Real Estate Market. Thoughts?

[Madeinhb]

Okay,
I'm a real estate appraiser in the Pueblo area and have been at it for 16 years. I've lived through the 2006-2010 roller coaster and made it out the other side. I can tell you we are heading for a massive downturn again. It's just a matter of when, so hang on.

- Values here are going up about 3-10% over the past 2 years depending on the neighborhood, which is now unsustainable. There are currently 20-25% fewer listings than normal pushing more market disturbances.

- The brokers and agents are screaming mad because they have full price offers on homes (way over priced to begin with) and the appraisals are coming in short, because there are no sales to support the contract price. Then I get called a lowball asshole because they didn't do their due diligence to begin with. (Fucked up brokers are a whole 'nother story)

- Market rents remain somewhat strong but FHA loans have become the new sub-prime lending source because they have relaxed the lending standards again, and people who should be renting are becoming homeowners. When you start to see 100% financing or ARM's it will have went full retard again.


I could go on....

Just bought mine but got lucky through a friend of a friend - so no bidding war. Now just waiting to see ARM's skyrocket and then might sell and wait for the crash.

[Persocon]

Aw crap, I should've read this thread before buying a 33 year old condo.
Here's how crazy this market is,

got outbid on a 758 sq ft 1 bedroom 1 bath old condo, Quincy & Chambers, asking $90k, sold for $110k cash, with a backup bid of $110k cash
got outbid on a 880 sq ft 2 bedroom 1.5 bath old condo, Peoria & Florida, asking $150k, sold for $162 cash
got outbid on a 790 sq ft 2 bedroom 1.5 bath old condo, 81st & Washington, asking $125k, sold for $135 cash

so I just got a 33 year old condo at Sable & Ellesworth for $110k instead, with the future lightrail 30 yards from my window

[Irving]

When the market crashes I'm going to try to pick up a 5-pack or 10-pack of condos.

[Brian]

When the market crashes I'm going to try to pick up a 5-pack or 10-pack of condos.

Just buy the condo uppers and receivers separately and assemble yourself in the garage during the next election cycle...

[Heuristic]

So what are your thoughts on using the inflated equity to buy something bigger? If its no cash out of pocket, is it a bad thing to do?

Okay,
so you buy a house that's around $400,000 for $470,000. The market crashes say 2 years later, and the house is now worth $300,00 on its best day. You're in the ditch $170K. You walk away from the house and let it go back to the bank. Then at the end of the year you get a $170k 1099 for the loss....

I have seen in more than once.

[Irving]

I never understood why people would walk from a loan like that. If they went through a job loss or something, I can start to see it, but I understood people were walking based on value alone and that just seems insanely stupid and irresponsible to me. Maybe a lot of those people should have stayed renters.

[ronaldrwl]

We sold our house in Littleton last year for a huge profit because we thought it was a good time to leave Colorado. To many liberals and pot heads moving in. There was no other reason as I can work from anywhere with a computer. We looked around the whole country for a place to live and made numerous weekend visit to different cities. We decided on East Texas and have loved it. Everyone has a different opinion but what I like is the hunting, fishing and southern ways. The people are outgoing-friendly and conservative. Just my 2 cents. We loved Colorado for 24 years.

[Dave_L]

Okay,
so you buy a house that's around $400,000 for $470,000. The market crashes say 2 years later, and the house is now worth $300,00 on its best day. You're in the ditch $170K. You walk away from the house and let it go back to the bank. Then at the end of the year you get a $170k 1099 for the loss....

I have seen in more than once.

We're looking at a new build so no bidding war, does that help? Price is about $380k but we are going to roll about 100k of equity from our house, which we bought pre spike. I look at it as were getting the house for essentially 280k since that will be our mortgage. But were getting a brand new house with tons of upgrades and more house. Then, in March, I want to sell the rental and pay off the cars with that profit. Were in for the long haul on the new house so should be able to ride any market cycle. But use the high to upgrade and pay off some debt.

[Heuristic]

I never understood why people would walk from a loan like that. If they went through a job loss or something, I can start to see it, but I understood people were walking based on value alone and that just seems insanely stupid and irresponsible to me. Maybe a lot of those people should have stayed renters.

You're right in most of them are job loss or medical issues where they and up walking. I've seen situations where people own a house, buy another bigger better house with the intention of selling the original smaller house, and simply walk away from the original home and let it foreclose. Sometimes intentionally....aka 'strategic foreclosures'. Its really tough to qualify for 2 homes nowadays from what I gather...

[ChunkyMonkey]

We're looking at a new build so no bidding war, does that help? Price is about $380k but we are going to roll about 100k of equity from our house, which we bought pre spike. I look at it as were getting the house for essentially 280k since that will be our mortgage. But were getting a brand new house with tons of upgrades and more house. Then, in March, I want to sell the rental and pay off the cars with that profit. Were in for the long haul on the new house so should be able to ride any market cycle. But use the high to upgrade and pay off some debt.

You aren't supposed to sell something that is appreciating to pay off one that is depreciating.


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