I am closing on a Toll House in two weeks! Am I doomed? Give me a break "Mr. The Sky is Falling."
Toll Brothers does not have a history of "firesale" pricing homes. They would rather ride out slower sales levels than compromise their margins or the integrity of their communities.
Look around Phoenix. The biggest incentive I have found for Toll is $50,0000 on $800,000 product.
Most of their $1m plus projects aren't offering any incentives other than a token offering to use their in-house lender.Learn something about the industry instead of just "yelling fire" all the time.
December 05, 2006
Some poor sucker is closing on a Toll Brothers home in two weeks (while visiting HousingPanic). Anyone got any advice?
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83 comments:
Kill yourself.
Keith your work here is not done if there are still idiots out there like that
Get your chapter 7 bancruptcy papers in order.
You know what is funny is everyone's rush to judgement.
You guys don't have any clue of where I bought the house. It isn't in Phoenix or any other market that has experienced rapid price appreciation the past two years. I am not looking at the purchase as a way to make "X"% per year. It is a home for my family.
Ask questions before you make broad based assumptions about housing. What is occurring in AZ, CA, NV, and FL is not something that is uniform across the country.
"They would rather ride out slower sales levels than compromise their margins or the integrity of their communities"
If that's what the nice salesperson at Toll told you, and it made you happy, then be happy too
Meanwhile, the cold hard truth of reality will be knocking on your McMansion's front door (along with the foreclosure attorney)
Good repsonse Keith. It didn't address the comments I made about not purchasing in a market that is declining.
My comments on Toll are from working on the financial side of the homebuilding industry. Watching how Toll has responded to the slowdown this time and in the more substantial slowdown in the 1990s. It isn't some BS from a sales person.
I am curious Keith, what is your background in being a prognosticator on housing and real estate?
So where is this magic kingdom you are buying in?
"In the latter part of 2005 and 2006, we're learning how to creatively lower prices in those communities that are having a tougher time," said Robert Toll, chief executive of luxury home builder Toll Brothers Inc.
"We never lower nominal prices, but give more incentives, create a better mortgage deal, that kind of thing," Toll said at the Reuters Real Estate Summit in New York.
A few weeks can mean the difference between a high-demand market and one that requires sweeteners to close a deal, Toll said. In Arizona in March, Toll needed a lottery system because of strong demand for homes in a new community, and the company was able to raise prices. But a few weeks later, Toll was looking at incentives to draw interest.
These can run anywhere from $1,000 or $2,000 worth of kitchen remodeling, or better appliances, to a spa in the back of the house, or as much as a $50,000 credit for options, Toll said.
"Incentives are all over the place," he said, adding that their extent depends on the community.
Supply and Demand - if Toll doesn't lower prices enough, their sales plummet (which they have)
Plummeting sales mean the market is telling Toll their prices are too high
If you buy at the price Toll is offering today, the market is telling you you're paying too much
Econ 101. I recommend it.
man I wish the anon Toll buyer would at least pick a user name
Gutless
Anonymous said...
Good repsonse Keith. It didn't address the comments I made about not purchasing in a market that is declining.
~
You've convinced yourself you've bought in a market that isn't declining. Or someone convinced you of it.
You are obviously a fool.
i work with someone just like that. He and his fiance are looking to buy a place, in the $750,000 range !!!
he makes at BEST, AT BEST $20 an hour, she is a realtor - get this - in the biz 2 years! they dont believe there is a slow down or a crash coming.
UNREAL!
"Everything is worth what its purchaser will pay for it."
- Publius Syrius
upside down
Market meaning metro area, not housing market in general. Not all metro areas are experiencing price declines.
"i work with someone just like that." Like what? You don't know squat about me. How can you generalize.
By the way Keith, thanks for not answering about your background (or lack there of) in the housing industry.
Lets take a moment to ponder this wisdom.
If everything is worth what its purchaser is willing to pay for it than surely no buyer ever overpays.
However, principals of economics are premised on the belief that all people are rational and knowledgeable operators.
Perhaps the fundamental assumptions of economics have it wrong.
P. T. Barnum said that a sucker is born every minute.
If P. T. Barnum is wrong, it is because suckers are born far more often than once a minute.
Your area may not be dropping but those around you are. If your area never went up, then it's probably not a desireable area. And if those areas that are desireable come down in price, what does that do to the price you paid?
If you can afford the payment, no problem. Falling house prices are irrelevant.
If you don't mind paying a high premium to renting, no problem. Some people buy escalades, others buy Kia's. More power to you.
But you seriously can't deny that if prices are dropping in areas within driving distance to yours then your home price will be affected to.
Certainly you are not representing that your purchase was a stroke of financial genius are you?
So, when many of your neighbors start to forclose and sell at a loss, do not say you had "no idea".
Just a thought from another anonymous blogger.
Look around Phoenix. The biggest incentive I have found for Toll is $50,0000 on $800,000 product.
Some people won't believe until they see the bulldozers leveling off the unwanted "inventory". LOL
Anon, pick a freakin name, any freakin name will do!!!!!!! What aspect of the "financial side" of homebuilding do you do?
Please do everybody a favor and DON'T by a house in PHOENIX now!
Forclosures are now listet for 18% less than comps where I live (O.C.)
If the new REO prices are valid, the guy that bought my house has lost $190,000 in a few months.
Consider that when deciding to part with a deposit.
Don't buy... Rent! That way we'll have one less sob story to read.
Looks like houses out there have now passed brand new vehicles as the fastest depreciating "asset".
You can call me Elme Fudd. What difference does it make?
I will be the first one to admit that Phoenix is as bad as it gets in terms of markets around the country. But this board makes it sound like the world is ending and this market won't recover.
The downturn is Phoenix lies solely on the backs of "flippers" and the builders who sold homes to flippers. The impact of 25% or more of sales in 2004 and 2005 going to investors was inflationary. Now that segment is gone. The market is adjusting to less demand and a pseudo new home market of existing "new" homes. It is going to take time for the vicious cycle of incentives, cancellations, and high inventory levels to settle out. It might be 2008 before conditions solidify in Phoenix. The upside is that growth projections (employment, population, households, etc.) are very strong. There will be demand for new housing once inventory levels decrease. Phoenix has a very bright future beyond the problems of this year and next year.
That is a realistic view and not a "sky is falling view." Show some balance with the negativity.
Okay Elme Fudd, now, Can you just check the "other" box and type Elme Fudd into the name space so we know who and what we are responding to?
I just love all the comments by this Toll House toastie.
He won't give details except to say it isn't in a bubble area. Newsflash; everyplace with access to easy credit is in a bubble area.
He demands that Kieth tell more about himself but won't go so far as to pick a blog handle.
We all know people like him. Not just the desperate need to rationalize a major financial decision but the need to try and pick a fight over it.
Here's the deal with a Toll house; they've run out of greater fools. By definition they'll need to do better on the next house after yours closes as you'll set the newest comp in a declining market. Then there's the flippers in trouble. In a down market their distress sales sets the new comp. At least you can enjoy lower taxes for a short while.
How did Robbie and Brucie Toll react to the current market conditions? THey sold at the top! Guess what, they are still selling at the top; to you!
It didn't take a crystal ball to guess you considered yourself an insider. Too bad you didn't buy in Phoenix, Greg Swann would be glad to help.
This is just too funny. Kieth could you check the logs to see if we can get a general area on the incoming IP addy? Seems to me that nearly all Toll developments are specifically located in bubble zones. This one can't be in a place without exposure.
robert cote,
So true.
I have nothing to hide. It is Austin, TX. The market slowed here during the dotcom bust and didn't pick up with the same steam as markets in AZ, NV, FL, or CA.
I am not justifying anything. I did my homework. If I lived in a market that is adjusting, I wouldn't buy right now either. I would rather miss some of the upside than mistime the bottom.
elmer,
I'm confused. If you like the house, and can afford the house, why do you come to this blog?
"The upside is that growth projections (employment, population, households, etc.) "
Employment: Mostly in blue collar and construction. how many people in PHX make the income to sustain a 750k home? Not many.
Population: Mostly people that couldnt cut it in California and illegals.
Households : 3 families per household.
Good luck with that. Suck it and suck it good.
Anyone else notice his Freudian slip: $50,0000 -- put on the last zero for realistic thinkin!
I like to debate. :)
Keep the discussion going Keith.
There are two sides. I think yours is a little extreme and you proabably think mine is too optimistic. But that's what makes the world go round. People can listen to the good and the bad and decide for themselves.
"People can listen to the good and the bad and decide for themselves."
Didnt Leriah say that at one point?
Don't listen to the negativity out there.Go out and buy a house. Just Do it!
No offense, but he's a complete and total moron......Most of us have been rsearching this collapse for 1-2 years now and we all know things are just getting started......Buying a home from soneone that keep prices artificially propped is brilliant.......He will be singing a different tune within the next 12 months.......
Actual pricing by Toll Brothers, please note 140K price drop in 10 months!! They sure are "protecting" their communities. This is for the Renoir model in Scottsdale.
PRICE EDIT DATE
$642,975 2005-11-10 03:23:06
$575,975 2006-03-03 03:20:16
$584,975 2006-03-11 03:21:11
$483,975 2006-05-31 03:22:03 $502,975 2006-09-14 03:19:27
How many more do you want???
The only way he will be singing a different tune is if he figures out later that he could have bought a nicer house cheaper by waiting (or if he goes BK). This bubble will burst, but when I can't say. They (the REIC) still have some tricks up their sleeves.
Well Elmer picked about as safe a place as possible. Austin is urbane and diversified with a range of employment and housing without beeing either to big to sustain or too small to survive. Only problem he'll face is The Big Squshdown™. Places like Austin don't have far to fall in general but newer high end housing does and that's their future burden in the coming events. Heck my primary residence has already lost more than the median home in Austin is worth and we've barely started.
With a secure job he could close and move in and not read the financial section for about 4 years and do just fine with one of their $350k products.
Make no mistake however, what's coming isn't going to bypass the houses that smear realtors blood over their doors. Housing is priced at the margin and one floper in the same model walking away and bye-bye equity.
Uh oh, looks like Caseys karma finally caught up to him. No more Jamba Juice for him, lol
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/12/05/BAGV3MPROO12.DTL
Hey Anon, it would probably be better to show a Toll project other than 5-story condo building. The Renoir floorplan in this community probably has a variety of prices due to different views and different floors. There is a ton of price variation among the same floorplans in urban projects.
Show me the same comparisons with Toll's single-family product in Scottsdale if you can.
Just kind of curious but why would anybody that wasn't in a bubble market and is closing on a Toll house be reading this particular blog? This could be a troll, Keith.
Let's assume for one second that he isn't a troll. Every market will experience a harsh fallout from this housing bust. Look at Denver, Dallas, and Detroit as examples. These are cities that didn't really get the explosive appreciation, and now they are rolling over and dying just like the "frothy" areas. My point is this: without the mega-appreciation and wealth-effect of the bubble markets moving inland, areas like Dallas, Denver, and Detroit would have caved in a long time ago. The wealth-effect of the equity locusts just delayed the inevitable and those that believe the "my market didn't get the big appreciation therefore it will be spared" mantra will find out how silly that logic was.
I am closing on a Toll House in two weeks! Am I doomed? Give me a break "Mr. The Sky is Falling."
Think about it - if your builder isn't discounting and the market is falling, does that "stop" the rest of the market? Do you want to be the last one standing as all the solvent peole take their seats?
The pricing I gave you is the base pricing for the same model, obviously views and upgrades will be variables. I'm simply showing you how Toll has lowered their base price on this model.
ERTE model, Scottsdale-600K price drop!!
ID PRICE EDITDATE
$2,700,000 2005-11-10 03:23:06
$2,327,975 2006-03-03 03:20:16
$2,125,975 2006-05-31 03:22:03
This website and its followers are people who are angry that they are too poor to afford a house. Admit it, you know it is true.
Warren Buffet said that you cannot tell who is swimming naked until the tide goes out. THat's what the people here are saying. Tens of millions of people are currently in homes they cannot afford and either don't know it or won't admit it.
Me? I sold all except personal use real estate. The last being April '06. "Too poor to afford a house?" No, too rich to risk investing in the housing market.
Sometimes I feel if I'm missing something. Why does anyone think their home will fair the storm because it's built by TOLL? Doe's TOLL know something special about pounding nails that no one else can figure out?
Developers are dropping land options and outright selling lots. Anyone can hire the same contractors or use a local builder and build the same damn house as TOLL for significantly less now and even cheaper in the coming years. But by late 2007 it won't even make sense to do that because REO sales will be cheaper than base labor and material costs. It's just inventory meets econ. 101 Mr. Fudd. But your nails were pounded by a TOLL hired Mexican so their worth more. I know, Bob promised.
I don't spend much time in Austin but I travel extensively in SE Asia working as a manufacturing engineer. Prices have seriously been run up in the areas where foreigners work and vacation in Penang Malaysia, Bangkok Thailand, Shenzhen China, etc... Keith has told us as much about Europe and Australia. So you think Austin, TX is a price enclave? Good god man, take your head out of the sand.
Austin isn't different than any other market. It may not be as inflated but property taxes are, which helped along with the dotcom bust to keep a lid on property prices. Still, as in all cities, wages run the usual spectrum from very good to piss poor.
Things have slowed down here but in a schizophrenic way. As I've posted before I still can't figure the market out here. Sizzling hot in one small area, dead-cold in another, homes that look like a bargain in just about any other market will stay on the market for over a year while the house down the street sales in a day. As I've said, I can't figure it out.
Rents are high, interest rates are low, but a lot of people aren't jumping in to buy unless they are coming here from elsewhere. The locals don't seem to share the same enthusiasm and I think property taxes are one of the reasons. Still, looking in a rental book today since I was curious on what I could rent vs my mortgage payment and was surprsied on how many apartments rent from $1200-2600 a month in Central and SW Austin (my turf). The typical 3 bedroom apartment rents for between $1500-2600 a month. A pretty hefty mortgage payment for a lot of folk
There are 1 bedrooms for $650-900, not fancy, not in the best areas so okay if you are single.
There has been a boom in the mansion market, at least in construction. Driving through the hills I'm amazed at the size of these houses, more for the size of their tax bill!
Austin may be a good buy if you stay within traditional buying guidlines and if you intend on holding long-term. But immune to the national economy? Depends on how bad the meltdown is elsewhere. The only consolation is they are coming out of a five year recession here but I think they are subject to the same market corrections as anyone else.
The pessimistic side of me worries about everywhere in America. The optimistic side says things here don't look bad. The consolation is knowing that if worst scenarios take place I'd rather loose 10-20% of a luxery home that I paid $106 a sq ft for than one in say Phoenix of lesser quality that someone pays $200 or more a sq ft. A lot of upscale homes here even pre-bubble in Phoenix would cost $200,000 more on the low end and at their peak in 2005 easily $400,000 or more.
So if you are buying a Toll home in Austin is it out in Lakeway? Absolutely stunning area (I live 9 miles east on the border of Bee Cave and Oakhill), last summer I was impressed with the homes there, great view lots and homes over 3200 sqft loaded for the high 300s, now I think they are in the $500?
Lots of luck if you buy. Austin rocks.
Isn't that the guy's face from the game "operation"?
Austin is a cool place to be, no question (I've spent a lot of time in Madison, WI which has some similarities) and the market is doing about as well in Austin as anywhere in the country. But what makes you so sure that this will continue? There were a lot of other places in the country where they thought "Everybody wants to live here" and then there was a flameout on housing prices.
Bottom line is, there comes a point where the housing prices are running up too fast to be supported by the "everybody wants to live here" or "they're not making any more land" kind of thinking. Maybe there are enough people running around Austin that can afford the house you are buying. I don't know. But judging from the rest of the country has gone, probably not. And houses in your price range will be the first ones to head down when there's a problem with demand. If you don't need to move, there's no need to care. If you think you will need to move in a couple years, then maybe you should.
Toll Bros. -- didn't they go BK in the 1990's? And now, back, and so smug? Sickening. Which makes one wonder why anyone would fork over five figures to any builder in this environment.
As a followup, you may want to check how much disparity there is between a monthly mortgage payment (PITI, after tax deduction) and a monthly rental payment, although it may be difficult to get decent data for an upper-end house like yours. The greater the disparity, the greater the risk.
Toll Brothers did not go bankrupt in the 1990's. It has actually been one of the better homebuilding stocks to own over the last 15 years.
Elmer:
1) What would the house generate a month in expected rental income (be honest)
2) What would your total monthly cost be (assume no-down) - Principal, Interest, Homeowners, Insurance, Taxes
If #2 is less than #1 - buy. If not, do not buy.
Are you good at roulette? Elmer, where do you fit in this chart???
http://recenter.tamu.edu/data/hs/hs140a.htm
The market says "rent".
New condos converting into apartments.
http://www.ocregister.com/ocregister/money/abox/article_1367779.php
Wait until OC finds out what is happening on the other side of the hills.
Sorry Link is:
http://www.ocregister.com/
ocregister/money/abox/
article_1367779.php
For Elmer and Annonymous, I can give you some examples. Friends have a rental in Lakeway (so I assume maybe near this Toll neighborhood?), which is considered pretty upscale. Their house is in old Lakeway, custom, on a 1/3 acre, 2500 sq ft (So I'm sure smaller than yours). They rent it for $2100 a month. Taxes are $7200 a year without a homestead exemption since it is a rental. They pay a management person $200 a month to take care of the property. They didn't take my advice and only put 10% down, have a 10% second at 6.5%, and the two mortgages combined equal about $230,000. I told them to sell their rental in Phoenix last year when they could have gotten $325,000 and owed $124,000 and roll the entire amount into this house which would have given them a solid positive cash flow instead of owning two properties that give them no positive cash flow and only tax deductions.
The average house in Lakeway rents for $1800 pm. It is usually an older property and around 1800-2100 sq ft. Newer, larger, goes from $1800 to $4,000 pm and a few of the lake mansions...well, none of us can afford those. I've seen some of the large homes, 3000 sq ft rent for about $2800 but a lot of those homes were purchased for $400-500,000 so you work the math.
My house to buy with a 20% down at 6% would run $3300 a month to buy with PITI. To rent I'd get about $2500 per month (I may be on the low end as there are no comprable rentals in my neighborhood to compare but on the low end of 75 cents per sq ft, which is what a typical home would rent for on the low end without location or quality it would be $2550, and if they typical upscale price of per sq ft is used I'd get maybe $3,060 to $3400 a month). So I could rent on the low end for $2500 pm and still not have a negative cash flow since I have a lower interest rate (5.5%) and a lower principal amount than someone putting 20% down. In fact I could rent it for $2,000 a month and break even for PITI since the property taxes would be $1,125 a month without my homestead.
As I said before I never buy a house unless I think I can rent it out for more than my costs in a worse case scenario. If I can't rent this place for $2,000 a month in Austin then the whole US economy will have had to collapse. Even if I paid this house completely off I'd have to rent it for $1125 a month just to meet tax liability unless Texas reforms their regressive property taxation laws and that wouldn't include insurance or management fees.
Since it will cost you $1500 a month on average for a upscale 2 bedroom apartment I don't think $2,000 a month for a 3400 sq ft home on a 1/2 acre hillside lot built out of imported stone and brick, 13 foot ceilings, 11 foot windows, floor to ceiling stone fireplace, 48" cherry cabinets (38 to be exact) with granite, the usual top quality finishes, custom 11 foot plantation shutters, remote controled blinds, limestone terrace hillside lot in the hills 9 miles from downtown is out of line. While I was building this house, which took a year, I rented a 1400 sq ft unit in central Phoenix for $1600 a month.
I've spoken with several of my neighbors and a lot of them, like me, pay more in taxes than in PI payments and insurance. A lot of the neighbors put 50-75% down when they bought because of the high taxes. So Elmer, I hope you took those taxes into account when you bought.
I don't think there's anyone angry abut not living in a house. If you can breathe, you can get a loan for a house. Millions in loans are being doled out to the homeless, people in prison, and teenagers. This blog is full of people who don't want to end up in foreclosure to buy a house. This blog is full of people who are sick of the fraud going on. They're sick of the skyrocketing property taxes and insurance premiums due to the housing bubble.
dUMB & dUMBER!
tHE nEW nAME oF tHIS BLOG!
Lets put the bubble aside for a moment.
Another problem with Toll Brother homes in any market is that they are very overpriced for what you get (bubble market or not). They are nice, but not as nice as the price suggests. You can have a custom home built to your exact specifications for a much lower price with much better quality of construction and finish.
Case in point. I had two family members retire in Austin a couple of years back. Price of somewhat nice, 5200 square foot Toll Brothers home that looked pretty much like all of the others = $800k. Price of much nicer, same sized, custom home designed by a well known local architect with much nicer finishes and better level of construction = $600k.
So, bubble or not, if your going to pay that much for a home you should go for the real deal and get a custom home instead of an off the shelf McMansion.
Folks,
Don't be too hard on Elmer Fudd if we don't know the story.
If the house is a good place to raise his family and he can afford the payments and still eat, then he's in good shape. Austin sounds like a nice place. (Go AMD!)
If it's a wacky loan or bought for investment, then maybe not, but you don't know that.
Sure, it sucks to see an investment go down, but you can still live in your house.
If we see hyperinflation, it'll all go up again anyway.
I will not give advice to these "Scrooged" buyers.
I want to witness a catastrophe. A genuine sh*tshow. I will settle for nothing less. So the more the merrier.
Line Properties LLC
This sounds like one of the "I Shouldn't Be Alive" stories in the making!!
So is the poster just going ot pay full boat on a product that is already diminishing it's return??
"We never lower nominal prices, but give more incentives, create a better mortgage deal, that kind of thing," Toll said at the Reuters Real Estate Summit in New York.
------------
Just means they want their accounts full. Cooking their books, are we?
These can run anywhere from $1,000 or $2,000 worth of kitchen remodeling, or better appliances, to a spa in the back of the house, or as much as a $50,000 credit for options, Toll said.
---------------
WOW! a grand? that will get you 1 stainless fridge.
Bake McBride said...
Ask questions before you make broad based assumptions about housing. What is occurring in AZ, CA, NV, and FL is not something that is uniform across the country.
*********************************************
-------------------
the whole country is in a bubble. Ok, mabye not back woods Mississippi, but most major metro areas are up.
Chicago is up 60% in the last 5 years. For no good reason. That is a bubble. Worker's salaries did not go up correspondingly so now the once blue collar neighborhoods are priced out of the reach of the average blue collar guy. Another sign of a bubble.
Just because we don't have movie stars driving around don't mean people are trying to profit off RE.
I live in Chicago. I have been renting the whole time sitting out this ridiculas market. I'll be low-balling this summer.
My Apt blding was converted to condos a few years back. The whole thing sold for $581,000 in 2001. They studded it, doing a bad job as we have found out. Then started to break it up for condos 8-10 units total.
A neighbor has a duplex unit(basement and first floor). 2 bed 1,200 sq ft, basically 2 600' units on top of each other. He bought his for $198,000 in '03. Put it on the market top of this year for $269,000. Finally today got an offer at $240,000. He turned it down! I almost fell over. His reason was: "I need $250,000." Okkkkkkk.
He's a real good guy, just think that will be the best offer he'll ever get.
Houses need to keep being purchased to absorb all the excess money rich people have. Once that happens it will all crash, returning the system to equilibrium.
People seem to be giving housing the benefit of the doubt, no matter what. What the heck is buttressing the irrational exuberance? It's confounding me. My only guess is that people who own bubble houses (including a lot of stock analysts) are so afraid of what might happen they can't even look at the problem?
Anyone else have any clue what's keeping this corpse alive? How are flippers able to keep up the payments on houses they intended to sell quickly? What am I missing?
FYI: loan of $800,000 @ 6.0% for 30 yrs comes out to $4,796.40 a month!
I make $70,000 gross.... minus taxes, minus medical, minus penion, minus def comp, minus union dues my monthly income is $3,600!!!!!
I **COULD** buy it too.
In Chicago, a housing study by Dartmouth professor of real-estate John Vogel, Jr. revealed that in two apartment buildings built only four years ago, condo rentals were $1,800 per month and one could purchase one of those condos for $270,000. In 2005, only four years later, the prices in this same set of buildings have reflected the unusual aspects of the housing bubble, where the cost of purchasing a condo has risen to $450,000. However, the rental price of these condos has remained reasonable, falling by $100 to $1,700 per month. In fact, in the past year, 25 of the 50 states plus Washington, DC have seen double-digit appreciation in the prices of houses for sale.
I bought a huge Tool Brothers house for 200,000 in a part of the country that doesn't have a bubble. My property will only go up in value, I can assure you.
Last weekend I had my good friends Frodo and Gandalf over for tea, and Harry Potter stopped by too with a housewarming gift, a brand new Nimbus 2000 broom for the kitchen. Nice.
It's in a very exclusive neighborhood. At night, elves come out to tend my yard. Dwarfs are busy mining my property for the gold, silver and uranium that lies beneath. Ahhh. Home equity is so nice.
So I feel sorry for all you people with normal houses. I feel your pain.
The problem with Austin is simple supply and demand. Same with much of Texas.
Supply of scrub land is endless, zoning laws are lax. Take a look at Round Rock.
Developers control supply of houses simply to maximize thier prices as prices get too high in Texas competition comes in and build house with a lower price.
Houses in Texas stay very close to that supported with average salary simply due to the control of supply and demand.
Besides some lakes and rivers there are few natural areas in Texas where land is contrained and justifies a higher price simply due to demand.
I think we're talking to the husband from the Suzanne commercial. Just tell the wife "No".
the last of the flippers/investors seem to have invaded austin texas and salt lake city, looking for one final gin and tonic before last call
belly up to the bar!
if they were such wonderful towns, why didn't they see any apprecition during the bubble? did the mountains just rise in slc? did austin just get cool?
you make your bed, you sleep in it. get ready for the biggest financial mistake of your life if you buy in those two towns, just like most towns across america, and across the world
the biggest bubble in recorded human history has popped
Buying a house for a residence isn't dumb. I realize most are renters here and would prefer to live in a cardboard shack down by the river until their local markets correct. But, for those of us with a family (and a job) need to have a stable environment.
There are several reasons to buy a home in the other 70% on the country that aren't imploding. Most of the population doesn't live in Phoenix, Denver, So Cal, Boston, Fla. or DC.
Reasons to buy a home:
1. Affordability-average price range in my area is $170k. 3 br, 2.5 ba, 2 car garage.
2. Cost of borrowing money is still low. Doesn't mean you have to be a dolt and buy more house than you can digest. That's never a good idea.
3. Renting sucks. Apartments suck even more.
You don't have to buy a McMansion to live in a nice home. $400k here will buy a excellent home in the best part of town.
Our prices have increased 8% this year. A normal year is 2-3% appreciation.
Reasons to buy a home:
1. Affordability-average price range in my area is $170k. 3 br, 2.5 ba, 2 car garage.
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Where do you live? That much won't even get you a house in the worst ghetto sh!t-hole in Chicago.
You don't have to buy a McMansion to live in a nice home. $400k here will buy a excellent home in the best part of town.
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SH!!!!T, $400,000 will only get you the 1,000 ', 3 bed 2 bath 2 car ranch in a non-free fire zone in Chicago.
Hardy a McManson.
Renting does NOT suck. Renting ROCKS!
I own 11 rentals in a positive cash flow market, but I rent the home I live in and SAVE $3000 a month over what it would cost me to purchase... (Florida)...
Austin is cool, but there are charming, older neighborhoods close to down-town with character. It would not be my preference to by an "off-the-shelf" house from TOLL on a McLot, but hey they wouldn't call it "keeping up with the Joneses" if there weren't a lot of you "Joneses" out there playing the game...
??WTF??
In a neigborhood of 2,000 homes, 25 sold last year. Now the other 1,975 are worth a comparable amount based on those sales regardless of how much it costs to build them.
??WTF??
If it's not an investment, just a home, you like it and you can afford it, that's all that matters. Congratulations on your new home!
Here is the TOL conference call. the Q&A session was pure comedy. One caller asked him what koolaid he was drinking.
http://biz.yahoo.com/cc/4/75514.html
"This is just too funny. Kieth could you check the logs to see if we can get a general area on the incoming IP addy? Seems to me that nearly all Toll developments are specifically located in bubble zones. This one can't be in a place without exposure."
Bob Toll grades markets. he gave a lot of D (as in "dog", his words) and F's on the CC yesterday. Their margins in Detroit are zilch - they are working for free! Only metro DC is doing OK. Listen to the Q&A on the conference call.
If you are buying the house to live in for the long run (20+ years), I would not worry too much. The majority of people who are in trouble tend to be the ones who see their house as cash cows, and not homes.
Either way, good luck
"Buying a house for a residence isn't dumb. "
I have to disagree and say buying a home for a residence NOW is dumb.
Why?The way I see it there are 2 customers:
1)Ones buying a first home> If you waited this long, you can wait another year or so to buy in a better market.
2)People trading up. You are already in a home. Just suck it up and wait for a better market to buy.
well, your argument falls apart though if the housing market is actually STRONGER where you live a year from now...
of course those here absolutely know the fure and that housing will crash from here.... thats why theyre already down almost 30% on the homebuilder index they sold three months ago..
seriously thats why you are all super retired because you all know how the trades gonna go,, you read it on cnn and blogs and can confidently filter out the fact that mortgage applications for new homes is at a 7 month high---no only bearish news counts, the rest is "dead cat bounce"---same with the fact that in most areas supply has been shrinking recently ---with thats some NAR lie "people taking homes off the market and gonna sell to me 40% cheaper next year in wyoming iowa illinois texas wherever ... right)--
THe market is always right, not your opinion of it,, and the odds a a tremendous national housing crash from here has been getting more and more remote...
Last anon..pleaze change your handle to read TOOL.
styrofoam stucko at double the price of concrete block, and twice the labor of roadside rock? id figure 100 foot tall nakid statuettes ala michaelangelo of styro stucko, for 50 bucks not 100,000s, guess the bankers deposits of 100,000 produces 1,000,000 in loans might have started somethin, more than bankers houses, insured for repayment by the taxpayers oooh shet!
viva la scottsdale!!
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