Thanks a bunch. The author points out that Time was touting homeownership in 2005, just as the market was beginning to fall. Thus, this dismal piece may be evidence that the market is about to regain its footing.
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Yeah, I love publications like Time. When it was clear to many that it would be impossible for real estate to continue its current trajectory, these rags only talked about how homes were incredibly fabulous investments.
Tough as the market may be now, I doubt that the value of homes will drop to zero. So, even though there may be some good values out there, Time tells people to rent.
I do hope that those who are brave enough to buy now will be the ones chortling when others say, “Gee, why didn’t we think about a purchase when prices AND rates were so attractive….?”
80 Lower Cross “dropped to $15 million and now has a contract” (maybe $900ish per square foot); one commenter would value the structure at 390 Round Hill at $250 per square foot because it is very basic. I realize that real estate, especially homes, are idiosyncratic. However, I don’t think all these price points can coexist in a rational market. As CF implies, the buyer of 80 Lower Cross may be paying way too much, albeit for a nicer house, compared to 390 Round Hill or 8 Wyckham (being offered at $300/ft). No one wants to draw a line in the sand to say what value is. Everyone thinks “houses might go down another 5-10%” or are “still going down” or “aren’t going up any time soon.” But the fact is we actually have some guidelines to figure out what a house is really worth…for one thing, what it costs to build it. I would suggest that the $4 million ($250/ft) one commenter suggested for 390 Round Hill and the asking price for 8 Wyckham are BELOW REPLACEMENT COST. If these houses require massive renovations to approach livability, so be it. Otherwise it doesn’t make sense relative to construction costs, renovation costs, the price point for 80 Lower Cross or, most convincingly, the fact that our experts believe 443 North St might be worth about $800,000. Assuming you can put a 3,000 square foot house there, that is $270 per buildable foot for the land.
HG, agreed, and in fact both Round Hill and Wykham Hill need no renovation, so they really are below replacement cost. Good deals, both, I would hazard. For that matter the neighbor to the Wyckham house was selling for at least a million below what its owner has into it. Again, deals are emerging.
The author certainly does not, but lest we forget…
Looks like its time for me to start house shopping.
I think it was Business Week in 1974 with the Dow Jones Industrials at 600. The cover story was:
“The Death of Equities.”
Not 1974 Armonk- Business Week Aug 1979…Paul Montgomery came up with the magazine cover indicator, and interestingly enough, he used the Time Magazine archive!
As I’ve been trying to communicate (and being met with stiff resistance-thank you very much), the time for sideliners to buy is NOW (as in the next 18 months). No need to try and time the bottom- we are close enough if you plan on staying at leat 5 years…
8 wyckham – that is Merritt-ville, correct? Might want to take an ax to the land value estimate…
Making the cover of the weekly glossies is not a good omen. Newsweek, Businessweek and Sports Illustrated consistently mark the peak or bottom of whatever it is they might br writing about.
Calling the financial markets is certainly an example. I am not positive but I think one of the news weeklies had a favorable stock market cover just before the market crashed in 1987. Akin to a NYC cab driver offering a hot stock tip.
Calling the GOP and/or Conservatism dead after the 2008 elections might be another. Choose any of the late 2008 to early 2009 Obama as messiah covers for the same.
when comparing apples and oranges…..location,location,location is MOST important.
Out looking in:
That WHL house that backs on the Merritt should have a 20% discount on land value on their tax cards. Thus, Chris’ assessment indicators already accounts for that (assuming the discount is there). It is on my house which also backs on the Merritt.
thanks Merritt backyard…learn something new every day..wasn’t aware
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