patrick.net

I suspect that the real difference is the asking price vs selling price spread.

yep they are working over time protecting the perception that the RE market is still inflated and every thing is hunky Dorey. But that is just a facade that the "listing price" projects. The reality of what houses are going for, is the selling price. Here in South Florida they had a good run protecting the market by outrageous list prices, and on the bench accepting offers. Other tricks they used to keep peak buyers at bay, is Cash only offers. They seem to think that the lack of qualified cash buyers will mask the fact that they are the only houses moving and for 25% of the listing prices.

Some neighborhoods they our right abandon, and offer those as sacrificial lambs. Like redlining those neighborhoods to set the floor. O.K. here's the houses that goes for 150K.
Now the market is so fractured down here. You'll find a house going for 120K, right next to a house still asking 295K.

I'm quite certain that in 5 to 10 years time, I'll buy my "Dream House" for 40K to 50K less than I paid for the house I'm in now. It's a nice spread and I like it. but if I had my druthers, I would have bought on the east side of US1. I'll eventually buy there and rent out the two incomes I could realize from this property.
I bought now, because the price was right with the interest rate, that it made mathematical sense, and I was able to stop putting my life on hold. But I'm not done yet.

"I’m just looking for a slightly larger house on a slightly bigger piece of property. People say, “well, you’ll get more for your house, so it’s a wash.” NO! Wrong! I don’t care how much I make on my house, I want to pay the cheapest price possible."

If your looking to trade up, it is a wash. You get more for your house, you pay more for the new house. You pay less for the new house, you get less for your house. Come on, I'm sure you fugured this one out already. I honestly don't understand your line of thinking UNLESS you want it both ways. You want to sell your house for a peak price, and then pay a low price for the new house. Is that it?

NO! I DON'T WANT IT BOTH WAYS!! I want to pay way less than the ridiculous, absurd prices that these delusional people are asking. I thought I made that clear enough. I don't care about how much profit I make, I want to pay in line with the long term trend. I'm I not getting through here? The prices are still f*cking ridiculous.

Fast Eddie says

I don’t care about how much profit I make

If you don't care how much you make, then why do you care how much you pay? Obviously money isn't important to you...

HousingWatcher says

“I’m just looking for a slightly larger house on a slightly bigger piece of property. People say, “well, you’ll get more for your house, so it’s a wash.” NO! Wrong! I don’t care how much I make on my house, I want to pay the cheapest price possible.”
If your looking to trade up, it is a wash. You get more for your house, you pay more for the new house. You pay less for the new house, you get less for your house. Come on, I’m sure you fugured this one out already. I honestly don’t understand your line of thinking UNLESS you want it both ways. You want to sell your house for a peak price, and then pay a low price for the new house. Is that it?

Well just add the numbers. I'll make small numbers to make math easier.
Lets say his house is usually worth 100 dollars, but inflated it is 150.
He wants to trade up into a house which is realistically 150, but inflated 300.

150 - 100 = 50 (he pays only 50)
300 - 150 = 150 (he pays 150)

Both being ballooned he loses on a trade because there is a bigger spread to cover.

I'm starting to wonder if you guys are seriously putting me on.

Fast Eddie, you mentioning about trading up made people questioning your intention. Is it just too high in general or is it too high for you to trade up... that kind of confusion.

I think what you tried to say was the former. And you're not alone. Guess what I heard today in the radio. NAR said existing home sale went up 12%, the price went up 6.4% during last november in DC metro area. The kind of house you can buy under 200K in FL sells 650K here. I think the same goes there too. I bet the area you're talking about is old established area or newly developed area by river where lots of docs, lawyers, and bankers are, and HH income is quite high.

I honestly do not understand your intentions Fast Eddie. What difference does it make to you if you pay an "absurd" price for the new house if you get an "absurd" price for your house? IT EQUALS OUT. If prices are as high as you say they are, then why have you not listed your house for sale to take advantage of these high prices? If some fool offers you a high price for your house, then who gives a rat's butt about the "long term trend"?

No offense, but it sounds to me like your wife wants to move up, but you don't, so your making excuses so you don't have to trade up.

ChrisLosAngeles says

Well just add the numbers. I’ll make small numbers to make math easier.
Lets say his house is usually worth 100 dollars, but inflated it is 150.
He wants to trade up into a house which is realistically 150, but inflated 300.

Why would the more expensive house be overvalued by 100% and the cheaper house only overvalued by 50%? Not sure I agree with those numbers...

HousingWatcher,

To make it simple: let's forget what I can sell my house for, that's irrelevant. Let's stick with the buy end instead. No asset ever failed to revert to the mean. Assets eventually always fall back in line with the long term trend. With that said, when that house listed at $600,000 is eventually listed at $480,000, I will make an offer. Not a lowball offer, but a reasonable offer. Case closed.

tatupu70 ,

I agree. Where are those numbers coming from?

So then why don't you sell your house now before prices decline? You make little sense.

HousingWatcher,

Now I know you're putting me on. omg....

I guess I will never understand your rational. Perhaps you don't want to upgrade, so your making excuses so that the wife does not nag you.

Fast eddie's issue is he cannot afford 600k. He would make an offer on a home at 480k which is reasonable and affordable.

His house he would be willing to break even on.

If the new house drops in value from $600k to $480k, then Fast Eddie's house will fall by a comparable percentage and he still won't be able to afford the new house. He might not break even on his house depending on when he bought it.

HousingWatcher,

I have about 70% equity in the house and can pay it off at any time. The value of my house is roughly 375K by current comparable sales and similar houses. If it falls 20%, that would be 300K. If the 600K house falls to 480K, that's 120K less, which is what it should sell for according to the long term trend. 20% down on 480K is 96K and on 600K, it is 120K. That's 124K difference... on the same house!!! The difference in mortgage balance w. 20% down would be 384K compared to 480K. Factor in a 30 yr. fixed and that expands exponentially. Why is this still a mystery? The houses are still over-priced and the sellers are still delusional.