Posted on 08/24/2005 6:58:33 AM PDT by austinite
I have two friends one a mortgage broker and the other a realtor. Both told me things are really starting to change since most of the investors are tapped out and are getting hammered with carrying costs. They both told me they think the high property taxes and fuel costs are scaring people off as well as the feeling that the most of the appreciation in many areas has peaked.
So, when people don't see the potential for gain in a lot of these areas, people just are not going to jump at these insane prices anymore.
Wait till some of these renters don't pay a few months rent and get to stay there rent free via some landlord tenant judge.
RE is great, but many who have bought into the Carlton Sheets deals have no clue about dealing with tenants and zoning laws.
Everyone I knew who were stock marketeers in the late 90's immediately ran to RE once that market crashed. I knew all I needed know about what is going on when I saw that happen.
Its like the Sopranos episode when they hyped that b.s. stock "limbistics" and all sold out right before they knew the floor would drop.
"Could higher fuel costs this winter push a lot of folks over the financial edge?"
Since so many products are derived from oil, there may be the need for interest rates to rise in order to counteract inflation.
No one is saying the real estate market is sacrosanct. Nor are the stock market, bonds, etc.
Most people don't buy their personal residence as an investment. It is where they want to live. They are somewhat insulated from the "housing bubble" presuming they have fixed mortgage rates. Over time housing costs should decrease as a part of their budget just from inflation alone. What has been painful for those of us living in areas of rapid appreciation is the escalating property tax bill. Unless you take some equity out (and increase your debt) increasing home values look great on paper but the net effect is higher taxes. Longer commutes also mean higher gas bills.
I disagree about Loudoun county, I thought there could be one more burst of buying with short supply to drive up prices some more, but now supply has swamped demand. Those 500 tract mansions are not going to be bought at their current prices since speculators have stopped buying and are now selling and the people in Herndon who want to trade up to a tract mansion are priced out.
You may be right in the short term, but not in the long term. When I first moved here in 1970, Tysons Corner was far out. Dulles was a sleepy little airport dwarfed by National. The entire Dulles corridor has been built out, Dulles has doubled in size physically and I would wager that passenger throughput has risen exponentially. The entire area is growing faster than the supply of housing. Eventually, we will see a second Beltway. The demographics will mandate an increase in the housing supply.
Loudon County is the fastest-growing county in the country. From a March 2005 WP article: "With plenty of new jobs being created in Loudoun, and house hunters looking increasingly to Washington's western suburbs for lower-priced property, home sales in the county rose to 11,935 in 2004 from 10,121 in 2003 and 7,762 in 2002."
"But in another sign that Loudoun is no longer the bargain spot it once was, the median sales price jumped to $420,000 in 2004 from $344,000 a year earlier."
"That lifted prices in Loudoun ahead of neighboring Fairfax County, where the median home price was $415,000 last year.
Yes. But I was thinking of a more direct correlation. For instance, there might also be a pull back on consumer speeding.
Let's see what the story is ten years from now.
Interesting, our home builder, Pulte, is building a huge 200 complex of apartments on the back edge of the 800 single family home development. Probably to "corner the market"......
I assume they must have done some research to make an investment of that size.
The U.S. population is growing by about 2.5 million people each year. Of that, immigration contributes over one million people to the U.S. population annually.
Using the Census Bureau's medium projections, U.S. population will grow to 394 million by the year 2050.
The United States has one of the highest natural growth rates (0.7%) of any industrialized country in the world. For comparison, the United Kingdom's natural increase is one quarter the rate of the U.S. at 0.2%, while Germany's natural increase is 0.
Florida's population has grown from 1.9 million in 1940 to 15 million today. That is over a 600% increase in just 50 years.
Where do you think all these new people are going to live and work? We will need to build new housing to keep up with population growth.
Agreed. With intelligent planning, our little town of Dixon, CA is destined to be a thriving modern living/working community of 100,000 within the next ten years. The newer communities have a much better opportunity to grow and develop than those poorly planned, overly-built, traffic infested ones......
Based on just a little information I gathered from the Internet, Dixon looks like a nice place to live and is situated in a good location, which should augur well for future growth. Close to Sacramento, UC-Davis, and RT 80, it appears you will grow quickly.
bubble bump
Interesting from Standard & Poor's.
Housing Boom, Oversupply of Housing Units Continue to Weaken REITs, says S&P Report
"The number of housing units, particularly apartment buildings, constructed has far exceeded the level of household formation over the past several years -- and the spread continues to widen. Standard & Poor's projects 2.04 million housing starts in 2005, with the formation of only 1.41 million new households. The spread of 630,000 excess units for this year is 4.2 times greater that it was just two years ago. And the average apartment building's vacancy rate more than doubled to 6.9 percent in 2003 from 3.1 percent in 2000. Traditionally, newly formed households have been renters rather than buyers, but with home affordability historically high, many new households have opted to skip renting altogether and many existing households are making the jump to home ownership."
http://biz.yahoo.com/prnews/050915/nyth137.html?.v=25
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.