homes are still overpriced, or not?

[MikeJaquish]

Declining inventory is partially due to fewer spec home starts.
On site agents are groaning for inventory.

[almost3am]

Originally Posted by DowntownVentura

That is down from 4 million in July and represents an 8.5 month supply. That is the lowest level in 2 years.

I still don't know if homes are overpriced or not, I am just providing clarification to your post.

I was curious about the numbers, so here is an article I just read, it is pretty interesting reading.

U.S. Economy: Sales of Existing Homes Unexpectedly Decline - Bloomberg.com

Three points from the article, some I hadn't heard before and found interesting:

1. They say we are at a 8.5 month supply, and that a 7 month supply is usually consistent with a stabilization in prices.

2. They say low appraisals and slow underwriting are continuing problems, which I have heard from a number of acquintances recently in the housing market.

3. They say a lot of markets (not all) have more solid pricing, calling the bottom in some.

[NatasNJ]

Originally Posted by trickymost

I'd tip my hat towards depression if we see 3-4 more months of sales and inventory decreases.

Look at any chart showing sales #'s and you can almsot ensure that we are facing 3-4+ months of reduced sales and inventory decreases. August dropped and is usually the leveling off of the summer. Typically only goes down from here through spring.

Now you may have a bump if the buyers credit thing expires and people RUSH to use it. But then expect a harder drop in Nov after it. Surely the Gov't can open its (our) wallets and extend it or make it even bigger.

Not that I think this means depression.

You also have rising foreclosures to factor in. Will be very interesting to see how this all pans out. But that being said I still side in the camp that housing is still very overpriced in many areas when compared to Cost of Living/Income Debt type ratios. Even in situations where college grads get decent paying jobs (which they are struggling bigtime right now) their ability to BUY a place (starter home) is becoming SMALLER & SMALLER in my area. Towns that were once reachable are WAY out of thier range unless they have parents offering the down payments.

[homeowner35]

Originally Posted by sheenie2000

Sure less bills are better and I aim to be debt free, but we'll always have bills, and with homes, insurance and taxes go up as well. It's not like once your home is paid off, the bills end! (Though I wish!!!)

It's not a big deal to lease in certain situations such as business reasons or you are wealthy. I have a few friends who lease cars, bc they change their cars every couple years.

I understand about eventually being debt free. The biggest reason I'm renting now is because of the thousands and thousands of dollars I'm saving right now. I wouldn't be able to save that much because having a monthly payment is not as cheap as renting. I pay $900 bucks in rent where as PITI would be over 1700 bucks with putting 20% down. In that scenario it just doesn't make sense. I think many of us who are waiting around is to build up significant savings so one could purchase a home on cash or have a much shorter term mortgage.



I was talking about it from a financial perspective. You aren't counting it because of how you feel emotionally about the house. But yet it's still a cost.


I wasn't comparing it with cars, I was comparing it to rent. You are saying who cares, but it's still quite a large sum of money.



C'mon...
First, rents are decreasing even in <gasp> NY!
Rents Drop Nationwide as Vacancies Spike - BusinessWeek

Second, your friend I'm sure not only left because rent was too high but because the price of homes are outrageous.

I think it is great that you are working towards homeownership.

[trickymost]

Originally Posted by NatasNJ

Look at any chart showing sales #'s and you can almsot ensure that we are facing 3-4+ months of reduced sales and inventory decreases. August dropped and is usually the leveling off of the summer. Typically only goes down from here through spring.

Now you may have a bump if the buyers credit thing expires and people RUSH to use it. But then expect a harder drop in Nov after it. Surely the Gov't can open its (our) wallets and extend it or make it even bigger.

Not that I think this means depression.

You also have rising foreclosures to factor in. Will be very interesting to see how this all pans out. But that being said I still side in the camp that housing is still very overpriced in many areas when compared to Cost of Living/Income Debt type ratios. Even in situations where college grads get decent paying jobs (which they are struggling bigtime right now) their ability to BUY a place (starter home) is becoming SMALLER & SMALLER in my area. Towns that were once reachable are WAY out of thier range unless they have parents offering the down payments.

I'd bet we see the leveling off due to the 8k credit sooner than November. If you're buying a short sale or foreclosure, it's unlikely if you put in an offer today you'd close in time to get the credit. And for a non-distressed sale, not everyone is in a position (buyers and sellers and banks) to close in 30 days or less.

But like you mention, b/c there are many properties which either haven't been foreclosed on or have been but the banks haven't put them on the market, what we SHOULD see if we were in a continuing correction is a decline in sales AND a rise in inventory, which would bring down prices much more quickly and then get us to a real bottom in housing sooner.

If the markets were in the process of bottoming, we would see a decline in inventory AND an increase in sales, maybe with some fluctuations up and down month over month.

Were this a stable market I would agree seasonality is the driver behind declines in sales and inventory.

But declines in inventory and declines in sales in a declining market? The last time that happened was during the housing bubble burst of the late 80s/early 90s, and the time before that was during the depression. I'll go look for charts...I know I've seen them somewhere before.