Posted on 06/24/2005 10:55:45 AM PDT by Tumbleweed_Connection
People are going to be much more reluctant to dump that kind of money into an asset that a bunch of two-bit local politicians can steal on a whim.
What the heck is a million dollar condo? Park Avenue New York?
No Virginia? No I haven't seen anything concerning increased bankruptcies and forclosures here? The only industry that was hit was telecom (WorldCom). The unemployment is around 5%? What are you talking about?
I do believe there will be a good dose of pain as this deflates. It happened in 1991-1993 so there's no reason it won't again when rates increase.
You're kidding, right? You can't even touch a condo on Park Avenue -- at least nothing decent -- for under $3 million. But the prices go up to $10 and $12 million.
I've heard that too, but I think that was the mantra about a decade or so again when we had higher interest rates.
1% per month should cover the mortgage, repairs, and property taxes, give or take. At 6%, a $100,000 that's thirty years requires $599.55 per month in mortgage payments. But at 8%, you've got to fork over $733.76 per month. You of course also have property taxes, landcaping, snowploying, repairs, etc. With a 6% mortgage, you should be able to cover the rest with the remaing $400.45 per month if you were getting a $1000 per month in rent. So if property taxes were $150 per month and other expenses were $200, you'd have a tax flow of $50 per month, but assuming you had it set up as a business, you could also take a depreciation allowance to offset other income.
Here you go, check it out --
http://www.corcoran.com/property/search.aspx
Almost sounds like I should find another line of work...but in Ohio things seem pretty reasonable.
I'm living in one (renting). Being in the downtown area of a fashionable, relatively crime-free California edge city is all it takes to break the million dollar threshold, these days.
And Park Avenue condos are going for more like five to twenty-five million. ;)
So what's the next bubble ?
BUMP
Commodities. Energy and metals.
Well, that's damned cheery. Inflation maintains housing prices, but bread costs four dollars a loaf...worse than the bubble popping, if you ask me.
Houses around here have appreciated more than 100%, in three years.
Cool. I'm hanging on to my Exxon stock.
This assumes people who are forced into lower paying jobs are not relocatable. In fact they should be. And as people move out of an "hot" real estate area the real estate will cool unless other new jobs move in to take the place of the jobs lost. Since you believe the new jobs will not have equal compensation, (even though other economic studies disagree), then the real estate prices will drop in this local area. This did happen in Austin TX in the mid 80's. But you are right about retireement homes which people are switching into.
The retirement boom will drive the real estate market in the Sun Belt and a jobs recession in the work areas (like Silicon Valley) would drive home prices down there. However the Silicon Valley firms do not plan on shipping all the jobs overseas, (it is really more like a 5% problem), and in the end it will be jobs that drives the market in job locations. I believe the jobs amd real estate are about ready to even out and the real estate in CA will run level for a while. It does not look like it will drip like a bubble burst, but we shall see.
It is happening. Housing is growing much faster than population. That means it isn't people that live in their "investment." It means lots of speculation. Which means a bubble that can pop.
Wrong Equitable Building. This is the one that caused all the commotion...
http://www.nyc-architecture.com/LM/LM059.htm
Oh- I was thinking the other one wasn't half bad
Heinlein said much the same thing...
A fake fortuneteller can be tolerated. But an authentic soothsayer should be shot on sight. Cassandra did not get half the kicking around she deserved
Part of the definition of a bubble is that hardly anyone identifies it as such. I think we've got more upside on prices, then when most people decide there are new factors never before seen, that's when it's time to get out.
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