Posted on 08/24/2005 6:58:33 AM PDT by austinite
That hardly makes any sense at all.
The purpose of a house is to live in. If people cannot live in it, then it has no value at all.
As Greenspan has suggested, no basis in reality. A 2% rise in mortgage rates will squelch this "Real Estate" boom as fast a it began.
I am on the board of my co-op building and our oil has gone up 50% since last year.
It's empty because nobody wants to live there (lousy climate, no water, etc). A glut of day-old hamburger won't do diddly to bring down the price of lobster.
I agree mostly. The top of the market in Loudoun was pretty obvious back in June while at the same time the less expensive properties closer in are still selling like hotcakes. Where I disagree is with the gentrification thing. I lived in "gentrified" Jamaica Plain in Boston during the late 80's and it didn't take long to ungentrify after the "rental quality" RE market crashed (e.g. condos dropping 50%). Also there are a ton of rentals inside the beltway for those people just moving in or selling at the peak. The rent is generally a lot less than the interest payments on the same property without the high taxes.
The "boom" has already slowed. Houses remain on the market much longer than previously. As rates rise and folks are less secure about their economic futures, it will get worse.
Buy a house if you can, actually buy 1,2,3 as many as you can!
There is now a rental explosion in my area in Socal. Fewer and fewer families can afford to buy houses.
Market forces will prevail in the long run.
That's precisely what scares me.
"it will get worse"
I agree, with the late entrants being the hardest hit.
The psychology present is similar to that of the dot.com craze. I have friends in California who purchased a multifamily property months back, taking a $1,440.00 negative hit per month on a variable loan with the notion that the market will continue up as it has.
The spread between mortgage payments and rents is going to be huge as the interest rates kick up. Renters are bound by wages, the old saying about blood out of a stone is appropriate.
I live in McLean. The market remains hot and there is still a building boom to use what little land is left for residential units. Presuming the extenison of the Metro out to Dulles including Tysons' Corner, real estate vaules will continue to increase in the area, including Loudoun County.
Where I disagree is with the gentrification thing. I lived in "gentrified" Jamaica Plain in Boston during the late 80's and it didn't take long to ungentrify after the "rental quality" RE market crashed (e.g. condos dropping 50%).
I have lived in the area on and off since 1970. The gentrification of DC has been admittedly slow but inevitable. It has to do with money. Blacks are cashing in and moving out to Prince George's County to have better schools and less crime. DC's population declined about 6% from 1990 to 2000, but it is on the upswing now, but still less than 1990. The white and others population is increasing. According to the 2000 census, blacks make up about 60% of the population, down from the 65.8% in 1990 or about 50,000 less in 2000.
Also there are a ton of rentals inside the beltway for those people just moving in or selling at the peak. The rent is generally a lot less than the interest payments on the same property without the high taxes.
No doubt that as real estate prices go up, rentals will become more attractive. The DC area has always had a greater turnover than most cities in terms of people coming and going. USG employees (including military) move in and out of the area more frequently than the average and the changes wrought by politics causes turnover as well.
In the long run, real estate values will increase. There are very few places in this country where real estate is cheaper today than it was 30 years ago.
"And tulips. Don't forget tulips"
Good one! Most excellent!
There are many developed plaves which could support a storage facility. Other locations do depend on growth. So it's a mixed answer.
Earlier I commented on a phenomonen I am seeing more of. Three incomes per house. Whether it's grandma or adult child, it helps make the payment.
No money down, and paying only the interest (if that) will boom any market. You'd have to be a BLITHERING idiot to think this will go up forever.
Tell that to the Japanese.
As far as I know, the Japanese didn't hold their property investments in the US for 30 years. Please be more specific.
Holy crap, you're me! My wife and I have been doing this stuff and appear to have the same goals that you do. Except, neither of us is a lawyer.
Demand has been artificially hyped up thru easy money lending practices and speculation. Just like what happened in Japan.
I sold in Vienna, but too early (2002) because I thought prices were already too high then. So I have a long commute now, but my monthly payments of all types is about $400 or so. 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.
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.