HOUSING MARKET CRASH BEGINS SOONER THAN I THOUGHT

As I watch the market in Ramona, California, Raliegh, NC, and far eastern LI, prices are dropping, and banks are agreeing to short sales.  A short sale means the bank agrees a buyer being allowed to buy the home for less than is owed because it is better than putting the house into foreclose.

The cost of housing is beyond the reach of most people.  Brownsville and similar communities are unique.  The cost of building a new home has come down.  How do I know this?  My home is insured for the cost of rebuilding.  The insurance company looks at the costs put out by the government and multiplies it by 2000 sq feet.  Last year my insurance went down. 

The sale price of my home has dropped.  We had a surge of SpaceX engineers, but that surge is over.  Many are now living in trailers or small homes waiting on Elon to finish the new $100 million dollar development. 

In Brownsville the price of land remains high.  Some new developments have small enough lots to build very small homes new homebuyers can afford.  Still better than paying rent, but as a long-term investment not good. At some point the market will turn and that small affordable home will not be in demand.

Mortgage rates are way too high. There was a time on $60k a year you might be able to afford a home.  Today, you cannot.  I am no longer helping first time home buyers because they are so priced out of the market.

The cost of the home is just not the mortgage.  It is more than electric and cable.  I invested heavily in energy efficiency, and never pay more than $300.00 with the BPUB, even with the pool.  In the summer you add a lot of water.  The AC runs non-stop.  The pool filter is a money drain, although mine is very energy efficient.

To make the house more marketable, I am working on spending $50,000.  That will put me at $140,000 invested in 13+ years. I can still make a profit if I sale.  Also consider I have locked in mortgage of about $900.000 a month.  Rental homes around my neighborhood go for about $2,000+ a month. 

Sooner than later the number of foreclosures will go up.   You cannot go from a job which pays $100k a year to another.  They are just not there.  Also, if you are approaching 50, they are not looking to hire you.  

Unless you are paying cash for a home which is highly discounted, now is not the time to buy.  They will tell you it is a buyer's market, but it is not.  We have to hit rock bottom before it becomes buyer's market.