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I live in the San Francisco bay area and some of the prices I'm beginning to see are near the prices I saw the last two years I was living in Tokyo. I'm somewhat shocked that a 600 sq/ft (180 sq/meter) flat is going for $330,000 USD - $450,000 USD. Have people lost their minds?

What does the market look like in your area?
 

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Here in the good old Midwest, $750,000 can gain you entrance into an exclusive neighborhood with a 6,000 square foot home on a 1-acre lot.

Nice to move into, if you're transferring from one of the high-cost areas. Terrible to move in the other direction, though.
 

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Here in Oklahoma, $400,000 will get you a 3-car 4,000 sq ft home with a backyard and pool on a 2/3 acre lot.

That way you can fill your garage with Maseratis!

D.Min
Tulsa, OK
04 911 GT3
04 Spyder CC
05 H2 (supercharged rawr!)
 

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My area north of Boston on the coast has gone completely nuts, You would need to pay at least $400,000 for a very small starter house. Bought my house in 1995 for 287,000 and now appraised at over 700,000, Which is great If I want to sell but if I want to stay in my area would have to pay more for bigger house. Plan on retiring soon so best bet will be sell my house and move to Oklahoma, I guess
 

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Hah! Scott, if you do move to Oklahoma, there's a really nice road circuit course in Hallett, OK. It is about a 30 minute drive from Tulsa and about a 45 to 60 minute drive from Oklahoma City. It is a highly technical road course that has been featured in the "One Lap of America" event sponsored by Car and Driver Magazine. I've rented it out and it's a total blast.

Of course, there's not much else around to enjoy :?
 

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Ha! Here in Santa Barbara a 3 bdrm/2 bath, 1500 sq. ft. "fixer upper" in "the burbs" is going for $800,000. Anything decent is over a million.
 

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Anywhere in CA is priced high, and the realtor keeps telling me it will only go up. That is what people said in Tokyo in 1980s until the end when everything tanked. It is tuff to say if the same will happen here in the U.S.

How about overseas? What are the prices like in Switzerland (I know we have some members there)? Other parts of Europe?
 

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Here's the report from NY, Miami & Colombia:

Just sold a 720 Sq Ft apt on the upper west side in NY for $565K: One bedroom, One Bath, One small living room & one tiny kitchen.

Just sold an 1800 Sq Ft Town Home in Coconut Grove, Miami w/ 3 BR, 3 baths & one garage for $415K

Just moved out of a 6000 Sq Ft Penthouse rental in Bogota Colombia with a breathtaking view of the city, private entrance, 7 parking spots in the garage, three storage rooms, Library, Media Room, LR, 2 Family Rooms, Marble & Wood flooring, 4 BR, maids quarters, 6 baths...you get the picture...that would sell for approx $1.2MM

Am now finishing a $1.2MM "custom" home in Coconut Grove w/ 3500 Sq Ft under A/C, 4 BR, Pool, 2 car garage, marble & wood flooring, high ceilings. In my book this is expensive compared to previous prices. This same home would have cost approx $900K two years ago.

Property prices (I almost wrote property values, but that would be stretching it since I don't think this can continue) in Miami rose 26% over the past year. This can't continue for the following reasons:

1. Personal Income has by no means kept up with price increases

2. Monthly Rental fees are less than 0.5% of current property prices-- low by historic standards

3. Within the next 18 months a glut of new condos will be coming on the market here, representing 4 or 5 years of historic yearly new inventory. When that happens, all prices will be impacted.

4. Speculators are rampant among condo pre-sales

5. As prices rise, locals who might consider trading up or moving to a different neighborhood decide to stay put because the move would trigger a significant jump in property taxes. This area offers a "homestead exemption" that caps annual property basis hikes for tax purposes. So if someone bought a $600K home 5 years ago that would now sell for $1,200K, their property taxes would double if they simply moved into a home of similar value. In this example (which is based on numbers considered with a friend in this situation), their property taxes would increase approx $1000/month by moving into a home of equal value but better situated given their offices & kids' schools. If they decided to get something nicer, it would be even more. They came to a rational conclusion & remodeled their existing home & bought nicer cars!

6. US Mortgage interest rates are at their second lowest point in many years. While short term rates are increasing, long term (mortgage) rates have actually declined a bit over the past 3 months. I believe rates will trend upwards. When that happens, many who have opted to finance their homes with "interest only" or 1 to 3 year rate locks will have a hard time making ends meet.

So why am I buying a new house now & adding more fuel to the madness? Tax-wise I am able to defer the gain realized on the NY rental property and exempt the gain on the Miami property. This provides a buffer for declining prices. But even more importantly, my wife is fixated on ownership & there are no rational arguments against that, although you could argue that it's rational to heed your wife!
 

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Sounds like all of you who are living near metropolitan areas (including all of California except Fresno :)) are seeing much higher property prices than I do in the Midwest. Perhaps one of the trade-offs for all of the cold winter weather!

I consider myself fortunate. Most weeks I travel and entertain in metro US cities and several times per year 'get' to visit metro areas outside of the US. Then I fly home to my 7-gate airport (parking is $12 per day in short term!) and can live in relative luxury for next to nothing. Very, very fortunate. Gives me pocket change to spend on things automotive.

SJP, are you now permanently in the US instead of splitting your time between Miami and Columbia? If so, welcome back!

It was interesting reading about your thoughts on Miami real estate. A couple of weeks ago I visited my brother at Marco Island. He's been speculating on condos for the last couple of years. There's absolutely nothing on the island for under $1 Million, including condos that need to be gutted to be liveable. Amazing.

Brad
 

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Hi Brad,

Yes-- am now based in sunny Miami covering Latin America. Much more travelling but when I'm home I get to enjoy the toys more often! When you were in So FL did you happen to stop by The Collection? Incredible dealership-- I live nearby & usually wind up taking visitors who are autoholics.
 

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Interesting how it varies. Thank goodness I don't have London or South- East England to contend with!

Here in Scotland prices have risen steadily, and the rise has accelerated recently with more and more people leaving cities and buying farms just for the sake of the farmhouse. Not much help if one of your businesses is farming and you want to expand.

Our house is a small converted (and extended) cottage which we've lived in since we were married many years ago. Small house (stone-built, teak woodwork throughout) with a large garden, and with the benefit of being surrounded by our own fields.

Approx. 2000 sq ft, with 2 car garage and pool in 1 acre garden. I would estimate $750.000 USD.
 

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A double-wide mobile home sold in Malibu for $1.4MM


USATODAY.com
Mobile home madness: Prices top $1 million
Tuesday July 5, 9:37 pm ET

The crazy California real estate market has come to this: a million-dollar trailer.

A two-bedroom, two-bathroom mobile home perched on a lot in Malibu is selling for $1.4 million. This isn't a greedy seller asking a ridiculous amount no one will pay.

Two others sold in the area recently for $1.3 million and $1.1 million. Another, at $1.8 million, is in escrow. Nearby, another lists for $2.7 million.

"Those are the hottest (prices) I've ever heard," says Bruce Savage, spokesman for the Manufactured Housing Institute. He says prices in another hot spot, Key West, Fla., top $500,000. As if the price isn't tough enough to swallow, trailer buyers:

Don't own the land. As with most mobile homes sold in Malibu, the land is owned by the proprietor of the trailer park, in this case, Point Dume Club.

Still pay rent. Not owning the land means paying what's called "space rent" that is as high as or higher than many mortgages in other parts of the USA. On the $1.4 million trailer, space rent is $2,700 a month.

Can't get mortgages. Since the buyers don't own the land, most of the mobile homes are paid for in cash or with a personal property loan that usually amounts to $100,000 or less, says Clay Dickens, mortgage loan agent at Community West Bank.

Why would anyone pay seven figures for a trailer? It gets you more than the typical mobile home. The $1.4 million trailer is in a gated, guarded community with a shared tennis court and panoramic views of the Pacific Ocean. It also is on a larger-than-usual "triple-wide" lot.

Buyers are willing to pay such prices just to get into Malibu, where the average list price is $4.4 million, says Coldwell Banker broker Rick Wallace.

But, it's still a trailer with a modest kitchen and faux wood floors. Many still have trailer hitches attached.

Sellers couldn't be happier. Charley Chartoff, a 29-year-old Coldwell Banker Realtor, is selling the $1.4 million trailer after living there about three years. Chartoff won't say how much he paid, but neighbors say prices have climbed about threefold in that time.

Developers are partially driving the rise. Janet Levine at Maliblue Holdings has bought several old homes and is installing high-end "mobile villas" to put up for sale. Levine and others bristle at the term "trailer." To be permitted in the park, the home must be perched on piers (a high-end version of up on blocks).

Some neighbors, though, can only marvel at the prices. Longtime resident Jim Schwartz, 92, says he got an $800,000 offer for his trailer home, which is not for sale. He declined. But, "You come to me with $1 million, and we'll talk about it," he says.
 
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