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Just read the official report from Forbes and other predicting factors for the 2009 market. You think we have it bad? We are predicted to loose 3-5% of home values across the Triangle. Places in California, Florida, the DC area and so on? 20-32%! Down from already 20-35% over the past 18 months. San Diego, for example, will be down over 50% from it's 2005-2006 highs. Wow! That is some scary stuff.
We should all be thankfull the biggest problem we have here, is taking a little longer to sell. In most parts of the country it is dire and getting worse. Far worse then even my doom and gloom mind had previously thought.
Do you have a link for that information? My husband and I are considering moving to the area. Although we are not going to buy right away, it would be nice to get some info on the market.
One thing to consider is that in those markets that are losing a lot in the east and west coasts, they had huge gains for many years before now. That is no concelation to the people that brought houses between 2004-2006 in these markets and now owe more than what their houses are worth. For the folks that have owned a house for 5 years or more and have not taken money out in refinancing; they still should have equity in their houses and be doing OK.
Things are taking longer to sell in the Triangle, but I can tell you right now if I listed my house for the same price I paid for it (or a little more to cover all closing expenses), I could sell it in days. Since I bought the house May 2006, that says a lot. If I bought a house in the DC area in the summer of 2006 and tried to sell it for anywhere near what I paid for it back then, people would be laughing in my face.
Even though we made a killing on our last house in NoVA after owning it only for 2 years, I much rather have the slow and steady appreciation that we have always had here in the Triangle. That way when things go bad we at least tend to not lose value. Also if we want to sell our house in 5 years and move up to a bigger place, I know that the bigger house will still be within our price range when we are ready to move up.
Another thing to consider is that economists of all stripes are well known for having terrible predictive abilities. Such as the fact that, as one article reported, "most economists expect the United States to skirt a recession." And some other good predictions: "Home sales could hit bottom by mid-2008, some economists predict, but prices will fall at least into early 2009. And oil prices should retreat from near-record levels but stay high, keeping the pressure on low- and moderate-income families."
And after quoting perennial pessimist Nouriel Roubini, who got it right, the article presents the opposite side:
Quote:
Roubini's view is among the most pessimistic. On the other hand, Rich Yamarone, director of economic research at Argus Research in New York, predicts the economy will chug along, expanding at a solid 2.7 percent rate next year. He expects consumers, supported by a healthy job market and low interest rates, to do what they have done for 63 consecutive quarters: Spend more.
The impact of falling home values on consumer psyches is overstated, he added.
"We seriously doubt," he said, "that there's a mom pushing a child down the aisle of a Wal-Mart in Sheboygan, Wisconsin, saying 'The house is worth 4 percent less than it was last year, we're not buying any toys this year.' "
Now Mr. Yaramone is saying "This is the reason it's going to be the longest recession we've had in post World War II history." So there's a good chance things will be doing better more quickly next year!
I kid, I kid. But take economic predictions -- either from professional economists, or predictions that we've hit the bottom, or haven't hit the bottom, or the bottom is so far away you can't see it with binoculars, or posters claiming how everything is rosy here in the Triangle and that folks better exit charlton, massachusetts now and move to Paradise in Cary in a hurry -- with a great deal of skepticism.
Yes, the areas mentioned (east coast/west coast) had humungus gains overnight practically and if anyone could read the writing it was inevitable that they would crash the hardest/fastest
An example in an upscale neightborhood outside Boston where a relative lives: in recent years, houses in her neighborhood did not even get listed, they sold instantly on word of mouth. And the one she bought would be a standard, run of the mill, 1950s cape with major upgrading/basic mechanical repaired needed on a spit of a lot. Selling price 2.5 years ago? $775,000 with multiple offers and no eye blinking. At refinance time last year, it was estimated to be worth a little over two-thirds of that
Be glad you live in the Raleigh area where more reasonable appreciation occurred
Yes, the areas mentioned (east coast/west coast) had humungus gains overnight practically and if anyone could read the writing it was inevitable that they would crash the hardest/fastest
An example in an upscale neightborhood outside Boston where a relative lives: in recent years, houses in her neighborhood did not even get listed, they sold instantly on word of mouth. And the one she bought would be a standard, run of the mill, 1950s cape with major upgrading/basic mechanical repaired needed on a spit of a lot. Selling price 2.5 years ago? $775,000 with multiple offers and no eye blinking. At refinance time last year, it was estimated to be worth a little over two-thirds of that
Be glad you live in the Raleigh area where more reasonable appreciation occurred
Sounds a lot like what has happened in areasa of Northern VA. I bought a 20 y/o, beaten up, 1200 sq. ft. townhouse in the exurbs of DC (Leesburg, VA) in Feb of 2004 for $205k. In April of 2006 we sold it for $345k ($140k profit for just sitting on it and some new carpet and paint). In March of 2008 the bank sold it (it was forclosed) for $162k. So it lost more than half of its value in less than two years.
Sounds a lot like what has happened in areasa of Northern VA. I bought a 20 y/o, beaten up, 1200 sq. ft. townhouse in the exurbs of DC (Leesburg, VA) in Feb of 2004 for $205k. In April of 2006 we sold it for $345k ($140k profit for just sitting on it and some new carpet and paint). In March of 2008 the bank sold it (it was forclosed) for $162k. So it lost more than half of its value in less than two years.
Yep, I'm looking at picking up a property in San Diego, but after doing some serious research, I'm going to wait at least 6 months. I may not time the bottom, but I intend to get as close as possible. For those who tell you the bottom is here, they are obviously in the biz. We are nowhere near the bottom. Not even close. At least things seem to be stable here, for the time being anyhow.
Yep, I'm looking at picking up a property in San Diego, but after doing some serious research, I'm going to wait at least 6 months. I may not time the bottom, but I intend to get as close as possible. For those who tell you the bottom is here, they are obviously in the biz. We are nowhere near the bottom. Not even close. At least things seem to be stable here, for the time being anyhow.
In my own guess-tamation, (which, along with .75, will get you a real cheap cup of coffee ), 2009 will be the final killer for any real estate growth: commerical and residential.
After that, 2010 will prove to be the rebound year and all the pent-up buyers out there will begin looking for some real deals (although, in realistic terms, house values will be where they should have been all along, but that's another thread ) and things will starting looking up, albiet slowly
Again, my guess but I do have a tangible investment in it: our long-term plan for years has us selling in 2010-2011 and moving south so things must go accordingly!
And with the Tri-area being so strong initially, I can't see it going "south" as badly as the rust belt and the coastal areas....
First question I'd ask of anyone making predictions these days is how are their predictions from 2005 holding up? It's easy to say that you knew housing was a bubble, but not many people were saying that a few years ago when "real estate always goes up".
It might be that they're in the "done by 2010" camp, so they're getting salaries back in line with house prices here quickly rather than slowly. A 15% or so so drop would do that, assuming salaries stay the same. But so far everyone predicting a quick end to this RE crash have been disappointed, so we'll see what happens.
Edited to add - actually, a drop that big isn't totally unprecedented. The data shows prices dropped 8.4% in 1981. That's before adding 6% inflation for a 14% drop in real home value. With inflation actually being deflation right now, maybe we see a repeat of the early 80s recession in more ways than one.
I don't think we are any where near the end, we still have the option ARM and Alt-A wave to go through in the next two years. Not to mention commercial and consumer debt. 60-minutes had a nice piece on the next shoe to drop...I'm starting to wonder if they have been holding back some of the bad news until after the xmass season, so as not to further affect consumer spending...
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), 2009 will be the final killer for any real estate growth: commerical and residential. 
) and things will starting looking up, albiet slowly 
