*BANG*, *BANG*, *BANG*, *BANG*, *BANG*, *BANG*
Thats the bubble's in FL, MA, CA, PA, NY, and VA imploding.
A brief excerpt permissible under the fair use doctrine:Surging investment in real estate over the past decade has led to a bubble that threatens to send the world economy into recession, economist Roger Bootle said.
House prices and the economy enjoy a ``symbiotic relationship,'' Bootle, economic adviser to accountants Deloitte & Touche LLP and a former adviser to the U.K. Treasury, said in a revised edition of his book, ``Money for Nothing.'' As the housing boom ends, consumers will feel poorer and pare spending, driving up unemployment, he said.
You are wrong. This shows exactly what I said would happen, a leveling off of prices. A bubble would be if prices dropped 20% or over most of the country. You point to one area where prices have leveled off and declare a bubble is here. The only bubble is inside your head.
Any anectodtal evidence supporting your position is bellowed from the rooftops, and any evidence refuting it is pretended to not exist and anyone saying it does is called names.
Prices continue to rise here. I'm in Bucks County, PA.
I hope this new "trend" hits here in the next week or two. I would like to see prices drop by about $30k-$50k. Why? Because we just sold our condo and are now looking for a house. Closing on our condo isn't until Jan 31st (at the latest, but the couple buying it said they wish to spend one more Christmas in their house of 35 years). So I figure no earlier than Jan 1st will we be closing.
That gives us a great advantage for buying now. We are in no rush, there is no pressure.
Because (as the article says) the economy is in the tank. Why? They now have a Democrat governor. One can conclude nothing nationally from this fact, except that Democrats can screw up even the most vibrant economy. (Which is precisely what Michigan had, under three terms of Engler.)
I imagine going upside-down with a big mortgage is worse than with a car loan. It would take many years of payments to have any equity again, chasing the downward price trend. Lots of 85% and even 90% loans out there.
The point is not that Michigan's bubble is bursting; it's that its economy sucks so houses aren't appreciating like other places. The people fleeing Michigan are probably driving up values elsewhere.
Bump.
I said in a thread yesterday that prices in Michigan had been flat to falling for the last 3 years. It has been frustrating for some people but could hardly be called a crisis. It's hard to pop a half inflated balloon. Prices in Michigan doubled in many areas from depressed values in the early 90's and peaked between 2001 and 2003. I haven't done all the formal math, but if I take a property I have owned since 1994, and discounting home improvements increasing value, this growth outpaced 3% average annual inflation by about 25%. So you could say that 25% was the real return or appreciation over 11 years. About 2% annually. That is a lot less than many other asset classes.
Obviously things occasionally break way below the trend line, like in the Great Depression, so anything could happen. But I don't expect too much downside in Michigan in the short and medium term. The usual bubble markets (Cali, FLA, NE) are poised for a bigger hit. And like any market in correction, the people who bought at the top will be the most disappointed. I just don't believe we are on the brink of disaster.
The real estate bubble is bursting in Ga. as well, simply because we are trying to sell a house.
We are always too late in the "hot" investments.
In 2000, we invested $40K in a red hot tech stock IPO.
Lost it.
This year we bought a much bigger and more expensive house with the idea of making money on our other house and on the sale of this one in two years.
Well, there goes the real estate market.
I'm not surprised!
I advise folks to steer clear of any type of investment they see us getting into cause it is sure to tank!
I have a friend who just moved out of Phoenix. The sale of her old house has fallen through three times in the last few months and is still on the market.
Of course, if and when it does sell she'll still probably make more than double what she paid for it just a few years ago, but still, right before she put it on the market most houses in the area were selling within days.
Does this mean that I will soon be able to afford a house? My lease is up in March 06.
"Through August 2005 the median sale price of a home in Washtenaw County was $227,500, compared to $230,000 that time last year. "
That is less than a nice mobile home in Romona Ca, and I would rather live in the mobile home. (The price on the mobile home is: $279,000)
http://www.mhvillage.com/Listing.php?key=52773&start=1&pos=
ping
You sure seem to want the bubble to burst....waiting to buy?
Anyone familiar with Dave Ramsey? He's big on paying off your mortgage. We have become a nation of people that buy houses without expecting to do that.