- Jan 16, 2002
- Professional Status
- Certified Residential Appraiser
Instead of cooling down, prices keep hurtling upward, defying the laws of economic gravity just as grievously as those unmentionable dot-coms once did.
...Boston and the San Francisco Bay Area as well as New York, Miami, and Portland, Ore. Each is trapped in a classic paradox: Prices keep booming while jobs are vanishing. Clearly that can't last.
Steve Owen said:So, the first house that increased 319% actually appreciated at an average rate of 53% per year (if it sells at that inflated price; as appraisers, we all know that what they ask is often not what they get). That's still pretty hefty appreciation - in my market 2 to 3 percent per year has been typical lately.
They were quoting selling prices in that survey. One of the properties listed (Mill Valley) is in my subject market and I checked my public records and a property did go from from $432,000 (1997) to $969,000 (2002) but who's to say there wasn't $150k of remodeling (not unusual for the area). My rule of thumb has been to multiply 1992-1997 sales prices by 180% to estimate their current value which is an annual compound rate of 12-13% for 1997-2002.
Unlike what the article says about the coasts, I don't see a big bubble in my market - just north of SF. Local unemployment has jumped from 2% to 4% per the newspaper which is about the historical local average. Rarely do I see a downpayment of less than 20% and most of the refi work I've been doing has been rate & term or small cash-out, not "max-refi". I hope I'm reading these economic tea leaves correctly, I'd hate to be blindsided.
More on the "Bubble".
:roll: :roll: :roll: