The reason, as history will prove is that the folks in the D.C. area sold to buy further out in Frederick and Hagerstown Maryland. Why buy a home in D.C. for 900k when you can get a larger home in a better hood for 450k and just increase commute time by about 30 minutes. You bubbleheads really trip me out. The summer has alot to do with this too. This is typical of the RE industry - always slows in the summer just the way retail sales go up in the fall and holidays and slow in February.
Yoda is clearly nowhere near as wise as his counterpart. The inventory has risen considerably compared to the same time last year.
Red-Hot housing markets can cool off very quickly. A lot of the market is being driven by the greater fool theory. Once people start to question that, the market can easily cool off, and remain flat. I remember SoCal in the early-mid 90s, years of drops and price decreases.
The bubble will happen when it happens. As long as you guys keep bringing it up and the media follows suit. This bubble talk is exactly what is creating a bubble. I personally do not think that all of the theories "Greater fool than I" etc. etc. etc. mean jack. People here in the U.S. are always trying to keep up with the jones's so if money is cheap I will buy as much home that I can afford and use my home as an ATM
this demand is what drives up the prices until the no one can afford a house. Then people stay put. It is only the rich and the investors who pull out and sell cheap to other rich people and investors and occasionally renters. But if a home goes down say 30 percent in value and the rates goe up 30 percent the person buying is no better off. So why would I sell in a buyers market to lose money? Come on give me a break.
you say the market is driven by a greater fool - then why a people in my hood from D.C. and not western Maryland? They are wise to purchase homes at what they consider a bargain when folks in my neighborhood cannot afford to live here anymore.
Who is the fool, the rich buying up property in the burbs at a bargain, or people like yourself and the media creating a self-fulfilling prophecy.
Remember in 1996 the term was irrational exuberance and the market went on to break records for four more years.
You guys believe everything you want to hear. I forgot that I should never teach a bird to sing because it wastes my time and annoys the bird. You will never hear us.
Yoda: "Your" presentation does not necessarily contradict "ours". Of course given enough demand, for whichever cause, people will stretch themselves to the max, or go to alternate markets making tradeoffs.
Regarding the "greater fool theory", I had the evidence told to my face often enough. People do extend themselves, while generally within their current or projected means, more than they would otherwise be comfortable, and justify this with "prices will go up", or the modified form "they will not go down more than X%, I will be able to stick through and when I want to make my move they will be up again". When raising questions about local economic growth trends, I usually get faces, handwaves, or hear things like "bah".
And GFT is just a name that somebody coined, not to mean anybody particular is a fool.
"s long as you guys keep bringing it up and the media follows suit. This bubble talk is exactly what is creating a bubble."
Ah, I see it now. Those who are pointing out that prices in some markets bear no resemblance to historic trends, wage growth, rent or other such are actually fuelling this. The bubble talk most certainly does not create a bubble, it helps to deflate one before it reaches dangerous proportions.
But if a home goes down say 30 percent in value and the rates goe up 30 percent the person buying is no better of
On the contrary, a person is far better off buying at a lower prices for higher rates than vice versa even if the payment is the same. For one, there is a greater chance of appreciation, and a greater chance of refinancing at lower rates. Finally, you can prepay your mortgage and get out of the interest rate trap.
So why would I sell in a buyers market to lose money?
Right, people don't like to sell in a declining market. Which is why housing declines slowly over a period of years. I've lived through the SoCal crash of the early 90s, 8-9 years of stagflation and declines. You seem to think that prices only go up.
Who is the fool, the rich buying up property in the burbs at a bargain, or people like yourself and the media creating a self-fulfilling prophecy.
People who buy property with decent cash flows are not fools. People who buy property with exotic mortgages on the expectation that it will go up for sure and they can sell in 1-2 years are indeed hoping to sell to a greater fool. They may even make money, but sometime this merry-go-round stops, just as it did for those who bought theglobe.com
Remember in 1996 the term was irrational exuberance and the market went on to break records for four more years.
Not 4 more years, just over 3 years since Greenspan used that term to the market crash. And here's something to consider. 7 years after Greenspan said that, the MASDAQ was essentially where it was in Dec. 96. Its still off over 50% from its high. In any case, the real bubble signs didn't start flashing till early 1999.
I made a fair amount of money then by cashing in my options shortly after they vested. I've co-workers who made almost nothing in that period because they kept on waiting for prices to recover.
You guys believe everything you want to hear. I forgot that I should never teach a bird to sing because it wastes my time and annoys the bird. You will never hear us.
You can't even get your metaphors right, how do you expect to teach a bird to sing ?
But, I'm wrong. You're right. There is absolutely no bubble. It is right, proper and sane that Boston and the Bay Area, which have lost 10s of thousands of jobs should have 10% YoY growth in real estate. It is right and proper that the affordability index in SoCal is the lowest in history. It is right and proper that 100% of new Florida condo projects are sometimes taken by investors. We should all expect 15% annual gains yearly, till the last Judgement.
Yoda in the horrible rigged schemes of real estate business and its pyranna food chain selling off to foreigners and foreign bankers...and hemorrhaging a genuine productive economy?
Very wise you are, so if consumer (A) purchased a home last month and plans on staying put for say 5 years how will they be hurt?
Investor (Z) buys into a development early pre-construction and sells at settlement to consumer (A) who is the loser and winner here? The investor who cleared 50k at settlement or the consumer who buys a home the want at a price they can afford?
Prices for homes go down when the investors pull out if they see their investment declining rapidly. This means that consumer (A)'s new next door neighbor buys a home for the same or a little more that him.
His previous next door neighbor was a renter - a renter renting from the investor.
I am not saying that prices will continue to climb at the current rates once money is more expensive to get ie. interest rates go up but unless and I say unless there is a strong very strong decline in jobs in bubble markets and investors pull out then we will see price flatten out but NOT decline by the high percentages being discussed.
I know how the metaphor goes but I did not want to insult by using the word PIG so I was nice and used BIRD.
if consumer (A) purchased a home last month and plans on staying put for say 5 years how will they be hurt?
If consumer A purchased with a reasonable mortgage (not IO or ARM), acn cover mortgage costs + other costs for the next few years and plans to stay for several years (normally I would say 5, but in this mania 7) then they should be fine as long. if they bought in anticipation of 15% per year appreciation, they will not be fine.
but unless and I say unless there is a strong very strong decline in jobs in bubble markets and investors pull out then we will see price flatten out but NOT decline by the high percentages
The Bay area and Boston have already seen dramatic job loss since 2000. Several other areas have had weak job growth. In NJ, housing prices are up 40% since 2002, but job growth has been minimal.
Sure, one possibility is a flat-lining for years (its happened in most markets). That would be the soft landing. But each month the mania continues, that possibility recedes. The more the market gets inflated, the more likely it is to pop seriously.
Some of the most speculative areas, driven by flippers, could well see dramatic declines. In a real estate downturn, investors can vanish really fast.
Do I know whats going to happen ? No, but I think the best way to prevent a pop is to point out how inflated prices are. Hence, bubbleheads are helping to deflate the bubble. not keep it around.
Got ya... So do you think that the average American can even understand what is happening here? Yes the prices are inflated so what do you tell the folks buying in at alarming rates using these crazy loan products?
Do not buy a house for 7 years and rent? Buy but only if you can afford the payment say 26 percent of your take home pay? This would mean to most people a crack shack.
You mention Interest Only loans - this is just the same as leasing a car. Look at all the ads to lease versus purchase a car. Americans myself included, want more than we can afford - we want to drive a BMW on a Kia budget we want to own a home that is 5000 square feet or live in the ritz areas of SF LA DC or Boston on 60k a year (average income 30k with two breadwinners). We want to wear NIKE and have big screen Televisions so we take all the equity out of our homes to by the stuff.
By making ATM's out of our homes in the way of rapid RE appreciation and easy loan qualifications the rich are putting it to the poor again and we love it.
You will never deflate a bubble this one or the next. It is a function of greed and the love of material things that is perpetuating this as you say, "mania". I hope that you pass this along and maybe if you put more energy to discussing what is really important in life, "simple things" instead of bubbles, then just maybe...
Do not buy a house for 7 years and rent? Buy but only if you can afford the payment say 26 percent of your take home pay? This would mean to most people a crack shack.
No, it means making hard choices in terms of where to buy and live. Maybe you can't afford something in LA county, buy in Valencia county. Maybe you can't afford a SFH, buy a townhouse or a condo. maybe you need to look for a job in another area.
You mention Interest Only loans - this is just the same as leasing a car.
For the record, I have paid for every single car I bought with cash. DEspite dealers trying to hawk loans to me since they make some money. I and my wife own only 1 car, a 2001 Ford Focus despite having a combined family income of $250K plus
You will never deflate a bubble this one or the next. It is a function of greed and the love of material things that is perpetuating this as you say, "mania".
I don't expect to deflate this bubble by myself. But it will deflate, just as the NASDAQ bubble did. Or previous real estate bubbles did. I remember how badly SoCal was hit for 8-9 years begining 1990.
Besides, you started by this thread by claiming that we were causing the bubble by talking about it. Now you say we can never deflate it. You don't seem to regard the bubble as positive in any case, so why object to pointing it out.
josh, I'm not trying to deflate the bubble either! Nor am I giving any advice. But I agree with you that it is important to point it out.
With this post, I was just trying to make a prediction - next month we will see if I was overly pessimistic - maybe inventories will only rise to 4.5 or 4.7 months.
I do think rising inventories might be the first sign of the end of the boom.
You and I are on the same page as far as finances. In 1985 I took a chance and joined the Marines in order to serve and also pay for my education. When I went to war in 1991 the first Gulf War, I realized many many things. One of which is we did not belong there. Just a little political comment but I digress, anyhoo I was injured and received a medical discharge. This enabled me to get a MBA for free and a B.S.in I.T. When the Internet took off I put everything I could muster into stocks and sold just in time. I took all of my money and began purchasing RE around 5 years ago. I have sold all my RE except my current home and my small retirement home south of the border. I am 38 and joined the Marines when I was 18. Retired and purchasing homes that I like and renovating them just for fun. Have gifted many away - timing is everthing and so is luck - if you have read so of my other posts then you will see that I still have hope for the average family. I started with nothing at all and was fortunate enough to be blessed with retirement at 38. When I read posts like this I wonder what is the reason behind them?
What would you do if the situation does occur as you predict? Will you stop and say I told you on this site, or will you put your energy towards helping others and educating them on what is most important - family.
I am not trying to preach or be mean here - just asking that you use your talents to discuss and teach what you have learned where it would be more useful.
You are most interesting but you are being a bit preachy and a bit mean, and there is no reason. Simply participate and argue as you see fit, and let other argue as they see fit. This blog is of much help already, and there is much more to come.
MG, I was talking with a local RE agent today and she was complaining that her weekends have been ruined. She promised a homeowner that she would hold an open house every weekend until their house sold. It is a nice house, apparently priced right ... The problem according to the agent:
What would you do if the situation does occur as you predict? Will you stop and say I told you on this site, or will you put your energy towards helping others and educating them on what is most important - family.
Yoda -- I don't know how exactly I would react, but I do remember that I didn't spend my time after the dotcom crash on the Motley Fool board gloating over AMZN's fall.
As for helping others I donated a high 4 figure sum to the tsunami victims earlier this year. But I have no sympathy whatsoever for people who overspend or try and get things they really can't afford.
In fact, a real esate bust would be very useful for this reason alone -- it would get rid of some of the worst consumerist spending tedencies. A woman in my office was telling me how she was spending $50K on a new kitchen (this after spending 80KK plus on a new house). She also added that "Whatever you put into a house, you also get out". This sort of attitude that makes excessive consumer spending and indulgence a virtue, a way of saving should be discouraged. After all if RE keeps going up, there is no reason not to buy the most expensive house you can get since its only going to go up -- its an investment.
About inventory:
In NYC metro anecdotally, there is some buyer resistance to the most expensive apartments and some prices are definitely going down.
Meanwhile, I'm conducting my own small inventory checklist on a communicty of 40 townhouses in NJ with NYC views (down the road from me). Normally, 1 of these would sell every few months. One of these went on sale 1-2 months back for 1.18 million and went in a week. [ but this was the corner unit, a 3 family, with 2 units rented out so it was the plum property in the complex+]. Since then 4-5 units have gone on the block for prics ranging from 1 to 1.5 M. Only one is a corner unit, all are 2 families and as far as I know, none are rented. So far none has sold. It will be intersting to see how many sell, and especially why anyone would go for the more expensive units in the complex.
I wonder if the huge tract housing companies like Toll will start putting money on the hood... er doorstep... like Ford & GM to keep people buying?
Buy your new 2005 McMiniMansion! Get $25,000 cash back or 0% until 2010!
The reason, as history will prove is that the folks in the D.C. area sold to buy further out in Frederick and Hagerstown Maryland. Why buy a home in D.C. for 900k when you can get a larger home in a better hood for 450k and just increase commute time by about 30 minutes. You bubbleheads really trip me out. The summer has alot to do with this too. This is typical of the RE industry - always slows in the summer just the way retail sales go up in the fall and holidays and slow in February.
Yoda is clearly nowhere near as wise as his counterpart. The inventory has risen considerably compared to the same time last year.
Red-Hot housing markets can cool off very quickly. A lot of the market is being driven by the greater fool theory. Once people start to question that, the market can easily cool off, and remain flat. I remember SoCal in the early-mid 90s, years of drops and price decreases.
The bubble will happen when it happens. As long as you guys keep bringing it up and the media follows suit. This bubble talk is exactly what is creating a bubble. I personally do not think that all of the theories "Greater fool than I" etc. etc. etc. mean jack. People here in the U.S. are always trying to keep up with the jones's so if money is cheap I will buy as much home that I can afford and use my home as an ATM
this demand is what drives up the prices until the no one can afford a house. Then people stay put. It is only the rich and the investors who pull out and sell cheap to other rich people and investors and occasionally renters. But if a home goes down say 30 percent in value and the rates goe up 30 percent the person buying is no better off. So why would I sell in a buyers market to lose money? Come on give me a break.
you say the market is driven by a greater fool - then why a people in my hood from D.C. and not western Maryland? They are wise to purchase homes at what they consider a bargain when folks in my neighborhood cannot afford to live here anymore.
Who is the fool, the rich buying up property in the burbs at a bargain, or people like yourself and the media creating a self-fulfilling prophecy.
Remember in 1996 the term was irrational exuberance and the market went on to break records for four more years.
You guys believe everything you want to hear. I forgot that I should never teach a bird to sing because it wastes my time and annoys the bird. You will never hear us.
Yoda: "Your" presentation does not necessarily contradict "ours". Of course given enough demand, for whichever cause, people will stretch themselves to the max, or go to alternate markets making tradeoffs.
Regarding the "greater fool theory", I had the evidence told to my face often enough. People do extend themselves, while generally within their current or projected means, more than they would otherwise be comfortable, and justify this with "prices will go up", or the modified form "they will not go down more than X%, I will be able to stick through and when I want to make my move they will be up again". When raising questions about local economic growth trends, I usually get faces, handwaves, or hear things like "bah".
And GFT is just a name that somebody coined, not to mean anybody particular is a fool.
"s long as you guys keep bringing it up and the media follows suit. This bubble talk is exactly what is creating a bubble."
Ah, I see it now. Those who are pointing out that prices in some markets bear no resemblance to historic trends, wage growth, rent or other such are actually fuelling this. The bubble talk most certainly does not create a bubble, it helps to deflate one before it reaches dangerous proportions.
But if a home goes down say 30 percent in value and the rates goe up 30 percent the person buying is no better of
On the contrary, a person is far better off buying at a lower prices for higher rates than vice versa even if the payment is the same. For one, there is a greater chance of appreciation, and a greater chance of refinancing at lower rates. Finally, you can prepay your mortgage and get out of the interest rate trap.
So why would I sell in a buyers market to lose money?
Right, people don't like to sell in a declining market. Which is why housing declines slowly over a period of years. I've lived through the SoCal crash of the early 90s, 8-9 years of stagflation and declines. You seem to think that prices only go up.
Who is the fool, the rich buying up property in the burbs at a bargain, or people like yourself and the media creating a self-fulfilling prophecy.
People who buy property with decent cash flows are not fools. People who buy property with exotic mortgages on the expectation that it will go up for sure and they can sell in 1-2 years are indeed hoping to sell to a greater fool. They may even make money, but sometime this merry-go-round stops, just as it did for those who bought theglobe.com
Remember in 1996 the term was irrational exuberance and the market went on to break records for four more years.
Not 4 more years, just over 3 years since Greenspan used that term to the market crash. And here's something to consider. 7 years after Greenspan said that, the MASDAQ was essentially where it was in Dec. 96. Its still off over 50% from its high. In any case, the real bubble signs didn't start flashing till early 1999.
I made a fair amount of money then by cashing in my options shortly after they vested. I've co-workers who made almost nothing in that period because they kept on waiting for prices to recover.
You guys believe everything you want to hear. I forgot that I should never teach a bird to sing because it wastes my time and annoys the bird. You will never hear us.
You can't even get your metaphors right, how do you expect to teach a bird to sing ?
But, I'm wrong. You're right. There is absolutely no bubble. It is right, proper and sane that Boston and the Bay Area, which have lost 10s of thousands of jobs should have 10% YoY growth in real estate. It is right and proper that the affordability index in SoCal is the lowest in history. It is right and proper that 100% of new Florida condo projects are sometimes taken by investors. We should all expect 15% annual gains yearly, till the last Judgement.
I think Yoda's point of view goes far to explain how manias can go on for so much longer than regular readers of this blog could ever imagine.
You said it for me df,cm, and josh.
Agree with DiMartino.
Yoda in the horrible rigged schemes of real estate business and its pyranna food chain selling off to foreigners and foreign bankers...and hemorrhaging a genuine productive economy?
Very wise you are, so if consumer (A) purchased a home last month and plans on staying put for say 5 years how will they be hurt?
Investor (Z) buys into a development early pre-construction and sells at settlement to consumer (A) who is the loser and winner here? The investor who cleared 50k at settlement or the consumer who buys a home the want at a price they can afford?
Prices for homes go down when the investors pull out if they see their investment declining rapidly. This means that consumer (A)'s new next door neighbor buys a home for the same or a little more that him.
His previous next door neighbor was a renter - a renter renting from the investor.
I am not saying that prices will continue to climb at the current rates once money is more expensive to get ie. interest rates go up but unless and I say unless there is a strong very strong decline in jobs in bubble markets and investors pull out then we will see price flatten out but NOT decline by the high percentages being discussed.
I know how the metaphor goes but I did not want to insult by using the word PIG so I was nice and used BIRD.
No need to get nasty - I apologise.
if consumer (A) purchased a home last month and plans on staying put for say 5 years how will they be hurt?
If consumer A purchased with a reasonable mortgage (not IO or ARM), acn cover mortgage costs + other costs for the next few years and plans to stay for several years (normally I would say 5, but in this mania 7) then they should be fine as long. if they bought in anticipation of 15% per year appreciation, they will not be fine.
but unless and I say unless there is a strong very strong decline in jobs in bubble markets and investors pull out then we will see price flatten out but NOT decline by the high percentages
The Bay area and Boston have already seen dramatic job loss since 2000. Several other areas have had weak job growth. In NJ, housing prices are up 40% since 2002, but job growth has been minimal.
Sure, one possibility is a flat-lining for years (its happened in most markets). That would be the soft landing. But each month the mania continues, that possibility recedes. The more the market gets inflated, the more likely it is to pop seriously.
Some of the most speculative areas, driven by flippers, could well see dramatic declines. In a real estate downturn, investors can vanish really fast.
Do I know whats going to happen ? No, but I think the best way to prevent a pop is to point out how inflated prices are. Hence, bubbleheads are helping to deflate the bubble. not keep it around.
Got ya... So do you think that the average American can even understand what is happening here? Yes the prices are inflated so what do you tell the folks buying in at alarming rates using these crazy loan products?
Do not buy a house for 7 years and rent? Buy but only if you can afford the payment say 26 percent of your take home pay? This would mean to most people a crack shack.
You mention Interest Only loans - this is just the same as leasing a car. Look at all the ads to lease versus purchase a car. Americans myself included, want more than we can afford - we want to drive a BMW on a Kia budget we want to own a home that is 5000 square feet or live in the ritz areas of SF LA DC or Boston on 60k a year (average income 30k with two breadwinners). We want to wear NIKE and have big screen Televisions so we take all the equity out of our homes to by the stuff.
By making ATM's out of our homes in the way of rapid RE appreciation and easy loan qualifications the rich are putting it to the poor again and we love it.
You will never deflate a bubble this one or the next. It is a function of greed and the love of material things that is perpetuating this as you say, "mania". I hope that you pass this along and maybe if you put more energy to discussing what is really important in life, "simple things" instead of bubbles, then just maybe...
Do not buy a house for 7 years and rent? Buy but only if you can afford the payment say 26 percent of your take home pay? This would mean to most people a crack shack.
No, it means making hard choices in terms of where to buy and live. Maybe you can't afford something in LA county, buy in Valencia county. Maybe you can't afford a SFH, buy a townhouse or a condo. maybe you need to look for a job in another area.
You mention Interest Only loans - this is just the same as leasing a car.
For the record, I have paid for every single car I bought with cash. DEspite dealers trying to hawk loans to me since they make some money. I and my wife own only 1 car, a 2001 Ford Focus despite having a combined family income of $250K plus
You will never deflate a bubble this one or the next. It is a function of greed and the love of material things that is perpetuating this as you say, "mania".
I don't expect to deflate this bubble by myself. But it will deflate, just as the NASDAQ bubble did. Or previous real estate bubbles did. I remember how badly SoCal was hit for 8-9 years begining 1990.
Besides, you started by this thread by claiming that we were causing the bubble by talking about it. Now you say we can never deflate it. You don't seem to regard the bubble as positive in any case, so why object to pointing it out.
This discussion is most interesting. A helpful argument for me.
Josh
I learned to think as you and your wife think
josh, I'm not trying to deflate the bubble either! Nor am I giving any advice. But I agree with you that it is important to point it out.
With this post, I was just trying to make a prediction - next month we will see if I was overly pessimistic - maybe inventories will only rise to 4.5 or 4.7 months.
I do think rising inventories might be the first sign of the end of the boom.
Best to all.
You and I are on the same page as far as finances. In 1985 I took a chance and joined the Marines in order to serve and also pay for my education. When I went to war in 1991 the first Gulf War, I realized many many things. One of which is we did not belong there. Just a little political comment but I digress, anyhoo I was injured and received a medical discharge. This enabled me to get a MBA for free and a B.S.in I.T. When the Internet took off I put everything I could muster into stocks and sold just in time. I took all of my money and began purchasing RE around 5 years ago. I have sold all my RE except my current home and my small retirement home south of the border. I am 38 and joined the Marines when I was 18. Retired and purchasing homes that I like and renovating them just for fun. Have gifted many away - timing is everthing and so is luck - if you have read so of my other posts then you will see that I still have hope for the average family. I started with nothing at all and was fortunate enough to be blessed with retirement at 38. When I read posts like this I wonder what is the reason behind them?
What would you do if the situation does occur as you predict? Will you stop and say I told you on this site, or will you put your energy towards helping others and educating them on what is most important - family.
I am not trying to preach or be mean here - just asking that you use your talents to discuss and teach what you have learned where it would be more useful.
Yoda
You are most interesting but you are being a bit preachy and a bit mean, and there is no reason. Simply participate and argue as you see fit, and let other argue as they see fit. This blog is of much help already, and there is much more to come.
CR,
The inventory is stacking up faster than I expected.
Uh, oh.
MG, I was talking with a local RE agent today and she was complaining that her weekends have been ruined. She promised a homeowner that she would hold an open house every weekend until their house sold. It is a nice house, apparently priced right ... The problem according to the agent:
"There is just too much inventory right now!"
Best Regards!
DC inventory appears to be building. Houses are sitting weeks, where they would be quickly gone not long ago.
What would you do if the situation does occur as you predict? Will you stop and say I told you on this site, or will you put your energy towards helping others and educating them on what is most important - family.
Yoda -- I don't know how exactly I would react, but I do remember that I didn't spend my time after the dotcom crash on the Motley Fool board gloating over AMZN's fall.
As for helping others I donated a high 4 figure sum to the tsunami victims earlier this year. But I have no sympathy whatsoever for people who overspend or try and get things they really can't afford.
In fact, a real esate bust would be very useful for this reason alone -- it would get rid of some of the worst consumerist spending tedencies. A woman in my office was telling me how she was spending $50K on a new kitchen (this after spending 80KK plus on a new house). She also added that "Whatever you put into a house, you also get out". This sort of attitude that makes excessive consumer spending and indulgence a virtue, a way of saving should be discouraged. After all if RE keeps going up, there is no reason not to buy the most expensive house you can get since its only going to go up -- its an investment.
About inventory:
In NYC metro anecdotally, there is some buyer resistance to the most expensive apartments and some prices are definitely going down.
Meanwhile, I'm conducting my own small inventory checklist on a communicty of 40 townhouses in NJ with NYC views (down the road from me). Normally, 1 of these would sell every few months. One of these went on sale 1-2 months back for 1.18 million and went in a week. [ but this was the corner unit, a 3 family, with 2 units rented out so it was the plum property in the complex+]. Since then 4-5 units have gone on the block for prics ranging from 1 to 1.5 M. Only one is a corner unit, all are 2 families and as far as I know, none are rented. So far none has sold. It will be intersting to see how many sell, and especially why anyone would go for the more expensive units in the complex.
In fact, a real esate bust would be very useful for this reason alone -- it would get rid of some of the worst consumerist spending tedencies.
Josh this conversation has been fruitfull indeed,
Best Regards!
YODA
Why do people have to be punished because we may feel a market is inflated? The last thing we need is a real estate bust.
People, Do not lose your patience here...Even the great economists often disagree...Here is a great quote:
If all economists were laid end to end, they would not reach a conclusion.
George Bernard Shaw (1856 - 1950)