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Like what's been said many times, real-estate is local right? In my county, homes are selling:
January home sales set record in Prince William | InsideNova.com (http://www.insidenova.com/isn/news/local/article/january_home_sales_set_record_in_prince_william/30718/ - broken link)
The median price has dropped and this has caused many people to get off the fence and buy (me included). They may be investors (me), or they could be families that had been priced out of the market over the past few years and have now decided to buy. Many of the homes I looked at either had families already looking at it when I arrived, or waiting for me to leave so they could look at it.
Buyers don't dictate prices. Buyers compete with other buyers and sellers compete with other sellers. There are more sellers than buyers, so prices trend down. You aren't a buyer if you aren't willing to pay today's prices. If you could dictate the price, you'd already have bought. Houses are selling to actual buyers. Sales are down and prices are falling, just not fast enough to make YOU a buyer.
Using this logic: You aren't a seller if you aren't willing to list at today's prices.
Perhaps we should start calling sellers "listers."
I can afford every single house I've set foot in. No problemo. There's a house in my area right now on the market for $900k. Last summer it was $1.4 million. Another on for $600k. Last summer $900k. I could go on very easily and will send you links PM if you like. The point is, people can get very badly burned buying into this so-called "buyers' market."
I'm confused. Seems the homes you gave as example were "over priced" last summer, not now. So since they have both come down about 30+%, I'm trying to get a grip on why you think they should still come down another 15-30 more? So the 1.4 mil should come down to $765k -630k(15-30%) and the 900k should come down to 510k-420K (15-30%) more! No wonder this is all so messed up! Do you read this and see how crazy this expectation is? I hope so. I understand why people are fed up with thinking that the peak prices were not fair or out of wack, but come on! This is a perfect example of how these sellers are clearly trying to comply with the prices down and It is just mind boggeling to me that there is anyone out there who thinks this is and should be a free for all, free fall.
FMV..seems that everything but consumer prices for food and some other goods are in freefall.
Stock market peaked at 14K..it's now hovering around 6K, almost 700K lost their jobs just last month; we're in a deflationary spiral. Things are NOT good right now and RE is no exception. The Fed/Treasury can't go any lower on their rates which are at 0% right now.
Where do you see the "silver lining" that you are mind boggled ?
I'm confused. Seems the homes you gave as example were "over priced" last summer, not now. So since they have both come down about 30+%, I'm trying to get a grip on why you think they should still come down another 15-30 more? So the 1.4 mil should come down to $765k -630k(15-30%) and the 900k should come down to 510k-420K (15-30%) more! No wonder this is all so messed up! Do you read this and see how crazy this expectation is? I hope so. I understand why people are fed up with thinking that the peak prices were not fair or out of wack, but come on! This is a perfect example of how these sellers are clearly trying to comply with the prices down and It is just mind boggeling to me that there is anyone out there who thinks this is and should be a free for all, free fall.
Let's put it this way. Neiman's is having a 30% off sale. If the markup is 150% is that a good deal? What if you can get it for 30% less at Marshall's? What if Neiman's is going out of business next year and you can get it for 130% off?
I'm not comparing houses to clothes, before we get off on that track.
I'm just saying how much something is discounted has no bearing whatsoever on how much it is worth. One of these homes I personally think is probably a good deal-- unfortunately, it's the 900k one and it's out of my league. That said, if nobody comes forward at 900k and it drops to 800k (which means it'll sell for less than that) is 900k a good deal? I don't think it should drop another 15-30%, but it's entirely possible it will.
The examples I gave were to show how quickly homes can lose value in this market. Any one that sells sets the new comp and the new comps are just lower and lower. No stability.
This is the spring sale of snowmen. They're all marked down. And they're all melting.
I don't like it. I'm not gloating over it. I feel truly sorry for some of these sellers. But I'm not picking up the decline where they leave off.
FMV..seems that everything but consumer prices for food and some other goods are in freefall.
Stock market peaked at 14K..it's now hovering around 6K, almost 700K lost their jobs just last month; we're in a deflationary spiral. Things are NOT good right now and RE is no exception. The Fed/Treasury can't go any lower on their rates which are at 0% right now.
Where do you see the "silver lining" that you are mind boggled ?
The silver linings are:
1.You can get better deals on just about everything today from food, to furniture, to electronics, labor by contractors, building materials, cars, etc.
2.While unemployment is getting close to 10%, 90% of people are employed. A lot of the rest get unemployment benefits.
3. Gas prices are down.
4. A lot of people refinanced and now have more cash to save or spend.
5. Savings rates are up
6. Loans requirements on mortgages are underwritten better.
7. Recessions end. We have already gotten through 15 months.
One of these homes I personally think is probably a good deal-- unfortunately, it's the 900k one and it's out of my league. That said, if nobody comes forward at 900k and it drops to 800k (which means it'll sell for less than that) is 900k a good deal? I don't think it should drop another 15-30%, but it's entirely possible it will.
Why on earth are looking at homes that are out of your price range? You said in an earlier post that YOU COULD AFFORD any one of these homes you were looking at.
Are "buyers" kicking it up a notch or two on price range with hopes that prices will come tumbling down. That strategy is a bit risky, isn't it?
I said I could afford any homes I've looked at (meaning gone to an open house or asked my realtor to take me through).
The site I surf for new listings shows me everything that comes on and everything that reduces its price. In my area, one of the dynamics at play is a (last time I could check) 46+ month supply of homes priced at $1 million or above.
Which makes me wonder what will happen to the $800, $600, $500k houses when the 46 month supply drops to its eventual selling price. So I keep an eye on it. This house is one example of that dynamic. A 1927 gorgeous mini-mansion in good shape with beach rights on a prestigious cul-de-sac-- used to be $1.4, now will sell for less than $900k.
Which means the 1970's custom colonial on a typical suburban street that listed last summer for $900k will sell for what? And the little, but cute, 1920's craftsman on an average lot that listed for $600? And so on.
To be honest, if anything, I'm sadly "kicking it down" a notch. I'm conservative financially. Last year this time, the top of our price range looked very doable. In this economy, I'm shaving 10% off last year's top price for us. Less house, more peace of mind.
The bad news, good news piece of this is that there are many many homes that we would've bought last year if they'd been listed at the prices they're listed at now. A year ago, I would've thought they were a good deal. Now, they just look like big piles o' risk.
I'm a firm believer in (at least) 20% down and (at least) 6 months emergency funds in the bank. In this economy, I pad both of those and compromise on the house.
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