Wednesday, May 11, 2005

Arizona Spikes Higher

The FDIC, which reported no boom in Arizona may want to read this East Valley story. "The median sales price of an existing home in Chandler increased by a bit more than 50 percent over the past year. In Gilbert the median sales price of an existing home increased by about 49 percent."

"In Mesa, the median sales price of an existing home increased by about 30 percent last month. Tempe fared about the same, with the median sales price of an existing home increasing by about 27 percent." The FDIC criteria was a 30% increase in three years. How many other boom metro's did they miss?

Not to worry, there is a new mortgage that will keep that monthly payment down, for a long time. "Washtenaw Mortgage Company, is now offering 40-year residential mortgages, a first for many of the 40 states in which the Company conducts business."

"Mortgage flexibility has become a watchword and innovative products such as our new 40-year mortgage are needed for first-time or younger buyers in hot markets where housing prices have skyrocketed in recent years. The 40-year mortgage was the latest in a string of new products, that includes zero-down, interest-only and Alt. A, or No-Document loans."


At 10:09 AM, Anonymous Anonymous said...

Call me crazy but as long as the financing side of the business continues to be loose, this madness will only continue. I’m starting to think that the new paradigm of home buying is just renting in sheep’s clothing. The so-called “buyers” of today are not really interested in owning the home, give them set monthly payments and they’re happy campers. So what if it takes a 60 yr fixed rate @ 5.8%.

At 10:11 AM, Anonymous punchbowl said...

40-year doesn't buy you anything that you don't already have with IO. That is, until you hit the moment of payment shock, an IO is effectively an infinite mortgage. Given the (scary) success of IOs, the 40-year (or its Japanese kin the 100-year) will probably never catch on. This is part of the reason that we can say with confidence that new products won't get us out of this: once you have negam no-docs, there's pretty much nowhere else to go outside of offering your kidneys as collateral...

At 10:17 AM, Blogger John Law said...

(Call me crazy but as long as the financing side of the business continues to be loose, this madness will only continue.)


At 10:18 AM, Anonymous Anonymous said...

I disagree. This bubble can be extended.

All that is needed is for governement to set the price of homes and renting. Rental costs could then be increased at a faster pace than home prices to ensure that renters buy homes.

Everyone wins!

Forget the free market. It was dead a long time ago - when the federal reserve was mandated in 1913 (?) on a christmas eve where most representatives were not present for the vote.

Long live Amerika.

At 10:26 AM, Blogger John Law said...

50% is a lot of dough. even for a $200,000 home, that's $100,000 appreciation. that's $250,000 for a $500,000 home. damn.

At 10:39 AM, Blogger John Law said...

don't know if anyone saw this:

The land of 10,000 new homes in '05
Carl Holcombe
The Arizona Republic
May. 11, 2005 12:00 AM

At 10:39 AM, Blogger John Law said...

don't know if anyone saw this:

The land of 10,000 new homes in '05
Carl Holcombe
The Arizona Republic
May. 11, 2005 12:00 AM

At 10:55 AM, Blogger Ben Jones said...

That kind of scale is typical around Phoenix. It's all desert. They are restricted by water, not land.

The AZ economy is centered on the RE boom. When it slows down, what's everybody going to do for a living?

At 10:56 AM, Anonymous Anonymous said...

OCC is barking at IO loans for questionable borrowers. I have a feeling that 40 year loan is the replacement.

This is a tightening step though. Payments for 40yr amortization are at least 10% more than IO. And the increased portion is not tax deductible. The good thing is that, it is fixed for 40 years!

At 10:58 AM, Anonymous Anonymous said...

I wonder how many small towns are flying under the radar, as no one keeps track of their increases.

We moved to Kingman, Arizona a few months ago, intending to retire here. We are leasing a house, as the real estate in mohave county is out of control. Prices of homes have gone up more than 100% in the last year, land has increased as much as 500%.

I just checked the tax records for 4 lots currently available in Bullhead City, the last sale for each was between 1/04 and 7/04 and the current asking price is between 470% and 584% of the last sale price.

We would like a house of about 1800-2000' on a larger lot, something which would have been easy to get for well under 200K, about a year and a half ago. Now the only thing that the realtors have been able to come up with for under 300K are manufactured homes.

Before moving here, we had been coming to Mohave county and watching prices for the last couple of years. We saw prices go up some, but still felt that we could buy a home for a reasonable amount.

We looked at a new house of about 2400' on a 1 acre lot,in the best area of Kingman about a year and a half ago, selling for 205K. Older smaller houses in that area are now selling at 400K plus, lots alone are about 250K. This in a town with no real industry where the wages are very low. Small 1100' to 1400' new homes on small lots are selling for 160k on up. And they are selling very fast, to investors that are renting them out. Realtors are of course saying it will only go up, even though no working families can afford the houses. They expect California people to continue to purchase their homes as investments and retirement homes. They also brag about their main industry being construction.

When I told a realtor that I felt most retirees from California came here because the prices were low and they might not be so inclined to do so when the prices increased so much, he told me I was very wrong. He said Californians would come here because they love the weather. Okay, leaving California and coming to Arizona for the weather, sounds a little strange to me. That wasn't why we came here.

I told a developer that we were just going to rent for a while and see what happened, that I didn't feel that the prices could continue to increase at such a fast pace. He told me that prices of houses "Never" come down. He said just because I didn't like the prices, that had no bearing on them not going up. He told me I should look at the prices of cars, they also went up and although people felt they were too expensive, they also would never go down.

We are getting very frustrated and would like to buy or build a house rather than continue to rent. We are at an age where we would like to move into a permanent home. We have not rented for well over 30 years and do not feel as confortable doing it as we might have when we were younger. However, I refuse to pay double what I could have purchased for last year. If one more person tells me "of course land has increased 5 times in the last year, they aren't making more of it, you know", I think I will scream. Up until a year ago, you could buy 40 acres of land for 1K an acre, now I see those same 40 acres for as much as 50K an acre. I just don't see how this can continue.

At 11:04 AM, Blogger Ben Jones said...

Anon in Kingman,
I know of parcels around you that are much cheaper. How do you like Seligman? It is a little wetter than Kingman and the outlying land is less than $1,000 an acre.

Good luck! Thanks for taking the time to tell us about Kingman. I drove through a couple of weeks ago and it's obvious bubble territory.

At 11:05 AM, Blogger Ben Jones said...

10:56 anon,

(OCC is barking at IO loans for questionable borrowers. I have a feeling that 40 year loan is the replacement.)

Great point.

At 11:10 AM, Anonymous kailuabruddah said...

I just don't see how this can continue.

It won't... the timing of the end is of course the tricky part - but the bottom line is price-to-income and price-to-rent ratios always mean revert...

There have been some spectacular RE busts in the past:

Florida 1926
Northeast 1930s
Japan 1990
Hawaii 1991

The 1988/9 RE downturn in California, Boston, NYC, DC will be nothing compared to this one...

Jim Rogers said things were insane in 2002:

He'll be proven correct - but he was early with his analysis...

At 11:16 AM, Anonymous Anonymous said...

You actually can get larger parcels a little closer than Seligman, about 40 miles or so out of Kingman, but thats a little far for us. As you get older, things like "emergency services" become a little more important. We would like to be closer to civilization and don't really want a large parcel, 1/2 acre or a little less would be fine. We are trying to stay close to California as our youngest grandson lives there and we tend to visit a lot.

Bullhead City is even more out of line. They are building new homes there on the parkway between 450k and 650K, all for the "rich" California retirees.

I think that people are mistaken about how many of us California retirees are rich. Remember we have had to pay the higher cost of living for a lot of years. Most retirement age people I know have borrowed on their equity many times in the last few years, just to pay their higher cost of insurance etc.

At 12:16 PM, Anonymous ChrisH said...

I know about the AZ spike all too well. I've been considering moving and been looking at homes around the Phoenix metro. I have homes in the 200-250 range emailed to me. I've been noticing the SQ FT going down....first around 2000, then 1800, then 1500, now I'm getting some around 1300... All within the past 3 months.

At 12:21 PM, Anonymous Anonymous said...

I've been reading your blogs for about 2 months now. Speaking of Arizona........I'm selling my Manufactured home in Flagstaff for over 200,000 dollars! That is insane. Moving to Chandler to teach and I'm going to rent. Should see the look on peoples faces when I tell them this. You cant rent......u must have an insanely overpriced house like me!I believe Flagstaff will bust like the rest of them

At 12:27 PM, Blogger Ben Jones said...

Anon in Flag,
I love your town, but burrr in the winter. Thanks for the inside tip. Please let us know prices/rents in Chandler.

The rents in Flag are not high enough to justify the market. Your right, it'll bust too.

At 12:46 PM, Anonymous Anonymous said...

The bubble is indeed spreading.

I live in Denver, but spent the weekend visiting a friend in Kansas City. We spent 3 days looking at condo conversions and loft redevelopment projects in the downtown area. They were having a weekend of city wide open houses that they do once a year.

I was astounded by the prices. KC has always been way cheaper than Denver, but I found it is quickly catching up.

There are several thousand units in varying stages of development in downtown KC, an area that, until a couple of years ago, no one wanted to live in.

Units are selling briskly, from what I could determine. I asked a sales person where all the buyers were coming from. She said there were a lot of out of town buyers coming in and buying units. In KC?!

I think the speculators are now looking for any town that hasn't had a runup in price and heading there and buying units on the 'sure to come' rise in prices. In the west it startedin Las Vegas, now has spread to Arizona, and the midwest is apparently next.

Pretty soon there will be no place left in the USA that an average income person will be able to afford a home without taking on a ridiculous amount of debt.

We are witnessing one of the biggest 'greater fool theory in action' examples in recorded history, in my opinion. And we know how those ALWAYS end.

At 12:54 PM, Anonymous Anonymous said...

I've noticed the square footage in Arizona myself. We sold a home in California, for $311. per square foot, last winter. The zip code we sold in is now at $364 per square foot. We had a 1/2 acre in a popular area, lots of movie and TV people, a rural type area but in the middle of town. Although some houses were selling in the million or multi million dollar range, most of those were 3500' or more, on 1/2 or 1 acre lots. The price per square foot at that time, for the multi million dollar houses, was well under $300.00 per square foot.

The new houses I have seen in Bullhead City are much smaller, on smaller lots and are as much as $300. a square foot. Realtors keep saying their houses are cheap compared to California's million dollar houses, but if you figure $ per square foot, there are a lot of Southern California zip codes in good areas that are comparable. California houses just seem to be larger in most areas.

I watched my children (33-40) get priced out of the Southern California market many years ago. All but one moved to other states. It is sad to think that so many areas have priced out the young people and the average wage earners. It seems that there are fewer and fewer places where prices are in line with wages. Actually, I don't know of any personally.

At 1:28 PM, Anonymous kailuabruddah said...

It seems that there are fewer and fewer places where prices are in line with wages. Actually, I don't know of any personally.

There are some...

San Antonio
New Orleans

At 1:40 PM, Anonymous alwaysthinking said...

(The AZ economy is centered on the RE boom. When it slows down, what's everybody going to do for a living?)

Well, at some point, there would probably be a lot of RE tourists looking for bargains. So the locals could sell them cold Cokes. Or they could dip lizards in some kind of epoxy, dry them out, then put little outfits on them and sell them to tourists.

At 1:46 PM, Anonymous Anonymous said...

(He told me I should look at the prices of cars, they also went up and although people felt they were too expensive, they also would never go down.)

Perhaps your agent was from Crete, because he sounds like a cretin to me.

Of course cars have gone up in price. It's called inflation. RE goes up too. In fact, historically, it has been an excellent inflation hedge because (in most markets) it has outperformed inflation by a point or two a year on average.

But over the past 8 years, RE in bubble markets has tripled (300%), yet inflation is only about 18% over the same time period.

Cars are not subject to manias. They are not an asset class or an investment (except "collector" cars). Real estate has become, essentially, a "collectible". And like all asset classes (stocks, coins, etc), they are subject to cyclical and secular market swings.


At 2:35 PM, Blogger deb said...

Judging by what's going on around here (LA), I think a lot of the crazies have left and have moved on to other markets.

It's interesting a couple months back I started seeing and hearing "get rich quick in RE" schemes that centered on buying in the next "hot area". I guess they figure So Cal is maxed out and they have moved on.

At 3:02 PM, Anonymous Anonymous said...

"Judging by what's going on around here (LA), I think a lot of the crazies have left and have moved on to other markets."

Deb: Are you seeing changes in your market?

How long do you think it will be before it stalls out?

At 3:52 PM, Blogger deb said...

We are far from "stalled out", but it's not as frantic and it is flattening out a little. The cheap stuff is crazier than the higher end stuff. I posted some stats lately on my specific area. I'll repeat it for anyone interested.

The numbers for April are out from our Board of Realtors. In April our (San Fernando Valley) median was $540k for a single family res, up 13.6% y/y. Average price $659k, up 9.2% y/y.

Then, I decided to look at the appreciation with in the smaller sub areas (the San Feranado Valley MLS has 6 sub areas). The area where I sold my house is WS (west south). This tends to be the most expensive area, very desirable, low crime, good schools. From 4/04-4/05 the average price for a single family home in WS has gone from $724k to $740k. On the opposite side of the valley is EN (east north). This is the least expensive area, high crime, poor schools. The average price of a condo in EN has gone from $241k to $310k. So for a higher priced home with great fundamentals, we have 2.2% annual apprecitation. For the “affordable” condo with really lousy fundamentals, we have 29% annual appreciation.

I think there are a few telling things about the stats for my market. The median is increasing much faster than the average, which I think would indicate more pressure at the low end. Also, as you can see above the expensive areas are maxing out, while the "affordable" areas are surging as marginal buyers are making their last gasp at homeownership.

Any other thoughts on my interpretation are welcome.

At 8:49 PM, Anonymous Anonymous said...

I was visiting with a friend of mine who was staying at his brother's in Orange County, CA. He lives in a high end condo walking distance from the beach. When we walked up from the garage there were some glossy realtor leaflets (also 3-4 open house signs) indicating new stratospheric selling prices. I asked how much his 2 BR unit would sell for? Maybe $700k. How much did he pay for it in 1996? $200k. Holy smoke. My response was sell!! My friend is in my camp.... well, I have worked hard on converting him.... Oh, no the price will keep going up because it is near the beach, population of CA is growing rapidly and..... you have heard it. Dude, wake up, 3.5X appreciation in 9 years. People must be really desperate to live near the beach and those illegal immigrants must be loaded.

Maybe he could rent in the same development? Oh no, it would cost $3500 and he couldn't afford it. (Well, if you have $700k in the bank.....) I was highly skeptical about this rent claim (I figured it was an excuse to deflect the idea of renting) and the next day I walked up from the beach and saw a for rent sign in one of the prime units. Top floor, 3BR, 1200 SF, ocean view. I called the number on the sign: it's going for $2500. When I came back to the condo, I inquired, how much does a 3 BR with ocean view go for? Oh, somewhere between 900k and $1 million.

At 9:16 PM, Blogger bubbleman said...

wise words from bubbleman:

speculators are like locus. they started in NY, D.C. and CA and now they are moving towards the center of the US. by 2007, a 2,000 sq. ft. house in kansas will be 1 million...

big al killed the bubble and he will try to kill the speculation bubble. however, the rate master is in a cunumdrum: long rates refuse to increase while he continues to increase the short rates. that brings me to bubblemans next point - the chinese. when the chinese revalue their currency, the real ugliness will begin. those communist ass wipes are manipulating their currency in order to ship us cheap goods. in addition, since their dollar is artificially lower than ours, they have been financing our huge deficits by purchasing treasuries; hence treasuries rates refuse to go up. if those communist SOB's would stop buying our treasuries, then we would see a huge change in the rate on the 10 year. how ironic is this? our debt is being financed by a bunch of communist!!

At 9:28 PM, Anonymous goodmorningshanghai said...

---how ironic is this? our debt is being financed by a bunch of communist!!---

Interesting report on those self-same communists today in TheDaily Reckoning:

The Daily Reckoning PRESENTS: After a visit to China, Karim Rahemtulla is still puzzling over the Chinese government and economic systems...and can't help but wonder: is China is pulling off an economic miracle, or just the wool over the world's collective eyes...

by Karim Rahemtulla

Last week, I spent several days in Beijing and Shanghai, hosting a Supper Club Venture Capital meeting.

China is a conundrum. It makes no sense. And people accept that as normal. It is a country that has collided with capitalism and is now trying to manipulate it. It is country with a government that is adept at sleight of hand. What remains to be seen is whether China is pulling off an economic miracle, or just the wool over the world's collective eyes.

After having a few days of pondering the puzzle of China, visiting with companies and catching the local real estate scene, our group sat down to discuss what it was that did not make sense about the commerce that we were seeing.

We looked at a bunch of Chinese companies. Most of them were leveraged to the hilt with more debt than equity. Most were government spin-offs that were now private and publicly trading in the U.S. OTC market. When asked about how they were able to pay their debts - loans owed to the state-owned banks - they replied almost in unison that the loans were a low interest rates and renewable in perpetuity, and that the banks really did not force them [expect them??] to pay them back until they became profitable. One way around this, one executive intimated, was to keep two sets of books, one perpetually showing low profits or a loss. I asked point blank if this "government subsidy" was commonplace, and the answer was a resounding yes! The comment that was most telling was when one company officer, a U.S. trained MBA blurted out, "This wouldn't work in the U.S." I guess not, unless you were WorldCom or Enron!

The conclusion that I reached from this research was that China is not a transparent country, the government is subsidizing every level of the economy, from pensioner to taxi driver to major corporation, and that there will be a day of financial reckoning when many businesses go bust because the government will not bail them out by injecting more capital into already debt-ridden banks. And, you cannot trust any statistic that the government publishes.

Chinese banks, a.k.a the government, are saddled with hundreds of billions of dollars in non-performing loans. That is, if you use their published numbers, which are shaky at best. Yet, they continue to lend businesses whose owners are making money, not from product they sell, but from how much they can siphon out of the company knowing they are not being held accountable. As I see it, it goes something like this: You get a loan that you don't have to pay back. You produce goods that you then sell below market to generate cash flow. You then show a loss from operations, since you spent more to make the product than you are selling it for. You pocket some of the cash flow, since the debt service is non-existent. You use your newfound profits to put deposits on new office space and apartments that you are planning to flip - since in China you don't have to pay for the space until it is completed, and by then if prices have collapsed, you can just walk away. And since few Chinese pay taxes in this "voluntary system," most of your "earnings" are also tax-free. So why does the government put up with this?

There are two reasons that I can come up with. First, corruption in the Chinese government is about as common as smog in Beijing. The skids are being greased at every level. Capital is being provided for these companies via share sales in the global markets to keep the party going after the loans run out. Basically, this is how business is being done. Now, this may not be the case for every Chinese company, but elements of this type of chicanery cannot be isolated incidents or the number of bad loans would be much lower.

The second reason, and just as troubling, is that the government cannot control the new capitalism that has been unleashed across the country. People are seeking a better lot in life and finding it through commerce. With 1.3 billion people, it could be an ugly scene. So, the government is filling the trough of liquidity, basically subsidizing the entire urban population, to avoid an uprising. Money is flowing, goods are being sold, buildings are being built - and all within an artificial cost structure.

While Beijing has a relatively short history of modern capitalism, Shanghai has a long relationship with money. Known to some as the Pearl of the Orient, and to others as the Whore of the Orient, Shanghai is truly one of the world's great metropolises...when you can see it.

When you CAN see the city, you see modernity surrounding you. Subways, massive freeways that fly through the city center, suspended 40 feet above ground, a Maglev train to the new airport that I clocked at 430 kilometers per hour, and a port second-to-none. In my estimation, Shanghai, home to over 13 million people, has more skyscrapers than Manhattan. It is also more polluted, more gridlocked, and just as much fun.

I thought Beijing had the best markets, but Shanghai has even better ones. Here you can find all manner of goods and services that are available in the world's largest and most cosmopolitan cities. Five Star hotels abound, modern theater, huge malls with every imagineable offering from Europe and the United States, a McDonald's around every corner. If it wasn't for the smells and strange rooflines, you could very well be in any modern capital. (Speaking of McDonald's, The Economist magazine has long put out a Big Mac Index as a measure for valuing whether a currency is over or undervalued. I have been using this index as a guide for more than a decade and it has proven quite accurate. My Big Mac meal in Shanghai set me back $2.19 - about half what it would cost in the United States. This is a good indication, along with the 15 cents I paid for a Snickers bar and the 30 cents I paid for 16oz Pepsi, that the Yuan could appreciate quite a bit from current levels).

Of course, the lower strata of the population do not see it this way. As in any big city, there is a lot of poverty in Shanghai, and it is in your face everywhere. Parents with invalid children begging for pennies, people walking around picking every trash can clean of its putrid treasures - you name it, and you will see it in Shanghai.

Shanghai is almost not China. There is very little overt sign of government control of this commercial Mecca. It bustles like Manhattan, entertains like LA and offers Miami-like temperatures and beaches. It is China's version of Laissez Faire economics. Anything goes here and the aura of the old money, first made by the large opium houses, abounds. On the streets, you are as likely to see a Bentley as a rickshaw. Shops range from opulent malls to back alleys where one can still score knock-off Gucci and Louis Vuitton purses (about $10 a pop if you bargain hard enough.) This selling of pirated and knock-off goods is enduring China's version of a crackdown. Instead of selling openly in the markets, you are led down a series of back-alleys to small rooms with all the goods on display. China will pacify the West on the surface, but underneath, it's business as usual.

Spending a few days in Shanghai almost made me a believer in the China miracle. It was a real city, with real history and real money. But, it was just one city in a sea of billions of people, many who have yet to experience a working toilet in the 21st century. China has four such cash cows: Hong Kong, Shanghai, Macau and soon Taiwan will be sucked into the fold. None of them are too happy with being associated with a government that still tries hard to control every facet of life. It isn't working, and I think China will go the way of the USSR - a weird sort of capitalism with no looking back.

China is a conundrum. It defies economic principles with low inflation, high growth, and huge money supply, and a socialist government all in one...someone is lying somewhere. My advice on investing in China is this:

1) Trade Chinese stocks and look for emerging market like crashes as buying opportunities.

2) To really profit from China, fly over with a few suitcases and spend as much as you can, buying goods at artificially low price

At 9:49 PM, Blogger bubbleman said...

china is a ticking time bomb of fraud...investing in china is like putting a crack attic in charge of your savings will be gone before you know it...

At 11:30 PM, Anonymous beachbum said...


(I called the number on the sign: it's going for $2500. When I came back to the condo, I inquired, how much does a 3 BR with ocean view go for? Oh, somewhere between 900k and $1 million.)

At $1M, a buyer would be shelling out b/w $7-8K a month for the privilege of living in a $2,500/month rental. Ah, the joys of California beachfront ownership. Do these buyers not own calculators?

At 11:44 PM, Anonymous funwithnumbers said...

---a buyer would be shelling out b/w $7-8K a month for the privilege of living in a $2,500/month rental.---

I'm sure the buyer would say that appreciation will make up the difference. Maybe. But let's say a buyer ends up living in the condo for 5 years. Assuming 3% annual rent increases (probably less), the renter would have saved $330K in living expenses after seven years.

Of course, the buyer would have built up $62,000 in equity, so the net gain for the renter would be $268K. For the buyer to simply break even after 5 years, the condo would have to appreciate to $1,335,000 (factoring in 5% sales commission)---or a 33.5% gain.

To make real money, the condo will have to gain 50-60% over the next 5 years.

Now a gain of 6% a year sounds like child play when you compare it to the 300% gain over the past 10 years. But 7% is about the long-term avg annual gain for RE in Calif over the past 50 years. Do buyers really believe that we will just go back to the avg and we'll just forget about this little 300% blip?

At 12:05 AM, Anonymous Anonymous said...

I suggest we all read "The Alchemy of Finance" by George Soros. What we are seeing is a textbook boom/bust credit cycle.

The whole world is one colossal bubble. I honestly don't know what it will be like in 10 years.

Maybe "The Crisis of Global Capitalism: Open Society Endangered" will give some insight.

Soros is more than twice as wealthy as Trump. And he does not care about "reality" TV.

At 2:41 AM, Anonymous Anonymous said...

Anon 12:46.

Yes, yes a thousand times yes!!

I live in Australia but was in the UK for a couple of months last year helping my mother deal with her sister's estate. The exact phenomenon you describe was just finishing up there, where the price rises in the London area had fed through to massive percentage rises in the cheaper areas as prospective RE moguls used their London gains to leverage into multiple property ownership elsewhere.

The same thing has happened in Australia, with price rises in Sydney/Melbourne flowing outwards to the rest of the country.

Be assured that when the bubble bursts these outlying areas are usually the FIRST to fall back (along with inner-city Hi-Rise apartments) because Landlords will sell out faster than owner-occupiers.

By the way, for all you comparative pricers out there my Aunt's house was built in the 1830's as an agricultural labourers cottage, renovated kitchen and oil-fired heating added in the 1960's, bathroom renovated in the 1970's and a study, second toilet and single garage added by my Aunt in 1992. 3 small bedrooms upstairs with no built-ins and all the bathroom facilities downstairs. About 1250SF plus garage, semi-detached (Duplex), along a minor country road in the English midlands a mile from the nearest bus route and backing on to a working farm. (The actual field behind the back hedge is in permanently fallow due to EU subsidy factors, so by English standards this is actually quite a desirable location.)

This was valued for probate at 190K British Pounds, and the local Real Estate agent (who were not the valuers) paid Mum 188K as a fixer-upper. That's about 355K US Dollars.


At 4:28 AM, Anonymous Anonymous said...

Anon 8:49/beachbum/funwithnumbers;

Check out my post on the "Miami Condos Inventory . . .". Maybe Ben will pull it out and start a thread with it.

Basically a Sydney, Australia apartment bought for 2.47 million in late 2003 is on the market today for 1.65, and failed to reach reserve of 1.5 at a recent auction.

Now THAT would hurt.



Post a Comment

<< Home