I know that this to a large extent a depends, literally, on town or county where you live but:
Do you think the generalized trend in ascending Real Estate prices in most places in the US has reached its peak, stabilized or will begin coming down?
Love to hear your thoughts on that in general and specifically :
What will Mr. Blandings House on the market today for $X go for after Labor Day, & on next June 23 in your area?
2 trends:
US real estate has been, historically, dirt cheap - world-wide prices are much higher.
The Boomers will be dying en masse in 20-30 years - there are fewer Gen Xer’s than Boomers - what will become of the houses the boomers leave vacant (want a real deal on a house on the lower gulf coast of FL?)
My guess: the major markets will continue to experience growth - the smaller towns/out-of-the-way places will dip, at least for a while, as the boomers leave them vacant.
In play: telecommuting - if it becomes the norm, the need to live in large cities will be eliminated. What then?
Advice: buy cemetery plots - just as boomers ruined the housing market, and now the equity markets, eventually they will skew the cemetery price structure…
hh (who believes in burn-and-scatter)
I personally don’t know what’s going to happen with real estate prices, but from what I’ve read lately (Barron’s, The Economist, The Financial Times, etc.) the consensus seems to be that housing prices are currently in a bubble. I think there may be a financial illusion at work here, driving the demand upward. People think that their mortgages are cheap because rates are so low, but the only reason rates are low is because inflation is low. The inflation-adjusted rates, and all of the associated costs, haven’t really changed.
Here are two very good articles from The Economist on this subject:
Where I live, here in Southern California, you cannot find a decent house for less than around $400,000 (I’m not talking about a nice house, just a decent house). Since it’s generally not a good idea to take out a mortgage larger than twice your annual income, I don’t see how I’ll be able to buy a house in the current market.
Now, if we can just have another major earthquake strike here, say an 8.0 or thereabouts, the demand for homes will plummet, and I should be able to find a house at a bargain price!
Supply and demand.
Expect tech-oriented metropolitan areas and pedestrian-oriented neighborhoods in cities and suburbs of metropolitan regions that are growing to continue their upward climb. Suburban “new urban” neighborhoods will probably experience a greater-than-average rise in housing price than their surrounding loop-and-lollypop counterparts.
Racial transition, usually from white to black, almost always depresses housing values, unless there are proactive racial integration plans in place (i.e. Cleveland Heights, Ohio; Oak Park, Illinois; Hyde Park in Chicago), or the market is extremely hot and prevailing social attitudes prevent re-segregation (i.e. Aurora, Colorado). Otherwise, there’s lots of supply, with demand coming from those with typically lower incomes than those leaving the neighborhood.
Suburban areas where the housing stock is increasingly considered obsolete (i.e. small, 1950s era three bedroom, one bathroom houses), in areas that aren’t convenient, under gentrification/teardown pressure, the “target neighborhood” of a growing immigrant group, or in a booming metro area with high real estate prices, will likely plummet in value. Places like Tonawanda, New York and Euclid, Ohio will be hurting in 10 years.
Real estate will prices will crash in the next 4 years. There is overbuilding, and too many people buying overpriced homes on credit.
Oh please let that be true!
I have a fairly recession-proof job and a lot of savings.
I believe that Will Rogers once said “Buy land - they ain’t making any more of it”.
Don’t know about where you live, but where I live, they’re not going up. Granted, it’s only been a year, and before that we experienced incredible growth. I just accepted an offer on my house that is fully $20K lower than similiar homes sold for in my neighborhood last year.
In my city in california, prices are DOWN about 15% from a year ago. As a matter of fact,
they have been dropping for two years. The prices are pretty high though.
Don’t forget that Savings & loan scandal in the 80s (?), we are still paying for that. Wasn’t that when
people bought lots of real estate in a bubble?
Let’s see…15% off out-of-this-world-you-have-to-be-joking, outrageous prices is still pretty steep. I moved from LA after I got serious about buying a home. Talk about a depressing experience! I saw crappy, 2 bedroom, dark, condos going for $250,000 and selling withing weeks!
In the fastest growing city in the USA, Las Vegas/Henderson, the prices are steadily rising on both new and resale homes. They forsee no dip in price, as the land area zoned for building homes is starting to shrink. My real estate agent said a “starter home” with 3 bedrooms and 2 baths sold for $110,000 in 1995. The same home would cost at least $150,000 today.