Posted on 08/29/2014 7:46:46 PM PDT by Lorianne
Not like that here in OK. We didn’t see a boom so no huge bust, but prices have barely budged in over 10 years. We live in a desirable suburb, good schools, etc. and our house would probably sell for only a few thousand more than what we paid for it 11 years ago, and that would be if we did some pricey updating. If we had to pay for that, a real estate commission, and the cost of moving and buying another place, it would gobble up so much of our equity that we couldn’t afford to buy a house any better than the one we are in. And that is assuming we could sell it at all. Houses are not selling even with sellers dropping the price.
I also see a lot of houses that were newly built 5 or 6 years ago that are now in foreclosure. It’s not a good market here at all.
BTTT!
People “flipping properties” (running up the prices) and foreign investment in residential housing.
People are overpaying.
My city likes artificially high evaluations. More property tax dollars.
Of course, a recent Democrat mayor saw his home evaluation reassessed a million dollars less than his mansion had been on the rolls. He claims he didn’t ask for it.
Does the county generally drop an evaluation by 20% without request while everyone else’s evaluations keep going onward and upward?
Egads!!! Homes usually sell at the first open house unless there is something wrong with them.
I just bought a new home and am in the process of moving. Then my little Spanish Colonial goes up for sale. I hope it doesn’t take more than a couple of weeks.
I bought my current home before it went up for sale and sold my last home in a couple of hours.
True here in LA too. They say that there are usually multiple bids all cash ... many foreign buyers.
“Flipping” in my neighborhood means a developer buys a distressed, run down home. Pours a couple of hundred thousand in and sells it again in a few weeks for a profit.
It improves the neighborhood by fixing blighted homes.
Texas dodged the boom and bust to some degree because they had already changed their lending practices because of the S&L crisis in the 1980’s. Hence the term Texas Ratio, pertaining to the amount of outstanding loans a bank can have on the books relative to the entire amount of assets a bank has on its balance sheet. Additionally Texas is a non-judicial foreclosure state. Which means they are able to clear their REO properties quicker than a FL, NY and NJ where the process can lead to 400 + days foreclosure process.
Investors have absorbed nearly 40 percent of all home sales over the last four or five of years. And an astonishing 40% of all home sales have been cash deals. Historically that number is around 18%.
Besides the CRA one of the critical factors leading to the housing bust was the banks needed new customers. Approximately 32% of all homes in the US do not have mortgages. And with the baby boomers getting older and wealthier that number was only going to grow. The banks needed to attract renters and/or potentially risky borrowers to get become home owners. Hence all the crazy loan instruments.
They sit because the banks understand supply and demand. If the banks had flooded the market with all of their shadow inventory it would lead to a further collapse of the housing market. Too much supply, not enough demand, prices drop and now additional non REO homes fall into financial extremis (upside down).
The GOOD thing is that Americans have generally recalibrate their personal balance sheets. Meaning I see more Americans living within their means, trying to be more prudent on saving and spending practices. Over time this will bode well for the US economy.
The BAD thing is the regulatory and banking climate makes entrepreneurship difficult.
Depends where you live. Bought a 120 year-old single family house in Charlestown (Boston, MA) 11 years ago. Did a complete gut renovation over the next few years. Sold it for over twice what we paid a year ago. Put it on the market on a Thursday, had one open house, and it was sold by Monday morning.
“If sales are weakening and listings are going up substantially, prices will fall,” he says.
You would think; but people paid more for these houses than they can now sell them for and they are holding out for their price as long as they can.
I saw a home for sale here on LI for 565.000.00that “should” have gone in a matter of a month or two at most, that has been on the market for 580 days. The seller bought it in 2000 for 500.00.00. This shocked me as the location is a VERY strong ‘micro market’. I looked around at other homes in the area and the seller situation was the same; paid high want to sell high. I’ve been waiting 4 or 5 years for general prices to come down but people want what they paid or at least something reasonably close.
“Our neighbor got a job in the oil patch in west Texas and their house sold....”
Ask any of us who lived in Texas and derived our incomes from the oil industry about 1982. That was the year of the “oil depression.” There were other oil “booms to bust” eras on the average of 10 to 20 years.
My business is supported by the oil related welding industry and has been since 1979. I’ve seen the history of these cycles several times and known those who put their hopes, dreams and life savings in jeopardy by thinking “the last bust was the final one.”
I would venture to say that your neighbor just might have jumped out of the frying pan into the fire.
If you go to Zillow you will see many houses on sale for longer than 500 days. Some really nice places in all price ranges.
I’d think that this long period of homeowners being delinquent creates another problem. Repairs and general maintenance are often not going to be kept up if a person knows they’re going to lose their house anyway. Isn’t anybody thinking?
If they are going to go through that much trouble in my city, they tear down the homes altogether and replace it with something in the $350,000 to $450,000 price range.
“Why? Largely because home listings are going up but sale prices are not. “
Here is Denver, that isn’t true. Prices are at all time highs again. We have only a 1.3 month supply, down from several years supply. Properties sell within 44 days. I’ve seen many sell before they even get listed. Prices have climbed about 10% per year for the past several years. Many new home properties are in the $400k-$800k range again.
Interesting side note: Liberals said that Gen X/Y/Y-Me were not interested in larger homes, but are liberal minded and want communist style housing, tiny apartments. Not true. It seems every single new property being sold is at least 2,000 square feet in size and $300k or more. Sounds like the younger generation wants “it all” just as much as any previous generation.
Zillow shows our home value at around 585K....what formula comes up with that number is a mystery to me — I’d be tickled if it were worth 400.
Zillow simple uses the price/foot equation, which is useless. Zillow is terribly inaccurate. Real estate agents, appraisers, and loan officers hate Zillow for giving people false information they think is real, ‘cause they “saw it on the Internet.”
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