Tuesday, April 12, 2005

Mobile Homes To Sell For $800,000 And Up

It was just a matter of time before someone got this idea. "Upscale prefabricated homes at the former run-down Los Gatos Mobile Home Park..will sell for upward of $800,000."

The RISMedia story reminds us it's the dirt they're buying. "One unusual purchasing feature in the development is that owners will own the land under their homes as well as the homes, unlike other housing designated as mobile-home parks."

"It's pretty outrageous," said Tim Duffy, who put his name on a waiting list in December." A local realtor is confident in the projects' success. "If it hadn't been a mobile-home park, nobody would be saying it's outrageous. They won't have any trouble selling."

23 Comments:

At 1:56 PM, Anonymous Anonymous said...

That is an outstanding bargain, isn't it ? I'll bet next year he'd have to pay at least 20% more. He better buy that immediately.

I'll bet the buyer has at least a 50% down payment and will do the proper thing and lock into a 30 year fixed mortgage at these historically low interest rates.

I wonder how much it is to rent something in that area ? The interest cost on $800,000 at 6% is about $4,000 per month. I wonder if that would rent anything comparable ?

But then he'd miss out on the rapid appreciation of his... house trailer and "land". I wonder what the neighbors are like in that upscale mobile home community ?

Greenspan is right. There is no evidence of a bubble. People are being rational and just living out the American dream.

Nothing to see here folks. Move along.

 
At 2:05 PM, Anonymous Anonymous said...

"They won't have any trouble selling."

Funny he should bring that up ! How reassuring that the guy selling you a "place" is already thinking about what you will want to do with it in about a year. Flip and run. Isn't that the game. Who cares what the structure is.

No speculation here. None whatsoever.

I can't wait for all this crap to finallly end.

"12-acre property's zoning as a mobile-home park. That way he was able to build as many as 70 homes, replacing the exact number in the previous park."

So he will get 70 to 100 million dollars for his mobile home park when it is done.

Correct me if I'm wrong, but didn't we used to buy profitable things like whole companies for that kind of money ?

Does anyone see the damage that we are doing to the economy with this type of activity ? Instead of saving their money and investing them into good companies, people are borrowing heavily and investing in ponzi schemes like this, either as the developer or as a customer.

What a terrible, terrible misuse of capital. Worse yet, it is debt that has to be repaid sometime in the future.

My faith in our country is at an all time low. We are idiots.

 
At 3:06 PM, Anonymous Anonymous said...

I am totally disgusted by what the Feds and the gov have turned this country into. It all hinges on unsound money principles. When the Fed begin printing unbacked paper money, then the end of our country as we know it was a given.

If I remember my numbers correctly it use to cost about 3 times the household income to buy a single family detached home in the early 70s. Now, in my area of Boston, it costs above 5.

I'm a recent PhD graduate making $85K. Paying $10K a year for health insurance for my wife and my child. No debt, and yet I cannot buy a single family home in my area with a 30 yr fixed mortgage and keep housing expenses below 28% of my gross (after the $10K health insurance hit).

The standard of living the US has been dropping rapidly since the early 70s.

Housing is a symptom of a greater problem -- The Federal Reserve and fiat money.

 
At 3:14 PM, Anonymous Jim in Venice said...

Hey Anonymous, I'm in your boat too. We're 24. My fiancee and I have professional jobs and make $105,000 combined, have no car payments, credit cards, etc., and can BARELY afford a 2 bedroom condo in any decent area of LA and can't even think about a single family home - not to mention a "luxury mobie home." It's sick.

I can't wait to capitalize on the greed of the masses.

 
At 3:21 PM, Blogger Ben Jones said...

(What a terrible, terrible misuse of capital. Worse yet, it is debt that has to be repaid sometime in the future)

Good point. Besides driving up the price of an essential need, it diverts capital away from infrastructure and industry. This country need to be getting its business together and instead we go on a lark. Your right, much of it is debt, compounding the error.

(The standard of living the US has been dropping rapidly since the early 70s. Housing is a symptom of a greater problem)

I try to remind people of that all the time, as many have historical blind spots. In the 70's, even with economic strains, most blue-collar and middle class folks could afford to have mom at home with the kids, and buy a house without as much leverage.

Thanks for the great comments! Ben

 
At 3:24 PM, Anonymous Anonymous said...

Jim: you are making $8+K per month between the two of you. Can I ask how much your apartment is ? Where exactly is your money going ? It seems like you should be doing fine.

It might be a mixed blessing that you can't afford that home right now. You could regret buying one in the near future.

 
At 3:41 PM, Anonymous Anonymous said...

"The standard of living the US has been dropping rapidly since the early 70s."

Really? Many starter homes in the 70s were about 1,100 sq. ft. Many families had only 1 car and 1 TV. Many people didn't eat out often or have overseas vacations. No wonder they could afford a stay-at-homer.

 
At 3:47 PM, Anonymous Anonymous said...

"My faith in our country is at an all time low. We are idiots."

Well, you just need to look at who's running things in Washington to realize that! Who sent Bush to the White House, and the fools in the majority in the House and Senate? The American people, of course. And they're the same ones who are maxing out their credit cards and borrowing against their homes to buy necessities such as plasma TVs, vacations to Hawaii, etc.

I wonder why so few people see this. Denial?

 
At 3:48 PM, Anonymous Anonymous said...

"Many starter homes in the 70s were about 1,100 sq. ft. Many families had only 1 car and 1 TV. Many people didn't eat out often or have overseas vacations. No wonder they could afford a stay-at-homer."

We have one TV, one car, and still we cannot afford a 1,100 sq. ft. in my area of Boston. Saw such a home online the other day and the asking price was $350K. That's 4.7 times my income. That number would have been 3 in the 70s.

Don't forget I also have a PhD. You'd think I'd at least be able to match the standard of living of a blue-collar worker in the 70s?

 
At 3:58 PM, Anonymous Anonymous said...

If you think that you've got it bad, think about the blue collar worker. The way outsourcing is going, he probably doesn't have a job and if his employer was GM or Ford, he might not have health care and a pension in the near future.

At least we don't have inflation ! Luckily China had the capacity to meet our explosive consumption habits without raising their costs. We wouldn't want to be paying our blue collar workers to produce stuff for us. We'd rather they were flipping real estate.

Man this has gotten out of hand !

 
At 4:33 PM, Anonymous Anonymous said...

oh my god you have a PhD? get that guy a house!

 
At 4:39 PM, Anonymous Anonymous said...

"We have one TV, one car, and still we cannot afford a 1,100 sq. ft. in my area of Boston."

Maybe it's best that you wait to buy until "your area of Boston" devalues a little.

 
At 4:55 PM, Anonymous Jim in Venice said...

In reply - our apartment is $1200 a month. And it's not like we take home 8 grand a month - taxes and social security are such a pain.

We're doing fine (we put about 3k a month into our down payment fund and max out my 401k), but still not well enough to get a single family home in a good area with a 30 year fixed. It makes me wonder, who are all these people making more than us who CAN afford these places?

 
At 6:25 PM, Anonymous Melissa said...

It makes me wonder, who are all these people making more than us who CAN afford these places?

Maybe move-up homebuyers. Sort of a domino thing. Or else IO jumbo arm loans. But good question.

 
At 6:43 PM, Blogger Mr. Naybob said...

Ben, I've got an LA TIMES article from February detailing $1Million Mobile Homes in Socal. If your interested I can email it to you.
Let me know.

 
At 6:56 PM, Blogger Ben Jones said...

mr. naybob,
you can send it to

thehousingbubble@gmail.com

Thanks

 
At 8:08 PM, Blogger John Law said...

to all those saving...be careful your bank doesn't fail. it might be writing and holding the mortgages of this mess.

 
At 8:40 PM, Anonymous Anonymous said...

Some banks will go under, but the FDIC will protect you up to $100K, and the transition should be painless. (I had a 2 S&Ls go under on me back in the 80's with no transition glitches.)

The real issue is all these asset-backed securities, the ultimate dumping ground for all the mortgages. If you have a non-FDIC guaranteed money market or bond fund, then watch out for any ABS's among their holding! Watch out for stocks whose pension fund is heavily invested in ABS's. If you have life insurance or annuities, these too may be invested in mortgage ABS's. These things are the cockroaches of the modern fixed income investing world, hidden away in everything except straight treasuries.

 
At 9:17 PM, Blogger John Law said...

the S&Ls were small time compared to what could happen to an entire industry leveraged to the credit bubble.

 
At 11:27 PM, Anonymous Anonymous said...

There is very little reason for anyone who opposes the housing bubble to keep their risk-free assets in a bank (e.g. CD, money market, etc). The bank will probably use that capital to make more mortgages and further inflate the housing bubble. I've started to put my risk-free money into US Treasuries. I get the same rate as a CD, but don't have to pay any state tax on the interest. The US gov't guarantee is much better than any bank or S&L. And your capital helps reduce the cost of interest payments on the national debt rather than make more mortgages. If you have gobs of money sitting in the bank, search for Treasury Direct and move your money there.

 
At 7:49 AM, Anonymous Anonymous said...

I moved a chunk of my money off-shore. There are many countries that have much more sound banking regulations than the USA and much more strict privacy laws. Some that I can think of are Austria, Switzerland, Denmark and Panama. It's perfectly legal and it keeps your assets off the radar screen of loan sharks and thieves.

USA banks lobby the government hard to lossen rules and share information about you between themselves and others. It's best to move off-shore.

 
At 12:41 AM, Anonymous Anonymous said...

What's wrong with you Americans. I can't believe this crap. There must be a fraudulent activity behind these transactions. 800,000$ (1,000,000 CAN $) for a mobile home ? Give a break ! Are the doors at least made of massive gold ? Hope so for the stupid buyer's own sake.

 
At 10:30 PM, Anonymous Pamela said...

You posters on this site have been a godsend for me. While on a recent trip to San Diego, I went to one of the banks we put our money into after selling our home. (Don't shoot me, as we lived in the house 9 years, and are not flippers. We had only 2 months to sell everything we owned, and yes, the house was one of them, as we didn't want the worry of renters.) My husband and I were really concerned about FDIC backing, so we had to open accounts at two different banks. After making a transaction at the bank, I happened to ask the teller about the FDIC insurance, wanting to make sure we're covered. And, by the way, no one at the banks seem to have much knowledge of this insurance. I ended up talking with one of those people who sit at the desks who are supposedly more informed. He said to me "If you're worried about having FDIC backing, then fine. But, really, do you need to worry about a bank going under these days? Troubled banks are or can be purchased by other banks, and if banks are going under, there's more to worry about." Maybe, sir, but it's not your money. (I'd have been better off talking to the nice teller.) You posters are so right about US Treasuries and/or using foreign banks. We had so little time before we moved, and now with no US residence, investing from abroad with the Patriot Act (which is a subject few investment companies know little about and we have to research) is a challenge. I've got some major work to do. Thanks so much for all the valuable info.

 

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