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Housing Bubbles: 2003 Predictions

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Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
The housing bubble has already burst in the DFW area with a loss of approximately 10% in most areas, as much as 20-25% in some other areas for certain classes of homes. However, with the influx of population, this will work itself out and prices will increase again. However, in some areas, there is a declining population (Detroit for example) and the housing prices will never recover - there's no one to buy the homes. Further, some government activites will force housing prices down. These include certain protections of neighborhoods (size restrictions on homes, restrictions on tear-downs, requirements for repairs that turn a simple job into a rehab project, etc). People will just go elsewhere.

Roger
 

Karl

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Arizona
No matter what the paper says about AZ growing in this particular part of AZ the marjority of homes are declining due to over building.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
And this part of AZ is very stable without any appreciation over the past five years, Largest (and almost the only) is not hiring and not renewing subcontracts. Also AVMS still get used in this area which doesn't have two house alike. My orders from BofA have droped to almost half because of AVM and their desk top appraisals done within house. So I am keeping track of all the Trustee Sales in the paper every week--eventually I will be appraising them.
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
Jo Ann: I would like your opinion on the status and future of the financing of manufactured homes. It is my understanding that CONSECO Finance Corp., is the primary source of financing for manufactured homes and CONSECO is presently in bankruptcy proceedings because of bad loans of this type. It is also my understanding that the manufactured home market is in total turmoil because of the flood of repo’s. My question, is who will finance these homes and how will the manufactured home industry ever get out from under this mess? If you add to the homes already repossessed the ones that have negative equity it appears to be a self-defeating enterprise. If lenders resell the repossessed homes at MV it will only serve to increase the negative equity in the homes in good standing thus adding more repos to the fire resulting in even lower prices thus further destabilizing the market even more while at the same time geatly extending the recovery period. What is the answer?
 

Steve Owen

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri
... to take that equity and buy things to consume (or buy) depreciating assets would not be a recommendation that I would make. That is what a lot of people have done,” Inman said.

AMEN! I'm sick of seeing people with 10% equity on a house they can barely afford trying to cash out another 5% so they can buy a new car and I won't have much sympathy for them when they lose it.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Austin: I have no idea what will happen with manufactured housing. Not only have manufacturers, dealers, lenders, appraisers, etc have shot themselves in the foot--they have chopped off their heads with all the activity that has occurred in the past. And it is a shame because manufactured housing could be a very viable housing solution in many circumstances. As the years progress, the quality of construction for many are equal to or exceeding many site built homes--mainly because they are constructed in a controlled evironment under controlled conditions. Straight, kiln dried lumber cut on precision equipment, the same size every time for example. Which you don't have with site built homes that have been exposed to the sun, rain, snow, and each board still too short after it has been cut three times. So there are going to be be some interesting scenarios in the future!
 

Steve Owen

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri
the quality of construction for many are equal to or exceeding many site built homes

I don't know how much practices have changed since I operated a table saw in a mobile home factory. I do know two things, however. Back then, the very best mobile homes you could buy were put together with glue and staples (part of the reason for the new car smell most of them have). The other thing I know is that God hates mobile home parks. Every time we have a tornado someone in one of them gets killed. (Just happened here a couple of weeks ago.) That doesn't make a very strong argument for them being better than site built homes. However, I do agree that they can be a viable housing alternative in many situations - just don't stay in there when the tornado is coming.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
I grew up in toronado country--and I don't even want to be in a solid concrete building if a tornado is coming!!! I want to be in an underground storm cellar!
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
One good thing about the demise of the manufactured home business as Steve pointed out, is that by using matched pairing theory, it can be proven that manufactured homes clustered together create tornados. Therefore, the obvious conclusion is that with decreasing manufactured homes we will have a corresponding decrease in tornados. At least by match pair theory. Or so it would seem to me. Wouldn't you agree?
 
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