Anyone investing in rental properties in Pierce County?

[burritos]

I bought a new SFH 2004 in puyallup. I also got a new SF townhouse in Fife in 2005. Both bought with 20% down and with a 30 year 6% fixed rate. Both are rented out, but each currently have a negative cash flows of $100 a month. I'd really like to get a property in the Dupont area too, but an acquisition there with today's prices would be too much of a negative cash flow for me. Any opinions on whether there might be a market slump in the Pierce County? The RE agent I have in Pierce says no.

[sniglet]

Yes, I would say there are extremely good odds that there will be a major real-estate slump in the entire Puget Sound area with a minimum of 40% declines, and more likely in the 70% to 80% discount range (from today's prices) within the next 4 years.

For evidence, just look at the statistics for how many Puget Sound sales in recent years were based on exotic financing (e.g. 100% finance, no-doc loans, negative amortization, etc). Now that these kinds of loans are difficult (or impossible) to get a lot of the demand is going to disappear. Further, because of the popularity of these exotic mortgage types in recent years (up to 40% of all sales) we now have the most fragile market this region has ever seen: populated with numerous people who have little or no equity with which to whether any kind of downturn.

In fact, the vast majority of the people getting these exotic loans were gambling that price appreciation would bail them out and they were unable to really afford the homes they were buying in the first place (hence the need for the exotic financing).

I would suggest just holding off on buying another rental for 2 years or so and you should be able to easily pick up properties for 40% less than today.

[burritos]

[sniglet]

[redmondjp]

[rose-colored-coolaid]

[burritos]

[burritos]

[Ubersalad]

burritos...

if you're measuring in "decades", then you have no reason to be here, since nothing that is being offered here right now would apply 20 years down the road.

you can buy anything right now...you might hit a jackpot 20 years down the road.

[burritos]

[Ubersalad]

this blog has been existence for more than 2 years and so far in this last 2 years, there have not been any measurable decrease in price.

that should answer your question, nobody knows.

[burritos]