It looks like prices in my area (SoCal) are almost up to pre-recession amounts. This seems strange because the pre-recession price peak only lasted a few months, before falling back.
How about your area?
Rick Potter
[OP]
Contributor
It looks like prices in my area (SoCal) are almost up to pre-recession amounts. This seems strange because the pre-recession price peak only lasted a few months, before falling back.
How about your area?
Rick Potter
Member
I bought my house in 1993 for $283,000. That was a bargain (apparently) because it sold in 1991 for $420,000. I sold it last year for $235,000.
We had no pre-recession peak; prices just go down.
If you want a real laugh, it was for 2800sf built in 1983 on a wooded half acre, with a creek in the back; in a school district that is always rated as about 50th in the country.
Guest
They are high here, too, but they never really did drop much here. I'm not sure they dropped at all, they just stayed flat and took longer to sell.
We didn't have much of a pre-recession peak, either, just a steady increase of single digits % per year in the area.
They're higher here than I can ever remember them being.
Last edited by David Weaver; 06-24-2014 at 4:09 PM.
Contributor
Prices have rebounded some, but not to the ludicrous levels previously. The neighbor across the street wanted $7 million for his house prior to the downturn. (Believe you me, my house is not in that range) I watched the construction on his, and it is poorly put together. I suppose they are following the PT Barnum adage and looking for the next sucker. Typically the houses on the beach are listed high but actually close at a much reduced price. There was a very nice house listed at $4.5M. It sold at $2.8M.Originally Posted by Rick Potter
The realtors (which admittedly I have a poor opinion of) are trying constantly to promote trading houses. Probably one a week we get a solicitation to sell our house and buy a house on the sand. The tax increase would be a killer. Besides, I like our house. It is well made, fits our lifestyle and suits our aesthetic. I don't want a 6,000 sf house to clean and maintain.
Someone recently offered on our house (unsolicited) at a large premium over what we paid. We declined; as to move we would have to pay more, and our already high tax bill would also increase accordingly. Besides, we have been fixing / upgrading our house every year (ultra-high efficiency furnace, new appliances, and solar panels). Our goal is to minimize bills so that when retirement comes, I want to reduce expenses as much as possible.
Realtors are pushing to keep sales moving' thinking that we should all keep moving-upgrading or downsizing every 3-5 years. I want to pay off the house in the next five years or so. I have thought about this for a while. There has been a propaganda push to think of houses less as domisiles and more as an investment vehicle. This seem a bit out there for me. I watch a friend buy a house that he actively disliked but he felt he could trade up in a year or two. Very silly.
Prices in our neighborhood have risen, but they didn't fall as much as other neighborhoods / communities. The land here is very expensive. Beachfront lots are > $1M for 6,000 sf. We have a 1:1 FAR for our neighborhood. Many of the owners build these as trophy houses but visit once or twice a year. I wish I had that problem (where to put my money). But I still have to work for a living and the lottery is a tax upon those bad at math.
Shawn
"no trees were harmed in the creation of this message, however some electrons were temporarily inconvenienced."
"I resent having to use my brain to do your thinking"
Guest
One of the bigger hoaxes in terms of suckering people into "investments". When they say a house is the biggest "investment" you'll ever make, they neglect to tell you that the structure...the "house" is a depreciating asset. Houses depreciate, land appreciates. There are some short term anomalies where that doesn't fit, but can you imagine having a house from the 1950s where nothing had been upgraded and no dollars ever put into it? It wouldn't be standing. When you start taking into account the cost to own a house and maintain it, then all of the sudden it looks terrible. But people, even those who are OK at math, get caught up in it.
Last edited by David Weaver; 06-24-2014 at 4:15 PM.
Member
Our health insurance premium are slightly more than our mortgage, so I guess the house isn't the biggest investment anymore. Of course it will need a new roof in a few years, and electrical and plumbing upgrades were sweat equity.
The biggest advantage, IMO, is the privacy a stand alone structure provides. Some folks only need a few feet distance while other need/want acres.
Measure twice, cut three times, start over. Repeat as necessary.
Guest
I agree with the separate structures, etc. I think there's a TON of value to an individual to find a house they can pay off by the time they're 40 and then try to do it.
And think really hard after that if they want another mortgage.
Clark howard gave an interesting statistic, and I don't remember if it was the 1950s or what, but it may have been...but at the beginning of the period he mentioned, the average house was 2x the household income level. By 2007 or 8, originating loans were something like 7x household income on average.
It's almost impossible to ever pay off a house that's 7x household income when you consider the cost of upkeep and taxes. I wonder what a mcmansion roof costs to have redone with all of the direction changes, etc. Around here, mcmansion owners that have houses in the 3k square foot but with the open floor plan mcmansion style are paying $1k a month in property taxes.
Member
The 2013 tax valuation of my home dropped 4% from 2012 but went up 6% for 2014.
Brett
Peters Creek, Alaska
Man is a tool-using animal. Nowhere do you find him without tools; without tools he is nothing, with tools he is all. — Thomas Carlyle (1795-1881)
Contributor
I just sold my house in April. The price I got is about as high as it ever was pre-recession. If I had waited until spring to list I probably would have gotten 1% to 2% more even. There was no appreciation at all for me. Between buying the land and building the house in 2001 plus finishing the basement in 2007 I broke even on the house not including routine repairs like replacing the roof this spring.
I'm finding prices on the low end are going through the roof here. I may not have sold my house had I known how much prices on the low end would increase. I went a full month between looking at houses because there is nothing out there to buy. Homes were listing at the rate of 10 to 20 a day in May. Now, new listings are at a trickle. A day with two new listings is considered a heavy day right now. There have been days with no listings recently.
[OP]
Contributor
They are starting to build houses again in this area. All 'infill', no huge tracts nearby anymore.
We went to look at an open house for about 10 new places Sunday. 6,000' lots with 2800' houses with 2 car garage for $681900. 3396' houses with 3 car garage for $729,900. They went for max footage and cheap cabinets. Get this....Master bath had corian shower, but the other bath had a one piece fiberglass shower. The models had granite counters, but it was extra. The cheapest garage doors I have seen, too. I have better ones in rentals.
All show, no quality.
Oh, yeah, they are right on the 210 Freeway, just like mine.
I often wonder where they find people who can afford these places. Wages around here have stagnated, gone down, or moved to Texas.
Rick P
Contributor
Location, location, location........
It varies so much around here it's impossible to put a price on things.
Our house maxed out in value ion 2005 @ roughly $189,000.00 - give or take a couple thou. We paid $75k for it in 1986. Zillow lists it now for $162,000.00.
None of our rentals are valued anywhere near what we paid for them.
"on paper" we've lost money on all of them. (Yipeee!!!!! Yahooo!!!! - - I never thought I'd be happy to "lose money" ! )
One dropped from $89,000.00 - what we paid in 2002 for it, to around $52,000.00 today. Zillow says it's closer to $72,000.00, but, that's a cruel joke.
Similar houses in the area are going for $25,000.00 to $35,000.00 & sitting on the market @ those prices for months.
Man ain't that the truth!One of the bigger hoaxes in terms of suckering people into "investments". When they say a house is the biggest "investment" you'll ever make,
We paid $75k for our place in 1986 & today it's worth roughly $165k. Had we let the original 30 year note run it's course, we'd have paid out over $350k!
IMHO - losing that much money on something can hardly be called and "investment".
Plus the real irony of it all is - even once it's all paid for, the money tied up n the house just sits there and does nothing!
The only way you can use it is to - - borrow money against it & that's going to cost you more money!
Well, unless you invest the borrowed money in something that returns more back to you - but - that's not as easy as it sounds.
"Life is what happens to you while you're busy making other plans." - John Lennon
Contributor
Average house prices in the city I live are in excess of $700,000.
Of course that's in Canadian dollars so I think its $1.67 US........................Rod.
Moderator
The concept that owning a house is an investment is pure hogwash perpetrated by the real estate industry, the mortgage banks, and home builders. Anything that you have as a necessity to life is not an investment. As David Weaver points out, the physical plant of a house deteriorates and requires the addition of money, sweat equity, or both to continue to maintain or increase its value. What other investment requires the addition of money to maintain value? Most importantly, unlike real investments, a house is not liquid and can't be easily disposed of quickly or cheaply unless you sell as the owner and get lucky on getting a quick offer. Even then, the transfer and closing usually takes a few weeks while investments like stocks, bonds, gold, etc can be sold or exchanged or transferred within hours at the most. True investments have liquidity and can be sold without leaving you homeless. Second homes, true investment real estate, and other types of real property are a different matter entirely.
Dave Anderson
Chester, NH
Member
Interesting question. In Texas, homeowners insurance has changed the deductible on roofs (rooves?) from a set dollar amount to a percentage of value. I can't remember what the percentage is but even at 1% on a $250K house, it's $2500 and I think it may be in the 2 or 3% range. Anyway, as a result many high $ homes that had roof damage from Hurricane Rita or Ike (Rita was in 2005, I think and Ike was 2008) still have blue tarps because the owners can't afford the deductible. Many of these folks are barely getting by in a house above their means and when an emergency arises, they don't have the cash.
Contributor
Some home insurance companies are now depreciating roofs. If the roof is ten years old they will only pay 50% of the replacement cost of the roof because they figure you got 10 years out of the roof.
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