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my next door neighbor just sold his 4 year old home for 50K more than he paid for it.
it depends on where you live and how desirable an area it is.........much of NH is very desirable.
the home I'm currently looking to buy is listed at $419K..... I'm holding off, hoping the price will drop before I make an offer..... but I don't expect it to drop much.
Good Time to Look for a Second Home?
By Sheree R. Curry
Special to TheStreet.com
11/30/2007 6:31 PM EST
Though the housing downturn is straining many people, this might actually be good news for buyers -- particularly a vacation home, condo or a home in the center of the country, some experts say.
Home prices fell 4.5% from a year earlier in the third quarter, marking their sharpest decline in the 20 years since Standard & Poor's began tracking prices through its S&P/Case-Shiller® Home Price Index.
All 20 of the top metro areas tracked by the index saw declines in September over August, including the five metro areas that still have positive annual growth rates (Atlanta, Charlotte, N.C., Dallas, Portland, Ore., and Seattle).
Tampa and Miami saw the greatest year-over-year home-price declines at 11.1% and 10%, respectively. Detroit and San Diego followed with a 9.6% decline each and Las Vegas had a 9.0% drop, its lowest recorded annual decline to date.
"It is a great time to seriously think about the attractive prices," says Lawrence Yun, chief economist for the National Association of Realtors. "Home prices are lower than they were last year, and people can possibly negotiate for an even lower price."
The national median existing-home price for all housing types was $211,700 in September, down 4.2% from September 2006 when the median was $220,900, according to the NAR.
Excess inventory has contributed to the home-price declines. In fact, there are about 5 million homes currently up for sale in the U.S.. Some of the inventory buildup is due to the rise of people defaulting on mortgage loans and tighter restrictions on who can afford a loan, as well as overbuilding in many markets.
One reason potential buyers may want to act quickly: Historically, when home prices fall, they don't fall for long, says David Blitzer, chairman of the S&P Index Committee.
Last edited by Yac; 12-02-2007 at 06:58 AM..
Reason: shortened, copyright protection. Plese provide a link to the article.
Good Time to Look for a Second Home?
By Sheree R. Curry
Special to TheStreet.com
11/30/2007 6:31 PM EST
Though the housing downturn is straining many people, this might actually be good news for buyers -- particularly a vacation home, condo or a home in the center of the country, some experts say.
Home prices fell 4.5% from a year earlier in the third quarter, marking their sharpest decline in the 20 years since Standard & Poor's began tracking prices through its S&P/Case-Shiller® Home Price Index.
All 20 of the top metro areas tracked by the index saw declines in September over August, including the five metro areas that still have positive annual growth rates (Atlanta, Charlotte, N.C., Dallas, Portland, Ore., and Seattle).
Tampa and Miami saw the greatest year-over-year home-price declines at 11.1% and 10%, respectively. Detroit and San Diego followed with a 9.6% decline each and Las Vegas had a 9.0% drop, its lowest recorded annual decline to date.
"It is a great time to seriously think about the attractive prices," says Lawrence Yun, chief economist for the National Association of Realtors. "Home prices are lower than they were last year, and people can possibly negotiate for an even lower price."
The national median existing-home price for all housing types was $211,700 in September, down 4.2% from September 2006 when the median was $220,900, according to the NAR.
Excess inventory has contributed to the home-price declines. In fact, there are about 5 million homes currently up for sale in the U.S.. Some of the inventory buildup is due to the rise of people defaulting on mortgage loans and tighter restrictions on who can afford a loan, as well as overbuilding in many markets.
One reason potential buyers may want to act quickly: Historically, when home prices fall, they don't fall for long, says David Blitzer, chairman of the S&P Index Committee.
I thought one of the most interesting points was the last time "the reverse came very fast and very suddenly." There is pent up demand now with people waiting, HOPING prices will fall further. When the reversal comes that pent up demand could cause it to happen quickly -- people rush from the sidelines to try to catch the bottom when they realize they may have missed it. Have we seen the bottom in the Northeast already? We won't truly know until afterwards because the data reporting lags behind the market. Hindsight is 20/20.
That's a good point, however, IMO real estate needs to really go back to NORMAL appreciation, which is 5-6% a year. If you bought before 2000, much of the "paper gains" of the last several years have been lost.
HOWEVER, if you take your original purchase price, multiply by 1.06 (normal appreciation) for each year, sellers could still make a profit, assuming they haven't already taken all of the equity out of the house with additional loans... The downfall is that usually you need somewhere else to live, hopefully in an area where homes are priced lower
I ran some numbers: I built a house in 1988, sold it in 1998 (to move to St. Louis) for 148,000. Using normal 6% yearly appreciation, here's how the house would have gained in a "normal" market:
1998 value=156,880
1999 value=166,293
2000 value=176,270
2001 value=186,846
2002 value=198,057
2003 value=209,941
2004 value=222,537
2005 value=235,889
2006 value=250,043
2007 value=265,045
Here's what actually happened: (this info comes directly from the MLS)
Date--------Status-------List Price-----Sold Price
05/27/1998___Sold________$154,900____$148,000 (what I sold for...)
10/25/2004___Sold________$299,900____$295,000 (the price doubled!)
07/11/2006___Expired_____$324,900
05/22/2007___Expired_____$324,900
What's my point? Homeowners who bought from 2002 through 2006, (or refinanced to 100% of property value) and need to sell for whatever reason will probably do so at a loss, which is very sad...
Homeowners who bought BEFORE the boom years (pre-2000) can chose to sell their house at a hefty profit (ie: 2005 prices) or price their homes to sell based on normal 6% appreciation, possibly more depending on upgrades, etc.
My prediction (or maybe my wishful thinking) is that prices will continue to float downward (not plummet!) through 2008, then make modest gains in the 1st quarter of 2009. There is still a ton of overpriced inventory out there, which STILL doesn't allow the first-time buyers in. Once the starter homes start selling, it provides the ability for THOSE sellers to buy up, and so the process continues.
The next year certainly promises to be a very interesting...
Quote:
Originally Posted by Mustard
I thought one of the most interesting points was the last time "the reverse came very fast and very suddenly." There is pent up demand now with people waiting, HOPING prices will fall further. When the reversal comes that pent up demand could cause it to happen quickly -- people rush from the sidelines to try to catch the bottom when they realize they may have missed it. Have we seen the bottom in the Northeast already? We won't truly know until afterwards because the data reporting lags behind the market. Hindsight is 20/20.
Last edited by Valerie C; 12-01-2007 at 11:07 PM..
Reason: Fixed a date...
Northeast Home Prices Remain Strong
Thursday November 29, 8:08 am ET
By Prashant Gopal
BusinessWeek
New housing data released by the National Association of Realtors (NAR) suggest the Northeast is weathering the real estate slump better than the rest of the country.
Even as existing home prices in October tumbled in the South and West, prices in the Northeast rose 1.3% compared to a year ago -- the sixth straight month of appreciation, according to the NAR, which released its monthly home price report on Nov. 28. Home prices nationwide declined 5.1% in October compared to October, 2006. The South dropped 6.7%; the West, 6.9%; and the Midwest, 1.6%.
The Northeast's gain follows five straight months of higher prices on a year-over-year basis, including a 0.2% rise in September to a 6.4% bump in July. The Northeast, as defined by the Census Bureau, includes Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont. It doesn't include the slumping Washington (D.C.) market.
A Complicated Story
NAR's Chief Economist Lawrence Yun said in a phone interview after releasing the data that the Northeast's downturn arrived in the summer of 2006 -- earlier than in other sections of the country -- with its worst drop of 5% happening in October, 2006. "For the Northeast, the worst is already past and the question is how fast the recovery will be," Yun said. "Will it be a strong recovery or weak recovery?"
Yun says he's hopeful other regions will follow the Northeast's lead. But other real estate experts say it's far too soon for homeowners to breathe easy. It's true that the Northeast has, so far, fared better than the South and the West, where Florida, California, Arizona, and Nevada's speculative markets have gotten clobbered by foreclosures, the credit crunch, and weak buyer demand. And it's even doing slightly better than the Midwest, where homes are still relatively moderately priced. But the story is more complicated than that.
While prices remain slightly higher, sales in the Northeast fell 12.6% in October compared to a year ago, according to the NAR. U.S. existing home sales fell 20.7% during the same period. That means that fewer homes are selling -- and what is selling is going for a higher price. Such a scenario isn't likely to last long, though, as the Northeast is scarcely invulnerable to economic uncertainties. The full impact of the subprime mortgage mess, including the possibility of more job cuts on Wall Street and other urban financial centers, isn't clear. If bonus season is as bad as some people think it will be, those co-ops on Park Avenue and mansions in the Hamptons won't have as many buyers. If demand falls, so will prices.
At the same time, the Northeast has other attributes that may keep it strong. First, it remains an attractive investment for overseas buyers, especially those who are benefiting from the dollar's weakness against the British pound and euro. Second, the existence of many prestigious centers of higher learning will continue to contribute to a robust local market.
Too Soon to Tell
"You cannot make a pronouncement now that the Northeast has recovered and all is well," says Jonathan Miller, an appraiser and research director at Radar Logic, a New York-based property research firm. "It's early with rising foreclosure rates, rising inventories of homes, the number of sales transactions dropping significantly, and concern about a recession. So other than a 1.3% increase in existing home sales, what other indicator is there that the Northeast has bottomed out?"
Celia Chen, director of housing economics at Moody's Economy.com, says the Northeast might have to wait a year or more for a recovery and the market is likely to get worse before it improves. New England and the mid-Atlantic states have held up well because of the regions' wealth, a relatively small number of subprime loans, and home prices that didn't rise as much as in other parts of the country, Chen says.
Home sellers in the north have been holding prices steady despite falling demand from buyers. But changing economic conditions and even slower sales could force them to lower expectations, she adds.
"It is looking a little less dark in the Northeast than in the rest of the country," Chen says. "But I don't expect housing activity to pick up substantially in the Northeast in the next six months. There's going to be further correction in terms of sales falling and prices declining. A lot of these markets, such as Boston and New York, are still overpriced, overvalued, and do have excess inventory."
I believe this is a situation called a "sucker bounce" where the speculators that didn't get out in the initial price drop can recoup some of their money before the bottom fall completely out of the market. Just remember when a bubble bursts the last in get hit the hardest,
BN - I suggest you stay where you are. I think that 420 grand house will be selling below 350 in a couple of years.
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Hello Mustard!
