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Thread: 2 Housing Markets

  1. #1
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    2 Housing Markets

    the wealthy and everyone else

    [quote]
    [b]2 housing markets: The wealthy few . . . and everybody else[/b]

    By Michelle Conlin

    Associated Press

    In America, it's starting to feel as if there are two housing markets - one for the rich, and one for everyone else.

    Consider foreclosure-ravaged Detroit. In the historic Green Acres district, a haven for hipsters, a pristine, three-bedroom brick Tudor recently sold for $6,000 - about what a buyer would have paid 80 years ago during the Great Depression.

    Just 15 miles away, in the posh suburban enclave of Birmingham, bidding wars are back. Multimillion-dollar mansions are selling quickly. Sales in August were up 21 percent from the previous year. The country club has ended its stealth discounts on new memberships. And Main Street's retail storefronts are full.

    "We're getting more showings, more offers, and more sales," said Ronni Keating, a real estate agent with Sotheby's International.

    Think of this housing market as bipolar. In the luxury sector, the recession is a memory, and sales and prices are rising. But everywhere else, the market is moving sideways or getting worse.

    In the housing market inhabited by most Americans, prices have fallen 30 percent or more since their peak in 2007. That's a steeper decline than during the Depression. Some people have had their homes on the market for a year without a single offer.

    Almost a quarter of American homeowners owe more on their mortgage than the house is worth. Another quarter have less than 20 percent equity. About half of homeowners couldn't get a mortgage if they applied today, says Paul Dales, senior U.S. economist for Capital Economics.

    But then there is the other housing market, occupied by 1.5 percent of the U.S. population, according to Zillow.com. The one with outdoor kitchens and in-home spas, with his-and-hers boudoirs and closets the size of starter houses. The market that is not local but global, with international buyers bidding in all cash. And where the gyrations of the stock market are cause for conversation, not cutting expenses.

    In this land of luxury properties, the Great Recession seems over. [b]Prices of $1 million-plus properties have risen 0.7 percent since February, according to Zillow. Prices of houses under $1 million have fallen more than 1.5 percent.

    Normally, these two segments of the housing market rise and fall together. Now, they're moving in opposite directions.[/b]

    "Luxury is the best-performing segment of the housing market right now," said Zillow.com chief economist Stan Humphries.

    After every recession since World War II, housing has led the economic recovery. Not this time.

    The renewed vitality in the comparatively small market for luxury homes is not enough to power a full-blown recovery in housing or in the broader economy. This bifurcation in the market is yet another reason Michelle Meyer, the chief economist at Bank of America Merrill Lynch, says her housing outlook is "increasingly downbeat."

    [b]The phenomenon is not limited to real estate. You can see the same split in other gauges of the economy. Sales at Saks vs. Wal-Mart. Salaries on Wall Street vs. Main Street. Corporate profits vs. family balance sheets.[/b]

    The divide also is making credit a perk of the rich. Mortgage rates are the lowest in decades. But what good are absurdly cheap rates if you can't get a mortgage? Banks aren't granting credit to anyone "who even has a smudge on their application," said Jonathan Miller, founder of the real estate consulting firm Miller Samuel. Applications for new mortgages languish at 10-year lows.

    Wall Street's rebound starting in March 2009 - and lasting until recently - brought back the market for mansions in the Hamptons, on Long Island, where the number of closings has returned to the 2007 level, and for luxury co-ops in New York City. And because of social-network riches in Silicon Valley, twice as many homes have sold for $5 million or more this year than in 2010.

    But in the other housing market, an apartment tower built in 2007 in San Jose, Calif., recently converted to all-rental. The building had not sold a single unit. In Miami, a city that exemplifies the foreclosure epidemic, idled cranes dot the skyline. Unemployment shot up again this summer by 2 percentage points to 14 percent, a level not seen since the energy crisis in 1973.

    There are so many two-bedroom condos in gated communities with golf courses, private pools, and rustic jogging paths that you can pick one up for $25,000, 66 percent off the price five years ago. But luxury condos priced at $1 million or more are selling as rapidly as they did during the boom.

    "In the 20 years that I have been in South Florida real estate, I have never seen a greater divide between those who have and those who have not," said Peter Zalewski, founder of the real estate firm Condo Vultures.

    [url]http://www.philly.com/philly/business/20110923_2_housing_markets__The_wealthy_few_______and_everybody_else.html?cmpid=124488459[/url]
    [/quote]

  2. #2
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    [QUOTE=bitonti;4155698]...The one with outdoor kitchens...[/QUOTE]

    Hey! I have an outdoor kitchen :P

    But since I live in WNY, I get to use it for 9 days in July...then the pipes freeze up...

  3. #3
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    [QUOTE]About half of homeowners couldn't get a mortgage if they applied today, says Paul Dales, senior U.S. economist for Capital Economics[/QUOTE]

    You might want to think about this line for a while. Really.

    [QUOTE]The phenomenon is not limited to real estate. You can see the same split in other gauges of the economy. Sales at Saks vs. Wal-Mart. Salaries on Wall Street vs. Main Street. Corporate profits vs. family balance sheets.[/QUOTE]

    You can also see it in Govt. Growth, Govt. Salaries, and Govt. Revenues vs. Main Street as well.

    The Rich Elite, and the Governing Elite, have both done exceptionally well of late. Maybe we do live in a two-tier nation, CEO's and Government?Publci Workers....and the rest of us.

    [QUOTE]There are so many two-bedroom condos in gated communities with golf courses, private pools, and rustic jogging paths that [B][U]you can pick one up for $25,000[/U][/B], 66 percent off the price five years ago.[/QUOTE]

    Really?:eek:

    Prove it.

    Area: Northern Virginia

    I eagarly await your find, so I can buy one for $25,000! There I was thinking I wasn't getting anything for less tha $250,000, and that in a low-income neighborhood (read, Psudo-Ghetto).

  4. #4
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    Those sad pathetic job creators, when will their suffering end?

    I lie awake at night fearing for them.

  5. #5
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    Real estate has always been about location...that drives prices, and of course the mortgages that were haplessly approved to those who had no financial right to be buying homes a few years back.

    The liberal media is going to run with this you against them thing now, as dictated by BO.

  6. #6
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    Liquidate the Kulaks!

    :rotfl:

  7. #7
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    [QUOTE=bitonti;4155698]the wealthy and everyone else[/QUOTE]

    The wealth divide will continue and is based on 3 factors predominantly...

    Education, decision making and skill in demand.

    The poor should do what? Tax the wealth out of the top 1 percent? For what they'll still be poor and even MORE dependent.

    Just like Obama and Bit want it. Trickle up poorness.... sounds like a 2012 campaign!

  8. #8
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    [QUOTE=jetswin;4155735]
    The liberal media is going to run with this you against them thing now, as dictated by BO.[/QUOTE]

    the Prez sets the real estate prices and tells the news what to run. are we talking about Kim Jong Il?

  9. #9
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    [QUOTE=bitonti;4155764]the Prez sets the real estate prices and tells the news what to run. are we talking about Kim Jong Il?[/QUOTE]
    The Prez sets the vibe...redistribute, tax the rich, pay your fair share, this is not fair, that's not fair, blah blah blah blah

    Detroit is a ****hole, no one wants to live there, that's why houses cost 6k. This is not a new phenomena, there have been stories written about people trying to invest and fix up homes there only to get torched.

    High end homes are in trouble as well, mcmansions everywhere are sitting vacant, again because of location and people who have overstepped their means. Everyone can't be rich, I'm not rich, but I own two homes, and I don't overstep my means. When things change for me for the worse or better I will adjust accordingly, if somewhat grudgingly, but I will not blame the rich man.

  10. #10
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    [QUOTE=jetswin;4155776]
    High end homes are in trouble as well, mcmansions everywhere are sitting vacant[/QUOTE]

    that's pretty much the opposite of what's happening.

  11. #11
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    [QUOTE=bitonti;4155764]the Prez sets the real estate prices and tells the news what to run. are we talking about Kim Jong Il?[/QUOTE]

    Please do not ignore me Bit. You posted the OP, I'd like to see it's claims backed up.

    [QUOTE][QUOTE]There are so many two-bedroom condos in gated communities with golf courses, private pools, and rustic jogging paths that [B][U]you can pick one up for $25,000[/U][/B], 66 percent off the price five years ago.[/QUOTE]

    Really?:eek:

    Prove it.

    Area: Northern Virginia[/QUOTE]

    Can you confirm the article writers claim, and show me on any real eastet site a "two-bedroom condo in gated communities with golf courses, private pools, and rustic jogging paths" that I can pick one up for $25,000, please?

    Because if you can, I really want to buy it, assuming it's not in say, Oxen Hills, MD.

  12. #12
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    [QUOTE=jetswin;4155776]The Prez sets the vibe...redistribute, tax the rich, pay your fair share, this is not fair, that's not fair, blah blah blah blah

    Detroit is a ****hole, no one wants to live there, that's why houses cost 6k. This is not a new phenomena, there have been stories written about people trying to invest and fix up homes there only to get torched.

    High end homes are in trouble as well, mcmansions everywhere are sitting vacant, again because of location and people who have overstepped their means. Everyone can't be rich, I'm not rich, but I own two homes, and I don't overstep my means. When things change for me for the worse or better I will adjust accordingly, if somewhat grudgingly, but I will not blame the rich man.[/QUOTE]

    You know what would of stopped this, right? Keep the Bush tax cuts and keep interest rates low. What'd ya think?

  13. #13
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    [QUOTE=bitonti;4155828]that's pretty much the opposite of what's happening.[/QUOTE]

    go google "mcmansions are out" I don't want to link the multitdue of articles for you

  14. #14
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    [QUOTE=cr726;4155838]You know what would of stopped this, right? Keep the Bush tax cuts and keep interest rates low. What'd ya think?[/QUOTE]
    I think you've become nothing more than a ****stirrer and that's a shame.


    However if you keep the tax cuts, and the mortgage deductions you don't have to be a genius to realize that would be better for the real estate market...

    whachoo think?

  15. #15
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    [QUOTE=Warfish;4155835]

    Can you confirm the article writers claim, and show me on any real eastet site a "two-bedroom condo in gated communities with golf courses, private pools, and rustic jogging paths" that I can pick one up for $25,000, please?

    Because if you can, I really want to buy it, assuming it's not in say, Oxen Hills, MD.[/QUOTE]

    the article is not clear but they might be talking about South Florida.

  16. #16
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    [QUOTE=jetswin;4155848]go google "mcmansions are out" I don't want to link the multitdue of articles for you[/QUOTE]

    It depends on your definition of luxury. this article is about mansions not mcmansions.

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    [QUOTE=jetswin;4155848]go google "mcmansions are out" I don't want to link the multitdue of articles for you[/QUOTE]

    Thank God.

    McMansions are sh*tholes. Kinda glad people who bought them are taking a hit...hopefully it'll suppress any demand for those "things" in the future.

    [QUOTE=bitonti]that's pretty much the opposite of what's happening.[/QUOTE]

    A high end home is NOT the same as a McMansion. A McMansion is a low end home with a high end price tag. It is usually built with material that is even of lower grade than your average bi-level or ranch home and was usually built by illegal immigrants who would sh*t in boxes on the jobsite because the "builder" was too cheap to provide a porta-john.

    Also...lots of the developments where these places were built have tons of garbage and construction debris buried in the McMansion backyards. No dumpster = big savings for Mr. Builder (a builder that usually changes his corporation name after every 20 or so houses to avoid legal "entanglements")....

  18. #18
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    [QUOTE=bitonti;4155875]the article is not clear but they might be talking about South Florida.[/QUOTE]

    South Florida isn't exactly representative, cost wise, to the rest of the country, is it?

    If it is, I should have something similar to the "two-bedroom condo in gated communities with golf courses, private pools, and rustic jogging paths" for $25,000.

  19. #19
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    [QUOTE=jetswin;4155852]I think you've become nothing more than a ****stirrer and that's a shame.


    However if you keep the tax cuts, and the mortgage deductions you don't have to be a genius to realize that would be better for the real estate market...

    whachoo think?[/QUOTE]

    W wanted to end the mortgage deductions and it died. People have destroyed their credit and have taken lesser paying jobs and the tax cuts have hurt the entire country. If it wasn't for the 2 wars unemployment would be tripled. This issue can't be solved by a President.

  20. #20
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    [QUOTE=PlumberKhan;4155877]Thank God.

    McMansions are sh*tholes. Kinda glad people who bought them are taking a hit...hopefully it'll suppress any demand for those "things" in the future.



    A high end home is NOT the same as a McMansion. A McMansion is a low end home with a high end price tag. It is usually built with material that is even of lower grade than your average bi-level or ranch home and was usually built by illegal immigrants who would sh*t in boxes on the jobsite because the "builder" was too cheap to provide a porta-john.

    Also...lots of the developments where these places were built have tons of garbage and construction debris buried in the McMansion backyards. No dumpster = big savings for Mr. Builder (a builder that usually changes his corporation name after every 20 or so houses to avoid legal "entanglements")....[/QUOTE]
    I didn't realize they were as bad as that, but I do know inferior building materials were used. I think in Atlanta there is a huge problem with Chinese dry wall turning to mold.


    I'll tell you what's a shame, that so many of those great old homes were torn down and huge boxes put in their place with huge price tags. There is no way they will stand the test of time, much as you described above with mcmansions.

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