- This topic has 64 replies, 25 voices, and was last updated 17 years, 7 months ago by Anonymous.
April 6, 2006 at 3:12 AM #6457
Thanks to Bob, we are all better informed about the March rally, which didn’t happen.
Bob explains that despite the March slowdown, median price went up. Two factors behind the numbers explain the rising median price. The under-$500K home sales decreased to 45% of sales last month (vs. 55% of sales in March 2005), so the mix of homes sold changed downward. And this is in spite of the under $500K home being half the inventory! Also, seller incentives such as paying closing costs are folded into the financing, raising the sales price by 2%! Now how many realtors even know this, or would tell you this. I admire Bob for his insights, the time he spends to analyze his data each month, and his integrity in keeping us educated. He is a true professional. I’m also very grateful to him and his postings on Realty Times, because it allows us to get an almost 2-month lead on the data: the NAR/CAR will present this same data at the end of April.April 6, 2006 at 8:30 AM #24009
oops – I made a mistake. The fourth line should say “up” instead of “downward”. The mix in sales shifted UP to more expensive homes. Anyway, read Bob’s report to get the whole story.April 6, 2006 at 10:12 AM #24012anParticipant
I agree. I wait for his post every month. It’s very insightful. It helps explain why median price keep on going up even though you see price reduction everyday.April 6, 2006 at 10:15 AM #24013sdrealtorParticipant
A quick thought….do you think the decline in the percentage of homes selling under 500K had anything to do with alot of homes that sold between 475K and 500K last year now selling for 501K to 525K? I don’t know whether this is happening but it just points out how careful you need to be when reading anything into published statisitics.April 6, 2006 at 11:15 AM #24015lendingbubblecontinuesParticipant
Why don’t you e-mail your fellow realtor there and get back to us with the answer?
Meanwhile, I see LOTS AND LOTS of price reductions in just my own small neighborhood in the last two days AND several new listings just today. So much for the spring bounce or “spring-hope-mania” as I have heard it called.
There isn’t “alot” of anything being sold right now, except maybe PAINT for all those new “price reduced” signs going up. Who’s seen those “I’m beautiful inside” signs? Soon those will be changed to “I’m SCREWED inside”
Finally, screw statistics…get out there and look around, take the pulse of the market…every open house I went to last weekend had an agent in it that seemed like they knew they were wasting their time.April 6, 2006 at 11:28 AM #24017anParticipant
That’s a possibility but I don’t think that’s what happening. I’ve been tracking houses around this price range (400k-600k) for over a year now. Listing price this year is at least 5-10% less than last years. Also, the sp/lp ratio is much lower this year than last year as well. That’s why I couldn’t figure out why the median/average price is moving up although my data is saying otherwise. After I read his analysis, it makes perfect sense.April 6, 2006 at 11:41 AM #24019
“This is not due to a lack of homes for sale, the under $500,000 inventory stands at about 8,300 – 158 days supply – or 47% of total inventory.”
The statistics show that the under $500K homes are almost half the inventory. So there’s a lot for the first time buyer to choose from. I don’t know why they’re not buying – waiting on the sidelines, or not able to qualify?April 6, 2006 at 12:06 PM #24022nin_sisParticipant
“The statistics show that the under $500K homes are almost half the inventory. So there’s a lot for the first time buyer to choose from. I don’t know why they’re not buying – waiting on the sidelines, or not able to qualify?”
I don’t often post, but read this forum frequently. After keeping an eye on housing prices in SD for the past 2 years and as a renter, I like to know what I’ll be getting into one day as a first time buyer. I, along with friends and family my age (27-30) who also don’t own property are in a holding pattern. Prices are too high (along with the prop. taxes), ARM loans too risky right now and the knowledge that this whole housing scheme will collapse under its own weight is why us first time buyers aren’t buying. Sure, there is a lot to choose from, but I’m not willing to sacrifice my financial future just to “get in” and own. I highly doubt that in 5 years a $500K home will be worth a million like everyone is trying to convince me. I hear this daily. I’m tired of home owners twice my age telling me that I “missed the boat” or I “better buy now or I’ll never be able to…ever”. It’s just a bunch of nonsense to make themselves feel better about their purchases or to ensure that yes, their home will be worth twice as much 5 years down the road. I’m just fine renting for $1000/month.April 6, 2006 at 12:12 PM #24023
How many people do you know that feel as you do. I get the sense that many would buy if they could just qualify. My neighbor, a renter, said he and his wife were going to an Open House last weekend. I got the feeling they are looking for a good buy, and would buy if they could come up with the money.
What made you and your friends to decide to wait? If you’ve been renting for several years, you were way ahead of everyone else in seeing the bubble.
I’m glad you posted. I wish more people would. I get tired of reading my own writing 🙂April 6, 2006 at 1:22 PM #24026AnonymousGuest
OK, Poweyseller, you’ve convinced me to post. I also am a frequent visiter to this site, but this is my first. We are first time buyers not willing to stretch ourselves financially with a risky loan in order to buy. We are following the market and waitng for a better entry point. I wonder if the Professor could do a poll to see how many people who visit this site are first timers waiting, landlords wondering what to do with their investment properties, or other. How about it Professor? Would you be so kind as to oblige? (to be read in British accent)April 6, 2006 at 2:10 PM #24027nin_sisParticipant
Many people I know are in the same situation that I am…29 years old, married 2 years, salaries well over the average SD income (double that for both of us wage earners at $100K+), however we don’t want to buy a condo for $400K (which is all we could qualify for with a 30 yr. fixed) that is smaller than the place we rent add to that the huge amount of our income for the loan plus taxes plus HOA fees, etc. We would be paying out triple our rent and not see that money ever again even in the form of a refund in April. Buying a house 2 or 3 years ago wasn’t an option because we didn’t have a down payment, don’t have parents who are willing to loan us money, wasn’t married, oh yah and didn’t have a crystal ball. Hind sight is 20/20. Yes, I could have bought with a 100% loan and make out like a bandit today… but darn it, that’s just my luck. We are sitting waiting, but choosing to do other things with our savings, like travel. Also, I have an over abundance of confidence that prices will normalize and by that I mean drop.April 6, 2006 at 2:14 PM #24028uncle_gitParticipant
DING DING DING.
I’m waiting too… actually I’m hopefully moving out of the area – but the area I’m moving too is overpriced as well – so I’m gonna bide my time there too.
I’m going let this hole thing unwind in a spectacular fashion – for a lumbering monster it’s turning around surprisingly fast – and the ARM adjustments have not even started to roll in yet.April 6, 2006 at 3:37 PM #24029MANmomParticipant
We are watching and waiting, too. We bought in fall 1995, at the bottom of the previous cycle, and I remember all the elements of today’s market were in place then, crazy loans, unreal prices, lots of inventory…we bought a new house that had fallen out of escrow three times. We eventually sold that house in 1998 at a good profit, we didn’t think we would be back in San Diego (military). Now that my husband is retired and on to a civilian job, we are waiting for the market to correct. We could afford to buy now, but we are unwilling to over-extend ourselves just to “get in now” because we know that the market is frothy. So we wait and rent at 1/4 what it would cost to buy.April 6, 2006 at 3:44 PM #24030hsParticipant
I agree with you. I don’t believe the price will go up forever. Everything has a cycle. I believe price will go down. Don’t believe those realtors’or home owners’ nonsense and use your own brain.
We could put 20% down and we are qualified for those more than half million houses as first time buyers, but we don’t want to buy at high peak and watch the house lose value.(I don’t believe RE is always a good investment. It depends on timing and your luck.)
We are renting now. Wait and see is the best way to do.April 6, 2006 at 6:14 PM #24032hoo-dooParticipant
Waiting, waiting, waiting.
Just moved from Portland to Orange county. Not the kind of shift one makes without having a better job to go to.
Anyway, bought in Portland in late ’02 and we did very well with the sale last month. Just on the cusp of a slowdown in the Portland market. We didn’t cash out to the tune of $500k like the folks here in OC but I’m pretty happy and feel like we are really lucky.
We’re renting here in Orange county and I’ve been walking around the neighborhood looking at the home sale flyers and I’m noticing lots of price reductions just in the last month. We’re going to sit tight even though the apartment is a bit noisier than I prefer.
If the job goes well we’ll keep an eye on things over the next couple of years. I tend to think that it’s going to be a wild ride down.
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