Does anyone actually want homes prices to tank even more?

[Tommy2000GT]

I'm shopping for a house and they are still over priced.

And current home owners should be happy about lowered homes prices because they can get re-assessed and pay lower property taxes.

 

[Imported]

Since I'm not looking to buy for a couple more years.. I wouldn't mind it.

 

[PClark99]

I am house shopping right now because of divorce.

Sellers ask high, pretty much 90% of time. Most of the houses I have looked at are so bad for the asking price its not even funny.

I may end up making an offer but it will be for 15-20% less than the asking price, thats for sure.

 

[gevorg]

www.patrick.net

 

[mshan]

What market are you located in, OP?

Seems like there has been capitulation in lots of markets, though there are always individual outliers that are not just willing to accept reality and think their home is still worth what someone might have paid at top of bubble in say 2005 or 2006.

Canadians have commented on how expensive their real estate is, but I don't think their market ever popped (their banks were apparently conservative in mortgage lending, requiring the traditional 20% down). Sounds like they may still have a developing bubble, from comments I've seen posted by others.

Regarding property taxes, if your local government has gotten used to all that extra revenue and can't or isn't willing to cut spending, then they will just increase the rate to offset decreased assessments. You can probably just realistically hope that property taxes go up more slowly going forward.

If you are planning on buying with a mortgage, I think there is some sort of rule (forgot specific numbers, but I think it is something like 1% change in mortgage rates is equivalent to 5% effective change in price, when viewed from the point of affordability). Assuming no hyper-inflation down the road, seems like mortgage rates might creep up slowly to more normal 6% range (still low by historical standards), if economy starts to pick up speed in a few years.

 

[brianmanahan]

www.patrick.net

wat

 

[olds]

I'm shopping for a house and they are still over priced.

And current home owners should be happy about lowered homes prices because they can get re-assessed and pay lower property taxes.

Over priced? Doesn't McDonald's have a management program that you can promote in to?

 

[olds]

www.patrick.net

geocities revisited

 

[Chiropteran]

I bought my condo a year ago. Does that mean I'd prefer home value to rise? Not really. I'm going to need to get something bigger with my wife in the next 6-7 years so lower home values wouldn't really kill me.

 

[Tommy2000GT]

What market are you located in, OP?

Seems like there has been capitulation in lots of markets, though there are always individual outliers that are not just willing to accept reality and think their home is still worth what someone might have paid at top of bubble in say 2005 or 2006.

Canadians have commented on how expensive their real estate is, but I don't think their market ever popped (their banks were apparently conservative in mortgage lending, requiring the traditional 20% down). Sounds like they may still have a developing bubble, from comments I've seen posted by others.

Regarding property taxes, if your local government has gotten used to all that extra revenue and can't or isn't willing to cut spending, then they will just increase the rate to offset decreased assessments. You can probably just realistically hope that property taxes go up more slowly going forward.

If you are planning on buying with a mortgage, I think there is some sort of rule (forgot specific numbers, but I think it is something like 1% change in mortgage rates is equivalent to 5% effective change in price, when viewed from the point of affordability). Assuming no hyper-inflation down the road, seems like mortgage rates might creep up slowly to more normal 6% range (still low by historical standards), if economy starts to pick up speed in a few years.

San Francisco area. Homes prices here have begun to creep up though :'(

 

[Imported]

San Francisco area. Homes prices here have begun to creep up though :'(

Yup.. Been noticing it too. :[

 

[dullard]

San Francisco area. Homes prices here have begun to creep up though :'(

Prices are going up all over the country. The average price of a home sold in May 2012 (latest available data) was the highest it has been in years. The last time prices were this high was October 2008 when prices were falling. May 2012 prices were 7.86% higher than May 2011.

Of course, local markets will differ, but if the national average is going up then most local places are going up too.

Combined with record low interest rates, the best time to buy was winter 2011/2012.

Source:

http://www.realtor.org/sites/defaul...8067044af/ehs-05-2012-overview02012-06-21.pdf

 

[HendrixFan]

Since I'm not looking to buy for a couple more years.. I wouldn't mind it.

Housing prices are propped up by super low interest rates right now. People buy based on many factors, but the primary one is how much they can pay each month. The home values are then based largely on these all time low rates and as the rates go up, home values will drop in response. It isn't like people are making more money on the whole.

 

[olds]

Give it about a year. The coming recession will make Greece look like Mardi Gras.

 

[mshan]

http://blog.redfin.com/sfbay/

 

[lord_emperor]

I hope to buy a house some day and I look at prices in my area and see they are more than I will earn in the rest of my life.

Yes I want prices to tank and tank hard.

 

[mshan]

This is an old article, but if you are planning on buying with a mortgage, you need to think in terms of overall affordability, not just absolute price (and I am assuming you plan on keeping home at least 5 - 7 years, so appreciation in more normal 2 - 3%/year type housing market allows you to cover buying and selling costs with home appreciation; if not, do a google search for New York Times series of Rent Buy articles, their rent vs. buy calculator, and Rent Ratios articles):

Why would the wealthy be starting to purchase especially when everyone is predicting that prices will soften? The people of wealth understand finances. They realize that the COST of real estate is a much more important than its PRICE. With the government attempting to make massive changes to the residential lending business, the wealthy know financing a home may never be better. They realize it is time to buy. They can purchase a million dollar+ home for a rate lower than at almost any time in history.

Rates are at historic lows and the spread for jumbo loans has shrunk dramatically. As CNN Money explained:

Normally buyers have to take out a jumbo loan to finance any mortgage beyond the $417,000 threshold ($729,000 in high-cost cities such as New York). These loans have higher interest rates because they are considered non-conforming — or higher risk — and are not backed Fannie Mae or Freddie Mac.
In 2009 buyers of high-end homes paid 1.8 percentage points more in interest than the average buyer. But in 2010, that spread had shrunk to just 0.6 points more.


http://www.kcmblog.com/2011/03/14/if-prices-are-falling-why-are-the-rich-buying/​

I don't think there is an urgent need to buy right now, but like other poster said, particularly in a land constrained market like San Francisco, the bottom in your market might have occurred last winter / early this year before stock market really took off.

Might want to look for realtor, get some data on actual prices paid last winter / early this year for comps to what you are looking for, look at what the cost of a comparable new build is, and look at what historical lows were to provide some more perspective. Just be prepared to act if news about economy and stock market get so scary at some point later in the year that mortgage rates dip another 0.5% (coarsely equivalent to the yield on 10 year U. S. Treasury hitting 1%) and seller of home you like getting scared and other buyers competing with you get scared enough to hesitate, that you get slightly below market price on home you want.

This is a total guess, but I suspect if you are waiting for another historic dip to buy, in your particular market, you might be waiting for a long, long time.


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[Wreckem]

I am pretty sure there is a significant lag between appraisal prices dropping after market prices drop.

I was looking at Condos in Minneapolis, which apparently has a huge glut of condos. Fairly new condos that originally went for close to $300k when they were built, are still being appraised in the mid $200s even though the market rate is well below $200k.

 

[rh71]

right where it is is fine... people will bitch both ways. It's already come down for homeowners, and it's stayed up a bit for buyers. As for re-assessment... there's something called a tax-rate that keeps going up regardless so our taxes are still rising here.

 

[HardcoreRobot]

id be very happy if the market contracted a bit in northern virginia. trying to get into a SFH.

i dont really buy into the property tax thing. schools and services dont get any cheaper. if they do re-assess, they just bundle that with a tax hike. thats what happened in my county at least.

 

[Regs]

right where it is is fine... people will bitch both ways. It's already come down for homeowners, and it's stayed up a bit for buyers. As for re-assessment... there's something called a tax-rate that keeps going up regardless so our taxes are still rising here.

Yes; I paid a lot down on my house and pay a low mortgage. So low, my taxes are actually 1/3 the mortgage payments for each month. One thing is for certain, it makes home ownership less attractive to people who rent.

 

[Vdubchaos]

Prices are still high and banks are still giving out loans that they shouldn't be.

Don't assume much has changed.

And NOT ONE person is in jail since the whole mortgage debacle....

PS. Just waiting for Car Loans subprime loans to crash. Those are being handed out left and right as well.

 

[WaTaGuMp]

Someone said that over the years housing has gone up and down.

 

[purbeast0]

i hope not, since i'm about to purchase one heh.

 

[Atomic Playboy]

I would love it if home values would tank for about a year, so that after I get married, the wife and I can pick up a nice starter home for about $13 and half-eaten candy bar. Then I would like them to rise again since the tanking of property values would probably lead to mass riots and people being murdered in the streets, and that's not the ideal environment in which to start a family.