Is your house overvalued?

[paulney]

This study took into account the population levels to determine the "appropriate" price levels for each area, so theoretically the prices "should" come down to a reasonable level... but I doubt it. You never know though, with all the people in CA with interest-only options that they can barely afford, a chain reaction could be devastating.

About a year ago, my colleagues and me were talking about this: 3 to 5-year jumbo interest only loans were supposed to start expiring this year, and we were expecting a large number of foreclosures, because super-low rates aren't available any more.

Did this happen? No.
Why? I have no clue. People keep on buying like there's no tomorrow.

 

A house is worth what someone is willing to pay for it. If someone is willing to pay you the 'overpriced value' of your house, then that IS it's value; at least to that person.

Partly true, and partly untrue.
Sure something is worth what someone is willing to pay, IF they have the money. Most people do not and never will have the cash to outright buy a home.
Appraisers are used to make sure what someone is willing to pay is actually inline with market values, so the bank doesn't get screwed.

 

[mugs]

Originally posted by: EatSpam
Unless he moves to an area that isn't so overvalued...

Well yes, of course. If he wants to do that.

Originally posted by: paulney
About a year ago, my colleagues and me were talking about this: 3 to 5-year jumbo interest only loans were supposed to start expiring this year, and we were expecting a large number of foreclosures, because super-low rates aren't available any more.

Did this happen? No.
Why? I have no clue. People keep on buying like there's no tomorrow.

Presumably because their income increased enough that they were able to afford to start paying down the principal. But if values started going down first, all those people paying only interest could theoretically be seriously screwed.

 

[HeroOfPellinor]

Originally posted by: Taggart

Originally posted by: HeroOfPellinor
+61%

:roll:

:Q

And strangely I'm unconcerned. Studies like this are stupid.

-- In Sacramento, a large population is government employed with very secure jobs with obscene benefits that don't equate in these kinds of studies.

-- Another large population, like me, works in the Bay Area so our salaries are not in line with the area we live in.

-- Also not taken into account is that area like Sacramento are extremely diverse. You have South Sacramento and West Sacramento which are very populous and very low income. This drags down the averages for income and house price so, on paper, a house in a better area looks like it's way overpriced.

Thing are unequivocably cooling down, but worst case scenario we're facing a plateauing....not a dropping. At least in this particular area.

 

[aphex]

#20

 

[IHateMyJob2004]

Originally posted by: Taggart
http://money.cnn.com/2005/12/29/real_es...ping_housing_markets/index.htm?cnn=yes

I hope you don't live in California or Florida!

Yes, but it matters how you look at it.

Building my home would cost about $150K. That makes the 0.6 acres or whatever it's on worth about $250K!

Most real estate people say my home is worth $400K. I'm going to try to get $430K and see what happens.

 

[ElFenix]

Originally posted by: SampSon
Partly true, and partly untrue.
Sure something is worth what someone is willing to pay, IF they have the money. Most people do not and never will have the cash to outright buy a home.
Appraisers are used to make sure what someone is willing to pay is actually inline with market values, so the bank doesn't get screwed.

uh what? IF they have the money? borrowing money is just as good as actually having it. better if you can get a better rate of return than the people you're borrowing from. you can't be willing to pay for something if you don't have cash in hand in some manner or another. your post does absolutely nothing to refute mine.

 

[milagro]

Honolulu +31% and prices are still climbing....

 

[kranky]

Originally posted by: ElFenix

Originally posted by: SampSon
Partly true, and partly untrue.
Sure something is worth what someone is willing to pay, IF they have the money. Most people do not and never will have the cash to outright buy a home.
Appraisers are used to make sure what someone is willing to pay is actually inline with market values, so the bank doesn't get screwed.

uh what? IF they have the money? borrowing money is just as good as actually having it. better if you can get a better rate of return than the people you're borrowing from. you can't be willing to pay for something if you don't have cash in hand in some manner or another. your post does absolutely nothing to refute mine.

He's saying that (to make a ridiculous example) if someone wants to pay $1 million for a house that the bank appraises at $200K, and doesn't have the cash to buy it outright, it doesn't matter if the person wants to pay $1 million. The bank isn't going to give them the money, so no sale.

 

[FoBoT]

i doubt it
it say "Kansas City, MO-KS +4%"
but i live 40 miles outside the city