Interesting view on the real estate slump (Baltimore, Dundalk: for sale, real estate market)
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bawlmer -- One cannot argue with a guy like you. I do not think that most agents conceal anything. They simply do not volunteer anything, and are not required to volunteer anything. That's not being dishonest, but cautious because anything they say beyond certain listing information can land them in trouble. For example they recommend that you contact the school district for any information about schools.
rudy_d: What information counts contracts as sales? Perhaps developers do in their internal stats, but contracts are not counted as sales in the listings published in the Daily Record or The Sun.
rudy_d: What information counts contracts as sales? Perhaps developers do in their internal stats, but contracts are not counted as sales in the listings published in the Daily Record or The Sun.
Barante,
They may not be in the actual sales published in local newspapers, but signed contracts for new homes are counted as sales in the local and regional sales figures released by the government. These figures are then spun by the media and the NAR as signs that the market is bottoming. Also, just drive around to a new housing development and look at the billboards and signs that say things like "90% sold" or "last phase selling." Most are probably just referring to contracts that the buyer can back out of before the project is completed.
Here's some discussion of the subject from an excellent financial blog:
Location: Pigtown!! Washington Village Does NOT Exist.
692 posts, read 1,855,209 times
Reputation: 104
Quote:
Originally Posted by rudy_d
Barante,
They may not be in the actual sales published in local newspapers, but signed contracts for new homes are counted as sales in the local and regional sales figures released by the government. These figures are then spun by the media and the NAR as signs that the market is bottoming. Also, just drive around to a new housing development and look at the billboards and signs that say things like "90% sold" or "last phase selling." Most are probably just referring to contracts that the buyer can back out of before the project is completed.
Here's some discussion of the subject from an excellent financial blog:
You also have to consider that those billboards advertising "90% sold" don't also say "sold to investors who have no intentions of living in the homes". Granted, a sale is a sale, but you have to look at quality sales vs sales that continue the downward spiral.
In my neighborhood, a lot of homes sold during 2005-2006. Now a large portion of them are for rent and owned by out of town investors. That doesn't make for a healthy community -- in fact, we have a ton of vacant rentals...which to me is no different than any other vacant house, other than the fact that they're not boarded up. Which is no comfort to those of us who live here.
Carolott -- The hit that Pigtown is now taking will only be temporary. The seed has been sown. Your neighborhood's location is too compelling.
Having said that it is obvious that not only will Pigtown suffer when these out-of-town investors go belly up. A classic tale comes from Hollins Market-Union Square, where during the Reagan go-go years administration insiders including Ed Meese and Lyn Nofziger bought blocks and blocks. When they abandoned those shoddily done rehabs it became a long-term nightmare for the community.
Something similar is happening now.
Location: Pigtown!! Washington Village Does NOT Exist.
692 posts, read 1,855,209 times
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Quote:
Originally Posted by barante
Carolott -- The hit that Pigtown is now taking will only be temporary. The seed has been sown. Your neighborhood's location is too compelling.
Having said that it is obvious that not only will Pigtown suffer when these out-of-town investors go belly up. A classic tale comes from Hollins Market-Union Square, where during the Reagan go-go years administration insiders including Ed Meese and Lyn Nofziger bought blocks and blocks. When they abandoned those shoddily done rehabs it became a long-term nightmare for the community.
Something similar is happening now.
I think the difference is that there are enough of us here who won't let the abandonment make much of a dent in the progress. What we need in Pigtown is slow, thoughtful growth -- not a rush by a flock of vultures who want to get in and get out...which, on some level, is what we've had thus far -- and it obviously hasn't worked well.
Pigtown is poised for some wonderful things...I just hope that the "too many captains and not enough soldiers" mentality leaves, and leaves quickly.
I like your optimism jonjj, but it is just that optimistic. I studied the market as it began to crash Winter 2006, and like I thought the second the homes stopped appreciating in value, and new homes sales began decreasing, the market began to panic. Why? Because of the most important market predictor present today. Perception, what the mass thinks, or in this case hears on the news, is going to happen. PERCEPTION is the NEW REALITY..... they said it was a bubble, so it burst. The media, liberal biased, currently is painting the grimmest picture of the economy and the housing market. Result - people are not buying, home values are dropping, foreclosures, and a poor economy.
My forecast is exactly what the mass is predicting, bottom late 09 then spring 10 values go up. But what most people are missing, is that the second home values show any sign of increasing - the market will probably go into a frenzy. Which will be fueled by all the people waiting for rock bottom.
Army Boy -- I wish I could be optimistic. I see a very rocky road ahead for a long time.
For example, I think it is totally irresponsible from an economic viewpoint for some presidential candidates to promise a rescue package for gullible homeowners who paid too much, never understood what they were getting into and got suckered into a skyrocketing ARM interest rate. The banking industry will condemn me for saying this, but the smartest thing most of such buyers can do is to bite the bullet and walk away from it.
Most won't do that, if they can prevent it, for a lot of reasons, including psychological. So what will happen? If they have to sell a $350,000, they won't get anywhere that price but may have to consider $280,000. Which means that at settlement, regardless of their interest rate, they will have to cough up the difference, which they will not be able to do.
I think we are in a real mess. That said, the coming months will present a tremendous opportunity for those who have the money/credit, know what they are doing and can spot good buys.
In summary: I don't think we are anywhere near the bottom yet and the climb back will slow, difficult and uneven. This will impact the whole economy because for housing reasons people cannot afford to move out of their home town, even if they should.
Add to this the likelihood that we will be into a hell of an inflational spiral. Everything points to that. All material costs are going on. For those with good pay, having low-interest loans at this point is a godsend. But most Americans will be hard up because their pay packages are not going to match the rate of inflation.
Just my two cents.
Army Boy, I think that in most cases you would be absolutely accurate: That mass perception IS the new reality.
But in this case, affordability played a huge role. The median home price must equally roughly 3 times the median income. So unless salaries go up dramatically by 2010. Or 100% financing on stated income instantly comes back.
We got a long wayyyyys to go. And it would be down.
Location: Pigtown!! Washington Village Does NOT Exist.
692 posts, read 1,855,209 times
Reputation: 104
Quote:
Originally Posted by bawlmer
So are you saying Pigtown is in good shape or bad shape?
My world isn't quantified with terms as simple as "good" or "bad" -- there are many factors when assessing a neighborhood. Our community is changing and evolving constantly, and I look forward to the day that I can look back and see the considerable progress from the time I moved here.
I think we're on a solid, positive path, and I hope and pray we stay on this path.
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