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2006 Apr 30, 10:06am 30,351 views 272 comments
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George,
My point exactly! Where are the "bragging rights" of having a 3.875% 30 year fixed if you overpaid for your home by 30-50%? As Patrick is fond of saying, "You can always renegotiate your loan package, you can't renogotiate the price". So for many, it's just too late. In Boston, DC and FL "just listing the damn thing" isn't looking like a very viable option either.
One of the issues you address in your comments is that the builders seem to be just fine putting the same floorplan for on the market for $121,215 cheaper than some investor. Undoubtedly investor greed is a large part of that formula but it does shoot holes in the "it's the materials" and "it's the land" song and dance we've been fed the last 5 years doesn't it?
Randy H
2006 May 2, 2:25am
Before we sold to become bubblesitters in spring 2004, we had a 30-year fixed at 4.25%, with about 60% equity in the home. We could have stayed there forever with that payment had we not needed to move for other reasons. We refi'd quite a lot, but we always did so with zero or trivial fees and only when we could put even more equity in during the refi. (We were always careful to only take classic, standard, no-penalty fixed-rate loans) I wasn't bubble-aware really at that point so I didn't realize that most people were doing the opposite -- taking equity out. When we sold the buyer overpaid and his mortgage was about double what we were paying, yet I doubt his income was much different.
George,
HARM has been focusing on the "it's a land bubble" for some time. I agree! In the end I guess a 2 x 4 costs what a 2 x 4 costs so I have no real issue with the legitimate explanation of concrete facts as they apply to building expenses. I don't grudge a builder a reasonable profit for a lot of hard work. From what you've described though regarding the "tippity top" of the market I refuse to be held accountable as a buyer b/c the builder has grossly overpaid for his lots! Some of the lots in one of our "up scale" subdivisions can go from 90K to 200K. That's a land bubble.
Randy H,
Well that's your basic conservative mid-western upbringing showing again! Imagine that, putting equity INTO a home. What a novel concept. I will say (we sold DEC 2003) that we were very bubble aware. Perhaps regular and enviable appreciation are the norm in the BA, certainly not for Oregon! For our home to have doubled in value during our 10 years there (much of it since 1998/99) was a total aberration. With mill closings and a growing environmental movement home values had actually been on a steady decline since the mid/late 1980's.
newsfreak,
Yes, I believe that the bigger builders buy on a national contract and that prices are well negotiated in advance. I've had a number of clients and friends that were lumber brokers over the years. However; smaller players probably wouldn't have access to this end of the distribution chain.
Randy H
2006 May 2, 3:07am
George,
Can you copy & paste your last comment to the next thread. It is directly on-topic for that discussion.
Randy H
2006 May 2, 3:18am
Thanks George, and your very sapient comment is well placed at the beginning of the thread where everyone will read it.
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Haiku on the Asian Self Hater:
Racist self loathing
Oriental Cheetah man
A stealth troll is he
________
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Oh, man.
Dude!
newsfreak,
I checked zillow and the current tax on this house is under 2K a year, that means it was bought for 10-15% of its current price. There's plenty of concessions to wring out of the greedy selller yet.
Owneroccupier,
Thanks for your Andy Xie rec, he has some very interesting things to say.
Peter P.:
What? You don't want to live in EPA? That is the only place that fits your requirements.
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This tiny old box is for sale to any fool willing to throw away $1,595,000. While it is close to a nice park, what you will not learn from the sales material is that there is a half-way house for alcoholic vietnam vets nearby as well, nor that the street, which is quiet on Sundays, is a major thoroughfare during rush hours. In fact, the traffic situation is so bad that there was a city attempt to block much of the traffic through strategically placed barriers recently, but the outcry was so great that the barriers were removed, leaving only a simmering acrimony between neighbors for and those against the barriers.
There is no backyard at all, only a wooden deck. The house is overshadowed by the much larger house to the right. The steps are cracked brick, and the handrails are just painted pieces of pipe. There is peeling paint and perhaps some rot around the foundations.
The house has several cramped and unusal spaces which are called bedrooms for sales purposes. What used to be called the garage is a studio unit perhaps rentable to Stanford students, though that rent will make no significant difference to a mortgage this large.
#housing