Great perspectives everyone – We need to share the reality we’re all living b/c I don’t know what’s going on with the media.
I have to agree with Funder. We’re seeing a leveling out in pricing here in Los Angeles. Once nice, decent houses are priced $350K-$450K, they are quickly going into escrow. We just bought a house for $415K and our monthly payment is about what it would cost to rent that same house. I think other people are seeing this too. We’re prepared to ride out a dip in value since this is our family home but investors are back and purchasing around the $300-350K price point. If this trend holds, I’m thinking so will values. Hopefully it will be steady as she goes for interests rates so our values don’t plummet.
Funder also mentioned bank manipulation and I’m wondering the same thing. Banks are turning away so many very well qualified buyers right now for the minor things. I think they are looking to create a surge in demand when interest rates start to make their climb (also noted by raj).
I’m sure hoping the oil prices level off, burst, leak… whatever. My husband is an airline employee and cuts are coming but we’re hoping he’s spared. The terrorist event of 9/11 derailed our economy but it has nothing (I think) the Bush/Chaney energy policy. Anyone finding it ironic that this is happening the last few months the oil-prez & friends are heading out???
I'm sure hoping the oil prices level off, burst, leak... whatever. My husband is an airline employee and cuts are coming but we're hoping he's spared. The terrorist event of 9/11 derailed our economy but it has nothing (I think) the Bush/Chaney energy policy. Anyone finding it ironic that this is happening the last few months the oil-prez & friends are heading out?????
If you’re looking for irony in relation to current oil prices, you might want to consider Ben Bernanke’s actions in 2007 and 2008:
The following chart is of the US Oil Fund…which tracks West Texas Oil. While not the NYMEX Crude that’s typically monitored on CNBC, it still tracks in line with general market pricing. The arrows I’ve added represent the 2007/2008 starting points of Bernanke’s fiddling.
I think you make some valid points. The one thing I will comment on is the part about banks are turning away qualified buyers. You are absolutely correct in this statement, but I disagree on the reason. I honestly believe that true banks like Wells Fargo, and Wachovia would rather not loan money right now. I know that sounds ludicrous, but I believe they would just rather sit back for awhile and sort out what they have on their books, what their write-downs are truly going to be, and then start anew. Unfortunately it costs them too much money to just shut down operations for awhile so they just keep lending money very cautiously and hope that values don’t drop too much while waiting for the mortgage market to rebound. Just my .02.
I see that your saying he reversed the trend by lowering the rate, but wasn’t Bernanke appointed by the Bush admin? I’m such a cynic about these guys only helping each other out…it’s all they’ve done in the last 7 years. The media made that out to be the Fed’s effort to save people who had the resets coming. Like that would have done anything to help…it obviously hasn’t. Especially if every other cost has skyrocketed.
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Thanks for you .02 Chris. I’m sure you’ve got a decent perspective on what the banks may be up to.
I think the bottom has a lot to do with local markets, economies and incomes. If no one is making money, bringing in businesses or commerce…those areas will likely fall farther. There is so much going on in bigger cities it’s bound to level out in a place like L.A. sooner than say Barstow.
Real Estate will have many false starts over the next few years…Rates can only go higher from here and likely go much higher to combat inflation…The only people who profit from buying real estate in those times are cash buyers getting great deals…Normal investors who need banks will sit this out for years…Rates will shoot up and the cashflow numbers will evaporate,lets not forget about the strict new scroll of rules banks are setting fourth for new borrowers…I know in NYC and surrounding boroughs even if RE prices were cut by %50 most buildings (multi family) still would not cashflow…Point being there is still a huge amount of fat to be trimmed off the RE markets…Most of the problem is not only the price but the fact that many NY landlords pay heat for tenants…Cash is king for years to come or invest in technology…But for people looking to get started with little to no liquid capital,good luck…Those days are OVER…And the people you have to thank are the mortgage brokers who fudged all those applications for loans they knew were risky and knew the properties wouldn’t support the payments…But that’s an entire different argument…
Banks are turning people away for minor things because the FDIC and State regulatory agencies have been writing them up for minor offenses and threating to downgrade them; which in turn affect their lending abilities. I work for a small local bank…we don’t do subprime loans and have 3 foreclosures on the books…two of which are deceased people and one is a crackhead; but we must pay for the sins of Wachovia, Bank of America, Countrywide, etc.
Ok, let me first say this. I sorta kinda understand your question and even
why you are asking it, but it is really vauge and no one can really answer it.
If they can I would love to hear them try
(OK I so admit I gotta read all the above post to see what the masses say is the answer)
This sounds more like a 15 sec blurb you hear on TV around 9:30pm in between comercials
that are very loud that say:
“Has the Market Hit the Bottom” Details at 11pm, stay with NBC 10 to find out
Its like asking a priest: “IF God is so powerful can he make a rock so big
That he can’t lift it”
What I mean is Real Estate is VERY local, so hitting the bottom as you ask really depends on where you live.
If you live in say San Fransico CA, prices are still going up and things are still selling fast.
If you live in Miami then prices are still falling and may for a year or two.
To show how its so local the 4 mile main Vegas strip has apprecaited 42% this year already, where as mabe a mile away you can not give away a house.
So I would want to know - What is your specific market that you are an expert in and then ask
your expert opinion “has the market bottomed out in your market”
So does anyone agree with me here or am I the lone ranger…
Wow! very good information. It is good to be able to get your information from those who are out there buying and selling, who know what the market is actually doing. :cool
I agree with wallacehobbs. Your real estate market IS your local market. I’m in Miami Florida, nuff said with that. LOL. Looks like things will be close to the bottom come mid next year. In some of these markets the “bottom” will be the bottom for some time. There wont be this quick bounce back up like some think.
There are some great resources online which give you some pretty thourough market research and evaluate which markets are stable ( between buyers and sellers) and which markets to stay away from.
Saying that, it is impossible to determin or predict when a market will bottom out,but i believe you can get close to a bottom and start aquiring investment properties again. I myself will begin aquiring again in January- feb of 09’
Perhaps a better question that could apply to most markets would be:
What signs should we be looking for that we’ve hit bottom and RE is on the way up? Then we could keep an eye out for the signs locally.
A couple indicators will be when property values stabilize and the days on market (DOM) start to come down. In my area, a lot of homes are staying on the market for a VERY long time. The house we’re purchasing for our family was on the market for about 1.5 yrs. They finally brought it down to a reasonable level. Even a lot of the cheaper investment type SFHs are staying on the market for quite a while too.