Anyway, if someone is set financially they can step in and get great bargains right now, but buyers are going to become scarce because there are more and more people losing their livelihoods. That's why the foreclosure rate is so high in the area I'm in. The Chrysler plant closed down and it was the largest employer in the area. Whatever else is coming, it's not good.<.i>
If some one has the cash, it's no bargain to buy now if prices will decline further - especially to buy for investment. You would still see further declines of another 20% (from 2008 prices) and, while you could borrow at low rates, you'll lose substantial equity on the way down while you're still paying taxes and financing costs. The smarter money will wait another 2-3 years, earning something on her money, and let someone else buy on the way down, losing equity, and paying the taxes and carrying costs. So, when that buyer falls into trouble and has to sell at a loss, then the savvy investor will swoop in....
You’re right of course. I should have put in the added comment that current purchases are going for up to 30% less than LP and many of the List Prices were already below market value. Alot of it is dependent on the area as well. For example, there are homes going for 15K-30K. Yes alot need work but over all still a good investment even if for only the rental market. Some with money are looking for places to ‘park’ it for now; thinking they can ride out the storm.
Also, first time home buyers are still surfacing but, need near perfect credit. I listed a foreclosure, 1350 sq feet, 1 acre. House in good condition. Went for 45K (u/c) and it is a first time home buyer. His payments will be less than renting.
So it’s dependent on each individual’s circumstance. I’m not sure anyone knows what the true value is of any one property. What is the value based on now? Original SP, which was most likely based on an inflated appraisal? The MLS trends? LP and then the SP of that property? Or is it volume based which is also skewed. I don’t trust the MLS any further than I could toss it because there are agents that deliberately inflate their sp in this area. There’s no way to verify the SP around here, not without tracking down the closing office because it’s not required to disclose the amount to the county. (yet)
In other words, how can anything be predicted when the original figures were so skewed? Another thing to consider is the 1st and 2nd mortgages. You know, the lines of credit based on equity. If you were to investigate the loans/homes underwater, 9 times out of 10, they have a 2nd.
One thing we can agree on...it’s a mess and it is going to get messier.