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Old 03-26-2010, 01:04 PM
 
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Now I see the full study here http://www.ihsglobalinsight.com/gcpa...Report4Q10.pdf

At a glance I do not see where they discuss a rebound. Also, I do not know if you mean a rebound to peak levels, which for me would be odd for anyone to consider in a practical way, or a rebound as in reverting to the means, which would not be, eventually, unexpected and would entail the below bottom period we now seem to be experiencing if you believe the study.

Without having this information, I had already determined, before buying into the Tampa market, that the property I found was 50% off what I understand to be fair market value as determined by the 1999/2000 price to rent ratio. I also did a study of prices going back to the 1980s and determined my price today to be what it would have cost in 1993/1994 to purchase this property, also indicating a below bottom situation. So for me, the IHS study did not give me new information but confirmed what I'd already determined independently to be so, based upon my personal experience of not 16.7% but 50% below value.

As people require homes to live in but nobody requires a dot.com to fulfull a basic human need, I think it is interesting to compare the bubble heights of both markets but I do not believe it valid to take that comparison much further, certainly not into the future of housing and certainly not when housing has such history compared to the blip on the screen of dot.coms.

I think also it might be odd to say that they were not aware of foreclosure rates, inventories, et. al. when they published their study as even laypeople know that's pretty much all involved in this downturn. Similarly, I do not believe you when you say that "they are claiming that...prices...have never fallen like this before" though I will search better later to see if they actually said that, or if that is just your interpretation of their data.

As you can see here, as lately as the 1990s, prices also fell below the means. I would imagine they've done this a few times over the last 100 years. I would also imagine the economists at IHS aware of that.



Again, I think you have to be careful of what you are thinking and what the study is actually saying. I think you are confusing your thoughts for theirs.

Here is a better pic of housing prices going below bottom over time...

http://www.loanlifesavers.org/blog/wp-content/uploads/2009/07/copy-of-case-shiller-updated-1024x804.jpg (broken link)
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Old 03-26-2010, 01:36 PM
 
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Just had a look at the inventory figures for the greater tampa bay area. inventory is definitely moving esp for homes under $250 anything over that and there's closer to 2 years worth of inventory. Over $500 and you're looking at 45 months of inventory! that's insane! the message i got from that picture is that if you own a home in the $500 + region it is quite likely that you will never sell it unless you offer it at firesale prices!

in the first two months of this year an average of 7 $million homes sold per month. there are currently 426 listed. ouch! what does a realtor say to these owners? perhaps it's time for realtors to be a little more aggressive with sellers in this bracket?
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Old 03-26-2010, 01:59 PM
 
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There may be 426 listed, but there are probably several thousand more $500k+ homes/condos heading for foreclosure sales.

When I was house shopping in 2008, I was looking in one zip code that was overwhelmingly >$500k. 10% of the homes were either for sale or in the foreclosure process. Unfortunately, realtors do not consider a 4,000 sq ft waterfront home that has been abandoned as "inventory" if a local realtor is not being paid to list it.

I did an estimate of Tampa Bay high-end real estate last year and came up with about a 8-10 year inventory, if you include foreclosure/abandoned properties.
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Old 03-26-2010, 04:58 PM
 
Location: Sun City Center, FL
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The current Money Magazine (April 2010), page 85, has a table with the title "When will your Market Recover?" For the Tampa metropolitan area:

Price drop so far: -40.6%

Projected additional Decline: -17.2%

When will prices hit bottom: 2010:Q4

Projected one year change: -13.8%

They give Fiserv and Moody's Economy.com as sources.
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Old 03-26-2010, 05:20 PM
 
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Quote:
Originally Posted by chi_tino View Post
There may be 426 listed, but there are probably several thousand more $500k+ homes/condos heading for foreclosure sales.

When I was house shopping in 2008, I was looking in one zip code that was overwhelmingly >$500k. 10% of the homes were either for sale or in the foreclosure process. Unfortunately, realtors do not consider a 4,000 sq ft waterfront home that has been abandoned as "inventory" if a local realtor is not being paid to list it.

I did an estimate of Tampa Bay high-end real estate last year and came up with about a 8-10 year inventory, if you include foreclosure/abandoned properties.


hey chi tino, are you still house shopping? did you buy anything in 2008?
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Old 03-27-2010, 12:06 AM
 
Location: Imaginary Figment
11,456 posts, read 13,147,221 times
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Quote:
Originally Posted by dlhanson View Post
The current Money Magazine (April 2010), page 85, has a table with the title "When will your Market Recover?" For the Tampa metropolitan area:

Price drop so far: -40.6%

Projected additional Decline: -17.2%

When will prices hit bottom: 2010:Q4

Projected one year change: -13.8%

They give Fiserv and Moody's Economy.com as sources.
Ouch.
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Old 03-27-2010, 09:32 AM
 
1,500 posts, read 2,910,409 times
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Quote:
Originally Posted by dlhanson View Post
The current Money Magazine (April 2010), page 85, has a table with the title "When will your Market Recover?" For the Tampa metropolitan area:

Price drop so far: -40.6%

Projected additional Decline: -17.2%

When will prices hit bottom: 2010:Q4

Projected one year change: -13.8%

They give Fiserv and Moody's Economy.com as sources.
Not sure how to read one part of this. I do not understand how they project an additional 17.2% though bottom which they call for 4th quarter 2010 yet also they say the projected one year change will be 13.8%. Looks like they are making two projections for the same year of 2010?

Not that I trust Moody's anything but a total decline of 51% (the 40.6% already down plus an additional 17.2% off the remainder) does not seem out of line with where I bought in Tampa, as I paid lower than what was mostly selling at the time in anticipation of further deterioration; and, based upon bubble sales, it looked like I bought significantly better than 50% off peak bubble.

Though I don't know that further declines are very evident everywhere, at least not so far where I bought in Tampa, as the two which sold in my immediate vicinity after I bought in 2009 paid 20% more and the one sold so far in 2010 paid (cash) about 25% more than I did per sq ft of house.

I suspect most of that additional decline will come off the higher end houses, whose owners probably had more money to hold onto their prices longer, but now will be capitulating as none of their ilk intend to buy otherwise and since jumbo mortgages are more expensive and more difficult to attain.

I do not buy all those inventory numbers, however. Though they are an interesting look at a slice of time, I do not know if they reflect how much is available or how few people are buying and so it seems they could change rapidly month to month. If you have 400 homes trying to get over $1mm each and only 10 sold in a particular month, then you'd say you have 40 months of supply. But if 20 sell next month, then you have 20 months of supply. The supply has been cut in half in just 1 month? So taking that slice of time and trying to judge inventory over time is a bit off by that.

Hat tip to dhanson for posting this before cnnmoney.

Here is theirs from today

Money magazine real estate: Home price forecasts and housing data for Tampa - Money Magazine on CNNMoney.com

7. Tampa, FL

Home price forecast (1 year):* -13.8%
This Gulf Coast city cycled through the same kind of bubble as its Atlantic Coast sisters: Prices are down about about 40% from their 2006 high.

Tampa's economy centers around finance, real estate, tourism and insurance and some of those industries suffered during the recession. The unemployment ranks in Greater Tampa have swelled, with 12.4% out of work as of December, well above the national average. The resulting wave of foreclosures has given Tampa a delinquency rate that is 22nd in the nation.

City stats†

Population: (2006) 2,697,731

Median family income: (2008) $56,500

Home price data

Median home price:
(2009) $153,000

Affordability index:
(Median home price/family income 2009) 2.7

Prices peaked in: 2006:Q2

Total climb during the boom:
(2000 to peak) 130.6%

Total decline so far:
(Peak through 2009) -40.6%

One-year change:
(Q4 2008 to Q4 2009) -9.0%

Forecast Additional price change to bottom: -17.2%

When they'll hit bottom: 2010:Q4

*(Q1 2010 - Q1 2011)
† Data is for Tampa-St. Petersburg-Clearwater, FL Metropolitan Statistical Area
Notes:
Median home prices are for single-family homes through the third quarter of 2009, the most recent data available, and include sales of bank-owned properties.
Sources: Fiserv and Moody's Economy.com
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