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dynosore


Mar 12, 2007, 12:39 PM
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Subprime mortgages collapsing DUH
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You mean my three bedroom home isn't really worth 550k (even though it could be built for 200k new...meaning you paid 350k for a LOT)? A fool and his money...got GOLD? Any subprime shorters out there?


madriver


Mar 12, 2007, 1:43 PM
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Re: [dynosore] Subprime mortgages collapsing DUH [In reply to]
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let me know where you can build a decent sized (3) bedroom home for 200k? I'm always looking for oportunities.

Bob


dynosore


Mar 12, 2007, 5:09 PM
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Re: [madriver] Subprime mortgages collapsing DUH [In reply to]
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100 bucks a square foot to build here in the Midwest, 120 if you want someone else to do it. That gives you a 1800-2000 sqft ranch, plus 50k for a lot = 250k. Note I broke it down in the original post. Point is, the bubble is bursting, and a lot of folks aren't suprised, including me.


madriver


Mar 12, 2007, 5:27 PM
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Re: [dynosore] Subprime mortgages collapsing DUH [In reply to]
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dynosore wrote:
100 bucks a square foot to build here in the Midwest, 120 if you want someone else to do it. That gives you a 1800-2000 sqft ranch, plus 50k for a lot = 250k. Note I broke it down in the original post. Point is, the bubble is bursting, and a lot of folks aren't suprised, including me.


...wow!! $120 per sq. ft....!!! I live in a different world.....$300-350 per ft here. And there is no bust here, property is still bidding up. So NO I don't see it...and what does a sheet of plywood and SP#2 cost per ft. where you live? At $120 building cost per ft. with the cost of drywall, plywood, and lumber I would think that number is more like 1995 prices.

I think it depends on where you live and location, location, location. There may be a slight correction, but as long as interest rates are low, and metro area commutes are intermanible, unemployement is low, real estate is still the way to go.

I never understood why people would opt for ARMs when fixed rates were so low anyway. The people that got in the market on low or no interest arms that are now having to pay the piper are not what I would consider a market correction, only a clearing of dead wood. I was buying homes at 13-15% so 5-7% is still a good investment here in DC when you are looking at 10-15% return yearly (low average) more like 20-30% over the last 10 years for real estate.

Bob


(This post was edited by madriver on Mar 12, 2007, 5:38 PM)


dvd


Mar 12, 2007, 5:28 PM
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Re: [madriver] Subprime mortgages collapsing DUH [In reply to]
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get of of the coasts, market prices fall


dynosore


Mar 13, 2007, 7:28 AM
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Re: [madriver] Subprime mortgages collapsing DUH [In reply to]
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The real estate market is in for a train wreck, mark my words. After every bubble comes the burst.

I paid 225k for a 2500 sqft. home (built in 70's but totally updated inside and out) with finished basement and 2 car garage, on a 1/2 acre city lot in a great neighborhood. One of the few good things about living in Michigan. I built my first house here in 1999-2000, and it cost me 90$/sqft, and I used quality materials, i.e. spa tubs, poured basement, etc.

http://biz.yahoo.com/...3/27859_id.html?.v=1

If you're primarily in real estate, I'd look at diversifying, JMHO. Everything moves in cycles, and the real estate cycle is about to repeat the early 80's IMO. Joe Sixpack just can't afford his payments anymore, and something's got to give.


madriver


Mar 13, 2007, 7:59 AM
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Re: [dynosore] Subprime mortgages collapsing DUH [In reply to]
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I think I am insulated from extreme market changes here in DC. The outlying suburbs will have some big hits in terms of a market slide, but within a 2-3 mile radius of DC the real estate market will hold it's own. As far as construction costs go, again unless the price of a sheet of plywood is that much lower in Mich. vs. DC area I don't see how anyone can build for less than $200-250 a sq. ft. The cost of living and labor rates here push it to $300-350 a foot. I'm in construction/ Design Build so I see the trends about 6 months to a year before it hits the real estate market. The current inventory in the DC area is low and depending on where you are, listings are still getting multiple bid-up offers. It is slowing down but no bust yet.


Again, the banks and people that got in with 0% down and a below prime arm are going to get slammed... Duh.....all the outer suburban growth of overpriced million dollar homes will get burned big time....duh....property in locations that traditionally have held and gained in value will be worth even more. The speculative outer burbs were always a risk.
DC is almost fool proof when it comes to reccessions and real estate market dumps.


dynosore


Mar 13, 2007, 11:24 AM
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Re: [madriver] Subprime mortgages collapsing DUH [In reply to]
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Your builders must have REALLY high margins, good for them...but you CAN have a house built in Michigan (and I suspect a lot of the Midwest) for
$120/sqft (I'm not including property cost, just labor and materials).

http://www.midlandonline.com/278656

Right down the road from me. Lots in this neighborhood are ~100k, so you're paying 449k/3234 sqft = 139$/sqft, this includes granite countertops, 3 car garage, the works. You CAN have a quality home for 120$/sqft around here. Bear in mind this includes all your hookups too. I know several builders, and I've built myself too.

Edited to say: no place is recession proof when it comes to housing, though some are better than others and you're in a good area. If those McMansions around DC get foreclosed and go up for sale on the cheap, you don't think it could affect DC proper?


(This post was edited by dynosore on Mar 13, 2007, 11:29 AM)


bobd1953


Mar 13, 2007, 11:33 AM
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Re: [madriver] Subprime mortgages collapsing DUH [In reply to]
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In reply to:
DC is almost fool proof when it comes to reccessions and real estate market dumps.

Because of an endless supply of over paid government workers.

Most parts of the country don't have that luxury.


madriver


Mar 13, 2007, 11:39 AM
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Re: [bobd1953] Subprime mortgages collapsing DUH [In reply to]
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bobd1953 wrote:
In reply to:
DC is almost fool proof when it comes to reccessions and real estate market dumps.

Because of an endless supply of over paid government workers.

Most parts of the country don't have that luxury.


no doubt Bob...that and Defense/ Homeland Security contractors. I agree that here in DC we are very lucky to have a stable economic base.


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