Author Topic: 2017 Real estate CRASH  (Read 13444 times)

groove251

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Re: 2017 Real estate CRASH
« Reply #50 on: April 03, 2017, 08:59:11 AM »
Here's a quick shot at Denver's current houses for sale. 3 br with 1.5 bath. Are you telling me this is normal and makes sense for half the people (making over the median)? This is insane.

groove251

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Re: 2017 Real estate CRASH
« Reply #51 on: April 03, 2017, 09:03:19 AM »
We have made the decision to rent our house in portland out all summer while we check out other cities (asheville, etc). We are selling next April. Hope the market can hold on until then! *fingers crossed*

Another Reader

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Re: 2017 Real estate CRASH
« Reply #52 on: April 03, 2017, 09:25:04 AM »
Here's a quick shot at Denver's current houses for sale. 3 br with 1.5 bath. Are you telling me this is normal and makes sense for half the people (making over the median)? This is insane.

You do not understand the market.  You do not live in a balanced market.  Demand significantly exceeds supply.  There are far more buyers at or above the median income than there are sellers.  Your market is dominated by higher income buyers, people moving to Portland from more expensive areas with equity in hand, investors, and likely some cash buyers from overseas.  As long as that demand exists, your market will not decline.  The market will only change when the buyer pool changes.

groove251

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Re: 2017 Real estate CRASH
« Reply #53 on: April 03, 2017, 10:25:41 AM »
 I hear ya, and want to agree with it. That is exactly what has driven up the costs. My fear is that any failing of the job market will cause people to not be able to pay the extremely high cost of living (no job = no money). So you are right that as long as everything continues with big equity payouts from other home sales and people keep working at super high paying jobs and can pay rents/mortgages, then everything will be fine.

But, if you have read the book "Black Swan", it has a premise that you will not see a big fail coming. Some big thing can happen like a 9/11, etc. and can cause a whole market to crumble.Which is why we like to try to mitigate risk as much as possible and not live above our means.

 I agree with a previous post, sell when people are buying and buy when people are selling. We are going to cash out next April. Maybe it's too soon? No one can know. But what I love about this community is it helps answer the question of "How much is enough". For us, we have hit that point and we aren't going to try to chase the market to the peak. I don't have enough assets and other income models that allow for the flexibilty (and risk) of that (yet).

This one sale will allow us to have a massive amount of freedom and flexibilty and I guess that's enough for me. Maybe I'll be kicking myself after I see portland keep going up, but something about it doesn't feel right to me and i think this house of cards is coming down again. Not due to sub-prime like last time. Maybe it will just be buyers saying "I'm not paying this much for a tiny little house" and then the market corrects, etc.

dougules

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Re: 2017 Real estate CRASH
« Reply #54 on: April 03, 2017, 10:58:57 AM »
I hear ya, and want to agree with it. That is exactly what has driven up the costs. My fear is that any failing of the job market will cause people to not be able to pay the extremely high cost of living (no job = no money). So you are right that as long as everything continues with big equity payouts from other home sales and people keep working at super high paying jobs and can pay rents/mortgages, then everything will be fine.

But, if you have read the book "Black Swan", it has a premise that you will not see a big fail coming. Some big thing can happen like a 9/11, etc. and can cause a whole market to crumble.Which is why we like to try to mitigate risk as much as possible and not live above our means.

 I agree with a previous post, sell when people are buying and buy when people are selling. We are going to cash out next April. Maybe it's too soon? No one can know. But what I love about this community is it helps answer the question of "How much is enough". For us, we have hit that point and we aren't going to try to chase the market to the peak. I don't have enough assets and other income models that allow for the flexibilty (and risk) of that (yet).

This one sale will allow us to have a massive amount of freedom and flexibilty and I guess that's enough for me. Maybe I'll be kicking myself after I see portland keep going up, but something about it doesn't feel right to me and i think this house of cards is coming down again. Not due to sub-prime like last time. Maybe it will just be buyers saying "I'm not paying this much for a tiny little house" and then the market corrects, etc.

It wouldn't matter what Portland's housing market does in the future if you're happier somewhere else.  Shouldn't it be about where your quality of life is the best (and cost of housing is one factor in that)?  I hope you're going TO somewhere (sounds like you are), and not just leaving Portland. 

It will be interesting to see what happens as interest rates go up.

I'm going to put in my plug for Chattanooga while you're down this way. 

groove251

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Re: 2017 Real estate CRASH
« Reply #55 on: April 03, 2017, 01:28:42 PM »
We checked out Chatanooga last summer and really liked the direction they are headed! Really cool place!

Bublik2002

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Re: 2017 Real estate CRASH
« Reply #56 on: April 04, 2017, 06:50:03 PM »
I agree with some of your conclusions, but not your reasons for them...
My situation is I have about $500k in equity in my house in Portland (I owe around $250K still).
Wow.  Even without getting mortgages on the rentals, this amount of cash is enough to support $40,000 of cashflow in my neighborhood.

My job isn't dependent on local econmy.

The best way to leverage your job is to live somewhere cheap.  You could sell this house, buy 3 houses in cash that rent out for $1500/month each.  Get a property management company to handle finding tenants and checking on properties.  You could even move to an expat beach in Mexico, live on the rental income alone while saving 100% of the income from your location-independent job.  Years later you'll have a fortune saved to rule the world return to the overpriced Portland market.

I was thinking of selling and renting in a less expensive city for a few years while this whole market falls apart again, and then buy my next property outright (with rentable adu or duplex).

Any thoughts or advice?

Considering how far your money goes in so many other parts of the country (if not the world) I think getting out is a great idea.  Planning to get back in is possibly not such a great idea, but years of living it up in a low cost of living area with a high income might get you used to the good life.  If you keep watching Portland area real estate, and it doesn't crash for a DECADE, will you get disillusioned and buy back in anyway at high prices? 

I find it crazy ironic that the World Wide web created pockets of expensive real estate markets like Silicon Valley in California, and Portland Oregon, when the technology itself doesn't really require these areas.  You're finally starting to see technology startups in midwest locations where rent and electricity is cheap.  I think that trend will continue.

Where do you find these houses that you can buy for 150k that rent for 1500 a month. Please help I would buy 10 of those today.

okobrien

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Re: 2017 Real estate CRASH
« Reply #57 on: April 04, 2017, 07:04:59 PM »
Here's a quick shot at Denver's current houses for sale. 3 br with 1.5 bath. Are you telling me this is normal and makes sense for half the people (making over the median)? This is insane.
Crazy here, but it is worth noting that you captured the most expensive quarter of the city.

dougules

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Re: 2017 Real estate CRASH
« Reply #58 on: April 05, 2017, 11:12:01 AM »
I agree with some of your conclusions, but not your reasons for them...
My situation is I have about $500k in equity in my house in Portland (I owe around $250K still).
Wow.  Even without getting mortgages on the rentals, this amount of cash is enough to support $40,000 of cashflow in my neighborhood.

My job isn't dependent on local econmy.

The best way to leverage your job is to live somewhere cheap.  You could sell this house, buy 3 houses in cash that rent out for $1500/month each.  Get a property management company to handle finding tenants and checking on properties.  You could even move to an expat beach in Mexico, live on the rental income alone while saving 100% of the income from your location-independent job.  Years later you'll have a fortune saved to rule the world return to the overpriced Portland market.

I was thinking of selling and renting in a less expensive city for a few years while this whole market falls apart again, and then buy my next property outright (with rentable adu or duplex).

Any thoughts or advice?

Considering how far your money goes in so many other parts of the country (if not the world) I think getting out is a great idea.  Planning to get back in is possibly not such a great idea, but years of living it up in a low cost of living area with a high income might get you used to the good life.  If you keep watching Portland area real estate, and it doesn't crash for a DECADE, will you get disillusioned and buy back in anyway at high prices? 

I find it crazy ironic that the World Wide web created pockets of expensive real estate markets like Silicon Valley in California, and Portland Oregon, when the technology itself doesn't really require these areas.  You're finally starting to see technology startups in midwest locations where rent and electricity is cheap.  I think that trend will continue.

Where do you find these houses that you can buy for 150k that rent for 1500 a month. Please help I would buy 10 of those today.

Don't know about that, but we got our rental house for $74k and are renting it for $800/mo.   Of course that was in 2011.
« Last Edit: April 05, 2017, 11:16:56 AM by dougules »

the_fixer

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Re: 2017 Real estate CRASH
« Reply #59 on: April 05, 2017, 03:53:01 PM »
My realtor sends me a quarterly update on the Denver market I like to read it and see what is happening.

http://www.denverrealestate.com/blog/2017/03/denver-home-supplies-dip-record-low/


clarkfan1979

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Re: 2017 Real estate CRASH
« Reply #60 on: April 05, 2017, 05:18:04 PM »
Selling and moving to a less expensive area makes sense. However, if your long-term plan it to re-enter the Portland market at a later date, I think it would make less sense. Buying and selling real estate is a very expensive transaction. It's very difficult to time the market and come out ahead.


Capt j-rod

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Re: 2017 Real estate CRASH
« Reply #61 on: April 05, 2017, 06:09:00 PM »
Bear in mind that one of the most influential measures in our economy is "consumer confidence"... AKA... How dumb are you with your money and how much debt are you willing to carry? It is once again rising by the minute. Then there is the mystical "jobs" and "unemployment" numbers that can be swung around. Basically, money is easy to borrow and America's thirst for more and nicer things can never be quenched. The last bail out proved that you will not have to be held accountable for your actions financially. Will it CRASH? probably not. Will it slow down? Maybe. As long as the bank will lend it, the fools will spend it. Our community is not the "norm" we refuse to drink the cool aid. If you can sell and profit, then go for it. If you can rent it and make money... Do it. Detaching ourselves from the "Joneses" in our neighborhood is one of our many super powers. I love my house dearly... Offer me twice what I paid and you own it! I can always find another one.

mountainfamily

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Re: 2017 Real estate CRASH
« Reply #62 on: April 06, 2017, 12:27:59 PM »


I find it crazy ironic that the World Wide web created pockets of expensive real estate markets like Silicon Valley in California, and Portland Oregon, when the technology itself doesn't really require these areas.  You're finally starting to see technology startups in midwest locations where rent and electricity is cheap.  I think that trend will continue.

Agreed. We are tied to Seattle due to my husband's job and so wishing that there were better jobs throughout the beautiful state of Washington... :( However, tech companies like to be close together for collaboration, recruitment, and innovation.
« Last Edit: April 06, 2017, 12:34:12 PM by mountainfamily »

groove251

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Re: 2017 Real estate CRASH
« Reply #63 on: April 06, 2017, 12:41:57 PM »
I don't think I'll be returning to Portland once we sell. Too expensive and too much rain. If you like being dry while you hike, bike, run, etc., Portland is not the place for you. 8 months of rain typically which is then followed by the most glorious summer months ever. This tends to make people forget the 8 months of dreary greyness that settles over the city. Places like Bend Or, Denver Co, Asheville, etc have a much more balanced weather pattern. Each gets their share of unpleasantness, but not 8 months worth! haha! We are outta here!

PS, if anyone wants to buy a beautiful house in a great (and walkable/bikeable) area of porltand, let me know! 4 br/2.5 bath with a 3 floor elevator. Also separate art studio! $800k




joonifloofeefloo

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Re: 2017 Real estate CRASH
« Reply #64 on: April 06, 2017, 12:54:21 PM »
Too expensive and too much rain. If you like being dry while you hike, bike, run, etc., Portland is not the place for you. 8 months of rain typically which is then followed by the most glorious summer months ever. This tends to make people forget the 8 months of dreary greyness that settles over the city. [...] PS, if anyone wants to buy a beautiful house in a great (and walkable/bikeable) area of porltand, let me know! 4 br/2.5 bath with a 3 floor elevator. Also separate art studio! $800k

Worst real estate ad ever ;)

groove251

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Re: 2017 Real estate CRASH
« Reply #65 on: April 06, 2017, 01:09:08 PM »
haha! How about "Who wants to buy a totally overpriced home in an area that I think is going to crash?".

joonifloofeefloo

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Re: 2017 Real estate CRASH
« Reply #66 on: April 06, 2017, 01:11:50 PM »
:)))))

dougules

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Re: 2017 Real estate CRASH
« Reply #67 on: April 06, 2017, 02:00:59 PM »
Too expensive and too much rain. If you like being dry while you hike, bike, run, etc., Portland is not the place for you. 8 months of rain typically which is then followed by the most glorious summer months ever. This tends to make people forget the 8 months of dreary greyness that settles over the city. [...] PS, if anyone wants to buy a beautiful house in a great (and walkable/bikeable) area of porltand, let me know! 4 br/2.5 bath with a 3 floor elevator. Also separate art studio! $800k

Worst real estate ad ever ;)

At least the photos are from the summer.  We need a picture from an extra dreary day in January to complete the ad. 

joonifloofeefloo

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Re: 2017 Real estate CRASH
« Reply #68 on: April 06, 2017, 02:22:05 PM »
We need eight photos through a rain-blurred lens, to represent each of the rainy months, and four like the above. Informed decision and all that.

sol

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Re: 2017 Real estate CRASH
« Reply #69 on: April 06, 2017, 03:59:24 PM »

8 months of dreary greyness that settles over the city.

I prefer to think of the Pacific northwest skies as exploring the full spectrum of the steely slate palette.  Think of it like a black and white photography exposition, all about balancing textures and contrasts.

Don't say dreary, say seriously artistic.  It requires a certain sophistication to appreciate the subtleties of our grey skyscapes.  It's not for everyone, I'll admit.

joonifloofeefloo

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Re: 2017 Real estate CRASH
« Reply #70 on: April 06, 2017, 04:10:20 PM »
^ Totally bringing sol's take with me on my upcoming "nonpreferred" relocation to the coast :)

(I do genuinely see a lot in shades of grey, having even chosen my mountain bike and exterior house paint colours in these!)

Meowmalade

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Re: 2017 Real estate CRASH
« Reply #71 on: April 06, 2017, 05:03:47 PM »
When we moved to Portland five years ago, it was with great reluctance on my part, because I was convinced that I was going to die from depression.  I think I still carry those low expectations with me, because every winter I'm still surprised and delighted every time the blue sky peeks out (which I'm pretty sure it does at least once a week).  My colleagues tell me that ten years ago, it was grey for the entire winter, but that hasn't been my experience and I love how green it is here as well.  Though I do feel that I'm sheltered from some of the grey when I'm in the office all day in the winter-- maybe if I were FIRE'd and at home, I'd feel it more strongly.

My Seattle friend is convinced that both Seattle and Portland are grey, but that "Portland is a lighter, brighter shade of grey".  Austin would get these heavy clouds that felt low and oppressive, and I've never felt that here.  Anyway, if you can't stand the weather, then I see no reason not to cash out on your home's gains and find another place to live!

SwordGuy

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Re: 2017 Real estate CRASH
« Reply #72 on: April 06, 2017, 05:05:20 PM »
Where do you find these houses that you can buy for 150k that rent for 1500 a month. Please help I would buy 10 of those today.

Haven't tried properties in that price range yet.   I've been buying and repairing houses for $45K to $50K that rent for $800.

Don't know for sure which path is best.  1/3 the number of HVACs and Roofs to repair, etc., but 160% of the gross rent.   


joonifloofeefloo

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Re: 2017 Real estate CRASH
« Reply #73 on: April 06, 2017, 05:06:17 PM »
When we moved to Portland five years ago, it was with great reluctance on my part, because I was convinced that I was going to die from depression.

I was definitely concerned about that last time I moved from bright + dry to the coast. I too was happily surprised to find my mood stayed cheery regardless of the cloud cover. I did see a lot of other people struggling under it, though. Definitely different experiences for different bodies, ya.

Meowmalade

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Re: 2017 Real estate CRASH
« Reply #74 on: April 06, 2017, 05:20:02 PM »
When we moved to Portland five years ago, it was with great reluctance on my part, because I was convinced that I was going to die from depression.

I was definitely concerned about that last time I moved from bright + dry to the coast. I too was happily surprised to find my mood stayed cheery regardless of the cloud cover. I did see a lot of other people struggling under it, though. Definitely different experiences for different bodies, ya.

I think bright indoor lights help me a lot.  I definitely am prone to SAD and I have a 400-watt halogen bulb dawn simulator which is like waking up to sunshine.  Also, PNW folks should all take Vitamin D  :)

dougules

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Re: 2017 Real estate CRASH
« Reply #75 on: April 07, 2017, 10:04:07 AM »
I think the 50 shades of gray over the NW affect different people differently.  It didn't bother me.  The constant damp cold was what I personally found mildly annoying.  Some people have real trouble with the lack of sun, though. 



If you're of pasty white northern European descent, you probably shouldn't be somewhere with too much sun anyway. 

dess1313

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Re: 2017 Real estate CRASH
« Reply #76 on: April 08, 2017, 02:42:05 PM »
I have it financed at 3.5% fixed for 30 years.

This boggles me! Canada people, is this an option in Canada??? Have I not been seeing the option to lock in for the entire period?? My experience is: Lock in for the few years allowed, by renewal time interest has skyrocketed, people lose homes, repeat.

Here in canada we lock in from 1 to 5 to 10 years at at time.  when that period is up, we renegotiate rate and term of the new contract.  For the last 8ish years we have done nothing but go down.  its not till the last little bit that we have seen rates actually increase, though not hugely at this point.

The debt ratios here are crazy, even the bank of canada is warning people about their debt.  though no one is really listening.  house prices just keep going up fueled on cheap mortgages and greedy banks.  and places like toronto and vancouver are so over priced its horrible.  I thought the new rules about stress testing mortgages would have cooled it off more than it has.  in my prairie city places are still going at asking price up to 20k over asking price for mediocre houses.  Alberta is still taking a hit, from the oil slow down.  I know people almost a year later still don't have jobs.  Lots are trying to go to home provinces but the skilled trades are full for what they do.  I still think a slow down is coming, even if it doesn't crash.  all it would take is a sudden interest rate hike and a lot of people would be blocked from what they want.

joonifloofeefloo

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Re: 2017 Real estate CRASH
« Reply #77 on: April 08, 2017, 05:36:17 PM »
^ Yeah, in another thread I posted about my parents and neighbours going through that 20% spike when I was a kid. I remember the stress of it; itreally put me off mortgaging.

I realize a 20% spike doesn't happen frequently, but other yucky rates sure do, and it doesn't take much of an increase to kill some people's ability to pay. Even a hike of 2% on a large mortgage can do a family in.

dougules

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Re: 2017 Real estate CRASH
« Reply #78 on: April 10, 2017, 08:36:46 AM »
I have it financed at 3.5% fixed for 30 years.

This boggles me! Canada people, is this an option in Canada??? Have I not been seeing the option to lock in for the entire period?? My experience is: Lock in for the few years allowed, by renewal time interest has skyrocketed, people lose homes, repeat.

Here in canada we lock in from 1 to 5 to 10 years at at time.  when that period is up, we renegotiate rate and term of the new contract.  For the last 8ish years we have done nothing but go down.  its not till the last little bit that we have seen rates actually increase, though not hugely at this point.

The debt ratios here are crazy, even the bank of canada is warning people about their debt.  though no one is really listening.  house prices just keep going up fueled on cheap mortgages and greedy banks.  and places like toronto and vancouver are so over priced its horrible.  I thought the new rules about stress testing mortgages would have cooled it off more than it has.  in my prairie city places are still going at asking price up to 20k over asking price for mediocre houses.  Alberta is still taking a hit, from the oil slow down.  I know people almost a year later still don't have jobs.  Lots are trying to go to home provinces but the skilled trades are full for what they do.  I still think a slow down is coming, even if it doesn't crash.  all it would take is a sudden interest rate hike and a lot of people would be blocked from what they want.

It would be a little nerve-wracking to me to have a mortgage that could randomly just go up in X number of years.  You could end up getting your mortgage payment doubled.  It also seems like it would make the housing market more prone to boom and bust.