Saturday, April 14, 2007

Real Estate


I went for a walk in my neighborhood the other evening. I came upon a neighbor who was fixing a fence and visited with him for a few minutes. Somehow we got to talking about the price of local real estate. There has been a great deal of development out our way. The new houses that are pretty, but small and they are built on the cheap. These houses are selling for 450K and more.

My neighbor and I couldn’t fathom what our houses and property are worth now. We came to realize that we would never be able to afford our own homes if we were trying to buy into our community from the outside. How things have changed over the last 20 years.

The days of good deals are gone. I remember when I purchased my house on 10 acres. I thought I robbed the guy by only paying $75K for it, and he thought he robbed me because had purchased it two years earlier for $45K. I’m sure I’d feel like I was robbing someone if I sold my property at its current value. However when I see the prices for comparable properties in California or New York State I am shocked at those prices. How high can it go, and how much can the common person bear before everyone but the privileged is homeless?

11 Comments:

Blogger Hahn at Home said...

I bought my first house at 21 in 83 for 55. At 43 I bought my sixth home for 278. It wasn't any bigger or better than the first, just had different real estate (California). When I sold out my share of that house last year, I realized I'd never be able to own again in California. To realize that dream is gone for many of us is very sad. Every time an area, like Boise or Bend is "discovered" I mark them off my list of potential places to move when the kids grow up and I want to retire.

7:13 AM  
Anonymous Anonymous said...

Guy,

Four years ago, right about the time we were getting ready to build our house, two acres went up for sale right next to us for 40k. We shook our heads and said we would never pay that much for land. Last week I saw two acres just down the road for 169k.

There is a good side to this. Several years ago hubby bought our 25 acres for 50k. Hmmmm, now lets do the math using todays prices...

Love,
Anon

8:49 AM  
Blogger Syd said...

Staggering, isn't it? I often wonder how these people, mostly young couples, afford these homes. I suspect they are financed out the ass.

9:25 AM  
Anonymous Anonymous said...

Stop it you guys. I have to buy soon and you are scaring the shyte outta me.

Auntie

9:39 AM  
Blogger Jaggy said...

I'm fairly certain that, unless I inherit the family farm, I'm never going to be able to afford land. And I hate renting.

9:48 AM  
Anonymous gearhead said...

Good job Guy, in locating that very nice couple for the picture.
They appear highly qualified for many of the mortgage products that are readyly available.
Hopefully inflation will work in their favor.
I wonder if the bank will stick it to them at closing?
Awe,,, there won't be any surprises; trust me....

4:19 PM  
Anonymous Anonymous said...

Gotta check out this new site www.hoodfacts.com Real Estate and More for all 50 states!

6:33 PM  
Blogger Beth said...

The value of our house has more than doubled since we bought. We could get a great price if we sold. But the question is, unless you're downsizing, where can you then afford to go?

6:48 PM  
Blogger OC Mama said...

The houseing market here drives me crazy.

Unless Dh and I win the lottery, we'll be renting for a good long time. Unless I convince him to leave SoCal. The worst part is we spend almost $2k a month to rent a 2 bedroom condo. Sad huh?

Most of the people I know here either bought a long time ago, bought from their parents, or remodeled their parents house and moved back in. The rest are in debt up to their eyeballs. They buy $600,000 starter homes, get interest only loans, and expect the prices to go up enough every year to give them some equity. If the market drops they'll all be screwed.

8:56 PM  
Blogger Mom of Three said...

On the other hand, Guy, take a look at clatsopmls.com and see how many of those homes have been languishing on the market for ages. The bubble has burst, even here. We had the awful timing of getting here two years ago and renting for a year. We got lucky in that we got a private sale on a total wreck of a 1913 Craftsman. We could sell it for double today and haven't even done the first floor.

But we're not going anywhere, because the likelihood of finding another deal like this is rare. I have a friend in local real estate who said he was at Peter Pan market when the boom began, and a motor home literally screamed up to the front of the store with a breathless woman diving out of the cab yelling "DOES ANYONE KNOW WHERE I CAN FIND A REAL ESTATE AGENT???"

Unfortunately, he hasn't sold much lately.

Thanks for pointing out those new homes going for 450K and more were built on the cheap because we drove by when they were in process and were pretty unimpressed by the materials we saw...

I'll take my solid fixer any day but I do miss my land. On that scale, you really scored.

9:41 PM  
Blogger The Guy Who Writes This said...

Gearhead, you win for funniest reply.

Lori anf OC, you folks in California really have it hard. I can't imagine how people live down there.

I wonder if people getting into the housing market will do as well as people have done over the last twenty years. Lots of folks are counting on it. Forget a stock market crash, if the real estate market ever crashes there will be all sorts of economic doom.

Mo3, those houses are really bad. They used OSB on the roof rather than ply wood. OSB doesn't hold nails very well. The bed rooms are tiny. They put the least expensive carpet in. I doubt some of the houses are more than 1,200 square feet. They look bigger because of the steep pitched roofs, but they don't have an upper floor.

5:34 AM  

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