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American House Prices

DragonflyProperties

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Attached is the link to an Ecomomist.com article on the state of the US housing market. It begins with the famous last words of Alan Greenspan on the American housing market in 2005, "A DESTABILISING contraction in nationwide house prices does not seem the most probable outcome...nominal house prices in the aggregate have rarely fallen and certainly not by very much."

http://www.economist.com/displaystory.cfm?story_id=11453745

Keith
 

Thomas Beyer

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QUOTE (DragonflyProperties @ May 29 2008, 04:07 PM) Attached is the link to an Ecomomist.com article on the state of the US housing market. It begins with the famous last words of Alan Greenspan on the American housing market in 2005, "A DESTABILISING contraction in nationwide house prices does not seem the most probable outcome...nominal house prices in the aggregate have rarely fallen and certainly not by very much."

http://www.economist.com/displaystory.cfm?story_id=11453745

Keith
not all US sub-markets are the same !

some markets have barely moved down (say WA, OR, most of TX, CO ..) i.e. in-migration states that never had a huge price escalation . over 60% of all foreclosures are contained in 5 urban markets (Washington, San Diego, LA, Chicago, Miami .. I believe ..) ..

so yes, some markets are devastated .. mainly because they rose so fast like Las Vegas, San Diego, LA, Miami .. so of course a 300% increase in 8 years followed by a 50% drop sounds devastating .. but it would still be 100% higher than 8 years ago !!! They regress to the mean of inflationary upside (on average) ! Most of the price correction is known .. and as such priced into the price of bank shares or home builders for example .. perhaps it is time now while the news is still bad to BUY: Phoenix real estate, bank shares, shares of homebuilders, apartment buildings, rental pooled condos, foreclosed condos and fancy houses in FL ... ???
 

housingrental

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Excellent post - Banks shares have been beaten and nows the time to jump in


QUOTE (thomasbeyer2000 @ May 29 2008, 06:30 PM) not all US sub-markets are the same !

some markets have barely moved down (say WA, OR, most of TX, CO ..) i.e. in-migration states that never had a huge price escalation . over 60% of all foreclosures are contained in 5 urban markets (Washington, San Diego, LA, Chicago, Miami .. I believe ..) ..

so yes, some markets are devastated .. mainly because they rose so fast like Las Vegas, San Diego, LA, Miami .. so of course a 300% increase in 8 years followed by a 50% drop sounds devastating .. but it would still be 100% higher than 8 years ago !!! They regress to the mean of inflationary upside (on average) ! Most of the price correction is known .. and as such priced into the price of bank shares or home builders for example .. perhaps it is time now while the news is still bad to BUY: Phoenix real estate, bank shares, shares of homebuilders, apartment buildings, rental pooled condos, foreclosed condos and fancy houses in FL ... ???
 

DonCampbell

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As with any market, the Goldmine Scorecard is the key. Finding regions where in-migration is strong, average incomes are increasing transportation improvements are providing access, taxes are decreasing etc etc. No matter what the overall economy is doing, you can find regions like this.

However, the sad part is that people don`t remember to do this homework and they go and buy (speculate) based on the fact that the property seems cheap and they hope it will go up.

In the meantime, who will rent it, what type of financing can I get. You know, all of the questions that a real "Investor" asks are ignored by speculators.

Ask the tough questions no matter where you are investing.
 

wealthyboomer

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QUOTE (thomasbeyer2000 @ May 29 2008, 04:30 PM) not all US sub-markets are the same !
perhaps it is time now while the news is still bad to BUY: Phoenix real estate,
Phoenix had one of the largest booms in the housing markets in recent years, it is in the midst of one of the biggest corrections.
Housing-related employment is falling fast. Because i
t makes up more than 15 percent of employment in the Phoenix area, the impact is extreme.

Phoenix was pretty flat (in job growth) during 2007 and has been contracting a little bit since the third quarter.
Consumers now face higher gasoline prices, which further reduces their other spending. That, in turn, reduces sales-tax revenues for state and local governments and causes them to slash budgets. So much for funding the crumbling infastructure, as well as paying off their DEBT!

Where are the individual state governments, and Federal government going to get all the money needed to pay trillions of dollars of DEBT, and SERVICE current crumbling infastructure?
 

Thomas Beyer

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QUOTE (wealthyboomer @ May 30 2008, 04:17 PM) Phoenix had one of the largest booms in the housing markets in recent years, it is in the midst of one of the biggest corrections.Housing-related employment is falling fast. Because it makes up more than 15 percent of employment in the Phoenix area, the impact is extreme.
Phoenix was pretty flat (in job growth) during 2007 and has been contracting a little bit since the third quarter.
Consumers now face higher gasoline prices, which further reduces their other spending. That, in turn, reduces sales-tax revenues for state and local governments and causes them to slash budgets. So much for funding the crumbling infastructure, as well as paying off their DEBT!

Where are the individual state governments, and Federal government going to get all the money needed to pay trillions of dollars of DEBT, and SERVICE current crumbling infastructure?


well , depends on price .. if you buy a condo @ 300K .. maybe this is too much .. but if you buy a brand new middle class home @ 120K in a decent area BELOW cost .. this is as low as it will go !!

The US "depression" is not as severe as the media depicts it .. and not everywhere is doom and gloom ! look for job growth, in-migration, transportation improvements .. compensating for US dollar devaluation the prices in the US in many markets is LOW LOW LOW compared to many world markets !!! yes, maybe more months of slight delcine .. but then upside most likely in MANY US sub-markets ..
 

wealthyboomer

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QUOTE (thomasbeyer2000 @ Jun 1 2008, 10:45 AM) look for job growth, in-migration, transportation improvements ..Those things are NOT happening in Arizona.
Is Arizona a better place to live today than it was 20 years ago?
Are we headed in the right direction?


Brown:
We`re not headed in the right direction because we`ve not done what`s required to keep up with the same level of service and infrastructure that we had 20 years ago.

http://tinyurl.com/6zew7r
 

MoneyMan

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Never buy on the way down...buy on the way up. Real estate cycles are long...plenty of time to analyze and time your entry properly.
 

Thomas Beyer

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QUOTE (wealthyboomer @ Jun 1 2008, 04:43 PM) Those things are NOT happening in Arizona.

I am not so sure .. people moving from CA and Mexico .. new highways .. @ the right price AZ is a GOOD PLACE to invest !
 

wealthyboomer

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QUOTE (thomasbeyer2000 @ Jun 16 2008, 10:11 AM) I am not so sure .. people moving from CA and Mexico .. new highways .. @ the right price AZ is a GOOD PLACE to invest !
Source?
 

wealthyboomer

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10 markets set for steep losses
The worst isn`t over for Miami, Phoenix, and hard hit areas of California, which are forecast to see big price drops in the next 12 months, according to Money Magazine.

http://tinyurl.com/5bmw6s
 

Thomas Beyer

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QUOTE (wealthyboomer @ Jul 1 2008, 04:52 PM) 10 markets set for steep losses
The worst isn`t over for Miami, Phoenix, and hard hit areas of California, which are forecast to see big price drops in the next 12 months, according to Money Magazine.

http://tinyurl.com/5bmw6s

right .. prices went up from $250,000 to well over $1,000,000 in a few short years .. and assuming inflationary upside they might be worth $400,000 today .. so if they drop 30% from $1M to $700,000 there is still more drops to come !

However, not in all areas and not all price ranges .. states with in-migration or a strong economy (like GA, TX, WA, OR, NM, AZ ..) will do better than ex-migration states like CA or OK !

Of the top 10 growth markets in the US, i.e. cities with job growth, 4 are in Texas !

So yes, they are falling in some markets but are actually starting to increase in others ! Look deep !
 

wealthyboomer

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QUOTE (invst4profit @ May 31 2008, 10:08 AM) Where they always do the remaining working middle class,
The producing economy of people who work for a living simply can no longer generate enough purchasing power for people either to pay their debts, taxes, or allow them to purchase what is being sold in the marketplace. In turn it is the debt burden and the loss of societal purchasing power that are crashing the stock market. Thus the collapse of the financial economy has started to destroy the producing economy as well.
 
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