Just released the data today. 63% increase in Florida foreclosures year over year.
The best real estate guy I ever met told me once. “Kid, it’s right outside your window”
I had no idea what he was talking about at the time (20+ years ago)
So I asked him what he meant? He said…
“The future is happening NOW, you just have to SEE it. People see things everyday and just don’t LOOK AT WHAT THEY’RE SEEING. You don’t have to read The Wall Street Journal, Just keep your eyes open.”
This is all my opinion, and remember your getting what your paying for here. (nothing)
There will be GREAT opportunities here. Just BE PATIENT and wait for the REALLY great deal. THEY WILL COME. But keep your eye on your “window.” Be very careful here. Comps can KILL YOU in this type of market. 6 months ago might as well be 6 years ago.
It will get worse.
(write your “sky is falling” line and insert here______________)
What do you mean by “comps can kill you in this type of market”? Do you mean you find a deal and there is a problem with comparable properties? Is this a reference to something specific to buying foreclosures? Excuse the newbie.
I think he means if you are selling a house in a foreclosure market you house’s price is determined by the comps in the area. If all the comps were foreclosures and sold at 60% of the value guess what happens to the value of your house.
A guy I know just unloaded his preconstruction Florida condo (what the hell was he thinking???) for $249,000.
It was originally listed at $379,000
Dropped to $329,000
Dropped to $279,000
Sold 1 year later for less than he paid. If your buying ANYTHING in that type of market you can get your *ss handed to you. You are trying to catch a falling knife.
Just a warning.
Check out the new video on www.itulip.com about the sub-prime mess.
Scary, scary stuff.
Plus most realtors use comps that are up to 6 months old, the market is not the same place it was 6 months ago and is not the same today that it will be in 2 months. If you commit an offer to paper today that property may lose value before the closing date and if you will have it a little while before you resell it may go down even more before the second closing date. You better damn well figure in a big drop in price into your offer and be buying not at 70% of current market value but go even lower, like 50-60%.
I love falling markets. Just looked on the MLS for a house I had my eye on to live in…price reduction. Was $172,500…now $159,900. I have to get my finances together before I move on this one, will be nice to not have to negotiate as much when the time comes if its still available.
50% below market is not happening up here. Not saying it can’t be done or shouldn’t be tried. I’ve had some great deals, but nothing at a 50% discount. Most of the consistant money makers I grab are homes that I can blow out under $170,000. In the market I’m in there is NOTHING for sale for under $190,000 that you can live in.
So what I do is buy habitable homes for $125,000 or less and put my own ad in on a weekend for HANDYMAN SPECIAL and price it at $165,000. They sell faster than complete rehabs because that rehab is just like the other 8000 homes for sale in my area. There are NO $165,000 homes. I usually get a bunch of first time home buyers who want to buy but I end up selling to builders who can close in 10 days with no bank involved. They end up with it for $155,000 to $160,000 and I’m done. No last minute BS from inspectors, banks, realtors. In and out usually in 30 days from beginning to end.
Becareful with the 50% discount theory here. Find the price point in your market where entry level houses SELL and go from there. Every market has that starting point, the low end homes in good solid neighborhoods, don’t waste your time on trash. Decent cheap homes that need basic repair will always sell, find that price point in your market and buy behind it. There is lots of quick money down there. And entry level is the least effected segment in any down turn.
This shouldn’t be suprising. Florida had one of the biggest increases during the boom. They also had a ton of new condo construction. Condos have a more limited demand than a SFH. Throw in all the ARM’s out there and voila. You have a lot of people that can’t afford their payment anymore. Those same people often have zero equity or are upside down.
The same thing is starting to happen in California where 22% of all sub-prime loans are. You also had a few year period where over 60% of all new loans were ARM’s.
Nationally, this year will have 2.5 times more ARM’s adjust than last year.
I think the safer plays are in markets that missed the boom. People didn’t go all ARM crazy, and there wasn’t nearly as much activity. You have a lot more people with fixed mortgages who are they long-term. That’ll provide a stabilizing influence on prices.
Howdy, so as a OO buyer, how does one buy without getting stung? If we’re having a price correction, what happens when you’re paying “market” and the house drops in value?
Where do you price your offer so you have a buffer for this market loss?
If the home is $189k, where are you safe? I’m figuring if the seller grumbles when I offer 25% less, I’m in the right neighborhood price wise.
First, if the seller grumbles, what do you care? Let 'em grumble.
Second, current market conditions require a low ball offer. Don’t fight it. And if you are buying a property for yourself, with a long term outlook, don’t be overly concerned with a price decline in the near term.
Hard to know, of course. But I see nothing at present to make me think this market will turn to the upside anytime soon. All the vital indicators are pointing down, and sharply. Combine that with the high median price of a house, the property tax rate, and the exorbitant cost of homeowners insurance, and the average Joe and Mary can’t afford to live here anymore. I suspect we have a further drop in prices of around 20%, but then again, every dope can have an opinion. . . :cool