Housing Bubble Popped but why aren't the prices reflecting it?

[SKB]

Originally Posted by Marc Vaughan

I'm amazed at the amount of people who are indicating a 5 year downward cycle in house prices in America - is this based on fact or just wishful thinking on the property you'd be able to purchase if this happened?

In other countries where similar bubbles have burst the downward effect has generally lasted for between 12-18 months after which the house prices rose again upwards at a similar rate to the pre-burst market.

For this reason I'm actually looking at purchasing currently ..

Yes, please now inform us, what other countries are you referring to?

The current deflating USA credit bubble was the largest bubble in the history of the world so there is NOTHING to compare it to.


But please, go ahead and buy now, prices are still dropping but go ahead and make that deal!!!!
Someone has to catch that falling blade, so thanks in advance.

[nychiefsfan]

Originally Posted by Marc Vaughan

I'm amazed at the amount of people who are indicating a 5 year downward cycle in house prices in America - is this based on fact or just wishful thinking on the property you'd be able to purchase if this happened?

In other countries where similar bubbles have burst the downward effect has generally lasted for between 12-18 months after which the house prices rose again upwards at a similar rate to the pre-burst market.

For this reason I'm actually looking at purchasing currently ..

I guess there are two trains of thought that involve:

1. Those who buy when others are selling and sell when others are buying

2. Those who rely on tangible proof and research before they make a major purchase (or any purchase, for that matter).

The bottom line of my research is this:
The median household income for Florida between 2003-05 was $42,079. According to Century 21, they recommend spending no more than 2-3x your gross income on a home. If the median Florida salary is $42k, then the median salary can afford a home that's worth between $84k and $126k.

And what can you buy for that?

That's why homes are overpriced right now!!!


Lawrence Yun can make all the excuses in the world why homes aren't selling, but you can bet your bottom dollar that most economists know what I just explained.

The MAIN reason is they're overvalued. Period!!!

[hiknapster]

Originally Posted by JimKing

By the way, I noticed that the real estate agents on this forum post all the time, all hours of the day.

If Florida real estate is having a surge and these prices are just fine, in line with fundamentals, and real estate should continue going up and up....how do you find the time to post?

It would seem to me you would be out in the field all the time, showing houses, networking, attending closings...busy, busy, busy. I would think you would not have any time to be on this forum with all that work out there.

I noticed that a long time ago.

By the way, we've recently had a LOT of real estate agents on the Tennessee forum. We use to have ONE. She rarely came on and has always been very helpful.

In the past month, we must have at least six posting. Every one of them is very nice, helpful, honest and doesn't have an agenda. But I find it interesting that, even in Tennessee, real estate agents seem to have more time on their hands.

[kort677]

Originally Posted by hiknapster

I noticed that a long time ago.

By the way, we've recently had a LOT of real estate agents on the Tennessee forum. We use to have ONE. She rarely came on and has always been very helpful.

In the past month, we must have at least six posting. Every one of them is very nice, helpful, honest and doesn't have an agenda. But I find it interesting that, even in Tennessee, real estate agents seem to have more time on their hands.

I don't think anyone can argue the fact that the real estate market is very slow, but that is why this is a good time to be a buyer, there is a lot of inventory to choose from and prices are down.
some think the glass is half full others see it as half empty.

[JimKing]

You can not point to past real estate bubbles and compare them to Florida's. Florida has several issues that are unique.

1. It is a lower wage state, relying on service jobs and tourism related jobs more than most other states.

2. Property taxes are capped with small increases for existing owners and huge jumps to new owners.

3. Hurricane insurance costs are large and growing.

4. Florida has traditionally relied on retirees and lower housing prices to fuel much of its growth.

5. Prices increased more than any other state with the possible exception of parts of California.

6. The Florida market leads the nation in the percentage of subprime loans.

7. Florida had a higher percentage of flippers as buyers.

So to point to other markets that recovered in 12-18 months is meaningless. This bubble is the perfect storm of various factors that will all come to a head over the next few years.

[UKOK]

Originally Posted by kort677

I don't think anyone can argue the fact that the real estate market is very slow, but that is why this is a good time to be a buyer, there is a lot of inventory to choose from and prices are down.
some think the glass is half full others see it as half empty.

And some said they were leaving, but then came back.

[lostbuyer]

its funny how the argument shifted from,"theres no bubble" to "well maybe there is but its not that bad" what will be next ?prices didnt fall 50% they only fell 35%...so you are still wrong...too funny....people please now is not the time to buy...and even if prices didnt drop any further(which I doubt)they also aint going up anytime soon...so you have plenty, and I mean plenty of time to look around...

[memoriesbre]

2011 will be a sellers market. Be patient out there. The market stinks in alot of states right now. Florida is having a hard time. Prices have dropped since I sold my home back in November 06. If I still had my home for sale I would probably get $100,000 less than in Nov. If you have to sell, then work hard at it. Post your home in all the free real estate websites. I did and it sold at the price I wanted for that point in the market.

[JimKing]

Originally Posted by lostbuyer

its funny how the argument shifted from,"theres no bubble" to "well maybe there is but its not that bad" what will be next ?prices didnt fall 50% they only fell 35%...so you are still wrong...too funny....people please now is not the time to buy...and even if prices didnt drop any further(which I doubt)they also aint going up anytime soon...so you have plenty, and I mean plenty of time to look around...

lostbuyer...that is my pet peeve with the real estate folks on this forum. The entire time prices and property taxes were running up they were saying, more, more, more. Big commissions, lots of people entering the business. None had any problems then, and none were shouting warnings that things were getting overpriced for regular people.

Now, they want all of us to listen to them as far as pricing houses. Any formulas such as three times income or 120 times rent as rough guidelines for housing prices are no good in their minds. The very people that caused the problems now want to be the voice of reason. That to me is ridiculous.