Just watched NBC Nightly news and they said it we are all doomed! They said the real estate bubble has officially deflated. Hmmmm. The funny part is that they have only seen a 1.3% decrease in home prices on the east coast compared to last year. If I don’t recall last year real estate prices were at record And for the western states we saw a .03 increase on average. The media makes it sound like we are all going to lose are asses and things are going to get bad.
I don’t think it is going to be that bad we may be going back in time a little bit by not inflating prices. We still have apreciation it just isnt going to be at the record rates in the near future.
Any thoughts about this or your feedback will be great.
definitely slow out here on the left coast in orange county, ca. prices flat to declining and the number of sales are down bigtime (around 40%) compared to previous years. incomes here simply do not support current price levels.
just go into any deal you do with your eyes WIDE open (no matter which area of the country you invest in) and make sure the numbers work for you. don’t expect alot of appreciation( if any) over the next several years and take inflation and selling costs into account when making your calculations.
remember, the old axiom is your profit is made on the purchase, not on the sale. southern cal depreciated around 30% during the early to mid 1990s and personally, i don’t think we’ve seen anything yet. but time will tell.
yes, SOME (not all) people will lose their butts in this marketplace. Prices will go side ways and people will get upside down on their mortgages with little finanical reserves to carry them thru on their rental properties they thought (incorrectly) would be cash flow positive.
As one example, I know some one that is losing their shirt in the Myrtle Beach, SC condo market. All the HOA fees cranked way up due to hurriance/insurance, tons of stuff on the market, income does not even cover the mortgage.
With that said, this is just return to reality; not the end of the world.
How did you get the bank to let you use donkeys as collateral?
Keith
I saw that too. What is being seen is that houses that went for $800k last year are going for $780k now. This is only a problem for people that buy retail and sell retail. I would never buy an $800k property that I had to pay more than $550k to $600k. I could still sell it in 2 weeks at $700k. They are NOT talking to us. We buy distressed at a discount and if the market ever comes back to where we are, we are all going to be going to thunder dome for entertainment.
[quote="kdhastedt
How did you get the bank to let you use donkeys as collateral?
Keith
HAHAHA!
thats awesome!
Condos that were $370,000 just over a year ago are now $295,000 in my neighborhood.
I think there’s still plenty of room downwards before they stablize.
so would u say this is not a good time to invest? would u say invest after the dust is settle is a better idea? ???
incomes here simply do not support current price levels.
This is a clear indicator that your market is forming (or in your case now, bursting) a bubble. If home prices outpace income levels, then your market is being influenced by outside forces (investors, retirees, media hype, etc) and not the local population.
Any time is a good time to invest, Unique. In any market, in any area, you simply have to learn your market and adjust your investing to it. Of course, it also depends somewhat on the type of investing that you are doing, but generally speaking, if you are in a down market, then you need to allow bigger discounts from current retail, allow more time to sell, etc, etc.
There were millions of people that lost practically everything during the Great Depression, but there were also savvy individuals that planned carefully, invested faithfully and became very, very rich during that time.
Raj
I think that you might be the only one that got that…
Keith
re-appears from the shadows
No, I caught it Keith. I thought the same thing actually. Well back to the grind for me.
Welcome back, Tigress!
Thanks Keith. BTW looking for a good agent here in Houston if anyone can recommend one, just message me.
I now return this badly hijacked thread to its flight over Germany.
if you don’t know what market cycle you’re in, how will you know what method to employ.
if you have your buying and selling systems in place you can buy at a deep discount and flip them immediately for profit. now is not the time to hold for long term. [at least in southern california].
places like salt lake city are still appreciating and have historically appreciated when CA was doing badly.
That is an oxymoron I have been coaching agents all year.
Well until there was a “clerical error” I was a good agent. Don’t worry, I’m working on fixing the “clerical error”. Don’t worry Raj, I’ll be back to calling you about the awesome deals I keep finding :P. But in the mean time I need at the very least an agent with a good attitude that’s willing to listen and learn.
Glad to hear that you’re still kicking, Red!
You know, if you move to NC, you can still be a good agent. We don’t have those “clerical errors”
Raj
Here in Idaho they have allowed us to use donkeys as collateral for years. It is a custom to use them when financing a house, but it is also used when you ask a man to marry his daughter you tell him how many donkeys you will trade him for that privelage.
Regonz 8)
Whatever works in your market!
Keith
Thank you Roger. You guys are so sourceful. If anyone is ever looking to recruit a student, please let me know. I would love to be one of your student.