Hello Seneca: Your early 1970s purchase was similar to my first home bought in the Spring of 1970. Location.. Location.. Location was and still is a big factor in how well one will make out in a home purchase. I lucked out by buying near what turned out now to be one of the most expensive lakes in the entire state of Minnesota. Lake Minnetonka. I believe the second thing that helps is the number of people wanting to buy. The "Baby Boomers" helped many areas. The third thing that helped was more women bringing home a good or bigger paycheck to help buy inflated home prices. With all that said, I don't see another baby boomers generation or an extra persons income helping fuel Real Estate prices as much going foward so I look for a flat to down marker in most areas. Of course your milage may vary in your location.. I sold out my home of the last 32 years. I couldn't pass up a 10 fold increase and a chance to move into the country with more room to spare. I worked in Montana many years ago and it is easy to see why there is an influx to that clean "Big Sky Country" from big city life and its problems. I considered going back to Montana but as was mentioned the Western towns were getting run up in price when I did some looking in Montana. Dollars don't alway count in Real Estate since many couples want a home to raise kids so they pay up but I think they are maxing out in buying power for a while. Interesting topic for sure........... agpilot
many believe that real estate is a local issue, not national and there is some merit in those beliefs. the midwest, and areas such as ohio, montana, nebraska, iowa, etc, etc didn't experience the rapid appreciation that went on in cali, las vegas, most areas of florida, virginia, dc and the rest of the northeast.
This statement is simply untrue. I witnessed first hand the decline of the Japanese bubble of the '80s. Tens of thousands of suicides later, comparative Tokyo real estate is SIGNIFICANTLY cheaper at this point in time. The Japanese seem to have it in their mind (at least for now) that buying a new house or condo is like buying a new car. As soon as you drive it off the lot, it starts depreciating and doesn't stop. RoughTrader
To this day Tokyo is STILL one of the most expensive cities in the world to purchase real estate. Basically take NYC and multiply it by 1.5. At the height of the boom Tokyo RE was 4x higher than NYC. Think Your House is Expensive? Try Living in Tokyo. 9/5/2006 By Ilyce R. Glink Housing prices are up across the board in the United States. Existing home sales are up. New construction is selling so quickly that developers are once again having a tough time getting raw materials. In Brooklyn, New York, the Cocoran Group recently reported that prices for single family homes in some neighborhoods increased by as much as 125 percent in a single year. If you bought in 1999, you'd have paid an average of $322,000. This year, you'd pay nearly $800,000 for the same property. (article continues below useful links) If rising prices coupled with rising interest rates sounds expensive, don't even think of moving abroad. Compared to Asia and Europe, life in the U.S. is downright cheap. In Tokyo, Japan, in the Shibuya neighborhood (which is the equivalent of the upper East side in New York), you'd pay an average of $1.84 million for a 1,450 square foot two-bedroom condominium. In Hong Kong, in an area called the Peak, you'd pay $1.7 million for a home the same size. In New York, on Fifth Avenue, you'd pay just $1.3 million for a slightly larger two-bedroom apartment. In the Pacific Heights neighborhood, in San Francisco, you'd pay only $900,000 for the same apartment. According to the Corcoran Group, the top ten most expensive cities in the world, by price per square foot, are: Toyko, Japan ($1,271 per square foot); Hong Kong, China ($1,220); London, England ($1,101); Singapore ($906); New York ($890); Kobe, Japan ($884); Sydney, Australia ($839); Stockholm, Sweden ($753); Paris, France ($700); and Zurich, Switzerland ($667). The fact that these homes are selling, for full list or, in some cases, far beyond list price, indicates how quickly wealth has been created around the world in the past decade. According to one survey, the number of millionaires (people with a net worth exceeding a million dollars) in the U.S. has doubled in the last five years. But the truth is, a million dollars just doesn't buy what it used to. According to the National Association or Realtors and the California Association of Realtors, the number of homes priced at $1 million or more has exploded over the past decade. In the past ten years, the number of homes listed for sale for $1 million or more has more than quartupled. But just because a house carries a price tag of $1 million or more doesn't mean it feels like the million dollar house of your childhood dreams. Twenty years ago, a million dollars bought a large apartment on Fifth Avenue, in New York, a 6,000 square foot brownstone with turn-of-the-century detail in Chicago's Gold Coast, or a waterfront estate in the Hamptons or Palm Beach, Florida. Today, that same $1 million might buy the house your parents have lived in for the past 30 years. If a small, two-bedroom condo isn't exactly the house of your million dollar dreams, there's an easy remedy. Add a zero. Houses with price tags of $10 million or more still offer the look and feel of the million dollar homes of a generation ago. For example, recent dream house listings include a 1938 house in San Francisco with spectacular Bay views, four master bedroom suites, three private patios, two wine cellars, a four car garage and staff accommodations for $18 million. Or you'd like something with a bit more joie de vie, a six-bedroom Paris residence owned by the same family since 1812, with a six-cave wine cellar and spectacular formal gardens, was recently listed for nearly $9 million. NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher. © by Ilyce R. Glink. Distributed by Real Estate Matters Syndicate.
Basic supply and demand assumptions that suggest a 'quick bounce back' do not include the problems caused by ARM financing. A very good article on 'Nightmare Mortgages' can be found at: http://www.businessweek.com/magazine/content/06_37/b4000001.htm
Seems there have been a number of articles and books predicting gloom and doom for those with ARMS. Is there any data yet showing that the predicted problems are actually occurring on a large scale. Of course, there are, as cited in your referenced article, individuals who are getting hurt. Seneca
"Japan suffered one of the biggest property market collapses in modern history. At the market's peak in 1991, all the land in Japan, a country the size of California, was worth about $18 trillion, or almost four times the value of all property in the United States at the time." There's a difference between a BUBBLE ala Japan, 1991 and over inflated home prices ala the U.S. 2006.
Here's some links of interest: Foreclosures jump 90% in S.J. OC register - O.C. mortgage defaults spike 83.6% for 2nd quarter Las Vegas Housing Market Cools Down SacramentoBee - Foreclosure warnings grow in area SFgate - Mortgage defaults increase ABCnews - 'McMansion' Owners Caught in a Housing Bubble Marketwatch - Painful ARM twisting RealBlogging - Condo sales, backlogs eroding developer investments "prices have fallen a whopping 19 percent from a year ago!" USnews &WorldReport - A Reckoning With Risk ...etc, etc... Note that the areas that's being hit first are the ones that had the most rapid rise & appreciation and speculation activity in the past 5-years.