is the housing market coming back??????

[kev374]

4 upper end houses in Irvine that I know of sold with minor price reductions in 3 weeks. Are buyers coming out of the woodwork as the bulls said would happen? On the other hand I see new homes coming on the market from sellers with quite a good equity cushion still posting ridiculous prices, for instance home bought in 2002 for $240k listed for $675 etc. Does this mean seller sentiment has still not changed?

[bob007]

some sellers are sitting on a lot of equity cushion. they do not have to sell unless they get the right price. The key to the housing market is the marginal buyers who bought between 2004-2006. The few sellers set the prices for all of us.

[anxvariety]

yes a winner is u

[no_such_reality]

It means four homes sold.

Where the sales arms length?

Did the buyers use 100% financing?

Did the buyers get rebates on the close?

Houses will always sell. Someone will always be buying. The key isn’t whether or not they sold, the key is what did get for what it sold for and how was the purchase paid.

[SD Realtor]

kev347 – My read is that this is a to be expected spring rally. I believe the longterm trend is still flat to downward. I also believe that we are going to see much more variation in the overall market then people care to admit. I think that desireability is going to play a more marked role and that more desireable regions and housing types will hold up better then others. Will that stay true through the entire trend? Maybe but maybe not.

Many posters here are very quick to jump all over people who are considering buying or for buyers who already bought. Maybe rightfully so, maybe not. Even in this very thread there are possible justifications for the purchases. The bottom line is yes there is buying activity out there. That is a fact and it is plain and simple. What is generally not acknowledged on any threads is that there are other factors that are not tangible or measureable in dollars and cents that may drive people to buy. There is almost a certain hostility that I read when some people post questions about buy verses rent in some of the responses.

I am not saying to buy now although yes I did put an offer on a place a few weeks back. I am currently renting and recently signed another year lease. For me however the decision to buy makes sense for many reasons. However, I do it knowing the consequences regardless of which way the market goes.

However as you see there are some homes that are selling. For what reason I do not know. For that matter why is ANYONE buying at all.

The fundamental fact is that the trend will take many years to play out.

SD Realtor

[kewp]

There will always be buyers, indeed.

I’m curious if these are cash-wealthy folks sitting on a mountain of equity that just couldn’t wait (maybe even former owners who cashed out a year or so ago) or just a second round of greater-fools with the standard toxic loan products.

A scary thought is that there is a potential for a ‘soft-landing’ if there is an adequate supply of both of the above for the indefinite future.

Again, I think we really need to have some better statistics regarding how buyers are financing home purchases currently to have a better idea what can happen in the future.

[JWM in SD]

From Calculated Risk…oh it’s coming soon, so stop the handwringing already…don’t wuss out now.

“It has only been during the last couple of weeks that lenders have been tightening some of their lending standards. The New Century and HSBC losses were announced on February 7th, and the Fremont lending changes were announced on Feb 12th.

These changes will probably have a measurable impact on sales in 2007. See: Subprime: The impact on Existing Home Sales in 2007

Since New Home sales are counted when contracts are signed, these changes in lending standards will probably show up in the March numbers (announced in April).

Existing home sales are counted at the close of escrow. So these changes might start showing up in the March numbers if earlier sales fail to close (announced in April) or possible in the April numbers (announced in May).

But I wouldn’t expect any impact on the February numbers to be announced in March.”

[DaCounselor]

“Again, I think we really need to have some better statistics regarding how buyers are financing home purchases currently to have a better idea what can happen in the future.”
____________________________

There was a thread on this site many weeks ago that contained recent sales stats for Carlsbad (I think??) that showed some financing info. I think it was posted by one of the RE agents that surf this site. Maybe if whoever posted that info happens upon this thread they will re-post for you. I recall the stats showed minimal deals that were 100% financed (but don’t hold me to that).

[Farls]

I think after all is said and done the “desirable” areas will get hit hard too. As an example, during the last downturn Magic Johnson sold his oceanfront house in Maui for a $200K loss…and it was not nearly the most expensive home on the street. He wasn’t desperate to sell…that’s all the market would bear at the time….

These areas won’t be filled with as many desperate sellers with 100% financing….or toxic ARM’s as an entry-level area…But, when market psychology and the herd mentality turn even more negative it will bring all prices down.

Just my two cents…

farls

[Reality]

“What is generally not acknowledged on any threads is that there are other factors that are not tangible or measureable in dollars and cents that may drive people to buy. There is almost a certain hostility that I read when some people post questions about buy verses rent in some of the responses.

SD Realtor”

Those reasons are emotional and not supported by financial analysis. When you can rent for half the cost of buying, how does buying make any rational sense?

With the dollars at stake, that’s just stupid.

[kev374]

well, I think buying in this market is very obviously stupid. There is absolutely no rationale at all since as JohnAlt91941 said you can rent for 50% of the cost without any exposure to the risks associated with owning in an uncertain market. Given the immense media exposure about this downturn you have to be living under a rock to not know that the market is seriously on the downtrend, so what then motivates buyers in this market since there are still sales going on.

Surely there aren’t people this stupid. It’s just like the the idiot who pays $10k over sticker for a hot new car instead of waiting 2 months and buying it at MSRP or lower.

[Anonymous]

Buying now does make sense if you believe, like many people out there, that we have hit bottom and that prices will rise again this spring. Most people I talk to (who aren’t on this web site) actually do believe that prices have leveled and that they will either be flat or begin a very slow upward trend that will continue forever. With this mentality, it is easy to see why we are seeing sales.

Furthermore, it is easy to see how shocked these people will be when the impact of possible higher rates, a possible economic slowdown, adjusting ARMS, foreclosures etc. continue to take hold and send the market down further. Last year’s depreciation was based almost entirely on subjective psychology – just wait until some of these objective issues take hold. Unlike the drop this past year, potential buyers will be able to look at objective issues like foreclosures, a stalled economy etc. as reasons for future price drops and when they see no end in sight to these issues they will not fool themselves into buying. As an added motivation, the subjective psychology will also shift downward and slam the market IMO. I suspect that in a year we wont be asking each other why people are still buying.

[mixxalot]

Dead cat bounce

I think it will take several years to play out. I agree- why rush and overpay? I’d rather save and invest. Same for cars- people overpay all the time for cars due to foolishness.

[PerryChase]

Some of the reasons often cited for buying is school for the kids. That’s a stupid reason since you can rent in a better school district than you could buy.

Orange County is about 6 months to a year behind SD in terms of price movements.

[LookoutBelow]

LOL !…Hilarious ! Yes buy..buy ..buy !!!

 

Hurry up or you'll be left behind  

[Author]

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