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Why do you care about list price? List price has nothing to do with actual value. If the home is way overpriced and you get it at half of list price it may not be all that great a deal. Maybe it's just me, but I'd be more concerned about getting a discount off fair market value. I have a lovely 3 BR here in sunny SC that I'll sell you for 109,900. I'll list it at 225,000 and you'll be getting a heck of a deal at 109k. Interested?
Moderator cut: personal - off topic
Like Raleigh, I'm quite sure that Columbia relied on transplants to some extent cashing out of their overpriced homes to buy cheaper. Just like Raleigh, that money has ceased flowing. It takes 6-12 months at a minimum for the foreclosures to finalize and the stubborn sellers to relinquish their fantasy selling prices. Not that someone with 109K house will lose a whole lot, but losing 20-30K more is pretty much in the bag for 2009 or 2010.
Looks like a few of you need Econ 101 refresher training.
I suppose there are still pollyannish folks who believe that if you hold onto the house long enough that things will turn around.
It's called Prisoner's Dilemma folks. You can't count on your neighbors to do the same thing in concert. Your neighbors will sell for less because they want or have to move (job, divorce, etc), bringing down the comps to more natural levels.
Looks like a few of you need Econ 101 refresher training.
back at ya! I think it is you that's compromised! I've understood finances and economics for many years. But keep on hoping for your dream home at low prices!
back at ya! I think it is you that's compromised! I've understood finances and economics for many years. But keep on hoping for your dream home at low prices!
I call bs on that. No one can claim that houses can linger on the market without prices falling. If sales fall, prices absolutely must fall. As I mentioned above, not everyone will work together to stay in their homes. People either want or must move for various reasons. It's just the way of things.
Meanwhile, folks like us can enjoy the savings we have from cashing out of our former overpriced home and enjoy the life of renting a beautiful home while Mr/Mrs homeowner landlord fixes everything for us when things break.
As I pointed out, when you look at areas that have data showing that the median price is not behaving inline with the general trend, the reasons behind that behavior are hard to pin down without knowledge of the gory details.
Suppose that you do live in a neighborhood where values are far in excess of the region's median. It is also a good bet that incomes are far higher than the region's median. Let us further suppose that one neighbor does "need" to sell for what ever reason -- its reasonable to assume that the most likely buyer will also have a income inline with the remaining neighbors.
They are a variety of reasons to believe that the further an area is out on the "high tail" above the medians in terms of housing value and income the better insulated they may be from shifts that drag down the low end and even middle.
FMV "And no one is argueing that SALES are down. Doesn't mean prices are and will continue to be down."
Quote:
Originally Posted by stosh
Looks like a few of you need Econ 101 refresher training.
I think stosh is referring to basic, Econ 101, premise of supply and demand. If sales drop and stay down, prices invariably also come down to respond to the lack of buyers.
There are lots of markets out there that hit a wall in sales just before the prices tanked. Eventually someone gives in and drops their price, resetting the comps and fair market value at a lower level. And where there was panic buying on the way up, there will be panic selling on the way down.
Most ALL suburbs went against the "trend" you report, as the info you gave is for the city of Chicago and then the entire state of Illinois. Try looking at specifics and what the dirvers are, then come back and tell me otherwise. And no one is argueing that SALES are down. Doesn't mean prices are and will continue to be down.
The Chicagoland county data, from the 3Q 2008 single family sales at http://www.illinoisrealtor.org/files/3Q08%20Single%20Family.pdf (broken link)
All stats vs the same period a year ago.
Cook - sales down 12%, median price down 18%
DeKalb - sales down 15%, median price down 3%
DuPage - sales down 14%, median price down 6%
Grundy - sales down 22%, median price down 8%
Kane - sales down 16%, median price down 13%
Kendall - sales down 16%, median price down 5%
Lake - sales down 19%, median price down 12%
McHenry - sales down 27%, median price down 14%
Will - sales down 18%, median price down 10%
Which one of these counties went against the trend of decreasing sales and prices, exactly? I'll agree the drops weren't as bad in all locations as they were in others, but there seems to be a consistent theme here - fewer sales and lower prices.
FMV and I are not talking about counties -- specific SUBURBS. I mean this is silly. When some one buys a house, by definition it is ONLY ONE SALE. You pick the town you want to live in, in many Illinois suburbs there a specific school attendance areas that are more desirable, even then you rule out some streets (too close to the commercial district, too far from a park). There are limited numbers of homes to consider in the desirable areas.
In some towns there is STILL competition from "tear down builders", which sets a floor. Sure, in some cases that floor is lower, but it has not disappeared. In such towns basically any buildable lot is going to have some competition to snap it up. These lots in desirable towns will ALWAYS be more in demand than the lots sold by builders in some far flung suburb of tract homes. If the tract builder is selling lots at $75K and sells completed home and lots for $250K or something while the custom builder is selling the lots in a mature community for more than $250K and the homes for $800K how the heck are prices across the board going to compress?
Buyers would flock in from the hinterlands to cut their commute times, get into a superior school system, reduce their property tax rate. It would be a "land rush".
"Don’t make the mistake of thinking that every house on the market right now represents a good deal, it just isn’t the case.
So is it a good time to buy? Depends on your situation, of course, but even if a purchase was a good decision, that doesn’t mean home prices won’t continue to fall, they will. I’m looking for prices in Northern New Jersey to fall by an additional 15% over the next year or two, which would represent an average decline of approximately 25-30% from peak prices set in 2006.
As a buyer, you have the advantage, use it. Bid lower. Push harder during negotiations. Most importantly, walk away if the deal isn’t sweet, you have nothing to lose. Given the current economic trends, chances favor you finding a better deal tomorrow." New Jersey Real Estate Report
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