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I got the same impression in summer of 2008 as you seemed to get. Peak prices still seemed common place. But this past weekend was truly the first time out where I noticed a different attitude with realtors. Sellers I don't think realize the situation yet (most of them) but realtors are showing their uncomfortableness in the open houses by coming out and saying "this property is overpriced" and "make an offer any offer" as a plea to prove to the sellers that their price is unjustified today.
NJ is a tad behind the ball on this correction but I have faith that this spring will start to show the change.
I couldn't agree with you more. I have seen the change in the past two weeks myself. I am constantly checking realtor.com. I also looked at the sold prices on trulia.com and its beginning to show..My home price has fallen even more in the past 6 months so I was afraid I wouldn't be able to afford to even consider looking again.
if a "comp" sold for alot less, one has to wonder if it was a distress sale (divorce, relo, et al)
as such, yeah -- the bank will consider it a "comp"
but if I'm a seller, I discount it as a distress sale, and I will not be swayed by that price.
you're going to point to a distress sale ? fine -- keep looking out for another one.
distress sales have their own issues. if the house/location was any good, it would've sold for more.
I now see the motivation (for some posters on here) to keep harping on price drops in thread after thread...
Distress sale? Where has that term been used in this thread? I am not talking about distressed sales, foreclosures, short sales or anything. Sales for 80%+ of housing is selling for A LOT LESS than 2006 peak prices. There are a ton of remaining houses that are still listed at 2006 type prices. They are 10-20% easily over comps. (not one comp but several)
And if you like it or not SALES of your neighbors houses effects YOUR value. For each person who sells for less than you think your house is worth, it chips away your house value.
And this thread was to compliment realtors because they are the ones dealing with the indenial sellers and it is just taking time for them to realize that prices are declining and if you WANT or NEED to sell you have list accordingly...
You can deflect and bring up distressed sales (which was not mentioned in this thread) and discount lower sales all you want but if you end up wanting or needing to actually sell your house then I think you are in for a rude awakening.
if a "comp" sold for alot less, one has to wonder if it was a distress sale (divorce, relo, et al)
as such, yeah -- the bank will consider it a "comp"
but if I'm a seller, I discount it as a distress sale, and I will not be swayed by that price.
you're going to point to a distress sale ? fine -- keep looking out for another one.
distress sales have their own issues. if the house/location was any good, it would've sold for more.
I now see the motivation (for some posters on here) to keep harping on price drops in thread after thread...
JG,
Not sure if this is in reply to my post.
If so, you are taking a lot of liberty in assuming the prior sale was a distressed sale.
Anyway, the current home is asking more than assessment. It is listed at a premium. Original owners are looking at their home as the retirement fund, holding out for $100k more than the guy next door. Simple as that. Most homes in the area list below assessment and sell anywhere from 80%-95% of assessment currently.
Also, posting here has zero impact on the price for homes I am interested in. You have the right to defend real estate values, others have the right to argue the other side and cite examples. Don't take it personal. When I buy a home and see it drop in value 20% next year, I won't be complaining or looking for a sucker to bail me out. I am buying for the long term stability it affords. I will not be looking for my home to fund my retirement. I have other assets better suited to that purpose. Or had , lol.
As prices decline, keep your eyes interest rates.... If one was to buy a 460k house @ 5.25% it would be about the same price as buying a 370k house @ 7.25%. Interest rates will probably remain under 6% for the rest of '09, but at some point when the economy starts to recover rates will begin to go back up. That might be early as later this year, maybe 3Q09. Hard to say at this point.
I'm a firm believer its advantageous to a buyer to pay a lower home price, but a higher interest rate. You can always refinance to a lower rate in the future, if one becomes avaliable.
Anyway, the current home is asking more than assessment.
hold on here -- are we talking tax assessment, or appraised value ?
very few (if any) home in NJ are assessed at true market value.
tax assessments are never in line with market value -- if they were, your tax assessment would change every month !
now if you're using "assessment" to be synonymous with the bank appraisal, then yes -- it's in the banks' best interest (in the current climate) to assess the property at less than the list price. in this case, if the buyer's down-payment is less than the difference between the list price & the appraisal, then the buyer can:
seek another appraisal
ask the seller to lower the price
walk away
hold on here -- are we talking tax assessment, or appraised value ?
very few (if any) home in NJ are assessed at true market value.
tax assessments are never in line with market value -- if they were, your tax assessment would change every month !
now if you're using "assessment" to be synonymous with the bank appraisal, then yes -- it's in the banks' best interest (in the current climate) to assess the property at less than the list price. in this case, if the buyer's down-payment is less than the difference between the list price & the appraisal, then the buyer can:
seek another appraisal
ask the seller to lower the price
walk away
Tax assessment. And yes, it is not a reflection of market value.
HOWEVER, it is an extremely important measure of RELATIVE VALUE when looking at similar homes in the SAME TOWN. After all, your taxes are based on it. And who would stand for a neighbor in a more valuable home paying less taxes . Point being, a control exists to keep these values in line on a relative basis.
but, things have changed so much, so fast, that I don't envy a municipal tax assessor.
in theory, you are right -- it' should be a relative measure of assessed value.
but what happens when you build a new house on a street with older homes ? in theory, you should be comparing apples to apples.
however the fact is, when your neighbor was assessed, market conditions were likely much different than they are now.
I'll acknowledge that this is an outlying example, but it bears mentioning...
That is why I stipulated similar homes.
You are fighting a noble fight, but unless you were looking to sell in the near future or bought during the bubble you should not be obsessing over the value of your home.
Answer this question honestly.
Two almost identical homes on the same street (and similar tax assessment values). One sold three months back for X and it was not a "distressed sale". One is now listed at X+100.
How much would you pay for the one that is for sale?
Before you answer, think about this. The one that went for X was most likely contracted in the Sept. time frame to close in Dec. This was pre-economic collapse.
I know realtors may not like to hear this, but if you dont HAVE to move, there is nothing wrong with holding out for the price you want. It doesn't mean you are in denial. I'm pretty sure most people know how bad the market is out there, but I think how much one is willing to lower their price is more a funtion of how badly they need to get out of the home. The realtors want to sell the homes as quick as possible, but that does not mean that the seller has the same goal. I have considered putting my house on the market, and if someone offered me a good price, I would move, especially now with the decreased tax deduction, renting makes more sense. If not, I'll stay indefinitely rather than lose a big portion of my down payment on the sale. Is there something wrong with that?
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. Point being, a control exists to keep these values in line on a relative basis.
