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") \_ That article says Bay Area prices are vulnerable to a 10% correction. Consumer Reports says SF home prices are 15% above historical price/income ratios and Oakland and San Jose are 25% above. If you bought 3 years ago in a reasonable area, your home has already appreciated 50%. Have they taken the Murder Capitol crown from Palo Alto this year yet? A $200K house with $20K down payment that appreciates to $300K and then drops to $270K gives you $70K return on your $20K investment. of course, by the same rights, when did you last talk with your head out of your ass? thank you for participating \_ houses in the hills go for millions. There really *is* a huge bubble waiting to burst in Oakland. There's only just so many suckers with money willing to buy in Oakland.... And really, the crime rate on Hegenberger and East 14th really isn't meaningful to someone at College and Shafter. We went to a bigger house in a better neighberhood and reduced our net monthly cost. My rent on a 2BR was about $1200 which was typical for what I had in most of the BA. My mortgage was $2550 on a non-jumbo 30 year with a decent rate. The only way you could've ended up paying less is if you were renting a house and paying too much. Also, it's a huge investment in terms of time and effort. Depressed areas with high crime rates are always going to be the first and hardest hit. As an investment it may or may not work out but be prepared to spend lots of time and effort on it. It's basically the SW part of LA county, the area south of LAX that includes Torrance, Manhattan, Hermosa, and Redondo Beaches, Palos Verdes, etc. I believe it refers to the southern part of the Santa Monica Bay, which only extends down to Palos Verdes, which is probably 15-20 miles west of OC. He has his own Congressman and will utterly destroy you! You can find a small place for $400k in Redondo, but all the other cities will run you $600k+ for almost anything. How much will it likely go down, and how soon, as compared with the SF Bay Area? Is it as "bad" of an investment as Oakland or San Jose, which is apparently 25% overvalued? But making $70k I can't afford more than $250k, which means going inland, which sucks. I looked at a condo for $180k near Vermont and Torrance Blvd. It was a pretty decent 2 bedroom condo, around 1000 sq ft. Sure, you have to pay big HOA fees, but you save time and money. You don't have to hire a gardener or reroof your house, etc. the 10% down is what opened doors (borrowed from relative). too bad I got laid off (luckily before buying anything).
story \_ The guy made 12 mil (convert paper to money), then another 05 mil from the house. s=n/inman/realestate/20021009/20021 009601 Terms of Service - 10 Copyright Policy - 11 Privacy Policy Yahoo! Real Estate 12 Choose Location 13 Home 14 Find a Home 15 Find a Rental 16 Mortgage and Insurance 17 Moving 18 Tools 19 My Real Estate 20 Real Estate > 21 Resources & Tools > 22 Real Estate News > Article This Week in Real Estate 23 Real estate repairs a springtime priority Apr 30,2004, Inman News 24 Fed caught in economic tug of war Apr 30,2004, Inman News 25 Online real estate service speeds into auto clubs Apr 30,2004, Inman News 26 How to avoid buying bad real estate Apr 30,2004, Inman News 27 more news Wednesday October 9 4:57 PM ET Housing Bubble: Fact or fiction? Part three argues for continuing strong and healthy housing markets and house prices, despite the existence of a few scattered local markets where prices might weaken. The housing bulls all point to the same evidence and intone a similar mantra. The Conference Board economist said the task is akin to telling Chicken Little the sky isn't falling. He said anyone looking for a bubble isn't likely to find it this year or early next year. Could record home sales, record home price appreciation and record low interest rates add up to a weakening housing market? Assumingas economists so often warnthat the past isn't an accurate predictor of the future, there still are many other factors to consider. Demographic trends, Americans' view that housing is a good investment, government policies that keep interest rates low and encourage homeownership, and zoning and growth restrictions are expected to sustain a healthy demand for and constrained supply of homes and help prevent house price declines for the foreseeable future. Economists generally agree that historically low interest rates have been the primary fuel driving record-high home sales. These buyers contribute to the huge demand for housing that results in escalating and arguably sustainable higher house prices. The fact that Baby Boomers are in their peak earnings years also argues for a strong housing market. Boomer homeowners today can sell their current houses at attractive prices to entry-level buyers, then use their accumulated equity and low-cost mortgage financing to buy higher-priced bigger or otherwise more desirable houses. DataQuick analyst John Karevoll pointed to the current ratio of entry-level and mid-level buyers to the move-up and prestige-home buyers and said he hasn't seen a more balanced housing market in the last 15 years. Equity enables homeowners to leverage their starter-home investment into their next home, then leverage that next home into a luxury-class home or a second, vacation or rental home. Californian homeowners enjoyed 10 percent house price appreciation from 2000 to 2001, according to the California Association of Realtors. Innovative mortgage products also add to the seamless flow of houses between first-time buyers and trade-up buyers and consequently have contributed substantially to booming home sales. Almost all of the demand is going into homes and the reason primarily has to do with rising homeownership among the Boomers," he said. Burns added that 54 percent of home buyers purchase their first home by their mid-30s, but homeownership rises to 80 percent by age 70. That means the nation is due for a "huge surge" of home buyers in their '50s and '60s as the Boomers age. Adding to housing demand is a shift in the way Americans view their homes. A recent Milken Institute study found housing today is the psychological equivalent of gold. After all, the strong housing industry brought the broader national economy through the recent recession with far less damage than otherwise might well have been sustained. Bullishness among home builders is another sign of continued optimism. The total value of single-family housing construction activity last year set a new record of $206 billion, according to Harvard's report. Yet even the most bullish economists and experts who discount the existence of a housing bubble don't foresee continuing double-digit home price appreciation. Nicolas Retsinas, director of Harvard's housing studies center, is among those who said double-digit home price appreciation isn't sustainable. But he thinks home values will more or less hold their ground due to strong demand and tight supply. He said voters aren't going to be reading ballot measures asking whether they want to remove tracts of land from open space rolls and make them available for development and that lack of buildable land will limit the production of new houses. The housing market is not one all-encompassing national market, but rather real estate is and always has been local. That means some markets naturally are more vulnerable than others to housing price corrections. Economists said vulnerable markets could be hurt by rising interest rates, higher unemployment, a double-dip recession or other factors that would adversely affect consumer confidence and the local economy. And if you look at those markets over time, they're the markets that tend to cycle the hardest. They tend to have 80 percent appreciation over three or four years, followed by a 10 percent decline over seven years or something along those lines. Markets that meet supply and have buildable land don't experience a lot of appreciation and they don't decline because of it," he said.
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