Profile picture for Vero08

We want to buy a home but everyone is telling us the houses are still going to drop is that true?

  • February 10 2009 - Paramount
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Answers (4)

Profile picture for Blue Nile
Yes, they will continue to drop, especially for most parts of Southern California.

But really, why not look at the Zillow trend data???  Use the "find" local info, or houses to get the Z-index chart for the zip code, city and neighborhood and see for yourself.  If prices are still above the normal inflation line, and prices are dropping, they are not turning around overnight.  Let the curve level out for at least 3 months, at something substantually below the normal inflation line, before you believe the prices have stopped dropping.

Even then, we still have a large backlog of "option payment" loans that are headed for foreclosure in the next 2 years.  There is no way that prices will remain stable if there continues to be a saturation of foreclosures on the market.

  • February 10 2009
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Vero08 - here's our 5 year home value trend for Paramount, CA
  • February 10 2009
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"prices will start to creep up" on the heels of saying we can't predict it. Do you normally contradict yourself within two sentences????

Lets see:

1. the highest number of vacant homes in history.

2. fastest rate of job loss in modern history

3. extremely high rate of foreclosures.

4. more homeowners underwater then ever before.

If this happens and the other happens and the third thing happens, maybe its a bottom! wow! you must be a government economist!!!!

  • February 10 2009
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If we all could predict that with such absolute certainty then we'd all be rich, but I will try to answer that for you.  The answer depends on several facors - first, on where you live - from region down to neighborhood.  The number just realeased by the National Association of Realtors show that Pending Home Sales have picked up in the West and the Southeast which means prices in those areas will start to creep up.  So that is the beginning of hope for CA. 
Then it depends on the inventory available in your paticular area.  In areas where there were a very high rate of foreclosure, there is great inventory which would have to be picked up before the non-foreclosure properties pick up. 
Everything will then be impacted by the stimulus plan.  If it does stem the tide of foreclosures and brings down interest rates, then we may well see the end of declining prices.
We also have to hope that the layoffs start to slow.  Let's face it.  If people are out of jobs, they may have to sell their homes.
From the field, over this past two weeks, I have seen more people at Open Houses and the more desirable (and realistically priced) houses starting to sell.  That is in the Northeast.

So I like to think the worst is over in most parts of the country.  We shall see!

I hope this rambling helps a bit.
  • February 10 2009
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