Posted on 04/05/2006 11:15:28 AM PDT by ex-Texan
First, 350 for a condo sounds like a bubble since condos can be constructed for about 50-100k. Second. your argument sounds like "it is different here". I hear the same thing from many different areas all the time in these threads. It's different in No. VA because everyone wants to move here because jobs pay well or in Phoenix because everybody goes there from CA, etc etc. But it can't really be different everywhere (besides the obviously stagnant rust belt, etc) can it? Doesn't that sound like it is different this time (e.g. internet stocks in 1999)? IMO, it is rationalization instead of realism.
That sounds like it may be a good idea. I will give it some serious consideration. As a single guy I probably don't need all that my buying power can get me.
This is just an anecdote, but a guy in my office bought an "investment" property at the peak last june. The rental market went soft and he was unable to rent for 6 mos. Now it is finally rented but at a small cash flow loss. The property is tied to an adjustable rate HE loan on his primary residence. The "plan" is to sell at a profit as soon as this temporary lull is over. Also he even talks about having more HE to tap to do it again.
Your co-worker will regret his risky gambling habits sooner rather than later.
Thanks for posting this article. I know you have beating this drum for a long time -- I will use this information to my advantage.
That ain't the half of it. Take a look at gold & silver prices, value of the dollar, the balance of trade,etc, etc....
I forgot - Katie going to the Collective Broadcast Service...
Unintentional, but fairly accurate. ;)
well, it was constructed in 1992. Its 1200 sq ft and from studying comps on other properties, the area near downtown Seattle that I'm looking at averages about 280 to 300 per sq ft for condos of quality. There are many other factors as well. One other thing is that most two bedroom/two bathroom condos being built around there these days are all 900 to 1000 sq ft. Apartment sized condos. The developers just try to pack them in as tight as possible now. the 200 sq ft makes a big difference in livable space.
So the price is pretty much the median for that area.
And while its easy to say, "Hey just wait 3 years and prices will have come down". I don't really believe that. Thats 3 years wasting your money on rent where the money is going to someone else, instead of into your own investment.
Finally I get the heeby jeebies every time someone uses the term investment. If you consider it an investment then consider it a highly leveraged investment in which you can lose all your money and go into the hole. But my best guess is prices will not drop significantly in the next 3 years (so no point in waiting for that to happen) but neither will they rise significantly for the next 10 or so while they revert to trend.
The thing is, is that when the market changes, all the buyers just suddenly walk away.
Why pay more today when you can pay thousands of dollars less next year?
Once the riff of declining prices becomes a reality, as it is today in MANY markets, the buyers decide to wait..And why not?
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