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Replies (17)
- mrfnuts
- Contributions:1386
Awr... but what about...
- mina36
- Contributions:3478
LOL
- Chris Highland, "CKHighland"
- Contributions:57
Sales were up 65% in September, 51% of those were foreclosed homes. Some buyers are snapping them up...Don't you think that's good? Get some of them off the market?
- Bitter Renter Ron
- Contributions:1402
- Chris Highland, "CKHighland"
- Contributions:57
So, last year sucked, prices needed to come down more. Good news, they did, 65% more people than last year thought so. "Steep price declines."
Yes, where we go from here does depend on the financial markets this fall.
But good news is good news, even if its only a little: lots of foreclosed houses went off the market last month.
- Walters Consulting
- Contributions:1661
haters
- space_acer
- Contributions:4311
"Don't you think that's good? Get some of them off the market?
Do you ever wonder if $800k wasnt affordable in the best of times,
does it reducing it down to $500K make it more addordable in the worst of times?
I can point to you homes that sold for $200K 10 years ago that sold for more than $800K
at their peak and some now declining down to $500K ... but still even $500K would be considered unaffordable. Inflation and change in med. incomes has increased by 30-35% (accum) over the past 10 years.
There is nothing preventing these homes from forclosing the second time. Watch very carefully as repurchased homes repeat their forclosed status once again during a recession downturn.
The issue isnt a "GLUT" of foreclosures hitting the market thus driving prices down. Its the repricing of homes that makes them more fundementally unaffordable. Your true price discovery is back to pre-bubble years. And that is still a long way off.
- Bitter Renter Ron
- Contributions:1402
However, last month's sales were still the second-lowest for any September since 1996 and were 17 percent below the 20-year sales average for that month.
2nd to last place is not a win - a one month up-tick is not a reversal of trend. The market will not crash into the floor with a sudden stop, but will decellerate as more people slowly start to buy, but the people who buy early are still paying too much money for too little house.
- space_acer
- Contributions:4311
Look back and make a projection based on inflation...further declines in the works
Actual Inflation variance variance
Med Prices Mar 1998 (prebubble Sept08 add 35% est $ est %
Los Angeles $180 $243 $360 $(117) -48%
Orange County $221 $298 $425 $(127) -42%
San Diego $187 $252 $328 $(76) -30%
Riverside $137 $185 $237 $(52) -28%
San Bernardino $126 $170 $205 $(35) -21%
Ventura $211 $285 $385 $(100) -35%
So. California $179 $242 $308 $(66) - 27%
- Richard Bills, "HiTechOne"
- Contributions:148
Bitter. . . what you are prophesying is accurate but . . . the underlying assumption on your part that you "know" where the bottom of the market is . . . is it at the bottom ? or has it bounced? We must assume and agree that the pendulum is approaching the bottom . . . The early buyers may purchase a little early but their potential overpayment may be more than offset by their benefits of homeownership vs paying high rents.
- interested_observer
- Contributions:517
"the underlying assumption on your part that you "know" where the bottom of the market is "
I may not know exactly where the bottom is but I think it's reasonable to assume that prices will continue to decrease until the historical norm for the ratio between median income and median home price is reached. Since we're only about half way there (with the potential for a significant overshoot on the down side), I think it's also reasonable to assume that prices will be significantly lower a year from now.
- Bitter Renter Ron
- Contributions:1402
the underlying assumption on your part that you "know" where the bottom of the market is
You don't need to know where the bottom is to know we aren't there yet. The statistical bottom is not important anyways. What is important is affordability. Average people don't make purchase decisions based on statistics, they make decisions based on their own finances. When prices get down to affordable levels, people will be able to buy, the market will stabilize, and a bottom will form.
The early buyers may purchase a little early but their potential overpayment may be more than offset by their benefits of homeownership vs paying high rents.
Rents are not high, prices are. Why don't you ask all the people who have been forclosed on how much they are enjoying the benefits of ownership that they overpaid for.
- Pasadenan
- Contributions:21450
"Average people don't make purchase decisions based on statistics, they make decisions based on their own finances"
Which is why median purchase price financed over 30 years should never be as low as median household income since the lower end will still chose to rent Besides, you want to look at an index rather than median, or even better, if it actually is close to bell-shaped distribution, include upper and lower quartile too.
- Pasadenan
- Contributions:21450
How low can you go? Down, down, down to the depths of the unknown.
I'm enjoying watching my equity dissapear. It doesn't affect my finances any at this time; but boy would I have liked to have had the extra cash if I could have cashed out a year ago summer!
Oh well, it is just a dream. But better then some of Edger Allen Poe's dreams, where he kept going lower with absolutely no chance of getting out. At least his signiture was pretty.
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