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- Some Misconceptions about the Process
Some Misconceptions about the Process
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DebtsNMesses
Contributions: 6666
Zillow All-Star
Since July 2009
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The 50% that everyone is talking about is 50% from market peak. BUT IF YOUR MARKET DID NOT DOUBLE... it's not realistic to see a 50% drop!
So how do you time it? I think an earlier thread said it nicely. 2001. That's when the bubble hit.
Does that mean that you aren't risking anything, that you've hit the bottom? NO. The bottom for my area is somewhere around 40-65% from PEAK. Why am I buying? Because I'm targeting 2001 prices, around 45% drop from peak. Will it drop more? Yes. Are rents rising? Yes, that's another reason i'm buying.
Should others follow suit? NO. Examine YOUR market. Since my area is one of the first areas to deflate, THEN most of the rest of the nation decided to follow, I am about 1 full year ahead of other areas on the slide.
Use socal to show direction of your market, not degree.
Appraisals are handy tools, but still only a tool. They do not reflect real price, because they use homes purchased w/in the last 6 mos... and 6 mos ago it was a diff market. So why did I say don't bid above appraisal? Because the banks won't loan above it, therefore, very few qualified buyers CAN go above it. So why should you do it? Well, you shouldn't.
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