Miami Housing Boom or Prelude to a Bust?

[zoog]

Re: Miami Housing Boom or Prelude to a Bust

Despite outward appearances, the data for Miami doesn't really look "booming" to me.

My point is that the perception is Lending is tight and loans are hard to get is false...

...convince the herd its hard to get a loan = make em want it all the more...

...My wife and I like to watch House Hunters show and all the Homes people look at are empty. So, if the market is tight how can every House Hunter being looking at 3-4 properties that all empty?

Because they are empty. But just like the lending, convince the sheeple that there aren't enough houses on the market for sale, and they'll want them all the more. I believe there are still many homes being held off the market to drive inventories artificially low to drive prices higher.

[BK]

Re: Miami Housing Boom or Prelude to a Bust- Burlington-Massachuestts

How about Retirees with Multiple homes? I know of one couple in their 70s one home in Florida, one home in Jersey, and another in New England. As long as Real Estate feels like it is increasing in value people feel good about carrying three homes even in the face of rising carrying costs. I'd love to see some stats on number of people who own multiple homes and I agree lots of home being held off the market.

Today we are again in the midst of a full-blown frenzy in real estate in many cities with decent job markets.

I did a quick look at transactions for Burlington-Mass (which was home to Sun Microsystems during the DotCom Boom) and here is what I found:
Here is what I found when I looked at the most recent Burlington-Ma Real Estate transactions:

2 Woodcrest - Burlington - sold for $439,000 on 9/17
New Mortgage is $439,000 - No 20% downpayment
In 2004 this property sold for $423,000 - mortgages totaled approx $400K.

4 Stewart Burlington - sold for $600,000 9/16/2013
New Mortgage is $480,000 - nice to see 20% down
In 1999 this house sold for $367,000 - it was brand new - 7.4 % 30 year Mortgage rate. (the DoCom bubble was in full swing in Mass).
Money is 40% cheaper to borrow today the House sold for 38% more today than in 1999 (lower interest rates= people borrow more =houses go up)

8 Gibson Burlington sold for $480,000 on 9/9/13
New Mortgage $384,000 - great down payment
Sold in 2004 for$460,000 with a $368,000 Mortgage
Money today is 25% less expensive to borrow, yet this home only went up by 4.16%

13 Mountain Rd - Burlington sold for $385,000
New Mortgage is $371,500

5 Marret - Burlington sold for $570,000 on 9/4/13
New Mortgage is $484,4000
2002 it sold for $469,000 with a Mortgage of $270,000 (in the midst of the DotCom bust)
The Mortgage rate in 2002 was approx 6% - borrowing costs are 25% less today - the 2013 price is 21.5% higher than 04

8 Richardson Burlington sold for $410,000
New Mortgage is $369,000
sold in 2003 for $357,000 - Mortgage was $316,000
Mortgage rate in 2003 was approx 5.5% - 18% cheaper in 03 - todays buyer paid 14% higher price

Debt is driving Real Estate and yet it looks like the lower rates are having less impact as time rolls on.

[jpatter666]

Re: Miami Housing Boom or Prelude to a Bust- Burlington-Massachuestts

How about Retirees with Multiple homes? I know of one couple in their 70s one home in Florida, one home in Jersey, and another in New England. As long as Real Estate feels like it is increasing in value people feel good about carrying three homes even in the face of rising carrying costs. I'd love to see some stats on number of people who own multiple homes and I agree lots of home being held off the market.

Today we are again in the midst of a full-blown frenzy in real estate in many cities with decent job markets.

I did a quick look at transactions for Burlington-Mass (which was home to Sun Microsystems during the DotCom Boom) and here is what I found:
Here is what I found when I looked at the most recent Burlington-Ma Real Estate transactions:

2 Woodcrest - Burlington - sold for $439,000 on 9/17
New Mortgage is $439,000 - No 20% downpayment
In 2004 this property sold for $423,000 - mortgages totaled approx $400K.

4 Stewart Burlington - sold for $600,000 9/16/2013
New Mortgage is $480,000 - nice to see 20% down
In 1999 this house sold for $367,000 - it was brand new - 7.4 % 30 year Mortgage rate. (the DoCom bubble was in full swing in Mass).
Money is 40% cheaper to borrow today the House sold for 38% more today than in 1999 (lower interest rates= people borrow more =houses go up)

8 Gibson Burlington sold for $480,000 on 9/9/13
New Mortgage $384,000 - great down payment
Sold in 2004 for$460,000 with a $368,000 Mortgage
Money today is 25% less expensive to borrow, yet this home only went up by 4.16%

13 Mountain Rd - Burlington sold for $385,000
New Mortgage is $371,500

5 Marret - Burlington sold for $570,000 on 9/4/13
New Mortgage is $484,4000
2002 it sold for $469,000 with a Mortgage of $270,000 (in the midst of the DotCom bust)
The Mortgage rate in 2002 was approx 6% - borrowing costs are 25% less today - the 2013 price is 21.5% higher than 04

8 Richardson Burlington sold for $410,000
New Mortgage is $369,000
sold in 2003 for $357,000 - Mortgage was $316,000
Mortgage rate in 2003 was approx 5.5% - 18% cheaper in 03 - todays buyer paid 14% higher price

Debt is driving Real Estate and yet it looks like the lower rates are having less impact as time rolls on.

The number of people I've talked to who said they were buying houses because interest rates were at all-time lows. That the housing prices were at all-time highs just doesn't register.

This also is *much* more prevalent for those who don't own a home and who fear being shut out of the market. People with a house who don't need to move are much more reluctant to "trade up". They're also aware of the costs. This is essentially my wife and I. We live in the DC area and are fortunate enough to have paid off our modest townhouse. Doing so has given us an immense appreciation for the freedom of having no major debt hanging over us -- we're incredibly reluctant to take up that burden again. Get a bigger house and be stuck with the mortgage again, the expenses of a larger home -- and the "privilege" of doubling (or more) our property taxes?

No thanks....

[don]

Re: Miami Housing Boom or Prelude to a Bust- Burlington-Massachuestts

Historical note: During Florida's Real Estate mania of the '20s Miami went from 30,000 stable residents to 200,000 speculating maniacs in 5 years. 25,000 of them were in real estate: among them salesmen, brokers, speculators, con artists and binder boys. The latter were flippers operating on tiny margins in a time frame measured in hours. It all collapsed in '26.

[lektrode]

Re: Miami Housing Boom or Prelude to a Bust- Burlington-Massachuestts

Historical note: During Florida's Real Estate mania of the '20s Miami went from 30,000 stable residents to 200,000 speculating maniacs in 5 years. 25,000 of them were in real estate: among them salesmen, brokers, speculators, con artists and binder boys. The latter were flippers operating on tiny margins in a time frame measured in hours. It all collapsed in '26.

by the late 90's i had reached the conclusion - being in HNL since '90 - after coming out from LA for a 2 week vacation...
cue gilligans isle tune "...for a 2 hour tour, a 2 hour tour..."
and finally having enough income from my biz that would allow me to take vacations/travel again - and figgerin that i'd likely never make enough to afford a house here - i decided - due to the boatbiz kranking there at the time - on setting up over in fort lottatail, and pursuing a 'seasonal migration' lifestyle (to n fro HI, eastcoast over the holidaze, see mom&the rest etc, ski the rockies on way over and back, was a nice fantasy island vision/delusion, while it lasted ;) - and at that moment - spring 2000 - it looked as if i'd missed the real estate train leaving the station there - altho prices seemed - to me - to be perty cheap/reasonable - vs HNL anyway - but some mentioned that "if you think this is cheap, you should've been here a couple years back" - when the older CBS (conc blk/stuc) stuff just west of us1 was in the process of being flipped for the 2nd round and was fetching mid 150's and up at the time - have no idea what those peaked at, but wouldnt be surprised of they were right back to where they were in 2001 ? - all i knew was that no matter what they were running, it would beat the hell outa having to suffer i-95 or the sawgrass 'express'way at the 'rushhour' - esp when the newer stuff out in the swamps was running 2-3x higher.

thankfully i came to my senses the next winter and decided that i'd be nuts to give up what i have (had) for what _might_ happen over there (and all i can say now is that utaaaaah has never looked better ;)

[BK]

Re: Miami Housing Boom or Prelude to a Bust- Burlington-Massachuestts

I was visiting Northern New Jersey - and I can report there is a Real Estate frenzy. This is a bedroom community for Wall Street, but what people are paying for homes is staggering.

http://www.zillow.com/homes/recently...ect/16_zm/_fm/

I plan to troll for data on Mortgages in the Morris County data base.

Tear downs seem to found every few blocks and sold for $1 -$2 Million. It seems to me there is Real Estate speculation happening in many markets and its not just cash deals from faraway lands. We had neighbors over last night they bought a new-old home in the same town and are keeping their first home as an investment property (they were inspired to become landlords because of low interest rates).

Am I missing something in the numbers, perhaps now is the best time to buy????? The frenzy like behavior I am seeing reminds me of 2005 and it makes me very nervous. Am I wrong to be a contrarian and to believe low interest rates do not mean that its a great time to buy and right now everyone wants to buy/hold as much real estate as they can??

[lektrode]

Re: Miami Housing Boom or Prelude to a Bust- Burlington-Massachuestts

far be it from me, BK - but would offer will there ever be a 'better' time?