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tatupu70
2010 Nov 11, 9:34am
^AZ Real estate agent and/or troll.
~Misstrial
So if someone likes Phoenix better than CA then they are a troll? That's pretty funny...
toothfairy
2010 Nov 11, 11:12am
only 1 house in Oakland is a buy?
You mean, “a house in Oakland is a buy?†Isn’t Oakland, CA the murder capital of the known universe? Why would you want to live, er, die there?
it's mostly terrible and you wouldn't want to live there which is why there are so many "deals".
The low in market crashed because half the owners were flippers and decided to walk when prices didn't go up.
high end market will only crash when jobs crash or in the case of most expensive areas people who live there dont really need jobs so may never crash.
I live in Burlingame, in a house my family has owned since the 30s. There is unquestionably a multi-generation wealth effect supporting prices here and I believe that is something that can be relied upon going forward. People are willing to pay an insane premium to live here (for good reason, I might add; it's a fabulous area). If I had $3M cash to invest buying a 25-30X annual rent house here might make excellent sense as long as low-risk investment return is in the toilet. What else can you do with the money if you're not risk-tolerant?
Talk me out of this line of thinking, please. ;-)
Patrick
2010 Nov 14, 2:42am
You can live here and enjoy everything about the area without paying that insane premium though. Just rent the same thing, or better.
You can hold that $3M and guarantee that you at least don't lose in nominal dollar amounts. If you buy a house with that much money, even a few percent loss is a lot of money. Not to mention property tax, maintenance, etc. A house is a guaranteed cash drain.
Am I talking you out of it yet?
high end market will only crash when jobs crash or in the case of most expensive areas people who live there dont really need jobs so may never crash.
WHEN jobs crash? Har, stop it, you're killing me.
> Am I talking you out of it yet?
It's a start. I have a lot of thinking to do.
>You can live here and enjoy everything about the area without paying that insane premium though. Just rent the same thing, or better.
That is almost the situation I have now. I pay considerably below market to live in an inadequate house in a terrific area. The intelligent thing to do with this property would be to renovate/expand, but that's off the table for complex and utterly stupid reasons not worth going into here. The money's sitting there earning squat, everybody wants to move WAY up, prices are 35-50% too high and it's hard to see how that is going to change much due to the high net worth of the community. Yet rents ARE depressed here as everywhere else. Your math says it would be better to spend as much $8-10K/month on rent than buy a $3M house and you're almost certainly right, especially as it's hard to build a case for any future appreciation in prices. There is more likely to be a very sloooow downward spiral over a long time. No crash though. Too much old money that isn't going anywhere.
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There is still very little housing that's a good deal to buy in the San Francisco area. You can rent the equivalent of the vast majority of houses for sale there much more cheaply than the monthly cost of owning the same thing. Most owners in the SF area are losing hundreds or thousands of dollars per month compared to renting, and prices are still declining as well, to add insult to monthly injury.
But Phoenix, like many other areas, has crashed hard, with the result that rent can cover mortgage and all other expenses for the majority of houses of Phoenix now. So it pays to own rather than to rent for the majority of houses there on a monthly basis, though there is still risk of further price declines as more foreclosures come on the market.
These maps and stats are from my What's It Really Worth? service.
#housing