[quote=HLS]Flu,
You are touching on part of the concern of the report which is that many people cannot qualify to buy (even with almost nothing down) because of lending guidelines…
SO… should it be easier for people to qualify to buy ??
There will ALWAYS tenants, in all parts of the country. The macro housing market is not like San Diego/ So Cal though.
I have a friend in FL who was told he could get $340K for his house last year. It’s been listed for sale and is still for sale. I think it is down to $249,000 and hardly anybody looks.
Nothing wrong with condition. He’s even willing to carry with a down payment.
Many parts of the country have properties sitting. It’s not always easy to find tenants in many areas, even when rent is $300-$500 a month.[/quote]
LOL, HLS, one of my relatives began sending me SFR listings for (mostly) 73120 (and immed surrounds) about six weeks ago. He was sending me several batches per day and I told him to STOP! Before he bombarded me, he asked me, “What do you want in a house?” and, “What would it take for you to `retire’ here?”
I told him (priced for what I thought was reasonable for that area … up to $275K):
– completely flat lot with flat driveway
– min 9K sf lot
– 2+ car garage (not undersized)
– no busy streets
– no HOA or HOA dues <$500 per year
- min 1900 sf
- min 3 br/2 FULL ba
- one-story only
- floor-to-ceiling brick or flagstone FP
- prefer sidewalks but not a deal-killer
- no age preference
- located INSIDE the turnpike
Now this (theoretical) property couldn't even be found in SD County and if it could be, it would cost >$650K.
He send me HUNDREDS of listings in the space of 3 days which I went thru really fast. ALL were priced $98K to $235K with an avg price of about $145K. 95% of them met ALL my criteria and most of them had at least 600 more sf than I needed!
73120 is one of the more “desirable” zip codes in that particular metro area and it is bordered on the east by the (historically) very best area of town (73118 walled covenant). I was literally shocked at the sheer numbers of current listings (esp within the same subdivision)!
And only about 2-3 listings were “REOs” (FNMA) and I didn’t see any “short sale” listings at all!
In the end, I had to ask myself the following questions:
Why so many price reductions on so many of these seemingly perfectly decent listings in decent areas?
Why the long market time and multiple off/market and re-market of so many of these listings?
Why are there SO MANY current listings of homes in established areas?
If I decided after a couple of years that I didn’t like living there and wanted to sell, how long would it take me to sell?
And the bottom line was “Could I get my purchase money back after selling with less than five years ownership? How about ten years? 15?”
I determined the answer was probably no, even if I bought the place for only $100K and rehabbed it with a more modern interior.
This area is in a state where the vast majority of residents are native to that state. They’re not moving anywhere else, today, tomorrow or at any time (except maybe to their plot at the local cemetery where they are already “ready to roll”). The families who transfer in and out of there for educational/job purposes take a loss if they buy a home to live in and then sell it a few years down the line when their gig is up (which is cheaper then renting the same home). They don’t care. They take the loss (mostly RE commission) and move on with life. In addition, this particular residential market is ALREADY approx 48 miles long by 68 miles wide AND THEY ARE STILL BUILDING SUBDIVISIONS in the outlying areas, due to an abundance of flat, buildable land!
I have no idea who is buying in the new subdivisions but surmise it must be the “natives” who are currently renters or will attempt to sell or rent out their existing (urban) house in order to get a new lot in the outlying area which are up to 5 AC.
*****
Here in CA coastal counties, we have always had a “captive audience” for residential RE, due mainly to geography and strict zoning and land-use laws to protect this coveted environment. NOT SO for many flyover states. They don’t have the influx of new residents at anywhere the same rate we do. Therefore, their particular populations don’t view residential RE as an “investment.”
Aside from Props 13/58/193, the above para is THE main reason for the high housing prices in coastal CA combined with the dearth of listings from here on out. This situation will only continue to get more pronounced as the years go by, IMO.
