DZ, I actually agree with a lot of what you say about the macro markets and that the overall housing still has a lot of room to trend downward. However, all of the bad news, the charts, the debates on where the market is heading, and various scenarios and their applicability, come down to your individual situation.
We have been looking at buying a primary home to live in for years, and tired of renting. As rents have been going up, buying starts too make sense.
When people I know state “general” stats on how much housing has declined in XYZ state or in the US as whole lately, I remind them that I don’t really care about those examples, because I don’t want to live there. We don’t really care what SD County or the City of SD does as a whole, because there are many places we don’t want to live.
We’re looking in very specific zip codes. Lets take 92103 for example. There is VERY little inventory period, even less when excluding really small homes, and the inventory is not exactly quality. I would say 98% of the homes we’re looking at are equity sales. A lot of sellers are NOT motivated and end up pulling their homes off the market. There are few foreclosures or short sales we’ve seen and have been in terrible condition and need significant structural work, not to mention interior work. .
This year we saw an equity sale, first time in over 20 years because someone died. It was in impeccable condition and the home had 10+ above asking offers in 1 week. The home was priced very low to attract attention and for other reasons, but it sold for almost 15% above asking, although I believe still undervalued. It was in a part of 92103 that is considered very desirable and the lot and location were great.
So for us, EVEN though we don’t believe housing has bottomed or even that 92103 has bottomed, I do believe that when GREAT homes come on the market and rarely turn over, people will pay a premium for those homes and they will defy the trends of what’s going on in the greater zip code, and macro.
To some of the other posters points, the NEW tract homes I think will suffer the most, but in 92103 and 92104, they don’t exist. You can’t create more craftmans or homes built in 1950 by skilled labor so I believe will suffer less. Plus for people who want to live in a more urban area with walking accessibility to bars, restaurants, parks, etc, you’re not just looking at the house itself.
DZ, if you want to buy a home to live in ( versus purely for investment), then start getting specific about the zip codes, and the street within the neighborhood, the demographics. The macro stats and all the bad news will just drive you crazy. The downward price pressure may not affect your desired area as much as you’d like so stick to the specifics.
