News of rising prices in US want to put a few thoughts out to bring this into context

WE are all hearing about rising prices in the US.

While this is true in most markets the numbers need to be understood and I am sure Freckle could explain this better than me but I will just use my every man approch to give some perspective.

I the US we have about 6 ot 7 distinctive markets.

1. West Coast   California , Oregon Washington.

2. South WEst   Las Vegas  Pheniox

3. Texas  we all know TExas is a huge place and a market unto itself.

4. Upper mid west   Chicago Detroit  Ohio  PA

5. Upper East coast   New York Boston Washington etc.

6. South East   Atlanta and we can lump florida in there as well.

7 Deep south   Tenesse Mississippi Alabama and i will lump in St. Louis and KC as those markets are similar in nature.

Now when we hear all this press about rising prices in San Francisco and LA Oregon and Washington what are we talking about ?  we are talking about HOMEOWNERS buying homes for 10 to 20% more than they paid last year.. This is a huge deal.. this is not investors with cash creating false markets this is TRUE appreciation period. And this is the closes thing to what Aussies know and understand about real Estate this is what happened in your market. So in SF were you have average sales price about 600to 700k and you have 20% bump in prices well its real money at that point.. Our market in Portland oregon rose 15 to 20%.. Case in point one housing track were I built  14 homes. over the last few year.. 18 mon  ago I sold a 2500 sq ft home for 350k  my wife just listed it for 430k and it got showed 5 times first day.

Same with New York Boston areas.

When we talk about Vegas and PHX there is a mix of investor driven price rises but also a heck of a lot of owner occ activity so this again to me is True appreciation. Large hege funds created a lot of what Happened in PHX they bought thousands of homes.. so will be interesting to see their exit stratgy and what that does to the market prices for now it caused nice increase in values because of lack of product.. Also a buddy of mine is buidling homes there and is doing extemely well.. As American do love a new home.

In Texas the markets again are a lot of ower occ and investor so its a blend. buidlers are killing it with new construciton there. Investors buying lower end older product are holding firm and a lot of good buzz in TExas.

Upper mid west,I will take chicago out because it by itself has as big an economy as all of the rest of the area combined and prices are stable with a good mix of owner occ and investor chicago has not been overloaded with foreign money the locals buy most of the rentals there which I think says alot about that market.

The rest of the Rust belt Detroit anyting Ohio  Pa  this market has been driven by cash buying out of area investors for years because cost of entry was so low and the returns on paper looked so great,, AS we all know those returns on paper are just that.. its completly hit or miss wether you get a good one or a money pitt.. the values that have risen in these markets are false they are driven by wholesale prices rising from say 10k a house to 11.5 k next year so zillow and truila pic it up as 15% gains in price. which is true but is any real money being made I think not.

Now Atlanta and south east.. here the markets even on the wholesale side rose dramatically this Is because of Blackstone and Coloney capital as well as a few lessor known hedge funds. I personally witnessed this. HOmes I was buying at foreclosure sales in Atlanta in the summer of 2012 for 40k  the exact same home age sq ft etc. in November of 2012 were being bought by the hedge funds at court house steps for 60 to 70k  a that point I exited Atlanta and sold my 45 homes to a hedge fund and took my profit.. So yes in the right parts of atlanta if my friend you choose well paid a fare price  ( not double what it was worth in 2011 oe 2012 ) you have made true appreciation. 

Florida,, Same with most parts of Florida the wholesale prices have risen.. I bought foreclosure down in Ft. myer for 25k a house in 2010 and I am sure minimum bids on those now are closer to 50k. per… I am very active in Orlando and the wholesale prices there have risen because of competition from Hedge funds at least 10 to 20%  so a huse we would have picked up for 40k is now46 to 48k % gain is high dollars are still low.  Some nice retail is comng back in parts of Fla as well.

Deep south KC St. Luis

Markets are stil the same in my mind.. Low end rentals in KC ( we have talked about those ad naseum) if you can make them work god bless you .. I still think you need to be Engelo and move there is your go to make any money on them and then you only make money flipping them wholesale to turn key investors.

Ok thats my basic take on what your seeing in the news… Is there price apprecitaion in  US  absolutly is it reginalized YES.. will all investor accross the board cash in NO. depends on where you invested.

Lastly the very best appreciation markets in the US   WEst coast upper east coast are really just like OZ  neutral to negative gear but you can make 100's of thousands on a rebound in market.. If I told you 18 months ago you should buy a house in Portand for 300k that rents for 1700 hundred a month no one from OZ would have even considered it.. cash flow did not stack up to what you hear about in the Low end markets.. WEll the reality of the market is you would have had 100% performance on the rental side with rents paid like your used to on the first of the month electronicaly.. your house would have rented to white colar professional who would at worse just put holes in the wall when hanging pictures. And you could have sold that house this year for 375 to 400k after commish made  50k or so.  So whats better buying low end trash flow and being frustrated and in all likely hood never sell your home for what you paid for it or buy nicer upper end have neutral gearing but have true asset that will go up as markets correct.. That is the investing question.  And in each of the 7 markets of the US you can either go low and take risk or go high and usually come out better.

HOpe this gives so pespective on % growth in the US  markets that are being stated on the news.

Now Freckle will follow up with Charts and graph to support my positions.

And as always all spell errors are intentional  spell check does not work in the US.. and the site is unstable for me after the second paragaph.