[swfl]

I think the real estate market will "correct" for the next 3-5 years. After such an overheated market, it is going to take more than the shallow correction that most people who make a living in RE are predicting. A lot of the previous "demand" in my area (WPB) has been speculators or "flippers". Since that demand dried up, numerous homes and condos are sitting around with for sale or for rent signs. I really think it is a "buyers" market...they can rent for cheaper than to buy while they wait for the inevitable price drop.

And if someone really needed to buy a house in this market, I would buy a new house from the developer....because they can and have lowered their prices to move inventory. They are not stuck with a loss....just a lower profit margin. Existing homeowners don't have that luxury...some or most are upside down in their financing.

I really never understood the tax deduction argument. It is only everything above the standard deduction that counts. Let's say the standard deduction is 10,000 and you can deduct 12,000 mortgage interest and taxes....2,ooo above....we're not talking about much of a selling point for a tax deduction.

If the interest rates suddenly start rising, then home prices will drop automatically. It is an inverse relationship.....just as the home prices rose with the FED dropping the rates...which sparked this overheated market in the first place.

[SKB]

Originally Posted by rxt

It's interesting reading all of the articles about how much prices have dropped, because it's very misleading. In our city, the percentages are very different from one zipcode to another and even within our zipcode, there are substantial differences between subdivisions (some are more desirable and in more demand than others). Just in our subdivision, one house has dropped it's priced $150k and hasn't sold, while several other homes have only dropped their prices $10-$20k and have sold. People prefer one house style to another or one lot location vs another. The price of a house is based on supply and demand. Some houses will sell quicker and at a better price because they've been fixed up, in a better location, etc while other homes will need to be discounted if they're on a less desired lot or haven't been updated.

I read how people say they're not going to buy a home unless the market drops 25 or 50%. That's great, but what happens if the market only drops 15% and then rebounds... are you going to rent for the rest of your life? Or what happens if home prices do drop 25%, but interest rates spike to 9 or 10%? You now might not be able to qualify for that home. I'm not a realtor, but I think people need to look at the big picture. Nobody can accurately predict long term what is going to happen with home prices, interest rates, etc. If you can find your dream home now for a good NEGOTIATED price and lock in at around a 6% 30 yr fixed rate mortgage and you can afford your monthly mortgage payments.... why gamble on your housing future..... unless you like living in an apartment and not having any tax deductions.

If the market only drops by 15% (which is already has in some areas) nothing is going to make the market miraculously “rebound” over night.

Interest rates going up to 10%? For some people that could poise a problem if they are not prepared with a great down payment and excellent credit. This really should be the goal for anyone wishing to purchase a home. Going in prepared with what you need to be successful at homeownership makes more sense than getting an 80/20 and stating your income and then struggling to make that payment each month. Now that those scenarios have dried up and all the other “creative” financing is going up in smoke how are average people going to purchase homes in Florida?

What needs to happen is a return to the historical norms of the median income versus the median price of homes.
When this happens not only will homes become affordable again, it will correct the taxing issue and the insurance crisis.

So while we are patiently waiting for the correction this is what people should be getting prepared with:

1. large down payment
2.Excellent credit score ( 700+)
2. Six months of emergency savings in the bank.


For my situation if the interest rates would to go up to 10+++ % this would not hurt me as I am prepared.
At this point though, I wonder if I would even buy a house considering what my savings account balance would look like each month. I may be tempted to just continue renting and use the interest I am receiving to more than cover the rent.

You can always re finance your interest rate, but once you lock into a mortgage you can not negotiate your way out of what you bought it for.

As far as gambling, I am not willing to gamble with all of that money we have saved up to purchase a home. What if I purchased now and the value of the home dropped by 10’s of thousands of dollars. This loss would be my REAL money that we saved and used to pay for the house.

My husbands work colleague purchased a lovely home in Carlton Oaks in Feb, 2007 they paid 365,000 and put down 113,000.
This newer community of two styles of homes 3 or 4 bedroom were selling for as low as 222,000 in 2002 and went for as high as 500,000 at the peak of the bubble.
I spoke with them in December just before they moved and we discussed the bubble, they indicated that they didn’t want to “throw money away on renting”. They would only rent for two months and then buy a home.
I have noticed that his same home (3 bedrooms) in April being offered for sale at 14,000 less what he paid in Feb.

When you are dealing with your own money that you actually worked and saved for it is a heck of a lot different than the “paper money” that you thought you had in home equity.

I am not prepared to take a loss like that, no way.

[JimKing]

You have to look at longer term trends. Florida real estate will go down for years and years. The spring always brings a 'dead cat bounce' in a bad market.

Prices are very sticky on the way down. But momentum will build. Some sellers will become more pressed financially, renters will realize they can get great deals, new home builders will keep building, gas prices and inflation will slowly eat away at incomes. All sorts of factors will eventually contribute to Florida real estate going down, down, down.

There is no bottom now. There will be no bottom a year from now. You will get small spikes up, but the overall long term trend will be down.

And there will be no huge influx of bably boomers coming after retirement to save the day. The vast majority of boomers have very little savings and will find they need to keep working. The ones that do retire to Florida will downsize to condos and townhouses. Very few will buy the 3-4-5 bedroom houses that are flooding the Florida market. Also, more and more states are competing for the boomers retirement housing, Texas, Tenn, Carolinas, etc.

Ignore the 'statistics' given by realtors and the government. Real life evidence tells you inventory is growing, buyers are becoming renters, costs of taxes, utilities, insurance, gas, etc. are steadily increasing and more people are tapping out their credit cards day by day.

The long term trend is down folks, plain and simple.

[nychiefsfan]

Originally Posted by SKB

If the market only drops by 15% (which is already has in some areas) nothing is going to make the market miraculously “rebound” over night.

Interest rates going up to 10%? For some people that could poise a problem if they are not prepared with a great down payment and excellent credit. This really should be the goal for anyone wishing to purchase a home. Going in prepared with what you need to be successful at homeownership makes more sense than getting an 80/20 and stating your income and then struggling to make that payment each month. Now that those scenarios have dried up and all the other “creative” financing is going up in smoke how are average people going to purchase homes in Florida?

What needs to happen is a return to the historical norms of the median income versus the median price of homes.
When this happens not only will homes become affordable again, it will correct the taxing issue and the insurance crisis.

So while we are patiently waiting for the correction this is what people should be getting prepared with:

1. large down payment
2.Excellent credit score ( 700+)
2. Six months of emergency savings in the bank.


For my situation if the interest rates would to go up to 10+++ % this would not hurt me as I am prepared.
At this point though, I wonder if I would even buy a house considering what my savings account balance would look like each month. I may be tempted to just continue renting and use the interest I am receiving to more than cover the rent.

You can always re finance your interest rate, but once you lock into a mortgage you can not negotiate your way out of what you bought it for.

As far as gambling, I am not willing to gamble with all of that money we have saved up to purchase a home. What if I purchased now and the value of the home dropped by 10’s of thousands of dollars. This loss would be my REAL money that we saved and used to pay for the house.

My husbands work colleague purchased a lovely home in Carlton Oaks in Feb, 2007 they paid 365,000 and put down 113,000.
This newer community of two styles of homes 3 or 4 bedroom were selling for as low as 222,000 in 2002 and went for as high as 500,000 at the peak of the bubble.
I spoke with them in December just before they moved and we discussed the bubble, they indicated that they didn’t want to “throw money away on renting”. They would only rent for two months and then buy a home.
I have noticed that his same home (3 bedrooms) in April being offered for sale at 14,000 less what he paid in Feb.

When you are dealing with your own money that you actually worked and saved for it is a heck of a lot different than the “paper money” that you thought you had in home equity.

I am not prepared to take a loss like that, no way.

GREAT POST!!!

[Qacer]

Originally Posted by UKOK

We were at a realtors yesterday in Sarasota and he told us flat out that Sarasota has reached the bottom and started it's slow climb back up. He said March of '07 was much better than March of '06. Things still look extremly over priced to me. Still, this is from a local Sarasota real estate magazine:

BEST LOCAL REAL ESTATE MARKET SINCE MAY 2006
The Sarasota Real Estate market rebounded in March 2007, with the best sales figures in 10 months, reinforcing recent expectations that the market is in recovery from a decline that bottomed out in the fall of 2006.
Total combined sales of single family homes and condominiums rose to 653 in March 2007, compared to February 2007, climbing by 51 percent. Pending sales also show a brighter furture ahead for the Sarasota market. There were 383 pending sales in January 2007, 565 pending sales in February 2007,and 705 pending sales in March 2007. Closed transactions increased in each of those months. This information was obtained from the Sarasota Realtor Magazine.

It's funny because according to the county: Sarasota is laying off workers due to a decline in the construction industry (broken link)

[nychiefsfan]

Originally Posted by JimKing

You have to look at longer term trends. Florida real estate will go down for years and years. The spring always brings a 'dead cat bounce' in a bad market.

Prices are very sticky on the way down. But momentum will build. Some sellers will become more pressed financially, renters will realize they can get great deals, new home builders will keep building, gas prices and inflation will slowly eat away at incomes. All sorts of factors will eventually contribute to Florida real estate going down, down, down.

There is no bottom now. There will be no bottom a year from now. You will get small spikes up, but the overall long term trend will be down.

And there will be no huge influx of bably boomers coming after retirement to save the day. The vast majority of boomers have very little savings and will find they need to keep working. The ones that do retire to Florida will downsize to condos and townhouses. Very few will buy the 3-4-5 bedroom houses that are flooding the Florida market. Also, more and more states are competing for the boomers retirement housing, Texas, Tenn, Carolinas, etc.

Ignore the 'statistics' given by realtors and the government. Real life evidence tells you inventory is growing, buyers are becoming renters, costs of taxes, utilities, insurance, gas, etc. are steadily increasing and more people are tapping out their credit cards day by day.

The long term trend is down folks, plain and simple.

I totally agree with you, JK. Realtors keep telling us that "Now is the time to buy!!!"

BS!!!!

Now is the time for them to get the big commissions while the prices are still high. They have sales quotas to make each month. Of course, they're gonna tell us to buy now, just like they said to "Buy now" 6 months ago when prices were even higher.

Try to find one realtor who will tell you, "wait 6 months to a year because the prices will drop." That person doesn't exist.

[nychiefsfan]

So today, the National Association of Realtors (NAR) said that existing home sales dropped 2.6%, also marking the ninth straight month that prices for existing homes dropped from year ago levels, with the national median price down 0.8 percent to $220,900.

The NAR blamed the weak data on a hangover of the subprime lending crisis and unusually warm winter weather that pushed some buyers into the market earlier in the year.

Of course, they won't blame themselves for encouraging sellers to sell their homes for significantly more than what they're worth. They've come up with every excuse in the book on why they're not selling homes (bad publicity, taxes, tighter lending standards, the weather, etc), except for the fact that they're way over-priced to begin with!!!

And they keep telling us, "Now is the time to buy..."

[SKB]

Originally Posted by nychiefsfan

So today, the National Association of Realtors (NAR) said that existing home sales dropped 2.6%, also marking the ninth straight month that prices for existing homes dropped from year ago levels, with the national median price down 0.8 percent to $220,900.

The NAR blamed the weak data on a hangover of the subprime lending crisis and unusually warm winter weather that pushed some buyers into the market earlier in the year.

Of course, they won't blame themselves for encouraging sellers to sell their homes for significantly more than what they're worth. They've come up with every excuse in the book on why they're not selling homes (bad publicity, taxes, tighter lending standards, the weather, etc), except for the fact that they're way over-priced to begin with!!!

And they keep telling us, "Now is the time to buy..."

Keep talking my friend and welcome to the board!!!

We need a few more housing bears around here that know what they are talking about.

Cheers on some great posts and great insight!!!!!!

[nychiefsfan]

Originally Posted by SKB

Keep talking my friend and welcome to the board!!!

We need a few more housing bears around here that know what they are talking about.

Cheers on some great posts and great insight!!!!!!

Thanks for the kind words and the welcome, SKB. I really appreciate the fact that I can use this board as a venting place for my frustrations with realtors, home builders and existing home sellers. With the writing on the wall, they still insist on trying to get 2005 prices when trying to sell a house right now.

Many people took out home equity loans during the housing boom and bought new cars, went on vacations, etc and have incorporated their luxuries into their selling price. I'm not willing to buy their new cars for them. They'll have to take that one on the chin, and the longer they wait, the less they'll get for their homes.

But I digress. Once again, I'm venting!!!

Thanks again for the kind words and I'll keep this thread updated immediately as any pertinent housing news becomes available.

[SKB]

I could not agree more, MEW was such a rage, so stylish and couture. A lot of these people used their ATM until it ran dry.

They are all crying foul, fraud, mislead, lied to, conned into, talked into, didn't know, didn't read, thought their home would appreciate forever, a new model, a new paradigm, it's different this time, real estate never goes down, running out of land. bla bla bla...It grew quite nauseating and continues to as we read more and more sob stories.

I am telling you one thing, if the government starts coming up with bailouts for these people there is going to be a riot of mass proportions.

I as a tax payer who has been financially responsible should not be punished for the mass sheeple mentality.

Rant off.