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Does anyone have any thoughts to whether it is a good time to buy a house in Sarasota or is it worth waiting another few months? I have heard from some that the housing market is recovering and others that it is going to get worse!
IMHO wait at lease six months as there are many more foreclosures in the pipeline
I dunno - honestly.
My take is that the government with the moratoriums has slowed the release of foreclosures to the market, and have pressured the lenders, banks, Fannie Mae, Freddie Mac, and others to follow suit. The strategy is that releasing them slowly, increases the demand for them, keeping the prices higher (than the dumping, at verly low prices, to get them off the balance sheet policy banks have been following). This has a number of effects that are good and seem to be working:
1. It has created a feeling (falsely in my opinion - but hey its working) that we have been bouncing along the bottom of the housing market, and things are going to, or beginning to, turn up now.
2. This sense that we have hit the bottom has brought buyers and investors back, in numbers, and they are offering cash and quick settlements in order to get some real value (I think) here is why. . .
3. Housing prices have deflated over 50 percent in many areas over the past couple years so the list / asking price is way down from where it was two years ago. If you look at the numbers, some of these prices are now below the cost to build them. Eventually the market will recover, and the value will return to them.
4. If they are rental properties because of the deflated pricing, cash deal, and other tax incentives, etc. . . they numbers will cover the investment capital, and produce a positive cash flow return. If you look the numbers will bear that out.
5. The house values if all the foreclosures were released in a flood, would really crash the market and make it completely unstable, and lower everyones equity in a huge way. By slowing the foreclosures to a trickle, and increasing demand, the government is raising the value of all the assets of the individual home owners, and the lenders, banks, and other mortgage holders that currently hold these properties. Thus keeping their balance sheets strong. (err stronger than they would be if the release of these properties were not controlled.
6. With the release of these properties trickling in, all these assets are more valueable, and that is bringing a lot of cash that has been setting on the sidelines for a while because people do/did not know where to invest and get a decent return. With property, it is tangable, and with the prices rising again, people are beginning to flock to buy. The higher property values is in everyone's interest, including the government, because of the property tax revenues they bring. The loss of revenue already has been stinging the jurisdictions in a huge way already, as you can read by the reductions in serious jobs, such as teachers, fire men, police forces, and others, the spiral continues.
7. So long as the government can continue this policy, the number of foreclosures will be obsorbed at a controlled pace, keeping prices high, and helping with another problem they haven't really calculated - what to do with all the homeless people that have been completely wiped out. The cost of that, and all the other negatives that go along with that are potentially huge.
I know I didn't list half of the other related things, but someone else will surely supplement my thoughts or disagree with them. . .
In any case, the time to buy is now if you think that the government dam, which is holding back all these foreclosures will hold up, because they have (really have) stablized the market and caused prices to level off, and in some areas (not all - this is not a universal global opinion - this is a SWFL local opinion) caused prices to go up, and mulitple offeres to be made, and reduced the number of houses to contract on. So if you believe the government dam is going to hold up, you want to buy now, BUT if you think the government dam isn't much better than some of the levies in New Orleans during Hurricane Katrina, then you don't or shouldn't want to buy now.
There you have it you are dam if you do, and levy if you don't.
I think long term there are going to be some pretty tough storms ahead, but I thing the prices are so deflated, that if you are strong enough, you will do well buying and holding. WARNING! I tend to be optomistic! So don't listen to me!
Big House has excellent points and his posts always seem unbiased, meaning he's not a realtor wanting to make a sale.
I have been following the real estate market in this area before we bought and now a year later after we bought. My anecdotal observation is that valuable property (near water) has not gone down any more from the inital downturn 1.5 to 2 years ago. There are deals to be had but quality remains stable in price.
Properties in overbuilt markets is cheap but risky (North Port being one area as well as some developments scattered around the region). You can get some great buys in NPort especially single family homes but you better be staying for 5-10 years before you think about re-sale.
I also think any condo/villa that has common property and association fees is risky due to other peoples defaults. You will be paying their fees because banks aren't obligated on foreclosures except for 6 months back charges.
Having said all that gloomy stuff I think it's a good time to buy if you do a lot of work and find the home you really want to live in for the next 10 years. If I were 20-35 years old I'd rent a fabulous condo and wait to buy. I'm 50(something) and wouldn't have gotten our house except for the financial downturn.
On paper we lost money this past year. Do I care? No. I'm not selling. Paper profits don't count and neither do paper losses....until you sell.
When you come upon a price that seems too good to be true look for the reason, there is one.
Big House has excellent points and his posts always seem unbiased, meaning he's not a realtor wanting to make a sale.
I have been following the real estate market in this area before we bought and now a year later after we bought. My anecdotal observation is that valuable property (near water) has not gone down any more from the inital downturn 1.5 to 2 years ago. There are deals to be had but quality remains stable in price.
Properties in overbuilt markets is cheap but risky (North Port being one area as well as some developments scattered around the region). You can get some great buys in NPort especially single family homes but you better be staying for 5-10 years before you think about re-sale.
I also think any condo/villa that has common property and association fees is risky due to other peoples defaults. You will be paying their fees because banks aren't obligated on foreclosures except for 6 months back charges.
Having said all that gloomy stuff I think it's a good time to buy if you do a lot of work and find the home you really want to live in for the next 10 years. If I were 20-35 years old I'd rent a fabulous condo and wait to buy. I'm 50(something) and wouldn't have gotten our house except for the financial downturn.
On paper we lost money this past year. Do I care? No. I'm not selling. Paper profits don't count and neither do paper losses....until you sell.
When you come upon a price that seems too good to be true look for the reason, there is one.
Great post - I completely agree, and we have kind of done the same. I agree that good properties in desirable neighborhoods have not fallen much, because as soon as they come down somewhat there is someone to buy them. That has certainly been the case in my bayside neighborhood.
I also would agree that now can be a good time to buy IF you find the property of your dreams, can afford it easily, and plan to live in it for many years.
Everyone is making some good points here. I have posted on this subject numerous times on other threads.
I can tell you that right now there are very few new foreclosures coming on and lots, and lots of them coming off the market. Many of the homes are in multiple offer situations. The funny thing is when I work with many of the people from City-Data they say that they have read my posts but until they actually start making offers and looking for property they don't seem to quite grasp the whole thing. Another thing I am noticing is that many homeowners don't seem to really want to sell their homes. By that I mean they are setting unreasonable term, not making their homes available to show, etc. Seems kind of odd to me.
Many people are having a hard time finding what they are looking for and when they do it gets swept out from under them with multiple offers.
I will say that I have gotten several orders from banks in the last two weeks on homes that are about to foreclose. But it seems as soon as we get them in they are gone within a few days.
So BigHouses answer of I dunno is pretty accurate. I think we will know a bit more in the next six months. I really don't like to form an opinion on just 2-3 months. But if this continues through December we might be out of the woods, somewhat.
I agree with Big House. We haven't seen the end of this story. I know the market has taken a hit and homeowners are trying to hold on to equity for the next stage of their lives but there's still a lot in the balance and out of their control. I don't like what the government is doing to try and fix this one bit.
I'm considering a move there within this summer. I've seen the market fall dramatically since visiting 2 years ago. Take a look at this chart of median single family home sales through April of this year.
Sarasota was one of the first to get hit and I know there's still room to fall further
but hey, I don't live there yet so....
I dunno - honestly.
My take is that the government with the moratoriums has slowed the release of foreclosures to the market, and have pressured the lenders, banks, Fannie Mae, Freddie Mac, and others to follow suit. The strategy is that releasing them slowly, increases the demand for them, keeping the prices higher (than the dumping, at verly low prices, to get them off the balance sheet policy banks have been following). This has a number of effects that are good and seem to be working:
1. It has created a feeling (falsely in my opinion - but hey its working) that we have been bouncing along the bottom of the housing market, and things are going to, or beginning to, turn up now.
2. This sense that we have hit the bottom has brought buyers and investors back, in numbers, and they are offering cash and quick settlements in order to get some real value (I think) here is why. . .
3. Housing prices have deflated over 50 percent in many areas over the past couple years so the list / asking price is way down from where it was two years ago. If you look at the numbers, some of these prices are now below the cost to build them. Eventually the market will recover, and the value will return to them.
4. If they are rental properties because of the deflated pricing, cash deal, and other tax incentives, etc. . . they numbers will cover the investment capital, and produce a positive cash flow return. If you look the numbers will bear that out.
5. The house values if all the foreclosures were released in a flood, would really crash the market and make it completely unstable, and lower everyones equity in a huge way. By slowing the foreclosures to a trickle, and increasing demand, the government is raising the value of all the assets of the individual home owners, and the lenders, banks, and other mortgage holders that currently hold these properties. Thus keeping their balance sheets strong. (err stronger than they would be if the release of these properties were not controlled.
6. With the release of these properties trickling in, all these assets are more valueable, and that is bringing a lot of cash that has been setting on the sidelines for a while because people do/did not know where to invest and get a decent return. With property, it is tangable, and with the prices rising again, people are beginning to flock to buy. The higher property values is in everyone's interest, including the government, because of the property tax revenues they bring. The loss of revenue already has been stinging the jurisdictions in a huge way already, as you can read by the reductions in serious jobs, such as teachers, fire men, police forces, and others, the spiral continues.
7. So long as the government can continue this policy, the number of foreclosures will be obsorbed at a controlled pace, keeping prices high, and helping with another problem they haven't really calculated - what to do with all the homeless people that have been completely wiped out. The cost of that, and all the other negatives that go along with that are potentially huge.
I know I didn't list half of the other related things, but someone else will surely supplement my thoughts or disagree with them. . .
In any case, the time to buy is now if you think that the government dam, which is holding back all these foreclosures will hold up, because they have (really have) stablized the market and caused prices to level off, and in some areas (not all - this is not a universal global opinion - this is a SWFL local opinion) caused prices to go up, and mulitple offeres to be made, and reduced the number of houses to contract on. So if you believe the government dam is going to hold up, you want to buy now, BUT if you think the government dam isn't much better than some of the levies in New Orleans during Hurricane Katrina, then you don't or shouldn't want to buy now.
There you have it you are dam if you do, and levy if you don't.
I think long term there are going to be some pretty tough storms ahead, but I thing the prices are so deflated, that if you are strong enough, you will do well buying and holding. WARNING! I tend to be optomistic! So don't listen to me!
Where do you stand?
Buy or Don't Buy
That summarized what I thought was happening and as a cash buyer keeping me on the side lines. I was waiting for prices to drop to pre bubble levels but it just has not happened or has not happened yet.
I hate the fact the government is still pushing the debt based economy in spite of that is what got us here in the first place.
Big House has excellent points and his posts always seem unbiased, meaning he's not a realtor wanting to make a sale.
I have been following the real estate market in this area before we bought and now a year later after we bought. My anecdotal observation is that valuable property (near water) has not gone down any more from the inital downturn 1.5 to 2 years ago. There are deals to be had but quality remains stable in price.
Properties in overbuilt markets is cheap but risky (North Port being one area as well as some developments scattered around the region). You can get some great buys in NPort especially single family homes but you better be staying for 5-10 years before you think about re-sale.
I also think any condo/villa that has common property and association fees is risky due to other peoples defaults. You will be paying their fees because banks aren't obligated on foreclosures except for 6 months back charges.
Having said all that gloomy stuff I think it's a good time to buy if you do a lot of work and find the home you really want to live in for the next 10 years. If I were 20-35 years old I'd rent a fabulous condo and wait to buy. I'm 50(something) and wouldn't have gotten our house except for the financial downturn.
On paper we lost money this past year. Do I care? No. I'm not selling. Paper profits don't count and neither do paper losses....until you sell.
When you come upon a price that seems too good to be true look for the reason, there is one.
Thanks imagardener,
You are right, I'm not a real estate agent, so I try to be open to both sides and be balanced.
You make a lot of good points too. And I agree, as long as you are buying long term things are bound to work out for you.
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