[quote=SD Realtor]As usual FLU and Esmith are the most accurate in this thread. FLU believe it or not, about the reworks you have identified, I know someone who is in the middle of one right now at terms very similar to what you mentioned. Please note these are only available for reworks. Also there are ramifications such as a 5 year period on that 2% but a delay is a delay is a delay.
As Esmith mentioned many people with plenty of equity are simply passing on selling the homes they are in. Even those without it are doing the same thing. We will continue to see more of this behavior over the next year.
Also price drops are meaningless if the house was not priced aggressively to begin with.
I doubt we are even close to capitulation yet but like kewp said, it will come… not sure when but it will come. [/quote]
I will add this. And no, I am not blindsided in euphoria thinking prices aren’t gonna fall.
But let’s look at something in comparison.
I purchased my home in CV back in early 2004 (again, with some fanagling and negotiation with the seller that fell out of escrow twice and the nearest competing offer was a lawyer who wanted to write his own proposal. (Yes, it did happen in 2004, no the house isn’t defect or something, just the seller had bad timing, didn’t prep the home,and was sort of in a rush to sell- financial crunch…yes i know it did happen to some 2004(
…. Anyway, we walked out with something close to $50k below what the neighborhood was asking for at the time. Fast forward to right now. There is a home on the market for some time now, sitting on the opposite side, current priced around $50k above my purchase price. And it’s sitting, and sitting and sitting, after lowered twice in 20k increments. And it’s been sitting at this “bare bone price, as the realtor says” for some time…And it’s probably gonna keep sitting and sitting because original person bought it back in early nineties and probably isn’t in a hurry to sell. I’m even venturing to bet that if this thing doesn’t sell at this price, he/she may actually do what his across the street neighbor did and lease the place out…Why not? He can float a $1000/month cash flow probably with his original purchase price back in the 90ies just like his neighbor. Not everyone is screaming to unload a home.
And while the argument might be, when the principle on the home is just sitting there earning no money. That’s true. But in this market, $0 gain is better than -20% loss in the stock market. Financially, it might not make sense. But a lot of people don’t think that way.
