Anyone thinking of buying a home anytime soon better poo or get off the pot. It doesn't look like the $8,000 and $6,500 tax credits are going to be extended since buying activity is fairly hot again. Must be under contract by Apr 30 and close by June 30 to be eligible.
It's busy here, at least for me anyway. Been logging about 4-5 hrs sleep a night the last month. Have 3 sales pending and enough active buyers that I'm showing properties 7 days a week. I'm sure most of you have noticed the quality of my posts has suffered because of it. Half are retirees with cash, the rest first-time or move-up buyers going for the low rates and tax credits. Most are from out of state. The singular commonality among them is none of the out-of-area clients need employment. All retired, on disability, or just "comfortable" financially. If we ever have jobs here, look out! It's a near perfect storm for buyers (I don't mean flippers) right now. Prices will drop a bit more, the inventory is guaranteed to stay high for at least 2 years, but the rates will gradually climb and climb, and the credits will not return. This is the time that we will look back on in 10-15 years and say "I wish I had bought that...".
I live in a decent area where you'd expect homes to maintain their values. There's only so much land near the beach here. But I've been watching about 1100 properties for the past year and a half and the prices on most of them have been reduced multiple times and many are taken off the listing and put back on to reset the "days on market" field on the MLS. Many, too many, are bank short sales that take 6 months or a year to close escrow. I think it's worth waiting for the double dip. What really sucks is how many storefronts that were businesses when I moved here are now empty and for rent. Of all sizes. Even Hooters closed, and they had a pretty awesome location with ocean views and all that. Not some ma/pa shop operation, by any means.
LA isn't very hot still. The inland communities are the foreclosure capitals and shit is mad cheap but are being bought by speculators and cash buyers. They are kind of shitty places to live in anyways.
I've read today that many of those who got modified loans are now starting to default. Prolonging the magic.....
http://www.nytimes.com/2010/03/26/business/economy/26mortgages.html http://finance.yahoo.com/news/Mortgage-delinquencies-rise-rb-1094988933.html?x=0
Circumstances are best for people financing homes right now. Cash buyers are probably jumping the gun if they're not buying the home to live in. Prices will not be going up for many years, decades in some areas. They will drop more in many places. Highly desired areas will flatten out soon. But there's way too many foreclosures in the pipeline for inventory to get scarce enough to drive prices up.
MARIS is right. It's not just the loss in tax credits, but also the upward pressure on mortgage rates that is bound to occur. If you purchase a home, please do yourself a favor and lock in a fixed rate. I also think the depressed market values are a lagging phenomenon. There's been so little new construction that values of existing homes have to solidify and later begin rising.
It’s a new paradigm, and everybody who doesn’t buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase. Renters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas. This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.
Back around 1990 or was it the late 80s, I spent one night deeply focused in psychic vision. I came up with an image for each decade up to 2200. For 2010, I saw the downswing into a depression. For 2020, I saw the nation finally admitting the depression will be permanent, that the nation will never return to what it was. For 2030, I saw that we had shed much of the middle class to adapt to this economic reality, and people were finally living more poorly, after living in pretense in the 2010 and 2020 images. It gets worse, with surprises, but I'll spare you. Anyway, I think it will take a decade to realize that this is permanent (that's mere psychological change), and another decade for the whole nation to change its lifestyle to accept its lifestyle to ever-increasing poverty (behavioral change).
Is it better to look into repos in your area? Also, I read an article stating Bend still ha s a lot of houses that will be repo'd and that will continue to lower, or keep, prices quite low. How think ye?
Meh, I think it's only human nature to think that if it sucks now, it'll suck forever; if it's awesome now it'll be awesome forever. Housing prices crashed because they were way too overpriced. Although local areas will surge or fall, if you factor in the rate of inflation a house bought 10 or 20 years from now will on average cost about the same as it does now, give or take 10%. The real fluke in housing prices has been the past eight years, not the prior 40 or so. There's only so much money a family can spend on a house, just like there's only so much money they can spend on a car or a loaf of bread. The market always eventually corrects itself to reflect that.
Increases in housing prices have to be tied to income growth. When that relationship becomes distorted, you have a market bubble.
Yep. Well, it also has to be tied to home quality too. I mean, the average new home built in 1977 was drastically smaller and less efficient than the average home built in 2007, so you'd expect to pay more for better quality on an average new home now than then. But I guess you could say we wouldn't be buying those higher quality homes if we hadn't seen a corresponding income growth over that time....so you're right.
