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Old 03-14-2010, 04:48 PM
 
87 posts, read 203,156 times
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Quote:
Originally Posted by dma1250 View Post
The current market value is that point at which buyers' resources and expectations meets sellers' needs and expectations. From my armchair perspective it seems to me that the current market is really hard to read because on the one end there are sellers who have priced their houses above the current value at peak-ish levels, and at the other end there are truly desperate sellers who simply have to sell no matter what and have priced their houses well below the current value. And then there is the middle, with sellers who are realistic about the current value and have priced their houses well below peak but who don't need to sell and aren't willing to go lower than that. These two extremes--the unrealistically high sellers at one end and the desperate to sell at any price sellers at the other end--completely skew things. Eventually the too-high sellers will give up and the desperate sellers will sell, and then things will settle at the middle.

Hi DMA, I meant to thank you for your note the other week. I had not signed on for some time but appreciated your gracious reply and the links you forwarded.

I agree with pretty much everything you said above except for the end. I don't think things will settle in the middle. Just as it was from 2000-2006 when sellers would price their homes a bit higher and/or inline with recently sold comparable properties, the same applies on the way back down. Once the "desperate" sellers sell those numbers become the comparable values that support the sales prices of homes that will sell in the future. For the foreseeable future, I can't see buyers being motivated enough to take "the middle" as you suggest. Why should they?

I will say this... there are plenty of buyers out there waiting to spring to action for well priced homes. My wife and I have seen probably 25+ houses in Westport, CT. Suffice it to say that we have a pretty good sense when we see a good value. We saw a house last week that had an accepted offer in less than a week with 3 backup offers. That house was priced well and attracted immediate attention. I personally think about the worst thing a seller can do is price their home poorly and let it sit for months or years while gradually incrementing the price lower. I suspect the end result is usually worse than getting buyers excited by pricing the house well from the get-go.
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Old 03-14-2010, 07:12 PM
 
Location: Yorktown Heights NY
1,316 posts, read 4,912,524 times
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Stook1, thanks for the thanks!

Here's my thinking RE the market: While there is always a small group of people who have to sell (due to new jobs or divorce or whatever), most sellers in Westchester don't need to sell and will only do so when it makes sense financially. In the boom you had people selling to upgrade to a "better" house every few years. Now they're staying put and renovating or adding on instead (according to articles I've read as well as what I see driving around). Currently we have lots of desperate sellers who lost their jobs and can't afford their mortgages and they'll sell at any price. Once they do sell, however, you'll be left with the sellers who don't need to sell and then it comes down to supply and demand and who is more desperate to get a deal done. My bet is that things will even out somewhere in the middle of where we are now--far lower than the peak prices but above the desperate fire sale prices you're seeing. You say that buyers won't be motivated to pay "middle" prices, but I'd respond that sellers won't be motivated to take less. Now, all bets are off if the economy gets worse or there are a lot more layoffs.
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Old 03-15-2010, 11:08 AM
 
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I agree with all above posters, but part of the issue (I think) may be that in some of the "nicer" (i.e., wealthier) towns of Westchester, some/many of the sellers have enough resources to "delay the inevitable". They have enough savings to pay their mortgage, etc. for a while, hoping for a "recovery" (or even if they have stopped paying the mortgage, the bank has either restructured debt or delayed foreclosure because they also do not want to foreclose in this depressed environment).
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Old 03-20-2010, 06:41 PM
 
87 posts, read 203,156 times
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Keep in mind that home prices have been artificially inflated since the bust by all of the Fed programs that have kept mortgage rates artificially low. On a 500k loan, every percentage point increase corresponds to $300 more per month. Now, that might not sound like much but it translates into reduced affordability for home buyers. The buyers who could previously qualify for a 500k mortgage can now only afford a ~450k mortgage to keep the same payment that they would have had with 1 point lower rates.

The point that I am making is that those sellers who are holding out for a better time to sell... well, it might be even worse if/when mortgage rates increase to more normal levels. Even with rates at literally HISTORIC lows the market is still weak. Raise rates back up to more normal levels and prices will have to come down significantly. The housing market is driven by the employment market and the cost of mortgages. The employment situation is going to take years to come back and mortgages can only get more expensive as we come out of the worst of the recession.
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Old 03-21-2010, 08:25 AM
 
69 posts, read 236,520 times
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Prices in Armonk and Chappaqua are down about 35% from the peak in 2006. There are lots of houses available for around $700m. Homeowners in these two towns are generally in better financial shape but there are 42 properties in 10504 (Armonk) in some stage of the foreclosure process.
The market is flat at best at this time.
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Old 03-21-2010, 08:40 AM
 
342 posts, read 1,026,131 times
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How do you get hold of "in foreclosure" lists without paying some fee?
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Old 03-21-2010, 09:51 AM
 
69 posts, read 236,520 times
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Foreclosure Real Estate Listings | RealtyTrac enter a zip code when that page comes up click on MAP
Uncheck "houses for sale" and "for sale by owner" to get down to foreclosures.
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Old 03-22-2010, 06:29 AM
 
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Thanks stibgo.
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Old 03-23-2010, 08:58 AM
 
Location: Westchester
32 posts, read 114,690 times
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I think prices will be flat and hold steady for at least 9-12 months. I'm observing prices are down generally between 15 and 20% from their 2007/08 peaks. Closings are down but buyer traffic has picked up since the fall. Offers are also coming in about 7-10% lower than seller's expectations.

Sellers are continuing to adjust to the realities of today's market and price accordingly. Buyers should continue to look at properties for sale and be prepared to make an offer should the "priced right" ideal homes comes around.

Keep an eye on unemployment figures, esp for the NYC Metro area. Once unemployment numbers start to go down, expect increased buyer activity and the start of an uptick in prices.
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