Home prices have bottomed out (Nassau: renting, home sales, to buy)
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Prices are what people are willing to pay. There's all types of cliches and rules of thumb, but that's the bottom line at the end of the day. There are many factors that go into buying a house other than income to price ratios. People have savings, they have investments, they have a house they are going to sell, etc. One can't say that a house should be $300K b/c the average income is $100K. That's too basic.
The economy is bad b/c the HELOC ATM has now closed and people are stuck with the bills. The funny thing is that people have shifted the pardigm a bit and are staying current with credit cards ahead of mortgages and auto loans. They figure they have to pay for necessities and credit is the easiest way to do it. It's fascinating, really.
Most of the subprime carnage is panning out. Of some concern are the number of jumbo ARMs that are due July (or so) 2009. This could cause another shockwave, but this is not certain by any means. I think there's a lot of people that will correct their current situation (credit card settlements, repo expensive cars, etc.) so the economy can once again gain some traction.
The plight of the dollar is not all bad. People make it out to be gloom and doom, but it is far from it. Look at the foreign invesment in the US now. We're cheap, so our exports are up, our RE and sales taxes are not as bad, and some jobs are even moving back from outside the US (like outsourced jobs in Canada). People are vacationing close to home rather than outside the country. Car makers are finally accepting alternative fuels. People are becoming more efficient. In the long run, this should and could be a great time for America.
I also think people need to remember that the NE US is the lease affected by all this mortgage mess and that home prices are pretty good, esp compared to the rapid increases we're experienced. People need to not panic and just ride it out. You can't possibly think that the economy can chug along ad infinitum and not have some pullback. There's been pullbacks and recessions (not one here yet) since the beginning of our modern economy and that won't change anytime soon.
Have faith people, you're in a good part of the world, no matter what the "haters" on this board think.
Prices are what people are willing to pay. There's all types of cliches and rules of thumb, but that's the bottom line at the end of the day. There are many factors that go into buying a house other than income to price ratios. People have savings, they have investments, they have a house they are going to sell, etc. One can't say that a house should be $300K b/c the average income is $100K. That's too basic.
The economy is bad b/c the HELOC ATM has now closed and people are stuck with the bills. The funny thing is that people have shifted the pardigm a bit and are staying current with credit cards ahead of mortgages and auto loans. They figure they have to pay for necessities and credit is the easiest way to do it. It's fascinating, really.
Most of the subprime carnage is panning out. Of some concern are the number of jumbo ARMs that are due July (or so) 2009. This could cause another shockwave, but this is not certain by any means. I think there's a lot of people that will correct their current situation (credit card settlements, repo expensive cars, etc.) so the economy can once again gain some traction.
The plight of the dollar is not all bad. People make it out to be gloom and doom, but it is far from it. Look at the foreign invesment in the US now. We're cheap, so our exports are up, our RE and sales taxes are not as bad, and some jobs are even moving back from outside the US (like outsourced jobs in Canada). People are vacationing close to home rather than outside the country. Car makers are finally accepting alternative fuels. People are becoming more efficient. In the long run, this should and could be a great time for America.
I also think people need to remember that the NE US is the lease affected by all this mortgage mess and that home prices are pretty good, esp compared to the rapid increases we're experienced. People need to not panic and just ride it out. You can't possibly think that the economy can chug along ad infinitum and not have some pullback. There's been pullbacks and recessions (not one here yet) since the beginning of our modern economy and that won't change anytime soon.
Have faith people, you're in a good part of the world, no matter what the "haters" on this board think.
One can't say that a house should be $300K b/c the average income is $100K. That's too basic.
Too basic! Lol! That's hilarious. So what exactly are people suppose to use to PAY their mortgage with. Pretty sure the bank won't accept happy thoughts instead of a check. People don't buy houses they can't afford -- it's 2008 and that doesn't happen any more. If housing is out of whack to income ratios, guess what, no one can buy the houses. Basic but the cold hard facts of the way it is.
The people who paid $500,000 for a house three years ago and are now underwater are simply screwed. They made a horrendously bad financial decision. Perhaps the scenario would be different for these people if they would have stuck to those bothersome silly basics. You know, crazy stuff like not overpaying for a POS on LI and only buying what their income could support.
I think that what a house "should" be worth is strickly an academic exercise. What "should" a loaf of bread be worth? Things are worth what people are willing to pay for them. A lot of people are starting to see value at the current depressed prices. I know that it is just anecdotal, but I am actually having one of my best years ever in real estate.
Too basic! Lol! That's hilarious. So what exactly are people suppose to use to PAY their mortgage with. Pretty sure the bank won't accept happy thoughts instead of a check. People don't buy houses they can't afford -- it's 2008 and that doesn't happen any more. If housing is out of whack to income ratios, guess what, no one can buy the houses. Basic but the cold hard facts of the way it is.
The people who paid $500,000 for a house three years ago and are now underwater are simply screwed. They made a horrendously bad financial decision. Perhaps the scenario would be different for these people if they would have stuck to those bothersome silly basics. You know, crazy stuff like not overpaying for a POS on LI and only buying what their income could support.
I beg to differ. People do tend to keep up with the jones's. Yes they most certainly buy houses they cannot afford. Yes, they are in over their heads. Yes, the banks were wrong to loan them the money, but they signed on the dotted line.
There's always going to be some activities in the market regardless of the condition. The current price will always be reflected by the latest sales data. However, to claim that the market is stabilizing today is just fiction. There's just too much downward pressure in the market right now. If you have to have a house and you can afford it today, by all means, buy it. Is it going to be a good investment, money wise? Properly not. But then buying a house is more than just an investment. There might be other factors that out weight monetary gain or loses. It is different for everyone. For those who cares about money and can afford to wait, it might pay off to wait just a while longer.
You might see a slight increase in sales; however, this is always the season to sell your home. Families are looking to purchase before the start of the school year. Overall, I don't think these sales signify that the market is stabilizing.
True. However if inflation takes off so will mortgage interest rates. As I have said so many times before, those who try to time the market end up getting burned
The only ones getting burned right now are the people who already jumped in this mess 3 years ago to present and don't plan on staying for 7 years or more.
I would much rather buy when prices are closer to the mean with higher interest rates. There will always be another housing cycle and the ability to re-fi at a lower rate. To buy when prices are inflated sets you up for loss of equity fast. Just ask anyone who bought a house in the last 2-3 years. If they didn't finance 100% that is. And if they did they are just another forclosure waiting to happen. The ones that are talked into buying now will be able to tell there sob stories in a year or two when the dust settles.
I'm not trying to time the bottom because it's not even close.
You must have an idea of were things are with slow sales, high inventory,an economy getting worse by the day and out of control taxes.
Don't mean to sound doom and gloom but it's just were things are these days.
What goes way up must come down.
okay - not sure what your point is or what you are differing with. If you don't have the job, the salary and the down payment now, in 2008 as I mentioned, you aren't going to get financing. Those days are over no matter how much one might want or need to keep up with the neighbors.
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