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I see the values dropping for the next 12-18 months, nationally. I see it dropping here in Chicago for at least 12 months.
Mr. Hoffman seems to have weathered the market thus far in low cost SC market (176m) but I expect even areas like that and NC which were slightly positiveast year to post modest declines this year.
There will always be local areas that post gains such as my hometown in Indiana which is getting a new Honda plant and is seeing bigtime rise in values, but even they have slowed.
And RE agents please don't respond to this post like I am an uneducated first time homebuyer. I have several investment properties in Chicago including an apartment building. I have also worked in banking for nearly 10 years so no BS realtor hype please. I have lost I estimate 100M in equity and anticipate losing another 100M before we bottom. And this is Chicago, one of the better markets to be in.
I still like RE as a long term not flip investment and will buy apartment building for 600-800m that is worth 1mm, with of course 20 percent down, 800 empirica and it has to cashflow 1.2x.
I can understand why the OP asked for no realtor responses. All you hear from them is "there is never a better time to buy than now". Even with values falling, foreclosures mounting and the Fed not exposing the whole ball of wax on the underlying subprime mess and how much more there is to it.
There's plenty of debates going on over in the City forums between realtors and potential buyers/sellers about the economic state of housing in their city.
Location: Georgia, on the Florida line, right above Tallahassee
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Quote:
Originally Posted by HappyTexan
I can understand why the OP asked for no realtor responses. All you hear from them is "there is never a better time to buy than now". Even with values falling, foreclosures mounting and the Fed not exposing the whole ball of wax on the underlying subprime mess and how much more there is to it.
There's plenty of debates going on over in the City forums between realtors and potential buyers/sellers about the economic state of housing in their city.
It wouldn't surprise me to see a double digit decline( from the peak) sometime in '09...Right now we're still at a standoff. Buyers are hearing about declines in other areas and lending standards have tightened, so there's far less buying. A lot of sellers know what their houses "were worth" a year ago, and don't see why they should lower prices, and some realtors are advising them to hold firm on prices, as if that could stem the tide. It doesn't mean you should or shouldn't buy. Inventory is high, so there's a lot to choose from, and if you're planning on staying in the house for 10 years, the price shouldn't make that much difference. And some people just don't feel whole until they own a house. In that case, just make sure you find a relative bargain to cushion you against price decreases. At the moment, renting is still far less expensive.
I never said I didn't want realtor feedback, just no pumper BS. Just don't assume we are all first-time buyers and uneducated.
Mr. Hoffman has been very professional on this forum and I welcome feedback from people like him. I do however have a more pessimistic view of the market than he does.
As I stated in the other thread. The drop is local. Very local in that it has not been equal even a city.
My part of Phoenix has seen price drops of 45%. All gains from the bubble years are gone and prices are back down to prebubble 2001-2002 ranges. Sure not all seller believe that yet, but having been watching my local market for the past 18 months the drop is quite clear to see. The other thing is that homes under contract have doubled in the last few weeks. Sales have not picked up that much yet since it take time for under contract to turn into sales, but they have trended slightly upward in the last 3 months. Volume is still down compared to a solid market, but things are changing. Even so demand is increasing due to low prices. Alot of people have been waiting on sidelines watch for the time to jump in. Many are doing so due the pricing. I don't see prices dropping much further here in my part of Phoenix. Maybe 5% more?
Other parts of Phoenix have NOT had this severe price drop in the last 18-24 months we have had so an overall city/metro figure may not show the nature of my local market.
BTW... I am not a realtor. I am just been keeping track of the market for a while localy.
Vincentnyc,
Why did you give yourself only 5-10% when places out in the midwest are undervalued for the most part, by like 30%?
Do you have any real research put into these numbers or are you just taking a blind stab?
I'm curious to what you think about the southern states, excluding Florida?
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