US Property Crash

A

andrew_de_a

I keep reading that across the US property prices have fallen as much as 40%
I have also heard that California has witnessed falls in some cases by 40% also.

What I would like to know (and I'm struggling to find info on) is what the property market is like in say Los Angeles and in the middle to upper class suburbs in LA. Or info on any other major capital city for that matter.

Is this market decline across the board or only in outer suburbs or more rural and less established areas?

The reason Im asking is im sure that there would be many areas out side of LA and major cities that would have taken the brunt of the crash and as a result skewed figures for the whole state and indeed the whole country.
 
Found the answer

http://www.globalpropertyguide.com/North-America/United-States/Price-History

Cities in coastal and/or sunny states experienced the biggest drop in property prices. Las Vegas, Nevada dropped 22.8% in Feb 2008 from a year earlier. Big declines were also registered in Miami (-21.7%), Phoenix (-20.8%), Los Angeles (-19.4%), San Diego (-19.2%), Tampa (-17.5%) and San Francisco (-17%). Of the 20 cities in the index, only Charlotte registered an annual price increase (+1.5%) over the same period

its funny though, as these drops come on the back of soem massive growth:

Areas that experienced the biggest house price gains during the housing boom also registered the biggest declines. House price growth from 1996 to 2006 was highest in Los Angeles (364%), San Diego (232%), Miami (219%) and San Francisco (209%), using the S&P/Case-Shiller® indices.
 
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andrew_de_a said:
Found the answer
Click to expand...

Hahaha,replying to your own posts ? Things are getting a bit slow at GHPC so you taught you'd come trolling over here? :p
I have an idea, why don't you pack up, move there and buy one of them 40% off homes. If enough of you boys did that you could reduce the pressure on the rental market over here. :D
 
what are you talking about?

I'm new to the property game and wanted to get a bit of info into the US market.

Can you explain your comments and point out in a non aggressive/sarcastic manor my errors. Im here to learn, not to be ridiculed.

Cheers
 
andrew_de_a, I'm assuming your query is genuine and will reply accordingly.

There are many parts of the USA that have not dropped at all. The market is enormous. When you consider how many markets there are in Australia, and the USA has approx 15 times as many people and presumably dwellings, it's not surprising that these broad statements only apply in pockets.

In those markets where there was no "bubble" - ie ridiculously fast and high gains (eg parts of California, Florida, Arizona, Nevada) - there's no corresponding "burst". It is true, however, that defaults have risen, lending is tighter, and time on market is longer. So the market has slowed down, but over a large portion of the USA, this has simply meant that sellers have had to be more flexible on terms, and that banks have had to write off some bad debts. But there have not been huge price drops in most markets.

I think the conditions for buying are fabulous, provided the area you're looking at has all the fundamentals one considers when buying any property anywhere - ie current and future demand, jobs, population growth, infrastructure, transport, etc. And I'm personally avoiding all those states that "boomed" because I think they're quite unpredictable in the short term.

Texas, Georgia, the Carolinas, Indiana, Oklahoma... all those have pockets of opportunity.

I posted a number of links here, which are a good starting point for researching the USA. Forbes.com's real estate articles and CNN's real estate website are also good.
 
Sorry, I meant to include a link to this recent thread, and forgot! In post 58 of that thread, I include a whole bunch of useful links. Reading through the whole thread will also give you a bunch of other opinions on the US market. Weigh them as you see fit; with respect, I don't know that many Somersofters are currently actively researching the US market. There also seems to be a lot of SSers who believe that "it's too good to be true", or who have heard the (true) horror stories of some other Aussies' investing overseas going bad.

Read it all, and make up your own mind.

I would say, though, that investing in the US market is fundamentally different to the Australian market. Over there, investments are weighed very much in terms of the income potential; appreciation (what we call capital growth) is seen purely as a bonus. Many who believe that Aussie housing is way over-priced would see this as a good thing. As property in the USA - in many non-bubble areas - is still generating yields that we'd consider staggering (20% gross, 10% net is quite common, even in metro areas), I can't see that those areas are going to suffer big falls in value. If they do, the cash flow means you can afford to ride it out.

Another big difference, though, is that vacancy rates are relatively higher: 10% is the nationwide average.
 
Thankls ozperp.

Im not really interested in directly investing in the US, I just wanted to get to the bottom of all the media reports that were coming from the US as well as all the d&g's saying that we will be following in the footsteps of America.

Thanks again for taking the time to respond.
 
Andrew, On SS there is one drummer, one drum, one beat. Fall in line and march to it or you will be given plenty of travel advice.
 
andrew_de_a said:
what are you talking about?

I'm new to the property game and wanted to get a bit of info into the US market.

Can you explain your comments and point out in a non aggressive/sarcastic manor my errors. Im here to learn, not to be ridiculed.

Cheers
Click to expand...
Andrew_de_a, this person gives you an idea into what happening in the US but like everything,it's just someone's opinion..willair..
http://www.frontlinethoughts.com/pdf/mwo080108.pdf
 
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Gatoblanco said:
Whats the beat?
Please. I would like to know what you mean.
Thanks
Jesse
Click to expand...
I would be guessing it's the beat of a song of a journey of personal financial abundance and success in as many spheres of your life as you can manage. Maybe others hear different music though?
 
When/if Australia has its turn to slow or drop in values.A drop of around 15% average is more than likely at its lowest point( Could be more ,could be less). That average will be made up of houses that dropped a lot more and some that dropped less or not at all( Thats averages for you).I guess the trick is to purchase the better properties that are are better protected with a higher chance of riding out the storm. Thats not new thinking but some people get caught up in a average % figure for the whole of Australia but if you due some homework you will find a better deal.
 
Bit late in the post but i think prices in parts of CA have fallen by at least 40%.

I have owned a property in Southern CA for over 22 years and this has fallen by around 40%. In saying this considering it is up over 1000% since i purchased it it was inevitable.

Overlooking the beach the rent has also increased over the years and this certainly isnt falling back.
 
devo76 said:
When/if Australia has its turn to slow or drop in values.A drop of around 15% average is more than likely at its lowest point( Could be more ,could be less).
Click to expand...
Sydney has already done this in real terms from its peak in 2004. i.e. zero growth over 4 years at 4% inflation = 15% odd real price depreciation. There might be a few more years of stagnation yet whilst we're in a high inflationary environment which will equate to real price depreciation.

I don't expect actual prices to come off significantly now that we're reaching the top of the interest rate cycle. Maybe 5% odd median falls in major capitals might be the norm before stabilising and turning the slow corner up again over 3-5 years. And that's pretty bearish forecasting.

Keep in mind that over the same period yields will be increasing as mortgage rates are flat or falling at the same time as rents keep rising. At some point we'll reach a tipping point where things are so close to cash flow neutral that buyers waiting in the wings will decide now is the time to commit and kick off the next up cycle.

Cheers,
Michael
 
Yep. Since the giddy height of the boom lots of areas in the western and south western suburbs have come off alot.
In the dying days of a boom there is always a mad scramble and people pay crazy prices because they are scared of missing the boat forever.
Sydney has lots of markets.
There are lots of investors getting itchy trigger fingers out in the west.
Scott
 
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