I've heard the real estate market is plummeting in CA (have family out there); thought I'd post a thread for an update elsewhere as well. Here in good ol' TX it seems stable, but we're in kind of economic bubble of sorts out here. What are the east coast urban areas like? Have you experienced the same dropouts for buyers?

It's slow,but it's still California Real Estate!

It's slow & holding. Definately a buyers market in most places.

I think this "correction" just weeded out most of the chaff and unscrupulous Mortgage "mills" & "speculative" investors that were cranking out bad loans to unqualified buyers, since there was such high appreciation throughout most of the west.

it'll be back, it's just a correction is my slant.

Kerry

Quote:

I think this "correction" just weeded out most of the chaff and unscrupulous Mortgage "mills" & "speculative" investors that were cranking out bad loans to unqualified buyers...

Yep, I totally agree.


Then in Florida you have the Property Appraisers jumping on the subprime mortgage bandwagon and skyrocketing property taxes based on a false valuation premise.

Let me explain what I mean.

A $100,000 dollar, 30 year fixed rate mortgage @ 6% interest has a principal and interest payment of about $599 per month.

A $160,000 dollar, subprime Adjustable Rate Mortgage with a 2% sucker rate has an initial monthly payment of about $593 per month.

In our financially brain dead culture a monthly payment of $593 is better than $599.

FORGET about the EXTRA $60,000 they borrowed that has to be repaid!

As a result those people did not and do not exert any effort to negotiate a reasonable price to pay for housing and totally disregard the fact that brand new construction in Florida costs about $100 per square foot INCLUDING the dirt.

So what's my point?

Well, if one had $160,000 cash on hand to buy a home they would be doing their best to get the price of the home down because each and every $10,000 dollars of price reduction would be $10,000 dollars in their pocket. But financially brain dead persons don’t think that way. THEY ONLY FOCUS ON WHAT THEIR MONTHLY PAYMENT WILL BE.

But on the bright side my son just bought a $300,000 foreclosure house for $235,000.

So all that being said.......financially brain dead persons AND unscrupulous Mortgage "mills" do have their place.

Wow, I usually only throw in my 2 cents.
The above is a full 10 cents worth!

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Gary Spicuzza, *SAFE
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*Self Appointed Financial Expert

Excellent points, Gary.

In Ohio we were experiencing tremendous growth in new-build homes, especially in central and southern areas of the state. This has come to a grinding halt in most areas. Even in the most affluent areas, new homes have been put on hold, delayed, or cancelled.

Looking at sale prices across central ohio, I can see that there is a long way to go. Asking prices are still way too high and people don't realize they are going to have to lower their expectations. Your market value of your home is the value that "someone else will pay". Homes will sit until people lower their asking price.

Around here, there are $300,000 build-price homes that are still trying to be sold for $320-$350k by owners, typically because they put some money into them. What they don't realize is that there are $300k build-price homes on the other side of town being sold for $200-$250k.

I'm all for getting as much as you can for selling your home, but usually selling for a small loss is better than having the property sit. What typically happens is you end up settling for the same price, but now you've got another 6-12 months of expenses paid into it. If you have a buyer or interested party, do whatever you can to get the best deal done NOW. If you can afford to wait, then pull it from the market and wait until the environment is better.

Mynion, the same thing was happening Florida.

People were buying 1000 sq.ft., 25 year old, wood frame homes for $195,000 when just ten miles North brand new, 1,800 sq. ft., CONCRETE BLOCK homes with all the new Florida hurricane building codes were being built and sold for $200,000.

The other thing that was happening down here was regular apartment complexes were being converted to condominiums and selling for...get this...$160,000 for an 800 sq.ft. APARTMENT that was never built for that purpose. No sound proofing between the units floors and walls so you can hear every sound and everyone flushing their toilet.

Those same units are now selling for $99,000 and those who bought at $160,000 will never recoup their money.

That's what happens when people focus ONLY on their monthly payment and disregard how much they are actually paying for the property ESPECIALLY when compared to new construction.

__________________
Gary Spicuzza, *SAFE
Copyright 1956
No Rights Reserved
*Self Appointed Financial Expert

CA and FL have been highlighted before as particularly vulnerable areas - personally, I think so long as predictions continue to indicate deflation over 2006, jumping in now could be a little premature overall.

However, as before, everything depends on local conditions - some areas will see bigger slumps than others, and some areas could well be poised for decent growth against the market trend. It's all about research IMO.

Good point Mynion. The vakue of your home is only what someone else agrees to pay for it. Totally agree with that.

The housing slump will continue for quite some time (but the real estate market depends on location). Home price deterioration has yet to fully impact the housing market but given the record-high supply on the market this will be unavoidable. Prices will have to come down in order for the supply to be sold.

Until supply is high, construction will deteriorate as well and until price will be lowered supply won't be sold-off the market.

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What are you thoughts on new constructed developments? Do you think they will suffer as much as individual homes?

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It really depends on the local real estate market and what those newly constructed developments were built for.

If the market is oversupplied then yes, they will suffer as well as there was no reason to construct them in the first place.

The majority of real estate markets are oversupplied but there are several local markets that old up quite well and that is why location is a very big factor.

__________________
It is not smart to play it safe but it is safe to play it smart.

I agree with all of you and hope that things will be better in 2008
Happy new year to all of you

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