Is this happening in your area?

[Don]

From todays local online newspaper:

*In Lee County, the median price of a single-family home sold by a Realtor hit a record $235,200, up 37 percent in a year. The number of homes sold increased 19 percent to 890, the Florida Association of Realtors reported Wednesday. The median is the price at which half the sales are higher and half are lower.*

My brother and SIL just completed the refi of their 4 y.o. home, it was contracted at $130k and now it is appraised at $220k. Bear in mind they live in a *tract home*, there are 100's of them sitting around. So what is causing the value of these homes to spiral upward? This is going on with raw land too, prices going through the moon.

Is this stuff going on in your area, if so, what do you think is causing it? How long will this *bubble* last? What will be the initial signals that the air is being let out of the bubble? In 5 years will there be massive foreclosures as overinflated home values collapse under the strain of inflation and rising interest rates along with corporate downsizing and mergers? If this occurs, and with regard to the fact that most homes are slapped together like cheap Walmart knockdown furniture, what will happen to all of these disposible homes in a few years, after the are foreclosed and no longer worth the money they are appraised at? Will suburbia turn into a vast wasteland, an extension of the urban plight, wrought with crime, downtrodden citizens and rental merchants?

"If everybody agrees that a particular thing is worth 10 bux then its worth

10 bux, but if everyone suddenly agrees that that particular thing is junk....."

--gs, 2005

[Pierre Levesque, AIA]

So long as the royalty project I'm working on gets finished and sold before the bubble bursts I'll be happy...

[o8TY]

I heard or read somewhere that GM has a market cap of $16b but is $300b in debt. Go figure.

[Pierre Levesque, AIA]

No, the one I asked you guys for advice on a few weeks ago... I ended up breaking down the agreement into base services of $25K +2% of profit for a guaranteed 200 hours service. Then for every 50 hours more, 1% additional up to a cap of 400 hours (200 to 250hrs-2%, 250 to 300-3%, 300 to 350-4%,

350 to 400+ -5%). Projected profit is around 1 mil (purchase 1mil, construction budget $700-$1mil, projected sell $2.7-3mil). There is risk all around but so long as that bubble doesn't burst it should be quite profitable... That's based on today's sell prices for that quality/quantity in that area (Hewlett Harbor, NY waterfront). If the bubble bursts then everybody loses and compensation on this project will be the least of my concerns as work in general will dry up... UGH... perish the thought...

The "twisted sister" project was shut down for the winter after the owner went "cheap" on snow removal... didn't go for snow removal AND sand in the slippery areas. The driveway is 3/4 mile in and gains 300 feet in elevation. The main bend cuts up a 30% incline and that's where the crew and van went for a slide ride once. The job will be re-opening in a couple weeks though last night's 10 inch dump of snow won't help. Otherwise, it's going slowly... All the windows are in and the building is enclosed so once it re-opens, it'll all go pretty fast. I'll post pics after I go on my next site visit.

[Ron]

Don, its the same here kitty corner across the continent. . .

from:

The average price of single family homes in Greater Victoria hit a new record high of $433,939 in February."While prices have been rising it?s important to note that the average price for single family homes for the last six months at $408,821 was well below the monthly average for February and the median price last month was even lower at $385,000. Equally important is that nearly 40% of single family home sales last month were for less than $350,000."

Whats 'letting it happen' here is a more business/investment-friendly government (provincially) and obviously lower interest rates. Plus this is the nicest damn place in Canada to live, and we're getting a lot of 'Mericans too, they want low crime, quainter place to live or be a second home. Lots of celebs that want to be out of the spotlight too, even Pamela Anderson, Michael J Fox, and David Foster aren't fussed over when they come home.. It doesn't have Florida's or Californica's heat but we also don't get hurricanes and floods...

Ron PS that high tea price included (I believe) all you can eat scones and pastries :-)

[o8TY]

R4??

Its almost bun time here.

[Pierre Levesque, AIA]

Day before yesterday everyone around here was walking around in short sleeves... t It was a little cloudy but th temp was in the mid 60's.

What a difference a day makes.

[o8TY]

You may have, but I do neither recall asking for it nor receiving it. In any case I am quite content with my access to R2000.

snip

[o8TY]

And its less than five years from the 80th birthday of the Great Crash.

[George Ferreira]

Hi everyone..

I had to respond to this because here in Bermuda real estate is in a similar situation. Home prices have reached at least the 1 milliion mark for a decent minor sized 2 bedroom house and a small plot of land. It is not uncommon for homes to be even more expensive. Right now in the local papers there is much talk about sustainable development and how we can preserve what we can. Yet still the Real Estate developments still go on. We have a government corporation that takes care of our main city, and they're in the process of building a new hotel with a few other people. Also, in our local paper there's been talks of modular steel frame houses for those seeking affordable housing ( a very hot topic in Bermuda as lots of people can't even afford rent, with rents also sky high.. there are executive houses going for as much as $20,000 a month, but rents typically start around 1800 to 2500 for a one bedroom apartment.).

I'm just wondering if I should take a wait and see approach to the real estate market. Even though rates are very low down here(we're pegged to the dollar. We're close to the USA and mostly influenced by what happens there) it just makes one wonder if it's ok to buy a home now.

The only other concern I have is I'm still thinking of becoming an architect, but after I graduate would the bubble still be there?

Just needed to put forth those questions..

George