reading about the real estate bubble
- Thread starter OS
- Start date
Meh...this is why I own income property rather than simply speculating on property whose value might increase.
My rental income healthily outpaces my depreciation and other costs so that's covered. Any amount I can get back through resale is just icing on the cake...
My rental income healthily outpaces my depreciation and other costs so that's covered. Any amount I can get back through resale is just icing on the cake...
Triumph
Lifer
- Oct 9, 1999
- 15,031
- 13
- 81
That's my plan for the future. If I can just get out of this area and into a place where I can actually afford to buy rental properties on top of my own. The price of admission around here for that type of investment is just too high.
My dad has 4 rental properties (2 duplexes), and those are the main reason he could afford to put 6 kids through college. I plan on doing the same. It's a different kind of investment, where if you would rather work on a house and spend time fixing it up rather than watching the business news and calling your stock broker every day. Neither one is necessarily easy, just better suited for different styles of investers.
LOL. If you've been sitting on it for years, you should have bought a few years ago and sold for profit now. Dumbass.
Seriously. I have 2 friends who live at home with mommy and daddy and have both had a good amount of money for a down payment on a house for 5 or 6 years now. They keep saying house prices are too high, they can't afford it.
Bull - they just don't want to actually support themselves, and give up some of the frivilous things they buy now to actually gain some independence.
Well, here they are now - prices are much higher, and they refuse to make a move.
I bought my first house 4 years ago and was deathly afraid the market had topped off. Sold 3 years later and made $80K or so on the deal.
Personally, I wish I would have bought years ago when I first started renting, convincing myself it wasn't a good time to buy - I'd have a $500 mortgage payment right now on a great house!
Bull - they just don't want to actually support themselves, and give up some of the frivilous things they buy now to actually gain some independence.
Well, here they are now - prices are much higher, and they refuse to make a move.
I bought my first house 4 years ago and was deathly afraid the market had topped off. Sold 3 years later and made $80K or so on the deal.
Personally, I wish I would have bought years ago when I first started renting, convincing myself it wasn't a good time to buy - I'd have a $500 mortgage payment right now on a great house!
StageLeft
No Lifer
- Sep 29, 2000
- 70,150
- 3
- 0
Something to be said for that. Long term, just like the stock market, housing prices will rise. If you are thinking you'll live in your house for two years it's a bit more risky, but if you are thinking 10 it's bloody unlikely your house will not appreciate in 10 years, even if a bubble bursts.
Now, if you're in a market like some of them in Florida or CA good luck to you, but throughout the rest of the country it's pretty safe to buy a home now. Don't stretch yourself, and then if your house dips a couple of percent it's no biggy.
my sister doesn't make enough, she's been saving up for years and is waiting to buy a house with me after im done with college
Demon-Xanth
Lifer
- Feb 15, 2000
- 20,551
- 2
- 81
Put it this way, I have a friend who is a realtor who sends me listings every few days. The bubble isn't close to popping in my area.
This guy is only talking about the bay area. Nationwide there is no bubble if you look at the averages. Parts of California, Miami probably. NYC is a maybe.
If you do the math and adjust for interest rates the prices aren't really that high.
kranky
Elite Member
- Oct 9, 1999
- 21,005
- 116
- 106
While a bubble is clearly a regional/local issue, there are some serious warning signs for the overheated markets out west.
When the average home sells for 10 times the average salary, something is going to change. And people taking interest-only mortgages... they are crazy. That's betting your financial security on low interest rates, and that's not real smart.
When the average home sells for 10 times the average salary, something is going to change. And people taking interest-only mortgages... they are crazy. That's betting your financial security on low interest rates, and that's not real smart.
It's about time that the bubble bursts. Fortunately, there hasn't been much of a bubble locally. Real estate has remained affordable. Nor is there a huge appreciation in value. Most property values have been outpacing inflation, but not by much... certainly not doubling in value in 5 years or less as some have reported in the bigger cities. Where I live now, prices have actually been going down (which is nice) - I'm thinking about buying another house in my new neighborhood as investment property.
alkemyst
No Lifer
- Feb 13, 2001
- 83,967
- 18
- 81
There isn't a 'bubble' so much in my opinion for the educated.
When you have someone selling a property for $150k, then immediately someone flipping it for $250k and another coming it to try and get $350k...that is where you have the danger, the last guy standing. Especially when you are talking a 5-10 year old home compared to an equally sized new home that's probably now in a gated/guarded community with a warranty and better amendities.....just doesn't make sense other than avoiding the 12-18months houses here take to build.
I do see prices adjusting though, some areas will be really hit. The guys that bought in 2+ years ago should be safe, maybe the last year buyers, but those just coming on need to buy as low as possible as I do see a definitely blip down.
That said I don't think anyone is losing their as$ that's living in the homes or renting them. Those that are planning on flips though may be holding a large mortgage.
When you have someone selling a property for $150k, then immediately someone flipping it for $250k and another coming it to try and get $350k...that is where you have the danger, the last guy standing. Especially when you are talking a 5-10 year old home compared to an equally sized new home that's probably now in a gated/guarded community with a warranty and better amendities.....just doesn't make sense other than avoiding the 12-18months houses here take to build.
I do see prices adjusting though, some areas will be really hit. The guys that bought in 2+ years ago should be safe, maybe the last year buyers, but those just coming on need to buy as low as possible as I do see a definitely blip down.
That said I don't think anyone is losing their as$ that's living in the homes or renting them. Those that are planning on flips though may be holding a large mortgage.
JulesMaximus
No Lifer
- Jul 3, 2003
- 74,448
- 827
- 126
Why? Did you buy a house within the last year with 100% financing and an adjustable rate mortgage?
Demon-Xanth
Lifer
- Feb 15, 2000
- 20,551
- 2
- 81
Entry level houses here just jumped from $200-250k to $340-380k in two years. We're 120 miles east of the area where the bubble supposedly popped.
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