October 22, 2007

Here's a look at how bad the housing crash is getting city by city



Take Housing Watch for a spin. Lots of 10% price drops now over the past six months as the Ponzi Scheme ends and the credit crunch takes hold.

If you "own" a home and want to salvage any of your paper gains these past few years, get your home on the market immediately, and price it below any home in the neighborhood, significantly below if you need to.

The speculators are gone. The flippers are gone. 50% of the buyers are gone. If you're going to sell a home in the next couple of years, it'll be at a "drama price" or it'll be sold to a complete and total fool (aided by a realtor on commission of course).

Ugly.

20 comments:

Anonymous said...

These charts are not NAR approved

-Lawrence Yun

bickerer said...

WTF is going on with this nutty piece in the nytimes today?

http://tinyurl.com/ys3s3z

Anonymous said...

Agreed, you must completely ignore peak price of 05. One must leverage the faux equity created by the bubble, here is one way. Determine the P/E price (~130x monthly rent). Take current list/asking/comp price and subtract the P/E price. Divide the delta by 2 and tack that onto the P/E price. That should be your asking price. The 1/2 delta is more than a generous premium any seller could as for in one's lifetime to sell a home. You're very competitive relative to your FB neighbors who are pegging price at 05 peak and then making surgical price cuts. Yours will stand out on price and be snapped up by a bull trap buyer.

Anonymous said...

You had me going there for a minute, but I just checked zillow and my home is zestimated to be worth even more than I thought. Real estate only goes up!

Anonymous said...

I bought my house in 1994. It's almost paid off. I like where I live, and realy, I dont care how low the price goes. It will never go lower than I paid for it, seeing that houses around here are going for $800,000+ and I paid $250,000. I have a 900 square foot rental I am getting $1500 a month for. I still owe $80,000. The rental pays my mortgage and my property tax. Why on earth would I sell. I live for free.

RayNLA said...

Sniff, Sniff, Sniff...

Kieth,

You smell that?

Sniff, Sniff, Sniff...

Smells like a fart but I think It's fear!

RayNLA

Denverdude said...

What is up with the Denver numbers? This is where there are TONS of forclosures and prices have been flat at best (from what I see) but they show Denver as the best performing area in the nation. How can that be?

6% Is Dead said...

Same in the Raleigh ,NC area...This chart does not reflect the foreclosures & homes sitting on the market all year. That median price you see listed is already falling like a rock.If they cannot sell'em in Jersey...they cannot buy'em in the south.This list is definately behind based on the real world.

Veronica Lodge said...

RE: Lots of 10% price drops now over the past six months as the Ponzi Scheme ends and the credit crunch takes hold.

And now, with the government-sponsored destruction of the US dollar underway, inflation will cause even greater losses.

If a house suffers a 10% loss and REAL inflation is 8%, the house has actually lost 18%.

HERE is an excellent article on this concept.

V.L.

Lost Cause said...

Supply and demand, my ass.

Anonymous said...

anon @3:49

You would sell to cash out and then buy it back after a few years for less than you sold it for and book the profit.

Of course if your house is actually your home and not an investment vehicle then that's not worth the upheaval of moving... Plus you missed the peak by enough to make the hassle not worth it.

The bubble inflates and the bubble pops, if you're in before and out afterwards it's irrelevant (unless you took out loans against the inflated "value" of course). There's the opportunity cost of not selling at the inflated prices, but that's an investment decision with associated risk (what if the prices don't go down... what if wherever you park the money loses significant value... etc.) and if your house is your home, who cares.

Anonymous said...

Omaha?!?

I wonder how shocked and awed Warren Buffet was when the bubble showed up at his doorstep?

Anonymous said...

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/ASuperDuperBadLoanBailoutPlan.aspx

Anonymous said...

Yes, my house is my home, and I have never thought of it as an investment. I have never taken any money against it. I have done everything I can to pay it down. I am a very frugal person. Some of my friends told me to leverage it and buy and flip, and I did not. Some of those same friends are leveraged to the hilt now. I have a small business and am a avid saver. I figure, once I own it, it's mine. If things should fall out from under me this house is still mine, period. Let them die in debt; I am sure I'll be the last one laughing.

Anonymous said...

“The market’s really low right now, so you can get a good price,” said Lori Crook, a food server at Keys Cafe who said she was looking for a place she could fix up and sell. “Even if you can’t sell it right away, if you just sit on it and sit on it, it will go up.”

Yea, 3.2% over the life of your 20% down, 30yr fixed convential loan, provided that you do all the necessary maint.,repairs and renovations yourself.

People just don't get it!

Anonymous said...

http://efinancedirectory.com/articles/New_Survey
_Shows_ARM_Mortgage_Holders_are_Clueless.html

Anonymous said...

Yeah you can keep it as long as you pay the King his dues, or property taxes, however you fancy it!

Bottom Feeder in Philly said...

Here in the Philly Suburbs, builders have cut base prices 15 to 20%. If any resales want to compete they will have to follow. Builders are building spec houses because they have to keep building. Many new subdivisions are full of empty homes for sale. Inventory levels have exceeded 10 months, and prices are starting to drop. Sellers are also bending over and signing deals 15% below list price. They realize prices may be worse in the spring, so cut loose now. Our market didn't have ridiculous appreciations like some more speculative areas, so the knife is still slow to drop. Based on current pricing to rent there is still negative cash flow, so there still is further to drop until I am a buyer again.
Bottom Feeder in Philly

6% Is Dead said...

A follow up on the Raligh ,NC area from the local station:

Raleigh — There were more signs Monday that the national housing slump has hit the Triangle.

According to the North Carolina Association of Realtors, sales of existing homes dropped 24 percent for the month of September compared with the same period last year.

The slump has hit high-priced neighborhoods the hardest.

“In certain price ranges, we're seeing quite a lot of stagnation,” real estate agent Gilbert....

http://www.wral.com/news/local/story/1957042/

More proof that even in the "Good" areas...Realtors are in the unemployment lines.

bad credit mortgages said...

I haven't followed the mortgage mess too closely, but it seems there's plenty of blame to go around. Mortgage companies have been very aggressive (and possibly deceptive?) in their marketing of $0 down, interest-only, second mortgages, and ARMs. But ultimately, nobody made anyone sign a contract. You don't borrow $100,000 without knowing what you're getting into. Just because somebody tells you that you can afford it doesn't mean you can.
If mortgage lenders have been deceptive, they should be held accountable. But borrowers themselves have to also be held accountable for their greedy and short-sighted choices. And I share your resentment over having to pay for other people's folly.