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47505 clicks; posted to Main » on 15 Feb 2007 at 7:42 PM (7 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2007-02-15 10:13:54 PM
MonkeyBoy666: LOL at the HOAs. I've got a mini-CNC purring away in my crappy apartment in a poor area of Montreal. No one's the wiser, it doesn't sound any louder than a washing machine to the downstairs people. Different, but not louder...
The bonus is if I get robbed, it's still quite heavy and I've got little else of material value.
 
2007-02-15 10:14:49 PM
Charmaniac: Its actually the stampede of farktards who feel the need to wave their sour grapes...

Bitter much?
 
2007-02-15 10:15:13 PM
Material prices, especially steel, copper, lumber and gypsum board, skyrocketed over the past 15 months. They've leveled off now, but don't expect to see them decline again.
 
2007-02-15 10:20:45 PM
I hate real estate. It is by far the most shady business out there. I have some relatives in different aspects of it, and never is there more a business where emotions run so high, fraud and deception seem so rampant, and contracts get broken all the time. The government props them up via tax subsidies and interest deduction, so they aren't going anywhere, but the whole business feels so unprofessional. I'll stick to REIT's if I want to get in on it.
 
2007-02-15 10:21:05 PM
2007-02-15 09:01:42 PM MisterLocutor

Are you in a 6 flat by chance?

Nope.

I don't remember exactly how many units are in our complext...but I think it's somewhere around 30 or 40.
 
2007-02-15 10:25:24 PM
stpickrell: Your statement is like a third class passenger on the Titanic cheering its sinking, because that means the first class passengers will all drown.

No.

The Titanic is going down and the people that figured out what was going on are in lifeboats a half mile away thanking their fortune/foresight.

I do feel sorry for people... but on the other hand... no one put a gun to their head to buy with 100% down interest only mortgage.
 
2007-02-15 10:30:28 PM
Heh, old neighbor where I use to live owns 22.5 acres of land in NJ (guys a farmer).
He bought the land way-back-when for a total of like couple $100,000, so if he was to sell it all, and retire right now, he'd still be making a killing.

Land as an investment.......Not to bad, at least in this case.
 
2007-02-15 10:34:01 PM
unikcycle: House prices are going up... they always go up.


All the times they went down notwithstanding.
 
2007-02-15 10:35:53 PM
Thank god.

Just before moving to the Seattle/Redmond area, we had to sell our housein Virginia. We had limited time to do so, and unfortuantely we *just* missed the peak for houses. Had we sold two months earlier, we'd have gotten $50k more. As it was, the realtor took more money from the sale than we did, so my family has been forced to rent. The money from the sale of our home moved us across the country and paid for the new baby.

I miss having a house, but who can afford one? Without a down payment, we'd be looking at over $2k a month for a $300K home. Around here, $300K will get you a 900ft-square manufactured home.

Another year, maybe. Hopefully. Not having a permanent home sucks.

*sad sigh*
 
2007-02-15 10:36:17 PM
How is this bad? I don't get it.
 
2007-02-15 10:44:53 PM
feepness
You may be correct, but if the economy slows down due to Reeltor Madness, a lot of innocent people will be hurt or going down.

Or, if housing goes down 40% and your income goes down 80%, you'll still have trouble buying a house. But, I forget that everyone on Fark is immune to economic cycles and will prosper no matter what. Maybe I should be Libertarian. That'd make me rich, instantly.
 
2007-02-15 10:52:18 PM
Hm. Maybe I'll actually be able to afford a reasonably-sized place when I finally get done with law school in four years. I've been counting on having to move into a refrigerator box somewhere in the hood, but things are looking up.

Then again, I'm probably going to be moving to Paris in a few months, so if things don't go my way when I return to the states, I'll at least be acclimated to getting my ass reamed by the real estate market.

/seriously, though, apartments there go for like 30 Euro per square meter (~$3.70/sq.ft)
//And if you're lucky, you get a bathroom all to yourself
 
2007-02-15 10:55:26 PM
Aracnix: Another year, maybe. Hopefully. Not having a permanent home sucks.

Typical housing downturns run around 3-5 years until trough, and we're just at the start of this one. There will be some sweet deals to be had on the other side. That's a good thing.
 
2007-02-15 10:56:25 PM
people just cant seem to understand what the article actually is saying... House prices are going up... they always go up. The 40% drop is in house sales... 40% lest houses sold, the price of houses did not drop 40%


That's how real estate bubbles pop. Unlike the stock market people don't like to hit the bid, so prices don't drop immediately. What happens is people just stop buying and sellers find it impossible to sell. Prices stay the same for a while, before sellers start reluctantly lowering their prices.

I studied the 90s real estate boom in the UK, for which you can download historical price data from the mortgage banks. City centres and 'desirable' areas -- the areas that rose the most during the bubble -- are the first to start crashing, even whilst further out prices are still going up. Then the crash spreads like waves outwards. From what I've seen in the UK and Japan, you can expect prices to bottom out at anywhere between 40-60% of what they currently are. So even if you 'got a great deal' you're going to end up sat on a property that's not worth the mortgage you're paying interest on.

IMHO it should take about 6 years to recover. Possibly longer.

My idea for the best trade right now: Get a floating rate mortgage in any major currency except dollars or Yen, and buy land close to - but not in - the centre of a major Japanese city.

once the u.s. housing market crashes interest rates will stop going up, and should eventually come down. The yen is incredibly undervalued against most major currencies, but less so against the dollar as the dollar is also very weak right now. Add to that the fact that Tokyo land prices have just started to rise after 15 years of falling and you have a magical combination that I believe would make 40% or more over the next 3-4 years.

I just missed an opportunity to buy a small building close to the centre of Shibuya for what amounted to around $1050 per square foot. (land price) which is a freaking STEAL. It was essentially auction property but I didn't even get a chance to see it before some real estate fund snapped it up.

Dammit.


Now, Does anyone know where I can get a mortgage in Euros for Japanese investment property? Cos I don't, and I really want one.
 
2007-02-15 11:09:52 PM
The_Sponge

The real estate market for Snohomish County (WA) is still going strong, mostly due to the fact that Boeing is doing very well and hiring a lot of new engineers. As long as the company keeps doing well, local property values will continue to appreciate.

Job growth wasn't the major driver in the run up and the outlying areas are where the subprime loans are concentrated. If you house is in a good area, then it's probably going to hold it's value. If your neighbors are among the millions of farked subprime borrowers, then jobs aren't going to save them.
 
2007-02-15 11:14:04 PM
...bought my house in 1987 for $178,900, appraisal says it's worth $685,000 today, $127k mortgage left due to multiple remortgaging. I'm currently in a middle of a divorce and am willing to let it go for $600k. With all of the improvements we did, I would bet it's the best non-roof-leak and earthquake
retrofitted home in the neighborhood. Did I mention that it's 1/2 mile from the beach in Santa Cruz, Ca?
 
2007-02-15 11:15:35 PM
stpickrell: Or, if housing goes down 40% and your income goes down 80%, you'll still have trouble buying a house. But, I forget that everyone on Fark is immune to economic cycles and will prosper no matter what. Maybe I should be Libertarian. That'd make me rich, instantly.

If you save money and don't speculate you will be much more strongly insulated... if not immune.

For example, my income could easily drop by 80% and I would survive just fine. Why? I already save 33%, the tax bite would be much smaller, and I have enough savings to make up the difference for years.

I also own my house... but see it for what it is: an expense, not a retirement plan.

I will be buying property when I can rent it for positive cashflow from day one. I'm thinking late 2008.
 
2007-02-15 11:16:34 PM
2007-02-15 10:15:13 PM ISubmittedThisYesterdayWithAMuchFunnierHeadline

Material prices, especially steel, copper, lumber and gypsum board, skyrocketed over the past 15 months. They've leveled off now, but don't expect to see them decline again.

Interesting take. I've negotiated significant price cuts on everything but steel in the last three months. We're seeing great prices on lumber, compared to a year ago, and my drywall contractors just offered up a decent cut last week. Electricians are clamoring for work, so we cut them back from $2.30 per sq. foot, to $2.00, and they were happy to get the work. I'm not sure where you're located, but I'm guessing if you're not seeing any price cuts, you're particular market must still be quite hot.
 
2007-02-15 11:21:14 PM
lindseyp: once the u.s. housing market crashes interest rates will stop going up, and should eventually come down. The yen is incredibly undervalued against most major currencies, but less so against the dollar as the dollar is also very weak right now. Add to that the fact that Tokyo land prices have just started to rise after 15 years of falling and you have a magical combination that I believe would make 40% or more over the next 3-4 years.

Why do you think the dollar is weak? Wouldn't a strengthening currency indicate lower home prices as purchasing power improved?

I honestly don't know which will win... the tug of war between written off housing values (strengthening the dollar) or terrible trade/government deficits (weaking the dollar).
 
2007-02-15 11:21:24 PM
Ha! Man, I live for taglines like this..
 
2007-02-15 11:25:08 PM
Acid_Aspirations: appraisal says it's worth $685,000 today, $127k mortgage left due to multiple remortgaging. I'm currently in a middle of a divorce and am willing to let it go for $600k.

Attention housing bulls: your house just lost 15% of it's value.

Sales volume drops... and then distressed sellers (not a perjorative acid -- I get you're fine but just don't care) come in and knock 10+% off the price.

For the speculator who's entire profit was 10%? Well, sorry. And I have little to no sympathy for them.

What happens when it drops 15% and they only put 5% down? Leverage can hurt baby.
 
2007-02-15 11:26:32 PM
feepness
You're preaching to the choir with regard to saving. I save and invest perhaps 30-40% of my income and have two years' pretax income in various investments. Like you, I do hope my house will go up in value but I buy it as a place to live and not as a money-spinner.

It seems you're prepared to handle a CAT 3 or 4 economic storm. I'm probably able to handle a CAT 1 or 2 storm.

A powerful CAT 5 economic storm -- hopefully *I* get to be Lord Humungous. I'm sure you have the same hope too.

I just ain't cheering for a hurricane to strike the economy, nor will I take glee in people as they suffer for a poor economic decision.
 
2007-02-15 11:27:37 PM
Acid_Aspirations
I believe you are what a Realtor refers to as a motivated seller.
 
2007-02-15 11:31:12 PM
PeriRies: Interesting take. I've negotiated significant price cuts on everything but steel in the last three months. We're seeing great prices on lumber, compared to a year ago, and my drywall contractors just offered up a decent cut last week. Electricians are clamoring for work, so we cut them back from $2.30 per sq. foot, to $2.00, and they were happy to get the work. I'm not sure where you're located, but I'm guessing if you're not seeing any price cuts, you're particular market must still be quite hot.

This is interesting. Where are you located?
 
2007-02-15 11:34:30 PM
Hard to say about the bubble, I think its rather regional instead of national. Here, in my part of Florida (near Cape Canaveral) my house sold to investors for 63K. We bought it two years ago for 180k (it has been totally rehabbed, it looks like a brand spankin' new house). Its now worth 240k by itself, but everyone else on my block has let their houses go to shiat in the last three years, so it has ruined my selling price, should I decide to move. It has also made a big diff in case I refinance (which I am in the market for, the ARM has kicked in and its too expensive!). So, all in all, its kind of an up and down thing here. Oh, and my job is gone now in the meantime, so back to freelancing. My area is severely depressed as far as job market goes, either you work for NASA or you bag at WalMart, not a lot of inbetween, so I gotta head off to Orlando and try to get back in with Uncle Disney : ( Its a real weird economy over here, but back in my hometown of San Francisco, things look pretty rosy, or so my mom and sisters tell me. Too bad I can't afford to retrofit my vehicles to meet the EPA standards there, or I'd head out there!
 
2007-02-15 11:36:49 PM
my house sold to investors for 63K. ....

Its now worth 240k by itself,....


Um... what?
 
2007-02-15 11:37:13 PM
Can't you go to Home Depot and make yourself 4 walls for a lot less than that?!?

www.burbed.com
 
2007-02-15 11:40:16 PM
I love people who spout their house values without giving any information about where it is, how big it is, it's closeness to transportation, cities, etc.

/real estate value is meaningless without context
//400k don't ya know
 
2007-02-15 11:44:10 PM
feepness

Knoxville TN. We haven't seen the wild speculation in the market here that has been the talk of the industry in places like SoCal, Florida and Northern VA. This isn't a "company" town, in that we don't have one dominant industry or employer that has the ability to just shiatwreck the market, like say, what happened in Charlotte NC when BofA has huge layoffs. It helps keep some stability in the pricing.

This market is a bit unique in that the big homebuilders have not been able to penetrate the market due to the absence of available land, and the stonewalling of local vendors to their demands. Phillips just took off after they realized they couldn't buy as well as the locals.
 
2007-02-15 11:44:58 PM
PeriRies
Have they ever finished that construction on I-70?
 
2007-02-15 11:46:28 PM
lindseyp

I think it's a safe bet to say that few, if ANY, local real estate markets in the US will see real estate (or even home) values fall 40-60%.

Needless to say, I think Howard K. Stern has a better argument that he's the paternal father a Anna Nichole Smith's daughter than you do saying the real estate in the US will see a decline of 40-60%.
 
2007-02-15 11:50:46 PM
And howdy neighbor to Ironic_Hypocrite. We probably shop at the same Winn Dixie : ) Its a small little bitty world out here, and I was watching what he was talking about from my house in Decatur, GA (downtown Atlanta). We kept trying and trying to get back to FL, but were stuck as the buying market slumped and slowed and sputtered in existing homes in my area of Atlanta. The McMansions were popping up and being sold left and right (SO designs and installs air conditioning and heating systems for new construction) and we kept waiting for someone to buy our Decatur house so we could get out of Atlanta and get back home (home for him, anyways) to the Space Coast of Florida. We were watching as the prices in Cocoa and surrounding areas climbed and climbed...with no end in sight. We bought the house I mentioned because we figured if we didn't, we would never be able to own, we would rent for the rest of our lives!
Now, at the new construction job site he is at, the new homes are vacant, the original buyers have pulled out long ago, and ghost towns are popping up all over (he is building in Vero Beach.) The phase has 300+ homes, but just over 70 have anyone actually living in them. Its sort of creepy to drive down there and see all these perfect, expensive, landscaped homes with not a soul to be seen, just waiting for someone to come live in them. There is an inch of dust on the perfect marble floors and there are cobwebs in each corner. The builder and developer counted and banked on that big boom continuing, and it just didn't pan out.
 
2007-02-15 11:50:49 PM
I miss having a house, but who can afford one? Without a down payment, we'd be looking at over $2k a month for a $300K home. Around here, $300K will get you a 900ft-square manufactured home.

I guess you didn't see the 1000sqft house for $600k in Daly City, CA above.

Our bubble in Silicon Valley is Better(TM).
 
2007-02-15 11:52:51 PM
The bubble was caused by the mortgage banks cuting standards - this will have a disporportionate impact on the areas where the average buyer wouldn't have qualified for a traditional mortgage.

...and those areas where the well qualified buyers got drunk on extracting home equity.

Just in the last month banks have moved the qualification level for 100% financing up from a 580 credit score up to 640 - that has removed alot of first time buyers from the market, and made it impossible for many subprime borrowers to qualify for refinancing. This is across the board - you won't find anyone willing to finance these loans, but in December you would have been able to.

Just this week several large subprime lenders have stopped offering 80/20 loans because they can't sell the second mortgage on the open market. (Look up Fremont)

Subprime lenders are dropping like flies and the remaing companies are writing off billions in losses (HSBC).

This is just the beginning of the credit tightening.
 
2007-02-15 11:55:43 PM
Everyone's gettin' the hell out of the USA and moving to Canada. Real Estate prices here have never been higher.
 
2007-02-15 11:57:10 PM
stpickrell

If you mean I-40, and I'll assume you do since we're a long way from Nebraska, ummm, no. sigh**

Apparently, about the only thing my town is known for, other than the Vols, is road construction. Hell, I was in Germany in 1998 having a beer with some locals when one of them chimed in with "Ya, I've been there. Orange barrels everywhere!" big laugh.

It sucks. It's hell on your suspension too. They plan to have the latest expansion of I-40 done in 3147.
 
2007-02-15 11:57:11 PM
seatown75
Ah, I should have shorted Novastar (NYSE:NFI) sometime last year. Would I have had the faith to sit tight? Probably not.
 
2007-02-15 11:57:41 PM
Needless to say, I think Howard K. Stern has a better argument that he's the paternal father a Anna Nichole Smith's daughter than you do saying the real estate in the US will see a decline of 40-60%.

Why is it so crazy to decline 40-60% after rising 200-300% in a few short years?

In places that haven't gone up? Probably not... but the house I'm in was $180K in 1998. At one point it was $1.05M. 40%? Not hard to imagine. 60%... well then prices would only have doubled in the last decade.
 
2007-02-15 11:58:47 PM
You're a Mean Drunk R2D2

Yes, the house I live in now sold to investors for that price, and we bought it after it was rehabbed for 180k. So, the investors put in about 12-15k in rehabbing and turned a mighty nice profit. I live 3 miles from Cape Canaveral, by the beach, my house is 3/2/1 1500sq ft and can withstand a Cat 4 hurricane no sweat. Yet everyone else has let their houses look like shiat! Crazy, ain't it?
 
2007-02-15 11:59:32 PM
1000 of Lumber 2X4 (8') @ $3.00 each = $3,000
1000 of Plywood @ $30.00 sheet =$30,000
200 lbs of Nails @ $1.00 lbs = $200
1000 of Shingles @ $2.00 sq/ft= $2,000

Grand total =$35,200
with plenty of extra wood, and,
don't biatche about not having windows!
 
2007-02-16 12:00:03 AM
PeriRies
I-40, I-70, what's the difference? :P Glad to know the road construction is still ongoing. Is there supposed to be a goal to all this construction?
 
2007-02-16 12:02:58 AM
Picolo, paying $3.00 for a 2x4 stud right now is like paying $.05 to see Paris Hilton's tits. You're getting ripped off bigtime.

\drunk again
\\not surprised
 
2007-02-16 12:03:11 AM
Now, at the new construction job site he is at, the new homes are vacant, the original buyers have pulled out long ago, and ghost towns are popping up all over (he is building in Vero Beach.) The phase has 300+ homes, but just over 70 have anyone actually living in them. Its sort of creepy to drive down there and see all these perfect, expensive, landscaped homes with not a soul to be seen, just waiting for someone to come live in them. There is an inch of dust on the perfect marble floors and there are cobwebs in each corner. The builder and developer counted and banked on that big boom continuing, and it just didn't pan out.

The set for Lethal Weapon 3 where they trash an entire neighborhood was done in an abandoned development in the early 90s. Houses just sitting empty for lack of buyers.
 
2007-02-16 12:03:47 AM
Subprime credit quality?

www.markit.com
 
2007-02-16 12:04:17 AM
Seatown

About those 80/20 loans...is it because of the high interest on the seconds? Ours was a staggering 8.99%, thus the reason we refinanced back in December (whew!) I am just curious, I have a friend who now wants to refinance but is getting led to the altar a lot with that due to her 610 score and that dang 20 interest only mortgage with the 9.25% rate. Ouch.
 
2007-02-16 12:06:49 AM
feepness strange...I thought it looked familiar. I was thinking either Edward Scissorhands neighborhood or that one : )
 
2007-02-16 12:11:11 AM
Bizarro
Oh, I get it now. I thought you meant that you bought it for 180,000, and then you sold it for 63,000, despite the fact that it was "worth" 240,000.
 
2007-02-16 12:13:52 AM
Bizarro, these subprime lenders (credit below 640) are concluding that there is no market for the loans, period - they're requiring that the primary loan cover the entire liability and charging PMI to protect from default.

This may be an overreaction in the market, but with the huge losses in this segment, it's prudent for the lenders to be conservative.

Really, your friend shouldn't be refinancing now unless it's dire. Depends on where she came from - if her score dropped to 610 - no, now is a bad time to refinance. If it rose to 610, this may be the best, or only time to re-fi.
 
2007-02-16 12:14:15 AM
The_Former_BV

THE HOUSING MARKET!! THE!!
 
2007-02-16 12:15:02 AM
Some of the best deals out there are finding houses that were bought by buyers who did 100% financing through two lenders. The primary lender really just wants their 80% out of the house, and will often auction the house for that amount. You get the house at 80% of its original value, and often within a year of the original closing date. That's a sweet deal if you can find it. I just missed out on one a few weeks ago, and the guy that got it bought a 1 year old house, that originally sold for $249,900 for $204,000. He put a coat of paint on the walls and listed it the next week for $279,000. We'll see where it closes, but basically, he can't lose in that neighborhood.
 
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