I'm a real novice in RE investing but I'm enjoying this thread. The comment about we may be at the 25 year high got me to wondering, what has history shown. The attached graph, the Freddie Mac, year over year price change index, shows no down year. That is to me a big surprise. Is there any way to get more localized data? DS
trust me i am more of a novice...i am piggy backing on info from a friend of mine who has been in the RE biz for quite some time and done quite well...
Look - those of you who use the argument "they are not making anymore land" do not know what the f--k you are talking about need to stop. I'm going to say it again - this is not about supply versus demand, this is about greed. Why do you not understand that greed has entered the current RE picture? You cannot use ECON 101 ideas to describe greed and the rational behind "flipping" properties. Mike
Dataquick provides some of the data you are looking for. Don't know if they do it nationally. Might check with a local realtor for the data. On a national basis there may not be a bubble, but as I mentioned in another thread, I DON'T GIVE A RATS ASS ABOUT RE IN KC, DALLAS, Etc. I don't live there. Anyone that is in a hot RE market and relying on those national charts for support of a position that RE won't retreat are DUMB. As my mom says, "When you're dumb, you're dumb for a long time!" National data is WORTHLESS when looking at local RE markets. If you haven't seen RE dive at least 45% from the peak, you haven't been in these so called hot markets. It happened the last time we got smoking in California and it will happen again.
I agree with you on this in the HOT MARKETS.... it's greed. The 90 home development my sister bought into in La Quinta, Ca had the builders preferred lender buying 20% of the units to flip. 18 homes that should have gone to willing buyers at the lower cost are now in the market at FMV. Based on what I know regarding cost, the lender will make approximately $3 million flipping the homes, provided the places sell quickly. That took a few properties out of the mix and caused a supply constraint, thus driving up prices. Once that imbalance disappears, get out of the way.........
http://money.cnn.com/2005/04/05/real_estate/rentprices/index.htm Nice little article, goes to show that some areas the cost of renting is half the cost of owning (assuming 20% down and 5% intrest only rate).
Why do I have the feeling that this is about to get very messy. The thing about the hot market is while they may not be making any new land, they can still go taller...
Disclamir: The Kin does not invest in RE properties above $400,000. It's strictly on a cash flow basis and rents. I don't rely on appreciation to make money, in fact, I won't mind if the markets cooled off a bit so I could save on property taxes and bottom feed in the hot markets.
Absolutely incorrect. Many of the areas of So Cal have limits on building heights or they are limited to defined areas of cities. You don't see the high rise apartments in these areas like in the east. Not sure if you've every been in a high rise building during an earthquake, it's quite a ride.