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I've been trying to buy a place for awhile now. On Zillow, as a matter of fact. I can attest to the fact that it seems bloody impossible to find a place. I've h

I've been trying to buy a place for awhile now. On Zillow, as a matter of fact. I can attest to the fact that it seems bloody impossible to find a place. I've had people in my neighborhood tell me that they bought their townhouse for $200k or so ten years ago and putting it up for sale now at rates of $350k or higher. The nice thing about Zillow is being able to see the pricing history. The vast majority of houses I have looked at are approaching their 2005/2006 prices, before the last bubble popped. I'd say we're due for another one soon. I will begrudgingly bide my time until then.

ohgreat 11y ago
Same here. Zillow made me realize I should wait too. I've been following the development of a new area that's going to open up later in the year, but the surrounding neighborhoods are priced at least in the $500k. The likelihood of getting into the new area is not looking good for me. There's affordable housing, but I definitely don't qualify.
- talmand 11y ago
  What I find interesting in my area is that many houses are being sold for a high price above the listed tax assessment from the previous year. Then once it gets appraised during the sale process it is valued close to the tax assessment, which is much less than the agreed upon price. Which means the new owner will have to pay much of that difference out of pocket since a mortgage may not be allowed to go that high above appraisal. The current owner likely won't renegotiate because they know they can put back up on the market and somebody else will make an offer. I looked at buying a house during the last bubble in Vegas and once I heard the overly obvious BS from everyone involved I decided not to bother. Once again we are looking at houses in a new state and hearing much the same BS as before. Unless we see a deal, we'll likely wait again.
  - coev 11y ago
    This is area-specific. For example, in Florida (where I've bought/sold 4 houses over the years) property taxes tend to be reassessed to very close to purchase price upon sale, because due to homestead exemptions the taxes haven't kept up with home price inflation. I believe similar happens in California.
    - talmand 11y ago
      Could be, but based on the tax assessment history we can see on Zillow I would hope it's not going to be reassessed to 50k or more above last year's assessment.
gdilla 11y ago
I think it depends on the location. During the last bubble-burst(?) housing in Santa Monica didn't really fall. Activity just kind of slowed down. Also, the last bubble was partially fueled by bad loans to unworthy borrowers. They were leveraged to the hilt, and when their rates reset on their teaser loans, foreclosures went up. This is happening less now because easy mortgages aren't as rampant. I bought a house in LA as a 20 year old with 0 downpayment and 'stated income' in 2002! That doesn't happen anymore.
- ghaff 11y ago
  Much of the Boston area didn't really drop much either. Certainly a much different situation from, say, Las Vegas where there was a huge amount of speculative building and bad loans going on.
  - talmand 11y ago
    I was there, it was an interesting thing to see that's for sure.
- CalRobert 11y ago
  While supply and demand affect Santa Monica as much as anywhere else, there are probably a _lot_ of people in the LA area who would like to be in SM but instead are living elsewhere, so if prices ever drop they will be sure to swoop in and grab a spot. Santa Monica also has rent control, which increases pricing friction and raises prices (fewer people willingly moving = fewer vacancies = more competition for the few places that do come on the market = higher prices). This means that if housing drops at all people will be enticed to become buyers instead of renters. I was lucky to get a spot in Santa Monica, but mostly because the landlord wasn't too concerned about maximizing rent, and we were the very first people to show up and look at the place. It was listed on a Sunday night and we were signing papers Monday at 9 AM. And this was in 2011!
- maxxxxx 11y ago
  Things have to get really bad for Santa Monica prices to fall. It's probably one of the most desirable places to live in the US so there will always be people willing to move in as soon as prices fall even a little.
pc86 11y ago
Here's a hypothetical: housing prices stagnate at 30% higher than they are now and don't move much for decades once they reach that. You'll spend quite a bit of money waiting for a correction that never comes. Timing the market is a losing strategy. So is banking on the cost of housing appreciating during the period of time you own a home. Buy a house when you want to buy a house. Anything more complicated than that is a waste of time.
- nugget 11y ago
  Timing the market is usually but not always a losing strategy. The best variables to watch are the cost of renting versus the cost of owning. I remember by 2006 these costs had diverged in certain markets to the point where CAP rates were negative (you couldn't make money buying and renting 80% LTV property out). That was a pretty definitive sign that there was turmoil in the market. If renting is or becomes much cheaper than owning, then don't be afraid to keep renting and don't panic buy just to feel like an owner.

ohgreat 11y ago

Same here. Zillow made me realize I should wait too. I've been following the development of a new area that's going to open up later in the year, but the surrounding neighborhoods are priced at least in the $500k. The likelihood of getting into the new area is not looking good for me. There's affordable housing, but I definitely don't qualify.

talmand 11y ago
What I find interesting in my area is that many houses are being sold for a high price above the listed tax assessment from the previous year. Then once it gets appraised during the sale process it is valued close to the tax assessment, which is much less than the agreed upon price. Which means the new owner will have to pay much of that difference out of pocket since a mortgage may not be allowed to go that high above appraisal. The current owner likely won't renegotiate because they know they can put back up on the market and somebody else will make an offer. I looked at buying a house during the last bubble in Vegas and once I heard the overly obvious BS from everyone involved I decided not to bother. Once again we are looking at houses in a new state and hearing much the same BS as before. Unless we see a deal, we'll likely wait again.
- coev 11y ago
  This is area-specific. For example, in Florida (where I've bought/sold 4 houses over the years) property taxes tend to be reassessed to very close to purchase price upon sale, because due to homestead exemptions the taxes haven't kept up with home price inflation. I believe similar happens in California.
  - talmand 11y ago
    Could be, but based on the tax assessment history we can see on Zillow I would hope it's not going to be reassessed to 50k or more above last year's assessment.

gdilla 11y ago

I think it depends on the location. During the last bubble-burst(?) housing in Santa Monica didn't really fall. Activity just kind of slowed down. Also, the last bubble was partially fueled by bad loans to unworthy borrowers. They were leveraged to the hilt, and when their rates reset on their teaser loans, foreclosures went up. This is happening less now because easy mortgages aren't as rampant. I bought a house in LA as a 20 year old with 0 downpayment and 'stated income' in 2002! That doesn't happen anymore.

ghaff 11y ago
Much of the Boston area didn't really drop much either. Certainly a much different situation from, say, Las Vegas where there was a huge amount of speculative building and bad loans going on.
- talmand 11y ago
  I was there, it was an interesting thing to see that's for sure.
CalRobert 11y ago
While supply and demand affect Santa Monica as much as anywhere else, there are probably a _lot_ of people in the LA area who would like to be in SM but instead are living elsewhere, so if prices ever drop they will be sure to swoop in and grab a spot. Santa Monica also has rent control, which increases pricing friction and raises prices (fewer people willingly moving = fewer vacancies = more competition for the few places that do come on the market = higher prices). This means that if housing drops at all people will be enticed to become buyers instead of renters. I was lucky to get a spot in Santa Monica, but mostly because the landlord wasn't too concerned about maximizing rent, and we were the very first people to show up and look at the place. It was listed on a Sunday night and we were signing papers Monday at 9 AM. And this was in 2011!
maxxxxx 11y ago
Things have to get really bad for Santa Monica prices to fall. It's probably one of the most desirable places to live in the US so there will always be people willing to move in as soon as prices fall even a little.

pc86 11y ago

Here's a hypothetical: housing prices stagnate at 30% higher than they are now and don't move much for decades once they reach that. You'll spend quite a bit of money waiting for a correction that never comes. Timing the market is a losing strategy. So is banking on the cost of housing appreciating during the period of time you own a home. Buy a house when you want to buy a house. Anything more complicated than that is a waste of time.

nugget 11y ago
Timing the market is usually but not always a losing strategy. The best variables to watch are the cost of renting versus the cost of owning. I remember by 2006 these costs had diverged in certain markets to the point where CAP rates were negative (you couldn't make money buying and renting 80% LTV property out). That was a pretty definitive sign that there was turmoil in the market. If renting is or becomes much cheaper than owning, then don't be afraid to keep renting and don't panic buy just to feel like an owner.