The bubble has officially burst, folks,

[OldLeftieLawyer]

and the real estate party is over.

This is from the front page of today's (Saturday's) Washington Post:

Doors Close for Real Estate Speculators

After Pushing Up Prices, Investors Are Left Holding Too Many Homes

By Kirstin Downey
Washington Post Staff Writer
Saturday, April 22, 2006; A01

Investors who sought quick profits buying and selling real estate in the Washington region are in full retreat, dampening demand for homes, most notably for condos.

What is becoming apparent, market watchers say, is how big a part speculators played in the region's real estate boom of the past few years. Not just condominiums, but also townhouses and single-family houses, were snapped up by investors using no-money-down financing and non-traditional loans. They helped send prices soaring at unprecedented rates. And now many are trying to sell, or rent at a loss. Some may eventually dump properties at low prices to get rid of them. That could weigh down values for everyone.

Sales of new condos fell 43 percent in the first quarter of the year, compared with the first quarter of 2005, according to one report, and there are almost four times as many existing condos for sale than last year.

http://www.washingtonpost.com/wp-dyn/content/article/2006/04/21/AR2006042101720_pf.html

[blm]

1. Same thing is happening in Charlotte area, too.

It was so hard to find a home here just 2yrs. ago. Now, there are so many houses for sale at reduced prices, it's ridiculous.

[Rockholm]

22. Flew into Charlotte in late February...

The countryside landscape was from the air was orange. As in clay. As in new construction everywhere.
Oversupply is a major issue, and is what is driving down prices.

Sadly, investors have driven the market wildly high, displacing many who could not afford rents. Here in Boston, triple deckers were snatched up, converted to condos and sold for rather high prices. Now, there is an oversupply of condos here.

What seems to always be missing from these "burst" stories, is that many people, at least here in Massachusetts, who have owned their homes before 1992 have made enormous paper profits. I wish that I had stayed in the condo I bought in 1998. Instead, I moved up every couple of years. Now I have a beautiful home 200 yards from a stunning harbor, just under 3 acres and have no intention of moving.
The folks who buy to flip may get hurt. Prices are softening, not bursting.

There is really too much information out there that is confusing. One reporter in the Boston Globe writes NOTHING but negative stories concerning real estate. One wonders WHY she is so negative.

Bottom line. If you own your home and you plan on living in it for a bit, you are fine.

[LiberalPartisan]

79. Welcome news - long overdue.

And may the speculators get taken to the cleaners - it just means bargain real estate for others.

[BlueStateBlue]

2. Same is true in NJ. Here's a link to a terrific blog

http://nnjbubble.blogspot.com/

Being a disgruntled renter in northern NJ, I'm addicted to this blog.

This guy publishes quite a bit of well-researched data, and refuses to take donations or even allow ads on his site.

Spread the word - the bubble has burst!

[Triana]

3. The idjits who like to 'flip' real estate got burnt, it seems...

...too bad their bad investments and greed will hurt the whole market (ie: everyone else) even more.

[BlueStateBlue]

5. The fallout is going to be ugly for the unsuspecting first time buyers

who signed on for "suicide mortgages".

I understand that with many of these crazy loans, the monthly commitment can go up by as much as 60% after the loan rate resets (usually 1-3 years) Let's say a naive young couple signs up for an interest only mortgage to get the house they want, and they start out with a $2000 monthly payment. After the reset, that goes to $3200! How many first time buyers are going to be able to handle that?

And the new bankruptcy law will only add to the carnage.

[acmejack]

18. My goodness, what kind of loan is this?

I don't know very much about these exotic financing schemes, I have avoided them like the plague and I haven't financed anything for decades. What's the deal on this, I understand it has to be an ARM of some type, but holy cow-60%?

[Triana]

23. JUST AVOID THEM....

..go with a 15 or 30-year fixed mortgage. Forget the fancy schmancy crap.

[American liberal]

28. that's the whole point

many buyers couldn't "afford" to use traditional financing, because the price of the home was too high! So, they would get entangled with those interest-only or short-term ARMs in order to have "reasonable" monthly payments.

[incapsulated]

43. They were handing them out to anyone who wanted one...

NO MONEY DOWN!

No one read the fine print, it was their chance to own a home.

All the while I was thinking when this goes down the toilet, these people will be screwed.

[DoYouEverWonder]

72. Even better

go with a 30 year but pay it off like a 15 year.

That way if you get in trouble you can lower you monthly payment back to the 30 year rate and that gives you the best chance at not losing your home.

[Clark2008]

77. I was smart enough to do that - built tons of equity in my home

in five years.

After an awful divorce and a deadbeat who rarely pays child support, I was able to re-fi to a 30-year-mortgage in my own name and my payments are at least $200 less than apartment rent and $400 less than renting a house in the same area.

I saved my home, have tons of equity and, now that I'm remarried, we'll be able to afford a bigger home in a couple of months.

[BlueStateBlue]

46. Interest only ARMs

You pay only interest for the "golden" period of the first few years, then it amortizes over the remainder of the term, with a much higher monthly payment.

[okieinpain]

61. damn, who can afford 2000 a month. I live in oklahoma, and I make

a really nice salary for this place. damn, I can't even imagine having to worry about coming up with 2 grand for rent every month.

[Warpy]

24. My pop's house qualified as a distressed property

because my 89 year old pop had been living the bachelor life and hadn't kept up with upkeep for quite a while. I priced it slightly under market value and was reasonable when a bid came in. It sold in a week, to a flipper.

That person is going to have to do a lot of cleaning and cosmetic work like painting and flooring and landscaping, but with an investment of under $20,000, he's likely to see a profit of $20,000. It's not what he would have seen two years ago, but it'll keep him in business and return a property to liveability. That's the kind of property flipping that provides a great service and I'm all for it. I was happy to be reasonable about selling the place to him.

People who are going to get burnt are the ones who took out those ridiculous interest only loans on new construction, thinking they could just let it sit empty for six months then cash out. Since that's naked speculation that just bids up property prices, removes usable housing from the pool of people who are desperate for it, and hurts neighborhoods by offering empty buildings attractive to squatters and vandals, I'll be quietly gleeful watching them get nailed.

[jwirr]

27. Doesn't this also hurt the little guy who bought a house and

now would like to sell it?

[liberal43110]

73. Yes, it does

I'm speaking for myself.

[Faux pas]

4. I don't feel for the get-rich-quickers, they created their own mess.

It's the average Joe Schmoo who gets stuck with paying high mortgages on property that isn't going to be worth what they paying for it.

[Triana]

21. Exactly...the get rich quickers are/were part of the problem

Everyone else gets to suffer for what they helped cause.

[Faux pas]

33. Class warfare sucks. n/t

[warrens]

58. Yeah, when the wealthy, connected and greedy prey on the middle class

It sure does

[MsTryska]

62. to be fair, i don't think it's the wealthy

making the stupid mortgage choices and flipping property like there's no tomorrow.


Rich people know how to get rich and stay rich. it's the nouveau riche, and those hoping to one day be rich that let finance get the better of them.

[Faux pas]

65. The middle class better wake up or there won't be a middle class

anymore.

[Stinky The Clown]

6. I'll take a couple of contrarian views of this .......

First .... the operative words in this article are:

"Investors who sought quick profits ....."

and

" ..... no-money-down financing and non-traditional loans."

The fact is, over the **long haul** real estate is a sound investment because it is based on the intrinsic value of the property. Unlike, say, stocks. Or alpaca farms.

The fact is, those 'creative' loans were **never** in anyone's best interest except for the company that made the loan .... in hopes of later repossessing a certain percentage of the properties securing the loans. A reverse 'get-rich-quick' scheme that should have met with the ire of angry consumer advocates but never did.

Depressed home prices are, in fact, a good thing for the larger society. (This last being said by :::gasp::: a (very minor) real estate investor with two properties). Depressed values will lead, at some point, to more genuine owner-occupied houses. And that type of market is sound.

**********

The only wild card ....... the underlying US economy. And **that** worries me.

[BlueStateBlue]

9. The creative loans have largely contributed to the unrealistic prices.

No easy money, no huge uptick in prices.

I have read statistics that in the bubble areas, over 40% of buyers in the past two years have used creative mortgages.

Interest only loans were never meant to be used by the end user (homeowner, bagholder), but by investors and venture capitalists who will be "in and out" by the time the third mortgage payment is due, if that many.

The last time interest only mortgages were commonly taken by the public was in the late 1920's, just before the Great Depression.

It's a sad state of affairs.

[kurth]

7. Guess who's gonna get hurt the most?

Not the banks and speculators.

[Poppyseedman]

12. Actually, not true.

If the bankruptcy rate goes up dramatically, the banks will be hurt unless Uncle Sammie bails them out, Oh that's us.

You post as if the banks have dome something wrong and should be hurt? A bank is a highly regulated business, not a loan shark

Nobody put a gun to someone greedy or stupid who signed a loan.

[Teresa4ChrisCarney]

45. I worked in a home equity loans department

banks are as close to loan sharks as they can legally get. HE loans and lines of credit are a very bad investment and banks go after the easy targets, foolish people who don't have financial knowledge. They market these loans to them VERY agressively. But even worse than that are their credit card practices.

[sofa king]

57. I have terrible credit, and the banks wanted me bad.

For awhile there, I was getting home-loan letters from real estate agencies and banks weekly. Twice in one week while I was looking to rent a new Democratic White House, I had agents tasked with showing me a property for rent try to sell me a house or apartment nearby instead. One of them told me my credit was too bad to rent the place I was looking at, but he could get me a home loan, no problem.

Why did all those people want me to buy a home? Because they could see from a mile away that I was a sucker who would never keep up with the payments. That's predatory practice, if I've ever seen it.

[MsTryska]

63. You think that's bad - you should have seen my mailbox

after i claimed Bankruptcy - all sorts of people were literally throwing credit cards and cars at me.


the funny thing is, that i haven't owned a credit card for almost 10 years (my bankruptcy was primarily due to medical expenses).

[Poppyseedman]

8. In real life, it more like a leak not a burst.

In everything there are cycles, including housing. Real estate pricing will not plummet, just stabilize. For those with patience, real estate will pay off again.

For the stupid or greedy who bought or refinanced homes way past their ability to pay for them by getting ARMS or interest free loans.

Well, in life there is no "free ride"

[BlueStateBlue]

11. What state do you live in? n/t

[Poppyseedman]

13. Florida.

[BlueStateBlue]

15. I've read several reports that the party's over in Florida

Brand new condos for sale everywhere with no takers.

Of course, I'm in NJ, so I can't say for sure... :-)

[Poppyseedman]

19. Don't misunderstand me.

Prices will drop depending on the area. The doom and gloom reports are highly overrated.

The bottom is not going to drop out of the housing markets. My home was worth as much as $160,000 as of a few months ago. My area did not experience the hugh increase in value as some other areas did.

If I wanted to sell today, I can still easily get $150,000 on the first day.

That's still 50% more than I paid for it just 5 years ago.

[1monster]

25. It is no longer a seller's market. It is now a buyer's market in Florida.

Within a six block area of my home, there are easily ten houses for sale. Two on my block alone were for sale long enough that the original contract with the Realtor expired and the owners decided to pull them off the market.

Up until late last year, houses in this area sold easily within weeks, if not days, of being put on the market. (Five cleared empty lots across the street from me went up for sale on a Monday two years ago. I asked the asking price. The answer was so much more than the amount being asked for lots in the area just a year before that I shook my head and told them they'd never sell for that much. The lots were sold by Thursday. They probably could have asked another $50,000 or so.)

We still have major housing PUD's and DRE's going in all over the county. Just a few units here and there you know, like 25,000 here, 7,000 there, 34,000 over there, etc. After a while, were talking some real numbers.

The only up side I can see is that housing prices may come down enough that middle income and working class people may be able to afford housing in the area...

[Lorien]

52. God I hope so. I live in a 'historic" Florida neighborhood where old homes

(with class and character-but not a lot of square footage) are being demolished right and left to make way for pastel stucco condos. It's depressing as hell. there's no attempt at all for historic preservation in this state, so entire neighborhoods are being ruined at an alarming pace. You'll have a tree lined street with small and moderate sized craftsman, cape cod, tudor, Spanish and georgian homes-then interrupting this tranquil scene are two or three MONSTROUS stucco Mcmansions; 6,000 square foot homes that are built right up to the property line (no trees, of course; they take down the gracious 200 year old live oaks before they build). It looks downright freakish.

[Zynx]

26. Indeed there are cycles.

Historically, way out of whack real estate markets do crash and burn. It has happened in Boston, New York, Houston, Florida, Chicago, and various Western markets as well. I expect it to happen again. Markets correct to account for imbalances. For prices to simply stay still and wait for fundamentals to catch up in the out of sync markets would take years and years and the speculative investors who drove the prices up in the first place by providing much of the marginal increase in real estate investment will not just sit there when much better returns present themselves elsewhere. They will pull their money out and that, combined with high prices pricing a huge portion of the population out along with higher interest rates WILL cause inventories to build and prices WILL decline.

[mike_c]

10. it won't matter unless the result is SIGNIFICANTLY reduced costs....

In my county only 12-14 percent of the population can afford to buy a median priced home now. Real estate costs have doubled and nearly tripled in the last several years. I'm in the group that cannot afford to buy a home-- and I'm a thoroughly middle class professional with a salary well above the local average. The only bursting bubble that's meaningful IMO is the one that cuts house prices at least in half, back toward their late nineties levels.

[BlueStateBlue]

17. Same thing here in NJ. The median house price is around $450K and the

median income is $58K.

The economists say that markets always revert to fundamentals, which for real estate should equate to the median home price being ~2.5 times the median income.

I can't wait for that day to come.

[jbnow]

54. y sister in Princeton bought a house

for $100,000 several years ago. She sold it a few years later for 4 times that amount. A nice little family home, nothing special, skinny lot, she'd done few improvements.

I kept wondering where a teacher let alone a janitor or waitress with a family would live. That is true in many places.

I bought a house in the 90's for a very low price. It was ugly and I made it cute but it is still a tiny 3 bedroom, a starter home. When I went to refinance I was shocked that it was assessed at more then 5 times what I paid for it. I was sure they had confused the dip in my driveway filled with water as me having lakefront property. A low wage earner could never afford my home now and a high wage earner shouldn't want it. That was the first time I had any idea how values had gone up.

[trof]

14. Condo market very flat in coastal Alabama.

Real estate second only to tourism as local "industry".
Several friends are realtors and they say just ain't nothin' movin' right now.
Beach and nearby rentals at close to 100% occupancy, though.

[aquart]

16. If the bubble has burst, should citizens press their states for

re-evaluations of their homes?

My mother's dinky split level is taxed at a ridiculous value of over half a million.

[Warpy]

20. I'm hearing a lot of "price reduced" on the real estate shows

here in central NM, but only on the high end houses. Those suckers are just plain not selling, since the high end buyer generally builds because he doesn't want to live with somebody else's questionable taste. There is nothing quite as unwanted as one of those million dollar monuments to corporate ego, I guess.

More houses are being shown unfurnished, which means people have had to move before the place sold. Prices are no longer increasing week to week, but the prices of bread and butter houses under $200,000 are holding steady. Houses in my own neighborhood are still selling within a couple of weeks, while houses elsewhere are sitting on the market for a couple of months.

I'm also not seeing as much construction and the trailer dealers are starting to bring in more inventory.

All this adds up to a market that is changing. My area is doing well because it's convenient to everything, important in a time of increasing transportation costs. Prices in the exurbs are stagnant and due to decline because high transportation costs are making them unaffordable.

Anyone trying to get into housing now has a terrible choice: do they pay an inflated price to get in, knowing that their down payment will evaporate when prices decline, or do they wait for the price decline and risk paying higher interest? It's a tough choice.

[Stinky The Clown]

29. Warpy, you're exactly right

In the Baltimore area, where we've invested in two houses, ours were, when purchased, and remain, at the bottom end of the market. They're affordable to almost anyone who can legitimately qualify to buy a house. The more pricey (ha!) of the two is in a stable close-in suburb. The cheaper of the two (from a purchase price perspective) is right downtown in a transitional (but largely owner-occupied) neighborhood. We've seen some **really** serious appreciation in its value, but still well below what nearby neighborhoods are selling for. This one was clearly a success for us, if for no other reason than we won the 'location, location, location' lottery.

But back to your point .... the lowest ends of the market are at a minimum, stable, and in many cases, still good investments. And that goes to the point I made upthread ..... it helps the entry level buyer who intends to live in what she buys. The house will hold its value and enhance her personal wealth. And **that** is a big part of the American Dream.

(on edit ..... :::::removing and cleaning the lenses on my rose colored glasses::::: :) )

[grasswire]

30. wait 'til gas prices drive real estate even more

Don't ya think that people who live 40 miles from work are going to start wondering about the future of their commute? I believe that's going to affect the real estate markets soon.

[OldLeftieLawyer]

39. You got that right

All these people sitting on the interstates, commuting. Wait until they realize they can either drive their cars or heat their homes.

Total collapse. That's what I think we're gonna be seeing.

Total.

[Southsideirish]

31. In Chicago things are still pretty good - I hope they stay that way!

Lots of properties for sale but so far, no big clouds developing over the market.

[Phoebe Loosinhouse]

32. Too many info-mercials and get rich quick shows on TV

The greatest factor in the a bubble bursting will be the huge influx of new and newer small investors who will be burned by a downward trend in prices. The NAR did a study that said as many as 25% of home purchases last year were investor related. That is unprecedented. Too many of these new investors did not have a really good grip on the basics of the investor market - particularly the ones who were buying properties that already clearly have negative cash flow but they were banking on constant appreciation to bail them out and deliver a profit. If the appreciation gravy train slows and stalls, they are cooked. Then they panic and they toss this housing inventory into the market, they are willing and grateful to take a loss and move on and lick their wounds, but the downward spiral effects ALL properties.

Real estate has always manifested itself in 2 different guises - as "shelter" and as "investment". If you bought a home you can afford on mortgage terms you can live with and you plan or are willing to stay in your home over the long haul - you will be fine. You are a "shelter" buyer. You have the enjoyment of living in your own home and you enjoy some tax breaks. Investors right this moment should make sure that their properties will at least break even as a rental. The problem with real estate as an investment has always been the il liquidity. If you need to sell fast, you may not always be able to. It's not like a stock where you make one phone call to your broker and it's sold in 2 minutes.

[The Velveteen Ocelot]

34. A realtor friend told me business is lousy lately.

Lots of houses are for sale but they're so expensive people can't buy them; the sellers can reduce the asking price only so far because they paid too much in the first place, unless they've lived in the house for a long time. For the last few years, maybe beause of low interest rates, people have been buying the most expensive houses they can finance (sometimes using these creative mortgages, which will eventually bite them in the ass), and then they can't afford to furnish them. This guy said the same folks are even getting their utilities cut off because of the expense of heating these mcmansions many of which have vaulted ceilings and huge windows. And swimming pools -- in Minnesota, where you can use the damn things for only about 4 months a year.

The other problem that we are starting to see around here is that people are buying houses in more distant communities, maybe up t0 50 miles away, because they are too expensive in the close-in suburbs. But now with gas prices going up, who can afford the commute?

Guess I'll stay in my little old house in the 'hood.

[DancingBear]

35. This is a bit misleading

I live in northern Virginia, and what is happening is that ONLY the speculative "people will buy anything if it looks new" housing market is hurting. In other words, the 25 lot "estate home" sub-division that Toll Brothers built that sits 100 yards from a major thoroughfare. Two years ago those houses would have been long gone. Today, they sit with builder incentives piled all over them. The same for the 200-300 lot Phase 3 and 4 sections of existing developments.

However, the market for homes done "correctly" is still fine. Last year, we bought a home in need of deferred maintenance. It sat on a private 5 acre lot in a good area of the county we live in. Last week, I spoke with our realtor, and we are on track to list it for sale (next year) for what we thought it would be worth at that time. Granted, I've been doing investment real estate for a pretty long time, but the key as always is to not be blinded by the dollar signs you think you see at the other end. Here in VA, as (I'm guessing) in a lot of the country, speculators were able to renovate/build on the cheap (hell, they STILL do that) because so many folks here are so consumed with their Type A lives that they (literally) let the builders walk all over them. This is not a very savvy populace when it comes to housing, and since most of what they see is all flash (game rooms, media centers, granite counters sitting on top of builder grade cabinets) they don't really have any idea what constitutes quality. Now that the speculators and big-box builders have (as they always do) overplayed their hands, and looked at anything with four walls and indoor plumbing as a gold mine, the conventional real estate market is taking over.

I remember when I moved here, the first thing I did was decide we would buy investment property - somewhere else. :)

We never did, though.

[OldLeftieLawyer]

37. In Alexandria,

especially in the West End (condo canyon), there are places still being built - close to Metro, so that's a plus - but, they're going to go begging, because the contracts for these projects were written a couple of years ago, and you and I both know what the $$$ is like now. I think there's going to be a shitload of cut-rate condo sales which will then become rental properties.

Those great big houses out there past Dulles - who's gonna pay for the gas for the commutes?

[DancingBear]

50. On the button

What is fascinating to watch are the big developments now going up west of Fairfax that were approved years ago for "start dates" in 2006. The builders have to put them up, lest they lose the building window, but nobody wants them because of a) gasoline costs and b) their original appeal, being "in the country" (or whatever the bozos around here THINK is being in the country) is now lost since 800 houses in a planned development on 1/3 acre lots with 25 minute drive times just to go the 1/2 mile to get on I-66 to get to work is not "quaint" anymore.

I often wonder how the folks who bought in WVA and travel to DC each day for work are doing. They moved there because they couldn't afford VA prices, and now they're being killed with gasoline.

I am SO grateful we are heading back to New England next year. Someone else can have my house. Gladly.

[Virginian]

75. In western Fairfax

We were the last in our townhouse development to get full asking price in June. Our agent was frustrated that it took 20 days to sell. The development was a majority H-1b visa holders buying their first home on interest only loans.

They were good neighbors and I loved my townhouse, but I was afraid of a market downturn turning my community into a ghost town. If they can't sell when the visa runs out, they can walk away. Their expenses may have been a little more than rent, but they had a chance to double or triple their money. I don't think defaulting on a loan in the US will hurt them in India.

My brother's townhouse in Manassas has been on the market since September. He's retiring to Florida. They really fixed it up with the English garden and fishpond in the back yard. They trained wisteria to grow up their deck for more privacy.

[cliss]

36. Here in Oregon, we've had a real estate bubble

the size of the Hindenburg. It hasn't burst - at least not yet. But....we're seeing the zeppelin lose some steam.

Houses are sitting on the market longer....and .longer....and longer...

But still, you have lots of little bulldozer projects; little cracker boxes that are 560 sq. feet, and they sell for $360,000. Unbelievable. The foolish buyer will never be able to recoup their investment.

Coincidentally, I went out to dinner with a lady friend last night. She's very excited: she's going to start investing in Foreclosed homes. She's going to buy a bunch of houses, fix them up a little bit, do some landscaping, and turn around a nice big profit. Can't go wrong on this one!!! Now's the time. Hurry...

She just went to one of those "investment seminars". They didn't let her go until they got about $8,000.00 of her money. But what the hell - she's going to make millions!

I stifled a yawn. I've heard all this before. Get rich! (zzzz) Can't lose (snore).

The problem is, she's getting in too early! Just wait another 3 years, after Bush has really wrecked our economy. There will be SO MANY houses, just sitting there. And then, I'll......

[OldLeftieLawyer]

38. You're right

Timing.

This one isn't going to recover any time soon. Not hardly.

Eight thousand dollars? Oh, man ...............

[BigYawn]

48. Can't say the "Bush economy" has hurt my stocks...atleast so far....

I just cashed out of the stock market with a 60%
profit over 4 years. Now I will wait like a scorpian
waiting for a beetle to walk by...until the market
drops by 10 to 20% and get back in sometime this
fall ...hopefully for another good run.

As for the real estate, I know nothing, and frankly
have no time to spend on finding buyers, dealing
with brokers, dealing with lawyers, dealing with
contractors for repairs, and preparing complicated
tax returns....just not my cup of tea. My golf
handicap would sky rocket with all that waste of
time.

[omega minimo]

40. "BECOMING apparent"!

:rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :puke:


"What is becoming apparent, market watchers say, is HOW BIG A PART SPECULATORS PLAYED in the (nation)'s real estate boom of the past few years. "

[Gormy Cuss]

41. I know, such a surprise.

Who'da thunk it?
:rofl:

Next thing you know, market watchers will notice all those interest-only mortgages.

[omega minimo]

44. Lotsa "flippers" will get stuck holding the bag they hoped

to sucker someone with

[Teresa4ChrisCarney]

42. a good time for my powerball investment to pay off

This would be a great time for my powerball investment to pay off. Buy low!

[Neil Lisst]

47. Yep. It sure has.

It really started last summer-fall, and it's been coming since. We're a long way from the bottom, yet.

[sendero]

49. Easy credit..

... leads to speculation leads to a bust. This has happened a zillion times before and it will happen again.

Thanks in no small part to our own Federal housing agencies FreddieMac and GinnyMae, who have made the financial requirements for getting a mortgage non-existent.

Add in MORONS who will buy an ARM at a 40-year interest rate trough, and assorted dummies who think that the prices for housing can only go up, and you create a recipe for unavoidable disaster.

And yes, if you are planning to live there and not sell, you are in better shape. Unfortunately, most people have trouble sleeping when their mortgage balance exceeds the current market value of their home, regardless of their plans to sell.

[APPLE314]

51. DON'T BUY THE HOUSES BANKRUPT BANKS TOSS OUT.

WAIT ON THE COMMERCIAL PROPERTY THAT GETS TOSSED AT THE END. YOU WILL BE ABLE TO GET IT 10 CENTS ON A DOLLAR.
CONCENTRATE ON GETTING BANK LOCATION PROPERTIES AND GOVERNMENT BUILDINGS. BUY ANYTHING THAT HAS SCULPTURES AND/OR WATER FOUNTAINS IN FRONT OF IT. TURN THESE PROPERTIES INTO EXTREMELY LOW RENT PLACES.

[Vinca]

53. These things go in cycles - eventually there will be another boom.

If you bought intelligently you'll be fine. If you financed 125% of your McMansion and have to move, you're in trouble.

[Bandit]

55. Tell that to my city assembly who raised my property value 25%

They raised it 10% last year and 25% this year. They don't seem to know real estate balloon is burst..My property taxes are based on a 12 millage rate which means considerable in property taxes this year.

[wicket]

56. Boston Globe: Multifamily-home sales boom ends 4-year run

15% decrease in 2005 signals the state's market has peaked

http://www.boston.com/realestate/news/articles/2006/04/22/multifamily_home_sales_boom_ends_4_year_run/?p1=MEWell_Pos2

Sales of multifamily properties in Massachusetts dropped 15 percent last year, ending a four-year run of rising sales and signaling that the market for condominiums converted from duplexes, triple-deckers, and four-families has peaked.

Multifamily sales, which make up 10 percent of the state's housing market, have risen every year since 2001, hitting a record 9,401 units in 2004, according to the Massachusetts Association of Realtors. Sales were fueled by contractors' converting them to condos, investors' buying them as long-term holdings, and homebuyers who would rent the spare units to help pay the mortgage. But last year, multifamily sales declined to 7,980, the association said yesterday.

''There's been a tremendous amount of condo conversion, especially in recent years," said Arthur Foley,of Century 21 Annex Realty in Quincy. ''The market's getting saturated with condos."

During Massachusetts's housing boom, buyers increasingly turned to condos as an affordable alternative to single-family homes, which are the third most expensive in the country, after Hawaii and California. Builders, small developers, and investors rushed to buy two- and three-families in Somerville, Quincy, Waltham, Dorchester, Worcester, and other communities. They could purchase the properties relatively cheaply and renovate and resell them as condos for far more than they paid for the properties.

As the condo market exploded, annual sales of multifamilies increased 33 percent from 2000 through 2004. The median price doubled during that time, to $357,000, according to MLS Property Information Network Inc., which also tracks the housing market. Prices continued to rise in 2005, with the median price jumping 8 percent to $384,900.

[Catherine Vincent]

59. Does that include Texas?

This weekend I visited an area southwest of Houston to where my sister is building her new home and everywhere I looked they were clearing the land to put up these new subdivisions. A lot of the lots are already sold.

[elehhhhna]

69. TX prices are still relatively low and sales are booming...

especially entry-level new home construction.

[1932]

76. Oil:$75 per barrel.

[guidod]

60. It's happening here in the Los Angeles area as well,

My brothers house has been for sale for 3 mos., he's had to drop the price twice and it still sits there.

[calimary]

66. There's a house next door for lease - sitting there vacant since February.

I think probably they're asking WAY too much for it.

[guidod]

67. Hi neighbor!

This housing market is going to take a lot of people down to their knees. I really feel sorry for the people that took out loans and extended themselves beyond reach. :hi:

[calimary]

70. Hi back atcha!

Even just this past weekend, I couldn't believe how many For Sale signs there were, poking out from the grass at almost every major residential intersection - especially around the Westside. Unbelievable!

[kineneb]

64. don't know if the bubble has burst here

(here is Lake Co. CA)
but it is sure leaking lots of air
...what gets me is all the new construction
... one place has a for-sale sign that is asking $325K- for a modest-sized place on a dirt road, next to one of the main roads
...who here can buy that? The folks who would be commuters won't, because we are too far away from the jobs.
...lots are still available and it is much cheaper to install a manufactured house on them than stick-built


I predict all those folks who put their houses up for sale are not going to make the money they expected. The peak for us was last summer. There are lots of places for sale now. I have even seen the magic word "reduced" several times.

[saltpoint]

68. Agree. The signs support it and it's beginning to look like a much

tougher go.

[Blue_Tires]

71. knew it was coming, sooner or later

luckily, i never had enough cash to even dream of buying or investing in the real estate rackets

[Clarkie1]

74. Great news. A healthy correction. n/t

[oasis]

78. Condos have a high price tag plus monthly association fees. Who's gonna

have time to play tennis, swim or use the gym equipment they're paying for if they have to work extra hours?