What has been your experience of the housing bubble/crash?

[El Pinko]

Poll question: What has been your experience of the housing bubble/crash?

What has been your experience of the housing bubble/crash?

This is especially directed to people living in the bubble areas of the West Coast, Florida, Phoenix, Las Vegas, Metro DC and the Northeast...

[peacebird]

1. we sold a year or so before the peak, relocated to a less expensive area

and bought a much nicer, (and less expensive) home on a biweekly payment fixed rate 15 year loan.

Used some of the extra money we got out of the old home to put solar hot water, and solar electric on the new place.

[Blarch]

2. I saw this coming.

the writing was on the wall, I sold my house and made a killing.

The problem is that the people who wanted to buy my house also had a house for sale ...in the end I had to buy their house to get out of my house. Mine sold for 470,000 ...I bought theirs for 215,000

I was going to downsize anyway ...but here I am ...trying to sell this house, not happening. Bought it for 215,000 ...up for sale at 205,000.

[slackmaster]

3. Bought house at bottom of last cycle, refinanced in May 2003 near the bottom of rates, BUT...

The company I work for depends heavily on the volume of residential real estate sales for its revenue. I have worked there almost four years without any kind of meaningful pay increase. In the last nine months we have laid off or lost to attrition about half of our staff, and things are looking very tight for about another year.

If I weren't so skilled, productive, and likeable I might well have lost my job. I would be hurting a lot worse than I am now.

The increased cost of everything (rooted in energy costs, of course) has forced me to tighten my budget. The only good news is that I am still able to put about $1,150 per month into my 401k, and a moment of clarity allowed me to ditch some gold and silver boullion when it was near the top. I became interested in precious metals back in the '70s, and it's taken that long for me to figure out how that one works.

Did I see this housing market collapse coming? Yes, very clearly. I've been working in related industries most of my working life. A simple rule for John and Jane Q. Public is: Just like gold and silver, when they are pushing adjustable rate mortgages on AM radio you should avoid them like the plague. I bought my home in December 1994 when I was married. We had been trying to get into a position to buy for several years. Even with the recent collapse in prices, my loan-to-value ratio is still very low. I have not leveraged my equity, but have a large credit line in case I need a lot of cash for a major purchase like a solar power installation.

50 years old and I'm only slightly wiser than when I was 40.

[El Pinko]

4. Referring to what is happening now as part of a "cycle" -definitely in the RE biz.

The runup in prices between 2001 and 2006 was unprecedented in the last century. Never before had RE prices risen so quickly year over year, and never had they been less coupled to household incomes in the various regions. Which says to me that the bubble, as well as the correction (which I think is still in its infancy) are both exceptions to the long-term cycles. I personally think the prices will continue to drop until they're more or less at the 3X median income point that they stayed at for most of the 20th century. Without liar loans and subprime vehicles, I simply see no other way such outlandish prices can be sustained in a country with long-term stagnant incomes and soaring prices on food and energy.

[slackmaster]

5. I agree with you, El Pinko

The bubble was definitely an exaggeration of the normal busienss cycle.

Especially in high-value areas like where I live (San Diego), the affordability index situation remains untenable and it will be until pricess fall a lot.

[El Pinko]

6. Of course you have to figure in the desirability factor for places like San Diego, Santa Barbara etc

I would say more like 4X local median income in these areas, simply because people are willing to stretch more financially for the privilege of living in places of great beauty with year-round pleasant weather.

[davsand]

11. A high "desirability factor" means a higher number of investors.

The location and the weather are huge factors in that. Places where there were larger numbers of investors have taken the biggest hits in value. Mainly those were places with really inflated prices that needed to adjust downward to get a little closer to reality.

The places that have held values fairly well are the ones where there was a fairly stable job market and not a huge amount of investors--the places seen as "less desirable." Nobody wants to vacation there, nobody wants to retire there. Those particular markets really have held value fairly well in spite of the increase of foreclosures and buyer/seller panic.

Locally (in a market with lower numbers of investors) we JUST saw a drop in sale prices of about 1.4% in the last 60 days. Certain price points have slowed down, and we can't deny that average DOM is running about 60 days when it used to be 30--but the median sale price has still (until just recently) shown increases even if they are modest ones.

YMMV.


Laura

[El Pinko]

12. I just read that prices are up 8% in El Paso over last year...

...but I wouldn't say that El Paso is the norm...

[trof]

7. Bought in '93 for $225,000

Actually pretty cheap for 150' of waterfront with access to Gulf of Mexico.

At one time in 2005, my house was 'on the market' as a one-time-only favor to a realtor friend. Her clients HAD to have a house in our neighborhood. For a high enough price, just about anything I have is for sale.
"What price would you quote them?"
"I'm thinking around $950,000."
"Bring them on."
:bounce:

They came back a second time but eventually decided on a similarly priced gulffront condo.

But even now I'd guess I could get around 3 X our purchase price in a pretty quick sale.
Interested?
;-)

[xchrom]

8. i bought my place twenty plus years ago

and i have a very low 30 year fixed rate - but i vrey much want to sell and move to durham.

i'm in a what is still considered a good market in the bay area -- housing has retained most of it's value with no sign of weakening.

but it makes me very nervous to sell now -- and i want to open my own business.

this is really bumming me out -- because all my dreams for what i want for myself are on the line.

i need for the economy to be ok -- i need for americans to be working and not under constant fear of losing their jobs, etc.

i really want to get on with my life.

[KarenS]

9. Bought just as the bubble was bursting,,,,

so we got a good price but not the "best" price,,, but we are more than fine with the price we paid. We bought this house to live in ~ not to sell for a profit. We are in Arizona ~ outside of the Phoenix metro area.

[Ewellian]

10. I bought 20 years ago in

upstate NY....no housing bubble here. Prices have shown slow and steady increases.

[InkAddict]

13. We bought a modest home in what was not the preferred side of

town, but still a nice area, 20 years ago. Too bad there are no stable living-wage jobs left in the Rustbelt. We're screwed: early boomers who have lost home, filed bankruptcy, after more job losses than is conscionable(never for performance issues). It's a good thing the lease is up next month. We've now got to give up our home furnishings and moving in with our children (who by the way both lost their jobs last week, a bilingual Sales/Operations Manager with management-level retail experience and a just short of a 10-year purchasing specialist with para-legal training (AS-no cert) and newly-minted marketing BS degree who was working at a MAJOR luxury German auto corporate office); the end is near if ALL OF US can't get OUT OF THIS RUSTBELT STATE. We've pretty much exhausted the decent opportunities in three cities.

AS IF AUTO, MFG, AND IT JOB LOSSES WEREN'T ENOUGH - READ IT AND WEEP

Ohio loses millions for job training
http://blog.cleveland.com/plaindealer/2008/05/ohio_loses_millions_for_job_tr.html

The PUKES are right, there isn't a RECESSION; it's a DEPRESSION. Any suggestions for our Grapes of Wrath tour of America embarking soon?

[KharmaTrain]

14. I Got Lucky

I've owned my home since '94...bought it at 160k and it's still nearly double that price now. In 2004 we sold my parents home...they bought it in 1965 for $75k...I sold at the peak of the market at $475...the buyer then built a McMansion on the lot...I'm not sure if it's current status.

A mortgage banker I know explained the local situation well...the upper level and lower level homes are still moving...the rich are still getting richer and the middle class is forced to downsize...condos and quads are doing a brisk business, but 3 and 4 bedroom single families are moving real slow, if at all.

Unfortunately I know a lot of people in serious credit crunches. Some due to refis and unexpected expenses...their credit card debts soaring. They can no longer keep pace with the inceases and I suspect we'll see a lot of personal debt defaults in the months ahead.