New Poll-most people think there is no housing slump

[cr]

At least the title of the article indicates the author has a clue as to what is happening.

People are funny though. I’m sure most people who have been here for a while now were laughed at when they first said housing is going to crash.

Sentiment is changing, slowly but surely. Those in this poll are still behind reality and probably only believe what their realtor told them.

Money is the one thing the average person should be most logical about, yet it’s emotions that tend to dominate their decisions.

[cr]

At least the title of the article indicates the author has a clue as to what is happening.

People are funny though. I’m sure most people who have been here for a while now were laughed at when they first said housing is going to crash.

Sentiment is changing, slowly but surely. Those in this poll are still behind reality and probably only believe what their realtor told them.

Money is the one thing the average person should be most logical about, yet it’s emotions that tend to dominate their decisions.

[surveyor]

re

Just because prices in certain areas are lower than others that does not make them a good deal. Texas, South Carolina, North Carolina, Tennessee and Atlanta are NOT booming.

=shrug= All I can say is that is not what I’m experiencing and seeing. And sure just because prices are lower in those areas than in California doesn’t mean that it is a good deal. Ultimately it comes down to rate of return and cash flow. Most of the properties I see there cash flow and are giving about a 30% return. And true there is a lot less California money nowadays flowing around, but those are the places I see them flowing to.

[surveyor]

re

Just because prices in certain areas are lower than others that does not make them a good deal. Texas, South Carolina, North Carolina, Tennessee and Atlanta are NOT booming.

=shrug= All I can say is that is not what I’m experiencing and seeing. And sure just because prices are lower in those areas than in California doesn’t mean that it is a good deal. Ultimately it comes down to rate of return and cash flow. Most of the properties I see there cash flow and are giving about a 30% return. And true there is a lot less California money nowadays flowing around, but those are the places I see them flowing to.

[temeculaguy]

I know that all R/E is local and that in places where the pendulum never swung in the first place wont have a backswing. But there are some components that would work against rising prices in any area of the country.
1. Less bubble money/equity from CA,Fl, the North East, etc.
2. Rising interest rates
3. lender tightening
4. Loan programs being eliminated

The stars were perfectly aligned nationally for a R/E boom in 2003 and the areas where it didn’t take usually had a reason for it. Move those stars out of alignment and I don’t see why it would cause a sustainable boom now.

[temeculaguy]

I know that all R/E is local and that in places where the pendulum never swung in the first place wont have a backswing. But there are some components that would work against rising prices in any area of the country.
1. Less bubble money/equity from CA,Fl, the North East, etc.
2. Rising interest rates
3. lender tightening
4. Loan programs being eliminated

The stars were perfectly aligned nationally for a R/E boom in 2003 and the areas where it didn’t take usually had a reason for it. Move those stars out of alignment and I don’t see why it would cause a sustainable boom now.

[lostkitty]

"But a non-speculative-market state (Ohio) currently has the highest foreclosure rate ever recorded in U.S history."

 The way I see it, if there was a great salesman of subprime mortgages in an area (see: http://piggington.com/subprime_loans_made?size=_original ), with another link to get them in (like the Temecula guys did at their church), coupled with layoffs or other changes to the local economy, then we will see huge foreclosures.

California unfortunately has all of those, and an economy that was largely growing BECAUSE of the real estate increases.

I agree that "people all over the country should know by now that the market is in a downward trend".. it is just that some places have not much falling to do.  The pain will not be as severe.  Just my opinion as I sit and watch the inventories stay relatively mellow, sales & prices as well.  Same old same old around here. 

 

[lostkitty]

"But a non-speculative-market state (Ohio) currently has the highest foreclosure rate ever recorded in U.S history."

 The way I see it, if there was a great salesman of subprime mortgages in an area (see: http://piggington.com/subprime_loans_made?size=_original ), with another link to get them in (like the Temecula guys did at their church), coupled with layoffs or other changes to the local economy, then we will see huge foreclosures.

California unfortunately has all of those, and an economy that was largely growing BECAUSE of the real estate increases.

I agree that "people all over the country should know by now that the market is in a downward trend".. it is just that some places have not much falling to do.  The pain will not be as severe.  Just my opinion as I sit and watch the inventories stay relatively mellow, sales & prices as well.  Same old same old around here. 

 

[PD]

When we had our house for sale in 2005, I told a neighbor that we wanted to sell because we felt we had reached the top of the cycle and prices were going to start coming back down. He laughed at me and told me that we were foolish for selling because our properties were going to appreciate another 100% in 5 years. I doubt he is laughing now. His property has depreciated 100K since then.

[PD]

When we had our house for sale in 2005, I told a neighbor that we wanted to sell because we felt we had reached the top of the cycle and prices were going to start coming back down. He laughed at me and told me that we were foolish for selling because our properties were going to appreciate another 100% in 5 years. I doubt he is laughing now. His property has depreciated 100K since then.

[Farls]

You’re dreaming if you think properties right now in Texas, South Carolina, North Carolina, Tennessee or Atlanta are giving a 30% return and positive cashflow.

[Farls]

You’re dreaming if you think properties right now in Texas, South Carolina, North Carolina, Tennessee or Atlanta are giving a 30% return and positive cashflow.

[surveyor]

dreaming

Living the dream. Being the dream.

yours truly,

The Dream King

South Carolina Property (4 unit) Purchased August, 2006

Purchase Price: $230,000

Downpayment: $46,000

Return on Equity = (Cash Flow + Appreciation + Loan Reduction + Tax Deduction)/Downpayment

{all values annualized}

= (2400 + 0.04(230000) + 0 + (230000/27.5*0.33))
= 31.27%

[surveyor]

dreaming

Living the dream. Being the dream.

yours truly,

The Dream King

South Carolina Property (4 unit) Purchased August, 2006

Purchase Price: $230,000

Downpayment: $46,000

Return on Equity = (Cash Flow + Appreciation + Loan Reduction + Tax Deduction)/Downpayment

{all values annualized}

= (2400 + 0.04(230000) + 0 + (230000/27.5*0.33))
= 31.27%

[Farls]

I suspect there’s some fuzzy math involved with that…But good luck.

[Author]

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