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Guest
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Posted: Sat Dec 31, 2016 5:19 pm GMT Post subject: |
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The lowly renter would like to thank everyone for their responses!
Laughing through my tears as it is assumed that perhaps I am being pressured by baby boomer parents. I "am" a baby boomer and lifelong renter. Via cheap rent and living beneath my means, I have saved enough to pay cash if necessary.
But not at these inflated prices! e.g. "they want 500K for that dump?"
Agree a "crash" or correction on the horizon seems likely. Yet if the Fed does not raise interest rates in 2017 (and history has shown us, they may not!) does this mean another year of rising prices and low inventory unless one moves an hour away from Boston (or decides to buy in Worcester)?
https://worcestermag.com/2016/12/22/worcesters-woes-foreclosures-rise/48325
Then, as I raise my glass to 2017 I recall this foreboding article in the Globe earlier this year:
https://www.bostonglobe.com/business/2016/01/07/think-boston-housing-expensive-now-wait-five-years/6qTjKdarDT2AdZkpqrJWaJ/story.html
Happy New Year! |
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RealEstateCafe
Joined: 11 Dec 2007 Posts: 234 Location: Cambridge, MA
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Posted: Sat Dec 31, 2016 6:58 pm GMT Post subject: |
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Lowly renter, "living below your means" is my kind of hero? HGTV wouldn't agree and neither the president-elect, but both Thoreau and Millard Fuller, the founder of Habitat for Humanity, would applaud your "discipline." That's a spiritual perspective based on what Fuller called a "Theology of Enough."
If the Fed does not raise interest rates in 2017, some will continue to rush over the cliff like lemmings every time a listing agent says, "we have multiple bids." Before you or any other Boston Bubble readers take the plunge, take a look back:
http://bit.ly/iCoveryMA
Then look forward. This started out as a comment here, but turned into a blog post:
Defensive homebuying in 2017: Can you future proof homebuying decisions?
http://bit.ly/FutureProofRE2017
Happy New Year! _________________ Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com/blog
http://twitter.com/RealEstateCafe |
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RealEstateCafe
Joined: 11 Dec 2007 Posts: 234 Location: Cambridge, MA
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Posted: Sat Dec 31, 2016 7:17 pm GMT Post subject: |
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Quick correction: The question mark behind "my kind of hero" should be an exclamation point!!!
Quick update: @FormerArlingtonian, think this is another benchmark for the End of Real Estate Cycle is near!
Boston Globe's most read story today:
Can a rookie house-flipper pocket $1 million?
http://bit.ly/FlipprHype
Obviously a graduate of Trump University or plausible scenario? Any BostonBubble readers planning on Flipping in 2017? Got experience, or just reading headlines like the above and page 1 story in the WSJ on 12/28/16?
House Flipping Makes a Comeback as Home Prices Rise
Number of investors flipping homes returns to precrisis levels; big banks get back in the game
http://bit.ly/FlipREvival2016
EXCERPT:
"House flipping, a potent symbol of the real-estate market’s excess in the run-up to the financial crisis, is once again becoming hot, fueled by a combination of skyrocketing home prices, venture-backed startups and Wall Street cash." _________________ Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com/blog
http://twitter.com/RealEstateCafe |
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Former Arlingtonian
Joined: 23 Oct 2013 Posts: 141
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Former Arlingtonian
Joined: 23 Oct 2013 Posts: 141
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Posted: Mon Jan 02, 2017 7:42 pm GMT Post subject: Profit and taxes |
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Flipper articles never include the TAX consequences.
Less than twelve months and the income will be taxed at the highest rates.
Never a mention of how much money the Flipper invested, plus the time, plus the wages to pay her helper/construction guy!
Huge risk of finding yourself holding a property or two with the music stops.
I feel like and idiot for missing this wave! I never fully appreciate how crazy a market can get because of my need for safety.
Oh well! |
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lendingtweet.com Guest
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Posted: Mon Jan 02, 2017 8:28 pm GMT Post subject: Re: What's really going on in Boston |
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victorgbishop wrote: | hi,
I was a victim of the past housing bubble, where my wife and I purchased, 0% down, in Brockton on an over priced 2 bd condo. Short sold in 2012. 4 years removed considered 1st time homebuyer instead. Now we've rented a place in Roslindale (and would like to stay in Boston-south/JP/HydePark, West Rox/Dedham) and are looking again but this time for a SFH.
As of this week, I've beginning to notice a few newly built home sitting on the market. These are houses that have just been built and I believe are over priced. I saw a 3bd, 2bath new colonial, priced at 499K in Hyde Park, but after 2 weeks down to 479K. I've seen this happening a bit more frequently.
I am asking the Boston Bubble community, what do you think will happen within the next few months? Will housing prices continue to fall? Should we wait another 6 months to see how this thing actually shakes out?
Looking for advice |
We don't have the same bubble as the past not to say we could have a different future bubble with other factors. The last bust was fueled by unqualified buyers with easy payment loans. The new rules for loans limit home buyer leverage and sometimes qualifying.
In your situation, work with a lender to become pre-qualified and a realtor to locate a home. For the property you are looking at, it would seem ripe to make an offer. The bank appraiser will validate the offer. Houses that are prices right are selling withing 5% of the asking price. Waiting too long may work against you since interest rates are trending up. A rise in rates would limit your buying power.
If you need more help, contact me directly. Joe |
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Guest
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Posted: Mon Jan 02, 2017 10:07 pm GMT Post subject: Re: What's really going on in Boston |
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I'm praying for a continuous uptick in interest rates that will hopefully translate into lower prices, but worry this could take more than a year or two... |
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Former Arlingtonian
Joined: 23 Oct 2013 Posts: 141
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victorgbishop
Joined: 03 Oct 2016 Posts: 25
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Posted: Wed Jan 04, 2017 2:44 pm GMT Post subject: Higher rates and higher home prices |
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just saw this posted....http://abcnews.go.com/Business/wireStory/home-shopping-2017-expect-higher-rates-prices-44542997
Quote: | Smoke predicts mortgage rates will reach 4.5 percent in 2017. Other economists expect rates will remain above 4 percent but not go beyond 5 percent next year.
That's still low compared to the last decade. Rates didn't dip below 5 percent before 2008.
So someone looking to buy a home in the next few months doesn't need to panic, said Svenja Gudell, chief economist at Zillow, a real estate information company.
"My advice to buyers would be to not freak out and feel a sense of urgency," she said. "If you aren't able to buy a house at 4.5 percent, you probably weren't able to buy a house at 4 percent."
The stakes are higher for buyers in expensive markets, where housing can eat up a much larger share of household income. |
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Former Arlingtonian
Joined: 23 Oct 2013 Posts: 141
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Posted: Wed Jan 04, 2017 3:02 pm GMT Post subject: Best time to buy when rates are high |
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What the home buyer/home shopper doesn't get is it is best to buy when interest rates are high!
The folks with the most home equity in their homes today are folks who bought when interest rates were higher 6-10% range.
You are able to buy homes at lower prices when mortgage rates are high and you will be able to refinance as interest rates fall.
When you buy a home at 5000 yr low in interest rates - you will never have an opportunity to refinance and if you are forced to sell during an interest rate spike you will not be able to sell your home for what you paid. |
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unclemat
Joined: 25 Nov 2013 Posts: 18
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Posted: Wed Jan 04, 2017 9:16 pm GMT Post subject: |
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Former Arlingtonian, it's generally true, but I think high rate environment means high inflation.
Naturally, somebody who bought in Boston area in late 1970, and even in 1980s made out like a bandit. The mortgage stung, but then real wage inflation made pay off - with then reduced interest rates after refinancing - a breeze.
It all depends on your horizon. I was a real estate sceptic and kept renting in Boston area between 2007-2014 and kicking myself for not buying earlier. I am buying an investment property now, what presumably is a peak, but with a longer horizon (15+ years)and a modest but positive cashflow, I am hoping to come out ok. Of course we'll see how it goes. |
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Former Arlingtonian
Joined: 23 Oct 2013 Posts: 141
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Posted: Wed Jan 04, 2017 9:33 pm GMT Post subject: Illusion |
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Uncle mat
I respectfully disagree. Lots of people are piling into real estate for cash flow investment. What happens when recession hits and cash flows slow. There is a chance that I will be wrong and no more recessions. |
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unclemat
Joined: 25 Nov 2013 Posts: 18
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Posted: Wed Jan 04, 2017 9:57 pm GMT Post subject: |
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Most certainly the risk is there. But if the property is in a town with a short rental supply it, it is unlikely the demand will fall off the cliff.
Of course all depends how severe the recession is. I waited for the perfect disaster so long that I overlooked the great recession of 2008... |
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Former Arlingtonian
Joined: 23 Oct 2013 Posts: 141
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