Recent Real Estate Auction Sales Suggest Crash Not Over Yet

[haha]

http://www.nytimes.com/2009/04/22/business/economy/22leonhardt.html?_r=1&partner=rss&emc=rss

 

[tmm99]

Thank you for the article.
It sounds like this is going to continue a while longer....

 

[tryan]

Having been to a few of these auctions, what most don't realize is that roughly 3/4's of the high bids are rejected by the bank/owner because the minimum bids are not met. Then they market it thru conventional means. All the while the asset withers on the vine: unmaintained, vandalized ...

Need absolute auctions to move the inventory ... they're coming.

 

[bright eyed]

Interesting things are happening in this area (sunny southern ca), on the borderlands of mcmansions mecca - since my town is older and more established, our prices seem to be stabilizing (i check regularly to see what's going on and motivate me to save more money) - I think this is because our neighborhoods and schools are established and stable. Our once passe older homes on large lots now look like a good deal and great schools to boot.

In the mcmansion lands I think things are getting worse - in many of the newly built communities, it's gotten so bad for a few reasons - w/ the wild price deflation, schools that were just planned to be opened are not opening, neighbors are disappearing and people also now realize some of these areas are not that desirable (windy, cows next door and the flies that come with them - flies that attack anything living - you, your food, everything and they were just on poo a minute ago!), which weren't a consideration when they were just looking at beautiful models and dreaming of their 5000sq ft homes and theatre rooms. Now that people have settled in, economy has tanked etc, things look very different!

It will have to get a bit worse before it gets better in those areas...

 

[Purron]

Interesting things are happening in this area (sunny southern ca), on the borderlands of mcmansions mecca - since my town is older and more established, our prices seem to be stabilizing (i check regularly to see what's going on and motivate me to save more money) - I think this is because our neighborhoods and schools are established and stable. Our once passe older homes on large lots now look like a good deal and great schools to boot.

I've been following the RE market closely and am noticing a similiar trend here in the DC suburbs. Closer in and established neighborhoods are starting to rebound a bit and first time buyers appear more motivated to buy. McMansions located far from employment centers are still not moving. Also, many buyers are turned off by neighborhoods with lots of foreclosures.

DH and I have a rental property and our tenants have given notice they are moving. We plan to do a few modest upgrades and put it on the market. If it doesn't move, that's not a big problem and we will wait it out. Since it's in the "starter home" range, we hope there will be some interest. Also, it's located near employment centers, is in a great school district and is on a 2 acre lot which is rare for this area.

 

[Ed_The_Gypsy]

The glut of foreclosed homes creates a self-reinforcing cycle. Falling prices lead to more foreclosures. Foreclosures lead to an excess supply of homes for sale. The excess supply then leads to further price declines. Jan Hatzius, the chief economist at Goldman Sachs, says that the “massive amount of excess supply” means that home prices nationwide will probably fall an additional 15 percent.
This estimate hides a lot of variation, too. In Miami, Goldman forecasts, prices could drop an additional 33 percent, which is pretty amazing since they’ve already fallen 50 percent from their 2006 peak.

I agree with this. People aren't finished walking away from their houses. This recession is going to be long and people are going be out of work longer and run out of ways to keep up the payments. Some areas will be worse than others. Bellingham, WA, seems to be relatively stable. It looks like a lot of our home buyers are retirees from other parts of the country.