looking for a condo not sure about the town

[elflord1973]

Originally Posted by E-TOWN-R.I.P.

BTW, it was just announced today that average homes sales and home construction are up 3%, higher than the forecasters predicted. The Dow just topped 8,400. These are signs that the market is coming back.

The question is, which "market", and "coming back to" what ?

The housing market isn't "coming back" to 2006 bubble levels, it's "coming back" to historical norms, which are lower than 2006 and lower than today's prices.

The stock market is "coming back" to a more optimistic view of future earnings.

[elflord1973]

Originally Posted by kalim2008

The main point here which people keep forgetting is that people left and right are losing their jobs, and two big job makers, chrysler and GM, might soon go into bankruptcy.

Great post. One thing to add to that though -- Chrysler already filed. The senior secured creditors weren't going to let the subordinate (but politically favored) creditors get off with better terms.

GM are probably next in line, for the same reasons as Chrysler.

The problem with these analyses that rely on the stock market, is that the stock market is a leading indicator. So suppose you're losing money. Your stock goes down. You layoff enough of your workforce that you are reasonably profitable again. Then your stock starts going up. You keep this up for a year, and the market thinks you'll be back to boom time profits in 2 years. Because stock prices are forward looking, your stock trades at a premium relative to current earnings, even though you're producing barely over 1/2 what you were before. At this stage, the real estate bulls conclude that house prices are going to magically return to levels before the bust (ignoring the fact that the real economy hasn't recovered, and ignoring the fact that when the real economy does recover, a return to peak prices is unlikely)

[E-TOWN-R.I.P.]

Originally Posted by kalim2008

Sorry, did not know you lived there...but:

1. How can Trulia "lowball" actual sales numbers? Median sales for that town was $725k last year, it was $530,000 this year, a 27% decline in sales price Y/Y

2. That 3% rise in pending sales is for the NATIONAL MARKET, NOT for the northeast.

Lots of other places have dropped off the earth in terms of value, and are thus stabilizing (e.g. FL), but the NE, where we are, actually DROPPED m/m and y/y in that same report.

The quote: "The index in the Northeast fell 5.7 percent...in March and is 24.1 percent below a year ago."

3. I would never predict the economy based on the stock market. This is the same market that mispredicted the internet bubble and kept rising to historically high levels while homes were already being foreclosed and the housing market crumbling in 2006/2007. What you're seeing are speculators, not real investors, as someone from the NASDAQ said last week.

The main point here which people keep forgetting is that people left and right are losing their jobs, and two big job makers, chrysler and GM, might soon go into bankruptcy.

Then I guess I'm saying Trulia's wrong. There's NO WAY that the average home sale price in Westfield last year was $530,000. You'd be hard pressed to find a decent home in Westfield for $530k. BTW, I own a townhouse, not a house, so I'm not trying to pump up the town. Also, I've been actively looking for a house in Westfield and you won't get much for $530k. So I highly doubt those stats.

[E-TOWN-R.I.P.]

Originally Posted by elflord1973

The question is, which "market", and "coming back to" what ?

The housing market isn't "coming back" to 2006 bubble levels, it's "coming back" to historical norms, which are lower than 2006 and lower than today's prices.

The stock market is "coming back" to a more optimistic view of future earnings.

Nobody said they're coming back to 2006 levels. What I said was that prices in the Westfield/Cranford/Springfield area aren't getting lower. In fact, they're inching up. I'm a seller and a buyer, so it doesn't really help me either way. But I've been watching prices in this area for months, and they're not falling as much as they were six months ago. Like I said, many prices are going up.

[kalim2008]

Originally Posted by E-TOWN-R.I.P.

Then I guess I'm saying Trulia's wrong. There's NO WAY that the average home sale price in Westfield last year was $530,000. You'd be hard pressed to find a decent home in Westfield for $530k. BTW, I own a townhouse, not a house, so I'm not trying to pump up the town. Also, I've been actively looking for a house in Westfield and you won't get much for $530k. So I highly doubt those stats.

1. That's the median sales price during Q1 2009, not average sales price, and not last year. The median sales price Q1 2008 (last year) was $725k...it DROPPED y/y by 27% to $530,000

2. So, you're saying let's just ignore actual sales data and go with your individual perception of sales? Hmmmm...that sounds reasonable....

[kalim2008]

Originally Posted by E-TOWN-R.I.P.

Nobody said they're coming back to 2006 levels. What I said was that prices in the Westfield/Cranford/Springfield area aren't getting lower. In fact, they're inching up. I'm a seller and a buyer, so it doesn't really help me either way. But I've been watching prices in this area for months, and they're not falling as much as they were six months ago. Like I said, many prices are going up.

1. Listing price does NOT equal actual sales price.

2. If we compare actual median sales y/y for Feb-April using Trulia data, all those towns are either stagnant or have dropped.

Cranford: +1.9%
Springfield: -15%
Westfield: -27%

Only Cranford went slightly up, but that is probably within range of error, so you could say that's stagnant.

Personally, in this town, last year I saw a home close by sell within a couple weeks at asking price, and I now see a home in about the same area and

[elflord1973]

Originally Posted by E-TOWN-R.I.P.

Then I guess I'm saying Trulia's wrong. There's NO WAY that the average home sale price in Westfield last year was $530,000. You'd be hard pressed to find a decent home in Westfield for $530k. BTW, I own a townhouse, not a house, so I'm not trying to pump up the town. Also, I've been actively looking for a house in Westfield and you won't get much for $530k. So I highly doubt those stats.

There are lots of reasons that could be the case. And it's median, not average. It's also sales price, which could be very different from list price.

Here are some possible explanations as to why these could be different:

1. it's possible that many places that are listed don't sell (because they're listed at unrealistic prices). Maybe the sales are all of places that are priced to sell, and these places don't sit on the market long (which means they have less visibility in the listings)
2. it's possible that the places that do sell could end up selling well below their list price
3. it's possible that the sales are largely confined to the low end of the market.

[elflord1973]

Originally Posted by E-TOWN-R.I.P.

Nobody said they're coming back to 2006 levels. What I said was that prices in the Westfield/Cranford/Springfield area aren't getting lower. In fact, they're inching up. I'm a seller and a buyer, so it doesn't really help me either way. But I've been watching prices in this area for months, and they're not falling as much as they were six months ago. Like I said, many prices are going up.

Sales prices year on year are down, no up. It's difficult to determine price when sales are low, but low sales numbers tend to mean that list prices are too high for buyers.