Liberty On Bluff Creek townhomes in Chanhassen (real estate, foreclosed)

[1stpontiac]

Originally Posted by mnota

One of my realtors said, buying a house these days is like buying a car - depreciation is guaranteed, you just need to decide how much, your moving can offset the loss - raise in pay, sweet deal on a dream house or not getting killed . Needless to say he was not very popular with his clients.

That's funny. Sounds like your realtor has had enough clients who were starry-eyed people getting in over their heads dreaming of getting rich off their house.

Perhaps a bit more negative than I would be (and I tend toward being very conservative about house-buying), but I can see how the last 5-10 years would push a realtor to saying that.

[Slightly_Untidy]

Originally Posted by mnota

One of my realtors said, buying a house these days is like buying a car - depreciation is guaranteed, you just need to decide how much, your moving can offset the loss - raise in pay, sweet deal on a dream house or not getting killed . Needless to say he was not very popular with his clients.

Wow. That sounds like my kind of realtor . Any chance you can PM his details?

[QuietBlue]

Originally Posted by mnota

One of my realtors said, buying a house these days is like buying a car - depreciation is guaranteed, you just need to decide how much, your moving can offset the loss - raise in pay, sweet deal on a dream house or not getting killed . Needless to say he was not very popular with his clients.

It's refreshing to see a realtor with that kind of honesty. I would much rather work with someone realistic like that than one who is all pie-in-the-sky about future prices.

[golfgal]

Originally Posted by mnota

One of my realtors said, buying a house these days is like buying a car - depreciation is guaranteed, you just need to decide how much, your moving can offset the loss - raise in pay, sweet deal on a dream house or not getting killed . Needless to say he was not very popular with his clients.

It's funny how short some people's memories are. In the 90's and early 2000's, housing prices were skyrocketing and people were turning huge profits on their houses in a matter of months to a couple years. People were getting 40,000-100,000+ over asking price for their homes. It's only been in the past 6 years where people haven't realized gains on their homes. Those huge profits on houses have shifted people's thinking from a long term investment, which is what a house is, to short term thinking and that just isn't how the housing market works.

Our very first home was purchased in 1992 for $42,000. We put an offer on it the day it came on to the market because the market was hot. That same house sold last year for $140,000, in a depressed market. Now the owners that sold that house probably lost money, but the house itself has gone up in value tremendously. Still kicking ourselves for selling that house. Houses we were looking to buy in 2000 were going for about $150,000. Those same houses now are selling in the $300,000 range. You have to look more long term than 4 or 5 years.

[rzzz]

New suburban developments priced near the $300s to begin with will not go up. The next generations don't have any money. The few that do have money, don't want to live out there.

[1stpontiac]

Originally Posted by rzzz

New suburban developments priced near the $300s to begin with will not go up. The next generations don't have any money. The few that do have money, don't want to live out there.

Meh, maybe, maybe not. Too many unknowns to say for sure what will happen over the next 15-20 years. As has been discussed on here before, what happens when the young urbanites have 2-3-4 kids and start feeling cramped in their 1500 sf houses? Also, what kind of business development and community development will happen in the suburbs? Lots of tech and finance companies down in the southwest (not near the density of the downtowns of course, but still lots of jobs out in that corner). Its not an "out there" place to live, if you work out there, too.

And, of course, suburbs are not static or stagnant, either. The smart ones will (and already are) adapting to some of the "urbanizing" trends with shopping areas, different housing developments, adding sidewalks and trails, farmers markets, etc.

Or, who knows, some of these new developments might be wastelands in 10 years.

[northsub]

Originally Posted by golfgal

Our very first home was purchased in 1992 for $42,000. We put an offer on it the day it came on to the market because the market was hot. That same house sold last year for $140,000, in a depressed market. Now the owners that sold that house probably lost money, but the house itself has gone up in value tremendously. Still kicking ourselves for selling that house. Houses we were looking to buy in 2000 were going for about $150,000. Those same houses now are selling in the $300,000 range. You have to look more long term than 4 or 5 years.

$42k to $140k over 19 years is a 6.5% yearly return. That sounds nice, but is basically the same as the Dow Jones (and probably less of a return depending on the exact dates you pick).

[northsub]

Originally Posted by rzzz

New suburban developments priced near the $300s to begin with will not go up. The next generations don't have any money. The few that do have money, don't want to live out there.

I'm not sure what you mean by "next generations", but the data show that the only age groups that are choosing the central cities over the suburbs are currently in their 30's and also the 55-59 age group.

Here's the change in % of age groups of the 7-county metro that live in the central cities from 2000-2010:

0-4: up
5-9: down
10-14: down (from 22.2% to 18.9%)
15-19: down (from 26.8% to 24.6%)
20-24: down
25-29: down
30-34: up
35-39: up
40-44: down
45-49: down (from 22.5% to 18.5%)
50-54: down (from 21.4% to 18.9%)
55-59: up
60-64: down
65-69: down (from 21.0% to 18.1%)
70-74: down (from 22.9% to 17.7%)
75-79: down (from 25.8% to 17.3%)
80-84: down (from 28.6% to 18.1%)
85-89: down (from 32.6% to 19.9%)
90+: down (from 35.5% to 22.3%)

[rzzz]

I mean people who will be in their 30s in 10 years. The reason why people in the 20-29 year age group is down is because that is the generation I am talking about with no money. They still live at home in the suburbs with their parents! Or, they just move out of state for work.

Anything could happen. I am not saying the suburbs will turn into ghost towns, just that someone who paid $300K for a new development today probably won't be making any money on their house.

[northsub]

Originally Posted by rzzz

I mean people who will be in their 30s in 10 years. The reason why people in the 20-29 year age group is down is because that is the generation I am talking about with no money. They still live at home in the suburbs with their parents! Or, they just move out of state for work.

But, the % of homeowners who are in the core cities is going down in the younger age groups as well.

Change from 2000-2010 in % of owner occupied housing units in core cities vs. 7-county metro (by age group of householder):

15-24: down (from 26.1% to 23.7%)
25-34: down
35-44: up
45-54: down (from 19.1% to 15.2%)
55-64: up
65+: down (from 23.5% to 16.4%)