Thousands of HP readers, we can't all be sitting pretty. Heck, even a realtor or two out there likely bought that second home or investment property in Phoenix and is now starting to sweat a bit.
Let's hear your stories. What is your situation? What are your choices? Which way are you leaning?
May 13, 2006
Anyone reading HP who bought a house at the top, financed with an ARM, and is now regretting it?
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We bought a house in Florida's "hot market", sold recenly, took a loss, but glad to be out before market crashes further.
Nope. I did that in the early 90's - had to wait 12 years to get out from under that house.
Hot stock tip - the maker of Rolaids.
"Hot stock tip - the maker of Rolaids."
Hot stock tip - the makers of Prozac and Zoloft
I am an investor in the Seattle / Tacoma area. Within the last 12 months, I have purchased four properties some with ARMs. I believe the bubble will deflate the overall housing market, some areas worse than others. That said, I think my local area will stagnate and if it does decline - will do so slowly. I am not "regretting it" but I will not buy any more property for investment purposes anytime soon.
Are they still making land in Seattle?
Making Land - interesting question. If you count the condos rising you could say they are making space vertically. I would never specualte with condos though - way too risky.
how bout planes, software, coffee, and outdoor recreational equipment? how are those industries doing in seattle recently?
That making land argument is so fricken stupid, they have not made any land in Japan for 15 years, that did not stop the non stop plumeting of houses.
sure......but a shortage of land AND a plethora of job growth bodes well for Seattle housing
I have an ARM and do not regret it.
Got my ARM in 1989 (11th District cost of funds + 2.25%) and it has gone up and then down (for a very long time).
I still owe $128K and it is at 5.375% and rising.
Don't regret getting the ARM.
Both Boeing and Microsoft (based out of the Seattle area) are doing quite well. Obviously Ameriquest isn't helping the picture any with their nationwide layoffs. The overall job growth for Seattle area is quite good though. Zillow is also Seattle based (though their staff is only around 100).
As far as the land issue goes, the further away from downtown Seattle and the close-in suburbs, the lower the price. Though commuting can be a nightmare around here. The DOT of Washington is not up to par.
so i should assume that microsoft and boeing are going to make everyone rich enough to afford housing in seattle?
so i should assume that microsoft and boeing are going to make everyone rich enough to afford housing in seattle?
I moved from Vegas to Seattle, and from that point of view, don't see Seattle as a "true" bubble market. As for the economy, I can tell you first hand as a software engineer that demand is incredible. Don't believe me? My salary has increased 50% in the past 2 years.
anon
No, microsoft and boeing aren't going to make everyone rich, the point is that the term bubble is thrown around everywhere and I don't believe that the Seattle area is a bubble area similar to Phoneix or Las Vegas or SoCal. The job market is better, the housing not as overvalued as other markets, so if/when there is a deflation in prices it will be less severe in our local market here than other areas - that is my point.
Since the national "bubble" talk started 6 months ago, Seattle median house prices have increased by 9% and inventory has decreased -8%,
Seattle did not enjoy the meteoric house appreciation that other areas in the nation experienced in the past six years. It's economy has been steady (not robust) in this time, and has only recently showed tremendous job prospects.
Seattle residents will feel the economy driven effects of the national housing slowdown, but will fare far better than others when and if there is an economic slowdown,
I bought three houses since I moved to Dallas from California about 2 years ago. Paid two off and one with 5.75% fixed rate. Mortgage is $425/month. Rented each one out for about $950/month. Even if the housing market deteriorated, I am still making good Dinero on rent. Now the Texas legislature just passed a law to reduce property tax by 1/6 so I think the housing value will go up. Will close on a lake view house in two weeks. Life is just too good for me right now.
I guess this proves it - people stupid enough to buy a house at the peak with an interest only no down no doc loan are to stupid (or scared) to find their way to a housing bubble blog
ignorance is bliss. then bankruptcy of course. but bliss until then.
btw, seattle and dallas are two of the cities that should escape the wrath of the bubble for the most part.
Keith, a guy I work with was only a few months ago buying a $400k house in Gilbert knowing that he would be in a negative cash flow situation for months if not years. His rationale: Long term, real estate only goes up. I don't think he realize that in his case long term means in his great grandkids lifetimes.
Seattle area is right up there with CA in creative loans. 70%. What the heck makes people think that Seattle is immune?
Seattleites sound exactly like the Phoenix people- sounds like they are in denial too.
Honestly, Seattle homes started outrageous appreciation in the mid to late 90's and have just kept going up from there.
Anybody who thinks Seattle is not in a bubble is delusional.
Rents are out of whack to buying.
Today, this advice from the Seatle Times on how to afford a house when you can't really afford to buy:
Tip #1: use ARM's and other creative loans.
Tip #2: buy with friends. In other words team up with as many people as you can to buy that grossly overpriced property.
(Seattle Times, Sunday, May 14. reporter, Elizabeth Rhodes)
Travis is right. Now is not the time to buy is Seattle.
People who say otherwise are anxious realtors or FB's interested in doing whatever they can to perpetuate the bubble.
If Seattle was not in a bubble, it would not need to give people such lousy tips on how to "afford" a home.
And this craps been going on for a few years now here. So IMO we may have a ways to fall.
Alright, you Seattle, Salt Lake, Albuquerque pumpers, let me make it real easy for you, you are buying Pets.com, Lucent, and Cisco in January of 2000!!!!!!!! Looking for the market that is not gushing blood yet.
The stock market is breaking apart, the real estate market is breaking apart, jesus, check a fricken chart, check inventories, do your dd, you people are gonna get whats coming to you and more!!!!!!
Holy crap, Phoenix is adding 500 unwanted, not needed crap boxes every week, how long before 100k are on the market, I say by the end of the year!
Forgot to add the link for the hot stinky craphole known as Phoenix!
http://www.benengebreth.org/housingtracker/location/Arizona/Phoenix/
Facts are facts!
The arguments the seatlite made remind me of the arguments I hear every day about Albuquerque. I do think seattle has more, and better paying jobs, but most of the job creation in this country is in low wage areas. Just drive down central and see one, "payday" loan place after another. I didn't think I knew anyone who went to these places, but a close friend, confided in me that they'd been using these places to pay their bills for months. These are people that are strickly middle class. The husband makes 60k a year, and the wife makes 20k. Even on 80k a year, this family can barely scrape by. Well, I guess I'm off-topic. My point is, that seattle will fall, just as Albuquerque will fall, and it's because the californians have spread out all over this country, buying with their imaginary money, and raising prices to imaginary levels.
I built my own house. 4800 sq. ft. 100k remaining on fixed 5.5% 30 yr mtg. Current value: $350000. Cost to build: ~45 sq.ft. by doing a lot myself. 19' TnG wood ceiling in the center of the house, built into the side of a hill for energy conservation. Electric bill ~100 a month. Water bill:Zero - well. Sewer bill: zero, septic tank on 2.5 acres. KB homes and US Homes:go eff yourselves dead square in the A. You couldn't build this. Ever.
Get this: I built the home to live in. An odd concept. There is no for sale sign on the front lawn. Nore will there be.
5K Price Increase
I printed a listing price (298K) for a home in York PA on Friday. My wife and I drove there from MD on Saturday. I looked at the list price on the web on Monday; the house went up $5,000 (303K) over the weekend. Needless to say we are not be making an offer. I think I’ll rent for a whale.
RC
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