The Residential Housing Value Run-up

**Waterfront Specialist** · 01-06-2010, 04:49 AM

real estate has always appreciated at a steady pace with the exception of a few massive run-ups in value followed by sharp declines. The decline of the late 1980s . So what has caused the latest mass-speculation and run-up in values between 2007 and 2009?

Well there were a few culprits that acted together to create this latest debacle.

(1) Underlying Market Strength - As stated above, Metro Phoenix has inherent underlying market strength. That is what got the ball rolling and led to the mass speculation for 3+ years.

(2) Cheap Credit - Interest rates came down to unheard of levels making it easier to buy more assets with less money.

Investor Stupidity - As values went up and loans became easier to attain, investors started buying property with no money down and buying as many properties as they could get loans for (see next point below). It became an exercise in buy high and hope to sell higher.

It got to the point that, in 2005, there were actually busloads of investors that were driving around in town stopping in new housing subdivisions and lining up to buy new homes. Why did they concentrate on new homes? Because they could purchase a home to be built in the future, put little money down to secure it and watch the value of their property increase for 6-12 months without even owning it yet! Then they would either flip it right away when it was completed or hold it in hopes of it appreciating even more.

**Sabir** · 01-06-2010, 11:40 PM

Yes as the property growing upside more and more people are interested in buying and investing in property market. It is grooming market of the day.. that is also one of the source to increase in the price of property and real estate..

Many and much more information about latest property NEWS can be studied at real estate portals now a day's..

**jamesww** · 01-08-2010, 01:04 AM

Originally Posted by Waterfront Specialist

real estate has always appreciated at a steady pace with the exception of a few massive run-ups in value followed by sharp declines. The decline of the late 1980s . So what has caused the latest mass-speculation and run-up in values between 2007 and 2009?

Well there were a few culprits that acted together to create this latest debacle.

(1) Underlying Market Strength - As stated above, Metro Phoenix has inherent underlying market strength. That is what got the ball rolling and led to the mass speculation for 3+ years.

(2) Cheap Credit - Interest rates came down to unheard of levels making it easier to buy more assets with less money.

Investor Stupidity - As values went up and loans became easier to attain, investors started buying property with no money down and buying as many properties as they could get loans for (see next point below). It became an exercise in buy high and hope to sell higher.

It got to the point that, in 2005, there were actually busloads of investors that were driving around in town stopping in new housing subdivisions and lining up to buy new homes. Why did they concentrate on new homes? Because they could purchase a home to be built in the future, put little money down to secure it and watch the value of their property increase for 6-12 months without even owning it yet! Then they would either flip it right away when it was completed or hold it in hopes of it appreciating even more.

Interesting in what markets were values running up between 2007-2009. Because I do a fair amount of investment and I didn't see any U.S. market see above average appreciation rates and most markets declined during that period.

If you are someone paid to post for the backlinks granted here then you need to get your information straight. The run up happened between 2003 and 2007. The freeze up of the Mortgage Backed Securities auctions in August of 2007 put the breaks on most markets in the world other than a hand ful in Asia and the Middle East.