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Old 07-20-2010, 06:49 AM
 
Location: Blue Bell, PA
118 posts, read 270,979 times
Reputation: 65

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Here is a link to a great article that I just received from TRULIA....It addresses conditions all over the country. If your home (or listings) are not selling...this could be the moment to consider a price adjustment to meet the market.

News Room - Trulia.com - Press Releases
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Old 07-20-2010, 07:11 AM
 
Location: Hobart, IN
157 posts, read 411,997 times
Reputation: 101
Just sold for 10,000 les than what they we asking
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Old 07-20-2010, 09:20 AM
 
Location: Little Pond Farm
559 posts, read 1,294,770 times
Reputation: 506
There comes a point that homes could not be built today for the prices they are selling for...........Our home, on the market went from 429,000 in 2006 to 299,000 today and my realtor wants me to drop the price another 50,000. That sale price doesn't not cover the original cost , the second story addition, Custom kitchen, new heating system, new electric..............Making a 3400 square foot home 88.00 a square foot, I wish I could get a brand new home built for that.
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Old 07-20-2010, 09:42 AM
 
228 posts, read 776,496 times
Reputation: 102
Quote:
Originally Posted by casper324 View Post
There comes a point that homes could not be built today for the prices they are selling for...........Our home, on the market went from 429,000 in 2006 to 299,000 today and my realtor wants me to drop the price another 50,000. That sale price doesn't not cover the original cost , the second story addition, Custom kitchen, new heating system, new electric..............Making a 3400 square foot home 88.00 a square foot, I wish I could get a brand new home built for that.
Good point. Seems that a bottom threshold price should be replacement value.
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Old 07-20-2010, 09:47 AM
 
Location: Union County
6,022 posts, read 9,283,611 times
Reputation: 5409
Quote:
Originally Posted by Trump View Post
Good point. Seems that a bottom threshold price should be replacement value.
There in lies the ultimate rub with Real Estate! There is no bottom.
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Old 07-20-2010, 11:15 AM
 
3,283 posts, read 4,968,707 times
Reputation: 753
Quote:
Originally Posted by casper324 View Post
There comes a point that homes could not be built today for the prices they are selling for...........Our home, on the market went from 429,000 in 2006 to 299,000 today and my realtor wants me to drop the price another 50,000. That sale price doesn't not cover the original cost , the second story addition, Custom kitchen, new heating system, new electric..............Making a 3400 square foot home 88.00 a square foot, I wish I could get a brand new home built for that.
what a house can be built for is irrelevant! totally irrelevant! the only thing which is relevant is how much money is available to buy the existing inventory.

it is also worthwhile noting that building costs will fall dramatically over the next few years. perhaps a plumber who was earning $75k per year won't work for $40k today. add a few more years of unemployment and that same plumber might beg you to pay him $25K just to put food on the table.

Last edited by 58robbo; 07-20-2010 at 11:24 AM..
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Old 07-20-2010, 11:19 AM
 
3,283 posts, read 4,968,707 times
Reputation: 753
Quote:
Originally Posted by Trump View Post
Good point. Seems that a bottom threshold price should be replacement value.

20 grand would probably buy you a mansion in parts of detroit. mansions which would probably cost millions to replace. maybe it seems that way to you, but that is not the way the market works
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Old 07-20-2010, 01:22 PM
 
1,989 posts, read 4,239,621 times
Reputation: 1396
In the short term, falling prices are bad for sellers, realtors (and associated industries) and the adjusting economy. In the long term, lower home prices are better for middle class America. Remember? The middle class where ONE income used to be able to buy a home?
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Old 07-20-2010, 01:25 PM
 
Location: Barrington
62,747 posts, read 42,718,857 times
Reputation: 20231
Quote:
Originally Posted by casper324 View Post
There comes a point that homes could not be built today for the prices they are selling for...........Our home, on the market went from 429,000 in 2006 to 299,000 today and my realtor wants me to drop the price another 50,000. That sale price doesn't not cover the original cost , the second story addition, Custom kitchen, new heating system, new electric..............Making a 3400 square foot home 88.00 a square foot, I wish I could get a brand new home built for that.
I suspect the real story is that your local market demands you to reduce another $50K or so, if you want to become sold. Your agent has interpreted the market and is the messenger.

With the exception of the blip that was the bubble, in some areas, ROI on significant home improvements was rarely 100%. Home additions rarely recover their cost.

Can you just stay put, as millions in NJ did back in the 90's when they found themselves upside down and unable to refi at substantially better rates? Last goaround in the NY tri-state area took almost a decade to work out. That was a localized bust. This one is not.
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Old 07-20-2010, 02:48 PM
 
Location: Barrington
62,747 posts, read 42,718,857 times
Reputation: 20231
Quote:
Originally Posted by cohdane View Post
In the short term, falling prices are bad for sellers, realtors (and associated industries) and the adjusting economy. In the long term, lower home prices are better for middle class America. Remember? The middle class where ONE income used to be able to buy a home?
Back when, people tended to live on farms or in cities. Farmer's wives worked like dogs and got no credit for their contribution.

Many woman took in laundry, baby sat, cleaned houses and sold jelly for pin money. Most kids did not progress to high school. It was also common for 12 year olds to enter the work force and contribute their income to the family's welfare. Newly married usually lived with the family until the family could do without their income and the next generation was able to swing their own modest apartment. Most folk were renters, not owners.

Well into the 50's, it was illegal for married woman to work in many states.
In the 50's most of what was consumed in the U.S. was manufacturer and serviced in the U.S.

The Honeymooners depicted typical lower middle class urban life in Brooklyn. Ralph was a bus driver. Alice was a house wife and only did secretatrial work when Ralph was laid off. If I recall, their apartment consisted of 2 rooms.

During the same timeframe, I love Lucy depicted a rather glamorous upper middle class couple in NYC. They rented a 3 room apartment from Fred and Ethel. Fred sure did know how to squeeze a quarter, eh. Eventually, Ricky got involved in motion pictures and they were able to move to Ct.

Ward Cleaver, a farm boy who made good, was college educated and a WW2 vetran, was an executive and had a secretary. June ( who met Ward while she worked on her Mrs Degree) stayed home and took care of The Beaver and Wally. Their house was likely a 6 room house with more than one bath. This was not typical for the majority of people, at that time. And most men did not have a college education and were not business executives.

Jim Anderson was an insurance agent in a small midwestern town. He likely was the only insurance agent in town and did not have national online competition. Wife Margaret took care of the three kids. The girls shared a bedroom. Betty and Bud chose to attend state college where tuition was likely a pittance. The house is modest by today's standards/aspirations.

Laura Petrie was the stay at home wife in New Rochelle. Rob worked as a writer for a TV show, not a common position. Their box like house consisted of 4 rooms, if one counts the combined LR/DR as 2 rooms.

Back in those days, municipal services and education were very basic and property taxes reflected this norm. Fuel was dirt cheap. College was downright reasonable. No one knew or cared much about the enviornment. Vacations were rare and usually involved a road trip and eating sandwiches packed from home. Dining out was an occasion.

Health care costs were nominal and life expectancy at least 10 years less than it is today. Medicaid/Medicare had not yet been created. And of course social security was in its infancy, being supported by the baby boomers, as they matured. People did not have the ability to spend more than they made because credit was not available. Paying offf off the mortgage was honorable.

One car, one phone, one TV was as good as it got for most folk. Laundramats were common. Those fortunate enough to have a wringer washer hung their clothes out to dry. Homes were not air conditioned and tended to be drafty in the winter. Most women did not have 27 pairs of shoes in their closet and made do with a winter coat for a decade. Men spent 50 cents for a hair cut if the wife was not inclined to cut it for him. Children went out to play instead of being put into organized activities that cost an arm and a leg. Grandma came to live with the family instead of a extended life care facility. When her time was up, it was up. She lived a good life till she dies at the old age of 66.

Last edited by middle-aged mom; 07-20-2010 at 02:59 PM..
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