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Thread summary:

Realtor opinions on when to buy home, when to trust real estate agent, hiring new real estate agent, low interest rates not only reason to purchase home

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Old 12-02-2008, 04:30 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 21,050,060 times
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Quote:
Originally Posted by Hobokenkitchen View Post
To be quite honest I would be thoroughly suspicious of any agent at the moment who was not 'insecure' in their views.
The fact is that NO-ONE - not agents, not economists, not mortgage guys, knows exactly where this market is going.
I realize that everyone is looking to the agents to tell them that it's all going to be hunky dory, and right now I cannot do that with good conscience.

Your last comment is more or less correct, however in these modern days of regular moving and no such thing as a 'job for life', I am not sure that it holds entirely true. It is one thing to buy hoping to turn over quickly for a profit, and quite another to buy somewhere planning to live in it for a substantial amount of time - 5 + years. However man plans, and god laughs as they say, and at the moment if you get relocated for work, or laid off that 6 - 8 month emergency fund that you should have whittled away in case of emergency, may or may not be enough to save you.

So again, while agents are experts in their area, I absolutely defy any agent to know absolutely what is going to happen in their local market in the coming years based on the state the economy is in. Even the trends that they follow could prove to be off. We just don't know.
Well yes and no. I certainly don't feel secure in saying that the bottom is here or here in the spring or such. I do feel reasonable secure to state that it is highly probable the present levels will not be held very long. I would also agree that a general meltdown could screw up whatever. Note that even your cash holding are suspect...this could easily turn into hyper-inflation where owning property is far more desirable than holding currency.

Our market by the way is very robust volume wise. October was the best October in history for volume. November will not be as good but will still be 2.5 times last year. Prices continue to drop maybe another 3% or so in November. But at the first sign of a fall off in REPOs I would expect a rapid price rise and likely a fall off in volume.

Quote:
When listing properties I actively encourage a pricing strategy based on the price range and warn clients that buyers (especially on high end property of 1 million to 2 million) are lowballing.

For buyers, I am giving the recommendations I outlined above. Right now to buy a house it had better be the 'right' house. Ie; make sure that you LOVE it, and that you pay BELOW the just sold comps, because you could be there for a long time.
I guess we have a problem on "comp". On nice homes here you don't get any significant difference below the comps. Maybe a few percent but no more than that. Now if you find a REPO in a good area with no other REPOs you might be able to get well below the comps...but in good areas that is a few percent of the homes or less. So you can perhaps do it...but you are ruling out 95% or more of the homes. Most clients I know of who are going for nice areas won't do that. NOw if the area is wiped out by foreclosures you still won't score. The lenders have it down pretty well and will sell at or just a little below the comparables REPOs.

Quote:
I'm sorry that my honest answer to this question caused 'hmmms', but I can assure you that those agents who claim to know exacty what the market is going to do - don't.

Even the atmosphere in real estate offices and on broker tours has shifted in recent weeks. Going from the 'we must educate our clients that real estate is local and our area is doing well' (true for Philly as it happens), to 'it's no longer about price, no one is buying'. This is not just true of my office but offices all over the north east where pricing has up until now held better than in some other areas.
Don't complain. I rather wish we had held in that slow, deliberate decline we began the drop with. Then came the REPOs and the very high volume and rapid price drop. Maybe it is better to have it dropping 3% a month...but it is tough on sellers. Our standard advice to sellers is don't...rent it out.

Quote:
I happen to believe that it is ALWAYS about price. If the house I like which is priced at 1,295,000 dropped to 900,000, I would buy it. But at the moment in this market, I am not paying over a million for it. Someone else might. But it's been sitting at this price since June with no offers, so who really knows.

You may not want it to be true, and believe me, I don't either, but this is the case IMHO.

There are some excellent agents on this board, and I agree that it may be a great time to buy if you get a great deal on your dream home (BELOW comps) and have a longer term view. In that case, go for it and buy. I would.

Otherwise I would wait, and this may be the route we take ourselves. We shall see. What I am NOT about to do is to recommend to others that they rush out and buy if I am not prepared to do that with my own cash. Sorry.
As I have said elsenwhere best time to buy in at least ten years here. And it is a good time for the investor, for the speculator...I am in fact thinking about putting a portion of my mothers money into a couple or three little houses. She has sufficient liquidity in other areas so this would set her up against an inflationary runup. The estate would end up making money as well I suspect over a relatively short future.

And I will continue to advise sellers not to sell. Even if it costs me income. Here you wait for the change. It will come. Unfortunately I think a lot of the volume may go away...but the market giveth and taketh. Out two or three years this will all seem like it never happened...
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Old 12-02-2008, 10:32 PM
 
377 posts, read 1,077,066 times
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It's only an "average" time to buy... and that's only if you know what you're doing. You need to really understand the market and really be a seasoned real estate investor to be able to determine a "great deal". Most people think that if they're getting "x" dollars off the asking price or "x" dollars under the last comp, it's a good deal. You really need to look at several other factors and calculate some projections in order to tell.

For the average homebuyer, this is a great time to figure out which neighborhood you want to live in and start creating a spreadsheet tracking all of the "very similar "homes for sale in that neighborhood. Keep track of the number of days on the market and how many price reductions it took to sell and the difference between the intial asking price and selling price. Once you see the number of days on the market decreasing, the number of price reductions decreasing and the difference between the asking and selling price decreasing, you'll know that the market is starting to get stronger. There are other factors to look at also, but I didn't want to write a book here.
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Old 12-02-2008, 11:20 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 21,050,060 times
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Quote:
Originally Posted by stevep View Post
It's only an "average" time to buy... and that's only if you know what you're doing. You need to really understand the market and really be a seasoned real estate investor to be able to determine a "great deal". Most people think that if they're getting "x" dollars off the asking price or "x" dollars under the last comp, it's a good deal. You really need to look at several other factors and calculate some projections in order to tell.

For the average homebuyer, this is a great time to figure out which neighborhood you want to live in and start creating a spreadsheet tracking all of the "very similar "homes for sale in that neighborhood. Keep track of the number of days on the market and how many price reductions it took to sell and the difference between the intial asking price and selling price. Once you see the number of days on the market decreasing, the number of price reductions decreasing and the difference between the asking and selling price decreasing, you'll know that the market is starting to get stronger. There are other factors to look at also, but I didn't want to write a book here.
Virtually all that data is readily available to your neighborhood RE Agent.

I think however the market in a city is better looked at as a whole. The neighborhood data is impossibly noisey. Simple things like which lender makes a large difference in how the sale proceeds.

In general the investor is in pretty good shape if he simply follows the age old guidelines. There are lots of positive cash flow places with solid margins. Does not get a lot better.
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Old 12-03-2008, 12:08 AM
 
377 posts, read 1,077,066 times
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Quote:
Originally Posted by olecapt View Post
Virtually all that data is readily available to your neighborhood RE Agent.

I think however the market in a city is better looked at as a whole. The neighborhood data is impossibly noisey. Simple things like which lender makes a large difference in how the sale proceeds.

In general the investor is in pretty good shape if he simply follows the age old guidelines. There are lots of positive cash flow places with solid margins. Does not get a lot better.
The re agent has some of the data, but there are other variables that we also track. For ex: 2 homes in the same neighborhood might have the same sf but could sell for drastically different prices, maybe because one has a very chopped up floorplan, or might be on a very busy street, or hasn't been updated (or updated with strange upgrades), or has smaller backyard, or a bad view, etc. These also need to be tracked, so that you make adjustments to the price to come up with an accurate value. In our neighborhood there could be a difference of $100k between homes built in the same year with the same sf and you'd never be able to determine the reason for the difference by only looking at the realtor's data.

Personally, I like looking at the whole city data just to get a trend of where the market is potentially going, but then drill down into the neighborhood data because a lot of neighborhoods in our city have been appreciating/depreciating at very different rates. Actually, even in our neighborhood, specific houses and floorplans have also appreciated/depreciated at different rates in the past 6 years.
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Old 12-07-2008, 07:54 AM
 
Location: NorthTexas
634 posts, read 925,797 times
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I think for some people this will be a very bad time to sell and for some a very good time. There is no absolute answer for everybody, everywhere. Just like there are no two people alike, there are no two situations exactly alike. Some people will come out on top and some people will loose, I think the important thing is NOT TO PANIC!
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