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Old 03-02-2013, 10:10 PM
 
Location: Steilacoom, WA by way of East Tennessee
1,049 posts, read 3,828,640 times
Reputation: 701

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I don't post much anymore, but we just had a ton of sales on our street. There are 9 houses on our street in a newer subdivision in Telford, but close to Jonesborough.

There were 4 homes for sale, 3 have sold in the last few months, with the last 2 being sold in the last month. All the homes were built in the 2005 timeframe, with the sellers being the original owners, and the 3 that sold, closed for less than the sold price back in 2005. As bad as that is, the realtor fees had to be subtracted from those proceeds as well. These are the sold prices in 2005/2012-2013. 1st house $225,000/$190,000, second house $205,000/$199,000, 3rd house $185,000/$180,000. So no equity over 7 plus years on very well kept homes in a nice subdivision. The 4th house is empty and is chasing the price down, it's been for sale approx a year, was priced over $300,000, had an offer at $265,000, the owner refused it and has steadily reduced the price, it's currently listed for $279,900. The 4th house will not sell at anywhere near their asking price, all of the other homes on our street sold for under $200,000 and he's asking too much for his.

No real reason posting this neighborhood sales report other than to say it's good news, buyers are getting good deals and sellers are finally selling (but at reduced prices) in order to move on with their lives. 3 out of 4 sellers have left, are leaving the area.

Tony
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Old 03-03-2013, 01:12 AM
 
Location: Seattle
6,936 posts, read 15,677,315 times
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I think this just continues the rightsizing of the market. Bad news for the sellers, though. Thanks for the report...
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Old 03-03-2013, 04:22 AM
 
Location: Jonesborough, TN
708 posts, read 1,371,605 times
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The only thing that I will say to this is that it underscores the importance of ignoring the national news regarding home sales/prices in a particular area. Each market is different- and in the tri cities each area is different. Telford vs. Johnson City are completely different markets right now.

When the national news was terrible regarding home prices, much of the tri cities were stable- yet we had many buyers come in and offer crazy low numbers based off of national news. Despite this, our average price stayed pretty stable (except for some condos).

Now that the national news is saying that everything is turning around, many sellers are expecting to make a profit in a market that it is very difficult to do so. Basically, the national news created in the past unrealistic expectations for buyers, now its doing the same thing for sellers.
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Old 03-03-2013, 05:15 AM
 
Location: Jonesborough, TN
708 posts, read 1,371,605 times
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One more thing- that goes against the one liners that many real estate agents use. I hope im not breaking any of the board's rules by posting this. This is just my personal opinion.

Is there an assumption that real estate is a good investment in the short (2-3 years) or medium term(5-7 years)? I think in many areas that assumption needs to be challenged. Real Estate is a good investment long term. But over the short or medium term, it all depends on timing, etc. In my experience, our area doesnt go up or down in wild swings. This provides stability but also limits any investment gains. If you put money into the stock market or real estate, or the bank over the last 10 years you would not have gained or lost much in either option. Depending on timing, you could have made a little in real estate or lost a little in real estate, made alot or lost alot in stocks, or basically broken even with the bank (very low interest rates).

Also, do people buy off the assumption of the tax deduction? Im not a tax attorney obviously, but I believe this only works if you itemize. Well, I paid a little over 5,000 last year in mortgage interest. The standard deduction is more than that- so I am taking the standard deduction. Did the mortgage interest reduce my tax bill?

Listen, there are many reasons to buy. The high rental market here makes it cheaper in many areas to buy than to rent. And personally id rather live in my house than in an apartment sharing a wall with other people. And id rather be able to make changes to my house if I want. But it just drives me crazy when I see assumptions such as "its been 7 years, there should be equity". That has been true in the past especially in some areas, but lets not assume that will be the case going forward.
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Old 03-03-2013, 12:50 PM
 
Location: Tennessee
31,659 posts, read 25,778,322 times
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Home prices are essentially functions of the desirability of living in a particular area. One can classify desirability in many different ways - crime (or lack of it), quality of schools, beauty of the property, distance from amenities, etc.

The RE boom was really cranking in 2005, lending standards were loose, basic goods were generally cheaper, there were more jobs available and the jobs generally paid better than what is available in the area now. Fast forward eight years - gas has likely at least doubled, lending standards have tightened, food is far more expensive, incomes have been slashed, and unemployment is up.

Telford is an outlying community. Google Maps shows the distance between Johnson City and Telford as 15-20 miles, depending on what route you take. Schools in the counties around here typically aren't as good as city schools. Basic necessities, like groceries, doctors, restaurants, shopping, all likely require a trek back to Johnson City. Sure, you may save on taxes by being in the county, but do the property tax offset the extra fuel for commuting, time spent, lack of amenities, etc? That's up to the individual, but to me, no, I wouldn't want to live in Telford - I would reduce my home expectations to stay closer in.

These sellers are wanting to match their 2005 prices now, when most people are far worse off than they were 2005. It doesn't surprise me at all that they have little equity and are having trouble selling.
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Old 03-03-2013, 07:04 PM
 
Location: Steilacoom, WA by way of East Tennessee
1,049 posts, read 3,828,640 times
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Quote:
Originally Posted by Emigrations View Post
Telford is an outlying community. Google Maps shows the distance between Johnson City and Telford as 15-20 miles, depending on what route you take.

These sellers are wanting to match their 2005 prices now, when most people are far worse off than they were 2005. It doesn't surprise me at all that they have little equity and are having trouble selling.
Actually These houses are 2 miles from downtown JB, not in the boonies and your post sounds a little mean spirited to me, just saying.
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Old 03-04-2013, 08:36 AM
 
7,374 posts, read 8,715,197 times
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10% fall over the last decade is pretty reasonable. As pointed out, many areas of the country are MUCH worse off than this.

I notice an interesting phenomena in my neighborhood: Previously owned, but NOT OLD, houses in my neighborhood are sitting on the market, even though they represent much better value than what it currently takes to build a new house. Today's buyers want 'new', and they seem to be able to scrape together a financing package to get it done--albeit at a far slower pace than ten years ago.

I keep thinking that all those folks renting, or living in their parent's basement, will eventually have to come forward and buy. That should create demand for existing homes....but it just doesn't seem to be happening at present.

No conclusion, just observations.
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Old 03-04-2013, 10:20 AM
 
Location: Tennessee
31,659 posts, read 25,778,322 times
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Quote:
Originally Posted by Ted Bear View Post
10% fall over the last decade is pretty reasonable. As pointed out, many areas of the country are MUCH worse off than this.

I notice an interesting phenomena in my neighborhood: Previously owned, but NOT OLD, houses in my neighborhood are sitting on the market, even though they represent much better value than what it currently takes to build a new house. Today's buyers want 'new', and they seem to be able to scrape together a financing package to get it done--albeit at a far slower pace than ten years ago.

I keep thinking that all those folks renting, or living in their parent's basement, will eventually have to come forward and buy. That should create demand for existing homes....but it just doesn't seem to be happening at present.

No conclusion, just observations.
I'm noticing this trend too in my grandparents' neighborhood as the neighbors pass away. Those homes were built in the 60s and 70s, most were owned by the original owners, and well-maintained. One has sat vacant for years since the owners died - a few people were interested and then backed out. Others sold, but not quickly, and at below market rate. The newer homes further out in the neighborhood are also having some difficulty, but this is a subdivision of people mostly 65 (if not 70+) and older.

Income to home value ratios in the Tri-Cities need to get closer to a more acceptable level. Here are City-Data's own numbers for median house price vs. income in JC and TN in general.


Estimated median household income in 2009: $36,990 (it was $30,835 in 2000)
Johnson City: $36,990
Tennessee: $41,725
Estimated per capita income in 2009: $22,858

Johnson City city income, earnings, and wages data

Estimated median house or condo value in 2009: $150,579 (it was $95,300 in 2000)
Johnson City: $150,579
Tennessee: $137,300

Median home prices increased 58% in Johnson City between 2000 and 2009, however, median household income only increased by 20%. Even after the "bust," the "median" income household is finding the "median" priced home less affordable than it was in 2000. That median home price is more than four times the median household income in 2009, whereas it was only slightly more than three times household income in 2000. The "median" household in JC should not purchase the "median" home in JC - they cannot afford it. Median income in JC is not only less than median income TN, but median home prices in JC or even more expensive than median home prices in TN, compounding the costliness vs. TN at large. Granted, this data is somewhat old, but I'd say it's on the right track. Until income increases in the area, home prices will need to continue declining to match the purchasing power of area households.

Last edited by Serious Conversation; 03-04-2013 at 10:32 AM..
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Old 03-04-2013, 08:21 PM
 
Location: Seattle
6,936 posts, read 15,677,315 times
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Quote:
I keep thinking that all those folks renting, or living in their parent's basement, will eventually have to come forward and buy. That should create demand for existing homes....but it just doesn't seem to be happening at present
Maybe. I'm a renter and I'm not sure I would buy right now. Too many factors (job market) don't assure me that I will be in place for the 5, 10 or 20+ years that it takes to make sense to buy a house. In my opinion (which might be an eclectic opinion), we are going to see some major changes in the next few years. Places like Telford are on a tedious fulcrum between value and no value. It will depend on energy supplies and prices.
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Old 03-05-2013, 07:15 AM
 
Location: Tri-Cities
235 posts, read 637,273 times
Reputation: 129
Quote:
Originally Posted by Tony1790 View Post
Actually These houses are 2 miles from downtown JB, not in the boonies and your post sounds a little mean spirited to me, just saying.
Quote:
Originally Posted by Emigrations View Post
Home prices are essentially functions of the desirability of living in a particular area. One can classify desirability in many different ways - crime (or lack of it), quality of schools, beauty of the property, distance from amenities, etc.

The RE boom was really cranking in 2005, lending standards were loose, basic goods were generally cheaper, there were more jobs available and the jobs generally paid better than what is available in the area now. Fast forward eight years - gas has likely at least doubled, lending standards have tightened, food is far more expensive, incomes have been slashed, and unemployment is up.

Telford is an outlying community. Google Maps shows the distance between Johnson City and Telford as 15-20 miles, depending on what route you take. Schools in the counties around here typically aren't as good as city schools. Basic necessities, like groceries, doctors, restaurants, shopping, all likely require a trek back to Johnson City. Sure, you may save on taxes by being in the county, but do the property tax offset the extra fuel for commuting, time spent, lack of amenities, etc? That's up to the individual, but to me, no, I wouldn't want to live in Telford - I would reduce my home expectations to stay closer in.

These sellers are wanting to match their 2005 prices now, when most people are far worse off than they were 2005. It doesn't surprise me at all that they have little equity and are having trouble selling.
I agree with Tony1790. Everyone likes to live different places and have different expectations. We live in the county too, but it is only 5 minutes to a grocery store. I would also challenge Emigrations statement about the county school vs. the city schools. It absolutely depends on which county and which city school you are comparing, and what you value in a school.

Last edited by PacersFan; 03-05-2013 at 07:19 AM.. Reason: spelling error
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