Dr. Housing Bubble 10/24/14

The myth of buying a home and staying put: Tiny home in Pasadena reaching peak prices as square footage decreases.

Whenever we see an analysis of the benefits of buying a home there is always this underlying assumption that you will stay put in the same residence for a long duration. Of course, most people in places like California hop on and off the property ladder game multiple times. Repeat sales continually cut into equity gains and also cause buyers to experience new costs as they move into a new place. The assumption also is that you will always be selling into a rising market. That is not the case. Timing matters in a boom and bust market like California. We are seeing more homes being de-listed as sellers wait until next year as if a hidden trove of buyers will emerge ready to buy their crap shack at a hefty price. The market has suddenly softened. We also see many listing having price reductions which was nearly unheard of in 2013. Today we’ll examine Pasadena but also the underlying mentality that people somehow stay put for long durations in properties.

Smaller spaces with big costs

Pasadena has many homes built during the 1920s with HGTV upgrades. People love these kind of cosmetic touches and during booms, buyers eat this up. As markets get tighter, the pool of buyers dwindles as many realize that they may be buying at a high premium. Buyers in solid positions are questioning current prices on homes. Since these buyers are tentative, there is now talk about bringing less credit worthy buyers to get the game going again. That is yet to be seen.

Many of the homes on the market are currently listed at near peak prices, even getting close to what they were during the manic days of 2005 to 2007. Take a look at this place in Pasadena:



1616 Corson St Pasadena, CA 91106

2 beds, 1 bath, 780 square feet

http://www.doctorhousingbubble.com/home-buying-duration-tiny-homes-pasadena-real-estate/