Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
We all know that there was a push of buyers that thought the tax credit was going to expire these past few months. You also will get the same artificial push again this spring for the same reason. Then what? With no governmental help, rising foreclosures, rising interest rates, and unemployment still at very high levels......... where is the recovery going to be? I agree with Lumbollo that until people's salaries increase home prices have to decline.
Also, I do think the lower housing market is near a bottom, but the mid to upper end housing market has a ways to go before the bottom is hit.
Also, for Jan. 2010 - List price $229,214 - Sold Price $200,592. A DECREASE of 5.2% from December 2009. ( which was $211,705 in Dec. ) Just a little important information left out of your last post
The article you linked to showed data from Oct - Dec, so I posted the information for that only.
I was a little surprised Dec went up so much. But my point overall was, the data can be interpreted in so many ways depending on how you look at it and the months you are comparing.
I have been on the fence waiting for some kind of bottom. I am looking to buy a house in the higher end, and prices are dropping like crazy. Some of the houses that I have looked at a few months ago have dropped 500k in price. There are so many foreclosures and short sales in this price range that one can only expect future downward pressure on their prices. It's making it hard to buy anything now.
Bajunqueen,
Here are a few more examples of how the government is holding up the housing market and why one should worry that changes might be coming to the housing sector.
1. Federal Housing Administration loans, an increasingly important source of financing for many borrowers, especially those with low and moderate incomes. Imposed more stringent lending criteria in January which will cause less people to qualify for the loans. Less loans available to people equals less home sales. Inventory increases, prices decline.
2. Home Affordable Modification Program, the government-backed plan to get banks to help troubled homeowners, has kept the market from being flooded with foreclosures, as hundreds of thousands of borrowers are negotiating with their lenders for lower payments. Eventually, observers say, much of that backlog will wind up in foreclosure because homeowners simply don't have the income or ability to make modified payments. A new surge of bargain-basement foreclosures would undermine home prices.
3. The home buyers tax credit of $8,000 for first-time buyers and $6,500 for repeat buyers expires April 30. Although many experts think the program simply caused people to buy houses earlier than they had planned, its end is likely to cause a dip in home sales.
4. Mortgage Interest Rates poised to rise. The Federal Reserve is poised to turn off a major money spigot that has helped sustain the ailing real estate sector, as an extraordinary program under which the Fed has pumped $1.25 trillion into the mortgage market is slated to end March 31.Experts agree that the Fed's exit will cause mortgage rates to rise.
Last edited by mmoorecharlotte; 02-16-2010 at 07:52 PM..
Reason: added
The Fed is eventually going to be forced to raise it's rates from 0%. There are reasons for this well beyond the scope of this topic having to do with the destruction of the dollar. This will cause havok with all loan rates however and if mortgage rates rise just a couple of percent, you will see the bottom drop out of this market fast. Right now will look like good times. Asset devaluation comes quickly when another big segment of buyers get priced out of a particular market.
Remember prices today are still way above where they should be and they are being held there due to the irresponsible printing of money by the Federal Reserve in collusion with the Treasury for political purposes. The democrats want to hold control of the government and they are wreaking the financial system in order to do so. The pains caused by this delay in letting market forces take over is going to be a lot worse now than if they had let it happen 2 years ago.
Yes lumbollo, the trillion and I mean Trillion dollars the Fed has put up to keep 30 year mortgage rate in the high 4%'s is going away.
This is like any incentive that goes away (0% on cars ect), it will hurt for a while.
What really needs to be changed is the required 3% down on FHA.
This is not enough collateral to keep homeowners from walking out of these properties and banks having to foreclose. There are 300-400 HUD homes that are on the market Weekly, with 90%of those North of Uptown Charlotte.
And yes, I blame the Banking Queen for wasting Billions of our hard earned tax dollars.
I have been on the fence waiting for some kind of bottom. I am looking to buy a house in the higher end, and prices are dropping like crazy. Some of the houses that I have looked at a few months ago have dropped 500k in price. There are so many foreclosures and short sales in this price range that one can only expect future downward pressure on their prices. It's making it hard to buy anything now.
Bajunqueen,
Here are a few more examples of how the government is holding up the housing market and why one should worry that changes might be coming to the housing sector.
1. Federal Housing Administration loans, an increasingly important source of financing for many borrowers, especially those with low and moderate incomes. Imposed more stringent lending criteria in January which will cause less people to qualify for the loans. Less loans available to people equals less home sales. Inventory increases, prices decline.
2. Home Affordable Modification Program, the government-backed plan to get banks to help troubled homeowners, has kept the market from being flooded with foreclosures, as hundreds of thousands of borrowers are negotiating with their lenders for lower payments. Eventually, observers say, much of that backlog will wind up in foreclosure because homeowners simply don't have the income or ability to make modified payments. A new surge of bargain-basement foreclosures would undermine home prices.
3. The home buyers tax credit of $8,000 for first-time buyers and $6,500 for repeat buyers expires April 30. Although many experts think the program simply caused people to buy houses earlier than they had planned, its end is likely to cause a dip in home sales.
4. Mortgage Interest Rates poised to rise. The Federal Reserve is poised to turn off a major money spigot that has helped sustain the ailing real estate sector, as an extraordinary program under which the Fed has pumped $1.25 trillion into the mortgage market is slated to end March 31.Experts agree that the Fed's exit will cause mortgage rates to rise.
Thanks for the clarification. You had only mentioned the tax credit in your statement. I agree with you ncentives to buy does not equal to one's ability to afford. Bottomline, a buyer's budget is the bottom line that's how the mess was started.
I so love when people in the industry are saying "things are picking up" and talk about doing a "market analysis" - it's pretty funny to me because it's like the hungry shark convincing fish to drop over for dinner and then showing them fuzzy math to explain why they should get eaten.
Most of the statistics and market analysis are useless imo (most, not ALL)... Apologies to the professionals here, but I don't really care too much what sold at what price 6 months ago. Frankly, I don't even hold the ultimate value in very recent sales of say a 3 month history. All you are doing is tracking the downward spiral and in the end I don't believe "market value" is attainable at this point. It's amazing to me that the banks are writing anything and it's no surprise that what is really moving is the <250k market. Anything above that is moving at heavy discounts and I'm talking HEAVY. It seem that the reports are just of 1 deal topping the next.
None of this is saying that homes won't sell in the >250k market because they will... The problem is that there's no way to make a significant dent into this inventory without factoring in the foreclosures and short sales. Just recently a foreclosure in Providence Downs sold for $325k... Do yourself a favor and drive through that community. This was one of many crazy things that we saw recently. If bargains like that are being found there (in arguably the A+++ location of Union County AND being a custom home), what is in store for all those tract built homes all over the area?
I'll point back to lumbollo's point that nobody seems to want to address... when salaries in the area don't support the values, it doesn't take a crystal ball to see what's coming.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
