“Buyers Not Willing To Pull The Trigger” In Massachusetts
Some housing reports from the Boston Globe. “The housing downturn in Massachusetts will last longer, and prices will fall further than first projected, according to an economic forecast released yesterday. Housing prices will slide by as much as 10 percent from their 2005 peak before hitting bottom in early 2008, according to the forecast by the New England Economic Partnership.”
“A year ago the nonprofit research group forecast prices would decline less than 3 percent, bottom at the end of 2006, and regain their peaks in early 2008.”
“But Alan Clayton-Matthews, the University of Massachusetts at Boston professor who prepared the forecast, said job growth isn’t strong enough, and mortgage rates aren’t low enough to so quickly offset the main reason for the correction: Home prices outstripping incomes.”
“‘Once prices start declining there’s a lot of force to keep going until they are more in line with income,’ said Clayton-Matthews, adding that it’s difficult to predict where housing prices will go. ‘That’s what we saw in the late ’80s and early ’90s.’”
“Foreclosure filings against Massachusetts homeowners surged to nearly 13,000 through September, already surpassing 2005’s count. Filings increased 54 percent in the first nine months of 2006, compared to the same period last year, according to a monthly report.’”
“‘I don’t think we have hit the peak yet,’ predicted Jeremy Shapiro, the president of ForeclosuresMass.com.”
“More than a dozen communities, from Fitchburg and Athol not far from New Hampshire to Springfield near the Connecticut border, had at least 40 foreclosures per 10,000.”
“During the accelerating housing market, many people were desperate to buy a house, and credit was easy, though many could not afford the mortgages, once the adjustable rates began to increase, housing specialists and counselors said. In central and western Massachusetts, where house prices historically were low but took off during the boom, property flipping and investment scams compounded problems.”
The Telegram. “The Massachusetts economy is…still lagging behind the nation and will not likely recover all of the jobs it lost in the last recession until 2011, according to economists. The problem is a slumping housing market, which endangers an economy that is pumping out more exports, adding a small number of jobs, according to Alan Clayton-Matthews.”
“‘We expect these (housing) declines to be deeper and longer’ than the nation, said Mr. Clayton-Matthews, who described the state’s housing correction as ‘a very dark cloud.’”
“The difficulty with housing is that investors have been pulling out of the sector, home construction outpaced demand in recent years, homeowners extracted cash from their homes by refinancing and lenders delayed a collapse by offering mortgages with adjustable rates and interest options, economist Mark Zandi said.”
“About 20 percent of all of the nation’s $2 trillion in mortgages is due to reset to new interest rates in the next two and a half years, Mr. Zandi said. Another concern is whether foreign investors, who have purchased large amounts of mortgages, will maintain their appetite for investing in debt, he said.”
The Christian Science Monitor. “When she put up a new ‘for sale’ sign two weeks ago, real estate agent Mary Ellen Wasielewski had some unusual advice for the sellers: Give the buyer money to build a garage.”
“The family lives in the Boston suburb of Medway, where homeowners enjoyed a seller’s market not so long ago. But now the tables have turned. For a deal to happen, buyers must be pleased on every front. With the snow and slush of winter just around the corner, Ms. Wasielewski says no garage probably means no sale.”
“‘The buyers are out there. I see the same ones coming around,’ she says. ‘They’re not willing to pull the trigger until [they find] the perfect equation of the condition and the price.’”
“‘It’s all pricing,’ says Kenneth Hawkins, who has seen four real estate downturns in his four decades selling homes in Milford, Conn. ‘The new ones on the market draw the most attention, and if they’re priced competitively - maybe even a little bit below [the market] - that’s the incentive for people to buy.’”
“Even after sellers have made the wrenching decision to lower the listing price and offer other incentives, buyers are likely to ask for even more concessions in negotiations. ‘It’s a very emotional process,’ says Wasielewski. Many sellers ‘believe when they get to the negotiating table that they have already lost’ and don’t want to give up more money.”
‘This could help repair our cost-of-living disadvantage,’ Clayton-Matthews said. ‘Once again, we could be a state that’s pleasant to live in and also affordable.’
‘A ’silver lining’ in the falling prices is that Massachusetts will become a more affordable place in coming years, compared with other parts of the country, Clayton-Matthews said.’
‘In the long run, the slowdown in housing could benefit the economy by resolving some of the state’s affordable-housing problems, Clayton-Matthews said. ‘In the overall economy, this is a good thing, because it will help restore our competitiveness,’ he said. ‘(But) there will be a number of households who will be hit hard.’
‘The nationwide slump in the housing market has finally reached Rhode Island, where the median price of single-family houses and condominiums fell last quarter for the first time in six years. The number of houses sold dropped sharply to 2,635, down 15.2 percent from 3,107 in the third quarter of last year, The Warren Group said.’
If housing prices fall to levels that make MA affordable again, rest assured that the legislature will come up with new taxes to make it unaffordable again. Can’t have the public feeling comfortable with their finances now.
“Even after sellers have made the wrenching decision to lower the listing price and offer other incentives, buyers are likely to ask for even more concessions in negotiations. ‘It’s a very emotional process,’ says Wasielewski.
I know I’m in the vast minority, but what is the damn big deal why is it such an “emotional” process. It’s a house for haven sakes lower the price and watch it go, say good bye and move on It’s not like your selling off a kid or burying a loved one. It gets so old hearing about the “wrenching” process these poor folks are going through, what a bunch of wimps.
Well what about those marks on the kitchen entry way marking little timmy’s height each birthday? And those trees out back you planted and are now 30 feet high? And the tree house you built in it? And…
Simple. If you’re so attached to your house, don’t sell.
I value your emotions at the same level I expect you to value mine: $0. Or negative, if I have to buy the paint to cover up Timmy’s height marks or cut back those trees that are now interfereing with power lines.
I agree to a point, my parents still live in the house I grew up in 45 years ago, but my memories will live with me long after the time comes to sell the house, it is but bricks and mortor.
If the price you get makes any difference to parting with these things, then they didn’t matter much to you in the first place. Just the money.
P.S. I think for many the “emotion” isn’t for little Timmy’s height marks, it’s watching the huge profit they had counted on shrinking, and we all know that’s just not fair! Damnit.
Better to sell the place since Little Timmy’s a crackhead anyway.
Very true indeed. I agree 100%. I suspect your ‘vast minority’ may not be as small as you think.
And their being over-emotional will lose them money as they split hairs over a couple concessions, trying to wring every last dollar out of their falling asset.
If they viewed a house for what it is: a place to sleep, watch TV etc, as opposed to what’s been marketed to them: an extension/reflection of themselves, blah blah blah, they wouldn’t have these “wrenching decisions”.
Sellers that have to make the decision to lower their price don’t do it willingly. But, who cares about their feelings? As a buyer I don’t. Seriously, why should I? If you’re trying to sell right now it’s because you have to. You made a stupid decision to buy, or have recently lost a job, or purchased with a silly loan. Cry me a river.
Seriously if you’re not willing to sell at a lower price. I’ll buy it from the bank as a REO. My rent is 1/3 the price of a comparable home mortgage in the same location.
I’ve been planning for this for the last 2 years.
People should understand that buying a house is not like buying a car. It can be very risky! I feel sorry for those who lose their shirts and hopefully they can learn from this lesson.
I’m glad this got brought up. I didn’t realize just how fed up I was with the whole thing my damn self! I call it the SSOTW (sob story of the week). It seems like all the “emotional energy” is going into the poor poor sellers! WTF? What about the buyers? Even if these poor sellers take 10-15-30 % less than what they imagined at peak, it doesn’t mean the buyer is exactly getting a steal. If there was any empathy for buyers over the last oh…… 6-8 years it’s been more along the lines of “Oh those poor teachers/fireman/policeman they’re going to have to really stretch to be able to afford to live here!”
Totally fake empathy. Poor schmucks, we’re already rolling around naked in our big fat stacks of cash!
Sorry for getting off-topic, but thought you guys would get a laugh out of this:
http://sf.curbed.com/archives/2006/11/14/flippernation_episode_one.php
Click on the arrow to play the video. Hilarious.
Really funny!!! It just shows how this bubble has captured the imagination of complete idiots.
To put it in Wall Street terminology: change your sell order from a Limit to a Market, and it will sell. Imagine if you put in an order to sell Pets.com for $80 after the crash - it will never get filled. Change it to a Market order, and it magically gets filled. Change all these listings from Limit to Market and they will sell.
Absolute auctions for everyone!
A lot of houses WILL eventually be worth the nominal asking prices, but possibly not for 20 years or more. (Condos perhaps never.)
Outside of desirable cities where there’s nowhere left to build, a given house might NEVER be worth 2005 prices again, after adjusting for inflation. Yes, “median house prices” will get there again, but that will the median of a pool that includes many more recently built houses.
I’m not even convinced that median house prices will ever again reach the inflation-adjusted levels of 2005. When you look at that frequently-seen graph showing the last hundred years of housing prices (adjusted to something, I don’t know if it’s wages or the price of a pretzel), you see that the recent situation was just plain anomalous. I bet the price of Dutch tulip bulbs has never again reached the inflation-adjusted level where it peaked in the 17th century.
I’m not even convinced that median house prices will ever again reach the inflation-adjusted levels of 2005.
——————–
I tend to agree with you on this one, BTW.
“‘We expect these (housing) declines to be deeper and longer’ than the nation, said Mr. Clayton-Matthews, who described the state’s housing correction as ‘a very dark cloud.’”
Something like this one?
http://www.photolib.noaa.gov/nssl/nssl0107.htm
symbolic of the brewing storm
Some housing reports from the Boston Globe. “The housing downturn in Massachusetts will last longer, and prices will fall further than first projected, according to an economic forecast released yesterday. Housing prices will slide by as much as 10 percent from their 2005 peak before hitting bottom in early 2008, according to the forecast by the New England Economic Partnership. A year ago the nonprofit research group forecast prices would decline less than 3 percent, bottom at the end of 2006, and regain their peaks in early 2008.”
Hopefully prospective buyers in Mass are irrational, or at least oblivious to this forecast revision. Because if they were rational and believed the forecast revision, then more would-be buyers will immediately start waiting for that 10% drop, rather than falling on their swords. This, of course, would increase the likelihood of a 10% drop sooner than forecast.
If they’re rational, they might even question the revised forecast, given how off base this group was a year ago.
So being a market timing genius you present yourself to be, what is plan or are you all talk?
I never called myself a genius, but I’m certainly not stupid enough to have sold in 2004 and now plan on buying back in at late 2003 prices.
Once again, more philosophy. What’s your plan? Wait until 2020 until you get your 2001 price. You are more stupid than you think.
I bought in 2001 on the westside, still own my home, and would never consider buying in Valencia.
So, you’re planning on buying at 500k. How much did you sell your home for in 2004? What were your closing costs?
I bought a house in Pasadena in 1997 for ~$400,000, sold in September 2004 for close to a million, closing cost was $40K since we negotiated the listing agent’s commission to 4%. Looking back, we could have sold the house ourselves and save the 4% since the house sold in one day. Wanted to buy a house in Westwood but could not pull the trigger because of the price (my wife and I work at UCLA) and so-so public schools. We’ve waited until now to buy a house and who knows when that $500K is going to happen. Still it’s nice to know that we can pay cash for a nice house in Valencia. If we buy in Westwood, we will be slaves to the bank. Valencia is not perfect but it is freedom from debt.
you would commute from Valencia to UCLA every day? I’d almost rather be a debt slave.
You can’t have everything. We’ve decided to live in an affordable community (compared to Westwood) where we can retire at 50 years old (that’s in 12 years). I’m sure you have seen the UCLA Vanpool. I can actually read books during the commute so it’s not that bad. Let me see, buy in Westwood, work until 65 while scraping by to pay for the house or buy in Valencia, commute for 12 years and retire at 50. As the mortgage guy at AM radio commercials would say, “It’s the biggest no-brainer of all.” To each his own.
Pasadena to UCLA has got to be worse than Valencia to UCLA. At least it was when I did it. I did both those commutes - of course that was in the 80’s.
I agree. This forecast is more than a little disingenuous. My wife and I are looking for a home in the area and are focusing on traditional homes built in the 1920s through the early 1950s. We want quality construction and are willing to wait for reasonable prices.
We are already seeing that most properties in this area are listed at least 10% below what would have been a 2005 price. If not, the reductions come pretty quickly, and even then they don’t sell. The homes that are actually selling are the cream of the crop — really nice houses in move-in condition — and they sell at just below the 05 prices — maybe off 5-10%. At least the buyers are getting quality even if the price isn’t right.
The real market in my view is the mass of unsold average homes. What is the market clearing price for these today? I don’t know, but it’s already a lot lower than 10% off last year’s price.
This is the pink elephant in the room that none of these fake prognosticators seems to notice. Anyone can track declines in asking prices online, except for them, apparently.
I track prices in my Boston neighborhood. Peak prices sold at 50% above assessment in late 05. Now transactions are consistently -5 to 10% above assessments (assessments haven’t changed much, if any 05 till now).
In other words, most transactions are down 15-20% already. I expect they’ll fall another 20% as homes are sitting for months around us.
Lemme put it terms Massachusetts people can understand: You know the “soft landing” JFK Jr.’s plane had? It’ll be that kind of “soft landing” for house prices.
LOL!
Jr. suffered a bout of “get-home-itis,” a malady that has killed many a pilot.
Not to mention long-distance Wednesday-before-Thanksgiving commuters up I-81 or I-95. Sorry, Ma, can’t make it.
‘This could help repair our cost-of-living disadvantage,’ Clayton-Matthews said. ‘Once again, we could be a state that’s pleasant to live in and also affordable.’
What a joke. It will take 8-10 years for prices in Boston to become affordable. Then they will start to go up again. Calyton-Matthews is saying that the boom-bust cycles are good.
10% decline = there are lies, bigger lies, and then there are statistics. We are already experiencing 10-20% ~ and the music just stopped.
Pleasant to live in? Affordable? Wait, this is still Taxachusetts we’re talking, right?
Every inhabited place on earth is affordable. Someone obviously can afford to live there.
The reason some places are more expensive than others is either incomes are higher, or people are willing to sacrifice income in return for some sort of local amenity.
In any place which generates its own wealth (i.e. not places like Aspen or Monaco), the housing market must adjust to local incomes in the long run. Otherwise there will be nobody to sell to.
“The reason some places are more expensive than others is either incomes are higher, or people are willing to sacrifice income in return for some sort of local amenity.”
A third reason, which may not be so long-run, is that some people are willing to live with a higher risk of bankruptcy for the pleasure of living in a nicer area.
“Taxachusetts?” Actually Massachusetts is nowhere near the worst taxed state anymore. With a flat income tax and proposition 2 1/2 it’s fairly tax friendly compared to some others. I used to think I’d retire somewhere else, but when I crunch the numbers I realize my best option may be to stay right here.
With more reasonable property prices, it could be affordable to new residents. We’ve seen all this before, and not that long ago. It can get affordable in a big hurry. I bought a condo in Boston in 1991 for $64,750, nearly 50% below it’s price 3 years before. That’s a 50% drop in just 3 years. Things bottomed in 1992. I know because my neighbor paid $55,000 for his bigger unit in 92. Note that these are nice condos in an antique rowhouse in a trendy section of town. The $55k unit sold last year for $469k.
An important historical note. That moniker “Taxachusetts” became popular back when the tax on UNearned income was 12% from the very first dollar. Now all MA state income tax is treated equally, and taxed at only about 5% (?). One of the reasons I moved out of MA was that my income was starting to be largely UNearned, and I didn’t like that 12% stuff. Very senior-unfriendly, too.
It’s 5.25% and there’s a huge argument over whether to lower it (voters passed a reduction to 5% some years ago but the Legislature stalled it.)
In terms of percent of income paid in taxes, MA is actually in the lower range, because incomes are much higher here than in many places. But not high enough to make housing affordable…
This is not strictly true. MA still taxes short term capital gains at 12% - which is why i now live in NH.
“Onandoga County (of Central New York) has the destinction of being one of the 5 highest property taxed counties-as a percentage of home value-in the nation by The Tax Foundation”
The Good Life/Central New York
November/December issue
Former Home on Cape worth $499k according to Zillow: $3000 taxes
Home in Upstate NY worth $230k if we’re lucky: $5000 taxes (we’re not in Onandoga—home similar to ours could costs $6-$8k with much smaller lots)
Massachusetts…you have no idea how good you have it.
One Onandoga town after recent sky high tax increases put out signs asking
“Where’s the Beach?”
“…and if they’re priced competitively - maybe even a little bit below [the market] - that’s the incentive for people to buy.’”
Whatever it takes to sell, is not a price “below the market.” That IS the market.
Sure, but it will also sell if you set the price below that, and it might sell faster. I think (hope) that was the point being made.
This guy means to tell us that fundamentals still matter and that we’re not in a new paradigm of housing economics?
Who could have known?
David Merkel
Goldilocks at the FOMC
11/15/2006 3:33 PM EST
The FOMC minutes were very measured in their language. It has the feel of someone trying to say that they know a lot, but can’t come to a sharp conclusion. Data overload paralyzes. Housing is weakening, but it will pass soon. Labor is tight, but it will pass soon. Inflation is above target, but it will come into our target zone soon (we hope).
Not too hot, not too cold. Just right, kind of like I posited in my piece four months ago, “The Growing, Slowing Economy.” No wonder Fed funds futures are so evenly balanced. No wonder the curve is so inverted.
Where I disagree with their views:
Housing is doing worse than they currently believe.
Housing is having a bigger effect on GDP than they believe.
Inflation is not coming down as rapidly as they believe, because of owners equivalent rent, and maybe, employment cost pressures
We’ll see how this works out. For a few weeks, the market can ignore the FOMC. That in its own right is modestly bullish.
Position: none, but in this story, she doesn’t meet three bears — she meets a three-handed economist.
- Wait until homes pencil out as rentals again.
- Wait until homes are affordable relative to local incomes again.
- Wait until everyone is saying what a terrible investment homes are.
- Wait until anyone who can breath does not automatically qualify to buy any sized home they want.
- Wait until an appraisal does not amount to “hit the number.”
If the above conditions never again occur, I guess I will be priced out forever, just like the Realtors (TM) always warn about!
Sorry — this post was supposed to be to formerlahomeowner above. Not that I am claiming to be any kind of genius — just sharing the inherited wisdom which has been passed along on this blog.
Not being flippant here GS, but when was the last time an SFH in Mass. actually worked out as a positive cash-flow rental investment (and the investor wasn’t hoping/praying for appreciation)?
Maybe in Amherst, back in the mid 90’s, pre-boom college town off-campus student housing. As much as we might want to wait until the rent/own numbers make sense for an acceptable house in a good town, I get the feeling that we’ll be waiting a very long time for that in Mass.
I found marginal condos in Boston and Brookline that ‘pencilled out’ as rentals (assuming 20% down, 30 year fixed, not forgetting insurance and taxes) in 1997.
Three years later the bottom dropped out of the college student rental market (BU, Northeastern, Suffolk rolled out thousands of beds worth of residence housing for students as a result of political pressure) - after inflation, rents must have been down a good 30%.
The result? condos and small houses had a 50% in value by 2001. Go figure. Nobody who has been buying has relied on ‘pencilling out’ for a decade.
Um you might want to recalibrate that pencil, depending on what your using for criteria to determine ‘positive cash flow”. You do realize this is the state that in ‘93 the largest seller of homes was the FDIC?Explain your parameters, and I’ll explain how those “flowed” Mr. Sheets. Oh and you’ll learn if you read this board it really “is different this time’, and not in the we’ll be waiting a long time sense.
Sorry that was in reply to northeasterner’s “we’ll be waiting a long time” centuries old historic means don’t matter line.
“Housing is having a bigger effect on GDP than they believe.”
Perhaps housing is having a smaller effect on GDP than they would have thought. Judging from my area, where a large amount of residential construction is approaching completion, construction employment if anything has risen. But the number of large digs is declining, and it seems highly probable construction employment (last check - still rising slowly nationwide) will decline in Q1 2007.
Areas that have an inflexible housing supply are the ones that peak and valley the most, like Boston. If a supply of screwdrivers at Lowe’s can be replaced instantly, there could never be an unfulfilled demand and no bubble in prices. When real estate demand in Boston increases, there is very little increase in the supply. That low flexibility in supply bubbles prices, in an exaggerated way, when demand increases.
The same is true on the way down. Builders are slow to stop increasing the supply. The additional supply caused by the recent demand keeps coming, causing an over supply just as demand is turned of like a faucet.
I don’t know if you guys have seen this yet, but you are going to LOVE this — OFHEO just decided that if home prices go UP next year, the conforming loan limit will rise (that’s the limit on how large of a loan FNM and FRE can buy). If prices go DOWN, they’ll just ignore it and leave the conforming loan limit unchanged. They’ll then net any 2006 decline against any rise in 2007. For more details on what this means, please see my blog. Suffice it to say the government has decided “When prices are going up, we’ll play by the rules. Whey they’re going down, we’ll just call an audible.” I love it!
Here’s the OFHEO press release (PDF LINK):
http://www.ofheo.gov/media/pdf/PRConfLoan2007.pdf
Here’s the analysis at my blog:
http://interestrateroundup.blogspot.com/
Mike, are you right here in Jupiter? where I am visiting my cousin? Do you conduct a housing-bubble-bust celebration at any local hangout on a regular basis? Would love to see a real housing bubble blogger in the flesh !!
“Housing prices will slide by as much as 10 percent from their 2005 peak before hitting bottom in early 2008…”
As a resident of Boston’s western suburbs, I can vouch that prices have already declined 15% in my neighborhood. I think we’re looking at 30% - 40% by 2008.
I hope and pray it is a 40% decline by 2008… but that puts us at what, 2001-2002 pricing? Mass was unaffordable for many back then (I know, I was earning more back in ‘01 than I make today and I still had to buy a fixer-upper condo to make the numbers work).
I live in Montgomery County, MD. I hate to say this as I am a staunch supporter of a housing correction. Lately, I am seeing more and more under contract signs showing up in Bethesda, Potomac, and Rockville areas. I’m hoping these are selling for a lot less than the asking prices. Maybe it’s just a false bottom - anyone else seeing the same?
After about an eight month pause, houses are once again starting to sell here. Inventory is actually down a bit. The timing of the bottom will depend on the economy. If it tanks, housing prices could go down until 2010. If the economy holds, the bottom will be reached by mid-2007.
However long it lasts, the bottom won’t be recognized for at least 8 to 10 months afterward, just like the August 2005 top wasn’t recognized (by the MSM) until May or June of this year. One reason for this slow recognition is the use of YOY statistics.
I notice more sold signs here on Capitol Hill. Exspensive houses $1 Million and up. Go figure.
K Street turnover.
“Give the buyer money to build a garage.”
How about a big discount and let the buyer do what they want with the money! Oh yeah, comps (sorry forgot)…
You can’t give the buyer the money to build a garage you jerk realtor .
You can decrease your property price in order to sell because you don’t have a garage ,or you can build a garage on before you sell so you can get a higher amount .But you can’t inflate the appraisal and than give money to the buyer to build the garage .
Ben, thank you for this blog. I have learned tons of very useful information from the article and the comments.
I have posted in this blog only once. I am usually quite, besides I am not too confident in my English (second language) to frequently post. But this time I need a good rant!
My husband and I moved to Naperville last August…being financially conservative we decided to rent first, check out the market, save for a good down payment, see where my job would be and make numbers work first.
We are looking at places like Wheaton (really expensive) and Glendale Heights (a little bit more affordable). Last weekend I was checking Glendale listings and the background of houses I liked. Well, two examples a house built in 1976 4 bedrooms 2.5 bathrooms just over 2000sqft, sold in 2001 for 195,000; “wishing” price 310,000. Another 1976 house the same model sold in June 2005 for 288,000, “wishing” price 335,000. I know those appreciations do not like too bad if you live in CA or NOVA…but common! I checked the household income (from taxes) of Glendale and it was 40k in 2004…Now how the hell people can afford those prices with that income! my husband and I make much more combined but whenever we buy we want to be able to afford the mortgage even with just one salary and of course, 20%down payment - 30yr fx.
I am somehow frustated because although houses are not moving around this area (West suburbs Chicago) sellers do not realize their prices are too high because of their f***ing greed.
Ok, I feel better
I’ve often wondered about the western suburbs - used to live there.
Naperville seems like it is ripe for a serious fall, moreso than other communities. Glendale heights was already built up before the rush of the past few years, and there are few mansions there. Lots of working people, lots of smaller houses. But naperville was cornfields 10-15 years ago, and now is mostly medium to large VERY expensive homes. If my memory serves me correctly, people bought there not because it was worth it, but because it was Naperville - the up-and-coming place.
You might want to look at Winfield and West Chicago too. Great communities, great schools (though you’ll hear old-timers trash West Chicago), lots cheaper. Things could be more affordable there sooner than Naperville, which has a long way down.
But what do I know..I’m the guy who knowingly moved to South Florida.
SouthFLRenter,
Thanks for the advice. We are thinking to wait and see…maybe to buy in 2008, even before coming to Chicago from Atlanta I knew there was a bubble at national level. Not even, also international level (I’m from Spain, I am telling you the gap income/houses-condos prices is even bigger over there).
Around my “hood” in Naperville (built from the 90’s ’till 2001) I have seen 4 houses with an Open House sign every week end since September, there are all from the 90’s and they are asking almost 400k, no sales yet I do not think they even rised any interest (we pass by and there were no cars, except for the agent’s one, in front of the houses). Another house (quite big, almost new, in a small lot) at the end of our street had a sale sign for a couple of months, then a rent sign, then no sign, now again a sale sign…it’s empty. Market is very low, I think because of the asking prices. Naperville is nice but they are a little nuts expending $120mi in a high school!
Posted ” Buyers not willing to pull the trigger”
Well who could blame them? I want to buy, I have money. But I have learned from past experiance. I am not smart. I little formal education, yet I do know what I do know.
Buyers are constantly pulling the trigger and killing the deal. Perhaps buyers should have their trigger fingers removed. They keep shooting down the sky-high prices.
“About 20% of all the nation’s $2 trillion in mortgages is due to reset in the next 2 1/2 years” Mr Zandi said.
I’m confused. I thought I read, here and elsewhere, that the nation’s mortgages total $9 trillion. And I thought I read here that about 20% of mortgages were due to reset in the next two QUARTERS. Oh, maybe it was only 20% of the ARMs. Still, Zandi’s statement makes no sense to me. Unless the ARM total is $2T … and maybe he meant 20% of the $9T will reset. Help, somebody …
What I’ve read is approximately $1.5 trillion in ARMs are set to rest in 2007; 20% of $9 trillion would make more sense than 20% of $2 trillion.
This Zandi guy is the same one that was qouted about a month ago in the Globe article about the Moody’s study that said that Boston prices were near the bottom, so I’m not sure how much stock we can put in what this guy says.
I am 31 years old, and make way over average income, but could not buy in Boston for the last 5 years and now I have to wait another 5+ years for my income to catch up with the home prices. They expect me to pay $300K for condos that are not even liveable, or commute 30 miles to Boston.
If I can not afford to buy with no responsibilities, no debt and individually over average national average income I wonder who can.
We live an average of 70 years and it is unfair that people like me, first time home buyers who make too much to qualify for affordable housing but too little to buy a decent home, are kicked out of the market for a good portion of their lives to accomodate the people who already bought homes and maxed on HeLOCs. When will it be our turn to have a home and invest? I guess we missed that train…