The subprime lending bust

April23 said:
91k here will only buy you a really nice car. There is no such thing as a house under 150k here. :(
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My condo is $74K :fly:

2 bd, 1.5 bath, right in eye view of downtown, across the street from half million dollar mansions, a block away from a park on the lake.

I could get a house in mediocre nick for $110K, in proper nick for just around $150K.

Hooray for Rust Belt.
 
FlamingGlory said:
It's based on DJIA I think, about the same though. You are forgetting something either way, over time money is worth less. Adjusted for inflation, over an 80 year period, it averages just under 2% (google it if you dont believe me) before tax. Real estate stays level with inflation (also googlable).

Index funds arent even that good, havent you ever heard of an 'ETF'?

Psh, real property, if you can afford the upfront expenses is not a 'lose.' It is after all tangible. Even if you cant sell it you can rent it out.
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Read this: http://shlang.com/stock-market/

The real rate of real estate returns 1975-2002 is 0.635%.
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That's the only real estate returns numbers I could immediately find, but will look for more and over a longer period. I know that during that time, if you invested in the stock market, you'd have made a shitload more though...

And I had never really looked into ETFs. In fact, the only time I've really looked at this stuff is when I setup my Roth and I don't recall any ETFs being an option. Interesting though. Index funds are still WAY better than mutual funds though...

edit: Found this: http://www.themoneyblogs.com/investingguide/my.blog/real-estates-historic-low-rate-of-return.html
Some people think that real estate is a great investment. Over the past decade, real estate has been a very hot performer. But, over the past 40 years, real estate has underperformed stocks by a large margin. Real Estate's real rate of return since 1963 is a 1.35% compared to the 5.95%
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fly said:
Read this: http://shlang.com/stock-market/


That's the only real estate returns numbers I could immediately find, but will look for more and over a longer period. I know that during that time, if you invested in the stock market, you'd have made a shitload more though...

And I had never really looked into ETFs. In fact, the only time I've really looked at this stuff is when I setup my Roth and I don't recall any ETFs being an option. Interesting though. Index funds are still WAY better than mutual funds though...

edit: Found this: http://www.themoneyblogs.com/investingguide/my.blog/real-estates-historic-low-rate-of-return.html
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Location location location.

I made $55,000 in three years with my house. Now that I'm getting a new roof and siding, it's going to go up even more.

All of this with 0 percent money out of pocket aside from the initialy mortgage investment.
 
Coqui said:
I hope you took that because that's a damn good deal.
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Of course I did. The closing costs, however, I am not a fan of. ~$2130 + escrow + property tax, but I guess that comes with the territory. I could have gotten a no-cost loan, but the APR would have been much higher, think near 7%.
 
Fat Burger said:
The other way is for your house to appreciate enough. So using your numbers from above, your house has to appreciate to 110k, or 17.3%. When we move in on Saturday, we'll have about 10-15% free equity in our house due to the appreciation in the last 8 months since the purchase price was set. Based on the market and our development, we may hit that magic 80% and remove the PMI within 6 months of living there.
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your going to hit 20% appreciation inside 6 months during a declining market that has yet to see bottom? :confused:
 
w_a_w said:
your going to hit 20% appreciation inside 6 months during a declining market that has yet to see bottom? :confused:
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heheh, I'm hungover...I said your :fly:

ChikkenNoodul said:
The market isn't declining everywhere
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there is a certain modicum of equilibrium however that would dictate this to be nigh impossible currently

ChikkenNoodul said:
And anyway, let's say a house is on the market for $200,000 - you talk the seller down to $180,000, but the house was appraised for $210,000 before it went up for sale and still will now. Bam, right away you've appreciated 15%, the other 5% is easy.
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wouldn't buying new negate that?
 
ChikkenNoodul said:
The market isn't declining everywhere
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Exactly. It's going strong in Portland.

When we put the money down on our house and started building in October, we signed at $247k (And then on top of that we put several thousand in upgrades- we upgraded the cabinets, floors, light fixtures etc). When our floor plan was released 2 years ago the original price was 219k. Our neighbor sold the exact same floor plan as us in December and it sold for 272k (and from what we could tell, they didn't put much in upgrades). If our neighborhood continues to appreciate the way it has been, we could easily have 20% equity in 6 months (although realistically I'm not expecting it to that soon, but it would be nice so we could refinance :p)
 
w_a_w said:
there is a certain modicum of equilibrium however that would dictate this to be nigh impossible currently
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Nope, my house purchased during the decline appraises for more than we paid.

w_a_w said:
wouldn't buying new negate that?
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Again, nope :D when we bought a new house the developer was itching to find a way to get out of the contract because he could already sell it for a buttload more than the contract price.
 
*Fuxx Burger* said:
Exactly. It's going strong in Portland.

When we put the money down on our house and started building in October, we signed at $247k (And then on top of that we put several thousand in upgrades- we upgraded the cabinets, floors, light fixtures etc). When our floor plan was released 2 years ago the original price was 219k. Our neighbor sold the exact same floor plan as us in December and it sold for 272k (and from what we could tell, they didn't put much in upgrades). If our neighborhood continues to appreciate the way it has been, we could easily have 20% equity in 6 months (although realistically I'm not expecting it to that soon, but it would be nice so we could refinance :p)
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sounds like it's going well...happy to hear it <3
 
w_a_w said:
wouldn't buying new negate that?
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Somewhat, if you buy when it's ready to move in. However, as I said earlier, there is several months between the purchase price being set, and us closing.

fly said:
Depending on how quickly a dev needs to get rid of houses, you can sometimes get it for waaay below the appraised value. Depends on how well stuff is moving... ;)
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I mentioned the private sale of the house for $272. Our developer sold another identical house (but never lived in) in January for $242. It's the very end of a two-year neighborhood development, they're trying hard to finish up and move on.
 
ChikkenNoodul said:
Nope, my house purchased during the decline appraises for more than we paid.


Again, nope :D when we bought a new house the developer was itching to find a way to get out of the contract because he could already sell it for a buttload more than the contract price.
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again, glad to hear it...that's encouraging to someone who will be buying soon

I don't think real estate ever really goes down in NY though :p
the house I grew up in was bought for ~75k in 1975 and was valued at 1.1 mil in 1992 when we sold to the college adjacent to our property (Siena) for 800k for the tax write off
 
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w_a_w said:
again, glad to hear it...that's encouraging to someone who will be buying soon

I don't think real estate ever really goes down in NY though :p
the house I grew up in was bought for ~75k in 1975 and was valued at 1.1 mil in 1992 when we sold to the college adjacent to our property (Siena) for 800k for the tax write off
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kekeke, 120k for this in '01 now @ 200k

and it's a falling down shithole
 
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