Dr. Housing Bubble tells the tumultuous story of one two bedroom 1 bath 825 square foot home in Santa Ana, California. The little house sold for $88,000 in 1988 and had skyrocketed in “value” all the way up to $505,000 when it was sold in 2006. The 90 year old house is current on the market for $177,495. [Dr. Housing Bubble]

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  1. B says:

    The funny thing is if you bought it in 1988 and sold it today, you would have made a decent profit, but it doesn’t feel that way.

  2. backbroken says:

    I have a mansion, forget the price. Ain’t never been there, they tell me it’s nice. I live in hotels, tear out the walls. I have accountants pay for it all.

    Life’s been good to me so far.

  3. Lucky225 says:

    California sux

  4. JollyJumjuck says:

    @Lucky225: At least the house prices do.

  5. thesabre says:

    So, buy it now for $177k and when the market goes back up, sell it. Buy low, sell high. The market fluctuates, especially around the time of a presidential election and even more when there is a presidential election after a 2-term president. It happened in 2000 and 1988 as well. Not as bad, but it comes and goes in cycles.

  6. whatsthisnow says:

    Oh my goodness. I spent a part of my chidhood there. A large part of Santa Ana is a dusty ghetto. Bars on all the windows, cops don’t go there, etc. I imagine that’s where this house is. I can’t imagine paying anywhere close to this for what is probably a falling-down stucco shack.

  7. bohemian says:

    I want someone to find and interview the sucker ..eerrr.. investor that paid $500,000 for that house.

    I found this comparison of castles and certain US housing markets amusing.
    [www.divinecaroline.com]

  8. Empire says:

    @B: A five percent annual return is “a nice profit?” It doesn’t even beat inflation.

  9. u1itn0w2day says:

    @thesabre: buy low sell high-you got it.Too many bought high and wanted to sell higher-must of been high themselves for that would mean infinate inflation with that logic but I guess that’s what raw unabaited greed does.I’ve been priced out of living in certain areas thanks to house flippers.

    The house flipper creates artificial inflation,even places like the local laundromat more than doubled their price because of the volume of construction workers washing clothes quadroopled for a while.The lower rents get devoured when an area goes through extreme developement.Existing landlords see the boom and want their piece of the pie ie higher rents.

    Have no sympathy for anyone who bought a home strictly for profit.Can’t even stand the longer term resident crying when someone gets foreclosed in their neighborhood “oh my house went down to”-but you have a place to LIVE and are apparently making payments on agreed upon terms.

  10. synergy says:

    wtf?? 825 sq.ft. is NOT a home. That’s the size, I kid you not, of my apt in Texas. That’s insane.

  11. u1itn0w2day says:

    Location location location-isn’t that what they say.Funny thing is that the LOCATION that seems to draw people to it chases people away-first by pricing out the average person then even over pricing the richER.The whole boom seemed like a bit of a ponzi scheme.I guess that’s where the timing comes in.Some of the experienced flippers on these tv shows always emphasize get rid of it as quickley as possible yet many want to turn their flips into to Steven Speilberg productions.Some are just always late to the party.

  12. burgundyyears says:

    $612/sq ft. Wow, what a bargain that must have been! I think I’ll stick with my $57/sq ft. home. Thx.

  13. u1itn0w2day says:

    The more I read Dr Housing Bubbles post the more it infuriates me.This is outrageous,this is ridiculous and this IS a prime example of flipping/’lending’ gone wild.Even if you are looking for a place to ‘live’ what the heck were you thinking at 505K$ when the average income in that area is 44K$ per year.I always heard things like your mortagage should be no more than 3 times your yearly salary.What the heck were you thinking as a borrower-you were probably SPECULATING in the back of your mind-I’ll just sell it-for a profit if I get stuck-it all comes back to the shorterm speculator.