when it comes to real

[ceagle]

THIS is more 'real' in real estate than the charade of what's been happening around some listings the last few years. Snap it up! Probably could go for 65k (from comps in the area). This might be good too, but heh... "1 car garage in basement"? lol ^v^

The point is, you don't have to believe the smoke screens of real estate right now... that's a large portion of the reason we got into this housing mess! One agent actually told me, when I looked at a hovel she was selling for $600k, and I had remarked that "don't ya think it's a bit high?", she said "the market is adjusting down, and no, because it's hit bottom"). The place couldn't have been worth more than 150k or so. They'll stare you in the face and lie, causing their clients to wait and wait forever until their house sells (or go into default first), IF it sells.. all the while financially raping buyers left and right. >:|

So just look around a bit, and remember to use REAL scales and historical graphs. One wise ole fart tole me that over all his years, he's observed that housing goes up about 5 or 6 % a year, and that is the fair projection. If it's more, you're getting fleeced... if it's less, you're getting a deal. Don't get stuck in a property where you've artificially set the tax rate too high with an inflated purchase price.

Here are some examples showing a few charts of insanity..

One can clearly see that something WACKY has been going on since around 2001, and REALLY NUTS from 2003 to 2006. The trend on these graphs during those periods should be disregarded. It's practically the entire reason we're in a housing mess.
When a person (for instance) pays Highway Robbery Prices for something, it sets up a house of cards which will eventually fall somehow. If enough people fall for it, the collapse extends much further (as it has) into the overall market/economy. I took both macro and micro economics, so I can tell ya, this is REAL. Any amount of Economics is a blend of speculation and fact though, so opinions may differ from circle to circle, but the real effects do not vary far from where the furthest deductions meet in the middle ground.

This is a graph of how things worked out for my neighbor...

As ya can see, they did rather well :} They are good folks, and I'm glad for them, ...they sold about halfway up the insanity chart. At that point, noone was really sure what was going on, and as you can also see on the chart, we all actually lost value in the 1990s, more than shown because the chart doesn't go back that far.
They had a good profit, and the buyers did not get fleeced as badly as if they had bought at the top of the line graph. They probably paid a bit more than they should have, but in a few years, it will be worth what they paid, so it's not too bad of damage, and in this case, at least a small bit of luck prevailed... the buyers are happy and not in dire straits, and the sellers did alright without having to bear a huge burden of guilt.

BUT... I put this example here to show that a house worth 112k in 1990, is NOT worth 423k just 15 years later. Nor (as in the top example) is a house valued at $122 in 1995 worth $681k just a dozen years later. And it's Phony if you are told it is.

So my friends, just do a bit of research, and like they say in Missouri, be skeptical when spending THAT much money, and have them "show you" if ever claims are made of exorbitant exponential worth.
We can fix this market :> It's a bit like the 1960s and 1970s though... we have to fuse and be a movement of the People, not a passive population that flows willingly with the schemes of overscaling profiteers.

Comments

[orv.livejournal.com]

One of the clearest signs the market had gotten out of control was the ridiculous multiplier between the median home price and the median income. Incomes have been almost flat for the last six or seven years in much of the country. In some parts of California the median home price went from four times median income to sixteen times median income. That's just not sustainable. It was a house of cards built on easy credit.

A lot of areas saw overbuilding, as well, because high prices enticed more speculators into the market. I don't think this is going to be a downturn with a V-shaped bottom; I think housing prices are going to decline for a while longer, then stay flat until the excess inventory is used up.

[mortonfox.livejournal.com]

$18K house and only a 2-hour drive from Anthrocon. Of course, that may not be the best house in that area but the point is there are bargains in out of the way places that the housing boom just left behind.

[pawpad.livejournal.com]

unfortunately my husband and I believed those real estate agents and we bought at the very peak of the market. We're screwed. :(

(Reply to this)

birdy brains are pretty darn good, actually! ;D

[c-eagle.livejournal.com]

Wow.. thank you!! I forgot to include that! *hugs*

It could even be made an entire topic unto itself!... In 1975, people were making about $3/hr minimum. In 1980, about $4. This was a correcting effect (and some legislation) from a lag in growth in that area from the previous several years.
But by 2000, it's only about $7, and has stagnated.

This compared to other prices going through the roof in many realms. Some have gone down (like tech items) which has softened the blow of other product inflation, thankfully, or it'd be even worse.

1980 - wage $4, meal $1, rent $150
2005 - wage $6, meal $4, rent $600

i.e. Costs just about quadrupling, while income only up 50% ... isn't that 800% relative inflation over 25 years? 8|

PLUS the fact that we have other relatively standard expenses now... cable, cel phones, internet, housing association fees, higher proportional costs of health insurance... one of the scariest trends is that MORE people have to live in smaller spaces just to pay for the rising chunk of expense from the stagnating income levels! :/

[c-eagle.livejournal.com]

*nodnod!* My dad has pointed out that there are lots of good values all around his area, many for around $40k for a good sized place!

[c-eagle.livejournal.com]

oh fluffy... ;_; .. *winglepatterhugs gently*... Well, I hope you'll be able to re-finance, with all the programs that are in the works coming up to help people soon...
My brother has done it a couple times, and it really has been beneficial for them.. have a look into it when ya can..
If it's any consolation, I sold my house around 2000-2001, right before the market took off, so I just about only broke even (nothing left in the bank from the sale).
I regret not having a bit of money as a nest egg from it, but in the long run I comfort myself by knowing that I sold to a struggling young couple with a child, who needed it more than I did.. and so they now have the equity that can help them get a leg up in life.

[pawpad.livejournal.com]

Yeah we tried to refinance, but its impossible because our loan is now WAYYYY more than the house is worth, so no bank would be willing to.

Meh, its not the end of the world.. there's more to life than money anyway. We'll just have to work a lot to keep up payments and we can't really expect to break even anytime soon.

I'm sorry you had bad timing selling your place, but its really nice that you were able to help out that young couple. :) *hugs*

[aldi.livejournal.com]

One of the major cause of my depression is the fact that housing in my neighborhood has gone up 225% in the last 7 years. My dream of owning my own bungalow is pretty much destroyed.

[expandranon.livejournal.com]

I did a little quick research, and DuBois even seems like a nice place to live. It's a bit rural for my tastes, and lacks high-paying work, but you can pay off a house like that even making only $5/hour.

Thanks for the neat and edumacational entry. :)

Re: birdy brains are pretty darn good, actually! ;D

[orv.livejournal.com]

...MORE people have to live in smaller spaces just to pay for the rising chunk of expense from the stagnating income levels!

And yet the social pressure has been to live in bigger spaces. I think that's changing, though. Lately the hottest real estate developments here aren't the subdivisions of huge McMansions, they're the mixed housing/retail developments. People like the idea of being within walking distance of stores and restaurants.

[tilton.livejournal.com]

Prescient timing! My best friend just put an offer down on a $500,000 condo :( I've given up trying to convince him it's a terrible idea, but... well, he won't listen to me. He thinks it'll be up to $600,000 again in three or four years.

For his sake, I hope he's not hurt too much... but for my sake, I hope the prices come back down to earth. Sigh. Sad raccoon :(

[tilton.livejournal.com]

I know exactly what you mean. It's been a source of my depression for a long time now. I'm priced out of the market, even though I have a very well paying, steady career :/ I'm 34, I shouldn't have to wait so long to buy my first house.

[xianjaguar.livejournal.com]

I know how you BOTH feel. I lived in SoCal for 33 years, and I watched the housing rates soar ridiculously far out of my income range. I'm 37 right now and STILL don't have a house (although I'm out of SoCal, thank God), and I despair of ever being able to buy one.

[c-eagle.livejournal.com]

Ah yesh!... Our town is doing a lotta that too... building mixed use stuff close to town. It looks pretty nice!
Only quandary with new construction though is that it does cost a bit more, for the construction itself, and for the overall purchase (relative to older/existing construction), and it's unclear that ya get all that much more. I have friends who have bought places built in the last 20 years, and the nails regularly peel out from the walls, or the sink and tub basins lose their coatings prematurely, etc...
As a concept, the close-to-stuff housing is neat tho! *waggles* ... :}

[c-eagle.livejournal.com]

Oooo.. maybe you could even make a break for it and get yer game on again fast!

[c-eagle.livejournal.com]

Well, if this market keeps going south, you might actually be able to in a couple yeerz.... ah hope!

[orv.livejournal.com]

Maybe you can get a little schadenfreude out of the fact that prices in SoCal are now falling like rocks. Rocks with cartoon anvils tied to them. It was pure bubble economics, much like tech stocks.

[c-eagle.livejournal.com]

Here's hoping that when you get re-settled, you'll be on your way to positive avenues and answers soon! ^v^

[orv.livejournal.com]

Yeah, there's no doubt that they don't build 'em like they used to.

[c-eagle.livejournal.com]

*eeps n hugs* ... Up where you are, it's pretty tough, yeah... :/
Though, with this resolution and study, I'm launching into a program of assertion to press the market back where it belongs to effectively help the economy (and is why I'm encouraging others to do so as well). I've researched about 20 properties around here, and I'm attempting to make offers along sensible projections (vs. the circus of contemptible ones), and see if there will be a taker(s)... or if there *might* still be some pockets of resistance to giving fairness back to the people.
I initiated the first offer earlier today, and so far it sounds like the representative has a pretty good footing on things... but it depends on the reception of the bank holding the note... and *that* will depend on some balance between their number crunching and their gut feelings, I guess. Will keep ya posted... and hopefully this will bring more encouragement to everyone, no matter how it plays out! ^v^

[c-eagle.livejournal.com]

with cartoon anvils... lol!!
Maybe even Wile E. could afford better than ACME stuff soon, and finally catch that Roadrunner!

[expandranon.livejournal.com]

That might be nice, but I'm tethered to a mortgage here, already. I'd have to sell this place to get out and get another. Since I'm in MI, I'm stuck here forever.

Re: birdy brains are pretty darn good, actually! ;D

[telbert.livejournal.com]

You're right, C! People have extra "standard" expenses that they didn't have before. The other change is that unlike their predecessors, many of the current potential homebuyers of today are under the yoke of large student loans, which further limits their ability to safely get a home loan. It's hard to swallow the idea or borrowing $100,000 for a house when you already owe $40,000 to $80,000 in student loans, plus another $15,000 to $20,000 for a vehicle.

To buy a house or condo, I'm thinking of saving up a large down payment (50%) in order to minimize the amount of money I have to borrow. This way, whatever the market does, the chances of my owing more than the property is worth are greatly reduced. It may take years to save up the down payment, but the security is worth the wait.

Re: birdy brains are pretty darn good, actually! ;D

[aldi.livejournal.com]

I'm thinking of saving up a large down payment (50%) in order to minimize the amount of money I have to borrow. This way, whatever the market does, the chances of my owing more than the property is worth are greatly reduced. It may take years to save up the down payment, but the security is worth the wait.

I used to think that way too, when I had 40K in the bank and the bungalow of my dreams was 100K. Now I'm down to 14K and the same house is 225K. I'll never forgive myself for being too careful. :(

[aldi.livejournal.com]

The market is different up here in Quebec. But thanks for the good wishes. *hugs tight*

[c-eagle.livejournal.com]

Yeah... this first jaunt I'm taking into the field.. well, turns out the property is going to an auction on Sunday. I'll have to give the bank(s) credit for wanting to up their chances of higher numbers by putting it before a bunch more people in a setting where a fervor could brew. I'm toying with going to it, just to get a feel for it. I've been to a few small auctions, but never a real estate one.

[cabcat.livejournal.com]

Here you just put an offer in and its up to the seller wether or not they take it. Housing prices here are very high mainly as a lot of people from interstate are moving here and there's a bit of a shortage.

What I don't understand is why we don't have a property pricing system like several countries where the land price and house price are exclusive to each other. The house price devalues over time as it gets older and the land value is as well the market dictates, this allows people to buy cheaper older homes or knock them down and build new ones rather than spending a fortune on a shack that shoul've been condemed.

I say go to the auction...though that was probably a month ago XD