[b]Seems there has been a lot on the news, magazines, newpapers about the state of Real Estate nationwide.
I wanted to know what is the state of Real Estate Investing in your area, and how have falling prices, and more selection affected your investment strategy? ???[/b]
It hasn’t burst yet in Austin, Tx. I’m having a hard time finding any good deals for rehab. Inventory is low and demand is steady; prices continue to rise. It’ll catch up with us though. I have a feeling that everyone who is cashing out of California is putting their money here.
Multifamily properties in the city of Sacramento CA have increased in value from June of 05-June of 06 between 10 and 80 percent. Single family homes (average and median price) have hit a plateau, the values have flattened out, with no volitity, but, on average, no appreciation during that same time period.
Here in Tidewater, Virginia, the bubble has burst if you’re a seller – single family homes are sitting on the market, prices are being reduced, closing cost assistance, expired listings…
It’s great if you’re a buyer – there’s lots to choose from.
I guess it depends on how you define a real estate “bubble”.
Here in Ohio, we didn’t have a bubble but it burst anyway! Inventory is very high, days on the market are long and increasing, prices are dropping, and there are VERY few sales. There is also a relatively high vacancy rate for rentals (especially apartment buildings) and the tenant pool is terrible!
Mike
In oregon, there hasn’t been a burst, people in california migrate north on a continueous basis which keeps the inventory low. Apreciation of .5-1% a month average.
In Alaska , anchorage area, the appreciation is steady as well, there are a bit more homes on the market then before, but over all its just a yelow light which will be green before anything stops.
San Antonio, was my #1 pick out of the top 100 city’s to appreciate in Value for 2007, and I have heard good things about Austin and wish you well.
precisely the reason why vegas hasnt slowed down like other areas. as long as socal is @ 400-500$/sq ft, vegas will have a strong market. not to mention job growth and the median income to median home price ratio. as long as it stays strong (i.e…below 6.5-7), we’re doing good.
people in vegas make good money and the median price is still relatively low.
Anyone else who does a lot of business in Vegas?
What is your idea on the Market there?
I thought prices were dropping and there were a lot of properties on the market?
Whats the real story please? ???
Not in Utah, in fact far from it right now. Stong appreciation throughout the state with a couple of exceptions. Overall a strong and growing market 
In DFW, inventory for expensive house is getting bigger. It is getting difficult to sell a large/expensive house. It is still good for houses in 200k range.
In Orange County, CA, which is one of the most expensive counties in the nation (average home price about $731,000), sales prices during August 2006 are up 3.48% compared to August 2005, which means that if you bought last year and had to sell today, you’d lose money. Sales volume, however, is down about 45% compared to last year (and even down 35% compared to August 1999 which is as far back as the MLS computer goes).
Resale inventory levels are up 127% since the beginning of the year. There’s about a 7.25 month supply of homes available for sale now. Last year there was about a 1.75 month supply available in August.
Not a bust yet, but lot’s of people getting very nervous.
What about NEW construction?
Builders in FL are giving back $40K in incentives on Condos priced at $300K range to get them to move, and to show they got full price for the units…
Any other Areas where folks are seeing this?
I don’t know why they say the bubble has burst anyway. Real estate is not only a thing. It is not only a commodity. If your strategy is to buy a property and wait for the value to rise and then sell, you are speculating just like pork bellies or gold. Real estate is also connected with the life of a city. If there are jobs and people are living and moving to that city, they will need a place to live. If you are buying distressed properties fixing them up and selling them there is always a market for them. Retail home prices don’t go into free fall although they may be artificially high. What you find is that the prices are 10% or so above what the houses will sell for. You should be buying distresses properties and fixing them up anyway. That will have you acquiring them closer to its true value. Even cities with economic problems don’t just dry up. Look at Detroit. It has lost 39% of its manufacturing jobs but there are new industries moving in to take their places. People are still working. If people are losing their homes, we are buying them and these people are our new tenants. Yes I know the big money is in buying and letting the market take the value up 30% and then selling, but if you are I a city that has underlying economic problems, then you need to adjust your strategy.
Bluemoon, are you comfortable renting to tenants who have just foreclosed and can’t pay their monthly bills?
Also, generally speaking, do you invest for the long term and intend to hold properties for many years? One investor I know of never keeps his rentals for more than five years. He figures that eventually the roof, plumbing, the heating and air conditioning systems will inevitably need replacing, so why stick around to absorb these expenses? Get in, get out, and get your money is his philosophy. What would you say to that?
I am sorry for taking so much time to get back. I would rent to a person with a forclosure. I do it all the time. I look at their ability to pay (rent no more than a third of their income) and I need to see a speed bump in their financial situation that caused it. Something like a divorce layoff or something. I see 5 years as long term. I don’t want to hold them until they can’t be sold easily. I refinance at 5 years if they are good and sell them otherwise adn buy more.
Here is FL it has been a very tough market.
As much as any of the reasons though is the great increase in homeowners insurance rates and taxes over the past 5 years. Probably in the neighborhood of 400% and 200% respectively for new home buyers.
The effect from the increase in insurance and taxes adds about an extra 100 -300 /month to the regular homeowner. It’s been tough because many people in FL don’t earn more than 3000/month & others are on fixed incomes, as you can imagine.
The purchase market has ground to a halt, and prices have eased considerably.
Thanks for the reply, I always look forward to your posts.
Now, by “good” do you mean good condition, or good cashflow?
See, here’s the thing… I’ve always been intrigued by the idea of keeping rentals long term – and I mean REALLY long – like keep them until the mortgage is paid off. That way, in my golden years, I’ll have all of the full amount going into my bank account funding my retirement.
But then, it does make sense that if you keep any property that long, your profits are severly diminished by all the repairs and upkeep over 30 years. By having a predetermined cutoff, say 5 years, then you can avoid all of those expenses, get your money out and either put it in a money market account, or buy another property and start the process all over.
I realize much of this is simply a personal preference kind of thing, but again, I always appreciate your insights.