OK - Is there a housing bubble? Will it burst? Will we have deflation?

I'd like to know what all of you smart DU'ers think on this subject.

regions. It will probably take many years to recover. I also think we will have a small correction in the overall housing market. I would be very careful if I was buying now.

and plan on staying it for 15-30 years, caution might be wise.

although the details are murky.

I am personally holding off on purchasing a house for that very reason.

And anyone I know shopping for a house I advise them to do the same.

900 sq ft homes for $625,000.00. Will refinancing plans be available.
I know people who have done this and the market cant really go up any more.
Will these people lose money?

As long as they don't sell the house, they won't "lose" money.

And who knows if it'll ever come back.

it may take 30 years, but it'll come back.

in which case they can:

1) Simply not move for the next 10-20 years.
2) If they have to move and can afford it, carry a $100,000 debt around after selling their house for less than they bought it.
3) Declare bankruptcy. I know someone who has done this.

in the economy, budget, taxes & jobs forum

http://www.democraticunderground.com/discuss/duboard.php?az=show_topics&forum=114

DU is so big! It's easy to miss stuff.

and we can not understand who has the money to pay 1k plus mortgages each month.

Houses here in SE Wisc 175k - 250K or more, I don't see how that can continue.

quarter.
http://www.census.gov/indicator/www/newresconst.pdf
Seems most folks do not see a housing bubble.

I worry about al of these houses they are building. I read here that houses today are more energy efficient - but most still don't make an effort to have passive solar heating, natural cooling, etc. I've been wondering what will happen if the price of energy goes through the roof and people start wanting homes that are super efficient. May not matter in So. California - but here in Indiana they are building like crazy too. I've read it is easier to build a new energy efficient house than retrofit an old one. Window placement, etc is a big deal evidently.

I usually look at it before buying a home.

In Cleveland. It's been vacant since April. Nicer area, reasonably priced, but no buyers. I had it rented for a year, but threw the tenants out.

No buyers out there. I'm living in Florida, and 2 mortgages are killing me.

This would compare to the 1999 area in stocks. Homes are simply overvalued and have raised in value too fast given historic prices and how they rise. Many things have contributed to this, the very low interest rates have allowed buyers to borrow more for the same monthly and rather then get a good deal on a home, the prices of homes have skyrocketed up to meet that inflow of cash.

Some of us like myself got lucky. I purchased my home in July of 2000 when Greenspan was raising rates and a 30 year loan was 8.5 %. I was then able to refinance down to a 15 year at 4.75 % So I got in before the prices took a sharp turn up because at the time money was a bit tighter.

Another thing is this ridiculous "No Money Down" house buying.. talk about leaving your ass hanging out if something goes wrong... idiots.

Now people are starting to basically day trade houses:

http://money.cnn.com/2005/01/10/real_estate/investment_prop/manwithplan/index.htm

Yep its just going to keep going up and up never down, borrow more sheep.

Prices are going up on average of 2% per month!

I bought mine in 1999 with interest rates around 7.5...and refinanced last year under 6.0.

Now my home has doubled in value according the CMA I had done. My next door neighbor just sold his under the same circumstances. (our houses are basically the same) He sold in under a week. Unreal.

I could sell and cash out but I'd have to move somewhere else...no way could I afford to buy another house around here even with the low rates.

According to the National Association of Realtors some markets are still hot and some are flat or in recession. I'm a Realtor in Texas and just did a market analysis for a client that went back two years. Homes in his subdivision are selling for exactly the same price per sq foot now as in 2002.

The two coasts seem to be doing OK, but 20% gain in equity/year can't possibly hold up much longer. I'm working with two CA relocations that are selling simply to take advantage of the cost difference. A young couple moved here from CA with the proceeds from selling a 900 sq ft efficiency. They bought an existing 1600 sq ft home for $105k, changed their mind and bought a $250k new home with 2800 sq ft. They are making both payments and still living off the proceeds of the CA sale. Just taking some time off to relax.

Foreclosures in the DFW area are at an all time high. 'Course we got hit really hard with outsourcing of the Telecom industry.