Dream House or Nightmare?

Newsweek Web Exclusive

« Return to Article

Discuss

Member Comments

  • Posted By: deadcarnahans @ 10/21/2007 1:59:54 PM

    Enter Your Comment

  • Posted By: Wes-in-Ore @ 10/21/2007 1:29:14 PM

    I could not be happier about this! I hope to see all the big city yuppies that have moved into my formerly great state of Oregon go broke, then GO HOME! we are sick of your selfish self centered beliefs, and you careless about anyone but yourself lifestyle.

    • Posted By: CokiCat @ 10/21/2007 1:44:09 PM

      A sentiment shared by most residents of small towns. Years back, I researched for small towns to settle in and read the postings on Sperling's Best Places to find some very angry folks that felt they were getting squeezed out of their home towns by big spenders in California (check out the impact this had on Cedar City, Utah, which because of low supply -- planners didn't see "them" coming -- saw houses and rents rise by 30%+ in 1 year). Basically, in the housing heydey, Californians were selling their homes for nice profits and paying cash (paying no mind to the cost/value) for homes in small towns with small economies. Who can compete with that? Looks like those days are gone, or at least matters are under better control now and the coming days. And, hopefully, some of the hideous developments springing up will be mowed down -- not likely, but we can dream, can't we?

      • Posted By: CokiCat @ 10/21/2007 1:54:28 PM

        When I say "small towns with small economies" what I'm getting at is that people moving into smaller areas should be aware of the values of land tied to that area. In numbers, a mass migration of people can devastate the local townsfolk and really foul up the economy by throwing money about. Think what happens if you travel abroad and overpay how that effects that local economy -- with merchants now chasing after travelers' dollars instead of pricing items at prices locals can afford. Or, for instance, the trend for Americans retiring to Mexico, to stretch their thin savings much farther than they could have imagined here. Nice for Americans, not so nice for the locals, unless they have outstanding city planners, who set aside land to build affordable housing (communities, after all, need teachers, firefighters, mechanics, cashiers, right?).

  • Posted By: angfrick @ 10/21/2007 1:47:25 PM

    It is not just the big houses that are feeling the depreciation. I own a small condo in Denver, which I have not been able to sell for the past year and a half. Therefore, I have had to rent it out when I moved away from Denver. I just recently tried to refinance my adjustable mortgage and cannot do that either, without bringing a big chunk of money to closing. With all of the foreclosures in the area, my condo has dropped 10% as well. Since I am renting the property, I can only borrow 90% of the homes value. I am sure that I am not the only one who is having this problem currently either.

  • Posted By: angfrick @ 10/21/2007 1:42:41 PM

    It's not just the larger homes that are decreasing in value. It is also the smaller condos. I own a small condo in Denver and have not been able to sell it during the past year and a half. Therefore, I have had to rent it out, becasuse I do not live in Denver anymore. Well, I just went to refinance and now and cannot do that either, without bringing money to the table. Due to the foreclosures in the area, my condo has depreciated $10,000, and I can only borrow 90% of the value.

  • Posted By: jason1976 @ 10/21/2007 1:32:40 PM

    I would like to see a story on were the lowest prices are going for homes in the usa. or what state has the lowest prices. I know homes in areas of Pa go cheap. and others go for alot of money. but its still a good deal compaired to other states. or a store about what state gives you the best home for the money.

  • Posted By: 14kdawn @ 10/21/2007 1:19:39 PM

    I find it very difficult to care. How can you complain ? it is just speculative...correct? Want a real thrill! take out a second go to Vegas. Good Luck.

  • Posted By: Wes-in-Ore @ 10/21/2007 1:17:19 PM

    It warms my heart to see this happening, I am sick of these big money yuppies coming into my state and communities and destroying them with their bi diesed big city way! go back to the city and take your rushed and careless lifestyle with you!

  • Posted By: rickeM @ 10/21/2007 1:05:20 PM

    I'm in California and saw this coming years ago. People have monthly budgets to spend money to buy cars and homes. If interest rates are 20%-they can buy 5 times value. If 10%-10 times value. At an extreme-1%-100 times value. If rates go real low, prices soar. It rates go up, prices crash. The fall is tied to the rate of rise. I read that the blame is placed on the poor credit risk, a breakdown in lending policies, SIV, ... etc. It is a matter of lots of businesse making lots of money (lenders and investors) and people getting a lot for their money (buyers). It is now time to pay the piper.

  • Posted By: CokiCat @ 10/21/2007 12:56:42 PM

    Apologies for posting too frequently here. Just did a bit of research to get a bead on when there will likely be a bounceback. Seems that experts are saying anything from sometime in 2008 to much longer. If it's purely tied to supply and demand -- and there's a lot of supply, old and new, on the market -- then it will be a long wait for this to shake out. But I'm thinking that as boomers age and downshift and sell off larger homes, there will be another glut of those types of homes on the market. I know, thin on logic, as all boomers don't retire at the same time, choose to sell their homes/move, and might not own large homes. Do you folks know of any metrics to guide us?

  • Posted By: rickeM @ 10/21/2007 12:45:08 PM

    I'm in California and I saw this coming years ago. People have a monthly budget and they use it to buy cars and homes. If the rate is 20%, I can buy 5 times value. If 10%-ten times value. At an extreme-1%-100 times value. So value gets tied to interest rates. When rates go down low, prices can soar. When rates go down-VALUE CRASHES. With leverage, it doens't take much. For get about-its the poor credit slob who is at fault...It's the banks lowering standards...Its SIV. It is people making lots of money (banks and investors) and spenders getting a lot for their dollar. It is now time to pay the piper.

  • Posted By: conttlen @ 10/21/2007 12:44:54 PM

    Looking at your personal, (family) home as an investment to PROFIT on in the short term is sad and a reflection of a generation of GREED infected population ! My how insecure and unsatisfied they must be.

  • Posted By: jason1976 @ 10/21/2007 12:15:35 PM

    do you know what is funny over close to were my mom and dad live i have seen homes sell on ebay for 2,600 dollars for a home that someone could live in up to like 15,000 dollars. they may have 70's kitchens and so on. but i wonder why people rent when you can buy a house that cheap. do a search within 50 miles of zip code 15022 and see. the one i saw end for 2,600 dollars someone could of moved into just with painting.

  • Posted By: dwcola @ 10/21/2007 12:09:28 PM

    While I wil try not to sound condescending, I say to anyone with a house or buying a house to read. I'm a loan officer and have been doing loans through the boom and now in the perfect storm, and they only thing I am continually frought with is overindulgent pride. when you get over your pride and emotion making the decisions and you lend to the facts, you will make the right decision. Plain and simple, house prices are 6 times over real wages....unlike the 3 or 4 times over for your parents time period. That means if you make 50 grand a year, you will pay about 200 grand....can the average person do that....of course not. Is it reasonable to assume that tapped out americans living on credit cards and deferred debt with rising commodity prices from food to gasoline to electricity can afford a 3 4 5 6 7 8 hundred thousand dollar house...It's absurd...It must come down and it will come down to recatch the fundamentals. The only reason the houses are priced where they are at is because money was made extremely cheap to avoid a deflation in our economy. When money was cheap, you could get more of it, and consequently, the home prices soared on dreams of gold returns. Now that money is not cheap anymore, people cannot sustain these huge price increases. Expect home prices to fall and continue to fall until they come back to where they were before the increase, just like a stock.

    • Posted By: CokiCat @ 10/21/2007 12:14:21 PM

      In your estimation, will prices ever halve? Do you have an idea of when the low point will be? 6-12 months or 3 years? Thanks for your expertise.

  • Posted By: Brodie Wood @ 10/21/2007 12:13:53 PM

    Most people today can't afford to own a home. The fact you can make the mortgage payments, find the home a pleasure and bless your family with a home should be enough. Equating your home with other investments is a bit like viewing your children as investments; you may profit financially but lose the greater joys they offer. Try reading Paul Stiles book 'Is The American Dream Killing You?' . This book encourages us to stop applying market forces to our personal lives, for greater enjoyment...

  • Posted By: jason1976 @ 10/21/2007 12:05:21 PM

    Letts see i bought my house in Jan 07 for 62,000 dollars for a 3,307 squair foot house. everyone says i got a steel for that price. but its a old house. I just had to have the brickwork all repointed. and i am stripping layers of wall paper off the walls. what fun. but with it having a nice old built in china cabnit in the dinning room and have pocket doors and lots of nice old wood work. I feel i got a steel. My insurance company told me It would cost 330,000 dollars to replace the house. I hope to have all the work done to the place in the next few years. and i hope the values do go back up. A house up the street sold this year for 250,000 dollars and it was around 2000 squair feet, and is a brick house also. I also have a friend that rents out homes. she is bad. she is going around buying homes. giving people low ball offers on there homes. if they take it she buys if not she moves on to the next house since there are so many on the market.

  • Posted By: Brodie Wood @ 10/21/2007 12:03:10 PM

    Most people living today don't even own a home. The fact that you can afford this home, it meets your needs and affords comfort for your family is a blessing to be enjoyed. Reflecting on your home as a strict investment isn't far off from seeing your children as an investment; not a good idea. Try reading ' Is the American dream killing you ' by Paul Stiles. It fully explaines why we shouldn't apply market forces to everything in our lives...

  • Posted By: jason1976 @ 10/21/2007 12:02:51 PM

    Letts see i bought my house in Jan 07 for 62,000 dollars for a 3,307 squair foot house. everyone says i got a steel for that price. but its a old house. I just had to have the brickwork all repointed. and i am stripping layers of wall paper off the walls. what fun. but with it having a nice old built in china cabnit in the dinning room and have pocket doors and lots of nice old wood work. I feel i got a steel. My insurance company told me It would cost 330,000 dollars to replace the house. I hope to have all the work done to the place in the next few years. and i hope the values do go back up. A house up the street sold this year for 250,000 dollars and it was around 2000 squair feet, and is a brick house also. I also have a friend that rents out homes. she is bad. she is going around buying homes. giving people low ball offers on there homes. if they take it she buys if not she moves on to the next house since there are so many on the market.

  • Posted By: kod111 @ 10/21/2007 11:49:41 AM

    The market will come back...It always has....We are probably three years away due to the glut of inventory..
    If you drive through the treasure coast you see a ton of unfinished sub-divisions. If anything,we tried to grow
    too large too fast. Patience.

    • Posted By: CokiCat @ 10/21/2007 11:54:51 AM

      Can you provide more details about how you arrived at 3 years? I want to time when I make a purchase. I thought 6-12 mos might be a better figure, but you have me thinking otherwise. Thanks!

Reply

Report Abuse

Enter comments if any for reporting abuse