preview.tinyurl.com/6y7264 -> www.forbes.com/realestate/2008/07/29/overpriced-zips-homes-forbeslife-cx_mw_0729realestate.html
Willow Glen, a neighborhood with a small-town feel, Spanish-style single family homes and a main street with sidewalk cafes and locally owned shops. To live there, residents are paying the city's highest prices relative to what they could pay to rent similar properties in the same area. Willow Glen is one example of a neighborhood where homeowners are still taking chances on future appreciation--and paying a premium above and beyond their neighbors for that confidence.
Boston's Chinatown (02111), where demand for high-end condos, new development and proximity to downtowns have pumped up prices. Behind The Numbers While real estate markets may be slumping across the country, there are plenty of neighborhoods with similar characteristics.
com, an aggregator of rental listings from brokerages and real estate investment trusts, as well as home sales offerings from multiple listing services and individual brokers. com produced a price-to-earnings spread for each ZIP code in the nation's 40 largest cities by comparing rental costs with buying costs for similar properties, based on number of bedrooms, location and price per square foot. Price-to-earnings, or P/E, expresses how much one has to pay for each dollar of return. A neighborhood with a high P/E is overvalued because a buyer is getting a low return based on costs--and paying a huge premium to live in area relative to how much it would cost to rent a similar property there. In fact, when you get into the single digits, you're usually buying a weak investment in an area few are interested in. Detroit's 48235, around 7 Mile Road, for example, has a P/E of 3 It is inundated with foreclosed properties and houses going for as little as $25,000. It's hard to put an exact epicenter on Detroit's real estate crash, but this neighborhood is in contention. High-Priced Properties Instead, mini-bubbles are created when buyers invest in robust areas where they expect homes will continue to rise in value. If their gamble pays off and the neighborhood appreciates further, today's overpriced buyer is tomorrow's smart investor.
It's not prime West Hollywood, but since it's on the edge of nicer parts of town and of affluent neighborhood Los Feliz, it's been attractive to speculators, despite the cost. Limestone townhouses on the Upper East Side of Manhattan, for example, are listed for ever-dizzying prices. Financier J Christopher Flowers bought a $53 million townhouse on East 75th Street in 2006, and sold a smaller East 73rd Street townhouse undergoing renovation for $23 million in 2007. Consider that a five-bedroom mansion on East 74th Street that once belonged to Eleanor Roosevelt is currently listed for $60,000 a month. Prices may be tops in the city, but prime rental prices are peerless as well.
Outer Sunset neighborhood, 94122, which, given its location near the Pacific Ocean and on the south side of Golden Gate Park, was during the most recent boom widely thought to be up-and-coming. com price data drawn from California's multiple-listing service. Sometimes, however, betting on price appreciation doesn't quite work out, and when markets start to soften, speculative areas are often the first to take a hit. San Francisco as a whole has declined 6% over the last year, but prices in the Outer Sunset have declined 10%, dropping to $692,000. Based on asking prices and asking rents, though, the market still has a way to fall before reaching equilibrium. Investors and homeowners in the other nine neighborhoods on our list are likely hoping for immunity from this trend.
|
http://csua.com/feed/