to her grandchildren. Finally, she and her partner, Andy Elder, purchased an existing Smyrna home resting on 10 acres off Central Valley Road.
Acreage was important to the couple, but it was hard to find. They looked at homes in Mt. Juliet, Lebanon, Smyrna and Murfreesboro for five months before finding the perfect house on a hill and surrounded by trees.
Welch said the location is convenient to shopping and to her job as a nurse at the York VA Medical Center in Murfreesboro.
She's among an influx of new residents to Rutherford County whose demand for new homes is actually outpacing home construction, especially in the Smyrna and La Vergne markets.
Charles said those areas of the county are closest to the Nashville market, which so far has been unable to produce enough lots at an affordable price.
The market could expand by 30 percent to 40 percent if the land was available, Charles said, but the lack of lots will not cause home building to slow.
Hotspots for home building in the city of Murfreesboro are concentrated west of Interstate 24 in the state Route 96 (Old Fort Parkway) and 99 (Salem Pike) corridors and the Salem and Blackman communities north of I-24, said Matthew Blomeley, city planner.
More than 20 subdivisions are being developed or have homes under construction off state Route 99 and state Route 96.
These areas will continue to be the most active in the city for several years, he said, because of the amount of land available for development. The extension of the city sewer system to areas west of I-24 also made the property desirable, Blomeley said.
Candy Roberts, executive vice president for the Middle Tennessee Association of Realtors, said the homes in the state Route 96 corridor provide convenience and a country lifestyle for residents.
"As more retail options open up in that area, convenience is even more enhanced," she said. "Building sites accessibility came because infrastructure was added."
Roberts said it is the same for the state Route 99 corridor.
"People wanting the rural feel, larger lots with less density fit these areas well," she said.
Subdivisions such as Birkshire and Savannah Ridge have been popular within the Siegel school zone in northern Murfreesboro.
The Eschenfelders moved to Primm Springs subdivision on Twisted Oak Drive, in the Siegel school zone, in early 2005. The family moved from Birmingham to Gallatin and soon started construction on a 3,000-square-foot home in northern Murfreesboro to be near family.
Tonya Eschenfelder said the new home is much more affordable than homes in Birmingham. She loves her family-oriented neighborhood and its proximity to shopping.
By the end of the year Ole South Properties, the largest home builder in Tennessee, expects to close on 700 homes down about 74 homes from 2004.
Mike Lilly, senior vice president of development at Ole South, said the decline in construction is not due to a slowdown in the industry but the lack of developed lots.
In 2005 Ole South and Greenvale Homes, the largest home builder in La Vergne, started building more mid-level homes ranging from $160,000-$300,000 because of development costs and the price of land. Lilly estimated Ole South had seen a 15 percent to 20 percent increase across the board on the cost of a new home.
Because of rising home prices and increasingly busy lifestyles, townhouses are starting to replace starter homes. Lilly said more people aren't wanting to maintain a yard and the exterior of their homes.
Townhouses, specifically those beginning to pop up in the Blackman and Siegel areas, are becoming increasingly popular especially to first time home buyers not wanting to shell out $160,000 for a starter home.
With land costs growing, Roberts said smaller lots for building townhouses provide a better return on developers' investment.
"With affordable loan programs that open options for more first-time buyers, single owners and investors, townhouses are a very desirable product," she said. "Many homeowners want the pride and protection of having the tax benefits of ownership, without substantially higher maintenance costs or responsibilities."
Lilly contributes Ole South's most successful subdivisions, Indian Creek, Evergreen Farms, Barfield Commons and St. Andrews Place, to their proximity to Interstate 24, good schools and shopping. Ole South's most popular products were 1,600-square-foot to 1,700-square-foot homes ranging from $160,000-170,000 or a standard townhouse without garages.
Greenvale Homes saw a revenue increase of 30 percent and a 20 percent increase in home closings over last year, said Steve Dotson, co-owner of Greenvale Homes. The company expects to close on 350 homes totaling $50 million by the end of the year. Next year, Greenvale Homes will shoot for 400 home closings increasing revenues by another 20-30 percent.
The best performing subdivisions were Lake Forest Estates and Stones River Cove in La Vergne and Florence Green in Murfreesboro.
Jennifer Hollingsworth, real estate agent for Greenvale Homes, said Lake Forest Estates is popular because of the variety of affordable homes starting in the low $100,000s.
"Lake Forest has great affordability for us," she said. "It is the best value in new construction."
Hundreds of homes are planned for the massive Lake Forest Estates subdivision currently made up of more than 3,100 homes.
Lake Forest Estates and Stones River Cove, featuring homes starting at $140,000, are located close to large employers in the area including Whirlpool, Bridgestone Firestone, Ingram Books and Nissan.
Dotson said Greenvale Homes is currently in the position to grow over the next couple of years. The company has pre-bought lots in Lake Forest Estates and several hundred acres in the Antioch area, where the company plans to build as many as 1,700 homes in the next five years. The first homes in the Brookside subdivision off Carothers Road in La Vergne opened in November.
David Penn, director of the Center for Business and Economic Research at MTSU, said it is anybody's guess what will happen with mortgage rates in 2006 and how it will affect home building next year.
Mortgage rates, which has plummeted for several years, began edging upward in 2005. Rates were at 5.7 percent at the first of 2005, dropped to 5.6 percent in June and increased to 6.3 percent in November.
"Historically, that is still very low," Penn said.
Interest rates will go up next year and home prices will go up by 10 percent, Dotson predicted, but because of the job diversification in Middle Tennessee the home building market will remain steady.
According to the National Association of Realtors, 2006 is expected to be as strong in home sales as 2005.
"In light of the catastrophic weather issues of other markets, Middle Tennessee looks very inviting for those displaced from their homes anjobs in the Southeast," Roberts said. "We are seeing a growing number of out-of-state investors, buying properties sight unseen, because they recognize the strength of our area. With quality jobs, education, medical services and affordable prices for most incomes, we should see increased home sales."
Big Fella hopes to have a four-bedroom home to support his growing family constructed in Blackman Farms for around $210,000, but for right now Big Fella is waiting it out in his Murfreesboro apartment.
Since opening in July, 58 homes have been sold in Blackman Farms, a 450-home subdivision located off Old Fort Parkway, 1.2 miles from I-24.
Centex Homes, subdivision developers, hoped to have a dozen homeowners living in Blackman Farms by the end of 2005. Homes range from 1,656 square feet to 3,011 square feet. Neighborhood amenities include a playground, an acre playing field, 48 acres of open space, landscaped entry monuments, sidewalks and streetlights.
The neighborhood will be completed in four or five years.
While Big Fella is anxious to move in, he said he decided to stay in Murfreesboro because the city has been good to him, and he appreciates that most local schools are filled with children from diverse socio-economic backgrounds.
"I love Murfreesboro," he said. "It is a beautiful place."

[HM]

I just read an article in the WSJ, in which a representative from the National Real Estate Association predicts more of the balloon deflating, vs. popping. December still set new records and 2005 may have out paced 2004. While inventories increased, so did home values, which is not expected to last long, but will continue while demand outstrips supply.
The segment that will be hit the soonest and the hardest is condo's. But, then again, they were still on record pace.
Everyone is expecting it to burst because they can't see how the values can continue at record pace, and the real estate market has a history of popping do to reactionary response of the market.
Southern California still has a major shortage, especially San Diego, where it is close to a 8:1 ratio of demand vs. supply.
Who knows....I am positioned to win either way, both with my company and with my personal finances. I do stuff a little less conservative than the "pay cash" group, but the "pay cash" group will always do well. Just some of us believe in using OPM(other peoples' money) - just like the banks, and make money through arbitrage, which is a great way to go. It appears riskier to the untrained eye, until they realize who's money is really at risk.....OPM. I believe you either pay cash or finance 100%. I believe the "in-between" is really the riskiest position to be in - you have equity, but the lender has all the leverage on the equity. Since they get all the leverage..give them little to no equity.....they are much more willing to work with you when times get tough when they have everything to lose, and nothing to gain. It is quite alright if you disagree. But, it works for me and my clients. And it seems like the larger the client I have, the more interested they are in OPM. They tend to like to tie up their cash in more liquid and protected assets.
Nashvillebound has a great strategy. He pays cash, then gets a LOC - which creates liquidity. And most of all, it works for him. There are many ways to skin a cat in this industry, which is really cool as everyone has different comfort levels on risk, so they have lots of choices.
I don't care what the market is doing, as I will always be looking to buy and make money in the long run. While I am newer to the industry, I have key alliance's with guys who have been doing this for 16 years and longer. Their biggest losses have been attempts at short term gains. And their best successes have been sound long term strategies. And best of all, they don't just sell their concepts, they buy their concepts - and is key to why they are so successful. They show clients exactly what they have done, and how well they have performed, and where they learned their lessons.

[wsuwrhr]

You can go to the Sun City house. just wait out back......I'll be there soon......Honest :rollside:
Great...I'll need directions then. Preferably city streets please.
:rolleyes: :rolleyes:
Brian

[totenhosen]

ttt

[al cole'holic]

..why don't we just have the moderator make this a sticky...then we can argue all year long :)

[totenhosen]

..why don't we just have the moderator make this a sticky...then we can argue all year long :)
Hey, that's one thing we can agree upon.