Just information for people to read..
http://realestate.yahoo.com/promo/cities-with-dangerously-falling-home-prices.html
as always just my two cents
Alex
Yes very interesting. It shows that what goes down does not come back up straight away. I deal in Texas because it is a very stable housing market. I think some of the markets mentioned will come up eventually. The question is to you want to invest or speculate
Nigel Kibel | Property Know How
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You could take a portfolio view and have a small exposure to volatile markets with a larger exposure to more stable ones. That’s what is behind the willingness of many Aussies to look at higher risk US property. But why buy into a downtrend when you could choose a market that looks like it’s at the bottom?
David
Nigel Kibel wrote:Yes very interesting. It shows that what goes down does not come back up straight away. I deal in Texas because it is a very stable housing market. I think some of the markets mentioned will come up eventually. The question is to you want to invest or speculateThis is a very good question, invest in a place like texas that really never moves up or down as any surge in demand causes builders to just build new construction for what the exisiting stock sells for, therefor never any real apprecaition unless you hold 10 to 20 years. Property tax's are a killer to cash flow.
Or invest where markets were crushed and replacement value far an exceeds the purchase price of the existing stock. And given the 2 markets rents are about the same for quality of home and size.
Which is better one market that can clearly rise again. Or the other market that never moves much…
60,000 dollar question for this evening. thoughts?? EH
Nigel Kibel wrote:Yes very interesting. It shows that what goes down does not come back up straight away. I deal in Texas because it is a very stable housing market. I think some of the markets mentioned will come up eventually. The question is to you want to invest or speculateNigel where in Texas do you deal in. One of our clients out of Perth has an interest there.We only deal in Atlanta and Charlotte Markets. I think all the markets that investors are buying ( except war zones areas ) we are all speculating on appreciation factor. So I look for cash flow today ,and what are the positive factors for the appreciation markets for tomorrow.
Not sure that any one in the USA can be an expert on when the values will come back.
Sincerely
AlexI like the Atlanta property market where if you are buying very well can purchase at around $25-30 per sq ft and I believe it costs around $80 sq ft to build, well below building costs.
Could not agree more, there is no point chasing growth as who the hell knows when the US market will recover, cash flow is the key for my strategy and the Atlanta market provides good returns.
WI
From my point of view, texas has no real up side as market remains level, and if you can get the same rents on a house in other markets that got crushed and the entry point is 50% of texas, seems to me that if you had a hiccup in texas, which when Oil is down so it Texas the market has peaked and you risk some pretty good deflation, Where as other markets of the country the deflation has already hit and there really is only upside.
house that rent for 900 and cost 40 or 50k in Atlanta have bottomed out there is no arguing that point.
House’s that cost 100k in texas and rent for 900 could move down very easily and certainly will not move up in any significant manner as new construction homes easily compete with the rental stock and what are homeowners going to buy a nice brand new home or some house thats been a rental for 5 years. Americans have a real affinity for new construction.
You factor in the one of the highest property tax rates in the country, Foundation issues with the clay soil and there are certainly risk’s involved.
I have one client that sold 30 of his rentals in texas as they constantly made no money. And there is a pretty famous US investor from LA Bruce Norris who talks about the same problems in Texas.
And its a myth the market did not go down…. I am working with a client that works for Intel and transferred to Portland, He bought 4 years ago and to sell he sold for substantially less than he paid. property did not drop 50% but it sold for 30% less than he paid for it 4 years ago. And being an Intel engineer I am sure it was a good area.
JLH
The interest was a mining project in San Antonio . That is what our client asked about.
Jay you know me happy to be in Charlotte ,with Atlanta our secondary market. Always curious to see how others see the Texas market and why…
Alex
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