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Re: crazy real estate market
Old 02-01-2007, 08:26 AM   #21
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Re: crazy real estate market

What's CMA?

Basically my agent said since seller had cut price deep, so the price could not off too much of their asking price. that's why we gave an offer with 10% cut.
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Re: crazy real estate market
Old 02-01-2007, 08:47 AM   #22
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Re: crazy real estate market

Quote:
Originally Posted by semtex
What's CMA?
Comparable Market Analysis (CMA)--A comparison of the prices of similar houses in the same general area.


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Re: crazy real estate market
Old 02-01-2007, 08:56 AM   #23
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Re: crazy real estate market

I did some analysis myself.

All data from zillows
Got 7 house sold at same area, same school. Calcalate avg dollar/sf of house, avg dollar/sf of land. My conclusion is 580K will give me a little below average. considering this house is built at 80s and has renovation at 2005, all other 7 built at late 60s. So my conclusion is 580K not a bad deal.

But now the price like a free fall. I am kind of worry maybe I missed something.
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Re: crazy real estate market
Old 02-01-2007, 09:36 AM   #24
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Re: crazy real estate market

Quote:
Originally Posted by semtex
But now the price like a free fall. I am kind of worry maybe I missed something.
I guess this is "stating the obvious", but you are aware that real estate prices in your area may be flat or decline for the next few years. In other words, this 580K house may only be "worth" $480K in a few years. It would only take a 5% decline each year for 3 years in a row.

Or it might be worth $680K... Who knows?!
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Re: crazy real estate market
Old 02-01-2007, 05:32 PM   #25
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Re: crazy real estate market

zillow zestimate?............ouch. Be careful as thier data can be very abstract/outdated/etc. I remember I had an "armchair appraisal" for a refi. That's what I call it when the appraiser pulls data from public sources. That's basically how zillow works. The appraisal came in low in my opinion so I drove around to see all the comps. One had sq footage listed wrong....it was obvious just driving by it was smaller than our house, but the county had it with more sq ft. Another house with same lot size as ours, but it was severely sloped. CMA with best available sales data is better and in this market that would probably give an optimistic value.
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Re: crazy real estate market
Old 02-01-2007, 09:41 PM   #26
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Re: crazy real estate market

The New Jersey Market, Be careful. Taxes on that Bergen county house will be near 10K a year. Now it was listed at 750 then 680 now the come back is 580K.

I said this before I believe the housing market is in a big correction. Yes house built in 1980 split level in Bergen County NJ could be worth 680 again in 3 years but WHAT TOWN IS IT IN?? Some Bergen county towns and a weak market and you could be looking at 480 in three years. But then again if you NEED to move there well then buy it if it is nice.

Houses that were listed at 560K in my old neighborhood when I was listed at 519K last april are now in the 440K range and NOT SOLD!

Man were we LUCKY!
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Re: crazy real estate market
Old 02-02-2007, 11:29 AM   #27
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Re: crazy real estate market

I won't post them here, but do a little research on the big homebuilders, and their recent public statements ... from what I'm seeing, the management of these public companies believes we are in the early stages of a correction. Early. This has a long way to go ... probably 18 months or so, would be my wager.

Best of luck.
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Re: crazy real estate market
Old 02-02-2007, 11:40 AM   #28
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Re: crazy real estate market

Quote:
Originally Posted by Charles
I won't post them here, but do a little research on the big homebuilders, and their recent public statements ... from what I'm seeing, the management of these public companies believes we are in the early stages of a correction. Early. This has a long way to go ... probably 18 months or so, would be my wager.
I'm hearing big insider sales, far in excess of what's considered the normal asset allocation/diversification routine.
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Re: crazy real estate market
Old 02-02-2007, 12:04 PM   #29
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Re: crazy real estate market

I have very bad memory of the early stage of dot com bubble burst. The bottom fishingers died ugly. That's why I kind of worry.
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Re: crazy real estate market
Old 02-02-2007, 12:12 PM   #30
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Re: crazy real estate market

Quote:
Originally Posted by semtex
I have very bad memory of the early stage of dot com bubble burst. The bottom fishingers died ugly. That's why I kind of worry.
Well, you can always try to value the house based on fundamentals. One traditional metric is about 3.5 X median income for the median house. I don't think we're there yet.
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Re: crazy real estate market
Old 02-02-2007, 12:32 PM   #31
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Re: crazy real estate market

Quote:
Originally Posted by semtex
I have very bad memory of the early stage of dot com bubble burst. The bottom fishingers died ugly. That's why I kind of worry.
It's hard to peg the top or bottom of any market, but suffice it to say, your best indicator is to trust your gut. If you think something is overpriced, then it is overpriced, regardless of what the so-called "experts" say.
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Re: crazy real estate market
Old 02-02-2007, 01:49 PM   #32
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Re: crazy real estate market

Check these out:

http://thehousingbubbleblog.com/

http://housingpanic.blogspot.com/
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Re: crazy real estate market
Old 02-02-2007, 03:12 PM   #33
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Re: crazy real estate market

Quote:
Originally Posted by wab
Well, you can always try to value the house based on fundamentals. One traditional metric is about 3.5 X median income for the median house. I don't think we're there yet.
What about using rental value to work your way up to a break-even cost?

If you can't buy a house and collect enough rent to at least break even, then you are probably paying too much for the house.
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Re: crazy real estate market
Old 02-02-2007, 03:48 PM   #34
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Re: crazy real estate market

Quote:
Originally Posted by retire@40
If you can't buy a house and collect enough rent to at least break even, then you are probably paying too much for the house.
I doubt this will ever be true for a nice SFH in NJ. People pay a premium to live in a house versus rent. I often hear renters say they won't buy until the PITI (mortgage Payment & Interest, Taxes, and Insurance) equals what they could rent it out for. In reality, if PITI = monthly rental income in a nice, appreciating area, then it translates into a 10%+ return for an investor. Investors flood in, prices rise, rents stay the same (or fall). If you can come within 10% of breaking even then you're probably getting a good deal.

At some point, the smart money will step in. You won't read in the newspaper month after month that the bottom has been reached. Prices will bounce back up. There is still too much money floating around and nobody knows where the stock market is heading. People are still rushing into commodities - well, real estate benefits from inflation as well...
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Re: crazy real estate market
Old 02-02-2007, 05:54 PM   #35
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Re: crazy real estate market

Interesting report by mortgage insuance folks:

http://media.corporate-ir.net/media_...er2007ERET.pdf
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Re: crazy real estate market
Old 02-04-2007, 09:07 AM   #36
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Re: crazy real estate market

I live in central Florida, and I was talking to a contractor that was at my house this past week to do some work, and he told me that my job was the first job that he had in three weeks! He said that the bottom has fallen out of the new construction and remodel market, and a lot of contractors are hurting and looking for work.
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Re: crazy real estate market
Old 02-04-2007, 09:53 AM   #37
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Re: crazy real estate market

I too live in Central FL. Good (at least for contractors) is there is suddenly a lot of work available...those 1800 (approx.) homes that were trashed by the tornado(es) on February 2.

Gov. Crist flew into the tiny airport I can see from my front yard. Makes me feel a bit more important.

-- Pedorrero, still in his untouched bricks & sticks by the grace of the weather God.
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Re: crazy real estate market
Old 02-04-2007, 09:58 AM   #38
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Re: crazy real estate market

Quote:
Originally Posted by macdaddy
...If you can come within 10% of breaking even then you're probably getting a good deal...
Even using the 10% metric, we are not even close to good deals in real estate yet in many markets.
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Re: crazy real estate market
Old 02-05-2007, 08:56 AM   #39
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Re: crazy real estate market

Just got the call from my agent. The seller would like to accept the 560K offer. From 750 to 560, what a dive!
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Re: crazy real estate market
Old 02-05-2007, 09:06 AM   #40
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Re: crazy real estate market

Well congratulations, talk about a motivated seller!

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