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Old 03-04-2009, 11:11 AM
 
85 posts, read 162,814 times
Reputation: 25

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Quote:
Originally Posted by oneasterisk View Post
But who sets what the price should be? The market does. The market, being those who are buying.
Yes, market sets the price based on supply and demand. But, the demand was inflated by investor homes and RE flippers who were out to make quick bucks. It was unfortunate that several real buyers got caught into it. The demand equation is also going to become worse due to economic situation and as buyers realize that they will continue to see price depreciate for next several % points to come. Not to mention that supply side of the equation is already bad and getting worse. Another major factor is affordability in NoVA is one of the worse in the country.

Reality that got lost was that home is supposed to be a place to raise family, participate in the neighborhood etc. rather than be treated as part of your financial portfolio.

The sooner we get to acknowledge the reality, the better it is for our growth and economic prospects as we can start building from there. The longer we take, more likely we are to follow Japan in languishing at zero/negative growth in the years to come.

At the end of the day, I am sure we will come out better as a nation when we look upon this as a learning experience.

Last edited by spidercharm; 03-04-2009 at 11:32 AM..
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Old 03-04-2009, 12:18 PM
 
Location: Censorshipville...
2,674 posts, read 6,238,435 times
Reputation: 1543
I understand what you two are saying, but that was what was happening in the past. Now look to the future. Yes homeowners who bought in the bubble are trying to get out by selling at inflated prices, but that doesn't mean home buyers are going to buy at those prices. A person buying in today's market is probably more savvy than ever before. They will not want to over pay for a house today, because the value could still drop.

Now who knows what will happen with the Fed trying to bolster prices with their programs.

Quote:
Not really. The price of the house you buy should be under 4 times your salary
That's all fine and dandy, as long as the lender is holding the buyer to that standard. In the bubble years that wasn't happening, I bet it's happening now.
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Old 03-04-2009, 12:51 PM
 
314 posts, read 342,032 times
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Quote:
Originally Posted by oneasterisk View Post
I understand what you two are saying, but that was what was happening in the past.
The thread is about house prices are still overvalued. The OP and some others including myself are in agreement that we are still in the correction phrase. I don't think I call it the past. I probably am more likely to call it the peak.
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Old 03-04-2009, 01:48 PM
 
Location: Censorshipville...
2,674 posts, read 6,238,435 times
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I guess it depends on the region. I'm in PWC, and I believe the peak was back in 2006. Houses have declined since then. I'm buying an investment property at 42% of it's peak selling price. If it goes down in price some, then I can live with it because I have a bit of a cushion and I plan to hold onto it for a few years.
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Old 03-05-2009, 10:19 PM
 
52 posts, read 184,720 times
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Quote:
Originally Posted by Denton56 View Post
The value of any house is what someone is willing to pay for it. Very simple. A house is not over valued at any price, if people think it's worth that amount and buy it. The market decides the value of everything, including houses.
Exactly.

No matter how brilliant and clever the Excel tables and formulae of historical data of assessments and sales prices, factoring in general inflation and depreciation and home improvements and the quality of afternoon sun raking across an immaculate lawn, reasonable market prices are determined by what reasonable buyers are paying at a particular point in time.

Much as grim times seem to suggest a Priceline approach to some buyers, naming their own prices according to their own logic, there's nothing that suggests that the curve of sellers' desperation matches the curve of optimism of the deep bargain hunters who see slashed prices and want to slash a further 40% more.
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Old 03-06-2009, 11:40 AM
 
85 posts, read 162,814 times
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Quote:
Originally Posted by RW333 View Post
Much as grim times seem to suggest a Priceline approach to some buyers, naming their own prices according to their own logic, there's nothing that suggests that the curve of sellers' desperation matches the curve of optimism of the deep bargain hunters who see slashed prices and want to slash a further 40% more.
It took 7 years to arrive at this "once-in-a-lifetime" spectacular mess. Do you think it's going to end that fast? Curve of optimism is falling faster than you think. Unemployment just hit 8.1% and heading towards double digits. Even if NoVA lags behind the national unemployment numbers, it is bound to get worse...it's just a matter of time.

Not to even talk about trillions being lost in wealth by stock market crash on almost a daily basis.

Bargain hunters are making the same mistake people made during 2007/2008, when it looked like a bargain. Most are getting wiser for what that's worth.
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Old 03-06-2009, 02:21 PM
 
Location: Burke, VA
269 posts, read 898,620 times
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Quote:
Originally Posted by spidercharm View Post
It took 7 years to arrive at this "once-in-a-lifetime" spectacular mess. Do you think it's going to end that fast? Curve of optimism is falling faster than you think. Unemployment just hit 8.1% and heading towards double digits. Even if NoVA lags behind the national unemployment numbers, it is bound to get worse...it's just a matter of time.

Not to even talk about trillions being lost in wealth by stock market crash on almost a daily basis.

Bargain hunters are making the same mistake people made during 2007/2008, when it looked like a bargain. Most are getting wiser for what that's worth.
That 8.1% Unemployment rate does not capture the full picture, because it depends on what sub-group you fit into! And NOVA has one of the highest rates of College-Educated workers in the nation. Plus, this area has many double-income couples, and so we aren't being affected as much even when layoffs do occur.
www.bls.gov/news.release/empsit.t02.htm

Unemployment Numbers

High School Grad Only - 10%
College Grad - 3%
African-American Male - 16.1%
White Woman - 6.2%
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Old 03-06-2009, 02:45 PM
 
Location: Virginia (again)
2,697 posts, read 7,772,462 times
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Quote:
Originally Posted by spidercharm View Post
Not to even talk about trillions being lost in wealth by stock market crash on almost a daily basis.
Trillions lost almost daily? I am by no means minimizing the devestating losses that have occured, but another 2 weeks of that and we'd be at Dow Jones Industrial Average 0.
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Old 03-06-2009, 10:32 PM
 
85 posts, read 162,814 times
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Quote:
Originally Posted by sls76 View Post
Trillions lost almost daily? I am by no means minimizing the devestating losses that have occured, but another 2 weeks of that and we'd be at Dow Jones Industrial Average 0.
Of course, what I meant was trillions that have been lost so far due to stock market crashes occurring on almost a daily basis!!!

Just in 2008, 30 trillion wiped out in global markets. 2009 has been even more brutal so far.

http://www.davemanuel.com/2009/01/02...value-in-2008/
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Old 03-07-2009, 07:07 AM
 
5,071 posts, read 8,616,501 times
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Quote:
Originally Posted by spidercharm View Post
Of course, what I meant was trillions that have been lost so far due to stock market crashes occurring on almost a daily basis!!!

Just in 2008, 30 trillion wiped out in global markets. 2009 has been even more brutal so far.

Global Stock Markets Lost $30.1 Trillion Dollars of Value in 2008
You seem somewhat upbeat about the carnage. When you find the $200K four or five-bedroom in Arlington or McLean, there will probably be wild dogs roaming the streets of Sterling!
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