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Sorry folk but there is nothing natural or market driven about the prices in the existing market. There is no connection whatsoever between rent/sales ratios or any of those numerics. This market is being driven by the lenders and there desire to be rid of the foreclosures in the shortest possible time.
It is a completely manipultated market. If the lenders, in their wisdom, decide prices should go up five percent...up they will go. Ohh the volume may adjust after a while but the price will pretty well go where the lenders put it.
When the mortgage crisis has run its course we will see where we are. I would hazard a reasonable run up almost immediately upon the lenders ceasing to offer REPOs at prices well below the comps.
But no way is this anything but an artificially manipulated market.
Not complianing...I like it fine. But be careful about any conclusions on fundamentals until some months after the manipulatons stop.
Great posts. But here's the thing ... a lot of the repos, at least in my area, are gutted properties that need a lot of work. So the comps can be pretty misleading in that regard.
I've seen construction crews working for weeks on really cheap repos but, the buyer is obviously having to spend a lot of money and ...
You have to wonder how much closing costs, if any, the lender paid since I've heard buyers are asking a lot for that as well.
It's really difficult to figure out what the real market price is when you try to factor in those things.
When do you see a price bottom in the Vegas market? Most analysts say it is at least 1 year away.
When I started this thread I was referring to "bottom" as prices not volume.
Do you Olecapt believe that inventory levels have peaked in Vegas? If so, please tell us and we will check back in with you in 6 months.
Price bottoms this summer I think. (Las Vegas only!!) Volume is growing to fast for it to continue long. Getting hot and competitive out there.
Volume is official up a little over 4% since the first of the year. If you look at "available" listings it is down 10%. Difference if the treatment of pendings.
Under any circumstances year over year inventory will be down in the next few months. I would expect month over month to be negative in that same time frame. Again the volume is growing too fast for any other outcome.
Great posts. But here's the thing ... a lot of the repos, at least in my area, are gutted properties that need a lot of work. So the comps can be pretty misleading in that regard.
I've seen construction crews working for weeks on really cheap repos but, the buyer is obviously having to spend a lot of money and ...
You have to wonder how much closing costs, if any, the lender paid since I've heard buyers are asking a lot for that as well.
It's really difficult to figure out what the real market price is when you try to factor in those things.
We have some damage but virtually nothing gutted. Removing appliances is typical. Most though are fine. I have seen very few with damage any place near their discount. That is why they sell so well. The lenders are giving them away.
Price bottoms this summer I think. (Las Vegas only!!)
I think you may be right with other areas as well. I live out in the California desert where inventories are extremely high (obviously not a premium area) ...
However, I moving to a more desirable area of Monterey County where I've been bidding on some foreclosures and .... I'm seeing demand pick up on decent properties at about 30-35 percent below peak price.
People keep arguing that there will be more adjustables and foreclosures coming on the market and that prices will go down further to as low as 50 percent. I'm not so sure based on what I'm seeing ...
What do you think of that argument? I see a lot of people who are wishing prices will go down further but I'm not convinced that it will actually happen.
I see a lot of people who are wishing prices will go down further but I'm not convinced that it will actually happen.
I agree. In my area, there was a big chance from last fall until a couple of weeks ago. Right now anyway, prices seem to be stabilizing. Only time will tell.
Price bottoms this summer I think. (Las Vegas only!!) Volume is growing to fast for it to continue long.
I think Phoenix may be headed the same way. It could a little beind Vegas however. In the past few years Vegas had been a leading indicator for Phoenix. The vegas market started going south (ie sales volume) in mid late summer 2005. Phoenix and specificly Anthem seemed to be hit with sales slow down fall 2005. By winder 05/06 sales really dropped off like a rock despite prices holding on. So am thinking that Vegas is again being a leading indicator of Phoenix. March & April sales of resale homes in Anthem has been higher in these months than anything goign back to early 2006. So volumes are not crazy yet, but they do seem to be their best point 2 years and double what they had been back in Dec & Jan. Pending sales are up showing that May sales are also likly to be strong. Sure prices have dropped from $205 a sqft to $127 a sqft, but I see that as needed to get the invetory moving. It also appears that inventory levels are at their lowest in 2 years and have been trending down.
Seems to me that prices may still slid some, but with increase volumes prices will stop their slid over the summer as well. Not I can't really say if things are as hot as Las Vegas right now, but it does seem like this downward spiral is showing signs of reversing.
Warren Buffet said in a speach this weekend that he thought we were no where near an end to the housing decline... but then, what does he know.
Warren Buffet was quoted in response to the entire market. There are some areas like Seattle that are overpriced that have not seen a decline as of yet and will. The people who's posts you are responding to are areas where the declines have been going on for 2 years now and have declined very rapidly in historical terms. I am sorry to tell you that prices are not going to decline as far as you and many others think they should. In large part because of a well studied concept known as sticky prices. In addition to this rents have been on the rise and in some areas that have seen lots of foreclosures rents have gone up 11% in just the last year. Higher rents are going to prevent housing from declining to historical numbers.
In my market the rental market is amazing and most people that make a home purchase within the median home sale price range can actually own a home for less than it would cost them to rent it.
Buying Real Estate is a personal decision. There are some people who should own, others should rent.
There are many variables. If you want the truth, the market will bottom, when the supplly decreases and the demand increases, so watch the inventory when it starts to go down the prices will start to go up again.
All the best!
Kevin O'Shea
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