wrote
.... When your farm is making less and less profit and some
developer comes along and offers you a bushel of money for it, you take it
and to hell with the farm.

Yep. Why wouldn't they?


....The economy in MI is at an alltime low and people are
leaving the state in droves because of the job market not being able to
support the population. We are in a fortunate position where we do not
have to make a low sale on our house just to get out from under it, but
many in the state will be taking big losses, especially those who bought
the over-inflated pricey real estate in the first place. The whole thing
is a sad situation...onl;y people who benefit are the devlopers and the
realtoes....

I think some of them are going to be pretty hard hit too. It
might take a while for the effect to 'trickle down' (or is
it up?) but rest assured that they'll suffer too.

John Cairns wrote:
Katy, with the exception of waterfront property, there is
probably no real
estate in the state of Michigan that's significantly
overvalued. Even the
waterfront property, probably. Agreed, the real estate
market in Michigan is
fairly poor, but there's the economy again.

Well, if what Katysails says about the economy is true, then
there will be nothing to support high real estate prices.
People have to be able to earn enough money to afford their
mortgage, or they 1- sell for whatever they can get or 2-
just walk away (default). If enough of this happens, then
banks start to feel the squeeze.

..... Now soCal and soFla are another
story entirely. I've read recently that some areas may be
overvalued by as
much as 40%.

Optimist.

It all depends on a few highly subjective factors. What if
everybody who is planning to sell their house in South
Florida (or Michigan) decides to just wait a few weeks? What
if everybody who was thinking of buying decides they want to
go ahead? It's the supply/demand thing.

Now reverse the situation, with speculators. When lots of
people are trying to sell, some of whom are in a hurry, the
market can go into free fall. Prices literally hit the bottom.

And yes, it can happen here. Do I think it will? No, because
the worst-case scenario is rarely what occurs.


"Peter Wiley" wrote in message
No such thing as overvalued or undervalued in a free market, except in
someone's perceptions. It's worth what you can sell it for, when you
want to or have to sell it. Period.


Yep again.
But in this case there are some strong influencing factors.
Once a local housing market starts to drop, then banks
become ticklish about putting up big mortgages in that
market. If there are any speculators (and the entry of
speculators into *any* market is a bad sign) they all want
to sell in a hurry while they can still get their money out.
This puts downward pressure on a market that may be
otherwise normal & healthy... it will recover but will take
time.

And as John Maynard Keynes once remarked, "In the long run,
everything comes out fine, except that we'll all be dead by
then."

Maxprop wrote:
There is a lot of rhetoric here now about "overvalued" real estate. The
term is perhaps a misnomer, but it refers to what property will be worth
when the market cools and the prices readjust. This happens in places like
San Francisco, Miami, and Chicago from time to time.

Clue: it happens *everywhere* from time to time. Supply and
demand are in a constant state of seeking equilibrium.

... My brother's home in
SF, which he purchased in '74 for $58K, appreciated to over $400K, and then
readjusted in a slump to around $275K back in the 90s. Now it is over $850K
and still rising, but he strongly expects a readjustment somewhere down the
road. So the market gurus speak over "overvaluation."

And people who have strong reasons to sell their homes
during these periods of "correction" get hammered.

It's not a crash if it only happens to the other guy, right?

... Ultimately, however,
the trend is always up over the long haul.

Uh-huh.

Did the Tooth Fairy tell you so?

Did it ever occur to you that prices seek a level relative
to inflation? Did it ever occur to you that some goods &
services experience a permanent decline in demand?

If you think that long term trends are *always* up,
immutably & indubitably, then I have a great investment for
you in Acme Buggy Whip Co stock.

... That's why interest-only loans
are dispensed like candy in such areas these days.


Great idea: literally gambling with your home. Poker is for
wimps!

Gee this thread has come a long way. Started out at the
ports & worked it's way inland, I guess.

DSK

On Wed, 01 Mar 2006 08:43:16 -0500, DSK wrote:

wrote
.... When your farm is making less and less profit and some
developer comes along and offers you a bushel of money for it, you take it
and to hell with the farm.

Yep. Why wouldn't they?


....The economy in MI is at an alltime low and people are
leaving the state in droves because of the job market not being able to
support the population. We are in a fortunate position where we do not
have to make a low sale on our house just to get out from under it, but
many in the state will be taking big losses, especially those who bought
the over-inflated pricey real estate in the first place. The whole thing
is a sad situation...onl;y people who benefit are the devlopers and the
realtoes....



Happened to me in Oklahoma when crude and NG prices tanked in the mid
eighties. I was fortunate to more or less break even selling my house
that I had bought brand new and lived in for eight years. Many of my
friends, neighbors and people I had worked with were carrying money to
the closings to get out from under.

My Mother in law has waterfront in Florida. Value has doubled each of
the last two years. And it is real because the house is not for sale
but she has people knocking on the door making offers. It is not a
good thing unless you are flipping real estate. If you just want to
live there eventually the taxes and insurance will drive you out. I
feel sorry for people who retired on a fixed income and their dream
was to live near the water in Florida. Even though Florida limits
the amount of tax increase per year for a homstead, I expect it will
eventually drive them out.

Frank

"Frank Boettcher" wrote in message
...

My Mother in law has waterfront in Florida. Value has doubled each of
the last two years. And it is real because the house is not for sale
but she has people knocking on the door making offers. It is not a
good thing unless you are flipping real estate. If you just want to
live there eventually the taxes and insurance will drive you out.

I thought Florida had passed a law similar to California's Prop 51, which
freezes property taxes at the buy-in level. Not true?

I
feel sorry for people who retired on a fixed income and their dream
was to live near the water in Florida. Even though Florida limits
the amount of tax increase per year for a homstead, I expect it will
eventually drive them out.

Guess I should have read on--so FL *can* raise property taxes, but at a
fixed rate for homesteads. Hmmm. Not good for those on fixed incomes.
Then again the real estate moguls control that state, lock, stock, and
barrel, and increasing property taxes may be their way of forcing folks out
of their homes, which puts them on the market for them to sell profitably.
No one ever accused FL of being altruistic w/r/t real estate. One has only
to look at all the coastal wetlands that got backfilled between the 60s and
the present, all in the name of creating canals for more "waterfront"
property.

Max

I think you're talking about Prop 13.

--
"j" ganz @@
www.sailnow.com

"Maxprop" wrote in message
nk.net...

"Frank Boettcher" wrote in message
...

My Mother in law has waterfront in Florida. Value has doubled each of
the last two years. And it is real because the house is not for sale
but she has people knocking on the door making offers. It is not a
good thing unless you are flipping real estate. If you just want to
live there eventually the taxes and insurance will drive you out.

I thought Florida had passed a law similar to California's Prop 51, which
freezes property taxes at the buy-in level. Not true?

I
feel sorry for people who retired on a fixed income and their dream
was to live near the water in Florida. Even though Florida limits
the amount of tax increase per year for a homstead, I expect it will
eventually drive them out.

Guess I should have read on--so FL *can* raise property taxes, but at a
fixed rate for homesteads. Hmmm. Not good for those on fixed incomes.
Then again the real estate moguls control that state, lock, stock, and
barrel, and increasing property taxes may be their way of forcing folks
out of their homes, which puts them on the market for them to sell
profitably. No one ever accused FL of being altruistic w/r/t real estate.
One has only to look at all the coastal wetlands that got backfilled
between the 60s and the present, all in the name of creating canals for
more "waterfront" property.

Max

Capt. JG wrote:
I think you're talking about Prop 13.



He's got it confused with Area 51

DSK

"DSK" wrote in message
news
Capt. JG wrote:
I think you're talking about Prop 13.



He's got it confused with Area 51

I've been afflicted with avian flu H5N1.

Max

Don't joke. I'm just getting over the Feel-like-bird-crap flu.

--
"j" ganz @@
www.sailnow.com

"Maxprop" wrote in message
ink.net...

"DSK" wrote in message
news
Capt. JG wrote:
I think you're talking about Prop 13.



He's got it confused with Area 51

I've been afflicted with avian flu H5N1.

Max

Maxprop wrote:
"DSK" wrote in message
news
Capt. JG wrote:

I think you're talking about Prop 13.



He's got it confused with Area 51


I've been afflicted with avian flu H5N1.

Max


I always knew you were bird-brained ; P

I left my aluminun foil hat in the car...

--
"j" ganz @@
www.sailnow.com

"DSK" wrote in message
news
Capt. JG wrote:
I think you're talking about Prop 13.



He's got it confused with Area 51

DSK

"Capt. JG" wrote in message
...
I think you're talking about Prop 13.

Yup, thanks.

Max