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Originally Posted by mechanico
People are taking out lines of credit, against their depreciating home equity, to put down deposits on condos that won't be built for 2-3 years?
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Of course some people are, but I doubt everyone is or even a majority. These condos aren't exactly for the average state worker making 30K a year that barely had enough to put a down payment of 5% their first house where a downturn wips out any equity and puts them upside down.
Contrary to poplular belief, there are quite a few fairly well off people in this region, most of which don't live in the City of Sac...but are ready to cash out much much more money than a small downturn can wipe, out to a less expensive condo and live a different lifestyle. (Which is why I think many of these buyers are buying, not just to make money) Many of these people are the ones that are buying, along with some well to do younger people who are I'm sure taking equity for the deposit.
I would bet a lot of the people that are buying these very high end units really aren't going to go broke with a small (5-10%) downturn in the market. They have owned homes for many many years, built a ton of equity, and while it sucks to lose equity at anytime, they won't exactly be hurting or go upside down.
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Why would you put down a deposit now? Prices aren't going up anytime soon.
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I would hypothetically bet just about anything that the units that would be for sale 2-3 years from now will be more than the units for sale right now.
Brandon or Lobo - Maybe you can clarify, are prices for units now more than when you bought during the first phase? What about from phase 2 to phase 4? It's been less than a year between P1 and now, right?
When people see there is no turning back and it is 10000000000000000000% for sure it will be completed, I think everything will be fine. He only needs 36 more...that's nothing.