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I think it will vary region by region as to what year level (2001, 2004, etc.) prices will fall to and be at bottom. I am looking into a certain market for an investment where prices have already dropped 35% and are now at 2004 levels. There is quite a bit of supply, but buyers are coming out again and sales are up, so people are seeing value in this market again. I don't believe they are going to fall further but stay flat for anywhere from 6 months to a year. As soon as I cash out my investment in another (much stronger) market I will find myself a little deal - it's for our own use, and plan to hold it for many years, so if we buy it right I don't think we can lose. We will pay mostly cash for it.
i just wanted to add my perspective as a potential traditional buyer in the LA area. prices have gone down to the point where we want to buy, and to an extent we are part of that pent up demand...we were waiting for prices to fall enough to buy, otherwise we could never afford to buy in LA. we have friends in a similar situation. However, while prices in some areas are down to '04 levels, in '04, buyers like us and our friends could have gotten into easy little or no down loans (i'm not talking about bad arms). now that is not an option. so, i think that part of the current problem is there are probably a lot of people like us trying to find a loan right now and having trouble...400k might be "cheap" in la vs. the past few years, but if you've been paying $1800 in rent, and need 20% down, you are looking at a very decreased number of buyers. basically, we (me and close friends) are paying almost the same in rent as we would on a mortgage and are being told we can't afford a mortgage and need to save more money for down payments. just my 2 cents. i think there are a lot less buyers now because everyone who could afford high prices or was willing to get into a bad loan did it already.
The video has lots of anecdotal data from agents saying that things are picking up and prices are higher, but as usual, the statistics don't back up that claim (sales way down, prices flat or down after inflation). It could be that these minuscule number of sales in high-end neighborhoods ($2M+) are not significant enough to affect the statistics, or it could be that the agents being interviewed aren't accurately measuring the market. It wouldn't be the first time an agent tried to talk up the market, only to have the data show them to be incorrect.
Actually the commentator stated facts that are verifiable. She said that 60% of the home sold in "hot neighborhoods" were sold in less than 30 days. That information is readily available and easily verifiable.
The price that the agent with glasses mentioned was not 2mil. It was the 1mil range and they had been beaten out on 8 or 9 homes.
Also, remember that a $1mil property in San Francisco may equate to a $400k property in Phoenix, or a $200 property in another area. So this is not the real high end property.
It's easy to ignore facts and accuse agents of lying when one doesn't want to accept, or verify, what is being stated.
We're getting multiple offers here in Phoenix on short sales and REO's. We're not getting them in the regular market that I've heard, but we are getting them in these other markets, and the banks are playing the game.
We've been saying that real estate is local. What is happening in one market may not affect another market.
But if anyone wants to try and determine where the bottom may appear, it is, in my opinion, best to look at what is happening in all areas, and try to understand it rather than putting on blinders, accuse agents of lying, and pretend something that is reported isn't happening.
Check the San Francisco mls statistics to verify the validity of the report.
Actually the commentator stated facts that are verifiable. She said that 60% of the home sold in "hot neighborhoods" were sold in less than 30 days. That information is readily available and easily verifiable.
That information is kind of useless without context, though. How big are these "hot neighborhoods", and how are they defined? If they're defined as "neighborhoods where 60% of the homes are sold in 30 days or less", I'm not that impressed by this claim. And is that 30 days CDOM or DOM? Time on the market is pretty easy to game using the MLS.
Anyway, SF is pretty big - there had better be a lot of these hot neighborhoods to make a dent in the big picture.
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The price that the agent with glasses mentioned was not 2mil. It was the 1mil range and they had been beaten out on 8 or 9 homes.
These could have been $1.5M properties last year, for all we know. And again, there were several different anecdotes from agents - each mentioned a particular neighborhood but there wasn't enough detail to know what those limited data points meant. The fact remains that none of these were enough to put a dent in the 20% drop in YoY sales and flat median prices.
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Also, remember that a $1mil property in San Francisco may equate to a $400k property in Phoenix, or a $200 property in another area. So this is not the real high end property.
According to housingtracker, the 75% median price in Phoenix is about $450, so by that account these are fairly upper end homes. Is that what you meant?
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It's easy to ignore facts and accuse agents of lying when one doesn't want to accept, or verify, what is being stated.
I never accused them of lying, I just don't think they're very good at statistics. They, like you, are just seeing what they want and ignoring the overall trend.
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We're getting multiple offers here in Phoenix on short sales and REO's. We're not getting them in the regular market that I've heard, but we are getting them in these other markets, and the banks are playing the game.
Well sure, distressed sales are what's driving the prices in your area down at an accelerating pace (4% a month as of the last numbers I've seen). Homes priced way below comps are selling and the rest aren't doing much of anything. That's hardly the sign of a stabilizing market, though. which was your original claim.
Notice how the slope gets steeper the further along you go. That's kind of the opposite of stable.
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We've been saying that real estate is local. What is happening in one market may not affect another market.
But if anyone wants to try and determine where the bottom may appear, it is, in my opinion, best to look at what is happening in all areas, and try to understand it rather than putting on blinders, accuse agents of lying, and pretend something that is reported isn't happening.
Check the San Francisco mls statistics to verify the validity of the report.
Can you tell me which neighborhoods to look in and how many sales these anecdotes represent? And can I cherry-pick neighborhoods that are getting killed to prove that you are wrong? Or should we just go with the overall data for the region - the stuff that shows sales down and prices dropping?
"The family-owned maker of Alpenlite-brand motor coaches and campers had survived every bad economy and spike in oil prices since 1971, but it had to shut down when banks yanked its credit" ..
You don't need a crystal ball to see a train coming straight at you. This is no where near a bottom!
Bideshi
How is the RE holding up in Germany? Several years ago I had heard from someone from Frankfurt complaining about their inability to sell.
I am being approached by RE agents here in Italy telling me about the great prices. It all looks like a big bubble to me. I can rent for about 25% of what it would cost me in a mortgage.
It will be time to buy when people stop hiding behind this ridiculous crystal ball argument.
What does the very savvy Suze Orman have to say about the housing market?
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