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Scores of realtors® are throwing out the term "buyers market" hoping to lure buyers into purchasing the ever increasing inventory of overpriced $hitboxes that are currently on the market.
But most housing bears still aren't buying it. Is it because homes are still way too high in value? Or do you think it's just too early to say the buyers now have the advantage?
At what point would you call it a "buyers market?" What will you look for?
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Unless the seller is crying, I ain't buying!
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A buyer's market in my own definition is that period before and after the true bottom where buyers have the most pricing power.
I don't think it's a buyer's market now; at least not in Marin. It's not a seller's market either. It's just neutral, with very thin volume and piling up inventory. But buyers don't have pricing power yet as sellers still have not significantly dropped their prices. But sellers don't have pricing power either, because they're not selliing their homes at the asking prices.
It's a classic bid/ask spread gap. No one can make the market. Eventually, something will give, and judging by the rising inventory, we all know which way it's headed.
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Pre-bubble pricing is a must! And PLEASE don't show me anything BUILT, BOUGHT or RE-FINANCED from 2001/2000/1999 on!
Please do not waste my time with your delusional Craigslist "50K" BELOW MARKET VALUE! (If you couldn't sell it at the 50K+ price) how can this be "below" it!?
This may or may not be the thread everyone gets really passionate about (but it is should be). Everyone here has paid their dues wether it be by "bubblesitting" or being ousted from a rental so the owner could sell it for major major bubble bucks or through countless hours of research!
At 47 years old I'm just not in a place where I feel I can afford to make a $100,000 mistake! (Or a 250K+ mistake). I don't know there's EVER a "right" age to do that. It's especially important to those nearing retirement or being in the position of taking care of parents and paying for weddings and college at the same time. Even though sentiment has turned markedly and "price reductions" are becoming the norm there has not been any where near the correction we need to see for a purchase to make sense. There will be a "suckers rally" and it will be important not to buy into that. Can I suggest sitting back and enjoying the summer of "It" and focusing on friends, family and the holidays around the corner? 2006 has delivered every thing "I" thought it would and then some. Just think how wonderful 2007 is going to be!
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Hampton, VA
DinOR,
GOOD POINT! It takes time we do not have to recover from a $100,000 mistake.
They will have a names for us when we go house shopping looking for pre-bubble prices - "Vultures."
If a fellow bought for $400,000 in 2004, he should be happy to sell for $425,000 in 2007. That is, unless he HELOCed a couple hundred grand. In that case, if he is asking $600,000, he is really playing the buyer for a rube by expecting the buyer to pay off of whatever the seller spent his HELOC on.
The buyer and his realtor may consider me a "vulture," saying I am taking advantage of a down market to "steal" a house from a poor, distressed individual. I say the seller is a jerk, expecting me to impoverish myself to bail him out of his overspending.
I too, am looking ahead to 2007. But we may only have to wait until school starts for the fun to begin!
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nomadtoons's website
This isn't a buyer's market. The term "Buyer's market" doesn't even belong in the conversation when it comes to housing.
So.. my friends, the time has come for me to make an announcement. Many of you have listened to me go on and on and on about someday moving to another state, another city, another town where living is more affordable, and the salaries actually pay for the costs of living.
That time has come. Me and my wife had a serious conversation last night. We are now definantly moving out of the state within a year or less. We haven't decided which city we are planning to move to. Nashville, Asheville, Raleigh Durahm, Chapel Hill, and Richmond are all possibiltites.
So I have to tell you that as soon as we made this decision, my whole outlook suddenly changed from one thing to another. Housing isn't a problem. The cost of living isn't a problem either. The problem is the job situation.That said, I feel better about it because I sent in a few replies to a number of agencies in some of these cities, and heard back from 2 within 10 minutes. They NEED people with my skills badly. The kind of people with my skills that are plentiful and common in California are severely lacking in these areas. So in many ways, I am deeply relieved already.I think finding a job will be easier than I previously thought. I hope.
I am now going to start consolidating, selling, and getting rid of my accumulations of junk and unneccesary items. The move is now more about physical preparation than financial concerns. I've already looked at homes in all of these areas are realistically within our range. We do not plan on buying when we move to wherever. We want to really get the feel of the area first. That and even though homes are extremely affordable by CA standards, they are still overinflated there. The prices will come down there too, hence renting will be like saving at the same time for the future when those already low prices are even lower.
I have no doubt that I will miss it here. I've grown accustomed to the area, the food, the people, music, and weather. But I've also been feeling like I increasingly need to run the rat race for years in order to simply save up enough of a down payment to purchase what I would still consider a sub-par home.That's not a good feeling. Perhaps the prices will fall. But even if they fall 50%, we're still talking 450-500k for an average home, and if the prices fall that much, there will be so much stagnation in the economy that those prices might as well be bubble prices since the economy will be in the shitter. Maybe not. Maybe someone will invent "booble.com"
Our decision to move was based partially on a desire to be near our families and also so that we could live a normal lifestyle with the kind of middle class, back yard BBQ exsitence we grew up and came to expect as a given for those of us who made the effort to suceed.
Perhaps I am totally wrong about all of this. Maybe I'm a quitter. Perhaps things will turn out amazingly well, and all of us would have been able to pounce on those lovely craftsman houses while all the idiots that used IO loans squirmed under their foreclosures. I don't know, I can't predict the future. Instead I am placing my bets that a better future lies in an area that provides a suitable economic situation for it's residents. That's why I'm placing my bets that the Southeast will be a future growth spot for people like me, perhaps the last frontier of classic middle class America as we know it.
I've learned a lot living here. I have come a very long way, worked at numerous companies, honed my skills, tried so many diffrent things, met so many diffrent people with a diffrent point of view. I will use this knowledge for the rest of my life, wherever I go. Whether we wind up becoming residents in Nashville or Raleigh, I'd say the things I did and saw in California were a great benefit and will only help me appreciate what other things life has to offer. I will also appreciate what people in those places take for granted: good schools, roads, affordable living, and homes that are within reach. Even nice homes. I have a new appreciation for the American dream, and I will hopefully find it in these new places. I've been gone for a long time now. perhaps the " new south" is set out for me to rediscover.
I wanted to thank you all for being a great help in educating me. I don't have a high level degree or a comprehensive knowledge of economics either. My decision is what's best for me and my wife. I'll keep you all informed as the time creeps forward.
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MA,
Seriously? Last I heard the Fed Funds futures were at only a 28% chance of yet another delicious raise.
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Headset,
So good to have you back sir! You've nailed it. Nailed it with the precision that we all expect from "aviation types"! You know one gal that used to post here *athena* was fond to say, "No, I am not interested in buying you maxed out credit cards". Another one of her gems was, "Making someone else's retirement (one payment at a time)".
The fact that I'm unwilling or just plain unable to afford to pay off your trip to the Bahamas, your brand new SUV, kids college and mom's well, ahem "augumentation" shall we say makes ME the bad guy?
Yeah sure right whatever. I'M the Vulture, I'M the bad guy.
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nomadtoons's website
Guys,
Again I appreciate all the advice and comments. The decision was almost a 50/50 split over family being closer and cost of living. Many of you were right. I was bitter over the situation. After talking with a few of these agencies in these cities ( one in Nashville, one in Raleigh) I'm actually pretty excited because it will be cool to go to a job I enjoy and have the paycheck go somewhere besides a mortgage.
I plan on having a garage for my classic car, a small workshop, a garden, and a screened in porch. Maybe a house built in the 30's, like an old farmhouse. I realize that there will probably be wal-marts, Home depots, and Cracker Barrels galore. I also worry that I might have to order my favorite beer online. But these are small things and I'm sure within a year I'll get used to it.
You know what's funny? I already feel about 200% better now that the decision has been made. I do plan on enjoying it here, but hopefully we'll be moving during the torrential rainy season so it won't hurt as bad when we do skidaddle.
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A buyer's market is one in which the the sellers are desperate.
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I doubt prices will go back to pre-bubble level. I think they will retrace at most 50% of the gains.
However, I cannot ascertain the starting point of the boom.
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It’s a classic bid/ask spread gap. No one can make the market.
Just like the housing futures market. ;)
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Markets are reacting to rising chance of another rate hike. Indicators today revealed the strongest inflation measured in over 10 years. I think oil prices are finally working into the inner economy...it just took some time to squeeze all the way through.
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RE is going to have a large impact on the job market as more realtors®, mortgage brokers and construction workers are laid off as the market continues to slow down.
Reflexivity - housing layoffs will further depress prices, causing more layoffs and more price reductions.
When it comes, it COMES. 8-O
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Peter P,
You've reverted to hard-landing?
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You’ve reverted to hard-landing?
The more I learn, the more I do not know. Bay Area is a funny place.
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Ever aware of the BA bias to the blog I may agree. Perhaps only 50% of the gains will errode in the BA. However for much of the country there's a very real possibility that we'll actually "overshoot" and totally erase ALL of the gains since 1998? Just yesterday I'd read some of the most ridiculous "reasons" that Phoenix won't tank any further. I mean comical.
You know much of the run up in Bio-Tech stocks in the 90's was built on the same basic premise. Wealthy boomers (wanting to be "forever young") will POUR money into lifestyle and actual legitimate drugs. The story (like all good ones) had an element of truth to it. But valuations and reality parted ways by the late 90's as the "pitch script" got stretched a little thin. Looking back, in order to justify the the stock prices virtually ALL male boomers would have to have E.D. Virtually everyone would have to have alzheimers etc. Different asset class, same tired story.
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Allah's website
A buyer’s market is one in which the the sellers are desperate.
Alot of them are already desperate, but it sure as hell isn't a buyers market. Right now, it's a suckers market and Realtwhores are trying everything they can to get to the very last few sheeple who spend too much time in front of the TV set watching reality shows and not nowing a thing about what is happening in the Real Estate. From what my wife told me about one of her co-workers buying last week, I can see that there are still some left.
As far as when it will be a buyers market, when a POS mobile home in a shitty area such as this goes for a few thousand instead of $200K. Then, when that happens, I will re-evaluate whether or not it is a buyers market.
A buyers market is when it is actually a good time to buy and we all know (at least us anti-sheeple folks) that we aren't there yet.
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I'm waiting until a 2b/2b with a decent (5000+) lot can be had for around 250 per sq ft. Over here in the San Fernando Valley prices are already starting to halt, but no one has really reduced prices to a point where we can afford a mortgage.
Most places - Sherman Oaks, Encino, Tarzana - are still about 500+ per square foot, so we'll just wait it out until square footage comes nearer to what we can afford. If they don't go down far enough (which is a possibilty as all these areas are 'prime') then we'll look for somewhere in another, cheaper part of West LA (Palms, culver City etc..).
As far as a 'buyers' market, until prices come down to what I can afford (as opposed to what the sellers want/need) then its neither a buyers or a sellers market for us.
Personally, I'd like to buy a place in Topanga (90290) with a little land. Prices are astronomical at the moment...1.5 million plus. however, even Zillow is showing prices dropping there. Those 2.5 million houses are showing on Zillow for 1 million, and dropping. So, give it a year and some of them may be affordable.
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I'm still calling for more like 100% reversion to 2001 prices in non-prime neighborhoods.
I offer the anecdote of our first BA home, which we purchased for $365K in 1996. Nice safe neighborhood in Redwood City, terrible schools, 3BR, 2BA, 1800sqft, cute little yard.
That home more than doubled by 2000, and now comps on the block are selling for over 1.1M. I'm sorry, 1.1M for 1800sqft is bubble. But even 915K, a 50% reversion, might fly in Menlo Park or Palo Alto, but not Redwood City.
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I’m waiting until a 2b/2b with a decent (5000+) lot can be had for around 250 per sq ft. Over here in the San Fernando Valley prices are already starting to halt, but no one has really reduced prices to a point where we can afford a mortgage.
Currently, you can barely get anything built for 250/sqft in the Bay Area. Construction costs may not go down that much.