Single Digit Price Increase An "Aberration"
This JournalNews piece is full of housing craziness. " The inability of buyers to afford houses appears to increase the demand for lower-priced condominiums and cooperative apartments, pushing those prices up as well."
That's what happened in Orange County. As potential buyers were priced out of what they wanted, they bid up lower quality homes. It really is just a mind game to convince yourself that the $300,000 house is now "worth" $500,000.
"The affordability of co-ops led Kyana Kelley to bid on a one-bedroom apartment for $90,000. She said she hoped to close in the next few weeks. Kelley, age 30, figures to sell the apartment and trade up in a few years on continued price strength. 'It's going to keep rising,' she said."
Think about this chap when a professional talks about being on your side. "Agent Bobby Palazzo said demand in Putnam was being fueled by people moving up from the Bronx, White Plains and Yonkers. 'You can still get something decent up here for under five,' Palazzo said, meaning $500,000."
"'Unfortunately,' he added."
5 Comments:
It's great how everyone has a rationalization for the price increases. The guy in the article says it's everyone fleeing NYC after 9/11 to Westchester. So who's pushed the prices up in NYC to an ave over $1M?
"So who's pushed the prices up in NYC to an ave over $1M?"
Must be those nasty ole Californians.
Hey this is the Logic Police -- you two guys have been flagged as incendiary malcontents who use logic and rational thought. There is no room in the Utopian bubble environment for that type of thinking -- please cease and desist.
TheGuru
The NAR economist went on and on about 9/11 as a reason to own RE. It's in my posts; March, maybe February.
Good point about NY, too.
Everyone has their mindless explanation as to why there is no bubble in their particular area.
Here in the DC area the twisted logic is that DC area is "special" due to government jobs. Furthermore, DC is going to catch up with LA, Boston and NYC. There is no reason that DC should have lower prices than these regions!!!! (They cite that they DC is number 11 or whatever in the country, so it has endless upside.) This might sound astonishing but I have heard it at least 10 times over the past year. I think it is served as Realtor/ RE investor Kool-Aid when they are indoctrinated. There might be a slowdown elsewhere and if that happens DC is going to catch up.... I looked at an overpriced condo/TH for rent that sold new for 150k in 1995. The owner is charging too much. I remarked that it is not good for his cashflow if it sits empty for a year. "I don't care because I am making 20% or more per year....." Then I interjected that the party might be over at some point in the future and he then proceeded to mention this "catch-up" theory. And it's not part of the negotiation tactic.
In Hawaii you have the fact that the Japanese are not investing in this bubble. They were "fickle". Etc., etc.
Remember real estate is local and has nothing to do with Federal reserve policy or the credit markets........
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