I just want to find one part of this country where prices have either flatlined or started dropping...There has to be at least one area...I bet even Alaska is in a housing boom...
Plano, Texas, Right outside of Dallas where Lucent, Nortel and Alcatel had some major coorporate offices... You can get a great 4 bedroom house in a nice neighborhood for a little over 200k... In the entire Dallas Fort Woth Area existing home prices have declined... However new homes still seem to be attracting demand... Did a search on realtor.com for decent areas in Dallas and surrounding areas for homes> 150k... I got over 7000 properties... Can you say overcapacity.... Like the building of fiberoptics of the telecom industry... And then you got those luxury condos that crooked realtors are trying to dump on us for over 300k in this area... I saw ten of those things lined up back to back w/o one willing buyer.... Hey the bubble is bursting....
No city in the 90's grew like Dallas. It was amazing, back in 1995 everyone thought real estate had reached over capacity, and then they just kept on building on out to Frisco (not a reference to San Francisco, there is actually a town North of Dallas called Frisco). Many of my friends back in Dallas were in Telecom, until they lost their jobs last year. Now they're sitting on hefty mortgages trying to make the payments delivering pizza (not a joke). Real Estate has definitely dropped in the Bay Area as well (although I'm amazed that it hasn't dropped more in San Francisco). In the pricey area's around San Jose (Los Gatos and Saratoga) average prices have dropped as much as 70% in the last 2 years. It's already happening, the thing is that the average person doesn't have the cynical attitude of a trader, and thus they don't realize it's happening right before their eyes. The average Joe still thinks that buying a house will be a good investment over the next five years. Once that perception falls I think you'll see the prices follow.
topgun: These same 4 bedroom houses for 200k, at their peak what were these homes selling for? Is the foreclosure rate down there pretty high?
Just looking at the listings in Plano...This is insane...These houses(many of them) are 4br/3 bath 2000 sf, 2 car garages for 150k...This is the way things should be...Might be time to move to Texas...
I would say a year ago those houses probably sold for 185-250K My house in Dallas cost 145K in 1996 and sold for 225K in 2001
Matt, Which area of Dallas did reside. I lived there in the early-mid 80's. Mostly in the better parts of Garland and for a bit in Mesquite. Heard those two areas changed pretty drastically. Wouldn't mind moving back cause the 6 am thing really sucks here..... We have some acquaintances here in So Cal that run an appraisal service. His statement was the slowdown in the 500K+ price range has started and the trickle down isn't far behind. I love that industry. Surprising how appraisals almost always are sufficient to support the sales price, no colussion going on there...... Must be my cynical side coming out. I really think real estate is becoming the new ground for the greater fool theory...... Later all
I don't know if anyone else has noticed but there seems to be a HUGE and widespread bias in the financial media lately. The message is "SELL YOUR EQUITIES, the stock market is really dangerous and uncertain now. You'd be better off selling your stocks and investing the money in real estate, purchasing CD's, treasuries, anything but equities.". "SELL YOUR EQUITIES, sell your equities, sl yr eqtys...divest" I wonder if this is a consensus (which are wrong more often than not) or a planned campaign?
Hey Cracked, I lived in the Lakewood neighborhood of East Dallas. Technically I still live in Texas as far as the taxing authorities know (why pay state taxes when you don't have to). I've thought about moving back because most of my California friends have moved, but I love California so much, it's a tough call. As for the 6 A.M. thing, I here ya. Fortunately for my trading system, I do most of my trades in the last hour of the day (I'm more of a swing/position trader) so its not imperative that I'm up that early, but I certainly like to know what the markets's are doing, so usually I'm up with the roosters. -"Surprising how appraisals almost always are sufficient to support the sales price" I know, it sounds kind of like all those Wall Street analyst that told people to buy stock in dotcoms, while they were dumping it out of their private accounts. -"greater fool theory" Yea, that's what I think. But you probably shouldn't listen only to me, because I'm a contrarian investor at the highest order. My girlfriend is a consultant who is consulted out to the Coldwell Bankers here in the Bay Area, and she tells me that all the realtors think it's business as usual (I don't understand it). When I go to get my morning coffee at the coffee shop I see more unemployed people than I've seen since college. Oh well, I don't own a house so I guess the worst thing that will happen to me is that I'll pay a little more for one should I be wrong (and of course I miss out on the tax deduction in the mean time).
Here is how I might want to hedge myself against hot market. I gleaned this from an earlier posting. Let say you bought a house for 325K that is not worth 400K. Max out as much as you can from home equity loan, put it in an instrument as close as you can to the int rate you are paying on your loan, lets say 2% CD vs. 5.5% home equity. The int diffrential will be offset by the tax writeoff from the loan less income from CD. BUT if s_it hits the fan, and your house goes from 400K to 250K, AND you lose your job at the same time, you walk away from the house (you are going to lose it anyway) and have your cash to spend on a new house less expensive due to bubble bursting). Sorta like a disaster insurance. If house goes down but you still have your job, life goes on...