“INVESTORS” who haven’t learned their lessons?

[34f3f3f]

Prices have come down in Phoenix, but bidding wars are insanity, and very irritating for first time buyers trying to get a good deal. I’m not sure I agree that Phoenix is a template for what will happen in the rest of the country. As for living or retiring there, it’s pretty hot and a bit boring, but definitely better value than California.

Here’s Guntermans’ website http://knowledge.wpcarey.asu.edu/article.cfm?articleID=1750&post=success&CFID=37521768&CFTOKEN=43910290&jsessionid=f0301518e135f972aec4384549155e761b7f

[Anonymous]

As far as bidding wars (for buyers) and getting a price well below what you wanted (for sellers), it seems like people forget that the value of a home is what it sells for, not what the flyer out front says. It works both ways.

As far as investors, in the words of Kirk, I laugh at their superior intellect.

Real estate investing only makes good sense in an appreciating market, IMO. Otherwise the rent you get is not going to cover the cost of capital, the maintenance, and taxes. It’s sure not going to cover the hassle of dealing with renters.

It is with a heart full of shadenfruede that I smile at all the investor activity in the Inland Empire. They seem to think that the pendulum is going to swing back to the crazy days of free money. They are right in thinking that the average American will spend every last dime they can on a house. They are wrong in thinking that banks will ever again let them.

We’re back to 29/39 and 20% down (for no PMI or MMI). We’ve got significantly more inventory than the last time those rules were in place, about the time Clinton was in office. Not only that, but the boomers are aging and downsizing their housing options. As the greatest part of the population goes from McMansions to assisted living (exaggeration, but you get the drift), demand is going to plummet.

My financial planner told me he has a client that took 7 million dollars and the two of them went around the Southland snapping up $200K houses. Same guy, this December, said our Zip (well, it was mine then) was going to drop only another 10% at the most. I moved out in January and it saw that 10% within two months of my departure. Quite frankly, I can’t imagine we are at the bottom.

The optimism of investors like my financial planner’s client is going to meet the cold, hard reality of people who can’t qualify for loans.

And I am going to be on the sidelines in my apartment, laughing.

[Anonymous]

As far as bidding wars (for buyers) and getting a price well below what you wanted (for sellers), it seems like people forget that the value of a home is what it sells for, not what the flyer out front says. It works both ways.

As far as investors, in the words of Kirk, I laugh at their superior intellect.

Real estate investing only makes good sense in an appreciating market, IMO. Otherwise the rent you get is not going to cover the cost of capital, the maintenance, and taxes. It’s sure not going to cover the hassle of dealing with renters.

It is with a heart full of shadenfruede that I smile at all the investor activity in the Inland Empire. They seem to think that the pendulum is going to swing back to the crazy days of free money. They are right in thinking that the average American will spend every last dime they can on a house. They are wrong in thinking that banks will ever again let them.

We’re back to 29/39 and 20% down (for no PMI or MMI). We’ve got significantly more inventory than the last time those rules were in place, about the time Clinton was in office. Not only that, but the boomers are aging and downsizing their housing options. As the greatest part of the population goes from McMansions to assisted living (exaggeration, but you get the drift), demand is going to plummet.

My financial planner told me he has a client that took 7 million dollars and the two of them went around the Southland snapping up $200K houses. Same guy, this December, said our Zip (well, it was mine then) was going to drop only another 10% at the most. I moved out in January and it saw that 10% within two months of my departure. Quite frankly, I can’t imagine we are at the bottom.

The optimism of investors like my financial planner’s client is going to meet the cold, hard reality of people who can’t qualify for loans.

And I am going to be on the sidelines in my apartment, laughing.

[Anonymous]

As far as bidding wars (for buyers) and getting a price well below what you wanted (for sellers), it seems like people forget that the value of a home is what it sells for, not what the flyer out front says. It works both ways.

As far as investors, in the words of Kirk, I laugh at their superior intellect.

Real estate investing only makes good sense in an appreciating market, IMO. Otherwise the rent you get is not going to cover the cost of capital, the maintenance, and taxes. It’s sure not going to cover the hassle of dealing with renters.

It is with a heart full of shadenfruede that I smile at all the investor activity in the Inland Empire. They seem to think that the pendulum is going to swing back to the crazy days of free money. They are right in thinking that the average American will spend every last dime they can on a house. They are wrong in thinking that banks will ever again let them.

We’re back to 29/39 and 20% down (for no PMI or MMI). We’ve got significantly more inventory than the last time those rules were in place, about the time Clinton was in office. Not only that, but the boomers are aging and downsizing their housing options. As the greatest part of the population goes from McMansions to assisted living (exaggeration, but you get the drift), demand is going to plummet.

My financial planner told me he has a client that took 7 million dollars and the two of them went around the Southland snapping up $200K houses. Same guy, this December, said our Zip (well, it was mine then) was going to drop only another 10% at the most. I moved out in January and it saw that 10% within two months of my departure. Quite frankly, I can’t imagine we are at the bottom.

The optimism of investors like my financial planner’s client is going to meet the cold, hard reality of people who can’t qualify for loans.

And I am going to be on the sidelines in my apartment, laughing.

[Anonymous]

As far as bidding wars (for buyers) and getting a price well below what you wanted (for sellers), it seems like people forget that the value of a home is what it sells for, not what the flyer out front says. It works both ways.

As far as investors, in the words of Kirk, I laugh at their superior intellect.

Real estate investing only makes good sense in an appreciating market, IMO. Otherwise the rent you get is not going to cover the cost of capital, the maintenance, and taxes. It’s sure not going to cover the hassle of dealing with renters.

It is with a heart full of shadenfruede that I smile at all the investor activity in the Inland Empire. They seem to think that the pendulum is going to swing back to the crazy days of free money. They are right in thinking that the average American will spend every last dime they can on a house. They are wrong in thinking that banks will ever again let them.

We’re back to 29/39 and 20% down (for no PMI or MMI). We’ve got significantly more inventory than the last time those rules were in place, about the time Clinton was in office. Not only that, but the boomers are aging and downsizing their housing options. As the greatest part of the population goes from McMansions to assisted living (exaggeration, but you get the drift), demand is going to plummet.

My financial planner told me he has a client that took 7 million dollars and the two of them went around the Southland snapping up $200K houses. Same guy, this December, said our Zip (well, it was mine then) was going to drop only another 10% at the most. I moved out in January and it saw that 10% within two months of my departure. Quite frankly, I can’t imagine we are at the bottom.

The optimism of investors like my financial planner’s client is going to meet the cold, hard reality of people who can’t qualify for loans.

And I am going to be on the sidelines in my apartment, laughing.

[Anonymous]

As far as bidding wars (for buyers) and getting a price well below what you wanted (for sellers), it seems like people forget that the value of a home is what it sells for, not what the flyer out front says. It works both ways.

As far as investors, in the words of Kirk, I laugh at their superior intellect.

Real estate investing only makes good sense in an appreciating market, IMO. Otherwise the rent you get is not going to cover the cost of capital, the maintenance, and taxes. It’s sure not going to cover the hassle of dealing with renters.

It is with a heart full of shadenfruede that I smile at all the investor activity in the Inland Empire. They seem to think that the pendulum is going to swing back to the crazy days of free money. They are right in thinking that the average American will spend every last dime they can on a house. They are wrong in thinking that banks will ever again let them.

We’re back to 29/39 and 20% down (for no PMI or MMI). We’ve got significantly more inventory than the last time those rules were in place, about the time Clinton was in office. Not only that, but the boomers are aging and downsizing their housing options. As the greatest part of the population goes from McMansions to assisted living (exaggeration, but you get the drift), demand is going to plummet.

My financial planner told me he has a client that took 7 million dollars and the two of them went around the Southland snapping up $200K houses. Same guy, this December, said our Zip (well, it was mine then) was going to drop only another 10% at the most. I moved out in January and it saw that 10% within two months of my departure. Quite frankly, I can’t imagine we are at the bottom.

The optimism of investors like my financial planner’s client is going to meet the cold, hard reality of people who can’t qualify for loans.

And I am going to be on the sidelines in my apartment, laughing.

[EconProf]

Back to the original LA Times article:
This site has long postulated that several conditions must exist before a bottom can be called. Some of them are now appearing in Phoenix: rents higher than mortgage payments, investors outbidding owner-occupiers, bidding wars. I’m adding to those positives the long-term demographic fundamentals of Phoenix and its more favorable business climate and suggesting it is at or near the bottom.

[EconProf]

Back to the original LA Times article:
This site has long postulated that several conditions must exist before a bottom can be called. Some of them are now appearing in Phoenix: rents higher than mortgage payments, investors outbidding owner-occupiers, bidding wars. I’m adding to those positives the long-term demographic fundamentals of Phoenix and its more favorable business climate and suggesting it is at or near the bottom.

[EconProf]

Back to the original LA Times article:
This site has long postulated that several conditions must exist before a bottom can be called. Some of them are now appearing in Phoenix: rents higher than mortgage payments, investors outbidding owner-occupiers, bidding wars. I’m adding to those positives the long-term demographic fundamentals of Phoenix and its more favorable business climate and suggesting it is at or near the bottom.

[EconProf]

Back to the original LA Times article:
This site has long postulated that several conditions must exist before a bottom can be called. Some of them are now appearing in Phoenix: rents higher than mortgage payments, investors outbidding owner-occupiers, bidding wars. I’m adding to those positives the long-term demographic fundamentals of Phoenix and its more favorable business climate and suggesting it is at or near the bottom.

[EconProf]

Back to the original LA Times article:
This site has long postulated that several conditions must exist before a bottom can be called. Some of them are now appearing in Phoenix: rents higher than mortgage payments, investors outbidding owner-occupiers, bidding wars. I’m adding to those positives the long-term demographic fundamentals of Phoenix and its more favorable business climate and suggesting it is at or near the bottom.

[SDEngineer]

[quote=knumb]

Real estate investing only makes good sense in an appreciating market, IMO. Otherwise the rent you get is not going to cover the cost of capital, the maintenance, and taxes. It’s sure not going to cover the hassle of dealing with renters.

[/quote]

This hasn’t been true in the past, and I don’t see any reason why it is true now.

When bubbles burst, they overshoot to the downside – there’s a window during this period when it is generally possible to find a property – especially at the low end – which will cash flow immediately as a rental.

Interestingly, in the ’96-’98 timeframe we saw lots of real estate investor activity (the buy-and-hold re investors, not the flippers of the bubble peak). This activity started well before it was apparent the bottom was in and appreciation had started up again.

[SDEngineer]

[quote=knumb]

Real estate investing only makes good sense in an appreciating market, IMO. Otherwise the rent you get is not going to cover the cost of capital, the maintenance, and taxes. It’s sure not going to cover the hassle of dealing with renters.

[/quote]

This hasn’t been true in the past, and I don’t see any reason why it is true now.

When bubbles burst, they overshoot to the downside – there’s a window during this period when it is generally possible to find a property – especially at the low end – which will cash flow immediately as a rental.

Interestingly, in the ’96-’98 timeframe we saw lots of real estate investor activity (the buy-and-hold re investors, not the flippers of the bubble peak). This activity started well before it was apparent the bottom was in and appreciation had started up again.

[SDEngineer]

[quote=knumb]

Real estate investing only makes good sense in an appreciating market, IMO. Otherwise the rent you get is not going to cover the cost of capital, the maintenance, and taxes. It’s sure not going to cover the hassle of dealing with renters.

[/quote]

This hasn’t been true in the past, and I don’t see any reason why it is true now.

When bubbles burst, they overshoot to the downside – there’s a window during this period when it is generally possible to find a property – especially at the low end – which will cash flow immediately as a rental.

Interestingly, in the ’96-’98 timeframe we saw lots of real estate investor activity (the buy-and-hold re investors, not the flippers of the bubble peak). This activity started well before it was apparent the bottom was in and appreciation had started up again.

[SDEngineer]

[quote=knumb]

Real estate investing only makes good sense in an appreciating market, IMO. Otherwise the rent you get is not going to cover the cost of capital, the maintenance, and taxes. It’s sure not going to cover the hassle of dealing with renters.

[/quote]

This hasn’t been true in the past, and I don’t see any reason why it is true now.

When bubbles burst, they overshoot to the downside – there’s a window during this period when it is generally possible to find a property – especially at the low end – which will cash flow immediately as a rental.

Interestingly, in the ’96-’98 timeframe we saw lots of real estate investor activity (the buy-and-hold re investors, not the flippers of the bubble peak). This activity started well before it was apparent the bottom was in and appreciation had started up again.

[Author]

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