Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
People are emotionally attached to their homes, that is obvious. Most people do not have a grasp on what is going on with the economy. They take what the gov't PR machine spoon feeds them. Unfortunately, for most, the advice that they are getting is bad.
Again, sellers may find a buyer that blindly walks in and pays close to what they are asking. Then again, I might win the lottery.
People are emotionally attached to their homes, that is obvious. Most people do not have a grasp on what is going on with the economy. They take what the gov't PR machine spoon feeds them. Unfortunately, for most, the advice that they are getting is bad.
Again, sellers may find a buyer that blindly walks in and pays close to what they are asking. Then again, I might win the lottery.
Assuming the houses really are overpriced...
1.Either the house sits in the market for years until they need to sell
2.The seller lowers their price to sell
3.A buyer buys it, which put upwards pressure on other sales in the area
I do have a question though...are the only homes in your market that have sold in the last 3 months or so short sales & foreclosures?
People are emotionally attached to their homes, that is obvious. Most people do not have a grasp on what is going on with the economy. They take what the gov't PR machine spoon feeds them. Unfortunately, for most, the advice that they are getting is bad.
Again, sellers may find a buyer that blindly walks in and pays close to what they are asking. Then again, I might win the lottery.
This is all quite true.
There is definitely a ceiling on real appreciation in RE...if prices and sales firm up and/or the economy begins a true recovery, then builders will start to build again and banks will start letting inventory they're holding on their books back on the market.
I disagree that prices must fall dramatically from here. They are already well off peak prices, and certainlyare still overpriced.
However, it would take a massive deflationary event to cause prices to collapse further. What do you see that would trigger this event? The government will prevent this at all costs. The likely cost is severe inflation, stagflation, or something approaching hyperinflation.
Plus, FNM and FRE are now working with an unlimited guarantee from Uncle Sam. If delinquencies accelerate as prime and alt a mortgages begin to reset this spring, do you think the government would just allow another crisis to unfold? They'll bail out banks one way or another yet again.
Serene Quiet Beautiful Tree Lined Brigden Ranch Home (http://losangeles.craigslist.org/sgv/apa/1561064278.html - broken link)
That house should be around ~300k to match up with that rental rate, fyi.
Wow. 600k for a modest little home.
I still just can't understand how people can afford to live out there.
That house in the Chicago burbs is maybe 250k and maybe 125k in the KC burbs.
How can anyone with *normal* jobs afford to get a home?
There is definitely a ceiling on real appreciation in RE...if prices and sales firm up and/or the economy begins a true recovery, then builders will start to build again and banks will start letting inventory they're holding on their books back on the market.
I disagree that prices must fall dramatically from here. They are already well off peak prices, and certainlyare still overpriced.
However, it would take a massive deflationary event to cause prices to collapse further. What do you see that would trigger this event? The government will prevent this at all costs. The likely cost is severe inflation, stagflation, or something approaching hyperinflation.
Plus, FNM and FRE are now working with an unlimited guarantee from Uncle Sam. If delinquencies accelerate as prime and alt a mortgages begin to reset this spring, do you think the government would just allow another crisis to unfold? They'll bail out banks one way or another yet again.
In the case of inflation, stagflation, housing will get hammered in real dollars, particularly higher priced homes.
How can anyone with *normal* jobs afford to get a home?
Easy. Ok, well, maybe not so easy but doable. There is an old fashioned method which probably still works when put into practice. It is called stop spending money on every little stupid thing, save your money for a reasonable down payment and then buy a house if that's what you want.
I'm stunned by all the no down loans which were made. I didn't even realize it was real while it was happening. I'd seen them advertised but I thought it was a bait and switch marketing tool. Silly me.
I saved from my early 20s for a house. Took me a lot of years and then I wound up in a bad construction accident which ate up all my savings during my recovery. So I started saving again. Took me until I was in my mid 30s to save up enough to buy the house of my dreams, a run down cottage in a run down town.
I fixed up the place, I joined the town efforts to fix up the area which eventually became a very desirable place to live. So even if I sell now, in the middle of this great depression, I'll still realize 7%/annual or so on my initial purchase price.
I believe it is still possible to do this. Starting from scratch and working an average paying or even below average paying job. Even as a single income family of one it can be done. Maybe not overnight with a magical nodownpayment scheme. But properly done, with patience and perserverence, dreams can still be realized.
Wow. 600k for a modest little home.
I still just can't understand how people can afford to live out there.
That house in the Chicago burbs is maybe 250k and maybe 125k in the KC burbs.
How can anyone with *normal* jobs afford to get a home?
Well, first of all, this neighborhood is nothing special, around a 70k median household income. The median income can support the rental rate (you can afford to rent that place with 70k, it's tight but pretty easily possible). This place isn't near the beach or somewhere ultra desirable to justify this price. It is a very normal, middle or upper middle class area. LA is incredibly expensive to buy right now, but the prices aren't really much different from Chicago if you are renting, which anyone financially astute should be doing right now (in MOST parts of the area).
The likely buyer of that house is a dual professional earning couple, each person making 70-80k. Still, a 600k home on 150k household income is pretty much a stretch, unless they have a lot of savings, which may or may not be gifted from family. But most people with the discipline to save 20% or 120k are smart enough to realize what a bad deal this is. But there is a lot of pent up demand over the last 3 years (this place was probably 700k 3 years ago) and some people HAVE to buy, are tired of renting, etc. So they will pull the trigger thinking prices can't drop more (they dropped 40%!).
My neighborhood is also loaded with stale listings at bubble prices. The ones that repeatedly and drastically drop their prices eventually sell, the ones that don't drop their prices eventually go into foreclosure-- this tells me the most stubborn prices are the most desperate sellers. It's a Hail Mary price.
But there's another problem with this. As a potential buyer, it's really turned me off to the entire market for my area. When the majority of listings come on overpriced (proven by what they eventually sell for or the lack of a sale), it makes you mistrust ALL the initial listing prices (unless they're truly eye-popping).
In addition, by the time a listing gets to a reasonable price, I've already convinced myself I'm not interested in it. (After all, I couldn't be interested in it for an entire year). You've told yourself it's not that great a house, or you begin to wonder what's wrong with it if since no one is buying it, or you've had plenty of time think about the problems it may have (time you wouldn't have had to mull things over if multiple buyers including you were interested in a well-priced property), you even begin to wonder where the "bottom" is for an individual house.
In a market like this, so few homes are selling that price discovery based on comps is impossible. Overpriced listings don't help the situation, since they slow everything down.
In short: Sellers who overprice or "test the market" are damaging their local housing market. Beer houses at champagne prices only make buyers more leery of buying anything.
Location: Georgia, on the Florida line, right above Tallahassee
10,471 posts, read 15,833,234 times
Reputation: 6438
Quote:
Originally Posted by Flat2MT
There, I fixed it for you! It's now a logical statement. Afterall, if these homes were priced correctly, we wouldn't be having this discussion now would we...?
I think about 3 dollars is correct for me, if I'm buying. You give me 3 bucks and I'll take your house. However, when I sell, I'd like 1.5 mil. That would be nice. I'd say that would be correct enough for me.
Define: Priced correctly.
No matter what you say, there will be one dingleberry screaming REAL ESTATE IS LOCAL LA LA LA and they would be absolutely correct. We don't even know where this guy lives. Maybe he lives in New Jersey. Maybe, he lives in South Georgia. Maybe, just maybe.... the housing markets are totally different there. Maybe 10 percent off is the norm there, maybe it's 7 percent. Maybe it's like Seattle. I hope so. I hope someone has to go through the same crazy market crap 'm gonna go through next year when I buy a house. But, it's kind of self imposed crap, since no one is forcingme to a buy a house. I bought a house for 149K in Atlanta, back in early 2000. 5 bedroom, 3 bath. 149K in Seattle won't get you very far. Maybe a really, really crappy 1 bedroom condo on Prostitution Lane with a nice view of a wall and the wafting smells of the alley beneath..
Maybe.
300K? Depends on the neighborhood. Might be able to find something decent at that price. That is not sarcasm. You MIGHT.
Good luck with your home search, OP! Maybe you find the right house for the right price. (I really mean that.)
Incidently, all sellers who do sell do eventually take what the buyer offers. Othewise, it wouldn't be called a sale. More like a display. Here. Check this out. Wanna buy it? No, too low. Guess we'll take it off the market. Yep. Just like Christmas lights.
Remember the good old days? When the only person who brought money to the table...was the buyer?
I don't necessarily have an issue with someone pricing their home at whatever price they choose. In many cases, the seller has no option but to price it above the market since the only alternative is short sale or foreclose. My issue is with those that price their house above the market, leave it there for six months without any price drops and then claim, "We don't have to sell. If we don't get our price, we'll just stay". Yeah, no Sh&% Sherlock.
This attitude would be akin to stating, "We are not paying that price, we"ll wait until we get our price", when the market was going gangbusters five years ago. Houses were selling for more than list, sometimes, with bidding wars. A buyer with that attitude would have had a difficult time buying a decent house. They would have stuck watching prices rise, month after month, only wishing that they would have paid the price five months before.
I am not saying that every house is overpriced. Some people are pricing below 2005-2006 levels. These people along with short sales and foreclosures ARE the market. Everything else is just a drag.
Quote:
Originally Posted by cohdane
My neighborhood is also loaded with stale listings at bubble prices. The ones that repeatedly and drastically drop their prices eventually sell, the ones that don't drop their prices eventually go into foreclosure-- this tells me the most stubborn prices are the most desperate sellers. It's a Hail Mary price.
But there's another problem with this. As a potential buyer, it's really turned me off to the entire market for my area. When the majority of listings come on overpriced (proven by what they eventually sell for or the lack of a sale), it makes you mistrust ALL the initial listing prices (unless they're truly eye-popping).
In addition, by the time a listing gets to a reasonable price, I've already convinced myself I'm not interested in it. (After all, I couldn't be interested in it for an entire year). You've told yourself it's not that great a house, or you begin to wonder what's wrong with it if since no one is buying it, or you've had plenty of time think about the problems it may have (time you wouldn't have had to mull things over if multiple buyers including you were interested in a well-priced property), you even begin to wonder where the "bottom" is for an individual house.
In a market like this, so few homes are selling that price discovery based on comps is impossible. Overpriced listings don't help the situation, since they slow everything down.
In short: Sellers who overprice or "test the market" are damaging their local housing market. Beer houses at champagne prices only make buyers more leery of buying anything.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
