It's not the time to buy! Not good enough. (mortgage, sales, accept)
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I'm not a financial expert, but it's pretty obvious that a few things are going on that probably indicated we're at least 3-6 months from the bottom, BUT - you've got to define what part of the market you're talking about.
First, with all of the Wall Street issues it's clear that much wealth and discretionary income has evaporated for some people, the "third" or "fourth tier" wealthy, Wall Street types, etc..., really - many people with investments.
It's harder for buyers to get mortgages, which means there will be unsold inventory
Housing in our area (NY metro) is selling about 5%-10% below asking, which can be significant. People's perceived wealth is less than their actual wealth.
Companies have their own investments and as the overall market slows down with the Recession, it's unlikely that retailers will have a great holiday season. That means smaller bonuses, job cuts, etc...
It's going to take awhile for that to reverberate through the economy, but the big bailout meeting in DC is allegedly about the "Holy ***t" nature of these issues: high energy prices. Business and homeowners unable to get credit, which is typically fueled back into the economy. A weak dollar. Failed consumer confidence, which causes fewer purchases, which results in lower earnings, which results in layoffs, which results in homeowners unable to afford their mortgages, which results in unsold housing inventory, etc.... As each individual's personal wealth gets challenged, people put more on credit, have a harder time paying bills, take loans with worse terms, fall into higher risk categories, etc...
Obviously, I'm oversimplifying, but it's all either directly or indirectly related...
HOWEVER, in our area, housing is still competitive at the bottom of the market, since people are downgrading or downsizing to a smaller home. The entry level of the market is still pretty warm.
Can you pull up that link and do it over the past 5 years?
I think we might be able to see at what levels increased inventory leads to price reduction. I suspect prices stopped going up at certain inventory levels.
Ok trying to understand each column is two different housing prices and then the month and year how they appreciated or depreciated in price? Sorry not familiar
Location: Georgia, on the Florida line, right above Tallahassee
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Quote:
Originally Posted by cohdane
Before you jump in, read up on Alt-A loans-- some reports allege that they'll make subprime look like small potatoes. Also, check out this interactive map from the New York Fed. It allows you to see how toxic your area is by zipcode (no percentages, but at least color coding to give you a ballpark sense.)
Look before you leap. Once you leap, close your eyes and don't ever look back. Good luck.
Great link.
On the subject of buying, I made a promise on my wedding day to support my family. "Richer and poorer" and all that. To toss money away on a depreciating asset is not what I see as being in the best interest of my family. I can rent my apartment for 1432. I can buy a home for 2800.
Um.... I'm gonna wait for the ALT-A's to take the market down a notch and then buy. I do like owning my own home. I like ice cream, too.
If I knew that I could get twice as much ice cream later vs. buying ice cream for double the price now - then I can wait. That's called "maturity."
I looked at the site as well for Chicago. We should be able to go in and pull data on inventory and prices back 5-10 years, somewhere. Below a certain level, probably in 2005 or early 2006, inventory levels were low enough that prices increased. Prices tend to lag sales by 6 months, so once inventories get above a certain amount, prices will start to decline around 6 months later.
I understand there are more houses out there than there were 3-4 years ago, but we should be able to go in and look at what the inventory level was when prices started to go down. Until we get near that level again, prices will continue to drop, in markets, including Miami and Chicago. Clearly, inventory levels are higher than when that data started in 4/06. Until we get down to those levels or less (probably less if we have access to 2004 and 2005 numbers) prices will continue to drop.
May 2010 is forecast as price bottom for Chicago on Case Shiller Index futures (10 markets, including Miami and Chicago are covered).
Last edited by Humboldt1; 09-23-2008 at 09:32 AM..
There is also a huge shadow inventory out there. All those that want to - but don't have to - sell. IMO, that will drag any recovery out for quite a while.
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Ace
