“It’s Not The Same Market That It Was”
A housing report from the Tennessean. “Throughout much of what is considered the core of East Nashville, the rehabilitation market seems to have hit its peak. For the first time in five years, the area is experiencing a slowdown.”
“With rehabbers routinely asking for more than $300,000 for their homes, many first-time home buyers are passing up the market, real estate agents, residents and investors say. ‘It’s gotten so expensive, people that are making $30,000 or $40,000 and can’t pull the numbers,’ said Eric Quiram, chairman of an umbrella group for East Nashville neighborhood associations.”
“Investment groups are buying homes and renovating them on speculation. Many are pouring more money into the homes, with flourishes such as granite countertops and custom cabinetry.”
“‘Home prices have increased and the values have gotten so that there’s more money you can spend on it,’ said Lynn Taylor, owner of (a) East Nashville residential design firm. ‘If you bought it for two-hundred thousand and it’s valued at five-hundred thousand, there’s more you can do.’”
“But the higher prices have made some homes harder to sell. Price reductions have become commonplace, especially for homes in which renovators have not chosen top-quality materials, say agents.”
“‘If there’s a market that’s booming in value, a lot of people are going to put their house on the market with a projection of where they think the market is going to go,’ said agent Karen Hoff, who has worked in East Nashville for two decades. ‘It takes them a couple of months to figure out that maybe their house is not worth that.’”
“Chris Weigel and his wife have been house hunting since moving to East Nashville two years ago. ‘It’s a real estate bubble, like a fake bubble,’ he said of the housing market in the traditional East Nashville neighborhoods. ‘They’re trying to push the envelope so much that they’re driving up prices.’”
The News & Observer from North Carolina. “As the rest of the nation struggles with a housing slump, the Triangle appears a bit of a haven for those selling homes. But a closer look at the market data and conversations with local real estate agents and homeowners suggest a softening of the local market.”
“To sell their houses, homeowners and national builders alike are having to reduce prices, improve properties and offer incentives. The number of people in the Triangle who lowered the price of their homes in September so that they would sell surged 17.4 percent, compared with a year ago.”
“In September, 3,845 homes in the Triangle MLS had reduced prices, or 35 percent of all homes listed. The number of resales on the market at reduced prices has increased significantly every month since June, when they were up 3.6 percent from a year before.”
“‘If there is anything holding them back, they may need to lower prices,’ said Marti Hampton, (broker) in Raleigh. ‘A year ago we weren’t telling them that.”
“Potential buyers who have moved to the area from cities glutted with homes say they can’t buy here until they can sell their old houses.”
“Even older, more-established Triangle neighborhoods feel the heat from new projects. M. Ruth Little searched her 27607 zip code when she was selling her home in West Raleigh’s University Park this summer. The search turned up several dozen new homes priced at more than $500,000.”
“Little first offered her 2,750-square-foot home for $549,000 but ended up dropping the price twice before finally selling for $485,000. The architectural historian was eager to sell because she had bought a smaller house. But she also realized that the market had cooled.”
“‘I’d watched prices climb in the neighborhood, and, if the boom had continued, I might have gotten my [original] price,’ said Little, a former residential broker. ‘But I sensed it was slowing down.’”
“Ellen Dagenhart, a broker in Durham, said some sellers are doing more than reducing prices. ‘They’re also offering to pay buyers’ closing costs, offering to leave appliances or give appliances, and we’re seeing sellers offering a selling bonus to the selling agent,’ Dagenhart said. ‘We aren’t seeing as many bidding wars or multiple offers. It’s not the same market that it was, in many ways.’”
“Still, the only ones who might lose money are those who bought at the peak. The rest just need to adjust their expectations. Many saw neighboring homes fetch amazing prices and hoped to do the same.”
”A lot of people held their houses off the market, waiting for it to peak to maximize the price,’ said Bernard Helm, who tracks Triangle residential trends, but ‘they waited too long. Lots of property has come into the marketplace that has unrealistic price expectations.’”
“Agents helped boost buyers’ expectations because they could charge top dollar through this spring, and often got it, said Jill Flink, a top seller in Raleigh. ‘Now the agents that are pricing these homes are being more realistic.’”
“Dan Lucas knows full well how new homes can hurt a homeowner’s chances. Within five miles of his Cary home are 33 new homes priced from $150,000 to $250,000. Most offer some kind of incentive.”
“When Lucas put his 3,600-square-foot home on the market in April, he asked $305,000. With surrounding homes selling briskly and a renovated basement, he expected a quick profit. Now, four price reductions later, the house is down to $285,000.”
“Although Lucas doesn’t expect to lose money on the house, which he bought for $147,000 in 1987, he is wondering how many more times he’ll have to drop the price before the house sells. ‘I haven’t even had a bad offer yet,’ Lucas said.”
“Lucas has vowed not to cut his hair until he sells his home. It’s already below his collar. ‘I’d shave this mop in a New York minute if I could,’ Lucas said. ‘My mom sees me and says, ‘I see you haven’t sold your house yet.’”
First we have St. Joseph’s statues, now we have the Samson syndrome. Geez. Take the haircut on the house, then get yourself to the barber.
“‘I haven’t even had a bad offer yet,’ Lucas said.”
This statement is also very telling of Lucas’ attitude.
I have a feeling there will be alot of “cousin its” running around before this is all over…
“Still, the only ones who might lose money are those who bought at the peak…”
as well as anyone who buys now
the fundamentals are still skewed even if we go back to 2000. Ppl making 60k should not be buying 500k homes - ever…
That is so un-American.
“Don’t buy stuff you can’t afford”
And anyone who considers their house an investment and doesn’t sell. Doesn’t matter what you paid - if you bought it primarily as an investment you are losing money and should sell unless you expect the market to get better.
But then it would have been speculation, not investment. If we as a collective society understood the difference, we wouldn’t have the problem we have.
Patching a hole in the roof so that the home can continue to produce an adequate stream of shelter is making an investment. Patching the hole so that hopefully the price goes up so you can someday profit the difference is pure speculation. In a lot of cases, it is the intention of the person that is spending capital as to whether it is investment or spec. In some cases, it could be both. I am buying a house to provide an investment in my shelter. If I am buying it to hopefully sell at a higher price, spec. It is a capital good in that it provides/produces something else. You can’t consume it per se. Capital goods depreciate, like a car. It provides transpo, and it depreciates. Old antique cars at somepoint appreciate, but at that point it is no longer being used in it’s original intent. You keep on driving that sucker for it’s orig. purpose, and it won’t be appreciating anymore. Same thing with a house.
‘A lot of people held their houses off the market, waiting for it to peak to maximize the price,’ said Bernard Helm, who tracks Triangle residential trends, but ‘they waited too long. Lots of property has come into the marketplace that has unrealistic price expectations.’
And they did this because they are speculating. Is it any surprise there is near record inventory in most metro markets in the US?
And when their alligator gets hungry, I bet they’ll walk away from it. They did mark “primary residence” on the mortgage application, afterall. Once most of the inventory that’s been artificially removed from the market is returned… then we’ll be at the bottom. We have a ways to go…
Neil
Sounds like a big oooops, missed the peak…now wtf do I do?
Another REIC counter-measure puff piece comparing Raleigh to Austin. “Raleigh: Feels a lot like Austin in many ways.” “We are not part of the national bubble you hear so much about. We have not seen appreciation rates skyrocket. We’re just trucking right along.”
http://www.statesman.com/business/content/business/stories/statesmanhomes/11/19/19compare.html
RE professionals were hailed as “marketing genius” in the hot market. One thing I’ve enjoyed seeing is the “new marketing approach to this emerging and dynamic market”. To reduce cost in the office, fire the marketing company and do the graphics in-house on photoshop — evrybody knows Photoshop, now. You should see the ads that CA Central Valley RE and mortgage companies put out.
I saw the same thing during the real estate boom years in Tucson. Agents who should have known better doing their own websites. 0r designing their own brochures.
Those in-house photoshoppers, do they do stuff like put agents’ heads on Britney Spears’ body?
Britney Spears has a fat nasty body now. She’s reverted to her trailer trash roots.
(warning: open source plug) Why bother with Photoshop. Use The Gimp ( http://www.gimp.org ); it’s free and open source, and a very good photo editing program I’ve used myself. You’ll save even more money, unless like many you are just pirating Photoshop.
I use Gimp exclusively. I like it a lot, even though it is a bit more cumbersome than Photoshop… you can’t beat free…
Remember, don’t buy stuff you can’t afford.
John Doe,
http://www.socalbubble.blogspot.com
“and we’re seeing sellers offering a selling bonus to the selling agent,’ Dagenhart said.”
So, this is like, a bonus to actually do your job? As opposed to, say, the commision?
Just being stupid on a Monday morning.
Yes, this trick was recommended to me in 1996 when I was trying to sell a condo identical to many others on the market. The effect of offering a 1% bonus to whatever agent might close the sale was, that a nondescript condo got 30 showings in 30 days. The 30th looker bought it.
Hard US lessons, harder landings
By Max Fraad Wolff
http://www.atimes.com/atimes/Global_Economy/HK21Dj02.html
The US is beginning to unwind the largest housing bubble in modern history. There will be upswings and local exceptions and wide regional and price variations. This changes nothing. Hundreds of billions of dollars in household access to cash and debt from refinancing, equity extraction, home equity lines of credit and house flipping will dry up.
This will constitute a radical reduction in the wealth effect, access to credit, low-cost credit and notions of improving conditions for the long-suffering American middle class. The revolt of these folks in the November mid-term election is just the first in a series of cuts that their reaction to worsening conditions will carve into the national economy and polity. Middle class reaction to deteriorating economic conditions will be definitive next year and beyond.
The debt, income and savings situation of the American middle - if we take the three middle quintiles of the income distribution to be the middle class - is horrifying. The folks have thus stopped saving and have taken on massive amounts of housing and consumer debt.
Household debt has increased by almost as much since 1999 as the sum total of all debt accumulated by all households across the preceding 220-year history of the US. In 1999, household mortgage debt stood at $4.4 trillion. At the close of the second quarter of 2006 it had more than doubled to $9.33trillion. In 1999, consumer credit outstanding was measured at $1.6 trillion.
From the article:
“…The implied probability of a housing price boom being followed by a bust is about 40%….”
IMO, the historically based foundation for this number, assumes all things equal for the cycles. They are not. Never in our history were the lending standards so abandoned, the ignorant/first time/non-investor so quick to jump into RE, and the Fed play such an important role in fueling the price increases by offering free money.
The probability this time is 100%
“long-suffering American middle class”
^^^^ what is this supposed to mean….? the American middle class has it better than 99.9% of the 6 billion souls on this rock!
If a person takes on more debt than prudent by choice (not by a conflunence of unfortunate events i.e medical bills etc) its their own fault and should live with the consequences.
sorry fellas, but this statement shot up my blood pressure a few points, and had to vent. thanks for listening.
amen!
Am in NC right now, not far from Greensboro & Durham. Just passed a billboard saying “Friends don’t let friends rent homes.” Builder’s website listed at the bottom. I forget which. Liars.
There is a ton of buying stimulus everywhere yet sales and prices are declining which leads me to conclude buyers are in short supply.
GFs who want to catch a falling knife are in short supply.
That might be true in the Piedmont region of NC. Lots of decent-looking 3/2 townhouses can be found for $125K or so; non-embarassing starter homes can be still be found for five figures. And there are jobs there. The Triangle is more expensive, but not by much.
Here in Tucson, near the University of Arizona, there are ads that offer an Econ 101 lesson. The word “owning” is favored over the word “renting.” And the target audience is college students’ parents.
I graduated from UofA in 94, Cum Laude. Admittedly, Econ 101 was a bit hard to grasp at first. In fact, I remember going to study groups. Not to pass, but to excel - to earn an absolute “A”.
Probably has something to do with my fence sitting now.
PS - $150,000 in 1994 Tucson would have meant something at the base of, if not in, the foothills.
“Friends don’t let friends buy deflating homes.”
The triangle market had a slight blurp in terms of home appreciation in the last few years, but nothing compared to the hyper appreciation of Phoenix. There are still foreclosure/fixer-upper houses that can be bought for a discount.
A townhouse next to a friend’s just closed last month for $90K (2br/2ba HOA is $105/mo) it had been on the market for 9 months, orignial asking price was $99.9K, which I think was over inflated, the owners were a retired couple from the NC coast, and ditched their original Realtwhore back in the summer. The rent for this place should be in the $700 - $750 range, so i think it might have sold a little high. The appartment rents in Raleigh have gone up a little. Back in 2004, you could get a good 2br/2ba for $610, now its running at $725. RTP did get hit pretty bad during the Telecom bust, so i think its just started to come back to the 2000 level.
AzLender, recently looked in “Forest Hills” near Durham. Is that a crime-ridden hell-hole with bad schools?
Some nice, architecturally-significant older homes, but the area looked quite sketchy.
Oh, do NOT send your kids to city of Durham public schools. The whole county is one school district now, but I think the schools outside the city limits are OK, as is Durham Academy.
“Although Lucas doesn’t expect to lose money on the house, which he bought for $147,000 in 1987″
$147,000 in 1987 dollars probably equals $300K with today’s hyper-inflated dollars. You’re already losing, Danny boy.
I was thinking the same thing, so I looked up the BLS numbers myself.
October 1987 CPI-U = 115.3
October 2006 CPI-U = 201.8
So that $147K house comes out to $257K in today’s dollars. If you believe the BLS inflation numbers.
Far as I’m concerned, it’s nice to see there’s some part of the country where housing’s behaving about as it should. Housing in NC was prolly a bit overheated in ‘87 (have presonal experience if anyone’s interested), but same goes for today.
Yep. About $247,000 in inflation-adjusted dollars.
And don’t forget the interest, taxes, and insurance he paid!
You guys are doing Voodoo economics.
This is a house, not an investment. He did not PAY 147k for the house. That was the contract price. He probably put down $5000 and made monthly payments..
HE LIVED in the house. Therefore you have to take the opportunity cost of NOT living in the house and deduct it from your inflation numbers. The taxes, and interest were a tax DEDUCTION, so he saved even more money than paying RENT.
PLEASE>>>>>>>>>Stop trying to make living in a house an “investment”. He’s getting a couple of hundered cash back that he would have put into rent, assuming he bought a rent = .9 purchase cost or somewhere thereabouts.
I actually agree with you; my original point was not that he was a moron for buying in 1987 but that the real fair value of his house (once he sells) is rougly unchanged.
BTW, as long as you’re talking opportunity costs you have to account for the opportunity cost of the downpayment. $5K in the stock market in late ‘87 would be $35-40K today (counting dividends too). Yeah, 1987 is an iffy year to do stock market comparisons due to the crash.
We need a BEFORE picture, and then an AFTER picture of this Lucas clown. Hope his hair is down to his (well, you know what he sits on) and he still hasn’t sold his POS. Go, Samson, GO.
So you’re saying he looks more and more like a caveman the longer it takes to sell?
sounds accurate to me.
I am sorry. My previous post was not nice. I shouldn’t be insulting clowns like that. They are usually trying to be funny
“‘If there’s a market that’s booming in value, a lot of people are going to put their house on the market with a projection of where they think the market is going to go,’ said agent Karen Hoff, who has worked in East Nashville for two decades. ‘It takes them a couple of months to figure out that maybe their house is not worth that.’”
It takes them maybe six or more months to figure out that when everyone is putting their house on the market with a projection of where they think the market is going to go, the direction it goes is down.
“‘It’s a real estate bubble, like a fake bubble,’ he said of the housing market in the traditional East Nashville neighborhoods. ‘They’re trying to push the envelope so much that they’re driving up prices.’”
There is no bubble in East Nashville. The reason that prices are so high is that everyone wants to live there.
My Dad grew up in Nashville (during the Depression, when houses were free, rounding to the nearest $10K) and I have two sisters who live there, so I usually end up there over Christmas.
East Nashville is a bit of a hole - kind of starter-home heaven. Housing market there is very well-supported by the large Mexican (and Kurdish) population, but $300K? Absurd. Good access to the Opry and the airport and the lake, but most everybody wants to get out of there to the west and south, which also seemed to be getting bubbly last I was there in early summer.
Nashville is a pretty nice place, though, and quality of construction on most older houses is decent and lot sizes are generous.
“Still, the only ones who might lose money are those who bought at the peak. The rest just need to adjust their expectations. Many saw neighboring homes fetch amazing prices and hoped to do the same.”
What about those who cashout-financed all their home equity gains into spending money? I guess we don’t know how many fall into this category, yet…
“Although Lucas doesn’t expect to lose money on the house, which he bought for $147,000 in 1987, he is wondering how many more times he’ll have to drop the price before the house sells. ‘I haven’t even had a bad offer yet,’ Lucas said.”
The absolute dearth of offers just might be a hint that the wishing price is a bit too high. In fact, it is so far above current market value that would-be buyers presume the seller is too out of touch with reality to find any middle ground.
I grew up in Nashville and recently visited a month ago. The big difference between Nashville and say- The Bay Area is that unlike the BA where the city and suburbs stretch for 60+ miles in each direction, and housing prices are pretty much out of whack across the state- even in god-awful places like Vacaville, Nashville is surrounded by rural areas. You can just about drive through the city and suburbs in 30 minutes or less, and within 10 minutes you’re in countryside. What’s also different is that of the expensive areas mentioned in the article- East Nashville- which is a historically signifigant neighborhood with arts and crafts houses and so forth, you can still find page after page of regular decent starter homes scattered throughout the city and suburbs for as little as 50k.
Much of Tennessee is still in a 1960’s style social composition. The middle class is still the most prevelant class in the region. Thus indeed there are still plenty of people making middle income salaries and dictating the market. The Nashville bubble- if you could call it that- is confined to an extremely small area and to the primarily well-heeled segment of the population.
What’s more is that this bubble activity only started there only a year or so ago. The fact that it is already going down is proof that it will probably NOT become a bubblezone… that is unless the enormous amount of California ex-patriots I saw driving around keep on moving in, which seemed to be occurring at an alarming rate.
Me and my wife drove from Nashville to Knoxville, which is on the other end of the state. It took less than 3 hours. The simple fact is that if you wanted to work in Nashville and live cheap, all you’d have to do is get in your car, drive for 15 minutes and into the countryside, buy yourself a farm for 80-100k and be done with it. How many people in the BA would kill for that option?
It’s beneath the vast majority of Bay Aryans to live in Tennessee.
Come now, drive for 15 minutes and get out of Nashville to a 100K farm? You’d have to go at least 30 miles from central Nashville to find anything remotely approaching traditional “rural” prices (and forget south or southwest). From there you’d have a commute of over an hour each way to downtown during rush hour, from any direction.
You don’t even have to drive out of the city. I am still seeing plenty of homes in Nashville proper for under 100k. Comments to passthebubbly: I am glad that many Californians think anything outside of California is a hole. There’s 38 million Californians in this world- enough to flood most other states, so I am comfortable with them thinking that the entire Southern region is still like the set from “Gone with the wind”.
Big difference between a house and a “farm.” Still, I have a hard time even picturing houses under 100K in Nashville. Some run-down neighborhoods off Gallatin Pike? Some termite-infested 900 sq. ft. jobs on some of the near-in avenues south?
The Nashville MLS doesn’t even have a category for houses under 100K - at least in Jax (a similiar city in age, pop., growth, and non-descript football teams) they are willing to show you the crack houses you can buy with your 79.9.
Here’s one I found on Craigslist Nashville. There are plenty of these, and this is just from one site:
http://nashville.craigslist.org/rfs/237222471.html
There is a BIG difference between Nashville and the BA whereas in the BA- a crappy, ghettofied, run down, nasty, house in a crime-ridden area in West Oakland is STILL over 450-500k. Compared to some of the houses I am seeing in Nashville, which albeit might be boring looking, ugly 60’s brady-bunch suburban homes, are STILL under 100k, and within areas that you won’t get shot at or robbed.
BIG difference. I’ve lived in California for 7 years. The cost in living in Nashville blows the mind when you look at how little your money goes in anywhere CA.
Here’s one I found on Craigslist Nashville. There are plenty of these, and this is just from one site:
$99,000 Ranch 2BR 2BA #49816136862
Charming home with open flr plan; nice kitchen cabinetry; large beautifully treed lot. Hardwood floors under carpet, one car garage Very convenient location. Spacious rec room downstairs for lots of family fun.
There is a BIG difference between Nashville and the BA whereas in the BA- a crappy, ghettofied, run down, nasty, house in a crime-ridden area in West Oakland is STILL over 450-500k. Compared to some of the houses I am seeing in Nashville, which albeit might be boring looking, ugly 60’s brady-bunch suburban homes, are STILL under 100k, and within areas that you won’t get shot at or robbed.
BIG difference. I’ve lived in California for 7 years. The cost in living in Nashville blows the mind when you look at how little your money goes in anywhere CA.
From the above CL listing:
SELLER REQUESTS PREQUAL LETTER OR VERIFICATION OF FUNDS PRIOR TO GETTING THE ADDRESS OR SHOWING ALL PROPERTIES.
Please note: I only work with buyer that have letters of credit or verification of funds. If you need help getting a letter of credit I will me happy to help you. A letter of credit or verification of funds is required prior to getting the address or showing all properties.
What the hell is up with that!? It’s a $99K bungalow, not a $3 million mansion! And in a soft market! I could write a check for the purchase price (well, it would take a day or two to move funds around, but you get my drift).
Is this some form of racial discrimination? As, in, “at this price level I don’t want with *those people* whom I’d rather not see qualify”?
I like Nashville. But crime there is comparable to CA for a similar-sized city, especially if you are in a “very convenient location.” And this house looks like a serious fixer-upper - that kitchen cabinet has water damage and has to be replaced, for starters. If they can’t even keep their plumbing working in the kitchen - not a good sign.
But, I do appreciate the effort.
Paul,
I assume you live in Jackson TN? have you lived in CA? The point I was trying to make but might not have made crystal is that here in CA, there is no such thing as a fixer-upper. There are no starter homes. There isn’t anymore room to move for anyone trying to get in.
I can’t tell you how many well-paid, young professional families here in the BA would LOVE to buy a home in West Oakland no matter how bad a condition the dump might be in for 400k. Many are still tripping over themselves to buy 500k places in West Oakland. The crime rate there is awful. Most of the houses are tiny and with lovely iron gates and fences with skewer shaped points on the tops to keep out thieves. It looks like a third would country there, yet it is the only place left in the BA that passes for affordable by the best-paid upper wrung of the earning populace.
What I am getting at is that Nashville and many other cities like it still have a diverse selection of homes to choose from. If a house is like the one I listed- in need of work, well so what. It is a starter home and the buyer could easily move upward later on. This is how a regular market works.
Perhaps if you lived here, you would know what I am trying to get at.
“Is this some form of racial discrimination? As, in, “at this price level I don’t want with *those people* whom I’d rather not see qualify”?
Actually I did something like this when I sold my home myself. I didn’t put a sign out, I just put an add in with my number. When people called I told them I’d answer any questions they had about the property but I also asked them what they’d put down, what their financial circumstances were. I told them I didn’t want to waste their time if they couldn’t afford it or didn’t have the amenities they’d like. I told them our house was nice, we didn’t want a ton of people wandering around it.
The effect was (accidently) to make it more attractive.
Having priced it to sell and by telling people the truth about the limitations of the home and such I did save everyone time. Got a couple of offers fairly quickly (in a good market however).
I do the same thing even in a market like this; put in a descriptive ad, answer all questions, qualify the buyers and (most importantly) put an attractive, realistic, price on the thing. By being straightforward, honest and giving people all the information they might need to make a judgement before visiting I think I created a bit of mystery about the property, its value and also conveyed a message of trust in the integrity of the deal.
Quick reply to jetsonboy: yes, I’ve spent a lot of time in CA and lived in San Diego briefly several years ago - enjoyed it! I currently live in Jacksonville, FL.
Your original comment was that you could buy a farm 15 minutes from Nashville for 80-100K. That’s nuts - that was my original point. Then you started throwing numbers around trying to describe a market without referencing any properties.
I think I know both CA and Nashville reasonably well. My current point is that you won’t get much for your money in Nashville for under 100K. It may look nice with the trees and the yard and all, but it’s junk. These are actually the kinds of houses I have some history with of fixing up and re-selling and I know how badly damagede they can be (esp. coming of Craigslist, home of damaged goods) - BTW, “very convenient neighborhood” is code for “declining neighborhood with a crime problem.” Crime in Nashville would likely be comparable to Fresno, Bakersfield, or Sacramento, the most similar CA cities.
Of course TN is cheap compared to CA. We all know that - it’s not news. Price appreciation in TN, NC, and TX in particular in the past 5 years has been well below the national average. Sure, you can find something for 100K that could be lived in. And TN is a relative bargain compared to most of the country - probably one of the best on a relative basis. But just because CA is aburdly overpriced doesn’t mean TN is a bargain. Just because CSCO was trading in the stratosphere didn’t make GM a buy.
I will even back up my previous statement that farmland in the Nashville area can still be had for not a whole lot of money. Farms like this one: http://nashville.craigslist.org/rfs/221052426.html
for a mere 129k, which isn’t exactly off the mark from my original post.
For your benefit I will reposition my argument towards what is perceived value and quality of life when comparing TN to CA. Sure- the SE has been by and large a cheaper place to live for decades and will continue to be so. That doesn’t mean that the two areas follow basic economic principals though. Breaking it down even further, let’s say that a family in TN is comprised of a school teacher ( 35-40k) and a roofing contractor ( 35-40k), or 70-80k combined. To be more realistic, let’s say they buy a slightly nicer home in Nashville. Let’s round the number up to 150k. This family could easily afford the payments. Their equation and quality of life is in comparison better than the same couple making the same level of income in CA with CA wage inflation included. The teacher in CA makes 50k, and the roofer makes 45-50k. A 100k grand total in CA gets you nothing.
My argument here is that in areas like Nashville, the economy is better balanced. You have choices. You can live in the burbs away from the crime, or commute from 30-40 miles away- which wouldn’t take long on that 8 lane freeway- and pay even less. Or you could live in a nicer part of Nashville if you made more. There are rich areas and poor areas. There are cheap crappy fixer-uppers that are as little as 50k, and mansions in the millions. Every income level has a chance to make it there. This is not the case here in CA, and probably not the case in Jackson where there isn’t much of an economy other than retired baby-boomers from NY moving in.
I guess what I am trying to say here is that Perhaps places like Nashville are one of the few holdout areas that has yet to be stricken with such a severe case of a housing bubble that it totally paralyzes the middle class from having upward mobility. When you do that to your middle class as has happened here in CA and NY, you get trouble.
In my opinion, cities like Nashville will be in far better shape come the crash of the bubble.
Just got back from an exploratory trip to North Carolina.
I didn’t see even one neighborhood worth living in. You’ll drive for miles and see tiny, neglected shacks, and then turn into a new development (many with the trees clear-cut) with giant houses spaced 10 feet apart.
There’s really no feel of living in a given “town” at all. You’ll just drive along miles of rural roads with these tiny shacks, and then come up to a new development of 20 to 50 houses.
This area was far too hyped.
And the prices, they have balooned to unsustainable levels. Places that were $350K two or three years ago are now priced at $500K. The local job market simply does not support these prices. What apparently happens, is idiotic ‘equity locusts’ are coming in from New York and other places, seeing a “cheap” house, and becoming the next Greater Fool.
There’s nothing there. And get this, when you buy a house in a given school district, that district will be changed every few years (on a rotation schedule). So when a house is listed with a “great school district” that may not be the case 3 years from now. Bizarre.
I would recommend Dallas, Houston, or Atlanta, which are much more established cities, with RE prices somewhat based on reality (especially Houston, where $350K will get you a palace with a custom built-in pool).
That may be true for parts of the Triangle, but only in some bizarro parallel universe does that describe the whole state of NC, or even all its larger cities.
Also, I know large parts of Dallas and Atl that are exactly the same way. Can’t speak for Houston.
I really dislike comments from people who are simply looking at an area just for cheap real estate property and not the area. Parts of NC are actually some of the nicest areas I can think of The Blue Ridge Parkway, The Piedmont region, Asheville, Boon, Chapel Hill, and countless small mountain communities would make you think you were in parts of California. Yes- there are parts of NC that are ugly. There are parts of California that are equally hideous. The more desireable parts of NC are more expensive just like SF is more than Sacramento.
I hear an awful lot of people from CA, NY, etc making generalized statements about the entire SE like it is all one giant state. This area is very diverse and can vary dramatically from region to region, state to state, city to city. If you plan on moving there, the you’re going to have to do more research other than home prices.
TO clarify, this is for the Cary/Raleigh area.
that 350k house in texas will cost you close to 1000.00$ a month in taxes.
Quite a bargain, when that same $350K house will cost $1M+ and $2,000 a month in taxes up North.
Yes, factor in that in Cali, that same house would be 2.0M, and you’d have to pay almost double that… boo hoo.
Besides, Texas doesnt’ have an income tax. If you are in Cali and can afford a 2M house, you’re likely paying a lot more than 1K per month in State income tax.
Taxes are not bad in Texas. It’s only when you want to own a million-dollar house do you have to be a millionaire. In Cali, you only have to have a pulse.
‘The nation’s largest real estate auction company of foreclosed properties will auction over 200 homes throughout Tennessee, Georgia and Alabama at various sales sites from December 5th - December 13th. The properties are owned by national lenders and asset management companies, who took the homes after owners defaulted on mortgages.’
Indeed- I read that same thing. My dad who lives in Knoxville has mentioned a slowdown there, which is intresting because prices there are still under 100k. Just comes to show that buying sentiment is key to a RE market cycle.
“prices there are still under 100k”
Come on, jetsonboy, you’ve got to do better than that.
See my comment above, or go to Craigslist nashville, type in 100k, and nashville in the search bar. I rest my case.
The issue is psychology now in these areas in the SE that have not seen absurb appreciation and are nice areas and affordable relative to the bubble areas to live and work. People are moving here from bubble areas (FL, the NE primarily, also non-bubble but hard hit for jobs Ohio and MIchigan as well) and either haven’t sold their home yet, sold it after a great amount of duress and price reduction, and/or have heard all of the war stories and are not in any hurry to jump in. With no compelling reason to buy, most just look. There is good attendance at open houses in some parts of in town Atlanta (that I am familiar with)…however, way fewer takers than just as recently as June/July. Not completely dead…but definitely slower than last Fall (which was pretty slow).
That is part of the problem, real estate professionals protested, before and after Drake’s advertised auction. It was unrealistic, because many of the top bid prices were far less than the mortgage prices, they said.”
Unrealistic? - hardly. Welcome to the new reality!