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Sac - No. 8th In Riskiest Housing Markets


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#16 john

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Posted 19 July 2005 - 09:46 AM

when real estate "crashes", it means your investment won't double in value like it has the last couple of years. If anything, it might (might) go down as much as 10%, but odds are the market will be stagnant for a few years, no real appreciation in values. Look at the last crash in the early 90s - real estate does not plummet like stocks did during the dot-com bust.

It's basic. People are moving to the Sacramento Valley from the Bay Area. They will continue to do so as long as homes are more expensive in the Bay Area (this will be for a while). Your home is not going to all of a sudden plummet in value. There will always be a need for homes. Sacramento is a great market for the next 20 years. If your investment is long term, you'll be fine. I know I'm not moving anytime soon, so why rush?


#17 (Gaelic925)

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Posted 19 July 2005 - 09:47 AM

Tha Bay Area is good to look at as an example, the dot com bust left a few without jobs but did housing go down, no. The rent on apartments went down but not the value of homes. No matter what happens people will always want to own their own homes.

#18 nhardy

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Posted 19 July 2005 - 09:48 AM

QUOTE(Gaelic925 @ Jul 19 2005, 10:47 AM)
Tha Bay Area is good to look at as an example, the dot com bust left a few without jobs but did housing go down, no. The rent on apartments went down but not the value of homes. No matter what happens people will always want to own their own homes.

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Exactly
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#19 cybertrano

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Posted 19 July 2005 - 10:28 AM

Time to sell your house and cash in the $$$$$$ , put it in the bank and go live under the bridge for awhile. biggrin.gif

#20 cybertrano

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Posted 19 July 2005 - 10:29 AM

Very good point

QUOTE(Gaelic925 @ Jul 19 2005, 09:47 AM)
Tha Bay Area is good to look at as an example, the dot com bust left a few without jobs but did housing go down, no. The rent on apartments went down but not the value of homes. No matter what happens people will always want to own their own homes.

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#21 benning

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Posted 19 July 2005 - 11:08 AM

QUOTE(Gaelic925 @ Jul 19 2005, 10:47 AM)
Tha Bay Area is good to look at as an example, the dot com bust left a few without jobs but did housing go down, no. The rent on apartments went down but not the value of homes. No matter what happens people will always want to own their own homes.

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In the early 90's home values went down in in the bay area. A lot. It took several years to recover. All I'm saying is that when there is an adjustment, duing that time if people move or for whatever reason need to sell their house, some of them may find themselves 'upside down'.
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#22 7-11

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Posted 19 July 2005 - 11:10 AM

QUOTE(benning @ Jul 19 2005, 12:08 PM)
  may find themselves 'upside down'.

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Especially those who took out home equity loans to buy some 'toys' !!

#23 Cloud9

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Posted 19 July 2005 - 01:05 PM

Let me know when houses go down to zero like many dot com stocks did. I'll be there to pick them all up and rent them out. smile.gif
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#24 tgianco

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Posted 19 July 2005 - 05:17 PM

http://www.msnbc.msn...8586344/page/2/

Does it occur to anyone that the abundance of new and ever more risky loan products signifies a stretching, if not breaking point, in real estate prices? The only way people can buy some of these homes is through such risky programs.

Also, there were a couple of homes in my old neighborhood (Briggs Ranch) that did not get the loan since the bank would not appraise the house for its selling price.

Let's hear the retorts. I agree w/ Steve & John, though, that it shouldn't matter (except for the ripples through the economy) if you plan on staying in your home long term. For the speculators and investors, I look forward to picking up some of your property on the cheap.

Fear and greed, my friends. Fear and greed.
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#25 tgianco

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Posted 19 July 2005 - 05:23 PM

Oh, and by the way, our current economic "recovery" has been unique in that it rests on
one single pillar - the housing bubble, which the Fed systematically engineered to
boost consumer spending through easy consumer borrowing against rising house
prices. Ominously, this is occurring against the backdrop of unusual weakness
in the growth of employment and wage and salary income.

Folks, it just doesn't make sense. This could end very badly, but just keep whistling Dixie (since it seems to make some feel better).
In the immortal words of Jean Paul Sartre, 'Au revoir, gopher'.

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#26 Cloud9

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Posted 19 July 2005 - 07:12 PM

On a related front....

New Credit Card Payment Requirements Bring Good, Bad News
Mon Jul 18, 5:47 PM ET
http://news.yahoo.co...lo_wyff/2831815

If you have a high balance on your credit cards, you may be in for a shock when the next bill comes.

Within the next month, Bank of America, MBNA and Citigroup will raise minimum monthly payments on their cards from 2 percent of the balance to up to 4 percent, not including interest. Other card issuers are expected to make similar changes by the end of the year.
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#27 Cloud9

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Posted 19 July 2005 - 07:13 PM

Oops sorry, incomplete URL. Here you go. http://news.yahoo.co...lo_wyff/2831815
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#28 Mauigirl

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Posted 20 July 2005 - 11:27 AM

QUOTE(stevethedad @ Jul 19 2005, 09:33 AM)
A slowing is exactly what many experts expect. A price crash is very unlikely.

There are so many people for whom a nice house is out of reach, and if prices should come down, they will be right there to bid them up. All of those folks planning on moving to California are hoping for a price crash, too. The most desireable state in the union will become even more attractive. 

Investors are getting ready. They are hoping for a price drop so that they can snap up some properties at 'bargain' prices. Why? Because they know that prices will rise again.

As for the 'interest only' loans, what most people don't realize is that for these loans, 'interest only' is an option, not mandatory. You can pay as much on principal reduction as you want to. I don't have any figures on how many of these folks actually do pay down principal, but regardless of whether prices go up or down, their loans won't change.

We need to stop looking at housing, at least our own homes, as a cash cow, or even an investment.

Buy a house if you need a place to live. If you rent, you are paying someone else's mortgage, someone else gets the tax deduction on interest, they can raise your rent any time, or evict you. And while you may be unsure if the value of your home will increase, you know for sure the value of your apartment won't, at least, not for you.

Who knows what the future will bring? I don't. I am glad I own my own home, and that it is worth today, a lot more than I bought it for. If the market crashes, I'll still live there.

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AMEN! thumbsupsmileyanim.gif

#29 tgianco

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Posted 20 July 2005 - 08:01 PM

From MSNBC article:

In some of his strongest remarks yet about the potential fallout from high housing prices, Greenspan reiterated warnings about the increasing use of what he described as “exotic” mortgages and referred to “speculative fervor” that has driven up prices in some markets.

“This type of expansion in prices historically does not go on very long and indeed, while it’s hard to forecast, and I’m not sure that it’s going to occur, there may be -- there certainly will be in certain local areas -- price declines,” Greenspan said.

It was the most definitive prediction yet from Greenspan that home prices will decline in some areas.

http://www.msnbc.msn.com/id/8647548/
In the immortal words of Jean Paul Sartre, 'Au revoir, gopher'.

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