Alarming!?! 60% WON'T buy new homes in next 2 years

[ladelfina]

Poll: Majority not buying homes - Apr. 14, 2008

I almost laughed out loud when I read this!

Majority not buying homes, poll shows
Number of people 'definitely' not buying over next two years surges to 60%

Maybe I've always lived in some kind of bubble, but I don't think it would strike me as "odd" or "out of line" that a full 30% of people WOULD NOT be buying a new home in a given year!!

I understand that the more important poll number is this..

just 11% are certain or very likely to buy soon, down from 15% two years ago.

Anywhoo.. besides just the drop in home prices.. what's the effect of this new-found restraint on the whole RE industry? What percentage of GDP is tied up in Realtors, RE advertising, inspections, title searches, loan origination and so forth? Plus, moving companies, painters and decorators, etc. Looks like America will need a lot less of those services compared to recent years.

 

[bssc]

Seem to be a great time to remodel. We priced doors last year at $2300. This year, the exact same doors are at $2000 since they are hungry for business. Went to the home show and it was empty.

 

[chinaco]

Seem to be a great time to remodel. We priced doors last year at $2300. This year, the exact same doors are at $2000 since they are hungry for business. Went to the home show and it was empty.

Supply/Demand. I would expect the non-labor cost of building a home is lower today than a couple of years ago. Dry-wall, 2x4 studs, shingles, concrete, etc...

Anyone have any idea on how much lower the average home cost to build today? Now might be a good time to build a custom home (if you were so inclined).

New spec homes seem to be lower in cost because of the lower demand.

 

[brewer12345]

Hey we just got our house landscaped and they did the whole job (materials, labor, and lots of little extras) for $5k. OK, they didn't provide much in the way of design, but I knew what i wanted anyway. Our friends had a similar job done on a sightly larger yard in 2006 and it ran them over $10k.

 

[al_bundy]

i'm going to buy a home when i can get a decent one for 20% of gross income. 25% tops.

in the NYC suburbs you have neighborhoods where the average home is like $700,000 and the median income is $80,000 for family income. and taxes are like $8000 a year. something doesn't add up.

 

[maddythebeagle]

Seem to be a great time to remodel. We priced doors last year at $2300. This year, the exact same doors are at $2000 since they are hungry for business. Went to the home show and it was empty.

Yeah, I am currently able to get one of the better carpenters in my area since home building has all but stopped...I am not in a bubble area either...

 

[W2R]

Another great thing about remodeling is that it will make my house easier to sell when the time comes to sell it. I haven't done anything yet that is extensive enough to require outside help, but have been doing some minor stuff.

Home Depot and Lowe's should be feeling a hit from the housing slump, plus last year's hurricane season was relatively benign compared with 2004 and 2005, so they probably aren't selling as many generators and as much plywood as during those years. I needed some supplies from both for some painting and redecorating projects that I nearly finished last weekend, so I have been doing my best to support these stores.

Apparently Linens 'N' Things is going bankrupt and/or going out of business (oh, the horror! ). I absolutely love that store and regard it as nearly a shrine. It is full of things that I wanted but couldn't afford, though now I suppose that I can afford to shop there. Hopefully BB&B will get their business if LNT closes, and hopefully thrive despite the reduction in newly purchased houses to be decorated. I bought some new curtains from BB&B last weekend, too.

Doing my best to support the local economy, in a gently modified but still LBYM spirit.

 

[W2R]

i'm going to buy a home when i can get a decent one for 20% of gross income. 25% tops.

in the NYC suburbs you have neighborhoods where the average home is like $700,000 and the median income is $80,000 for family income. and taxes are like $8000 a year. something doesn't add up.

That's awful. It's a lot easier to buy one for 20-25% in the South. My mortgage PITI came to around 20% of my gross income when I bought it, so I managed to pay it off pretty quickly since that happened to be my goal. I don't know what someone would do with a median home price as large as it is in the NYC area. Even condos are out of sight there, if I can believe what I see on HGTV!

 

[al_bundy]

the $700,000 homes were $250,000 to $300,000 back in 1997

for a bit of history, my in-laws bought their home for $235,000 in 1987. it fell to $190,000 or so in the 1990's and is now around $700,000.

 

[semtex]

al_bundy,
If considering the realtor fee, 6%, the appreciation rate of the property is 5.3%. Really not impressive.

 

[honobob]

the $700,000 homes were $250,000 to $300,000 back in 1997

for a bit of history, my in-laws bought their home for $235,000 in 1987. it fell to $190,000 or so in the 1990's and is now around $700,000.

WOW! al_bundy, I'd say your folks did prety well considering almost 5.5% appreciation yearly and, if they put 20% down, a return of 14% compounded yearly over 20 years, plus either cash flow if rented or reduced housing costs if owner occupied. And if it's in CA ya gotta love that low tax base. AND, they could walk with almost $500,000 TAX FREE!

I'd say they did real well. Oh, did I tell you (if in CA.) you could inherit that low tax base under Prop 58 as well as their low financing and you would also receive a stepped up basis in case you wanted to sell at some time. Real estate is a great way to pass wealth to children!

 

[happy2bretired]

Apparently Linens 'N' Things is going bankrupt and/or going out of business (oh, the horror! ). I absolutely love that store and regard it as nearly a shrine. It is full of things that I wanted but couldn't afford, though now I suppose that I can afford to shop there. Hopefully BB&B will get their business if LNT closes, and hopefully thrive despite the reduction in newly purchased houses to be decorated. I bought some new curtains from BB&B last weekend, too.

Doing my best to support the local economy, in a gently modified but still LBYM spirit.

Oh, poo.... My daughter worked at Linen 'n Things before she went to Berlin, for quite a few years. I also love that store. While she was working there and I was also still working, I made good use of the family discount. I bought a bunch of, mostly kitchen stuff, to replace old stuff, in preparation for retirement.

 

[W2R]

Oh, poo.... My daughter worked at Linen 'n Things before she went to Berlin, for quite a few years. I also love that store. While she was working there and I was also still working, I made good use of the family discount. I bought a bunch of, mostly kitchen stuff, to replace old stuff, in preparation for retirement.

Here's an article on LNT's financial woes: Linens 'n Things weighing bankruptcy: source - Yahoo! News

I love that store! Having a family discount was a great benefit.

 

[Midpack]

For about 25 years, my BIL has had his own high end residential construction business in New England. For the first time in all those years, he has no backlog for new home construction, only remodeling jobs. Just one data point...but seems striking after 25 years with never a drought.