US real estate

I don’t see how people can live in such squalor…

On Yahoo this afternoon. 22 year old student buys 6,744 Sq. Ft. flat in NYC Central Park West, $88 million USD.

http://finance.yahoo.com/news/billionaire-s-daughter-pays-record-sum-for-nyc-pad.html

I will have my loft for sale in the new year… less than $1000/sf for sure.

R

LMO brings up an interesting point. Very expensive property is still being sold. You would almost think the recession hasn’t really touched like…1% of the population. Hmmm.

FYI, the recession is over… Didn’t you get the memo? Now we are all just poor.

Is Canada the 1%?

We had hippies camping out in parks too…

R

The 1% has no nationality.

To add to Nurb, if you dont have the 20% you will have to pay for mortgage insurance (PMI). This covers the lenders if you default (having less than 20% tells them you are more ‘at risk’). It stays on until you reach the 20% in equity, which can be a long time taking in consideration the amortization table. Also, many mortgage companies will not approve you if you have less than 10% down, and at that much you probably will not get the lowest rate possible. At least some of these companies have learned that they need to be a little more strict on their lending habits.

/

Pearl?

So, in short, it’s really as bad as I thought? All US real estate is super low? Somehow I find that crazy that while salaries are pretty much comp to north of the border, housing is so much lower. I’m not sure if it’s good (so much extra money to spend on non-housing), or bad (equity is low and a loss of value compared to purchase).

R

The salaries haven’t changed much at all for a few years. In addition, cost of almost everything has increased significantly in 5 years. Gas, groceries, utilities, etc.

The housing market 5-8 years ago, was riding a huge wave of value. People were having bidding wars left and right. Demand grew, as did home prices. When the bottom fell out, the market corrected itself. Now we’re seeing home values at about where they should be. Those of us with bad enough foresight to see that we were paying too much, are getting screwed.

Living on the central coast of California, our real estate prices, in general, are somewhat insulated from the extreme downturn. The county, on the whole, is a “destination” for LA and SF dwellers as well as central valley folks. In other words, it’s a nice place to live, especially if you are retired (which I’m not). We relocated to the area in 1978, following my employer from Illinois.

In 1980 we were fortunate to be able to buy our first home; a 900 sq.ft. post-war bungalow; $61,000 (the man we bought it from paid $21,000 three years earlier). We played by the traditional rules; we had the down payment and didn’t exceed our allotted budget. Ten years later (1990 ) we sold it in to buy a newly constructed 1,800 sq.ft. two-story; $121,000. Eight years (1998) later we sold it and bought our current 3 bedroom, 2,400 sq.ft. multi-level for just south of $335,000; property taxes are a shade over $4,200 annually. Average price per sq. ft. was $1,770 at the time…

3 bedroom median home price in Pismo Beach:
As of today (12/2011): $537,500 (+11.4% in 3 months)
3 month prior: $530,000
1 year prior: $482,500
5 years prior: $787,500

A handy tool … http://www.trulia.com/

iab: Wow, great graphic. I keep telling people here that the bubble is going to bust. “no no no, we aren’t as bad as you Americans.” Really?

I dunno, I don’t see any bubble in the chart. Looks just like a US crash which was due to the horrible lending practices and consumers taking loans they couldn’t afford or understand. I think Canada will remain to do quite well and if anything even get stronger as people recognize it’s one of the few stable economies around.

R

Sounds like what I thought in 2006, R…

And then there’s Vancouver…

House prices in and around Vancouver are insane. I live in East Vancouver - traditionally the “up and coming” side of the city. Any non-fixer upper in this end of town is probably $1,000,000. On the west side it will be $2-3,000,000. It is incredibly frustrating as it is essentially impossible for a first time buyer to get into the market.

For your viewing pleasure I present Crackshack or Mansion.
See if you can tell the difference between a recent drug den and a million dollar home.

Are these crack shack prices for real?

Someone must have pastet “10” in front of “49000.”

mo-i

The bubble is what pushes that ever higher, primarily based around the longtime premise that “Real estate can ONLY appreciate in value”. It happened throughout the world, not just in the US. Bad lending practices were part of the problem, but you can look at the rapid growth of property and realize that at a certain point, more people will be selling homes that no one can afford, and then the bubble pops.

The issue is what happens when the developers and people who bought all that property hoping to flip it for a profit go broke.