Housing market about to get much worse...

Quote from drsteph:

IMHO, toughest part of this whole nut here is the timing (like most things).

We all know its cheap(er) and that properties can be picked up for $.50 or so. However, when's the best time to buy, as whatever you buy you are going to be owning for the next 5 years at a minimum in all probablility.

Anecdotally, first wave of dumb money came in in Jan 2007 where they bought at a 10-15% discount off peak. Second wave of money is now coming in and purchasing bank owned and foreclosed properties at good discounts. However, those purchases imply cash burn, which is going to reduce future purchasing support (once you have bought, that's it, even if you need to pass on sweeter deals). New admin's actions seem to indicate that they expect things to be poor through 2010 at least. So why the hurry to buy?

Personally, I'm waiting for tax sales which take a while to filter through the market. There and absolute foreclosure auctions seem to be where the opportunity is.

I say wait until these 2nd wave deals are done. Then the time to purchase may be after June of this year through next year. Anyone want to refute my thesis and tell me why I should buy NOW?
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Seems like sound advice to me, only wrinkle might be if the Senate passes the bill that allows everyone to refinance at 4.5% as long as DTI ratio and credit scores qualify, but LTV would not be a factor which would allow even people underwater to refi.
 
Quote from mach700:

$1,000 homes. Radical cheap

NEW YORK (CNNMoney.com) -- The real estate market is so awful that buyers are now scooping up homes for as little as $1,000.

There are 18 listings in Flint, Mich., for under $3,000, according to Realtor.com. There are 22 in Indianapolis, 46 in Cleveland and a whopping 709 in Detroit. All of these communities have been hit hard by foreclosures, and most of these homes are being sold by the lenders that repossessed them.

"Foreclosures have turned banks into property management companies," said Heather Fernandez, a spokeswoman for Trulia.com, the real estate Web site. "And it's often cheaper for them to give these homes away rather than try to get market value for them."

In Detroit for instance, Century 21 Villa owner Randy Eissa has a three-bedroom, one-bath bungalow of about 1,000 square feet listed at just $500. It's a nice place with lots of light, but it needs a total rehabilitation inside, which Eissa estimates will cost between $15,000 and $20,000. But that's not bad, considering that the home last sold for $72,000 in late 2007, according to Zillow.com.

With prices this low, lenders aren't looking to make any money on these deals. They just want to get these houses off their books, so they don't have to bear the cost of maintaining them and paying property taxes.

In fact, the $500, $1,000 or $3,000 that a buyer forks over often goes straight to the real estate brokers as a commission. And often the lenders have to kick in extra cash to make it worthwhile for a realtor even take the listings, according to Eissa.

"Usually these homes are bank repossessions that the lenders have already tried to sell on the market, perhaps then put up for auction without success and then re-listed," he said.

http://money.cnn.com/2009/01/08/real_estate/thousand_dollar_homes/index.htm?postversion=2009010812
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Isn't part of the stimulus package a $7K buyers tax credit? Does that mean you can buy a house for $1K and get $7K from uncle sam :D
 
Quote from ralph00:

I own a lot of multi-family stuff (all buildings contain 5 or more units) in suburban philadelphia, and I can assure you that demand for apartments is strong as are the rents. Single family housing may be a different story, but multi-family is doing very well.
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Its all the single family people downsizing. Apartment rents holding up well here in Boston, in many cases are higher than SFH rents I think in part because people are trying to cut costs and don't want the higher utilities of a SFH, the landscaping and snow removal costs, and also they are probably trying to save so if they can live in a place with gym or pool included no gym membership fee to pay either. May also allow them to reduce driving with shops within walking distance of apartment buildings vs SFHs. I know a couple that sold their cars, moved from their SFH (which they are renting out) to a condo they bought downtown (200K off asking price of 1.1M) and are using these zip cars a couple of times a month for a run to Costco. Their building has everything they need (though as they bought not sure what their cond fee is but its probably hefty!)
 
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