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It appears the market is picking up a bit. But it always does in the spring & summer months. Ive been watching the market like a hawk for over a year now. I can currently still see houses droping in price, including my condo! As I said before...this winter will show which direction the market will be for 09. Just my .02
I agree. I remember when those houses were built. The retaining walls are huge and too close to the house. Kind of scary.
Wow. A friend of mine has been dealing with a nightmare when it comes to retaining walls. He cannot keep his yard from shifting. He has had two marine companies drive piles into the ground and no such luck. As we see with the Iowa floods right now, when the earth speaks up, there is no stopping it.
I saw a house I liked last fall in Melville. It sold last week after being on the market for exactly 1 year. Original listing price - 635K - the last listing price was 537K - it sold for 522K. Not that it means anything - I just found it interesting so I thought I would share.
jennifer6 hit the nail on the head. this market has nothing to do with assessed values or what the value of a particular house "should be", rather the price of a house is whatever someone in the market is willing to pay for it, hence "market price". It is based on nothing more than supply, demand, timing and quite honestly, a little bit of luck. Based on the housing boom in the mid 80's and subsequent correction that ensued, history dictates that we are in for another 6-8 months, or roughly 5% in NY of correction before this thing stablizes.
jennifer6 hit the nail on the head. this market has nothing to do with assessed values or what the value of a particular house "should be", rather the price of a house is whatever someone in the market is willing to pay for it, hence "market price". It is based on nothing more than supply, demand, timing and quite honestly, a little bit of luck. Based on the housing boom in the mid 80's and subsequent correction that ensued, history dictates that we are in for another 6-8 months, or roughly 5% in NY of correction before this thing stablizes.
Assessed value is what the county thinks the house is worth so that they can get the most tax dollars from the owner with regards to the perceived market value of houses in that neighborhood.
But “should be” and “willing to pay” are linked to how much money they have available to them unless they are awash in more cash than they need for that area. If banks have tightened the money supply by ending lax lending practices, this will affect those to criteria. “Should be” and “willing to pay” may land prices at historical values, which were based on what the bank would lend a borrower based on their household income, the traditional allocation of 28% of their income to housing costs, and no more than 36% of their income for their entire debt load. This formula worked before the bubble, so it should work now with regards to being a guideline to judge the ability of a borrower to afford a particular house, the related expenses and overall expenses. Obviously this will not apply to everyone in a given area as median implies that a good number of people’s income in an area exceed that amount, but it will affect those around or below the median. I suspect those at or below the median make up the larger portion of the group who state that they are living pay check to pay check or worse.
Pick an area and see what the median household income for that area is and then multiply that amount by 2 to 3.5 and see what houses “should be” valued at in that neighborhood. There are also the contributing factors of supply, demand, timing, property uniqueness and luck, but they all circle back around to how much money the buyer has available to them for their offer.
Pick an area and see what the median household income for that area is and then multiply that amount by 2 to 3.5 and see what houses “should be” valued at in that neighborhood. There are also the contributing factors of supply, demand, timing, property uniqueness and luck, but they all circle back around to how much money the buyer has available to them for their offer.
Does your formula take into account those people who may be retired? There are many people with paid off houses whose current income would not support the purchase price.
Does your formula take into account those people who may be retired? There are many people with paid off houses whose current income would not support the purchase price.
No, I was mainly commenting on those still in the work force or those without special circumstances, ie. they just received a big inheritance or a free loan from family. I would think most retirees would down size and purchase something that was more than covered by the proceeds from their current debt free house and have money left over. It maybe different for a working person moving up to a larger house and using the equity from his current house as an enhanced down payment on the larger one, but as the last 8 years demonstrated, extending oneself too far can be hazardous.
I view it similar to auto insurance and 18 to 25 year olds. They complain that insurance is too high, but statistics bear out that this age group is responsible for a lot of accidents. Not all are bad, but insurance companies can’t tell the good from the bad so they have to cover their bets. The same with the formula for borrowers, the line has to be drawn somewhere. And that line does affect the amount of money available to borrowers, thus affecting who can buy, and where they can.
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