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Old 06-30-2009, 12:05 PM
 
1,340 posts, read 3,512,889 times
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Quote:
Originally Posted by ghuber View Post
I'm going to go out on a limb and agree with Moorsetownresident and say it appears home price declines are moderating. According to Otteau NJ is now down to 9.5 months of inventory down from 16.7 months last year. I also recently put an offer in on a house that was on the market for 7 days. It received 4 bids, 2 of them for full price. Needless to say my bid was not the winning one. The house was definetely overpriced.I do hope I'm wrong and this is only a seasonal bump as some have suggested. We could really use some additional declines to bring this area into equilibrium with income.
I wonder about the inventory levels. It surely seems the number on the market has declined but it seems MANY people are waiting it out to sell. Which depending on how long they can wait it out may be a good move. But I wonder how long many of them will wait it out and if over the next year or so you will start seeing people finally just list and cause the inventories levels to maintain a high level or increase it.

It will be interesting to see how it all pans out.
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Old 06-30-2009, 12:08 PM
 
Location: New Jersey
3,870 posts, read 4,260,272 times
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Quote:
Originally Posted by ghuber View Post
According to Otteau
good grief, now you're citing ol' Jeff as if it's gospel

I don't hate Otteau, I just disagree with him.

with him too, if people read his writings more carefully, they'd see that his 1-size-fits-all answers aren't practical.

there doesn't seem to be much middle ground with Otteau -- his fans adore him, he drives other people right up the wall.

and it's not because of his fame, but because his net worth is growing rapidly, as a result of playing to people's fears/greed (depending on where we are in the business cycle).

apparently, I'm one of the few people in NJ who occupy that lonely middle ground.

I realize that Otteau doesn't need to follow his own advice, and he isn't big on nuance.

of course, neither is his audience.

they want to be told what to do, they (sadly) don't want to listen to a long treatise about the potential advantages and drawbacks of various financial moves.
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Old 06-30-2009, 01:38 PM
 
268 posts, read 723,867 times
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I don't think Otteau is an oracle, but he does provide some insight. His report is certainly more focused than the generic media driven reports people often dwell on (and obsess about) on this forum.
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Old 06-30-2009, 01:49 PM
 
268 posts, read 723,867 times
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Quote:
Originally Posted by theoakman View Post
Doesn't really mean much. Every single house that has sold in the past 3 years has probably been overpriced. That's why sales numbers have been dismal. Prices aren't at a level to clear the existing market inventory. Just because something is overpriced doesn't mean there are people who won't buy it.
I really don't think there is a clear future for housing in NJ. I would buy a house right now if I could actually find one I liked and it was priced correctly for the market. I just can't find much... the inventory that is out there (while there is 9+ months of it) is really just not that good. A lot of the houses I find were built in the 50s,60s, and 70s, and have little updating yet people want 500k for them. Crazy.

You're right though, people continue to buy houses that are obviously overpriced. My guess is a few years down the road something will change in their life and we'll wind up bailing them out. Gotta love how our society rewards stupidity.
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Old 06-30-2009, 03:10 PM
 
231 posts, read 551,410 times
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Quote:
Originally Posted by ghuber View Post
You're right though, people continue to buy houses that are obviously overpriced.
They aren't buying them fast enough to stem big price declines. You would do well to wait at least another few months. You will pay WAY less (as I'm sure you've already calculated) to continue renting at this point rather than buying now.
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Old 06-30-2009, 04:24 PM
 
Location: Montgomery County, PA
2,771 posts, read 5,905,205 times
Reputation: 604
Quote:
Originally Posted by JG183 View Post
for those who have such strong convictions on what home prices are going to do, here's your chance to put your money where your mouth is :

MarketWatch.com Story
You'd better read the fine print on these so you know what you're getting.

The market has already priced in a decline on futures. It's not enough to think that the prices are going to drop, you need to think that the market is underestimating the extent of the drop.

The reason for this is that Case Shiller futures are currently trading below the current value of the index itself. If you short the May 2010 contract, the rate for NY metro will be (for example) around 160, so you need the price to drop below that to make money. By the time you (or the ETF) closes out that contract, they need to enter another short contract (e.g. for Nov 2010) which would be trading some way below 160.
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