Housing Madness
Thought I’d devote a post or two on the ongoing housing bubble in the DC metro area that I’ve been keeping an eye on for the past year or so. I’ve been noticing at how ridiculously inflated the asking prices and tax assessments are for properties around the area that aren’t even close to what they should be. I’m no building contractor or structural expert appraiser, but there’s simply no way in hell these houses are worth as much as they are asking for. Like any other economic good or service, the market is determined for how much a prospective customer is willing to fork over for ownership. Unfortunately, I think the current housing situation is a prime example of how impulsive and stupid the American consumer is, following the herd into the illusion of home ownership as a means of lucrative investment, and status symbol.
I think the market is tanking, slowly but surely right now. There seem to be a lot more houses popping up for sale around my neighborhood, in fact there are right now 3 properties for sale on the street I currently live on, one of which sat on the market for about 6 months without any buyers, was taken off the market, and put back on again. the other two just went for sale end of 2006. A quick search of tax records lists the 2008 Assessments for the properties on my street:
$739,530
$752,150
$684,490
$726,730
$722,730 (For sale?)
$752,150 (For sale?)
$722,180 (For sale?)
Most of these houses are painfully small for the assessed price, granted they are in a really nice neighborhood and close to the metro, still you really have to be an idiot to be willing to pay that much money for such a small and relatively run down property. Especially when a further search in tax records reveals that these properties sold for about half or even a third as much just 4 years ago. Crazy. Of course there are some people who like to say that we all should’ve bought back in 2003 or 2004 before the market took off. this means nothing, since relying on hindsight (and luck) is such a bullshit point to make.
Unfortunately our society is brainwashed into making financial decisions driven by fear of exclusion or being perceived as being behind the curve of the joneses. I heard a lot over the past couple of years from people that made a lot less money than me that I was in danger of being priced out of the market if I didn’t buy soon, that I was putting to waste the my good credit and not taking advantage of the shiny mortgage that my professional salary would qualify me for.
Now that it seems like real estate is now a depreciating investment, and foreclosures are running rampant nationally due to predatory and fraudulent loans, I’m glad that I stuck to my guns in saying that “there no fucking way that tiny 3 bd house on the corner is worth $1.4M.” and “theres no way you can convince me that going that much into debt is worth it.”
Linkes 3/8/07
More conspiracy theories, but it Can’t happen here.
War game theory in economic terms, Raptors in Okinawa.
The system works? who’s complaining?
I like the free books part
Even spooks are turning green turning green, Job outlook not good in 2007