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Realtors Are Liars® says

The longer you wait, the cheaper it becomes.

Starve the beast.

You just need to make sure everyone else is on board with that plan.

The foreclosures are *increasing* in your area.
The person you and I both know who will insist you buy is your wife.
She will be getting "advice" from her mother.
You buying a house=cash cow to pay for all those people pushing baby strollers around in Seaside. You are going to be paying for all those people in Monterey Community hospital emergency rooms. Have you been in there to see the clientele?
The longer you wait=the cheaper the house=the less you have to pay for property taxes.
The houses in Monterey especially will fall because the people who want to sell cannot find buyers because those prices are high. A lot of people are still holding out hope that they made money on their little houses. They'll wait stubbornly for the reality to set in.

joshuatrio,

Just out of curiosity, what do you & your wife do for a living? I'd love to move to Monterey, but Monterey seems to have a distinct lack of jobs in my field.

clambo says

The foreclosures are *increasing* in your area.

The person you and I both know who will insist you buy is your wife.

She will be getting "advice" from her mother.

Not the case. My wife doesn't really talk to her mother - her mom is borderline crazy and a habitual liar.

Secondly, my wife is very frugal. If I told her prices were going to crash another 50%, she'd say "let's wait."

The reason we considered it, was because the home are now in the affordable range; with a nice downpayment, we could do a 15 year note and be free and clear, mo/ payment + tax would be about what rent is. Not to mention we like the neighborhood.

clambo says

You buying a house=cash cow to pay for all those people pushing baby strollers around in Seaside. You are going to be paying for all those people in Monterey Community hospital emergency rooms. Have you been in there to see the clientele?

I did some IT work for CHOMP a while back (we had our second child there), and yes I've seen the clientele. Mostly older, white folks. However, if you go to Natividad and SVMH, it's a different story, most likely what you are referring to.

Seaside def. has some sketchy areas - but there are some nice neighborhoods as well.

clambo says

The longer you wait=the cheaper the house=the less you have to pay for property taxes.

The houses in Monterey especially will fall because the people who want to sell cannot find buyers because those prices are high. A lot of people are still holding out hope that they made money on their little houses. They'll wait stubbornly for the reality to set in.

I know the Monterey area is high - so is Carmel. Not arguing with you.

My point is that some of the homes - which are inland just a bit - are in a desirable location are coming back in line with 2000-2003 levels.

We think things through - and don't like to take chances. I guess it was "exciting" that some of the homes that we'd really liked back in the day were coming into our "affordability range."

bmwman91 says

joshuatrio,

Just out of curiosity, what do you & your wife do for a living? I'd love to move to Monterey, but Monterey seems to have a distinct lack of jobs in my field.

I'm in the IT field my wife is in education.

If you work in the computer arena, feel free to send me an email and I can name a few companies that I know are hiring. The pay down here is hit/miss and a lot of the jobs are contract. Finding stable work really takes looking around, but it can be done.

Realtors Are Liars® says

Just sit tight Joshua. Time is on your side. Alot of it.

That's what we've been doing. And we have no problem continuing to do so - I just wanted to get a few opinions.

Just so we're clear here, the max we'd even consider buying is $300k. We even think that is a ton of $$.

We looked back east, and considered picking up a nice town home in the $120-140k range - but then again, that's back east, and we love it out west.

Realtors Are Liars® says

Just sit tight Joshua. Time is on your side. Alot of it.

If I had my life to live over, I would perhaps have more actual troubles but I'd have fewer imaginary ones.  ~Don Herold

Let us be of good cheer, remembering that the misfortunes hardest to bear are those which will never happen.  ~James Russel Lowell

Worry never robs tomorrow of its sorrow, it only saps today of its joy.  ~Leo Buscaglia

Collapsing Housing Prices says

The longer you wait, the cheaper it becomes.

Yes wait until the houses are free, or better yet when they are giving you money to take it off there hands.

I for one do not agree with this strategy. I said it before and I'll say it again, when the market reaches rock bottom, the most desirable houses / areas will be long gone. If you see something you really like and can afford it I say go for it. If your waiting for rock bottom, chances are the houses available will not be areas you want to live and others will badly damaged for being vacant for years. Smart consumers will pick up the most desirable houses in the most desirable areas well before the market bottoms. They will be the first houses to stop falling in value and the first to increase in value. If you don't mind living in a crack neighborhood, then by all means wait until the absolute bottom of the market.

Collapsing Housing Prices says

Why are you realtors attempting to create a false sense of urgency and encourage readers make a rash decision to buy housing when prices are falling?

I'm not a realtor, this is just my opinion. But there's some validity to my logic. If you compare the percentage of the peak of housing from different areas, you will find undesirable areas/houses have lost a greater percentage of value than houses in very desirable areas. Compare the properties that lost 40 or 50% in value to houses that lost 20 to 25% in value. You'll see a big different in the houses/areas. Nicer houses in nicer areas on larger lots will be the first to stop falling in value and the first to increase in value.

TechGromit says

I for one do not agree with this strategy. I said it before and I'll say it again, when the market reaches rock bottom, the most desirable houses / areas will be long gone. If you see something you really like and can afford it I say go for it. If your waiting for rock bottom, chances are the houses available will not be areas you want to live and others will badly damaged for being vacant for years.

I do agree with this - to a point. What we like about this neighborhood is that since it's an older community, the number of foreclosures is significantly less than the newer ones. Also, the residents really take care of their property and it shows. It's a quiet community, big lot, and it's not a stucco factory of boxes littering a field in the middle of nowhere.

Collapsing Housing Prices says

And we're a LONG way from the bottom so there is NO urgency.

Why are you realtors attempting to create a false sense of urgency and encourage readers make a rash decision to buy housing when prices are falling?

No urgency here. We're just browsing. There was no pressure from TechGrommit.

We randomly decided to take a drive through our favorite community, only to be pleasantly surprised that prices had already fallen so much.

3-4 years ago, I told my wife that if we could buy a modest home in that community for around $250k - we'd do it. I still agree with that statement. Now that some of the smaller homes (1700sq/ft) are going for the low $300's - I'm thinking that it may be in the cards.

In other words $250k may not be out of the question.

I like the area so I would be conflicted about it, but prices are falling. How many people has the county been laying off, the city? They are going to be receiving a zillion CONVICTS from state prison (system broke and overcrowded). This means Monterey County Jail will be sucking more money from the budget.
When I was CHOMP Emergency room I saw a lot of the clientele and we differ on that assessment.
As far as how low house prices can go, it's unknown but let us assume that the loss of value stops. Why and when would the freefall end? When employment and wages RISE in Monterey. When will this happen? Will it ever happen?
What will happen if wages rise? The Federal reserve will react to this by raising interest rates to combat inflation.
So, there will be rising interest rates which will put pressure on house prices down some more.
I know this all seems too incredible and too insane to be true, but like a tsunami or earthquake or other event it is true because it is happening now.
Do you believe in job growth and wage growth when you look around at the numerous slack-jawed illiterate teenagers shuffling around the malls?
But, the quality of life in this area will attract people from other places who have some dough to spend.
They just won't be spending as much as they are asking for when the sellers are hoping for bubbles that never come back.
I know some of these old timers who are unable to accept what happened. They won't lower their prices and they are sitting where they don't want to live and they are still wealthy.
When they die their heirs will sell at the lower price that their houses are really able to bring.

clambo says

I like the area so I would be conflicted about it, but prices are falling.

We do too. But yeah, you can't buy a house based on emotion. Although, there will always be a little emotion mixed in with a big purchase like that.

clambo says

How many people has the county been laying off, the city?

I do often wonder when the next shoe to drop will be. This is regarding state workers and retirement plans. It's not sustainable.

clambo says

But, the quality of life in this area will attract people from other places who have some dough to spend.
They just won't be spending as much as they are asking for when the sellers are hoping for bubbles that never come back.
I know some of these old timers who are unable to accept what happened. They won't lower their prices and they are sitting where they don't want to live and they are still wealthy.
When they die their heirs will sell at the lower price that their houses are really able to bring.

Yeah, it's a great area. But that's the million dollar question, where is the bottom? The downtrend has resumed, and the economy has not recovered. Lots of peak bubble buyers in this area too, makes me wonder if they'll default, or just continue making payments.

joshuatrio says

Lots of peak bubble buyers in this area too, makes me wonder if they'll default, or just continue making payments.

The bigger issue is whether or not the banks will actually foreclose on these houses & make them available to the market. Everyone in the area could be delinquent, but if the banks don't do anything about it, it doesn't help to lower prices very much.

Collapsing Housing Prices says

Prices are falling irrespective of what home-debtors do.

And for that we can all be thankful.

The main point of contention seems to be how far they will fall, and how fast. Right now, the answer to both is "not enough" thanks to deliberate manipulation of the market. Will that change? I don't think so, but that is nothing but a guess.

joshuatrio says

I know the Monterey area is high - so is Carmel. Not arguing with you.
My point is that some of the homes - which are inland just a bit - are in a desirable location are coming back in line with 2000-2003 levels.

Not that high as you think when you roll back to mid 1990. The people back then were not mega millionairs or something. I would do some research on what prices were in say 1997 vs 2000/2003. The closer you get to 1997 prices plus 30-35% the more cushion you have against price drops.

Most homes around that area were going for around $100-120/sq ft or so back in 1997. Therefore you were looking at $205K based on 1700 sq ft. Factor in 35% max appreciation since 1997, your looking at $275-300K. FWIW, around $300K your pretty much safe...with only $25K risk exposure. Avoid/reduce the risk by offering less.

GameOver says

IGNORE this realtwhore DRIVEL.

Skip time... no time like the present. Offer less! much less!

Collapsing Housing Prices says

bmwman91 says

Collapsing Housing Prices says

Prices are falling irrespective of what home-debtors do.

And for that we can all be thankful.

The main point of contention seems to be how far they will fall, and how fast. Right now, the answer to both is "not enough" thanks to deliberate manipulation of the market. Will that change? I don't think so, but that is nothing but a guess.

FALSE.

The point is that you're advising people to buy housing when prices are falling.

lol

Please take a chill pill. I am not telling anyone to do anything. Not everyone that disagrees with the hyper-bears is a satanic ratbag realtor.

GameOver says

For every single house on sale in the open market there are about another 157 being held off the books. At the same time, the pool of qualified buyers keeps SHRINKING.

What about the possibility of the government selling off these properties to large institutional investors, further screwing over the citizenry? There have been a few threads in here discussing this.

thomas.wong1986 says

Not that high as you think when you roll back to mid 1990. The people back then were not mega millionairs or something. I would do some research on what prices were in say 1997 vs 2000/2003. The closer you get to 1997 prices plus 30-35% the more cushion you have against price drops.

Most homes around that area were going for around $100-120/sq ft or so back in 1997. Therefore you were looking at $205K based on 1700 sq ft. Factor in 35% max appreciation since 1997, your looking at $275-300K. FWIW, around $300K your pretty much safe...with only $25K risk exposure. Avoid/reduce the risk by offering less.

Yeah, I spoke with a couple who had lived in this area their whole life (in Marina), and they said that it wasn't too long ago that a standard 3/2 home ran around $90-120k. This was probably back in the 90's.

The $250-300k range seems to be an acceptable level of risk in the neighborhood we are considering. If we could do $250k - I'd gladly sign the papers today, just because a DP of only $25k would bring the mortgage to what I pay in rent - which includes taxes (20 yr. fixed). Not to mention I could paint the walls whatever color we choose - lol, jk. But the benefits of having a full acre, and being in a warmer climate would be great.

"If your offer doesn't offend the seller, it's not low enough" : )

Collapsing Housing Prices says

That simple means that those areas that have fallen the least have much further to fall.

To assume prices will continue to fall forever is just the same type of lunacy to assume that prices will raise forever during the boom.

joshuatrio says

There was no pressure from TechGrommit.

BUY NOW! Or be priced out the market forever. :)

GameOver says

For every single house on sale in the open market there are about another 157 being held off the books.

I've mentioned this before. How many of those 157 house held off the books are even worth living in? Banks can't keep up with the mowing on there properties, how are they going to keep 157 houses for every house for sale secured? I wager a good 60 to 70% of those houses will be tear downs in 5 years after vandals and copper thieves get in there.

GameOver says

TechGromit says

Yes wait until the houses are free, or better yet when they are giving you money to take it off there hands.

I for one do not agree with this strategy. I said it before and I'll say it again, when the market reaches rock bottom, the most desirable houses / areas will be long gone.

IGNORE this realtwhore DRIVEL.

For every single house on sale in the open market there are about another 157 being held off the books. At the same time, the pool of qualified buyers keeps SHRINKING.

True, please keep in mind that we haven't made a decision to buy - but now that prices are starting to line up in areas that we really like. We are really pleased that purchasing isn't out of the question - at least it's not to much further out time-wise.

i haven't bought yet. i'm glad i've waited.

i used to be in the more moderate camp: "if it's affordable, then go ahead and buy".

i've moved to the more bearish camp: "i'll buy when prices stop falling" because
1) while i could buy a nice house at today's prices, i feel they are still over priced.
2) prices are still dropping. i'm in no hurry so i can afford to wait it out

last year, in my price range, there were houses on the bad side of el camino. this there are houses on the good side of el camino for the same price. next year i expect to find larger houses on the good side in my range.

the price drops are very slow (takes years and years and years), but steady.
most people don't realize this, if they did i suspect they too would wait.

Hysteresis says

i've moved to the more bearish camp: "i'll buy when prices stop falling" because
1) while i could buy a nice house at today's prices, i feel they are still over priced.
2) prices are still dropping. i'm in no hurry so i can afford to wait it out

last year, in my price range, there were houses on the bad side of el camino. this there are houses on the good side of el camino for the same price. next year i expect to find larger houses on the good side in my range.

1) Agree, but if prices in a particular area that you like came back into historical norms, would you consider? Or do you think that with the economy in shambles, we are going to drop well below where we currently are ?

2) Same here, no rush. But the fact that we can comfortably afford where we would like to live is nice. Plus with a couple kids in the mix, having a large plot of land for them to roam around is pretty cool too. Beats a 10x10 backyard with a patch of grass.

Again, just playing a little devils advocate. I'm not implying housing has bottomed - just more on the lines that things are starting to line up in certain areas where I live. Looking/considering may not be out of the question.

Rising tides lift all boats, or falling tides sink all boats. if you see all avenues for capital investment increasing in value, real estate even if it is weighted down with the anchor of supply will still eventually rise. Cash flows to the most worthy investments. If a investor can make a better profit by buying a house and renting it they will buy it over the alternatives that offer a lower ROI, even if there is a ton of houses. Keep your eye on the ROI relative to other investments that will tell you when to buy. If high inflation is in our future housing prices will increase and so will your interest rate. It seems even the best investors have a hard time timing the markets perfectly. My 2 cents is don't focus on timing the market perfectly focus on buying better than the average(which with housing needs to incorporate: price, interest rates , incomes at the time,inflation, rents and your market area particulars). When your preparations meets opportunity take action. Pulling the trigger is sometimes tough especially in selling. buffet says something like when others are fearful be greedy.. when others are greedy be fearful... measure the fear greed concensus. best of luck