Housing Bubble Popped but why aren't the prices reflecting it? (Tampa: mortgage, credit)

[Prichard]

If it is listed for $400,000, then dropped to $389,000, then sold for $375,000 that does not imply that the market is weak. Conversely, if the house lists for $365,000 and sells for $375,000, that means nothing either.

Here's why the above statement is dead wrong. It assumes that houses are listed at arbitrary prices - too high, too low, doesn't matter. Bad assumption. In reality, there is usually quite a bit of research that goes into determining what price ask for a house - it is based on recent passed sales of similar houses. So, if someone lists a house for $400,000 based on past sales of similar houses, and it doesn't sell close to that mark, it most certainly is an indicator of market weakness.

This is just "spin" at its worst. It is a long standing economic principal that relative price is highly determanitive of demand/supply, i.e. market strength.

[kelly3120]

nychiefsfan

ohhh my goodness you are the STAT MASTER!

=)

[SKB]

If you saw him you would think he was king of the Stair Master.

[JimKing]

No, an asking price of $400,000 does not mean they did careful research. It could be totally meaningless. After the run up in prices where banks and appraisers played along, all asking prices need to be completely dissected by the potential buyers.

If an asking price is $400,000, and a house next door sold for $395,000 2 months ago, who cares? Maybe the price is decent...maybe not. Maybe the seller bought for $225,000 4 years ago and is trying to make out like his neighbor did.

Just because people are overpaying for a house does not mean you should to. Compare rental rates for comparable houses and multiply by 120-150. That is a better indicator of the right sale price.

Asking prices are many times totally meaningless as to true value.

[kelly3120]

ahahahah!

skb ....that was CLEVER! ...props to you and your cleverness!

[Audacious]

Originally Posted by kelly3120

I am and I say we are on our way up!

up up and away!

Based on the MLS data for my area I gotta agree. I said this time and again, RE conditions are a LOCAL issue. What may be going on in Calif, the NE or Michigan is not an idicator or portent of every RE market. What a house sells for IS the value of the house. "Seller and buyer both being aware of the market"

Are we to believe that anyone who buys a house for more than what this blog says it is worth is a fool???? I doubt it very much. But I am glad to see all the negative BS on this thread, I only wish more people would read it or it could be published or something like that, makes it alot easier for those of us who want to invest or buy a home.

[kort677]

Originally Posted by Audacious

Based on the MLS data for my area I gotta agree. I said this time and again, RE conditions are a LOCAL issue. What may be going on in Calif, the NE or Michigan is not an idicator or portent of every RE market. What a house sells for IS the value of the house. "Seller and buyer both being aware of the market"

Are we to believe that anyone who buys a house for more than what this blog says it is worth is a fool???? I doubt it very much. But I am glad to see all the negative BS on this thread, I only wish more people would read it or it could be published or something like that, makes it alot easier for those of us who want to invest or buy a home.

people who don't have a grasp of things don't realize that the way to look at the RE market is not to view things gloom and doom but to see that houses are on sale! 20-30-40% off.
I know if they went to Wally world and saw their favorite product marked down 25% they wouldn't say wait a few weeks maybe it'll be 40% off, no they'd be buying all they could at the sale prices.
I hope that makes sense

[lostbuyer]

i have a serious question to ask,is David Lereah related to alberto "I dont recall"gonzales?they seem to have the same, stick two one punchline routine......lmao...

[Audacious]

Originally Posted by simplify3

My neighborhood, Golden Gate Estates, has a stalled housing market. It's a good thing right now.

There was SO MUCH CONSTRUCTION going on for about two years - the dumptrucks were EVERYWHERE, the rock quarry had to shut its doors 'cause it ran out of rock! - the landfill was getting nervous with so much construction debris.

Meetings were held, projections were made to the year 2030 and new roads started getting built. Now we can start to see that those projections were sorta like the projections in 1999 that the stock market would get past 30,000 --- taking a current temporary trend a projecting it WAY into the future. It never works, whether in stocks or housing.

Last time I checked there were 600 houses and 300 pieces of property (or visa versa) for sale in the Estates ("the largest suburb/subdivision in the world" - Swampland for sale). All stalled.

People bought at the peak of the bubble. Way too much money. Thought they could FLIP.

Now you find out the "Flip This House" show was a fraud and a fake. People are starting to either take their houses off the market and --- well, actually start to LIVE here, or rent their houses out.

But selling? People still expect to get back what they paid plus profit. The profit is gone for now, people. Maybe it'll come back - probably when Ave Maria is finished in the summer '07 prices may go up a little.

But they haven't gone down enough (the prices that is). And I don't think they'll drop like a stone --- unless the stagnation continues for another year or more...

Ken
Newshungry, citizen? sections/view.php/37/links/1 - http://free.naplesplus.us (broken link) - local yokal jokes and recipe sharing site.

Well said, every market area is unique onto itself BUT it is the market that determines value. After the runup in prices 2003 to 2005 the market said this is crazy and adjusted itself. In some areas up to 30% and more. Those who bought in 2005 will have to wait for the market to catch up to them. It is not a question of if but a question of when. Also, in some areas the market IS returning to life and balance could be approached within the next 6 to 12 months. VARIABLES: the tax reform, how much reform; interest rates, a divided issue, many say up in 2008 others say down in the last quater and flat thereafter for a year or more; The " H " word, all bets are off if a big one blows through. As a sidenote, I know a few people who did extremely well with Charley.

[Baja Boomer]

Historically, I wouldn’t be entirely surprised to see a scenario with an "echo boom" (i.e. suckers rally) this year or next. Echo booms are not uncommon in bubble markets and are typically characterized by a boom (which we've already had) > small crash > false bottom followed by a shaky boom w/a smaller peak > full crash to the bottom. It happened with the NASDAQ in 2001. It also happened with the 1929 market crash, where the Dow Jones increased by 38% between Nov. 1929 and April 1930, before continuing its crash.

We'll just hope that this real estate crash doesn't follow the Japan model, which took about 18 years or so to really begin to recover.

I really don't mean to sound like a big honking party pooper or doom & gloomer, it's just that I've really studied this issue in depth. It does not give me any pleasure to have been right so far. If this is as bad as it's going to get, I'll be very happy about it!