[ex-Texan]

'Nuff said by a guy who appears to know what he is talking about. There is a train at the end of the tunnel. And it is speeding your way Mr. Speculator. I'm planning on watching the slaughter from the sidelines. Read More About Bubbles?

[rmlew]

Actually, 700,000 for an upper east side 1 bedroom Condo in NYC is not unreasonable.
(I plan to get a junior 4, convert to a one bedroom and rent one bedroom out to pay for the maintenance and taxes.)
Of course, New York City is quite different from the rest of the country.

[Nateman]

Ug buy ulgy houses. Ug bite off more than he can chew! Poor Ug.

[Porterville]

I'm about to make 100,000 dollars... how about you?

[Texasforever]

Gee I have a 3200 sq ft. 5 bedroom house in Houston that sounds like it would be worth a million plus in New York or Las Vegas. Let's say I sold it to a New Yorker for 500 grand and he had the house cut into modules and moved by truck. I wonder how much he would have to pay?

[Porterville]

If you do not plan on living in a house for more than 5 years, why buy a 30 year fixed?

If you buy a 30 year fixed on a 300,000 dollar loan for 6% you would pay 1800 per month. The same house would fetch a rent for 1400 per month. For 400 dollars more you can own your own home.... what makes sense?????

Of course we've been over this time and again. There are localized bubbles. Buy smart, location location location.

[JasonC]

The speculators aren't the ones who are mad. It isn't their money, what do they care? If prices go up, they win. If prices go down, the bank loses. Just hand them their collateral and walk away. The ones who own the downsides are the ones holding the mortgages, not the ones with razor thin equity. Every loan with collateral is an embedded "put" option, and bankers are writing them hand over fist.

[Finalapproach29er]

This is reason # 8 why Illegals are allowed to pour in here,

Most in the housing sector benefit.

Naked self-interest/greed is changing America,and putting her at risk.

[irishjuggler]

As the WSJ noted the other day, the game must be just about over when A&E has a new show called "Flip This House" and Discovery has a new show called "Flip That House."

[atlanta67]

while there are good points here, to say that speculators are responsible for ALL new housing starts is ridiculous

[machogirl]

the investors (around 40% from california) have ruined it for the rest of us trying to become 1st time home buyers. The average housing price in Chandler, Az, which used to be affordable, has gone up 43% in one year, making it darn near immpossible for a mom with 4 kids (dad is having a mid-life crisis and received the home, because the judge "wanted" him to have it), to buy a home. I can't do it, so, I have to stay in the same neighborhood, for the kids or the judge will (I'm a stay at home mom for 18 years), give primary custody to him, the houses have gone from very affordable to outrageous. I will never be able to own my own home again, in this neighborhood (same schools-mandatory for myself and the kids), or even own my own home without moving into a not-nice area, not suitable for children, or way out into another county, which I can not or won't do because of my kids' schools they attend. Even those houses in the counties just outside Phoenix Metro, are now becoming unaffordable. Thank the investor, I hope that the ones, esp, those who don't have a stake in Arizona, lost their shorts, and I AM A CAPITALIST, I JUST DON'T LIKE WHAT THEY HAVE DONE TO THE LITTLE GUY. I have tried to buy in the new (no yard) subdivisions, and the developers have told me, in answer to my question, NO, WE'RE NOT SELLING TO INVESTORS HERE, bull, after the subdivision sold out soooooooo quickly, when the houses started to get built, BINGO, the selling signs come out, and you guessed it, big companies representing investors, or the signs come out renting (houses bought by these big companies that do this in AZ and beyond), who loses out? We who are trying to buy houses. The prices are articficially inflated. What was built and sold for 128,000 4 years ago with 1750 sq ft., two story, double garage, small yard, gated community, is now selling for 250,000+, prior to all this, the appreciation was around 10%, I know this because I am a native of Tempe and have lived in Chandler for 17 years. What was affordable at 150,000 before this onslaught, now costs around 300,000. Can't do this on 3000 a month, with 4 kids and pets.

[Mr. Jeeves]

Let's look at the economics of a "poster property" in San Diego called Park Place. The New York Times reported recently that a one bedroom condo is being offered for $719,000. A prospective buyer would expect to pay about $3,775 a month for a mortgage, plus maintenance fees, taxes and insurance. These additional costs can bring the monthly out-of -pocket total to well over $5,000 a month, or $60,000 a year. However, a renter, who would benefit from the same granite countertops, hardwood floors and fantastic views, can rent a nearly identical unit for only $2,400 a month, or $28,800 a year. At these price levels, the speculator who bought in could run an annual negative cash flow of close to $31,000 if they were forced to rent because no buyers could be found.

This exact scenario played out for both the people who bought my mom's house and for the property I am currently renting. The owners in both cases didn't care about the rental income, as long as they were getting that $10,000/month appreciation. They are about to learn a hard lesson...

[Mr. Jeeves]

Ivana Trump (long divorced from "the Donald") is marketing the Trump luxury brand name for a high-rise building going up with her name in Las Vegas where units will begin at $550,000 and top out at $35 million for the penthouse.

I'll not sure the Ivana tower will actually get built - it may be a petty slap at Donald, whose previously announced (and shorter) tower has already sold out. But the high-rise trend in Vegas (as opposed to the wild overbuilding in the suburbs) may remain viable for a long time - there is a lot of Asian money flooding into the market as high-rollers are buying permanent bases of operations for their gambling trips.

[Jimmy Valentine's brother]

Pinging you brother

[DancesWithBolsheviks]

Like to tap the collective FR brain...Assuming there is a bubble in the areas most frequently said to be bubble markets (NYC, BOS, SFO), and that it will go into decline, what do people think will happen to the more rural areas in the event of those markets declining? Is there an expected move of capital from those frothy regions to the rural areas, kicking up those prices? Or will the rural areas decline in price as well, as the urban bubbles deflate and become more affordable?

I'm interested in leaving my urban rental and buying into a rural area, perhaps an acreage. Not looking to 'speculate' as I actually want to live there, but also want it to be a good investment. Trying to figure out if thats a bad move at this time.

[Kokojmudd]

484 Fullerton Place Sharon, PA 16146 $ 25,000 4 Bedrooms, 2 Full Baths, 0 Half Bath


After the housing bubble bursts you will be able to pick this one up for 10 tin cans, 6 rubber band and a canadian nickel

[carl in alaska]

This is an oversimplified analysis that makes use of some misleading and incomplete statistics. First of all, I'd like to know where the author got that number of 3.8 million "vacant units." That sounds like an awfully big number just for houses alone. I'd like to know if that number also includes apartments. I have some friends who just rented a house in Phoenix, AZ and they said there were not that many vacant rentals with 30 miles of Phoenix. There were more in some distant new suburbs that had been built in the last few years, but those new towns don't have that many houses yet.

The statistic that only 20% of Californians can afford a house with a fixed-rate mortage is misleading because a high percentage of higher-priced houses in California are sold to affluent buyers from other states. I know because I lived in San Diego county for 25 years and many of the home buyers moving in to San Diego county are affluent people from the midwest, the northwest, and the eastern US who are looking for warmer weather and more of an outdoor lifestyle. A lot of real estate in Southern California is sold to affluent retirees from out of state who want a warm climate in their "golden years." The Palm Springs area is full of retired snowbirds from the midwest.

The author makes another odd statement where he says: "If over 20 percent of homes purchased are investor properties, it appears that practically all new housing starts in America are accounted for by speculative buying." Right in mid-sentence the author switches from the term "investor properties" to "speculative buying." Well which is it? Is he trying to say that all real estate investment is speculation. It's not all speculative. It depends where you buy and how much you pay for the properties. As we've seen repeatedly in the last fifty years, people are going to get burned if they buy properties in poor locations and pay too much for them. But I'm not expecting any kind of a slaughter. Our economy depends so much on housing that the Fed cannot raise interest rates more than about another 1 point without causing a recession. So you're not going to see major interest rate increases that will cause a slaughter among housing investors.

[rabidralph]

There are a few bargains out there.

[cambridge]

Online Bettors Find a New Love: Real Estate
http://www.nytimes.com/2005/08/22/technology/22consuming.html

Don't know if it's already been posted, but it fits in this thread as another sign of 'end times'.

[TexanToTheCore]

Recent sale of new construction in Houston:

220 sqft: 136,000

There is no bubble in Houston. The values here are as good any in the nation and better than most, particularly for a large metro area.

California writers like to pretend that their particular madness is endemic to the nation. We don't live in California, partly for the reasons cited in the article and for others. Houston housing is a great buy and will stay that way for some time.

Som of these California real estate goobers are hard to take seriously.

[the invisib1e hand]

With so much "free" money still flowing from the Federal Reserve,

OK, is this a treatise, a commentary, or a freaking poem.