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Speaking of Home Values...
Old 01-16-2011, 06:40 AM   #1
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Speaking of Home Values...

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Nationally, the great majority of housing markets are now fairly valued, according to Local Market Monitor. Eight markets are overpriced, and 15 are underpriced. That contrasts with the boom years: In mid-2006, 37 of the biggest markets were overpriced, six under and 57 fairly valued.
America's most overvalued and undervalued housing markets - Jan. 11, 2011


Assuming the information is correct.... if one lives in those undervalued areas... It might be a good time to buy (if you do no have an existing home to unload).
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Old 01-16-2011, 07:10 AM   #2
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We're doing that right now. Looks like this list is only major cities. Memphis TN shows up as undervalued - we just bought 94 acres of land a couple hours away from there for a very good price. We were thinking of buying a travel trailer to put on the property to live in while we build a house - but with prices so low, we're looking to buy a house near the property.
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Old 01-16-2011, 07:49 AM   #3
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I suppose this means that people who bought at the top really got burned. Considering a broad inflation rate of 3.5%.... they paid about 2x. Ouch!


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Chen estimates that Las Vegas home prices won't return to their pre-recession peak until after 2032; in Phoenix, the rebound will take until 2034; and Salinas, Calif., and Naples, Fla., won't come back until sometime around 2038
Decades for home prices to recover - Jan. 7, 2011


I will bet banks will begin looking at aggregation risk for loans more closely.... like P&C Insurance companies who try to limit the downside risk by limiting the amount they will insure in certain areas.


Oh.... but I forgot, they off loaded all of it onto Fannie Mae. It would serve those banks right to have to take all of those loans back!

If Fannie Mae and Freddie continue to exist and do that type of business... after a certain level... they should only make the market by participating at a steep discount to offset the risk (that ultimately we tax payers wind up assuming)!
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Old 01-16-2011, 08:24 AM   #4
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Whoever did the research or wrote the article is lazy. They should have picked locales separated by more than 0 miles.
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Old 01-16-2011, 09:57 AM   #5
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Suddenly everyone is a genius at pricing real estate & knowing their real value.
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Old 01-16-2011, 10:25 AM   #6
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Originally Posted by walkinwood View Post
Suddenly everyone is a genius at pricing real estate & knowing their real value.
Excellent point.
I see Cincinnati on the "most undervalued" list at -15%, and the Zillow estimates are very low and getting lower, yet I see homes for sale (and selling) all over the place for good percentage increases over their purchase price.

My next door neighbor has his house on the market for 41% above what he paid 7 years ago, and he has had loads of prospects looking at it. Even if he sells for substantially less than he's asking, he'll still do quite well.
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Old 01-16-2011, 11:20 AM   #7
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I suppose this means that people who bought at the top really got burned. Considering a broad inflation rate of 3.5%.... they paid about 2x. Ouch!


Decades for home prices to recover - Jan. 7, 2011


I will bet banks will begin looking at aggregation risk for loans more closely.... like P&C Insurance companies who try to limit the downside risk by limiting the amount they will insure in certain areas.


Oh.... but I forgot, they off loaded all of it onto Fannie Mae. It would serve those banks right to have to take all of those loans back!

If Fannie Mae and Freddie continue to exist and do that type of business... after a certain level... they should only make the market by participating at a steep discount to offset the risk (that ultimately we tax payers wind up assuming)!

An interesting observation related to this is that for at least one property (my old house)... it has not recovered from the 1980s!!!!


Some might remember the S&L crisis... it hit Houston hard in RE... in some place over half the homes were repoed.... I bought my first house back then... It cost me $66K... the people who sold got a deal because they were moved by their company and the company paid... they brought over $35K to the closing... and I was told the house was originally purchased for $135K.... Fast forward to 2008... according to the tax appraiser it was now worth just shy of $129K.... so almost back to the original selling price after 22 years...

But then this crisis came... and I sold the house for $115K.... and I bet it will take over 10 years to get back up to the original price... so a whopping 35 plus years this house might be worth less than the original selling price....
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Old 01-16-2011, 06:34 PM   #8
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I'm venturing a guess prediction that the greater Pittsburgh area will have increasing home sales in the spring. Further, it will be better them the last few years.


Here is why:

1. It is so bad, it can't get any worse.

2. For the last several issues, of the local daily's weekend edition has had nearly full page infomercials regarding some important aspect of home buying.

Today's hype is about the importance of Radon testing. And that Radon is the second largest cause of lung cancer. No research is cited nor is any evidence presented. I'm too lazy to do the research to confirm or refute the assertion.
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Old 01-16-2011, 07:08 PM   #9
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I'm venturing a guess prediction that the greater Pittsburgh area will have increasing home sales in the spring. Further, it will be better them the last few years.


Here is why:

1. It is so bad, it can't get any worse.
And after about 2003, I said every year the prices of homes can't go any higher and they did. So I wouldn't be too quick to assume they can't get any worse.

Personally, I think that real estate will continue to decline (obviously specific markets may be different) given: 1) high unemployment, 2) stagnant wages 3) increasing mortgage rates and 4) tougher lending standards.

But than as I said, what do I know, I thought the bubble on the way up wouldn't get nearly as frothy as it did...
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Old 01-16-2011, 07:34 PM   #10
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I don't know what it means, but in my neighborhood, all the short sales are sold and there are two new houses under construction.
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Old 01-16-2011, 08:41 PM   #11
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I don't know what it means, but in my neighborhood, all the short sales are sold and there are two new houses under construction.

That sounds like green shoots to me. You should alert the administration, I'm sure they'll send Biden or at least a cabinet member to celebrate the occasion.

Seriously, I can't remember the last time I saw new construction in my neighborhood (actually that isn't true is was spring of 2007) so that is good news.
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Old 01-17-2011, 12:35 AM   #12
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Seriously, I can't remember the last time I saw new construction in my neighborhood (actually that isn't true is was spring of 2007) so that is good news.
So did the builder finish them yet?
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Old 01-17-2011, 02:58 PM   #13
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Assuming the information is correct.... if one lives in those undervalued areas... It might be a good time to buy (if you do no have an existing home to unload).
I think I'd want to see some data on this guy's track record and methods before putting any money at risk. I didn't see much of that on his website.
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Old 01-17-2011, 05:06 PM   #14
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I think I'd want to see some data on this guy's track record and methods before putting any money at risk. I didn't see much of that on his website.
Dunno!

I was thinking more about selling once I FIRE!

But it might take awhile.
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