Is it me or are real estate prices going wacko again

[Thump553]

he said he was 55 miles from Boston

55 miles west of Boston puts you out past Worchester. I wouldn't even consider Boston as close

55miles north you are in NH and 55 miles south and you are in Fall River

easier way of thinking of it is outside or 495

actually im pretty sure he lives in NH as I sent him Secret Santa stuff last year or the year before

I believe those prices in the Worchester area-that still basically commuting suburbs for Boston. Heck, Pomfret, CT is loaded with Boston commuters now and that's about 75 miles outside of Boston. I'd be really stunned if NH prices are that high-but it may be a function of people paying many tens of thousands of dollars more for their home to escape income and sales taxes. Wait till they experience NH property taxes though. Years ago a friend in financial distress offered to sell me their $50k cottage in NH at cost. It looked like a great deal until I realized it's property taxes were almost equal to that for my home in CT (which is a high property tax state).

What we are experiencing here in CT is basically a healthy market-moderate price growth, good demand but certainly no bubble/boom. One thing a lot of people don't realize is the banks are still sitting on a lot of REO properties-everywhere. Plus even one short sale in your comparables will kill your appraised value.

 

[OutHouse]

the housing market in Denver is red hot and prices are shooting up. very little inventory at the moment most houses will sell in 2 days with multiple offers. its a sellers market here.

i just listed to sell my rental yesterday.

 

[Dr. Detroit]

Silicon Valley passed insanity about 12-months ago -

$570/sq ft in not the most desirable neighborhood in San Jose.

https://www.redfin.com/CA/San-Jose/285-Cresta-Vista-Way-95119/home/1251956

If you want a house on the Peninsula add another $250- $500K at a minimum.

 

[SSSnail]

That's what you get when $500k "invested" will buy you a green card. It's creative money laundering invented by the feds.

In the case of silly-con valley, it's a combination of that, and stupidity. You have people that lucked into a job with facebook, etc... And all of a sudden they have a few mils to throw around, with no concept of money or even earned, and you have this problem.

 

[Imp]

Generation X and foreign investors are driving most of the housing demand right now.

What's going to sink the Canadian housing market is when all the Boomers start looking to downsize. Generation X will be firmly entrenched by then, so the market for those homes will be Millennials. However, since contract work has replaced a large percentage of full time jobs, it's very difficult for them to get mortgages. So I predict you'll see a glut of homes coming onto the market in the next ten years that won't sell. Or at least not quickly. High housing prices are already what's keeping young people renting or living in multi-generational homes.

Every major international bank and economic NGO has said Canada's housing prices are stupid overpriced and due for a correction. It's only the national banks and local economies that are in denial.

Word is now that a lot of money is being handed down from parents to buy houses.

http://business.financialpost.com/p...ome-becoming-the-next-parental-responsibility

“The worst case I’ve seen was a woman who came to me and said she helped her son with a $150,000 down payment and that got [her son and his wife] into a $600,000 home. They ran up a line of credit, because once you have a home you can get a line of credit. They couldn’t manage it and the parents bailed them out of that. I told her ‘if you don’t help your son get financially independent, he’ll be coming to you in his 40s.’ The line went silent and she said ‘he’s 43′.”

Given the financial literacy of the general public, my money's on the above being a lot more normal than one would think. West coast is obviously more affected by Asian money, but then I don't get why Calgary isn't as bad as Vancouver. If money is supposedly just being sent here for shelter, Calgary's just a 1 hour-ish flight further east on a ~13 hour flight. Weather is obviously shittier, but it's not like they're supposedly living there.

 

[Red Squirrel]

I consider myself lucky for getting my house and job when I did, I was pretty much right on the edge of the start of insanity. Here it's not so bad mind you, but trying to find a job here right now... good luck. There's the mines, and even then lot of those jobs are contract jobs, so you can't really get established when you don't know if you'll have a job in a year or two. It seems a lot of jobs that do come out now are contract or temp. That's useless, you can't live like that.

 

[inachu]

The low brow IQ reason for the prices shooting higher is:

 

[kt]

chinese beverly hills y'all

http://www.bloomberg.com/bw/article...ng-binge-transforms-california-suburb-arcadia

All the people who sold their homes in Arcadia have started to buying homes in my area now. They sell their Arcadia homes and buy a few larger homes in my area with the cash. They live in one and rent out the rest as income. Some were able to afford buying 4 homes in my area from the cash they make selling their single Arcadia home. It's crazy.

 

[zanejohnson]

just going up steadily in my area..

3 bed 2 bath ~300k

5-7 bed ~500-700k

And several larger /fancier homes going for 1-2m

 

[slightlyhuman]

220 in texas get you more vs a lot of places

I live in the sticks and prices are still dumb for the area/what most people make

Real talk. I just bought a 1900 sq ft house(3/2) built in 2006 for 180k. It appraised for 10k more. It even has a pretty big separate house in the backyard that has AC/heat.

I live 3 hours outside from Dallas, my SO is from Fort Worth and I couldn't believe the prices of houses around the TCU college campus area.

#locationlocationlocation

 

[RagingBITCH]

Depends on area. DFW - highest increase in home prices of anywhere in the U.S. Friend bought her house 3 years ago down the street from us for $450, just sold for $617. (Probably put in about $50K of work, so equity + increased prop value) Houses have 10+ offers on them in the first day alone in the $100-$500K range.

 

[K1052]

In SF my answer would have to be....yes on it's way to ludicrous speed. Cash foreign buyers and tech money forcing everything not priced over several million dollars to sell above list. Stuff goes under contract in hours or minutes.

Unless the flow of foreign money cuts off and there is a significant contraction in the tech sector I'm never buying here.

 

[Denly]

I live in an old neighborhood 40km north of Toronto, a sh!tty 1200sq ft house build in the 50s. Since I move in 8yrs ago it value went up 3x, if the trend continue it will be pushing 1million by next year. Newer 3000sq ft house across the road going for 2m +.

I am in process fixing my leaky basement then cash out. :biggrin:

In Toronto? A house that is barely standing will cost you a million.

 

[ImpulsE69]

I live in an old neighborhood 40km north of Toronto, a sh!tty 1200sq ft house build in the 50s. Since I move in 8yrs ago it value went up 3x, if the trend continue it will be pushing 1million by next year. Newer 3000sq ft house across the road going for 2m +.

I am in process fixing my leaky basement then cash out. :biggrin:

In Toronto? A house that is barely standing will cost you a million.

But that is like pesos right?

 

[JSt0rm]

LA has only gone up like 2% this last year. Either its the top of the hill or things arent totally bubbly.

 

[ViviTheMage]

Just about to sell my 70's split 3/2 1600 square foot for 29k more then I bought it for 2 years ago ... crazy, this was in the burbs. Looking at a 4/3 2500 square foot for under 300k is easily had, outside in the burbs of course, just going to the south burbs now, closer to work.

 

[maddogchen]

Anyone think this bubble will burst when the interest rates rise?

 

[JSt0rm]

Anyone think this bubble will burst when the interest rates rise?

It will hurt. It has too. But hopefully they ease into it.

 

[SSSnail]

Stupid people and their maths, all they see is "low interest rates" but many don't know how to calculate the differences between that few percent, versus the added few hundred thousand dollars to the principal. Sometimes I wonder if I should jump in this cesspool, because even based on the greater fool theory, apparently there are a lot of fools out there, still.

 

[thomsbrain]

I wouldn't pay big money to live in a fly-over state, because land is cheap, there is room to build, and there are few inherent incentives to the area. But in a metro area like Silicon Valley, consider the situation:

- There's no more land.
- The population is continuing to rise.
- The job market continues to increase.
- There are insufficient candidates for high-paid jobs.
- As traffic gets worse, long commutes to rural areas are less attractive.
- It's still very hard to get home financing compared to the bubble.
- Most homes are being purchased with cash. Rates are irrelevant.
- There are arts, culture, scenery, and good weather. It's a nice place to live.

So please explain to me how this is a bubble. What would make it pop? Interest rates rise? No one is buying with financing, so it doesn't matter. Job market goes down? No real change in employment percentages because there aren't enough candidates anyway. Opportunity to telecommute? Go ahead, raise your brown-skinned kid in South Dakota and see how that goes.

No, this isn't a bubble. This is socio-economic stratification and you're either on the bus or off it, but it doesn't have any reason to slow down.

Sure, there are pockets of bubbling. San Francisco as a city is inflated and when the techno-weenies get tired of the urine smell, they will leave it back to the arts and finance people. But they're just going to move back down to Mountain View, not out of the area entirely.

 

[JSt0rm]

Stupid people and their maths, all they see is "low interest rates" but many don't know how to calculate the differences between that few percent, versus the added few hundred thousand dollars to the principal. Sometimes I wonder if I should jump in this cesspool, because even based on the greater fool theory, apparently there are a lot of fools out there, still.

If all the properties are selling for x and you want to buy what can you do? With my place it will not produce 250k in extra money for me but in 2006 it sold for 100k more then I paid. I feel kind of comfortable in that.

 

[dullard]

Depends on area. DFW - highest increase in home prices of anywhere in the U.S.

Just curious as to where you got that data.

Metropolitan area median price increases, year-over-year, right-most column:
http://www.realtor.org/sites/defaul...e-prices-q1-2015-single-family-2015-05-11.pdf

DFW prices are growing a lot at 10.1%/year. But other places are growing faster. For example:
Charlotte: 17.7%/year
Denver: 17.2%/year
Reno: 17.6%/year
Other metropolitan areas had even higher price increases, but (A) started at such a low price that percent increases are not very meaningful or (B) are relatively unknown so why post about them on ATOT.

 

[SSSnail]

I wouldn't pay big money to live in a fly-over state, because land is cheap, there is room to build, and there are few inherent incentives to the area. But in a metro area like Silicon Valley, consider the situation:

- There's no more land.
- The population is continuing to rise.
- The job market continues to increase.
- There are insufficient candidates for high-paid jobs.
- As traffic gets worse, long commutes to rural areas are less attractive.
- It's still very hard to get home financing compared to the bubble.
- Most homes are being purchased with cash. Rates are irrelevant.
- There are arts, culture, scenery, and good weather. It's a nice place to live.

So please explain to me how this is a bubble. What would make it pop? Interest rates rise? No one is buying with financing, so it doesn't matter. Job market goes down? No real change in employment percentages because there aren't enough candidates anyway. Opportunity to telecommute? Go ahead, raise your brown-skinned kid in South Dakota and see how that goes.

No, this isn't a bubble. This is socio-economic stratification and you're either on the bus or off it, but it doesn't have any reason to slow down.

Sure, there are pockets of bubbling. San Francisco as a city is inflated and when the techno-weenies get tired of the urine smell, they will leave it back to the arts and finance people. But they're just going to move back down to Mountain View, not out of the area entirely.

I don't know about you, but for someone on typical HR employee role that got a few mils through luck and bought a house with that cash, the property tax will catch up to them eventually. I see a lot of those type around.

 

[brianmanahan]

But that is like pesos right?

si, muchos de pesos

 

[Grooveriding]

But that is like pesos right?

There are only a couple cities in the US that are more expensive than Toronto. I actually believe Vancouver is still the most expensive city in all of North America to live in, then a region in California, then here. This is accounting for the exchange rate.

His comment was not an exaggeration, a detached house starts at a million here. Just a few minutes up the street from where we live you can't get a house for less than 3 million. Demand is high, it's a big city with a lot of money and there is nothing new that can be built here except for condos where there used to be parking lots. It's scary how value keeps going up. Everyone is nervous our homes' value could suddenly crash on us, but we don't have any of the financial issues the US does and the financial schemes that cratered the economy/real estate market there are not legal here. Hopefully we won't find ourselves tits up one day.

Our home has gone up about 80K in value since we bought it 3 years ago. My parents home in the north end (suburbs) is worth over five times more than they paid for it 20 years ago. You put your home up for sale here and buyers fight over it like vultures.