<p>Speaking of bubbles, back in the late 70s, H and I bought our first house (3BR rambler–no basement–1Bath) in Lawrence, KS, for $21,000. We were able to assume the loan for $7,000 borrowed from my parents. Three years later, we sold it for $30,000. Shortly thereafter, the housing bubble burst in Lawrence, and our buyers had a tough time breaking even on the sale.</p>
<p>There was an interesting story on NPR a while back about regional bubbles. Some cities–LA was mentioned in particular–will not see the bubble burst for quite some time. Our philosophy has been to see real estate, as with stocks, as a long-term investment and buy conservatively.</p>
<p>Reporting from Northern San Diego County here. Prices are still high ($500-600K) and real estate is still selling, but no longer are houses selling in a minute or two. So things are cooling down.</p>
<p>My sister lives in the Houston area–she just bought a new house and sold her old house. Neither took very long–what surprised me is that her old house was listed in the $150-175K range; her new house is probably in the $225-300K range. In other words, reasonable (compared to CA) prices. . .so some areas of the country haven’t gone bonkers when it comes to prices for real estate.</p>
<p>I wonder if I could ever get used to Houston humidity. . .</p>
<p>Here in South Texas, real estate gains have stayed modest, once people recovered from the oil bust in the 80s. In the city we just moved from, most people are losing money on their houses because the school system is going under. Unless you’ve lived in your house about 15 years, you will lose money and equity. We we moved to–about 15 miles north–the houses are appreciating at a modest rate. Again, due to the school which is desirable and the limited number of houses in this rural area. That could change if there is no movement on the school funding issue in the Texas Legislature.</p>
<p>My mother just left the Metro D.C. area because she would not have been able to afford to retire. Even though her house (3Br) was paid for (about 37K in 1972) the taxes were horrendous. She sold it “as is” without a broker for about 500K. Now that’s a bubble that may break soon! My in-laws, on the other hand, missed the bubble in their Long Island neighborhood, or I should say sold in-between. They moved in the early 1990s. The people that bought the house next door to them right before they moved paid about 200,000 more, and the houses have subsequently jumped again.</p>
<p>Same here in the Westside of LA, Ellemenope. Cooling down, to the point that prices are either going up either gradually or else flattening out. A good sign, imo. The rate of increase was not sustainable.</p>
<p>I’m still uncertain about a “bubble” because demands still outstrips supply.</p>
<p>“I hear thar prices are high and sales are slowing slightly in the North Bay of SF. I hear that people are still buying at a pretty good clip in SF.”</p>
<p>In San Francisco earlier this year, for instance, an income of $223,576 was necessary to purchase a $705,000 home, the median, or midpoint, at which half of sales are above and half are below, the report said. Using a different set of federal data in 2003, the group found $176,718 was required to buy the median- $567,000. </p>
<p>An elementary school teacher in San Francisco makes about $53,478 a year, researchers found, up from $51,100 in 2003. </p>
<p>Home buyers in San Jose would need $185,521 to buy a median-priced $545,000 home, up from $148,044 to afford a $475,000 home in 2003.</p>
<p>dstark: Greater fool theory applies to your comment. “Banks” (producers,commercial banks, CUs, Savings Banks, brokers, and other enties that start the process) really don’t own very many loans. A very large portion is sold to the secondary or tiertiary financial markets. In other words the risk is distributed to other investors, who ever they may be.</p>
<p>The “Who ever they may Be”, ultimately is the U$A public, through higher loan interest, more restrictive credit, and the foreclosure by foreign lenders. </p>
<p>Living in lovely SF,we bought our house 9 years ago for 290,000, added a floor and 2 bathrooms…imagine what we could sell it for now…
too bad we couldn’t afford to by anything else…</p>
<p>Our friends bought at 500,000 sold for 760,000 after 5 years…</p>
<p>A realtor knocked on our door yesterday to inform us that she had just sold a house 3 blocks west of us, near the local airport. It was a 3 bdrm + 1 bath–probaby no more than 1400 sq ft–and the asking price was $750K…it sold for $826K! We live in West LA…</p>
<p>Its unbelievable what people will decide to pay. Some freinds in the Magnolia neighborhood were stunned many years ago ( about 15) when a perfectly good house next door to them was purchased for $750K… and promptly torn down.</p>