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"coming" Housing market correction to hurt worst than .com collapse
- Thread starter Phoenix
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I don't see Georgia on that list, but I KNOW there will be even more foreclosures when the shit hits the comet. Georgia is NOT the state to fuck around with when it comes to housing loans and mortgages. This state's blind efficiency will kill the foolish investor
Prepare for the ugly in a couple of years.
Prepare for the ugly in a couple of years.
Phoenix
Member
DJ Brannon said:
Georgia is a fair bit down on the list. While parts of Georgia (Atlanta in particular) have appreciated rapidly, the state as a whole is been 'warm' at best. Not a lot of houses doubling in value over a 4-5 year period.
But I do watch, looking for good deals - particularly on land. There have been a lot of bank auctions recently and I'm in the market to buy 3 acres of land to build on
Been seeing a fair amount of stuff come on the market as the rates go up.brooklyngooner
Member
Loki said:
I was hoping you'd post here. It really is insane in Brooklyn these days.
A lot of my friends are buying now in neighborhoods like Clinton Hill and Park Slope (the extreme fringes) and are putting down insane amounts of money for very little space. I'm talking $500k for a one-bedroom away from mass transit and shops. It just seems ridiculous to buy now. And a lot of these buyers in general are from the city or outside it so will only live in certain trendy neighborhoods and so prices are approaching Manhattan levels. A married couple I know just bought a house in Clinton Hill for $900k on two publishing salaries, I cringe for their future.
My parents bought their brownstone in center Slope in '74 for $60k. They just got it appraised for 1.7 million. Two doctors just bought the brownstone next door for 1.9. Nuts.
Bluecondor
Member
fennec fox said:
Pittsburgh is the same way. I bought a 4 bedroom house, 10 minutes from downtown, for $80,000. I refinanced two years ago (at 5.75% fixed) to a 15 year mortgage, so I am paying about $1,000 a month for my house, which is awesome.
This is why I can't believe the stories I hear about buying houses in Boston, DC, LA, NYC, Chicago and even Philly. People from these cities always tell me that my house would be worth $500,000 in their markets, which is unthinkable for me.
A $500,000 house in Pittsburgh is either an old mansion with a lot of ground, or a beautiful new home in one of our best school districts.
Bluecondor said:
Yes but correct me if I'm wrong... isn't Pittsburghs economy still in the shitter? I mean from what I know(lived there long ago, father moved back recently). The economy is ok... but nothing to write home about... hell the neighborhood that I lived in briefly looked like a bomb went off there when I visited last year(no I don't remember the street names, my father just guided me to the place). I know it's much better than it was after the steel collapse... my god that was bad... I know that health, tourism and tech industries are helping it to recover though.
I hate the housing market. We had to move this year. Where we were before we bought a house in 1998, and after commisisons, we will lose money on it. Hell, right now I would be happy just to sell it for what we paid for it. Name me another market like that in the US.
I took a job in a fairly hot housing market. We got 1/3 less house that costs 50% more money than what we had before.
In a normal market, if interest rates move up much at all, there will be a huge dislocation with all of the sutff like these IO, 100% LTV, ARMs, and all. I can't believe how the mortgage market has changed in the last 5 years. But the one thing the feds will consider is that if a "crash" happens in real estate, it will effect many many more than the dot com bust did. And the repercussions are far greater. A best case would be just a leveling off or slight decrease in the hot markets. A real crash would be very very bad for the overall economy.
I took a job in a fairly hot housing market. We got 1/3 less house that costs 50% more money than what we had before.
In a normal market, if interest rates move up much at all, there will be a huge dislocation with all of the sutff like these IO, 100% LTV, ARMs, and all. I can't believe how the mortgage market has changed in the last 5 years. But the one thing the feds will consider is that if a "crash" happens in real estate, it will effect many many more than the dot com bust did. And the repercussions are far greater. A best case would be just a leveling off or slight decrease in the hot markets. A real crash would be very very bad for the overall economy.
Phoenix
Member
sonicfan said:
Yeah. Its one of the reasons they are trying to change the rules on lending and raising interest rates at a "measured pace" to try and cool off the markets before it collapses under its own weight. Greenspan recently commented that he was "confused" by the decreases in the long term lending rates as the worst thing that can happen is for Greenspan to keep raising short term rates while long terms continue to stagnate or go down. This inversion of lending rates has happened before and was 'unpleasant' so they are hoping to avoid that at the same time.
Bluecondor
Member
borghe said:fuck.. in milwaukee the only 4 bedroom you can get for 80K will get you shot in less than 2 months.
MILWAUKEE!!!!!!!!!!
sigh...
Are real estate prices in Milwaukee really high?
And - I don't want to make it sound like $80,000 is the norm or anything. Most people around here pay around $125-$150,000 for a nice house in a good neighborhood. It is possible to find a decent place under 100 Gs though if you search.
Bluecondor
Member
DarienA said:
You are pretty much on with your assessment of our economy. We are doing pretty well here, but, the thing is, the housing market is soft around here because our population is older and it has declined every year for the past two decades or so.
The big challenge for this area is creating the types of jobs that would make educated young people want to stay here. You have lots of decent entry level jobs for college grads, but then they feel like they don't have much mobility.
There are definitely some nice neighborhoods around here though. I live in the North Hills, which is a nice suburb. The city, itself, isn't very nice, but, out of a metropolitan population of nearly 2,000,000, only a few hundred thousand actually live in the city.
Economist here. You guys are in for some good times. If the housing market "quickly" (over the course of 2 years) corrects itself then the US GDP will probably contract by about 1% in a given year. The current account deficit (not to be confused with budget deficit) of 6.5% of the GDP will jump up to around 8-9%. The dollar "crisis" Greenspan has been talking about will materialize with such a current account deficit. A weak dollar will lead to fairly high inflation of 5-6% becase the US has a $700 billion trade deficit. As The Economist states, the US economy is "creaky."
Bluecondor
Member
Yamauchi said:
I have to admit that this sounds very logical and very scary. I have never understood how home prices could be as high as they are in all of these major cities. It has to stop sometime, and - like the tech stock bubble in the 90s, the market will correct itself....
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