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Agreed. The prices will continue to drop until the selling price comes down enough to where people have 20% down & the income to buying price is proportionate. Because without these 2 things in line the banks wont mortgage the home. The scam that created this housing bubble is over. Now its time to see how much money people really have saved and what they really take home(legally)!
I have also heard the term phantom inventory thrown out in conversations (basically bad assets that the banks haven't brought into the market and its not visible on the MLS or other sites.... atleast not yet !).... does someone have any insights/comments on it ?
I have also heard the term phantom inventory thrown out in conversations (basically bad assets that the banks haven't brought into the market and its not visible on the MLS or other sites.... atleast not yet !).... does someone have any insights/comments on it ?
I always thought "Phantom Inventory" where long expired listings Real Estate Agencies leave on their sites to generate leads and make their operation look larger and more successful than it actually is......
If you don't mind keep us posted on your findings....
Monte Carlo methods I believe are helpful to predict worst case scenarios (like right now for people who are retiring).... and it assumes an investor will stick it out, even in a bear market; that is often not the case.
up until recently you could blindly pick any 15 year period over the last 75 and average out the equity returns and they magically came out to the same average return with less then 1% difference,,... truely amazing when each contains wars, recessions, good time, disaters etc.... monte carlo simulations are based on a ceratin consistancy..
we we are now into our 12 year with little gains and no one knows what to expect going forward as we already broke the laws of large numbers..... well let me dust off the old crystal ball because it looks like thats all we end up with as a planner
Congratulations to everyone who has posted on this thread! I have been here for about a year or so and IMHO this is BY FAR the most intelligent and thought-provoking to date (my opinion again!). Really very insightful from all angles from every point of view.
I think someone touched on the "emotional" POV of this buyers market: that buyers just dont think these houses are worth the prices being asked - - especially in an economy where nobody's job is safe. And if buyer's aren't going to come to the dance - - then nobody dances. Thus, the market maker in this environment is the Buyer.....not the seller. If buyers still think that 90% of these houses are not worth the price, prices have nowhere to go but further down.
I concur that the LI market will continue to flag a bit, but I do think that LI is a little different than the boomtown collapses in Florida, Nevada, AZ, etc...In particular LI has always been expensive, so there is this historical perspective that houses will and do cost more in many cities/towns. What I think will ultimately happen, different than the classic bubble bursting (except in some marginal communities), is a stagnation of home prices. Homes on busy roads, in less than great condition, etc, will continue to come down to historical norms for the most part, and quickly. Other homes where longtime residents are looking to sell and retire might simply be pulled off the market until they think they can get a "fair" price, even if it is 5 years from now. I think it is fair say houses lag another 5-10% down on average over the next 12 month+ period. So as prices on average hover in the same range for following 5+ years, the norms will begin to catch up.
Exceptions in my mind would be the 500k+ home bought in an area like Yaphank or Selden or Lindenhurst, etc, that will most likely never catch up to the historical norm because half million dollar homes were so outside of the norm for the area in general, that it will never come back. No offense to those areas, it is just that they have always been very working class/middle class areas for the most part and home values would historically reflect working class salaries.
Now, off to get me guinness!! Happy St. Pat's to all!
I concur that the LI market will continue to flag a bit, but I do think that LI is a little different than the boomtown collapses in Florida, Nevada, AZ, etc...In particular LI has always been expensive, so there is this historical perspective that houses will and do cost more in many cities/towns. What I think will ultimately happen, different than the classic bubble bursting (except in some marginal communities), is a stagnation of home prices. Homes on busy roads, in less than great condition, etc, will continue to come down to historical norms for the most part, and quickly. Other homes where longtime residents are looking to sell and retire might simply be pulled off the market until they think they can get a "fair" price, even if it is 5 years from now. I think it is fair say houses lag another 5-10% down on average over the next 12 month+ period. So as prices on average hover in the same range for following 5+ years, the norms will begin to catch up.
Exceptions in my mind would be the 500k+ home bought in an area like Yaphank or Selden or Lindenhurst, etc, that will most likely never catch up to the historical norm because half million dollar homes were so outside of the norm for the area in general, that it will never come back. No offense to those areas, it is just that they have always been very working class/middle class areas for the most part and home values would historically reflect working class salaries.
Now, off to get me guinness!! Happy St. Pat's to all!
That's a very good assesment IMO. My wife and I have been looking for months. We finally sold our co-op (at a loss), but still have a signifigant 25-30% downpayment saved, no debts, excellent credit and both employed. Years of financial discipline at work.
We still haven't found our house because and few sellers have rejected our offers because of 5-10% differences. But that is the most we can afford without putting outselves at risk even with our large downpayment (based on worst case scenario of one income, my wife is a nurse and I am in ad sales, so we figure her income is more secure). The good news is we are not that far off anymore. But keep in mind, we have an unusually large downpayment, so I don't know how most others could do it without putting themselves at risk.
I did some MLSLI.com searchs and it's far from perfect... Actually quite disappointed with the UI in general and the way the search criteria results count as a "hit". I get the fact that it's really designed to be a sales tool and when in doubt - "show the listing". It's just not functioning the way I'd like. If a Realtor could help refine these counts it would be appreciated.
Anyway, here's some counts for Suffolk county only... to reiterate, there are overlap and dups because of the way the site operates. That aside, this is fairly telling for where the glut of inventory is sitting. Sitting at or above what your average (even above average) first time home buyer can afford. All this inventory needs sales of other inventory in order to feed the huge down payments needed to get these mortgage payments into a reasonable amount... Bear in mind that most of these homes will be in the 7,8,9k tax range - at minimum!
This educates us a little bit into how to read between the lines....
None of the articles talk about "phantom inventory" that the banks carry.... I'm pretty sure we are going to see headlines like "Existing sales pickup..." etc etc in the next few weeks.... you know who are they aimed at ! The media has to portray a happy immediate future....
Try asking people who have purchased in the last couple of years.... I think at this moment we just don't know how close to bottom we really are 50% or 90% ? I know its hard to admit that you have purchased the house at the wrong time. One thing is certain.... just like you have to be good to predict the absolute bottom.... you have to be equally good to predict 90% of bottom too.
I was on realtytrac.com this morning and I looked for foreclosures in a certain zip code in Northern Virginia. Then, I went over to realtor.com and looked for house listings in the same zip code. Needless to say, there was a HUGE disparity. There are tons of foreclosures that haven't even been put on the market. Check for yourself.
I concur that the LI market will continue to flag a bit, but I do think that LI is a little different than the boomtown collapses in Florida, Nevada, AZ, etc...In particular LI has always been expensive, so there is this historical perspective that houses will and do cost more in many cities/towns. What I think will ultimately happen, different than the classic bubble bursting (except in some marginal communities), is a stagnation of home prices. Homes on busy roads, in less than great condition, etc, will continue to come down to historical norms for the most part, and quickly. Other homes where longtime residents are looking to sell and retire might simply be pulled off the market until they think they can get a "fair" price, even if it is 5 years from now. I think it is fair say houses lag another 5-10% down on average over the next 12 month+ period. So as prices on average hover in the same range for following 5+ years, the norms will begin to catch up.
Exceptions in my mind would be the 500k+ home bought in an area like Yaphank or Selden or Lindenhurst, etc, that will most likely never catch up to the historical norm because half million dollar homes were so outside of the norm for the area in general, that it will never come back. No offense to those areas, it is just that they have always been very working class/middle class areas for the most part and home values would historically reflect working class salaries.
Now, off to get me guinness!! Happy St. Pat's to all!
Fair enough -
But IMHO dont see any analytics in your above assessment. I see nothing about the "new economy", nothing about "the new credit", nothing about "the incredibly shrinking work force" and nothing about the "new dynamics of Manhattan and Surrounding communities without Wall Street as we knew at" (and THANK GOD for that!!!!!)
Why is it "fair to say" housing will drop 5-10% with only dumps falling further? What are the market facts over the next 5 years that make your assumptions believable to you?
What are the positive market forces that you see that allows you to believe that we are being cushioned - - when in fact - - Manhattan, Brooklyn and The East End are just starting to enter "free-fall" city?
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