How much will real estate go down?

[offbyone]

Too many factors to answer this question. If we are talking about bubble zones like california I think the drop will be shocking, more than 30%. Prices have already come down a healthy amount.

So far it seems like all the original predictions have been very short of reality. Look at the subprime write offs, every time we hear that we have got them all taken care of a new round of write offs is announced.

I think one place where you can look for insight on this is the homeowners bailout bill being shuffled around congress. This bill is suggesting banks write off 15% of the value. So I think you have to at the very least expect another 15%.

Housing is cyclical and a good majority of the activity occurs in the spring/summer season. I find it very scary how foreclosures and the subprime fallout is growing and yet we haven't even gotten into the season that most affects this market. In 2 months we will have a much clearer idea what is going on.

 

[snowhite]

may lose another half of value in certain areas(LA,MIA,Vegas)).

 

[mynd66]

So I take it the consensus is prices are going way lower... I'm a first time buyer and I've been looking at open houses every Sunday. I figured I would just go in and low ball anything I liked. I live in North NJ I wonder how bad it will be here. Isn't there a way to compare the personal income with cost of living, past and present, not just nationally but in specific states/cities? Then if you adjust for inflation why can't we see where the prices should be? I mean based on the average income in a certain areas among other variables... no one is going to buy till its affordable. I know whats affordable to me and I'm going to bid on homes based on that no matter how big the spread is. Another thing is property tax... 8-13K/year over here... crazy!

 

[offbyone]

Quote from mynd66:

So I take it the consensus is prices are going way lower... I'm a first time buyer and I've been looking at open houses every Sunday. I figured I would just go in and low ball anything I liked. I live in North NJ I wonder how bad it will be here. Isn't there a way to compare the personal income with cost of living, past and present, not just nationally but in specific states/cities? Then if you adjust for inflation why can't we see where the prices should be? I mean based on the average income in a certain areas among other variables... no one is going to buy till its affordable. I know whats affordable to me and I'm going to bid on homes based on that no matter how big the spread is. Another thing is property tax... 8-13K/year over here... crazy!

My advice to you is to wait until the fall to buy. Wait until we at least get closer to a bottom, wait until the supply is bigger...Historically when there is a housing slump; when we find a bottom we stay there for an extended period if time even after it stabilizes...There is no rush

 

[HedgefundTrader2]

Quote from lasner:

How much lower will real estate go? I love these morons that think real estate has bottomed.

They are talking it will drop another 25% in two years. It's already down 15%. I live outside of Philadelphia and some of my stupid friends bought in Philly...they still think the value of their properties hasn't dropped.

Keep speculating on real estate sitting on the fence and doing nothing. It doesnot matter how much it will go down, it matters can you qualify with 10% down?

 

[Bob111]

Quote from HedgefundTrader2:

Keep speculating on real estate sitting on the fence and doing nothing. It doesnot matter how much it will go down, it matters can you qualify with 10% down?

i certainly can qualify anywhere anytime with FICO score >830 and have no problem to put 10-20% down. but i do have problem with property taxes,like it was mentioned above. in our area, on new condo(starts @ 500K!) my taxes will be 15K a year.15! add utilities,condo fees..man..who can afford this?

 

[Smart Money]

Quote from maxpi:

I was dramatizing quite a bit.

I have seen real estate cycles before, they are so ultra-dependent on interest rates and easy loans. I'm just trying to make it clear to the younger people... the thing is that many move-up buyers need to sell their existing homes to first-time buyers, with the easy credit gone the supply of first time buyers is dried up and the whole process stalls while prices fall, really they probably will fall until first time buyers are abundant again and that won't happen until we have a recession and we forget all the lessons we learned from this bubble [we always seem to] and the Fed stimulates things by lowering rates and lenders ease loan requirements.....

In my neck of the woods, the starter home costs are now slowly rising. Perhaps because with more stringent lending requirements, more people can only afford a smaller house. And people move due to job relocation, divorce, etc., every day.

Note that I don't live in Miami or California, so my market doesn't count.

SM

 

[Smart Money]

Quote from lasner:


Wait until all of these stupid lost sheep see a 10% mortgage rate or better a 15% mortgage. Tell me what happens to real estate then. Say goodnight....

They'll all rent. And rents will go up.

When rates went down, rents when down because the demand for rental property was low.

So if rates go up, rents go up.

Seems like if you really believe that mortgages are going to go to 10% or 15%, the smart move would be to buy a house for yourself now. Even if you believe that housing prices will come down further, if you don't buy, you're subjecting yourself to ever rising rents in that scenario. Its not all about what the house costs...its also about what your monthly payment is.

SM

 

[mgabriel01]

In california --- the 20 year old cinderblock ranch with 1900 sq feet that was build for 60K ---- and rocketd to 500k in 2007 --

is back to 350K after a 30% drop

so the people being hurt by that are ?
speculators
fools
carpetbaggers

and of course...... anyone who took a HELOC to 95% LTV
(but you shouldn't do that anyway if you are using that money to buy a plasma and a new escalade)

Quote from offbyone:

Too many factors to answer this question. If we are talking about bubble zones like california I think the drop will be shocking, more than 30%. Prices have already come down a healthy amount.

So far it seems like all the original predictions have been very short of reality. Look at the subprime write offs, every time we hear that we have got them all taken care of a new round of write offs is announced.

I think one place where you can look for insight on this is the homeowners bailout bill being shuffled around congress. This bill is suggesting banks write off 15% of the value. So I think you have to at the very least expect another 15%.

Housing is cyclical and a good majority of the activity occurs in the spring/summer season. I find it very scary how foreclosures and the subprime fallout is growing and yet we haven't even gotten into the season that most affects this market. In 2 months we will have a much clearer idea what is going on.

 

[gnome]

Quote from mgabriel01:

"... anyone who took a HELOC to 95% LTV... (but you shouldn't do that anyway if you are using that money to buy a plasma and a new escalade)

Hey man... In America, that's a RIGHT!