Quote:
Originally posted by Cassie
you are not kidding. my best friend just bought a 1/2 mil house. it was appraised at 10k more (usually appraisals come back at purchase price). in a year, this house is estimated to increase 100K. in 7 years, it's estimated to be at 1 mil. granted this is an estate home and they are still building in the area.
what a great part time income!
|
The real estate market is likely to see some leaner days ahead. The developers especially have been buying land in speculator quantities. It is going to soon come back to haunt them if the rate increase cools the new home starts. ARMs represent a much larger portion of the mortgage market and Greenspan is preparing to bring the pain for those folks. US household debt is at one of the highest points in history and when the rates move up, you will see alot of problems managing that debt.
I think what you will see is that the areas that experienced the fastest appreciation (like Boston and San Francisco) could be problem areas. One only has to look at what happened to property values in Honolulu in the 90s, when they experienced multiple years of depreciation, to see that there can indeed be a housing bubble that can burst.
Whoever told your friend that in 7 years his home will double has questionable analysis. I sure hope I am wrong, as I am sitting on an acre in Miami, and if there is going to be any bubble bursting, Pinecrest in Miami Florida will likely be popping with the rest of them.