550k gets you too much in Michigan. Mine is 3750 sq ft, 4 car side garage, 2 story all brick on all sides with an extra 800 square ft 3rd floor for a total of 4550 sq ft plus a full basement, and 110x160 lot. On tv I see crap like in Georgia one story 1600 sq ft going for over $400k. It's ridiculous, mine should be a lot more.
I am the quentisential housing bear. 1. I think before 2010, we will see one of the top 3 largest real estate crashes in history. Even non-bubble areas wil be effected 2. I think 50% of homebuilders will go broke...the smaller ones wont be able to seel anything due to a lack of demand 3. IT extends beyond the United state people! I live in costa rica, i am easily in the top 5% of wage earners in the country, and i cant afford a decent home. this is a 3rd world country with a 10k gdp! a decent house in a safe area close to work is 75-150k! at 10% interest. why? speculators...just like the USA. this bubble is in mexico, columbia, austrailia, europe...all over. when the US goes, the rest of the inflated areas will go as well. 4. The crash will be the begining of the next bear market...housing and construction are huge components of the economy. 5. It all boils down to what people can reasonably afford. The average wage per sperson in the US isaround $35k. average household income is around $50k-75k depending on area. how can they afford a $3000 month payment on a $500k house when they only net $4300 per month? they cant...not for long. 6. I sold my homes in dallas and aspen last year...i now rent...it is cheaper than buying! 7. houses are NOT always a good investment.
I have watched several housing cycles. The developers and sales people believe their own hype after the party is over and wind up closing out the last phase of a development at greatly reduced prices. The people that bought the next to last phase go crazy and try to get concessions out of the developer but they can't, they paid the going price, it's a done deal.
I completely disagree: 1) Mortgage interest reductions, and during the early years of a mortgage the % of interest is heavy and thus you will get a huge break on your taxes. 2) You are spending money on an appreciating asset. The prices are high, and they are only going higher. 3) You can always take home equity loans, just another option for you to fall back on where renting doesn't help. 4) You get the satisfaction, and security that you are living on your own piece of land.
Sounds a lot like my area. I'm in a 3500 sq ft, 6 bedroom, 3 1/2 bath. All brick, 2-car garage with RV/boat pad. 1/2 acre on the fairway of a beautiful golf course. 2005 "safest metropolis" and 2003 "Best place to start a business". $220-250,000. And that's because prices have gone up! I was in Santa Barbara on business a few months back. Saw a double-wide trailor in a real-estate mag. for $200,000! My house should be worth $4MM by those standards.
Has anyone considered that the stats regarding reported income are usually from the 2000 census and that they do not include accurate small business income information? Hell folks we are a service economy. Where there is a large workforce of fix salaried people -- prices have not risen. Where retirement money is headed prices have risen.
jem, we get the point already. South Florida is your domain and you've made this clear for a few years now.
Maybe I'll kepp it quiet. Don't want speculators bidding up the prices here before I can get my hands on some university rentals.