It's about time. Home buyers have been priced out of the market recently unless they went for one of those shyster loans. We need the market to revert to mean.
Posted on 11/13/2007 12:58:15 PM PST by Hydroshock
WASHINGTON (AP) -- Sales of existing homes in the U.S. are forecast to decline to a five-year low in 2007, a trade group for real estate agents said Tuesday - and the outlook for 2008 is worsening.
The ninth-straight downwardly revised monthly forecast from the National Association of Realtors calls for U.S. existing home sales to fall 12.7 percent this year to 5.66 million, down from 6.48 million last year.
Last month, the association predicted a 10.8 percent drop from a year ago.
This year's sales would be the lowest since 2002, when sales hit 5.63 million. The realtors group forecasts sales will rise slightly next year to 5.69 million, but that is down from last month's prediction of 6.12 million.
The trade group's chief economist, Lawrence Yun, said the housing market is likely to experience a "modest" recovery next year as mortgage markets stabilize.
"It is possible for even higher home sales activity than we're forecasting if buyers regain their confidence," he said in a prepared statement.
(Excerpt) Read more at money.cnn.com ...
Economy/Credit/Housing Issues Ping List
If you want on or off this list let me know.
If the house is 350 offer them 250. The bank will take it.
I just bought a 4044 sq ft house for 250 in Phoenix.
My stepmom is a realtor and she’s been cleaning up for the past few months (and has four more sales closing in the next 2 weeks.)
This is in central NH.
Come on! Get in line! What are you trying to do, here? Your story will not play well during a Bush administration.
Now, please go on and mind your own business. We have people to scare, doncha know.
Correct me if I’m wrong, but isn’t that STILL higher than the peak of the Clinton years?
Well, I'd like to sell my house, but I think I'll wait until it's more of a sellers market. From what I see in my neighborhood, we are in the arc of the cycle of the buyers calling all the shots.
Geezzzz. I’d trust the words of the Chief Economist of the NAR over almost ANY government employee or polling group. The NAR is a good association and it’s members do good work.
I guess you have known some real estate sales people who were sub-par. So have I. I also know a few great ones and they save their clients time, effort and money.
Please do yourself a favor and refrain from demeaning an entire group (40,000+ at this convention alone) so haphazardly.
By the way, I am NOT a real estate agent.
Oops, sorry...I forgot :’(
I love this place.
90% of the sales droids I have ever met have given the other 10% a bad name. I will never trust anyone who makes money off me spending it, and more so if they make more if I spend more.
What I’m am actually seeing and hearing, is most everyone in America that were not forced to sell, are now taking their homes off the market.
3 in my immediate area alone in the past 2 months. Was told they just did not re-list, and will wait for better times in the future. Was told this is a big trend right now.
Can’t say I blame them.
:)
This housing “crisis” is in its’ normal cycle...about every eight years...
And Seattle is just now starting to see the prices drop. Of course, it can be a long ways down from an apex.
The time on market in the Seattle area is really increasing and the statistics are finally reflecting what anyone with two eyes and paying attention already knew. Meanwhile, ONE agents listings sell pretty fast. It is becuase she is good at either finding or creating sellers that are offering their homes at prices that reflect the current market.
The NAR has been terrible in this mess. The t-bone remark really is a good analogy. I have lots of friends and acquaintences that are real estate agents. The NAR may do good work just like the hound may be good at whatever he does - just don’t be surprised if he thinks it’s always a good time to feed him a steak.
The answer is predictable - and completely useless.
So you're saying it's pretty much like everyday in the life of a real estate agent? Good to know...
>>Please do yourself a favor and refrain from demeaning an entire group (40,000+ at this convention alone) so haphazardly<<
I thought his remark was regarding the NAR.
Do you think that when we disrespect the Teachers Union we are disrespecting teachers?
>>This housing “crisis” is in its’ normal cycle...about every eight years...<<
Except this is really a credit crisis.
It is a excellent time to buy.
As I tell people, there won’t be an email sent out saying, “the bottom is in, buy this week”.
Builders are having to move some inventory, but that is a limited amount of homes. We are seeing a lot of activity, people with good credit and asset positions are buying homes right because they see the value.
Will prices go lower? No one really knows, the overall state of the economy will be a big factor.
>>So you’re saying it’s pretty much like everyday in the life of a real estate agent? Good to know...<<
Nope. Rather, in a tough buyers market it takes exceptional skills to make money. This particular agent is actually relatively well known locally. She is able to strongarm people that really need to, and can, sell into seing it her way or letting them find another agent. Often, once she does get them to a hot listing price, she or one of her apprentices will then buy the house.
I saw a home once (in a good sellers market), list TOO LOW by a very inexperienced agent. An interesting thing happened though and it was not anticipated. There were so many buyers that saw it as a good deal that it generated a bidding war with the result that the home sold for far more than it was worth.
We’re not in that kind of market now.
LOL. What would you think of a broker who told you, "Mr. Hydroshock, right now is a good time to buy, or sell, Boeing stock."?
It will be an excellent time to buy in, say 2012 to 2015. It is a very poor time to buy right now, unless you are simply moving from one home to another. I cannot imagine entering the market at this time.
And it is more prudent to wait for the bottom and then buy shortly after it starts going up than to buy just as the prices START to fall off a cliff - which is where I believe we are now. The former position holds very little risk, the latter, huge risk.
“say 2012 to 2015.”
That is an Armageddon point of view of the housing market.
If that happens the entire economy will be dead.
I don’t buy it..
It's a good time to buy a house IF:
you can pay for it without beggaring every other aspect of your life (the old 3x income rule is always best) AND;
you are comfortable with the market price of your house going up, or staying the same, or going down, over the next few years.
Come to think of it, it's always OK to buy a house if the above qualifiers apply.
Don’t base your opinion on how bad it would be. Rather, base it on the numbers and let the predictions fall where they may.
You know how resets effect the market, right?
Well, look at the chart in this article and tell me when you think it implies (or you infer from it) that it might be a good time to buy:
http://seekingalpha.com/article/51466-the-worst-is-yet-to-come-for-housing?source=d_email
Meanwhile, sales of imaginary homes are expected to show a modest increase.
>>Sales of existing homes in the U.S. are forecast to decline to a five-year low in 2007<<
HAHAHA!!
And a six year low in 2008, and a seven year low in 2009, and a...
It's about time. Home buyers have been priced out of the market recently unless they went for one of those shyster loans. We need the market to revert to mean.
Nuthin’ to see here folks. Just more “sky is falling” doom and gloom.
/s
I hope this one doesn’t fall to that “110” level like the last two booms did.
I would feel a lot more kindly towards them if they would stop charging such exorbitant fees for their services and using the force of government to restrict the way others want to buy and sell real estate.
It is time for the real estate business to change drastically. Open it all up to competition.
The shyster loans are a major reason for the rise in housing prices.
If you take a normal housing market and shove an extra wad of subprime buyers into any segment that will cause the prices to go up. Now that those buyers are gone the prices are coming back down.
bump for later read.
Oh, come on. You've got your head in the sand, man. Listen to all the investment advice on these threads. Hold onto that home until "times get better."
To a certain extent, we’ve reached a saturation point. Those folks who weren’t interested in selling and are happy where they are simply stayed put.
Those folks who wanted to upgrade have done so.
It’s unrealistic to think that you can entice somebody into buying and moving when they haven’t even unpacked the boxes from the last move.
Give it a break! Jeesh!
>>Oh, come on. You’ve got your head in the sand, man. Listen to all the investment advice on these threads. Hold onto that home until “times get better.”<<
In all seriousness, I don’t know if you are being serious or sarcastic.
I will say this: If I owned a home I wouldn’t sell unless relocating. But if I was a renter, I’d be a fool to enter now.
We’ve been seeing homes come on and off the market in our neighborhood for over a decade now and there is a big difference this year. Most of the homes that go off the market just, well, go off the market. No sold sign or anything. Those that are still on the market, with one exception ALL have “new price” signs up and some have for over a month, yet not a one has sold.
One of them is an older lady who’s husband has gone to a nursing home.
Meanwhile, as late as last year the homes in my neighborhood would see only a couple of weeks go by before the sold sign came up. Now a LOT of homes are just rotting away with the “new price” sign.
Oh, and one new development has a “huge price reduction” banner up.
This is a “near Seattle” suburb where we have a “strong job market”.
>>To a certain extent, we’ve reached a saturation point.<<
And that is where pyramid schemes get into trouble, as this one is.
That chart doesn’t show the huge drop in interest rates though. In the 80s, at 14% interest rates, you could buy the same house for more than TWICE what you could now and pay the same rate. Housing affordability index is more important IMO than just housing prices.
Uh, I only made one post to this thread. lol.
Fact is, those that are not being forced to sell, are taking their home off the market in droves, and they will continue to do so. You'd have to be pretty stupid to *want* to sell in this market. No?
We’re seeing lots of homes just go off the market. Like I stated earlier, you’d have to be foolish to *want* to sell, if your not being forced to sell, if you happen to be in a buyers market, where buyers are expecting a great deal. lol
I know, I thought about it after I posted.. just seems you can’t turn on the news or the radio or even walk down the street without somebody hawking real estate!
Sorry, I wasn’t picking on you, just the general attitude these days.
1984 was the last economic dip in this region. It’s been boom cycle ever since but we may be about to enter another down cycle and it might be permanent. Right now nobody is selling and nobody is buying. 1994 was crazy and that is when prices started to take off. Don’t know about five years ago but that wasn’t a low by any measure.
Oh really? You don't have much to do with DC do you? Would it trouble you to know that they are one of the most powerful lobbyists in DC? But they do it in the public interest, I am sure.
They are just another interest group trying to manipulate markets and political decisions in their favor. It is part of the national game, and that is ok, but that doesn't give what they say any special ring of truth.
In fact, up to a couple of months ago they were denying that there was any problem in the real estate markets.
It is affecting us now, though, because we want to sell and move back South. The home needed updating anyway, so we're doing that, taking our time to get it right, and we'll plan to put it on the market next summer. We may not get as much as we might have gotten in late 2005, but we'll still do well because it's well above what we originally paid for it, even figuring in the improvements we're making, since we're doing much of the work ourselves. We'll be competing against new homes, so we need to make it great. We're calling it 'The Conquest', because we're changing the things we've come to dislike about the house after living here 20 years, and doing things to make it just 'live' better.
I've heard that about EVERY boom and bust for the last 35 years. Real estate WILL go back up; it always does. Folks want to own their own homes, and will buy, when they're ready. Folks who want to sell, will do it at a time that they perceive as the most advantageous for their financial situation. If they're not forced to sell because of personal reasons, they're likely to stay put until they see the prices going back up. Seems wise to me.
While one reason for this massive sales slump is due to a normal housing cycle, the big reason is the bursting of the huge credit bubble, that is causing a fall of greater magnitude which I assume will be of longer than normal duration.
You also have to remember that after house prices fall, they will still retain a good portion of their appreciation, as homes have historically always appreciated at about the rate of inflation. So we know what homes should be priced at, and it is not like home values will crash.
Now here is the part that scares me. What if the FED had to raise interest rates. Home sales have plunged and prices are going down, yet interest rates are still not much above historic lows. What happens if inflation does return and rates on conforming loans go back to 9.5% or even into the double-digits. That is going to go have a huge negative impact on home sales prices.
I can imagine a worst-case scenario where homes sales begin to rebound and prices stabilize only to have the FED be forced to raise interest rates to fight inflation, and kill any recovery in housing. This could put the recover off years or even a decade.
This could be good for home buyers who might otherwise not be able to afford, since the amount they need to save for down payments will be smaller and their property taxes will be lower — all assuming they can qualify for that 10% loan and afford those high interest payments.
On the other side, it would be brutal for all of those people who honestly thought that the paper gains in their home values at peak was a permanent gain in their net worth.
His prediction strikes me as perfect.
Are you aware how long it became a “perfect time to buy” after the collapse in the California housing market in 1990? Peak was 1990. The bottom came in 1996. That is 6 to 7 years.
Peak in this housing bubble came in 2005. Add 6 or 7 years and you have 2011 to 2012 — only the deflation in prices will be far greater due to the much higher magnitude of the run-up in prices to begin with. I’m only referring to cities in states subject to the housing bubble like Florida and California, although MOST of the country was affected and most of the nation’s neighborhoods will be affected.
As for whether or not the “entire economy will be dead,” this bursting asset bubble and liquidity problem is precisely why I have been expecting a recession in the US economy.
I completely buy that it won’t be a “perfect time to buy” until sometime around or after 2012.
Now, if inflation returns and the FED has to raise rates to 10%, then yes = ARMAGEDDON. We be a hurtin’.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.