::Poll:: How fvcked are you going to be when the real estate bubble bursts?

[2cpuminimum]

If your electric bill is that high, consider switching to compact flourescent light bulbs, energy efficient appliences, a mobile cpu, and a higher SEER ac unit.
Real estate prices are going to shoot up in areas with good public transportation (ie. chicago, places with trains) and drop in regions with high commute times and limited fresh water supplies.

 

[DJFuji]

Its likely not the light bulbs and appliances but the 21" monitors, servers, workstations, and TVs i have running. =) Gotta cut down though because I just bought a place a few weeks ago and the mortgage is killing me. Damn SoCal real estate prices.

Originally posted by: rahvin
This real estate bubble you speak of, can you tell me when some more land was created such that the supply/demand curve changed?

lol that's going in the sig...


When you think about it, though, the "bubble" could begin to deflate (as opposed to burst) in areas where demand may not hold up under times of high interest rates. Imagine if we see 15-20% rates. It will push demand down enough to cause a decline in prices in some areas. Granted, santa monica and manhattan will still be far from affordable, but other areas (readutside of CA and NY) may not have the ridiculous demand to stabilize prices. I doubt there will be a 50% drop, but if that does happen (as it did in the 70s i think), i won't be complaining as i take these properties off people's hands.

 

[gigapet]

they are not making any more land but we are still making more people.

On a long timeline I don think real estate would ever be a bad investment.

 

[cavemanmoron]

Originally posted by: djheater
There's been a lot of talk lately about the 'real estate bubble' comparing in to the dot com nineties. So if it were to 'burst' would you be screwed? Nobody is going to buy your house at a profit for you if they have to pay 14% interest on MORE than what you payed.

Topic Title: :oll:: How fvcked are you going to be when the real estate bubble bursts?
Topic Summary: I'd like to play on your fears, just like the media.

I bought my house in 1999.
I am fine.

 

[nakedfrog]

Pretty sure there's no bubble here. I bought for $9k under the appraised value anyway. If I spend about $6-10k on improvements, it should be able to sell for at least $12k more than I spent on it (comparing with other houses in the area).

 

[Blastomyces]

Originally posted by: dwell
I paid $415k in 10/2003 now it's worth $600+. Manhattan real estate rocks.

Paid 430K for my place in 2001, sold last month for 750K (San Francisco). Took the profits along with the equity and paid cash for a new place in Sacramento. Ill be OK!

 

[DJFuji]

I think for those of us on a 30 year fixed with todays interest rates (<6%) who dont plan to sell anytime soon, the bubble wont really make much of a difference-- whether it happens or doesnt.

 

[PandaBear]

Like others said, San Francisco Bay Area called $800k or less houses low price, that is a less than 1000 sq ft house that have a small garage and probably 2-3 bedroom, 50 years or older, in a average to bad neighborhood. High priced houses like the one in saratoga and mountain view are 1 million to 1.4 million. Average income is 50k to 120k per year depends on what you do.

Maybe you live in 200k per house area, but most bay area residents aren't. People buy with no down and interest only, for say 5k - 6k per month morgage. They can rent for 2.3k per month on the same kind of house.

Now you tell me that it is not a bubble!


I have 80k cash saved up, my gf has 70k cash saved up, but we can't afford a 800k home. To hell with buying right now, I am waiting for the dummies who buy for investment and the stir fryers (chinese slang for people who make a living off buying and selling kind of investment) to commit suicide and pickup their belongings for cheap.

 

[DJFuji]

dont know the market of san fran, but that doesnt necessarily indicate a bubble in the sense of artificially high prices. To me, a "bubble" is when prices artificially exceed what would be normal under current market conditions and demand. San Francisco has always been expensive and the demand and area is such that housing naturally follows that trend.

 

[PandaBear]

True, always been high, but when lawyers (down stair neighbor who moved to oregon recently) can't afford a house, and when people are paying 70% of a combined 120k per year income to make the minimum payment, or when they buy a 3 bedroom house and rent out 2 bedrooms to keep up with the morgage (my friend)? That is artificially high.

I knew a friend working as a risk analysist in Well's Fargo's home morgage division, she told me that the risk is very high right now and suggest the bank to do less "risky loans", because when the market crash, the bad loans can bring down the bank to bankrupcy. Whether the bank listen to her is not sure, but they are cutting back from the more risky investors already.

Remember, it takes 6 years for Japan's RE market to crash after the economy crash, it takes a long time, but you can never expect any exponential growth indefinitely.