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(Guardian)   Biggest sign of economic recovery: Rising housing prices. Biggest threat to economic recovery: Rising housing prices   (theguardian.com) divider line 54
    More: Ironic, Real estate pricing, economic recovery  
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627 clicks; posted to Business » on 18 May 2014 at 12:55 PM (13 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2014-05-18 12:59:07 PM
But this time it's changed! We totally learned our lesson and promise to live within our means!
 
2014-05-18 01:11:31 PM
It's feeling very 2007 isn't it?
 
2014-05-18 01:17:51 PM
I'm never going to own my own house. I've just accepted that
 
2014-05-18 01:24:24 PM

pivazena: I'm never going to own my own house. I've just accepted that


Sure you will, just wait for the next crash and pick one up cheap.
 
2014-05-18 01:40:24 PM
Welcome to the economy: where everything's made up and the points don't matter.
 
2014-05-18 02:08:25 PM
I went grocery shopping the other day; I bought a bunch of eggs because they were running out.  I didn't have anyplace else to temporarily store them, so I decided to put them all in a basket.  Nothing happened so I think I'll continue to keep doing that.
 
2014-05-18 02:12:43 PM

Tman144: pivazena: I'm never going to own my own house. I've just accepted that

Sure you will, just wait for the next crash and pick one up cheap.


What crash?  They still won't go below 3/4 million.

With all the Hispanics living 8 to a house*, and China caught in the brain drain trap (plus the whole 4 grandparents for one grandkidmeaning that even minimum wage families have money), anything that gets close to affordable gets picked up by entire extended families.

You can't buy a house without an 80 mile commute anymore if you're a normal family who isn't inheriting money or living 10 to a house.  And short of filling in the Bay, there's no place to put more houses, and they keep refusing to build more condos where the jobs are because of "traffic concerns" (while ignoring the traffic concerns that arise from 20% of the population of Stockton driving into SF every day).

* Not a joke.  They evicted 8 from the 2 BR across from me, and my friend in SF lives with 9.
 
2014-05-18 02:21:45 PM

meyerkev: You can't buy a house without an 80 mile commute anymore if you're a normal family who isn't inheriting money or living 10 to a house. And short of filling in the Bay, there's no place to put more houses

FWIW the article is about the UK, though to be fair both economies seem to suffer from the same underlying issues.
 
2014-05-18 02:26:17 PM
Stop buying homes as investment property, assholes!
 
2014-05-18 02:49:47 PM

meyerkev: Tman144: pivazena: I'm never going to own my own house. I've just accepted that

Sure you will, just wait for the next crash and pick one up cheap.

What crash?  They still won't go below 3/4 million.

With all the Hispanics living 8 to a house*, and China caught in the brain drain trap (plus the whole 4 grandparents for one grandkidmeaning that even minimum wage families have money), anything that gets close to affordable gets picked up by entire extended families.

You can't buy a house without an 80 mile commute anymore if you're a normal family who isn't inheriting money or living 10 to a house.  And short of filling in the Bay, there's no place to put more houses, and they keep refusing to build more condos where the jobs are because of "traffic concerns" (while ignoring the traffic concerns that arise from 20% of the population of Stockton driving into SF every day).

* Not a joke.  They evicted 8 from the 2 BR across from me, and my friend in SF lives with 9.


Have you ever considered... moving? Seriously? What do you do, and can you stand to do it somewhere else?

Just for kicks, I Googled a random house for sale somewhere in Austin TX. Picked a random real estate site and clicked a house on the first page of the site. This one is about 7 years old with a 247k asking price. About 2500 square.

img.fark.net

This is the neighborhood when I highlighted the address and 'search for with Google'. First one on the right.

img.fark.net

I realize that sometimes people freak out about moving somewhere else and even taking a bit of a pay cut... but when you subtract all the cash it takes to pay increased taxes across the board, increased utilities and massively increased markup for 'high value' areas, when you put a pencil to paper, you'll often actually make more at the end of the day. I just picked Austin for kicks. You can do that in pretty much any large city that isn't LA/SanFran, New York, and so on.

If you're willing to go 'more rural' and put in some personal work... this is a home I helped a friend build about 8 years ago on the growing edge of a smallish town. Construction cost was in the 400k range, including the double lot. The outside looks like shiat compared to the interior work.

img.fark.net
 
2014-05-18 02:57:17 PM
The housing industry is a deceptive indicator of economic strength for the way home purchases are made: via long-term debt.
 
2014-05-18 03:19:23 PM

ElLoco: meyerkev: Tman144: pivazena: I'm never going to own my own house. I've just accepted that

Sure you will, just wait for the next crash and pick one up cheap.

What crash?  They still won't go below 3/4 million.

With all the Hispanics living 8 to a house*, and China caught in the brain drain trap (plus the whole 4 grandparents for one grandkidmeaning that even minimum wage families have money), anything that gets close to affordable gets picked up by entire extended families.

You can't buy a house without an 80 mile commute anymore if you're a normal family who isn't inheriting money or living 10 to a house.  And short of filling in the Bay, there's no place to put more houses, and they keep refusing to build more condos where the jobs are because of "traffic concerns" (while ignoring the traffic concerns that arise from 20% of the population of Stockton driving into SF every day).

* Not a joke.  They evicted 8 from the 2 BR across from me, and my friend in SF lives with 9.

Have you ever considered... moving? Seriously? What do you do, and can you stand to do it somewhere else?

Just for kicks, I Googled a random house for sale somewhere in Austin TX. Picked a random real estate site and clicked a house on the first page of the site. This one is about 7 years old with a 247k asking price. About 2500 square.

[img.fark.net image 850x586]

This is the neighborhood when I highlighted the address and 'search for with Google'. First one on the right.

[img.fark.net image 850x336]

I realize that sometimes people freak out about moving somewhere else and even taking a bit of a pay cut... but when you subtract all the cash it takes to pay increased taxes across the board, increased utilities and massively increased markup for 'high value' areas, when you put a pencil to paper, you'll often actually make more at the end of the day. I just picked Austin for kicks. You can do that in pretty much any large city that isn't LA/SanFran, New York, and so on.

If you're willing ...


A million times this.  The world is just filled with sparsely populated areas, but we all cram ourselves into tiny urban centers  The inevitable result is going to be sky-rocketing costs, particularly for real estate.  It's all about location, location, location, because people REFUSE to live somewhere else.  A 900 Sq. Ft. apartment (in bad condition, without a parking space) cost me more than a 1,600 sq. ft. home with a big yard and a two car garage.  And I'd still have enough money left over for a car payment!  Sure, sure, your salary might take a hit - but that only matters if you want to brag about how much you make.  A software dev that makes 120k in Palo Alto, CA could move to Chicago and afford more making 100k.  And Chicago is still an overpriced pile of crap (IMHO).  You can move to some suburban town making 70-75k and still have all the same stuff.  It's just, everything will cost you less.

I paid $200 for a *shiatty* hotel room in New York City.  The nicest hotel room I've ever been in, their 'presidential suite' or whatever, with a hot-tub thing going on and a kitchen, cost me $110.  Sure, it wasn't in New York City, but I see that as a good thing.

I don't get it, but I'm glad so many people are willing to kill themselves to afford crappy apartments and shacks in big cities....it keeps prices down elsewhere.
 
2014-05-18 03:27:29 PM
So if they're low they'll go up, but if they're high they have to come down. It's... as if there would be some sort of point in between where they head towards. An equal point... an equilibrium I suppose you might call it.

NAH!
 
2014-05-18 03:50:39 PM

ElLoco: Just for kicks, I Googled a random house for sale somewhere in Austin TX. Picked a random real estate site and clicked a house on the first page of the site. This one is about 7 years old with a 247k asking price. About 2500 square.


Austin is quickly running out of water due to Texas' extended drought (Lake Travis is around 30% full), and doesn't have the transportation infrastructure to handle its current growth (the city council's solution to traffic is to add toll lanes to the highways). Please don't move here.
 
2014-05-18 03:59:30 PM

Fark_Guy_Rob: ElLoco: meyerkev: Tman144: pivazena: I'm never going to own my own house. I've just accepted that

Sure you will, just wait for the next crash and pick one up cheap.

What crash?  They still won't go below 3/4 million.

With all the Hispanics living 8 to a house*, and China caught in the brain drain trap (plus the whole 4 grandparents for one grandkidmeaning that even minimum wage families have money), anything that gets close to affordable gets picked up by entire extended families.

You can't buy a house without an 80 mile commute anymore if you're a normal family who isn't inheriting money or living 10 to a house.  And short of filling in the Bay, there's no place to put more houses, and they keep refusing to build more condos where the jobs are because of "traffic concerns" (while ignoring the traffic concerns that arise from 20% of the population of Stockton driving into SF every day).

* Not a joke.  They evicted 8 from the 2 BR across from me, and my friend in SF lives with 9.

Have you ever considered... moving? Seriously? What do you do, and can you stand to do it somewhere else?

Just for kicks, I Googled a random house for sale somewhere in Austin TX. Picked a random real estate site and clicked a house on the first page of the site. This one is about 7 years old with a 247k asking price. About 2500 square.

[img.fark.net image 850x586]

This is the neighborhood when I highlighted the address and 'search for with Google'. First one on the right.

[img.fark.net image 850x336]

I realize that sometimes people freak out about moving somewhere else and even taking a bit of a pay cut... but when you subtract all the cash it takes to pay increased taxes across the board, increased utilities and massively increased markup for 'high value' areas, when you put a pencil to paper, you'll often actually make more at the end of the day. I just picked Austin for kicks. You can do that in pretty much any large city that isn't LA/SanFran, New York, and so on.

If you're ...


Some jobs allow you to live in bum-fark nowhere, away from all the people and buy inexpensive house. It's not so much as willing to take a pay cut and move somewhere else, but being able to find that actual job anywhere else. other than a handful of fairly urban centers across the country. Start factoring in other stuff like having to put up with freezing your balls off for 4-6 months a year, and that small number gets cut in half.
 
2014-05-18 04:29:12 PM
Depending on the locale, average housing prices used to be somewhere between 3-3.5 years of an average one-person salary in the US. Even though the market took a hit in recent years, the number of years of salary to buy a home has jumped to at least 4-5. That is not a small change.
 
2014-05-18 05:18:33 PM
The really fun part will be when housing prices actually catch up and stop offsetting inflation. If it wasn't for the continuing (relative) housing price slump dragging inflation down, people would be whining about that instead.

/comparing food prices to a year or two ago is scary...
 
2014-05-18 05:24:37 PM
Portland home prices are becoming insane. I bought a house in September 2012, and the price has went up at least 20% in less than two years.
 
2014-05-18 05:25:31 PM
Mark Carney said steeply rising house prices were caused by structural problems in the housing market that restricted the supply of homes.

Ah yes, BoE/Fed ZIRP has nothing at all to do with it.
Nothing at all.
 
2014-05-18 05:36:21 PM

kidgenius: Some jobs allow you to live in bum-fark nowhere, away from all the people and buy inexpensive house. It's not so much as willing to take a pay cut and move somewhere else, but being able to find that actual job anywhere else. other than a handful of fairly urban centers across the country. Start factoring in other stuff like having to put up with freezing your balls off for 4-6 months a year, and that small number gets cut in half.


Also, there's this weird Catch-22 going on.

* CA doesn't enforce non-competes.
* So every company makes you sign a non-compete knowing that they can't enforce it.
* Of course, if you leave the state, then you're farked.  Because you have the non-compete.

/Plus yay, network effects.
//Grew up in MI, so I'm OK with freezing my balls off, especially if you have skiing.  And at least when it decides to jump up to 95 for a couple of weeks, you have air conditioning.  Which you don't have in Palo Alto because it's never supposed to hit 95 in early May.
 
2014-05-18 05:40:24 PM

Snarcoleptic_Hoosier: But this time it's changed! We totally learned our lesson and promise to live within our means!


Given costs of renting and the low interest rate, housing prices need to keep going up.

I know people hate to think of it that way, but what else would you use as a metric to set house prices?
 
2014-05-18 06:04:01 PM

ecmoRandomNumbers: Stop buying homes as investment property, assholes!


Nothing in TFA suggests that people are buying houses as investment instead of to live in. Prices could be rising because they were depressed earlier.
 
2014-05-18 06:14:49 PM

meyerkev: Tman144: pivazena: I'm never going to own my own house. I've just accepted that

Sure you will, just wait for the next crash and pick one up cheap.

What crash?  They still won't go below 3/4 million.

With all the Hispanics living 8 to a house*, and China caught in the brain drain trap (plus the whole 4 grandparents for one grandkidmeaning that even minimum wage families have money), anything that gets close to affordable gets picked up by entire extended families.

You can't buy a house without an 80 mile commute anymore if you're a normal family who isn't inheriting money or living 10 to a house.  And short of filling in the Bay, there's no place to put more houses, and they keep refusing to build more condos where the jobs are because of "traffic concerns" (while ignoring the traffic concerns that arise from 20% of the population of Stockton driving into SF every day).

* Not a joke.  They evicted 8 from the 2 BR across from me, and my friend in SF lives with 9.


They're instituting occupancy limits here in Austin to 8 6 4 per single-family home. Sucks to be a college student or anyone looking to save $ on shacking up with friends.

And don't get me started on the real estate market here.

(Happy just to have a ~1000 sqft place in a great location for under ~1200/mo)
 
2014-05-18 06:16:36 PM
Vancouverite checking in... trying not to weap.
 
2014-05-18 07:32:11 PM
People are snapping up homes left and right in Central Texas (SA to Austin).  Friend sold her house above asking price in Kyle in just 3 days and she is trying to buy in San Antonio but they are going fast.

I don't think another housing crash is that far off although the amount of people paying all cash seems to have increased significantly.
 
2014-05-18 07:53:46 PM

Arkanaut: Nothing in TFA suggests that people are buying houses as investment instead of to live in. Prices could be rising because they were depressed earlier.


If by "depressed" you mean "less ridiculously inflated than normal," then you'd be spot on.

/median house price is appx. $275k
//median income is 48k
///the math just doesn't work out
 
2014-05-18 08:38:29 PM

meyerkev: You can't buy a house without an 80 mile commute anymore if you're a normal family who isn't inheriting money or living 10 to a house.  And short of filling in the Bay, there's no place to put more houses, and they keep refusing to build more condos where the jobs are because of "traffic concerns" (while ignoring the traffic concerns that arise from 20% of the population of Stockton driving into SF every day).



I totally feel your pain, but it is possible. The cheaper end houses in the Sunset District are going for about 8-900k.  As noted elsewhere in this thread, people are generally paying 4 to 5 times their annual income for a house.  that means you need (roughly) 900/5=180k.  This is perfectly reasonable; there are literally thousands of couples in SF who make this much combined. Yes, you will never buy a house alone, but let's face it: the day of the single wage earner has passed.

I know because I just made a purchase myself. I wife and I are from modest background and have no money getting out of college. We're now in early 30s and just bought a home.  Many of my friends back home bought a house by their mid-20s, but hey-now I both own a house and live in the bay area!!! I'm happy I finally made it. You can do it too.
 
2014-05-18 08:48:46 PM
I'm just glad we bought during the last crash.  We couldn't afford to buy at current prices.  Hell, we bought our 1550 sq ft home at $295k during the crash (about 2.5 years ago).  It had been on the market for like a year too.  The house next door that's only 1000 sq ft just sold for $369k right after being put on the market.  Dafuq?
 
2014-05-18 09:47:11 PM

pivazena: I'm never going to own my own house. I've just accepted that


i am having also to accept that. and i am pretty farking pissed off about it.
 
2014-05-18 10:24:34 PM
There are currently ~20 million empty housing units in the US. Rising prices are not a sign of recovery.
 
2014-05-18 10:36:40 PM

ajgeek: Arkanaut: Nothing in TFA suggests that people are buying houses as investment instead of to live in. Prices could be rising because they were depressed earlier.

If by "depressed" you mean "less ridiculously inflated than normal," then you'd be spot on.

/median house price is appx. $275k
//median income is 48k
///the math just doesn't work out


Are we still talking about the UK here? Confused by the use of the dollar sign.

Incidentally, the UK data is showing approximately £250k for the median house price, and £44k for the median mortgagor (apparently this is the proper spelling, even though it looks like an Orcish name). That ratio seems to be approximately what you said, but the difference between $48k and £44k is about $24k USD, because of the exchange rate; this means that the vast majority of British borrowers are middle- or upper-middle class, and thus should have the financial flexibility to take on the debt. (For reference, the median UK household takes home ~$25k USD or £15k GBP). And the median borrower income has increased since 2006, although that part of the data seems to be unadjusted for inflation.
 
2014-05-18 10:51:15 PM

DrPainMD: There are currently ~20 million empty housing units in the US. Rising prices are not a sign of recovery.


Sure they are.  it's just that the recovery is happening unevenly.  I bet if you zoom in to where those 20 million units are, you'll find that the prices are not rising in that area.
 
2014-05-18 10:53:19 PM
I also plugged the UK numbers I found into a mortgage calculator. A £250k house at 6%* over 30 years will cost a total of £460,674.92; in that same period you will have made £1,320,000 in income. The mortgage total represents 34.9% of your income, which is almost exactly at the high end of what many financial advisors say you should pay for housing. (This number generally ranges from 25-35%.) And as I said, it's plausible that a household that makes the equivalent of $72,000 a year can save up enough to make that 35% work.

*Did a quick Google for UK mortgage rates and found 4.5% being quoted as an approximate market rate; then I assumed that the yield curve for mortgages is proportional to the bond yield curve and just multiplied to get the 30-year rate. This is probably an unscientific method but I figure it should be close. 30-year fixed mortgage rates in the US just rose above 4% late last year after the Fed announced the taper. Also, did some more arithmetic and found that at 5%, the housing payment ratio goes down to 32%.
 
2014-05-18 11:01:41 PM
This is why I like Columbus. Technology jobs all over the place and for less than 200k you can get a nice 3 bed 2 bath in the suburbs with a 25 minute commute to downtown
 
2014-05-18 11:11:46 PM
Portland home prices are going insane completely. I am kind of stuck in the house bought nearly two years ago in the suburbs.  Prices are up ~20%, and interest rates are up a full percentage point. So moving to a more central location is completely out of the question without giving up a lot of square footage.

I can't believe I moved a 1000 miles to Portland, and I ended up in Hillsboro just to avoid the commute to work.
 
2014-05-18 11:22:11 PM

mrmaster: People are snapping up homes left and right in Central Texas (SA to Austin).  Friend sold her house above asking price in Kyle in just 3 days and she is trying to buy in San Antonio but they are going fast.

I don't think another housing crash is that far off although the amount of people paying all cash seems to have increased significantly.


those aren't people who are paying cash and buying up all the houses....more like companies looking to flip or rent
 
2014-05-18 11:32:34 PM

Smackledorfer: Snarcoleptic_Hoosier: But this time it's changed! We totally learned our lesson and promise to live within our means!

Given costs of renting and the low interest rate, housing prices need to keep going up.

I know people hate to think of it that way, but what else would you use as a metric to set house prices?


I agree that housing prices should be rising, but in line with inflation (just like wages). Using the house as a personal ATM and hyperleveraging to keep up the illusion of financial security is the setup for the banks to want to lend more credit. And since getting credit is tough, maybe we could find alternative solutions to established banking rules.... but don't tell anyone, it'll all work itself out.
 
2014-05-19 12:26:07 AM

Snarcoleptic_Hoosier: Smackledorfer: Snarcoleptic_Hoosier: But this time it's changed! We totally learned our lesson and promise to live within our means!

Given costs of renting and the low interest rate, housing prices need to keep going up.

I know people hate to think of it that way, but what else would you use as a metric to set house prices?

I agree that housing prices should be rising, but in line with inflation (just like wages). Using the house as a personal ATM and hyperleveraging to keep up the illusion of financial security is the setup for the banks to want to lend more credit. And since getting credit is tough, maybe we could find alternative solutions to established banking rules.... but don't tell anyone, it'll all work itself out.


If housing were properly set at a "correct" value then yea inflation would be the right rate.

Where I live I could buy any of a dozen homes and profit off the rental property. Were I a better handyman I might do so. I have my hands full with my home and one rental property atm. I have a couple friends working on their seventh purchase for renting.

Interest rates are low enough that a fifteen year mortgage comes in below the rental value for these houses. Anyone with credit and capital and an interest in living in one place beyond five years should be in the market for a home.


That said, yea, overextending oneself just to own is stupid.
 
2014-05-19 04:24:20 AM
I keep arguing the Bay Area is in for a crash. This shiat can't continue.
 
2014-05-19 04:41:29 AM

mjohnson71: I keep arguing the Bay Area is in for a crash. This shiat can't continue.


It seems kind of ridiculous. I was watching House Hunter on HGTV, and this fairly normal professional couple had a home search budget for $950k for what seemed a fairly ridiculous for the homes they were looking at. The prices were at least double the prices for a close in Portland neighborhood, which also are over priced. Prices are really insane in Portland right now.  A nice, close in 2000+ sq ft house is now around $450k; some what less in the suburbs.
 
2014-05-19 08:15:46 AM
I live in Ridgewood NJ. There were two houses in my neighborhood that went up for sale mid May. Both colonials, about 100-200 years old but both modernized (central AC, real electric not knob and tube, kitchens etc). In other words, nice houses. One was 2,500 square, the larger one a little over 3,000. Both on about a quarter acre. One asked $875k, the larger one $899k. I thought, maybe wait until they sit on the market for the summer then lowball one of them (I live in a slightly smaller house and was considering an upgrade).

They are both under contract in less than two weeks. Every other house in town has moved within a month at or near ask.

Bubble 2.0 is fully under way. If you have cash, it might be the way to go. I wouldn't trust the stock market to continue as it has. It will crash before the next US election.
 
2014-05-19 08:40:26 AM

Harry_Seldon: mjohnson71: I keep arguing the Bay Area is in for a crash. This shiat can't continue.

It seems kind of ridiculous. I was watching House Hunter on HGTV, and this fairly normal professional couple had a home search budget for $950k for what seemed a fairly ridiculous for the homes they were looking at. The prices were at least double the prices for a close in Portland neighborhood, which also are over priced. Prices are really insane in Portland right now.  A nice, close in 2000+ sq ft house is now around $450k; some what less in the suburbs.


I would kill for 2K sq ft in the bayside East Bay for $450.
Seriously, if there's someone you need dead, let me know.
 
2014-05-19 09:37:08 AM

Hyjamon: mrmaster: People are snapping up homes left and right in Central Texas (SA to Austin).  Friend sold her house above asking price in Kyle in just 3 days and she is trying to buy in San Antonio but they are going fast.

I don't think another housing crash is that far off although the amount of people paying all cash seems to have increased significantly.

those aren't people who are paying cash and buying up all the houses....more like companies looking to flip or rent


Companies or wealthy individuals buying houses offer as rental housing and foreign purchasers make up a large portion of the 'cash buy' portion of the home buyer's market. That's a larger percentage than anytime in 40+ years.

You also have more rental/apartment housing being built as a percentage of home construction than you've had since the 70's.

What you're seeing in housing prices is the result of wealthier individuals recovering from the economic slump faster than people who weren't previously wealthy, and that in turn is giving them even MORE economic advantage, which allows them to buy houses, which ups the prices, which squeezes marginal home buyers into renting, which makes MORE money for the already well off.

It seems to be a pattern with our economy...
 
2014-05-19 10:12:52 AM

mrmaster: People are snapping up homes left and right in Central Texas (SA to Austin).  Friend sold her house above asking price in Kyle in just 3 days and she is trying to buy in San Antonio but they are going fast.

I don't think another housing crash is that far off although the amount of people paying all cash seems to have increased significantly.


The last cycle has taught me that the housing crash can come way later than you expect it - I was expecting the crash was inevitable and imminent around 2003/4 and it kept going for years at ever accelerating rates.


Note also with respect to the article, in the UK, London and to an extent south east house prices are rising fast, but most of the rest of the country is really fairly stable and probably not particularly inflated - in my county prices are still only around the same as they were in 2010, which was the peak of the "dead cat bounce" after the 2007/8/9 collapse.
 
2014-05-19 10:52:20 AM

TheSelphie: I'm just glad we bought during the last crash.  We couldn't afford to buy at current prices.  Hell, we bought our 1550 sq ft home at $295k during the crash (about 2.5 years ago).  It had been on the market for like a year too.  The house next door that's only 1000 sq ft just sold for $369k right after being put on the market.  Dafuq?


I saw that movie. Someone was murdered in your house. Soon you'll start seeing weird shiat happening around the house. Your husband won't believe you because "ghosts aren't real" and "women are stupid, duh" and then one day some demon will break your husband's neck and throw him down the stairs.

By any chance your husband doesn't write books about unsolved murders does he?
 
2014-05-19 11:23:54 AM
My wife and I bought our house at a good time in 2011. Housing prices and interest rates were both close to the lowest point they would reach. Nice solid working class neighborhood, good access to the Blue Line, the Metra and the Kennedy/Edens.

This is the sort of thing that's been going on in our area recently. House listed in 2010 for just under 300K, reduced 20K after a few months, then delisted. Listed in 2013 for 154K, foreclosed, then sold to a developer for 172K. Developer puts about 75-100K into making the interior look like every episode of House Hunters in suburbia, then sells it less than a year later for 425K. Nice profit of 100-150K, if not more.
 
2014-05-19 11:43:23 AM

Tman144: pivazena: I'm never going to own my own house. I've just accepted that

Sure you will, just wait for the next crash and pick one up cheap.



This is the sad reality, at least in larger/denser metros. Buying still beats renting of course... I'm in my early 30's and am sick of renting apartments owned by cheapskate landlords. But, with my employer's love for cost-cutting (including lay-offs) and a recovering job market, I have no interest in buying in farking Illinois.
 
2014-05-19 11:55:31 AM

Deneb81: Hyjamon: mrmaster: People are snapping up homes left and right in Central Texas (SA to Austin).  Friend sold her house above asking price in Kyle in just 3 days and she is trying to buy in San Antonio but they are going fast.

I don't think another housing crash is that far off although the amount of people paying all cash seems to have increased significantly.

those aren't people who are paying cash and buying up all the houses....more like companies looking to flip or rent

Companies or wealthy individuals buying houses offer as rental housing and foreign purchasers make up a large portion of the 'cash buy' portion of the home buyer's market. That's a larger percentage than anytime in 40+ years.

You also have more rental/apartment housing being built as a percentage of home construction than you've had since the 70's.

What you're seeing in housing prices is the result of wealthier individuals recovering from the economic slump faster than people who weren't previously wealthy, and that in turn is giving them even MORE economic advantage, which allows them to buy houses, which ups the prices, which squeezes marginal home buyers into renting, which makes MORE money for the already well off.

It seems to be a pattern with our economy...


There's also a lot of foreign money flowing in.  In the Bay Area and in Portland, lots of wealthy Chinese people are pouring their money into real estate because it's a safer place to park large amounts of money than anything in China, and in doing so are reducing supply and increasing prices.  And I've heard that wealthy Brazilian people are now doing the exact same thing in Texas.

I don't know how much of the increase in home prices is actually due to foreign cash, though.
 
2014-05-19 12:30:18 PM
If you want to live in a popular area, especially one with strict zoning laws and slow growth policies, duh, it's gonna cost you.  Supply, say hello to demand.  Cheap housing is available in the sticks for cheap, though.
 
2014-05-19 01:21:56 PM

Tman144: pivazena: I'm never going to own my own house. I've just accepted that

Sure you will, just wait for the next crash and pick one up cheap.


This. I bought one in 2010. It is a rental now but if the price bubbles I will sell that biatch then buy it or something like it in the next valley.
 
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