Could we be nearing the end of the R/E crisis?

F

fmhealth

Recycles dryer sheets
Joined
Jul 1, 2007
Messages
50
In the past week, the following has happened:

1- My brother sold his home on LI after being on the market for 11 months.

2- My friend sold their home after 5 months on the market.

3- My daughter sold her home, now listen to this. In CLEVELAND ( the epicenter of real estate devastation !). House went up in August of '07.

All went for prices far below the original asking price. But they all sold. Now this obviously is not a representative sample. Although I'd be hard-pressed to remember when three houses owned by folks I know have sold in rapid succession. Simply some andecdotal observations that may possibly be the harbinger of the easing in the R/E market.

I certainly hope that this is the case!

FMH
 
Everything sells at a price.

I sold my house on LI, Nov. of 06. I started at 725K and sold for 570K, just wanted out and that's what it took to do it.
 
I don't think it is the end of the real estate crisis, but it is nice to know that some houses are selling! The house next door to me sold, too, after being on the market over a year. Got a higher price than I thought they would, too. The others for sale on my block are still sitting there as they have been for some time.
 
The fire sales will gradually go away. Then you'll have a lot of people (like me) sitting in their houses who would like to sell and have lowered their price expectations somewhat , but don't absolutely have to sell & aren't going to take a bath either.

This is why I'm opposed to the idea I've heard proposed of giving a 7K tax-credit for people buying "new homes" - (this was originally targeted to be only for homes in foreclosure - but "somebody" is trying to slip new homes into the program also)

This will esentially give the developers/builders an advantage over existing home sellers & further depresses the prices of existing homes.
 
honobob said:
There's a real estate crisis?
Click to expand...


OK... when I say the thread title.... I already KNEW what I was going to put down...

"Real estate crisis, what real estate crisis.... just ask Hono"....

BUT>>> he beat me to it!!!!

Way to go Hono :cool:
 
Any property will sell in any market at the market price. There is no crisis. Those sellers who think there is a crisis are simply asking too much.
 
How long did the last real estate bust last, from '89 to '95? Then real estate was considered a safe but boring investment compared to stocks from '95 to '01, so those who bought before the boom are still on sitting on some sizable gains. It's only builders who built in the last bit of frenzy and the people who bought near the top that are having problems, and nothing sells as well as bad news. No, hobnob didn't hijack my account, but eventually people will have to move for jobs, start new families, or just upgrade to something better than a crappy apartment. The problem is that eventually could still be a couple of years away.
 
JustCurious said:
Any property will sell in any market at the market price. There is no crisis. Those sellers who think there is a crisis are simply asking too much.
Click to expand...

But it's YOUR HOUSE! :eek:

Hee hee... just kidding. But there does seem to be something more painful about selling your house for less than expected than selling equities at a loss. Based on the asking price of a similar home to mine currently on the market (and not selling), I'm guessing my house is down roughly $25k from peak. That just kills me. Yet I've lost $25k on stocks or funds numerous times and just shrugged it off and lived to play on.

Some special karma about YOUR HOUSE I guess.......
 
Houses always are selling. They did during the last dump, and even though this one is orders of magnitude larger, yes, houses still sell! How else do you think the prices are going down? Not by magic, it takes transactions to set the new (lower) prices. Same as for the stock market.

Beyond that, I think there's a little blip here. Many seem to be happy to catch a falling knife and are buying this spring. But if you look at the macro numbers it's worse than dismal.

And Cleveland center of the RE bubble? Pleeze ...
 
Texas Proud said:
OK... when I say the thread title.... I already KNEW what I was going to put down...

"Real estate crisis, what real estate crisis.... just ask Hono"....

BUT>>> he beat me to it!!!!

Way to go Hono :cool:
Click to expand...

But Texas, you want to base your crisis on asking price vs. no sales price yet and office sub-leases that can't be identified because you believe that there are $85 leases that are being whored out at $20 but no one knows the location except YOU. All my resales have been based on 16% increases on addresses I've supplied that are verified online. I've offered reports of Utah, Colorado, CA. HI etc. of +++gains and studies that have said SF has earned compounded appreciation rates of at least 2.1% over any city in the US over the last 60 years.

[vulgarity deleted]?:D
 
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JustCurious said:
Any property will sell in any market at the market price. There is no crisis. Those sellers who think there is a crisis are simply asking too much.
Click to expand...

[expletive deleted by moderators]!!!!!!!!!!!
 
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honobob said:
But Texas, you want to base your crisis on asking price vs. no sales price yet and office sub-leases that can't be identified because you believe that there are $85 leases that are being whored out at $20 but no one knows the location except YOU. All my resales have been based on 16% increases on addresses I've supplied that are verified online. I've offered reports of Utah, Colorado, CA. HI etc. of +++gains and studies that have said SF has earned compounded appreciation rates of at least 2.1% over any city in the US over the last 60 years.

[expletive deleted]:D
Click to expand...


4!!!!

yep.... only I know where it is... not a problem... but just to clarify the 'all in' is $85... we do have to pay the OPEX... the actually 'lease rate' was (IIRC) in the mid $60s.... the leases were as low as $17 when you considered the free rent period... the 'stated' rate was higher... and we also had to do some TI payments... but if you are not paying for a year.... well.... cheap rent...

SOOOO, what was SF office space leasing for before the dot com bust? What were some of the last buildings built there? (before bust)... heck, I don't know that market well, but I do know that only one of the locations we exited that we did not need a reserve...

This does not give home prices... this is commercial....

But home prices are coming down... how many signs do I see with 'price reduced' etc.... and them on the market for many many months (and one was on for over a year and has been taken off... but sits empty)...

As someone said.... location location location.... but I would say (and this is from thin air), about 90% of homes have 'lost value' over the last year... so for the MAJORITY of the country.... it is bad...

But if you wish to be like Bush and say everything is GREAT... go right ahead... keep playing while the ship sinks...
 
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It is not the end of the crisis, nor the beginning of the end, but it is the end of the beginning. -WC
 
It is all very local. DW and I went to a bunch of open houses on Capitol Hill a week ago and were surprised at how high the prices were. Doesn't mean much to us since we won't be selling for decades, if ever. But my son is itching to upgrade so he is interested.
 
Could easily be a seasonal thing. Lots of people buy in the spring/summer, not so many in the winter.
 
donheff said:
It is all very local. DW and I went to a bunch of open houses on Capitol Hill a week ago and were surprised at how high the prices were. Doesn't mean much to us since we won't be selling for decades, if ever. But my son is itching to upgrade so he is interested.
Click to expand...

Agreed, condos in my neighborhood (Dupont/Adams Morgan) are still selling at high prices, even higher than what I paid when I bought in July '06!

It's all about where you live and managing expectations.
 
Also, some economists say the mortgage bailout plan in Congress will just make things worse.
Many Problems with Mortgage Bailouts

"Critics, including some in Congress, say the rescue plan rewards reckless behavior and transfers risk to homeowners and lenders who were responsible during the housing boom."
 
fmhealth said:
In the past week, the following has happened:

1- My brother sold his home on LI after being on the market for 11 months.

2- My friend sold their home after 5 months on the market.

3- My daughter sold her home, now listen to this. In CLEVELAND ( the epicenter of real estate devastation !). House went up in August of '07.

All went for prices far below the original asking price. But they all sold. Now this obviously is not a representative sample. Although I'd be hard-pressed to remember when three houses owned by folks I know have sold in rapid succession. Simply some andecdotal observations that may possibly be the harbinger of the easing in the R/E market.

I certainly hope that this is the case!

FMH
Click to expand...

fmhealth I'll have to give you credit for calling the return of the RE market!! Goodtimes for everybody.

FOR IMMEDIATE RELEASE
April 22, 2008NEW U.S. MONTHLY HOUSE PRICE INDEX ESTIMATES 0.6 PERCENT PRICE INCREASE BETWEEN JANUARY AND FEBRUARY


Office of Federal Housing Enterprise Oversight
 
In addition to the surf report:

The price of condominiums on Maui rose in the first quarter of 2008, according to a new report from Prudential Locations.
The median price of condominiums rose 6.2 percent to $587,000 in the first quarter of 2008, Prudential Locations said Monday. Most sales took place in the Wailea/Makena and Kihei areas. Prices in those communities appreciated 56.4 percent and 21.7 percent, respectively.
Condo sales were down 0.7 percent, with 276 sales in the first quarter of 2008, compared with 278 in the same period a year ago.

Sales down though, two less than last year. The horror! :angel:

Maybe we could have a benefit luau?
 
At the peak in about spring of last year, the value of the home we will sell had grown at a CAGR of 8.25% for 13.5 years. As it stands today, the CAGR would be about 7% at 14.5 years. I don't expect the prices to drop much more, and we won't be selling for at least 4 more years. I paid it off about 3 years after purchase by LBYM lifestyle when I sold some other real estate. If I sold it today, it would still be a respectable if not fantastic return...and that is on an investment that you can also live in. So, I'm not in crisis mode.

The folks who are in crisis mode are those who bought in 2005-2006 (and perhaps as early as 2004) at inflated prices and subprime rates that are now inflating, and who must sell. Others in crisis mode may be those who bought earlier, but refi'd and pulled out equity with a subprime. Some of this is stupidity, and some of this is gullibility on the part of the homeowner, and some of this is what I would consider to be predatory business practices by some of our banks and lenders.

Best advice, I think for most people, would be to just hunker down and ride out the storm. Sunny skies will come again, but I hope our regulators don't allow stupidity in lending to prevail again.

R
 
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