Nice to see verification of Nice to see verification of what I said would show up in the stats. Look what the high end did in December. It was a brutal month for the high end. Prices seem even lower than the alleged bottom in Late 2009. Told ya’ll it was coming.
sdrealtor wrote:Nice to see [quote=sdrealtor]Nice to see verification of what I said would show up in the stats. Look what the high end did in December. It was a brutal month for the high end. Prices seem even lower than the alleged bottom in Late 2009. Told ya’ll it was coming.[/quote]
For someone that bought during that alleged bottom and am currently in the refi process I can tell you that our house appraised for 4% less than it did at the time we bought it in early ’09. Not under water but when the chart shows 10% above and I’m hearing 4% below I’m feeling that something is not quite right. Maybe the appraisal was too high then and too low now?
moneymaker wrote:sdrealtor [quote=moneymaker][quote=sdrealtor]Nice to see verification of what I said would show up in the stats. Look what the high end did in December. It was a brutal month for the high end. Prices seem even lower than the alleged bottom in Late 2009. Told ya’ll it was coming.[/quote]
For someone that bought during that alleged bottom and am currently in the refi process I can tell you that our house appraised for 4% less than it did at the time we bought it in early ’09. Not under water but when the chart shows 10% above and I’m hearing 4% below I’m feeling that something is not quite right. Maybe the appraisal was too high then and too low now?[/quote]
I have been told by a few mortgage brokers that refi appraisals tend to be low.I don’t know if the majority of them say that. On the last refi appraisal done for me, the appraiser actually told me he was going to go low to give himself room to go higher in the future. The needed LTV was there so he did it that way.
For someone that bought during that alleged bottom and am currently in the refi process I can tell you that our house appraised for 4% less than it did at the time we bought it in early ’09. Not under water but when the chart shows 10% above and I’m hearing 4% below I’m feeling that something is not quite right. Maybe the appraisal was too high then and too low now?[/quote]
Did you buy a single family home under $300k? That’s the only category that’s 10% above the 2009 low.
In any case, here are two possible explanations:
– refi’s are very subjective, I think there is probably a pretty wide margin for error
– not all sub-markets behave the same… the mid and high tiers are on average flat since 09, so that is comprised of some areas that are up and some that are down, to average flat… perhaps you are in a down area
Its not only submarkets that Its not only submarkets that behave differently. A single house can behave differently. You could have overpaid or underpaid on your purchase relative the market in 2009. For example, the reason my client is up about 200K in a year is not so much appreciation but rather he got the best deal anyone has along NCC on a house like his in at least a decade. Thats the problem with applying summary statistics to individual situations. It doesnt quite work that way.
I will also add that appraisals are very subjective. I know a house that had 2 appraisals on it in January because the first one came in too low for the purchase to go through (I was not a part of the transaction). There was a $40,000 difference between two appraisals done wtihin one week of each other on the same house (price approx $1M). Its not an exact science and is one person’s opinion of value. Nothing more….nothing less.
Statistically, we have Statistically, we have reached inflation adjusted 2000 pricing. I’ve seen plenty of individual sales fitting that criteria over the last few years, but to actually see case-shiller hitting that mark, that’s something else.
Inventory is now the latest Inventory is now the latest buzz or lack of it. Just from these graphs making a simple observation anybody that purchased a home on April 09 or after (that still has it) would have a hard time getting their money they put into it back out of it. Forget even adding the selling fees in. So these homeowners can either hold on or sell for a loss, it looks like most are holding (hanging) on for now. btw, verification comes from your actions not your mouth.
Yes you are very simple. You Yes you are very simple. You can’t say anybody based upon summary stats. Some who bought in 09 will be under and some over. By your logic everyone who bought last year is underwater also. Tell that to my client who bought his last year and could sell for at 100k more today and probably a lot more. Simple thoughts from a simple man
sdr, I’ll take that as a sdr, I’ll take that as a complement. It does seem that you read thru my simple post to fast and did not understand it. btw, that $100k that another one of your so called clients could sell for more than he paid (profit?) I would just call that “chicken feed” compared to the actual profit that I made on each of the last two houses I sold.
Its chicken feed compared to Its chicken feed compared to what that client made on his prior home sales also but not compared to what people have done in the last 12 months. Probably could get $200K or more if he’d sell but the house is too sweet to consider selling. It would take alot more before he would consider it. He would need it because his wife would kill or divorce him if he tried.
Wonderful news, but too late Wonderful news, but too late for me. The high end is still over-priced. If this trend continues we might see some spiraling deflationary effects and, dare I say it even a correction. On the inflationary effects, many won’t see this as a consolation since the value of savings is equally effected.
Anonymous
12 years ago
Jazzman. Do you mind if I ask Jazzman. Do you mind if I ask why you think the high end is over priced?
I keep reading on bubble info that first time buyers will go up first and there is not enough equity for those wanting to buy up. Do you agree?
Ocean an wrote:Jazzman. Do [quote=Ocean an]Jazzman. Do you mind if I ask why you think the high end is over priced?
I keep reading on bubble info that first time buyers will go up first and there is not enough equity for those wanting to buy up. Do you agree?[/quote]
On a basic level home prices remain elevated as a result of fiscal intervention in the form of low rates, tax credits, and other measures. The collapse of the sub prime market effected more the lower end, which is where you’ve seen more of a correction due to high foreclosures rates. The high end has to some extent in my view remained insulated from the carnage, both from the perspective of subprime lending and the treatment of distressed loans. To see this first hand, you just need to research listings and attend viewings. Inventory is low, especially quality homes, themselves easily absorbed by sufficient demand armed with cheap credit, to buoy prices, or as some might say, create the illusion that price stability is here at last. On a more subjective level, it never ceases to amaze me that many sellers still believe their homes hold such values, but more amazing is that so many buyers are clearly prepared to pay these prices. You only need to turn back the clock 15-20 years, or look in other parts of the country or world to realize distortions and patterns have emerged. The subject can fill a book, and has …many of them.
I hear the same about the move up market remaining stagnant, and my belief is home prices across the board will remain static for potentially a long time.
I agree with Permabear and I agree with Permabear and Jazzman that it seems reasonable that more lower prices on the high end are coming. Most realtors will tell you otherwise. This is inline with your gut feeling and I will tell you why.
The upper price in the high end and super high end($2mm+) is falling further than the mid priced market. The people who buy in the high end are generally not first time buyers are buying up and are generally selling another home.
I believe that the majority of homeowners buying up don’t have enough equity( see link below) to sell their house (pay a Realtor 6% and put 20% to 25% down on a new loan). They would need 26% to 31% to buy up.
To get the buyers back in areas like LJ , RSF and beach markets you will need 36% equity and additional savings of another $300,000 to $400,000 to buy up in RSF. Lack of supply alone will not cause prices to rise consistently. We need more qualified buyers. Also check out this chart I recently saw on another blog on post bubble momentum lows that Rich discusses? Go to page 4 http://www.whitehouse.gov/sites/default/files/microsites/ERP_2012_ch_4.pdf
I would like to add to Jazzmans comment that the highend has unbelievable headwinds. Besides the headwinds of negative equity there is a subset headwind. Average Mortgage Debt.
Corelogic states. “……..Average Mortgage debt balances grew at a rapid pace from 2001 to 2007, one that far exceeded growth in real income during this period.” U.S. mortgage debt averages are at the same level as 2006. While bebt remained high average housing prices fell 35%. We have not been deleveraging.
In these times I can’t really In these times I can’t really understand the finance so I had to get some help online. I find it pretty awesome because while we do that you can learn so many things! I find that the index is now showing so good.
Nice to see verification of
Nice to see verification of what I said would show up in the stats. Look what the high end did in December. It was a brutal month for the high end. Prices seem even lower than the alleged bottom in Late 2009. Told ya’ll it was coming.
sdrealtor wrote:Nice to see
[quote=sdrealtor]Nice to see verification of what I said would show up in the stats. Look what the high end did in December. It was a brutal month for the high end. Prices seem even lower than the alleged bottom in Late 2009. Told ya’ll it was coming.[/quote]
For someone that bought during that alleged bottom and am currently in the refi process I can tell you that our house appraised for 4% less than it did at the time we bought it in early ’09. Not under water but when the chart shows 10% above and I’m hearing 4% below I’m feeling that something is not quite right. Maybe the appraisal was too high then and too low now?
moneymaker wrote:sdrealtor
[quote=moneymaker][quote=sdrealtor]Nice to see verification of what I said would show up in the stats. Look what the high end did in December. It was a brutal month for the high end. Prices seem even lower than the alleged bottom in Late 2009. Told ya’ll it was coming.[/quote]
For someone that bought during that alleged bottom and am currently in the refi process I can tell you that our house appraised for 4% less than it did at the time we bought it in early ’09. Not under water but when the chart shows 10% above and I’m hearing 4% below I’m feeling that something is not quite right. Maybe the appraisal was too high then and too low now?[/quote]
I have been told by a few mortgage brokers that refi appraisals tend to be low.I don’t know if the majority of them say that. On the last refi appraisal done for me, the appraiser actually told me he was going to go low to give himself room to go higher in the future. The needed LTV was there so he did it that way.
moneymaker wrote:
For someone
[quote=moneymaker]
For someone that bought during that alleged bottom and am currently in the refi process I can tell you that our house appraised for 4% less than it did at the time we bought it in early ’09. Not under water but when the chart shows 10% above and I’m hearing 4% below I’m feeling that something is not quite right. Maybe the appraisal was too high then and too low now?[/quote]
Did you buy a single family home under $300k? That’s the only category that’s 10% above the 2009 low.
In any case, here are two possible explanations:
– refi’s are very subjective, I think there is probably a pretty wide margin for error
– not all sub-markets behave the same… the mid and high tiers are on average flat since 09, so that is comprised of some areas that are up and some that are down, to average flat… perhaps you are in a down area
Its not only submarkets that
Its not only submarkets that behave differently. A single house can behave differently. You could have overpaid or underpaid on your purchase relative the market in 2009. For example, the reason my client is up about 200K in a year is not so much appreciation but rather he got the best deal anyone has along NCC on a house like his in at least a decade. Thats the problem with applying summary statistics to individual situations. It doesnt quite work that way.
I will also add that appraisals are very subjective. I know a house that had 2 appraisals on it in January because the first one came in too low for the purchase to go through (I was not a part of the transaction). There was a $40,000 difference between two appraisals done wtihin one week of each other on the same house (price approx $1M). Its not an exact science and is one person’s opinion of value. Nothing more….nothing less.
Statistically, we have
Statistically, we have reached inflation adjusted 2000 pricing. I’ve seen plenty of individual sales fitting that criteria over the last few years, but to actually see case-shiller hitting that mark, that’s something else.
Thanks rich as always for the graphs!
Inventory is now the latest
Inventory is now the latest buzz or lack of it. Just from these graphs making a simple observation anybody that purchased a home on April 09 or after (that still has it) would have a hard time getting their money they put into it back out of it. Forget even adding the selling fees in. So these homeowners can either hold on or sell for a loss, it looks like most are holding (hanging) on for now. btw, verification comes from your actions not your mouth.
Yes you are very simple. You
Yes you are very simple. You can’t say anybody based upon summary stats. Some who bought in 09 will be under and some over. By your logic everyone who bought last year is underwater also. Tell that to my client who bought his last year and could sell for at 100k more today and probably a lot more. Simple thoughts from a simple man
sdr, I’ll take that as a
sdr, I’ll take that as a complement. It does seem that you read thru my simple post to fast and did not understand it. btw, that $100k that another one of your so called clients could sell for more than he paid (profit?) I would just call that “chicken feed” compared to the actual profit that I made on each of the last two houses I sold.
Its chicken feed compared to
Its chicken feed compared to what that client made on his prior home sales also but not compared to what people have done in the last 12 months. Probably could get $200K or more if he’d sell but the house is too sweet to consider selling. It would take alot more before he would consider it. He would need it because his wife would kill or divorce him if he tried.
Wonderful news, but too late
Wonderful news, but too late for me. The high end is still over-priced. If this trend continues we might see some spiraling deflationary effects and, dare I say it even a correction. On the inflationary effects, many won’t see this as a consolation since the value of savings is equally effected.
Jazzman. Do you mind if I ask
Jazzman. Do you mind if I ask why you think the high end is over priced?
I keep reading on bubble info that first time buyers will go up first and there is not enough equity for those wanting to buy up. Do you agree?
Ocean an wrote:Jazzman. Do
[quote=Ocean an]Jazzman. Do you mind if I ask why you think the high end is over priced?
I keep reading on bubble info that first time buyers will go up first and there is not enough equity for those wanting to buy up. Do you agree?[/quote]
On a basic level home prices remain elevated as a result of fiscal intervention in the form of low rates, tax credits, and other measures. The collapse of the sub prime market effected more the lower end, which is where you’ve seen more of a correction due to high foreclosures rates. The high end has to some extent in my view remained insulated from the carnage, both from the perspective of subprime lending and the treatment of distressed loans. To see this first hand, you just need to research listings and attend viewings. Inventory is low, especially quality homes, themselves easily absorbed by sufficient demand armed with cheap credit, to buoy prices, or as some might say, create the illusion that price stability is here at last. On a more subjective level, it never ceases to amaze me that many sellers still believe their homes hold such values, but more amazing is that so many buyers are clearly prepared to pay these prices. You only need to turn back the clock 15-20 years, or look in other parts of the country or world to realize distortions and patterns have emerged. The subject can fill a book, and has …many of them.
I hear the same about the move up market remaining stagnant, and my belief is home prices across the board will remain static for potentially a long time.
I agree with Permabear and
I agree with Permabear and Jazzman that it seems reasonable that more lower prices on the high end are coming. Most realtors will tell you otherwise. This is inline with your gut feeling and I will tell you why.
The upper price in the high end and super high end($2mm+) is falling further than the mid priced market. The people who buy in the high end are generally not first time buyers are buying up and are generally selling another home.
I believe that the majority of homeowners buying up don’t have enough equity( see link below) to sell their house (pay a Realtor 6% and put 20% to 25% down on a new loan). They would need 26% to 31% to buy up.
To get the buyers back in areas like LJ , RSF and beach markets you will need 36% equity and additional savings of another $300,000 to $400,000 to buy up in RSF. Lack of supply alone will not cause prices to rise consistently. We need more qualified buyers. Also check out this chart I recently saw on another blog on post bubble momentum lows that Rich discusses? Go to page 4
http://www.whitehouse.gov/sites/default/files/microsites/ERP_2012_ch_4.pdf
Also negative equity is still rising
http://www.worldpropertychannel.com/north-america-residential-news/negative-equity-corelogic-upside-down-mortgage-foreclosure-pipeline-home-foreclosures-strategic-defaults-bank-reo-sales-upside-down-owners-5366.php
Great response Jazzman.
I
Great response Jazzman.
I would like to add to Jazzmans comment that the highend has unbelievable headwinds. Besides the headwinds of negative equity there is a subset headwind. Average Mortgage Debt.
Corelogic states. “……..Average Mortgage debt balances grew at a rapid pace from 2001 to 2007, one that far exceeded growth in real income during this period.” U.S. mortgage debt averages are at the same level as 2006. While bebt remained high average housing prices fell 35%. We have not been deleveraging.
It will be difficult for the highend to accelerate when the buyer moving up is already underwater above average and overextended with mortgage debt 200% above the norm. See page 5
http://www.whitehouse.gov/sites/default/files/microsites/ERP_2012_ch_4.pdf
In these times I can’t really
In these times I can’t really understand the finance so I had to get some help online. I find it pretty awesome because while we do that you can learn so many things! I find that the index is now showing so good.