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OT--Ping: To all who keep warning me of a housing bust in Naples
Deep-pocketed buyers steering Naples market clear of bust talk
By GINA EDWARDS September 18, 2005 When home prices hit the outer stratosphere, the number of potential buyers admittedly shrinks. But the Naples luxury market is still in boom mode, local agents say, despite forecasts of a housing bubble that some predict eventually must burst. A slowdown? "I just don't see it," said Bill Earls, an agent for John R. Wood, who specializes in ultra-high-end homes. Earls had a $20 million month in July and said, "I think I've topped that out in August." The $24.8 million Gordon Drive estate of billionaire Campbell Soup heiress Dorrance H. Hamilton flew off the market in less than a week when it was listed in May. That sent tongues wagging in real estate circles. The 7,000-square-foot beachfront house at 4444 Gordon Drive and its quick sale grabbed national headlines for John R. Wood Inc. listing agents Merry Coolidge and Bruce Babcock following the home's closing in July. Barbara Chur, whose husband made his fortune in nursing homes, bought the estate, which includes a separate guest house and Naples Bay frontage across Gordon Drive. The sale price wasn't a record for Naples, but the speed of the sale very well may have been. Agents say they had buyers lining up. "I had someone right behind them," says Prudential Florida WCI agent Jackie May, who specializes in Port Royal. The multiple listing service shows just more than 450 homes and lots on the market now priced at $2 million or more. Of those, close to 100 are priced at $5 million and more. Collier County Property Appraiser records show that more than 1,400 properties sold for more than $1 million from January through August. Surprisingly, local agents say there was no summer slowdown in the high-end market. But, although the luxury market is active, price appreciation appears to be slowing somewhat, agents say. Emily K. Bua, of Premier Properties, said she's not seeing as much appreciation in the $4 million to $10 million market as in the past. Bua said she doesn't see prices dropping, either. "There's tremendous appreciation in the under $2 million market," Bua said. Land values, as always, are dictating prices. Homes built in the '80s or '90s in Port Royal and Old Naples are mostly considered tear-downs now. "If they're not brand new, the houses are free," May said. "The ground has just appreciated so much." And the ground is especially rich if it's sand. Agents say prices for beachfront lots are fetching between $70,000 and $80,000 per foot of beachfront - thus adding between $10 million and $12 million for typical 150-foot-wide lots on Gordon Drive. Tearing down and building new gives buyers bigger homes, higher ceilings, and what Earls calls "the new sexy appliances." But what buyers want most is a beautiful view, agents say. "The bigger the view, the more it is," May said. Many high-end buyers are already here and they want more house or more water, May said. Some retired executives think they'll only spend a little time in Naples, but they end up staying here a lot, she said. Fundamentally, agents say demand from high net worth clients is strong. More and more newcomers are discovering the market, local agents say. They are top flight executives and increasingly they're hailing from the Northeast and out West - a departure from the traditional Midwestern crowd. Europeans, particularly from Germany and England, are coming in greater numbers, too. "There are a lot of people just discovering Naples," Bua said. Naples has had positive national press of late and its charity wine auction, the Naples Winter Wine Festival, attracts big spenders from all over the world. "I think the wine festival has brought a lot of attention to the Naples market," Bua said. What's most encouraging to Earls is this: "I'm seeing a good, healthy influx of new people," he said. "I think our market has broadened." Although the market appears flush with mega-mansions for sale, Earls said homes are turning over and sales are brisk. "I have 30 listings after selling $200 million (this year)," Earls said. Overall, he said, he's up 10 percent more than last year. One thing that gives Bua confidence in the health of the luxury market is it's not as prone to profiteering. "The market over $4 million or $5 million is end-users," Bua said. "The market under $2 million has a lot of investors in it." Agents typically define the luxury market in Naples as homes and condos valued at $4 million and more. There's a big range in between though. May estimates Port Royal's largest estate could be worth as much as $100 million. For now, Coolidge and Babcock - who sold the $24.8 million estate in less than a week - have bragging rights on speed of a mega-sale. The four-bedroom, 4½ bath estate home built by Newbury North Associates and designed by architect Jerry DeGennaro features dark wood paneling with tropical decor and such luxuries as an exercise and massage room off the master suite. Across Gordon Drive, a four-bedroom guest house and caretaker house front Naples Bay. "We had appointments one on top of the other," Coolidge said. "We were hardly even ready to show it to the market place." The top price for a home and property - $30 million paid in April 2001 for a beachfront and bay lot combination - still holds. High-end agents seem to be scrambling for the next record luxury sale. It could be a cell phone call away. http://naplesnews.com/npdn/news/arti...089510,00.html |
Mo
Naples-Marco market No. 1 for home price appreaciation By GINA EDWARDS September 18, 2005 Handicapping a real estate bubble has become a national obsession, if not a national pastime. And the Southwest Florida market is still grabbing the national spotlight. The Office of Federal Housing Enterprise Oversight says the Naples-Marco Island metro area is No. 1 in the nation for home price appreciation for the second quarter ending June 30, compared with the same time last year. Single-family homes appreciated 35.6 percent during that time. The Cape Coral-Fort Myers metro area ranks No. 9 in the country at 29.84 percent appreciation. Punta Gorda in Charlotte County ranks No. 12 on the list with homes appreciating 29.39 percent during the year. "We're not seeing any evidence whatsoever of prices topping out," said Andrew Leventis, an economist for the Office of Federal Housing Enterprise Oversight. Nationwide, homes appreciated 13.4 percent on average, according to the federal index. On the opposite end of the spectrum, Mansfield, Ohio, and Lafayette, Ind., had the lowest appreciation for the second quarter in the nation, both coming in at less than 1 percent. Overall, income levels and low interest rates are fueling home prices on a macro level, Leventis said. In Florida - and Naples in particular - demand from buyers appears strong. "We hear of demand being high for second homes there," Leventis said. Local agents say brisk sales in the luxury market appear to be boosting the area's median sales price, even as some sales in the lower end of the market have slowed. "The number of transactions on the high end has increased," said Joe Ballerino, owner of Amerivest Realty. Ballerino said the lower end of the Naples market - which he describes as properties at less than $750,000 - appears to be leveling off somewhat. The Florida Association of Realtors reported Naples' median single-family home price for July at $490,400, up 31 percent compared with July 2004. Closings in Collier County in August were up 24 percent compared with the same time last year, according to MLS data compiled by Amerivest Realty of Naples. Year to date, closings were 6,613 from January to August, compared with 6,494 for the same time last year. Another national group, the National Association of Realtors, reported in August that the Fort Myers-Cape Coral Metropolitan Statistical Area ranked second in the nation for median home price appreciation for the second quarter, with the median price up 45.2 percent from the same time a year ago to $266,800. NAR doesn't include the Naples area in its ranking. "NOYB" wrote in message k.net... Deep-pocketed buyers steering Naples market clear of bust talk By GINA EDWARDS September 18, 2005 When home prices hit the outer stratosphere, the number of potential buyers admittedly shrinks. But the Naples luxury market is still in boom mode, local agents say, despite forecasts of a housing bubble that some predict eventually must burst. A slowdown? "I just don't see it," said Bill Earls, an agent for John R. Wood, who specializes in ultra-high-end homes. Earls had a $20 million month in July and said, "I think I've topped that out in August." The $24.8 million Gordon Drive estate of billionaire Campbell Soup heiress Dorrance H. Hamilton flew off the market in less than a week when it was listed in May. That sent tongues wagging in real estate circles. The 7,000-square-foot beachfront house at 4444 Gordon Drive and its quick sale grabbed national headlines for John R. Wood Inc. listing agents Merry Coolidge and Bruce Babcock following the home's closing in July. Barbara Chur, whose husband made his fortune in nursing homes, bought the estate, which includes a separate guest house and Naples Bay frontage across Gordon Drive. The sale price wasn't a record for Naples, but the speed of the sale very well may have been. Agents say they had buyers lining up. "I had someone right behind them," says Prudential Florida WCI agent Jackie May, who specializes in Port Royal. The multiple listing service shows just more than 450 homes and lots on the market now priced at $2 million or more. Of those, close to 100 are priced at $5 million and more. Collier County Property Appraiser records show that more than 1,400 properties sold for more than $1 million from January through August. Surprisingly, local agents say there was no summer slowdown in the high-end market. But, although the luxury market is active, price appreciation appears to be slowing somewhat, agents say. Emily K. Bua, of Premier Properties, said she's not seeing as much appreciation in the $4 million to $10 million market as in the past. Bua said she doesn't see prices dropping, either. "There's tremendous appreciation in the under $2 million market," Bua said. Land values, as always, are dictating prices. Homes built in the '80s or '90s in Port Royal and Old Naples are mostly considered tear-downs now. "If they're not brand new, the houses are free," May said. "The ground has just appreciated so much." And the ground is especially rich if it's sand. Agents say prices for beachfront lots are fetching between $70,000 and $80,000 per foot of beachfront - thus adding between $10 million and $12 million for typical 150-foot-wide lots on Gordon Drive. Tearing down and building new gives buyers bigger homes, higher ceilings, and what Earls calls "the new sexy appliances." But what buyers want most is a beautiful view, agents say. "The bigger the view, the more it is," May said. Many high-end buyers are already here and they want more house or more water, May said. Some retired executives think they'll only spend a little time in Naples, but they end up staying here a lot, she said. Fundamentally, agents say demand from high net worth clients is strong. More and more newcomers are discovering the market, local agents say. They are top flight executives and increasingly they're hailing from the Northeast and out West - a departure from the traditional Midwestern crowd. Europeans, particularly from Germany and England, are coming in greater numbers, too. "There are a lot of people just discovering Naples," Bua said. Naples has had positive national press of late and its charity wine auction, the Naples Winter Wine Festival, attracts big spenders from all over the world. "I think the wine festival has brought a lot of attention to the Naples market," Bua said. What's most encouraging to Earls is this: "I'm seeing a good, healthy influx of new people," he said. "I think our market has broadened." Although the market appears flush with mega-mansions for sale, Earls said homes are turning over and sales are brisk. "I have 30 listings after selling $200 million (this year)," Earls said. Overall, he said, he's up 10 percent more than last year. One thing that gives Bua confidence in the health of the luxury market is it's not as prone to profiteering. "The market over $4 million or $5 million is end-users," Bua said. "The market under $2 million has a lot of investors in it." Agents typically define the luxury market in Naples as homes and condos valued at $4 million and more. There's a big range in between though. May estimates Port Royal's largest estate could be worth as much as $100 million. For now, Coolidge and Babcock - who sold the $24.8 million estate in less than a week - have bragging rights on speed of a mega-sale. The four-bedroom, 4½ bath estate home built by Newbury North Associates and designed by architect Jerry DeGennaro features dark wood paneling with tropical decor and such luxuries as an exercise and massage room off the master suite. Across Gordon Drive, a four-bedroom guest house and caretaker house front Naples Bay. "We had appointments one on top of the other," Coolidge said. "We were hardly even ready to show it to the market place." The top price for a home and property - $30 million paid in April 2001 for a beachfront and bay lot combination - still holds. High-end agents seem to be scrambling for the next record luxury sale. It could be a cell phone call away. http://naplesnews.com/npdn/news/arti...089510,00.html |
NYOB,
Harry and Kevin are the only ones who are upset that you have done so well with the housing market. They are jealous. -- Starbuck .... Arsonists of the world, ignite! "NOYB" wrote in message et... Mo Naples-Marco market No. 1 for home price appreaciation By GINA EDWARDS September 18, 2005 Handicapping a real estate bubble has become a national obsession, if not a national pastime. And the Southwest Florida market is still grabbing the national spotlight. The Office of Federal Housing Enterprise Oversight says the Naples-Marco Island metro area is No. 1 in the nation for home price appreciation for the second quarter ending June 30, compared with the same time last year. Single-family homes appreciated 35.6 percent during that time. The Cape Coral-Fort Myers metro area ranks No. 9 in the country at 29.84 percent appreciation. Punta Gorda in Charlotte County ranks No. 12 on the list with homes appreciating 29.39 percent during the year. "We're not seeing any evidence whatsoever of prices topping out," said Andrew Leventis, an economist for the Office of Federal Housing Enterprise Oversight. Nationwide, homes appreciated 13.4 percent on average, according to the federal index. On the opposite end of the spectrum, Mansfield, Ohio, and Lafayette, Ind., had the lowest appreciation for the second quarter in the nation, both coming in at less than 1 percent. Overall, income levels and low interest rates are fueling home prices on a macro level, Leventis said. In Florida - and Naples in particular - demand from buyers appears strong. "We hear of demand being high for second homes there," Leventis said. Local agents say brisk sales in the luxury market appear to be boosting the area's median sales price, even as some sales in the lower end of the market have slowed. "The number of transactions on the high end has increased," said Joe Ballerino, owner of Amerivest Realty. Ballerino said the lower end of the Naples market - which he describes as properties at less than $750,000 - appears to be leveling off somewhat. The Florida Association of Realtors reported Naples' median single-family home price for July at $490,400, up 31 percent compared with July 2004. Closings in Collier County in August were up 24 percent compared with the same time last year, according to MLS data compiled by Amerivest Realty of Naples. Year to date, closings were 6,613 from January to August, compared with 6,494 for the same time last year. Another national group, the National Association of Realtors, reported in August that the Fort Myers-Cape Coral Metropolitan Statistical Area ranked second in the nation for median home price appreciation for the second quarter, with the median price up 45.2 percent from the same time a year ago to $266,800. NAR doesn't include the Naples area in its ranking. "NOYB" wrote in message k.net... Deep-pocketed buyers steering Naples market clear of bust talk By GINA EDWARDS September 18, 2005 When home prices hit the outer stratosphere, the number of potential buyers admittedly shrinks. But the Naples luxury market is still in boom mode, local agents say, despite forecasts of a housing bubble that some predict eventually must burst. A slowdown? "I just don't see it," said Bill Earls, an agent for John R. Wood, who specializes in ultra-high-end homes. Earls had a $20 million month in July and said, "I think I've topped that out in August." The $24.8 million Gordon Drive estate of billionaire Campbell Soup heiress Dorrance H. Hamilton flew off the market in less than a week when it was listed in May. That sent tongues wagging in real estate circles. The 7,000-square-foot beachfront house at 4444 Gordon Drive and its quick sale grabbed national headlines for John R. Wood Inc. listing agents Merry Coolidge and Bruce Babcock following the home's closing in July. Barbara Chur, whose husband made his fortune in nursing homes, bought the estate, which includes a separate guest house and Naples Bay frontage across Gordon Drive. The sale price wasn't a record for Naples, but the speed of the sale very well may have been. Agents say they had buyers lining up. "I had someone right behind them," says Prudential Florida WCI agent Jackie May, who specializes in Port Royal. The multiple listing service shows just more than 450 homes and lots on the market now priced at $2 million or more. Of those, close to 100 are priced at $5 million and more. Collier County Property Appraiser records show that more than 1,400 properties sold for more than $1 million from January through August. Surprisingly, local agents say there was no summer slowdown in the high-end market. But, although the luxury market is active, price appreciation appears to be slowing somewhat, agents say. Emily K. Bua, of Premier Properties, said she's not seeing as much appreciation in the $4 million to $10 million market as in the past. Bua said she doesn't see prices dropping, either. "There's tremendous appreciation in the under $2 million market," Bua said. Land values, as always, are dictating prices. Homes built in the '80s or '90s in Port Royal and Old Naples are mostly considered tear-downs now. "If they're not brand new, the houses are free," May said. "The ground has just appreciated so much." And the ground is especially rich if it's sand. Agents say prices for beachfront lots are fetching between $70,000 and $80,000 per foot of beachfront - thus adding between $10 million and $12 million for typical 150-foot-wide lots on Gordon Drive. Tearing down and building new gives buyers bigger homes, higher ceilings, and what Earls calls "the new sexy appliances." But what buyers want most is a beautiful view, agents say. "The bigger the view, the more it is," May said. Many high-end buyers are already here and they want more house or more water, May said. Some retired executives think they'll only spend a little time in Naples, but they end up staying here a lot, she said. Fundamentally, agents say demand from high net worth clients is strong. More and more newcomers are discovering the market, local agents say. They are top flight executives and increasingly they're hailing from the Northeast and out West - a departure from the traditional Midwestern crowd. Europeans, particularly from Germany and England, are coming in greater numbers, too. "There are a lot of people just discovering Naples," Bua said. Naples has had positive national press of late and its charity wine auction, the Naples Winter Wine Festival, attracts big spenders from all over the world. "I think the wine festival has brought a lot of attention to the Naples market," Bua said. What's most encouraging to Earls is this: "I'm seeing a good, healthy influx of new people," he said. "I think our market has broadened." Although the market appears flush with mega-mansions for sale, Earls said homes are turning over and sales are brisk. "I have 30 listings after selling $200 million (this year)," Earls said. Overall, he said, he's up 10 percent more than last year. One thing that gives Bua confidence in the health of the luxury market is it's not as prone to profiteering. "The market over $4 million or $5 million is end-users," Bua said. "The market under $2 million has a lot of investors in it." Agents typically define the luxury market in Naples as homes and condos valued at $4 million and more. There's a big range in between though. May estimates Port Royal's largest estate could be worth as much as $100 million. For now, Coolidge and Babcock - who sold the $24.8 million estate in less than a week - have bragging rights on speed of a mega-sale. The four-bedroom, 4½ bath estate home built by Newbury North Associates and designed by architect Jerry DeGennaro features dark wood paneling with tropical decor and such luxuries as an exercise and massage room off the master suite. Across Gordon Drive, a four-bedroom guest house and caretaker house front Naples Bay. "We had appointments one on top of the other," Coolidge said. "We were hardly even ready to show it to the market place." The top price for a home and property - $30 million paid in April 2001 for a beachfront and bay lot combination - still holds. High-end agents seem to be scrambling for the next record luxury sale. It could be a cell phone call away. http://naplesnews.com/npdn/news/arti...089510,00.html |
"Shortwave Sportfishing" wrote in message ... On Sun, 18 Sep 2005 17:42:30 GMT, "NOYB" wrote: When home prices hit the outer stratosphere, the number of potential buyers admittedly shrinks. But the Naples luxury market is still in boom mode, local agents say, despite forecasts of a housing bubble that some predict eventually must burst. A slowdown? You will get your turn and sooner than later. It's already starting up here in NE. I figure that once the NE slows, we'll soon follow. They'll be a slowdown, but never a correction. There are too many baby boomers looking to retire down here. The SW coast of Florida used to be mostly midwesterners. But the housing prices in the midwest aren't keeping pace with the prices down here. So we're seeing more buyers from the NE, the West, and overseas. |
"Starbuck" wrote in message ... NYOB, Harry and Kevin are the only ones who are upset that you have done so well with the housing market. They are jealous. Actually, it really seems to bother DSK the most. He has sent the most doomsday warnings my way...but he is followed closely by Gould. |
Harry,
You said you still owned a home in St. Augustine, and would move back there when you return to Fl. Did you forget that story also? -- Starbuck "You are accustomed to ostracism from childhood because you are overweight, deformed, stupid, or have an extremely short [deleted]." "Harry Krause" wrote in message ... NOYB wrote: "Starbuck" wrote in message ... NYOB, Harry and Kevin are the only ones who are upset that you have done so well with the housing market. They are jealous. Actually, it really seems to bother DSK the most. He has sent the most doomsday warnings my way...but he is followed closely by Gould. As usual, Smithers is wrong. I'm neither jealous nor upset about your paper gains. I simply don't have much use for your part of Florida from April through mid-November, and for the rest of the year, it is too dull and small-townish for my taste. I far prefer NE Florida, because it has actual seasons and a pretty mild winter, and, while it on occasion is walloped by storms, it happens with far less frequency than your area. If I move back to Florida full-time someday, it'll be between Daytona and the St. Mary's River. As for your housing investment, well, that's your business. Your mortgage is of a far riskier variety than I would want on my personal home. I also speculate in real estate, but not the way you do. -- - - - George W. Bush, our hero! I've been GASJACKED! |
"Starbuck" wrote:
Harry, You said you still owned a home in St. Augustine, and would move back there when you return to Fl. Did you forget that story also? No, I made that up. |
On Sun, 18 Sep 2005 18:07:34 +0000, NOYB wrote:
I figure that once the NE slows, we'll soon follow. They'll be a slowdown, but never a correction. There are too many baby boomers looking to retire down here. The SW coast of Florida used to be mostly midwesterners. But the housing prices in the midwest aren't keeping pace with the prices down here. So we're seeing more buyers from the NE, the West, and overseas. You bought your house for the right reasons, as a place to live and additionally, long term. I don't see you at risk, long term, but geez, "never a correction." All the warning signs are there. I read somewhere that speculators are a third of your market. You have people in the industry openly denying the bubble will burst. Guy, remember "bust" is part of the "boom and bust" cycle. It ain't an "if", it's a "when". |
NOYB wrote: "Starbuck" wrote in message ... NYOB, Harry and Kevin are the only ones who are upset that you have done so well with the housing market. They are jealous. Actually, it really seems to bother DSK the most. He has sent the most doomsday warnings my way...but he is followed closely by Gould. DSK doesn't have to work hard to beat my number of warnings; I sent you one. Get thou to Amazon.com and purchase a book: Extraordinary Popular Delusions and the Madness of Crowds. Then sing along: All Around the Hurricane Zone Where wages are in trouble The housing prices rise and rise 'Til "pop" goes the bubble. You know, NOYB, at one time I was under the impression you had a couple of bucks or so. People with money don't launch a thread to to announce "look how well I'm doing financially." Besides, how many houses do you own in Naples. One? Que lastima, Doc. That's not an investment- (unless you decide to go pitch a tent down on the beach and rent it out). If you sell it for $99999999999999.00, you'll surely have to spend at least as much to buy another. You're no richer, and no poorer than if your house were worth $29,000.....you still need a place to live. Until you don't need a place to live, you can't extract a dime. |
On Sun, 18 Sep 2005 23:18:09 -0400, thunder
wrote: All the warning signs are there. I read somewhere that speculators are a third of your market. You have people in the industry openly denying the bubble will burst. Guy, remember "bust" is part of the "boom and bust" cycle. It ain't an "if", it's a "when". Unless, of course, hyper-inflation makes current housing prices seem like a bargain in a few years. I find it interesting to hear all the talking heads saying there's no real problem with inflation. From my perspective there's been tremendous inflation over the last few years, yet the "official" rate of inflation is mild. I think what's happening in gold is a good sign of what's about to happen in our economy. If you can make a dollar worth $.20, paying off all the dept and entitlement won't hurt the wealthy folks who control the country nearly as much. bb |
Chuck,
There are many people who do make money by selling their primary residence and moving to a less expensive area. I know people who lived in bungalows on the west coast, and then purchased mansions when they left. If someone lived in Naples, and then retired elsewhere, they could downsize and make a very tidy profit living purchasing a home in most other areas of the US. -- Starbuck -- Sacha Guitry - The little I know, I owe to my ignorance. wrote in message oups.com... NOYB wrote: "Starbuck" wrote in message ... NYOB, Harry and Kevin are the only ones who are upset that you have done so well with the housing market. They are jealous. Actually, it really seems to bother DSK the most. He has sent the most doomsday warnings my way...but he is followed closely by Gould. DSK doesn't have to work hard to beat my number of warnings; I sent you one. Get thou to Amazon.com and purchase a book: Extraordinary Popular Delusions and the Madness of Crowds. Then sing along: All Around the Hurricane Zone Where wages are in trouble The housing prices rise and rise 'Til "pop" goes the bubble. You know, NOYB, at one time I was under the impression you had a couple of bucks or so. People with money don't launch a thread to to announce "look how well I'm doing financially." Besides, how many houses do you own in Naples. One? Que lastima, Doc. That's not an investment- (unless you decide to go pitch a tent down on the beach and rent it out). If you sell it for $99999999999999.00, you'll surely have to spend at least as much to buy another. You're no richer, and no poorer than if your house were worth $29,000.....you still need a place to live. Until you don't need a place to live, you can't extract a dime. |
This is exactly what happened in Houston during the oil boom and bust period
in the 80's. 6000 sq. foot homes were selling for $200,000 due to all the bankruptcies. Banks were doing anything to clear their books of homes people could not afford to buy. -- Starbuck "External reality is sort of an affectation of the nervous system." -- Jaron Lanier wrote in message ... On Sun, 18 Sep 2005 18:07:34 GMT, "NOYB" wrote: There are too many baby boomers looking to retire down here. The real bust will happen when SS goes upside down, the market tanks and private pensions start failing. The first time one of those boomers actually loses money on a bad investment in a home things will start tumbling pretty fast. It will really affect "want" houses worse than "need" houses but all will see the effect. The real problem will be people who owe a lot more than the home is worth. They may end up just walking away from the mortgage. Banks are stuck with a lot of hard to sell property that is a negative cash flow. They end up cutting their losses and taking what they can get. That is when things tumble. A nice waterfront property with salt water access will always demand a premium but a lot of those McMansions that are just depending on ambiance and a gate guard are going to be screwed. |
wrote in message oups.com... NOYB wrote: "Starbuck" wrote in message ... NYOB, Harry and Kevin are the only ones who are upset that you have done so well with the housing market. They are jealous. Actually, it really seems to bother DSK the most. He has sent the most doomsday warnings my way...but he is followed closely by Gould. DSK doesn't have to work hard to beat my number of warnings; I sent you one. Get thou to Amazon.com and purchase a book: Extraordinary Popular Delusions and the Madness of Crowds. Then sing along: All Around the Hurricane Zone Where wages are in trouble The housing prices rise and rise 'Til "pop" goes the bubble. You know, NOYB, at one time I was under the impression you had a couple of bucks or so. People with money don't launch a thread to to announce "look how well I'm doing financially." This wasn't a "look at how well I'm doing thread". This is a continuation of a thread in which you and/or DSK debated the possibility of a crash in the Naples market. You both felt is was inevitable, and I disagreed. I created this thread to bask my assertions made in the other thread. I'm sorry if you took it the wrong way. |
"Starbuck" wrote in message ... Chuck, There are many people who do make money by selling their primary residence and moving to a less expensive area. I know people who lived in bungalows on the west coast, and then purchased mansions when they left. If someone lived in Naples, and then retired elsewhere, they could downsize and make a very tidy profit living purchasing a home in most other areas of the US. Or they could do a reverse mortgage and retire off the 1000% increase in equity that they accumulate over the the next 25 years. |
"thunder" wrote in message ... On Sun, 18 Sep 2005 18:07:34 +0000, NOYB wrote: I figure that once the NE slows, we'll soon follow. They'll be a slowdown, but never a correction. There are too many baby boomers looking to retire down here. The SW coast of Florida used to be mostly midwesterners. But the housing prices in the midwest aren't keeping pace with the prices down here. So we're seeing more buyers from the NE, the West, and overseas. You bought your house for the right reasons, as a place to live and additionally, long term. I don't see you at risk, long term, but geez, "never a correction." All the warning signs are there. I agree. But I don't think prices will "correct". They'll plateau and stagnate, but not fall significantly. Demand is increasing exponentially with the baby boom population retiring. I read somewhere that speculators are a third of your market. I've read up to 40% in some areas like Punta Gorda. It's much, much lower in Naples. You have people in the industry openly denying the bubble will burst. Guy, remember "bust" is part of the "boom and bust" cycle. It ain't an "if", it's a "when". I agree with you. I see the market cooling, but I just don't believe that you'll see significant price corrections. Naples/Marco saw over a 35% price increase in the 2nd quarter alone (4 months!)...putting it #1 in the country in appreciation for that quarter. My brother looked at a villa yesterday that the seller closed on in July 2005. She bought it pre-construction in 2004, so the price was locked in. Regardless, in July, it closed for $209,900. My brother was too late yesterday. It sold for $350,000. Two months and $140k profit. And she had two offers on it already. |
NOYB wrote: "Shortwave Sportfishing" wrote in message ... On Sun, 18 Sep 2005 17:42:30 GMT, "NOYB" wrote: When home prices hit the outer stratosphere, the number of potential buyers admittedly shrinks. But the Naples luxury market is still in boom mode, local agents say, despite forecasts of a housing bubble that some predict eventually must burst. A slowdown? You will get your turn and sooner than later. It's already starting up here in NE. I figure that once the NE slows, we'll soon follow. They'll be a slowdown, but never a correction. There are too many baby boomers looking to retire down here. The SW coast of Florida used to be mostly midwesterners. But the housing prices in the midwest aren't keeping pace with the prices down here. So we're seeing more buyers from the NE, the West, and overseas. Major money types are calling the Naples real estate market just what it is, a mini-bubble, and it's going to burst. |
Kevin,
The Wall Street Journal says one has to be careful of any market that has a large increase in a short period of time, but they are suggesting caution, not a forecast of a bust. Who are these Major Money Types and do you have a link to their predictions? Do they own a "Desmo"? -- Starbuck .... Hard work never killed anybody, but why take a chance? wrote in message oups.com... NOYB wrote: "Shortwave Sportfishing" wrote in message ... On Sun, 18 Sep 2005 17:42:30 GMT, "NOYB" wrote: When home prices hit the outer stratosphere, the number of potential buyers admittedly shrinks. But the Naples luxury market is still in boom mode, local agents say, despite forecasts of a housing bubble that some predict eventually must burst. A slowdown? You will get your turn and sooner than later. It's already starting up here in NE. I figure that once the NE slows, we'll soon follow. They'll be a slowdown, but never a correction. There are too many baby boomers looking to retire down here. The SW coast of Florida used to be mostly midwesterners. But the housing prices in the midwest aren't keeping pace with the prices down here. So we're seeing more buyers from the NE, the West, and overseas. Major money types are calling the Naples real estate market just what it is, a mini-bubble, and it's going to burst. |
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On Mon, 19 Sep 2005 08:11:12 -0400, "Starbuck"
wrote: Chuck, There are many people who do make money by selling their primary residence and moving to a less expensive area. I know people who lived in bungalows on the west coast, and then purchased mansions when they left. If someone lived in Naples, and then retired elsewhere, they could downsize and make a very tidy profit living purchasing a home in most other areas of the US. That's what I'm gonna do! -- John H "All decisions are the result of binary thinking." |
On Mon, 19 Sep 2005 09:22:34 -0400, "Starbuck"
wrote: Kevin, The Wall Street Journal says one has to be careful of any market that has a large increase in a short period of time, but they are suggesting caution, not a forecast of a bust. Who are these Major Money Types and do you have a link to their predictions? Do they own a "Desmo"? You stopped him cold! -- John H "All decisions are the result of binary thinking." |
wrote in message ... On Mon, 19 Sep 2005 12:37:26 GMT, "NOYB" wrote: Or they could do a reverse mortgage and retire off the 1000% increase in equity that they accumulate over the the next 25 years. That's not how a reverse mortgage works. The mortgage company pays a fixed amount per month (usually based on a fraction of the current appraised worth plotted against an optimistic guess on how long the person wil live) and hopes to pocket the appreciation. They only hope to pocket the appreciation beginning from the initial starting point of the reverse mortgage. Any appreciation that occurs between now and when the reverse mortgage starts belongs to the home owner. The homeowner's equity in the house drops as the bank continues to make payments. But the homeowners reaps the benefits of the appreciation that occurred before the payments begin. They also won't write a reverse mortage unless the owner is pretty old. In other words...most retirees would qualify. It is really just a scam that the banks foist off on old folks without anyone to look out for them. It's not a scam. It's a process that allows the homeowner to take out the equity of the home without having to pay monthly payments on the equity line. Here's another way to look at it: Suppose you live in a million dollar home, but have zero equity in that home (ie--you owe 1 million dollars). In 30 years, that home is worth $4 million, and you owe still owe $1 million on it (ie--you had an interest-only loan). You have $3 million in equity on the home. You decide to take out $2 million of that equity, and put it in an investment that pays a rate equal to what the monthly payment would be on the loan (ie--you end up with a net monthly outlay of cash of zero). You can then use the $2 million to live on. A reverse mortgage does the same thing. It gives you the $2 million, but amortizes it out over the life of the reverse mortgage. You're simply taking the money in payments instead of a lump sum. |
"Harry Krause" wrote in message ... NOYB wrote: Here's another way to look at it: Suppose you live in a million dollar home, but have zero equity in that home (ie--you owe 1 million dollars). In 30 years, that home is worth $4 million, and you owe still owe $1 million on it (ie--you had an interest-only loan). You have $3 million in equity on the home. You decide to take out $2 million of that equity, and put it in an investment that pays a rate equal to what the monthly payment would be on the loan (ie--you end up with a net monthly outlay of cash of zero). You can then use the $2 million to live on. A reverse mortgage does the same thing. It gives you the $2 million, but amortizes it out over the life of the reverse mortgage. You're simply taking the money in payments instead of a lump sum. The older you get, the bigger the lever you're going to need. That's true. But considering I'm only 34, I have plenty of time to begin working towards debt reduction. I have just under 4 years before my practice is paid off. Once that occurs, I'll have another $6k available in pre-tax dollars each month that I can use to pay off the mortgage. I intend to use $3k of that money to go strictly towards principle on the loan...which means that I will have paid off the house in just under 27 years from now...or when I'm 61 years old. And that still leaves another $1-2k/month for payments on my next boat. |
NOYB wrote:
Here's another way to look at it: Suppose you live in a million dollar home, but have zero equity in that home (ie--you owe 1 million dollars). In 30 years, that home is worth $4 million, and you owe still owe $1 million on it (ie--you had an interest-only loan). You have $3 million in equity on the home. You decide to take out $2 million of that equity, and put it in an investment that pays a rate equal to what the monthly payment would be on the loan (ie--you end up with a net monthly outlay of cash of zero). You can then use the $2 million to live on. The problem here is that you've already made payments on that interest-only loan that far far exceed your imaginary equity. Untill you sell it an pocket the cash, equity is nothing but a bubble. just like the stock market. BTW back in the late 1990s, there were plenty of articles in newspapers & investment magazines about how the stock market could never possibly go down. I'm still wishing you luck, NOBBY, apparently you have no clue you need it. DSK |
"DSK" wrote in message ... NOYB wrote: Here's another way to look at it: Suppose you live in a million dollar home, but have zero equity in that home (ie--you owe 1 million dollars). In 30 years, that home is worth $4 million, and you owe still owe $1 million on it (ie--you had an interest-only loan). You have $3 million in equity on the home. You decide to take out $2 million of that equity, and put it in an investment that pays a rate equal to what the monthly payment would be on the loan (ie--you end up with a net monthly outlay of cash of zero). You can then use the $2 million to live on. The problem here is that you've already made payments on that interest-only loan that far far exceed your imaginary equity. Nope. Try again. An interest-only loan on $1 million at 6% interest gives you a monthly payment of $5000. Over 30 years, those payments total $1.8 million. If you have $3 million in equity in the place at the end of 30 years, and only spent $1.8 million in payments, you're $1.2 million ahead of the game...and you essentially lived for free for all of those years. Even if you include taxes and insurance, you still lived for free. Your monthly payments over all of those years essentially equates to a forced savings plan. Untill you sell it an pocket the cash, equity is nothing but a bubble. just like the stock market. BTW back in the late 1990s, there were plenty of articles in newspapers & investment magazines about how the stock market could never possibly go down. That's BS. A company could go out of business or bankrupt (Enron, WorldCom, etc), forcing the premature liquidation of that asset at a loss. Property is always there. I have 28 years before I plan on retiring. Any possible correction in the market will have more than re-corrected itself by then. |
Suppose you live in a million dollar home, but have zero equity in that
home (ie--you owe 1 million dollars). In 30 years, that home is worth $4 million, and you owe still owe $1 million on it (ie--you had an interest-only loan). You have $3 million in equity on the home. You decide to take out $2 million of that equity, and put it in an investment that pays a rate equal to what the monthly payment would be on the loan (ie--you end up with a net monthly outlay of cash of zero). You can then use the $2 million to live on. The problem here is that you've already made payments on that interest-only loan that far far exceed your imaginary equity. NOYB wrote: Nope. Try again. An interest-only loan on $1 million at 6% interest gives you a monthly payment of $5000. And you have a fixed rate for that 30 years, right? It'll never never never go above 6%, right? And you don't have to pay taxes on that "appreciated" property, right? And your monthly bills aren't any higher in proportion to the size of that 'million dollar house' right? The bottom line here is that you're living on credit and trying to convince yourself it's sound fiscal policy. You probably feel a little guilty because you really know it ain't and you're risking your family's future. Otherwise you wouldn't even have posted that feel-good article about how market bubbles never ever collapse. DSK |
"DSK" wrote in message ... Suppose you live in a million dollar home, but have zero equity in that home (ie--you owe 1 million dollars). In 30 years, that home is worth $4 million, and you owe still owe $1 million on it (ie--you had an interest-only loan). You have $3 million in equity on the home. You decide to take out $2 million of that equity, and put it in an investment that pays a rate equal to what the monthly payment would be on the loan (ie--you end up with a net monthly outlay of cash of zero). You can then use the $2 million to live on. The problem here is that you've already made payments on that interest-only loan that far far exceed your imaginary equity. NOYB wrote: Nope. Try again. An interest-only loan on $1 million at 6% interest gives you a monthly payment of $5000. And you have a fixed rate for that 30 years, right? It'll never never never go above 6%, right? Yes. Wells Fargo is now offering a 30 year fixed rate interest only loan. The rate that they quoted me was in the mid 6% range. And you don't have to pay taxes on that "appreciated" property, right? Can't go up more than 3% every year thanks to Save Our Homes Act. And your monthly bills aren't any higher in proportion to the size of that 'million dollar house' right? No. My house is only worth a million plus dollars because of its location...not its size. The bottom line here is that you're living on credit and trying to convince yourself it's sound fiscal policy. The only debts that I have right now are my house and my business loan. Both cars, both boats, and any of my other assets are paid for. Credit cards get paid in full monthly. You probably feel a little guilty because you really know it ain't and you're risking your family's future. Otherwise you wouldn't even have posted that feel-good article about how market bubbles never ever collapse. I posted it because I like to argue. ;-) I knew you'd bite. |
NOYB wrote:
And you have a fixed rate for that 30 years, right? It'll never never never go above 6%, right? Yes. Wells Fargo is now offering a 30 year fixed rate interest only loan. The rate that they quoted me was in the mid 6% range. Tell you what. Spreadsheet the difference between 6% and 6.5% over 30 years, then get back to me. And you don't have to pay taxes on that "appreciated" property, right? Can't go up more than 3% every year thanks to Save Our Homes Act. And do the math on 3% compounded over 30 years too. The bottom line here is that you're living on credit and trying to convince yourself it's sound fiscal policy. The only debts that I have right now are my house and my business loan. And your house appreciation is something that you're gambling your future for, staked to the value of waterfront property in an area of frequent hurricanes. Add that to the fact that you like to plunder the environment, and you have a real problem with facts & logic here (but we already knew that). If Bush & Cheney's environmental policies are carried out for the next 30 years, nobody is going to want to live with miles of the filthy cesspool that our coastal waters are becoming with increasing rapidity. And that's not counting the rising ocean level which may put your home under water (or behind a levee... hmmm, where have we heard that before) within 30 years. I posted it because I like to argue. ;-) I knew you'd bite. In other words, your 'million dollar' house is fiction? Thought so. I also still think you're a closet Communists trying to discredit the right. |
"NOYB" wrote in message .net... "DSK" wrote in message ... Suppose you live in a million dollar home, but have zero equity in that home (ie--you owe 1 million dollars). In 30 years, that home is worth $4 million, and you owe still owe $1 million on it (ie--you had an interest-only loan). You have $3 million in equity on the home. You decide to take out $2 million of that equity, and put it in an investment that pays a rate equal to what the monthly payment would be on the loan (ie--you end up with a net monthly outlay of cash of zero). You can then use the $2 million to live on. The problem here is that you've already made payments on that interest-only loan that far far exceed your imaginary equity. NOYB wrote: Nope. Try again. An interest-only loan on $1 million at 6% interest gives you a monthly payment of $5000. And you have a fixed rate for that 30 years, right? It'll never never never go above 6%, right? Yes. Wells Fargo is now offering a 30 year fixed rate interest only loan. The rate that they quoted me was in the mid 6% range. And you don't have to pay taxes on that "appreciated" property, right? Can't go up more than 3% every year thanks to Save Our Homes Act. And your monthly bills aren't any higher in proportion to the size of that 'million dollar house' right? No. My house is only worth a million plus dollars because of its location...not its size. The bottom line here is that you're living on credit and trying to convince yourself it's sound fiscal policy. The only debts that I have right now are my house and my business loan. Both cars, both boats, and any of my other assets are paid for. Credit cards get paid in full monthly. Why is it liebral types cannot understand the "cost" of money. If you can borrow at a net cost of 3-1/2%, and you can invest at a average return of 6-7%, you should ALWAYS have a max. mortgage. You probably feel a little guilty because you really know it ain't and you're risking your family's future. Otherwise you wouldn't even have posted that feel-good article about how market bubbles never ever collapse. I posted it because I like to argue. ;-) I knew you'd bite. |
"DSK" wrote in message ... NOYB wrote: And you have a fixed rate for that 30 years, right? It'll never never never go above 6%, right? Yes. Wells Fargo is now offering a 30 year fixed rate interest only loan. The rate that they quoted me was in the mid 6% range. Tell you what. Spreadsheet the difference between 6% and 6.5% over 30 years, then get back to me. It's interest only. Even *you* can figure out the monthly payment without a spreadsheet: Loan value * interest rate/12=monthly payment At 6.5%, the payment is $5416.67/month. The total of the payments for 30 years is $1.95 million...which is still less than the 3 million in equity...leaving you with a net gain of $1.05 million. And you don't have to pay taxes on that "appreciated" property, right? Can't go up more than 3% every year thanks to Save Our Homes Act. And do the math on 3% compounded over 30 years too. The increase is peanuts compared to the figures that we're talking about. Remember that you're still $1.05 million ahead of the game before you start counting taxes. Even in the worst case scenario, the taxes eat up less than half of that amount. |
P Fritz wrote:
Why is it liebral types cannot understand the "cost" of money. Why is it that you never post anything about BOATS? Why is it that you only post "me too" crap to your far-right-wing wahcko buddies? Do they need your emotional support? Does being a lap dog make you feel safe? .... If you can borrow at a net cost of 3-1/2%, Please explain how a 6 1/2% mortgage is a "net cost" of 3 1/2%? ... and you can invest at a average return of 6-7%, you should ALWAYS have a max. mortgage. So, did you take a cash-out refi to invest in the stock market? BTW an "average return" of 6 ~ 7% isn't very good for the stock market, historically; and it still leaves open the possibility that you may need the cash coming out of a bust year... which leaves you broke in the ditch. So, who is actually the smart one here? Nobby with his 'million dollar home' which he can't really afford but hopes the housing market bubble will pay for, or your 'me-too' BS? DSK |
"Harry Krause" wrote in message ... P Fritz wrote: Why is it liebral types cannot understand the "cost" of money. If you can borrow at a net cost of 3-1/2%, and you can invest at a average return of 6-7%, you should ALWAYS have a max. mortgage. Some of us don't view the house we live in as an "investment." I've structured my residential financing so that if I FOAD, my wife will not be faced with much of a mortgage, even though she earns a good income. That way, she can decide what to do...stay, sell, whatever. I started out with a fairly typical 70% of appraised value mortgage on this house a few years ago. Thanks to incredible appreciation, my mortgage is now about 35% of appraised value. And my mortgage is 75% of appraised value. Last year, it was 95%. In five years, it will be 50%...and I will not have spent a dime on Principle. |
"NOYB" wrote in message k.net... "Harry Krause" wrote in message ... P Fritz wrote: Why is it liebral types cannot understand the "cost" of money. If you can borrow at a net cost of 3-1/2%, and you can invest at a average return of 6-7%, you should ALWAYS have a max. mortgage. Some of us don't view the house we live in as an "investment." I've structured my residential financing so that if I FOAD, my wife will not be faced with much of a mortgage, even though she earns a good income. That way, she can decide what to do...stay, sell, whatever. I started out with a fairly typical 70% of appraised value mortgage on this house a few years ago. Thanks to incredible appreciation, my mortgage is now about 35% of appraised value. And my mortgage is 75% of appraised value. Last year, it was 95%. In five years, it will be 50%...and I will not have spent a dime on Principle. Harry is proof that liebrals don't get it. There are other vehicles for protection...i.e mortgage insurance. THe fact of the matter remains, that if your net "cost" ofr money is only 3-1/2%, and you can invest at a 6-7% return, you are crazy to pay off the 3-1/2% |
As soon as my last kid goes to college I will be putting the current house
up for sale and moving into something smaller. I won't need the space and I don't want to have to cut the grass and all of the other yard stuff, I want to enjoy my time! "Starbuck" wrote in message ... Chuck, There are many people who do make money by selling their primary residence and moving to a less expensive area. I know people who lived in bungalows on the west coast, and then purchased mansions when they left. If someone lived in Naples, and then retired elsewhere, they could downsize and make a very tidy profit living purchasing a home in most other areas of the US. -- Starbuck -- Sacha Guitry - The little I know, I owe to my ignorance. wrote in message oups.com... NOYB wrote: "Starbuck" wrote in message ... NYOB, Harry and Kevin are the only ones who are upset that you have done so well with the housing market. They are jealous. Actually, it really seems to bother DSK the most. He has sent the most doomsday warnings my way...but he is followed closely by Gould. DSK doesn't have to work hard to beat my number of warnings; I sent you one. Get thou to Amazon.com and purchase a book: Extraordinary Popular Delusions and the Madness of Crowds. Then sing along: All Around the Hurricane Zone Where wages are in trouble The housing prices rise and rise 'Til "pop" goes the bubble. You know, NOYB, at one time I was under the impression you had a couple of bucks or so. People with money don't launch a thread to to announce "look how well I'm doing financially." Besides, how many houses do you own in Naples. One? Que lastima, Doc. That's not an investment- (unless you decide to go pitch a tent down on the beach and rent it out). If you sell it for $99999999999999.00, you'll surely have to spend at least as much to buy another. You're no richer, and no poorer than if your house were worth $29,000.....you still need a place to live. Until you don't need a place to live, you can't extract a dime. |
Bert Robbins wrote:
As soon as my last kid goes to college I will be putting the current house up for sale and moving into something smaller. I won't need the space and I don't want to have to cut the grass and all of the other yard stuff, I want to enjoy my time! Better hold off for a few years. My 26 yr old just came back to live at home for a few months while he was in-between jobs. |
On Mon, 19 Sep 2005 15:29:30 -0400, DSK wrote:
So, who is actually the smart one here? NOYB! He's the one who will be pocketing the money while the rest of you are telling him how foolish he is! -- John H "All decisions are the result of binary thinking." |
NOYB wrote: wrote in message ... On Mon, 19 Sep 2005 12:37:26 GMT, "NOYB" wrote: Or they could do a reverse mortgage and retire off the 1000% increase in equity that they accumulate over the the next 25 years. That's not how a reverse mortgage works. The mortgage company pays a fixed amount per month (usually based on a fraction of the current appraised worth plotted against an optimistic guess on how long the person wil live) and hopes to pocket the appreciation. They only hope to pocket the appreciation beginning from the initial starting point of the reverse mortgage. Any appreciation that occurs between now and when the reverse mortgage starts belongs to the home owner. The homeowner's equity in the house drops as the bank continues to make payments. But the homeowners reaps the benefits of the appreciation that occurred before the payments begin. They also won't write a reverse mortage unless the owner is pretty old. In other words...most retirees would qualify. It is really just a scam that the banks foist off on old folks without anyone to look out for them. It's not a scam. It's a process that allows the homeowner to take out the equity of the home without having to pay monthly payments on the equity line. Here's another way to look at it: Suppose you live in a million dollar home, but have zero equity in that home (ie--you owe 1 million dollars). In 30 years, that home is worth $4 million, and you owe still owe $1 million on it (ie--you had an interest-only loan). You have $3 million in equity on the home. You decide to take out $2 million of that equity, and put it in an investment that pays a rate equal to what the monthly payment would be on the loan (ie--you end up with a net monthly outlay of cash of zero). You can then use the $2 million to live on. You won't live very well on that $2mm if its only worth "half a house." First thing you know, you'll need to buy a new $250,000 car or a $500,000 ski boat. You will think twice before taking that $40,000 vacation in Europe. Surely you didn't expect housing prices to go up in a vaccuum, right? Heck, you'll be paying your pool boy and gardners $100 an hour (and getting by so cheaply only because they don't speak English and work under the table) when houses are $4mm a throw. You want to make some money and retire off real estate? Here ya go. This will work for you, particularly because you're in your early 30's. Buy up as many rentals as you can find. Yes, they will go up in value- but although the day will come when there are "do you want to sell XXX Main Street" letters in the mail several times a month you'll never consider parting with them. Money machine. You can have a couple of dozen properties paid down to zero by your mid 40's if you work at it. Then you can retire, or not, but you won't ever have to worry about money as long as people need a place to live. Not a bad way to go. You will wind up with a lucrative annuity for your retirement years,and when you and Mrs. NOYB have both kicked the bucket the little NOYB's can either continue cashing rent checks ("kaching!")or sell off a few of the properties for BIG BUCKS. If you put all your eggs in one basket, and you have to live in the basket to boot, that's a lot more risky than owning a variety of properties in several neighborhoods and price ranges. |
So, who is actually the smart one here?
PocoLoco wrote: NOBBY! He's the one who will be pocketing the money while the rest of you are telling him how foolish he is! If he can really afford a $5000/m home payment on an interest-only mortgage, and is *gambling* that his home equity will rise fast enough to both pay off the home and provide a good financial return, wouldn't he be better off living cheaper and investing that $5k/m? Hmm, this is one of those times when one should "do the math." It's clear that you and Nobby haven't. But then, he'd have nothing to brag about though. For some reason, "conservatives" aren't impressed by sensible living & money in the bank. DSK |
On Mon, 19 Sep 2005 12:44:45 +0000, NOYB wrote:
I agree. But I don't think prices will "correct". They'll plateau and stagnate, but not fall significantly. Demand is increasing exponentially with the baby boom population retiring. A real estate bust is not like a stock market crash. Any corrections will not happen overnight, but they will occur. A very general scenario, right now, your market is overheated, they are building like crazy, everybody is getting fat, and the market will never go down. But watch, you see a couple of buildings completed, usually a retail unit, with no occupants. Same with a house, here or there, completed with no one moving in. Six months later, it's bust. The switch has been thrown, and there will be no new starts. The well financed builders will complete their projects and hope for the best, the less well financed will leave theirs incomplete. Now comes the corrections. The prices will remain high, because no one is willing to sell for less than they paid, but those that thought they were going to get rich, leveraged to the max, can't make the payments, will either walk or declare bankruptcy. Those that have to leave the area, for whatever reason, will have to take the hit. That's the bottom. Then there are those, such as yourself, who bought a house to live in, they'll ride it out. I read somewhere that speculators are a third of your market. I've read up to 40% in some areas like Punta Gorda. It's much, much lower in Naples. Nothing against speculators, but if they are in the market enough to effect the market, it's a dangerous market. They don't really add anything to the market, they just take from it. |
"DSK" wrote in message ... So, who is actually the smart one here? PocoLoco wrote: NOBBY! He's the one who will be pocketing the money while the rest of you are telling him how foolish he is! If he can really afford a $5000/m home payment on an interest-only mortgage, and is *gambling* that his home equity will rise fast enough to both pay off the home and provide a good financial return, wouldn't he be better off living cheaper and investing that $5k/m? Hmm, this is one of those times when one should "do the math." It's clear that you and Nobby haven't. But then, he'd have nothing to brag about though. For some reason, "conservatives" aren't impressed by sensible living & money in the bank. The conservative live in those big fancy houses, drive big fancy cars, and own and operate big fancy boats. The liberal/progressives live in trailer parks, drive ten year old Chevy's, and own rowboats. Oh, when conservatives retire they usually move to swanky locations to enjoy the rest of their lives and when liberal/progressives retire they usually buy a new plastic chair so they can sit out in front of the trailer and watch the world go by. |
"DSK" wrote in message ... So, who is actually the smart one here? PocoLoco wrote: NOBBY! He's the one who will be pocketing the money while the rest of you are telling him how foolish he is! If he can really afford a $5000/m home payment on an interest-only mortgage, and is *gambling* that his home equity will rise fast enough to both pay off the home and provide a good financial return, wouldn't he be better off living cheaper and investing that $5k/m? How would I pocket $5k/mo if I lived in some place cheaper? Even a cheaper place would have a mortgage, taxes, and insurance. Perhaps you meant to say "pocket a portion of the savings"? A similar home to mine that is *not* on the water would run about $550-600k. But the ones that aren't on the water are appreciating at half the rate as the ones that are on the water. I'd wager any amount of money that I couldn't save enough money living in a house off the water to come anywhere near the amount of appreciation that I'm seeing by living on the water. Here's an example: Suppose a million dollar house on the water appreciates 10% per year (they've been averaging more than three or four times that rate over the last 10 years though). That's $150k. Suppose the $500k home that is not on the water appreciates 5% (once again, an extremely conservative figure). That's $25k. So the equity of the guy on the water is outpacing the other guy's equity by $125k each year. If the mortgage payment on the million dollar home is $5k/mo. and the $500k home is $2500/mo., then the guy who is not on the water can put away about $30-40 k more (the extra $5k is for additional taxes and insurance) each year in savings. But that's still a lot less than the $125k net advantage in equity growth for the waterfront homeowner. Hmm, this is one of those times when one should "do the math." It's clear that you and Nobby haven't. See above. And I didn't include the huge tax savings on the interest from the million dollar home vs. the half-million dollar home. |
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