[CuriousMike]

Originally Posted by olecapt

Yes...and Casinos make lines on any number of interesting things...but has that got anything to do with reality?

What's more real than making money?

[dmilll]

Originally Posted by olecapt

What the F*** is a Case-Shiller Investor? Some idiot doomsday jerk?

Spare me. We may not yet have seen the bottom but we are close.

Case-Shiller is a reporting technique...it has nothing to do with investors and does not project futures.

That task is left to the Doomsday jerks.

I have no idea who these investors are but it is certainly plausible to predict a further drop in prices by year-end. The bottom may not be as close as some people think...

A while back I noted that the historical median price to income ratio for Las Vegas (1980-2004) is 3.46. Using the latest available Median wage data for Clark county (60K from Fannie Mae/HUD), that translates to a median home price of approx $208K or a 13% drop based on the latest GVLAR Median price of $237K.

Just counting the last few years makes little difference. The ratio from 2000-2004 is 3.53. That translates to a median price of approx $212K or an 11% drop from the GVLAR number.

IMHO, there are a few wild cards out there that could negatively affect price in the next year or so...

Interest Rates - Prime is 3.25% less than last year at this time and I just don’t see it staying this way much longer especially with the current state of the dollar and energy costs. National averages for 30 & 15 year fixed mortgages are 6.34 & 5.94% respectively (Bank Rate). Any significant increase is sure to make potential buyers think twice about the higher monthly payments they would be taking on.

Buyers Willingness - By this I mean investing in a home where the price may very well stay flat or drop in the short term as opposed to the last few years.

Taxes - If any of the proposals floating around gain traction (e.g. lifting the income cap on S-Security, letting the tax cuts expire, Capital Gains etc.), the segment of the population most affected will be the ones most likely able to buy a home using traditional lending practices. Less income will probably translate to lower sale prices.

[olecapt]

Originally Posted by CuriousMike

What's more real than making money?

Go bet on red or black...almost have the time you will feel real..

[Daddys///M3]

Originally Posted by dmilll

Interest Rates - Prime is 3.25% less than last year at this time and I just don’t see it staying this way much longer especially with the current state of the dollar and energy costs. National averages for 30 & 15 year fixed mortgages are 6.34 & 5.94% respectively (Bank Rate). Any significant increase is sure to make potential buyers think twice about the higher monthly payments they would be taking on.

Prime rate won't stay this low for much longer. However, this will only affect car loans and credit cards. Mortgage rates are determined solely by mortgage backed securities. Specifically, in the case of fixed rate mortgages, FNMA and GNMA bonds. As the economy worsens the investors pull from stocks and funds to invest in more stable bonds. As more money is invested in bonds, the price and yield of said bonds decreases as the need for big payouts to attract investors decreases.

Bankrate is not an accurate tool to measure rates at all. Their averages are not calculated by deals that actually fund, but instead by advertised rates with no bearing on costs and fees, which would be advertised in the form of APR. Without an average APR to compare against, those average rates are worth any quoted rate without accompanying APR.

[CuriousMike]

Originally Posted by olecapt

Go bet on red or black...almost have the time you will feel real..

I only play games that are in my favor. Near as I can tell anyway, sometimes I'm wrong. I deal with it.

IMO, real estate is a bad play right now...and Vegas in particular isn't turning around for awhile.

[Coop01]

Originally Posted by CuriousMike

I only play games that are in my favor. Near as I can tell anyway, sometimes I'm wrong. I deal with it.

IMO, real estate is a bad play right now...and Vegas in particular isn't turning around for awhile.

I suspect that a lot of people in the Real Estate business actually started believing their own hype and invested in the overheated market with the expectation that this ponzi scheme would continue. This left them in a highly leveraged position with no hope of flipping their investments. The continual cheer leading of the GLVAR and NAR and similar trade associations is more of the same. I read their announcements more for amusement than information IMO..
The prices will fall until the common buyer can qualify for the loan and afford the product.
It reminds me of the admonition given to Al Pacino in "Scarface" - "Remember - Never get high on your own supply" and "Never underestimate the other guy's greed"
IMO - Nothing could be more true in this case.
Now - let the floggings begin. Associated press announces the arrest to two former Bear-Sterns managers. I hope this is just the beginning

[WOHR]

Here's a question. My neighbor just put their home up for sale after only living there for 9 months. He's an agent/broker. I know they paid $400,000 for the house. Zillow gives it a value now of $384,000 I think. 2 years ago it was valued over $500,000. He's got it on the market now for $499,000. What is his thinking? Do you think he is giving a lot of buffer room for the price to come down? I think they put in about $10,000 to fix it up, but nothing special except for the travertine floors. The house is almost 3000 sq. ft with a pool. I think they are flippers. I do not think they were in their last house for more than a year either.

[CuriousMike]

Originally Posted by WOHR

Here's a question. My neighbor just put their home up for sale after only living there for 9 months. He's an agent/broker. I know they paid $400,000 for the house. Zillow gives it a value now of $384,000 I think. 2 years ago it was valued over $500,000. He's got it on the market now for $499,000. What is his thinking? Do you think he is giving a lot of buffer room for the price to come down? I think they put in about $10,000 to fix it up, but nothing special except for the travertine floors. The house is almost 3000 sq. ft with a pool. I think they are flippers. I do not think they were in their last house for more than a year either.

I wouldn't be judging a house based on what Zillow says. There are so many homes going for 20-30% lower than Zillow's low estimate let alone their average. So go ahead and put it at 499K, not that he'll sell it, but who cares what he's thinking...he's daft.

[Daddys///M3]

Originally Posted by WOHR

Here's a question. My neighbor just put their home up for sale after only living there for 9 months. He's an agent/broker. I know they paid $400,000 for the house. Zillow gives it a value now of $384,000 I think. 2 years ago it was valued over $500,000. He's got it on the market now for $499,000. What is his thinking? Do you think he is giving a lot of buffer room for the price to come down? I think they put in about $10,000 to fix it up, but nothing special except for the travertine floors. The house is almost 3000 sq. ft with a pool. I think they are flippers. I do not think they were in their last house for more than a year either.

Perhaps he has no intention of selling his home, but rather is using it as a way to bring potential clients to him. Perhaps the price point is just a way of picking up the clients that are interested in said price point.

Then again, maybe the comps in the area support the asking price, or maybe he had it appraised and the upgrades brought it up to that value. Maybe he bought it well under market and even though it has lost some value it actually is still worth $499K.

Or maybe he is just entirely too optimistic.

[Buzz123]

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