Predictions on when it will become easier/cheaper to buy a house?

[UCGal]

[quote=LAAFTERHOURS]Let me ask you this. There are areas of this country that havent taken a substantial hit. One of those is the suburbs of philadelphia/ main line area and im not sure if this includes the burbs of Philly in NJ.

Since 2004 prices are for the most part about where they were back then. This doesnt mean that they went substantially up and dropped off again.

Based on the earlier comments about 2015, does anyone think these places will see a dump in prices or do you think bc of the mostly non toxic loan types in these spots that they should slide by?[/quote]
That may be true in the burbs – but I have friends who bought a nice, historic, 3 story rowhouse 2 blocks from Rittenhouse square. They bought for $300k in 2001, it’s worth over $800k now. (Based on a similar home sale on their block, on Locust.) Philly, at least center city, is still pretty frothy.

But you’re right about the western burbs and mainline. I have a friend who rehabbed a house and sold at the peak, in Narberth in 2007. He retired off the profits.

[sdrealtor]

Its different on the Mainline. The Mainline is the RSF of Philly but even the biggest nicest estates rarely exceed $4M. For $1 to 2M you are talking about a really nice home in Villanova, Gladwyne, Penn Valley etc. Most of the folks in those homes can afford them quite handily.

[sdrealtor]

Its different on the Mainline. The Mainline is the RSF of Philly but even the biggest nicest estates rarely exceed $4M. For $1 to 2M you are talking about a really nice home in Villanova, Gladwyne, Penn Valley etc. Most of the folks in those homes can afford them quite handily.

[sdrealtor]

Its different on the Mainline. The Mainline is the RSF of Philly but even the biggest nicest estates rarely exceed $4M. For $1 to 2M you are talking about a really nice home in Villanova, Gladwyne, Penn Valley etc. Most of the folks in those homes can afford them quite handily.

[sdrealtor]

Its different on the Mainline. The Mainline is the RSF of Philly but even the biggest nicest estates rarely exceed $4M. For $1 to 2M you are talking about a really nice home in Villanova, Gladwyne, Penn Valley etc. Most of the folks in those homes can afford them quite handily.

[sdrealtor]

Its different on the Mainline. The Mainline is the RSF of Philly but even the biggest nicest estates rarely exceed $4M. For $1 to 2M you are talking about a really nice home in Villanova, Gladwyne, Penn Valley etc. Most of the folks in those homes can afford them quite handily.

[cabal]

[quote=qwerty007][quote=Cabal] Every month ask 100 people of diverse backgrounds if they think it’s a good time to buy a house. If the answer is 50% positive, we may have turned the corner.[/quote]

I agree with a lot of what you say, but if you asked the same 100 people during the bubble peak what they thought, many would have been positive, otherwise why did they buy, but look how wrong they were.

However, if posters here are representative of the market, then it’s pretty clear that not everyone believes were close to a bottom. The very fact that we are still discussing price declines means that there is still so much uncertainty, which is not a harbinger of confidence. Below is apparently what Robert Shiller thinks.

HOME prices in the United States have been falling for nearly three years, and the decline may well continue for some time …something is definitely different about real estate. Long declines do happen with some regularity. And despite the uptick last week in pending home sales and recent improvement in consumer confidence, we still appear to be in a continuing price decline. ROBERT J. SHILLER June 6, 2009 New York Times

So without going out onto the streets and asking a 100 people, I’d say we have not turned the corner yet.[/quote]

Qwerty – That was just a simple rule of thumb to foreshadow the bottom. I didn’t say it also applied towards predicting the peak. I agree with you it would miss predicting the peak, however at some point on the downside it would surely suggest it, maybe 10%? off peak. Perhaps a better indication is the rate of change towards 50-50 on both the upside and downside. Nevertheless, my general point is not to get too hung up on negative macroeconomic news because they don’t necessarily drive or mean anything. Let’s look at one example. Yes, aggregate SD unemployment is near 10%, but if you scratch below the surface you see only low income areas like El Cajon, Chula Vista, IB, etc are well above 10%, whereas higher income areas like CV, Solana Beach, Poway, etc are only 5%-7%. The majority of folks in El Cajon are not going to be buying a home in 4s ranch, never have, never will.

What if interest rates rise to 7%-8% and homes have started to post a modest increase like they are now? My response is so what. People will find a way. They will borrow a bigger down from relatives, cash out the 401K, take the 40 yr amortization schedule, and opt for the 5/1, 7/1, or IO option to get the lower rate just to get that house. I’m also not concerned about the next wave of alt-a recasts, nor Chinas reluctance to buy our debt. China is in a catch 22 as they hold trillions in foreign debt, with the majority in dollar denomination. Any hint of divesting or unwillingness to buy more debt would instantly kill their investment. I do agree the one wild card is the duration of this unprecedented government intervention bubble, in all its forms. I’ll reevaluate after the outcome of the midterm elections. If the Dems hold power, my sense is it’ll keep going unless the economy show signs of becomes self sustaining.

On your second point, I would disagree that the Pigg pen is a fair representation of the general population. I would say the group is in general more educated, inquisitive, like to challenge the status quo, and willing to do tedious research to better understand a given situation. The danger of course, is being conditioned for so long by all the negative news and becoming permanently brainwashed to reside at least one sigma point to the bear side of the bell curve. The challenge is to stay neutral rather than become polar opposites of permabulls during the bubble. There are a lot of analytical engineer types here who like to crunch numbers and post stats. I say crunch all the numbers you want, that’s a good thing, but balance that against understanding the psychology of humans and what motivates them to take action. Also, most people simply just want a home to raise a family and move on with their lives. They don’t live and breathe RE 24/7 and visit Piggington 3 times a day. Finally, a few Piggs have already purchased while many are apparently actively looking. What does that mean ?

[cabal]

[quote=qwerty007][quote=Cabal] Every month ask 100 people of diverse backgrounds if they think it’s a good time to buy a house. If the answer is 50% positive, we may have turned the corner.[/quote]

I agree with a lot of what you say, but if you asked the same 100 people during the bubble peak what they thought, many would have been positive, otherwise why did they buy, but look how wrong they were.

However, if posters here are representative of the market, then it’s pretty clear that not everyone believes were close to a bottom. The very fact that we are still discussing price declines means that there is still so much uncertainty, which is not a harbinger of confidence. Below is apparently what Robert Shiller thinks.

HOME prices in the United States have been falling for nearly three years, and the decline may well continue for some time …something is definitely different about real estate. Long declines do happen with some regularity. And despite the uptick last week in pending home sales and recent improvement in consumer confidence, we still appear to be in a continuing price decline. ROBERT J. SHILLER June 6, 2009 New York Times

So without going out onto the streets and asking a 100 people, I’d say we have not turned the corner yet.[/quote]

Qwerty – That was just a simple rule of thumb to foreshadow the bottom. I didn’t say it also applied towards predicting the peak. I agree with you it would miss predicting the peak, however at some point on the downside it would surely suggest it, maybe 10%? off peak. Perhaps a better indication is the rate of change towards 50-50 on both the upside and downside. Nevertheless, my general point is not to get too hung up on negative macroeconomic news because they don’t necessarily drive or mean anything. Let’s look at one example. Yes, aggregate SD unemployment is near 10%, but if you scratch below the surface you see only low income areas like El Cajon, Chula Vista, IB, etc are well above 10%, whereas higher income areas like CV, Solana Beach, Poway, etc are only 5%-7%. The majority of folks in El Cajon are not going to be buying a home in 4s ranch, never have, never will.

What if interest rates rise to 7%-8% and homes have started to post a modest increase like they are now? My response is so what. People will find a way. They will borrow a bigger down from relatives, cash out the 401K, take the 40 yr amortization schedule, and opt for the 5/1, 7/1, or IO option to get the lower rate just to get that house. I’m also not concerned about the next wave of alt-a recasts, nor Chinas reluctance to buy our debt. China is in a catch 22 as they hold trillions in foreign debt, with the majority in dollar denomination. Any hint of divesting or unwillingness to buy more debt would instantly kill their investment. I do agree the one wild card is the duration of this unprecedented government intervention bubble, in all its forms. I’ll reevaluate after the outcome of the midterm elections. If the Dems hold power, my sense is it’ll keep going unless the economy show signs of becomes self sustaining.

On your second point, I would disagree that the Pigg pen is a fair representation of the general population. I would say the group is in general more educated, inquisitive, like to challenge the status quo, and willing to do tedious research to better understand a given situation. The danger of course, is being conditioned for so long by all the negative news and becoming permanently brainwashed to reside at least one sigma point to the bear side of the bell curve. The challenge is to stay neutral rather than become polar opposites of permabulls during the bubble. There are a lot of analytical engineer types here who like to crunch numbers and post stats. I say crunch all the numbers you want, that’s a good thing, but balance that against understanding the psychology of humans and what motivates them to take action. Also, most people simply just want a home to raise a family and move on with their lives. They don’t live and breathe RE 24/7 and visit Piggington 3 times a day. Finally, a few Piggs have already purchased while many are apparently actively looking. What does that mean ?

[cabal]

[quote=qwerty007][quote=Cabal] Every month ask 100 people of diverse backgrounds if they think it’s a good time to buy a house. If the answer is 50% positive, we may have turned the corner.[/quote]

I agree with a lot of what you say, but if you asked the same 100 people during the bubble peak what they thought, many would have been positive, otherwise why did they buy, but look how wrong they were.

However, if posters here are representative of the market, then it’s pretty clear that not everyone believes were close to a bottom. The very fact that we are still discussing price declines means that there is still so much uncertainty, which is not a harbinger of confidence. Below is apparently what Robert Shiller thinks.

HOME prices in the United States have been falling for nearly three years, and the decline may well continue for some time …something is definitely different about real estate. Long declines do happen with some regularity. And despite the uptick last week in pending home sales and recent improvement in consumer confidence, we still appear to be in a continuing price decline. ROBERT J. SHILLER June 6, 2009 New York Times

So without going out onto the streets and asking a 100 people, I’d say we have not turned the corner yet.[/quote]

Qwerty – That was just a simple rule of thumb to foreshadow the bottom. I didn’t say it also applied towards predicting the peak. I agree with you it would miss predicting the peak, however at some point on the downside it would surely suggest it, maybe 10%? off peak. Perhaps a better indication is the rate of change towards 50-50 on both the upside and downside. Nevertheless, my general point is not to get too hung up on negative macroeconomic news because they don’t necessarily drive or mean anything. Let’s look at one example. Yes, aggregate SD unemployment is near 10%, but if you scratch below the surface you see only low income areas like El Cajon, Chula Vista, IB, etc are well above 10%, whereas higher income areas like CV, Solana Beach, Poway, etc are only 5%-7%. The majority of folks in El Cajon are not going to be buying a home in 4s ranch, never have, never will.

What if interest rates rise to 7%-8% and homes have started to post a modest increase like they are now? My response is so what. People will find a way. They will borrow a bigger down from relatives, cash out the 401K, take the 40 yr amortization schedule, and opt for the 5/1, 7/1, or IO option to get the lower rate just to get that house. I’m also not concerned about the next wave of alt-a recasts, nor Chinas reluctance to buy our debt. China is in a catch 22 as they hold trillions in foreign debt, with the majority in dollar denomination. Any hint of divesting or unwillingness to buy more debt would instantly kill their investment. I do agree the one wild card is the duration of this unprecedented government intervention bubble, in all its forms. I’ll reevaluate after the outcome of the midterm elections. If the Dems hold power, my sense is it’ll keep going unless the economy show signs of becomes self sustaining.

On your second point, I would disagree that the Pigg pen is a fair representation of the general population. I would say the group is in general more educated, inquisitive, like to challenge the status quo, and willing to do tedious research to better understand a given situation. The danger of course, is being conditioned for so long by all the negative news and becoming permanently brainwashed to reside at least one sigma point to the bear side of the bell curve. The challenge is to stay neutral rather than become polar opposites of permabulls during the bubble. There are a lot of analytical engineer types here who like to crunch numbers and post stats. I say crunch all the numbers you want, that’s a good thing, but balance that against understanding the psychology of humans and what motivates them to take action. Also, most people simply just want a home to raise a family and move on with their lives. They don’t live and breathe RE 24/7 and visit Piggington 3 times a day. Finally, a few Piggs have already purchased while many are apparently actively looking. What does that mean ?

[cabal]

[quote=qwerty007][quote=Cabal] Every month ask 100 people of diverse backgrounds if they think it’s a good time to buy a house. If the answer is 50% positive, we may have turned the corner.[/quote]

I agree with a lot of what you say, but if you asked the same 100 people during the bubble peak what they thought, many would have been positive, otherwise why did they buy, but look how wrong they were.

However, if posters here are representative of the market, then it’s pretty clear that not everyone believes were close to a bottom. The very fact that we are still discussing price declines means that there is still so much uncertainty, which is not a harbinger of confidence. Below is apparently what Robert Shiller thinks.

HOME prices in the United States have been falling for nearly three years, and the decline may well continue for some time …something is definitely different about real estate. Long declines do happen with some regularity. And despite the uptick last week in pending home sales and recent improvement in consumer confidence, we still appear to be in a continuing price decline. ROBERT J. SHILLER June 6, 2009 New York Times

So without going out onto the streets and asking a 100 people, I’d say we have not turned the corner yet.[/quote]

Qwerty – That was just a simple rule of thumb to foreshadow the bottom. I didn’t say it also applied towards predicting the peak. I agree with you it would miss predicting the peak, however at some point on the downside it would surely suggest it, maybe 10%? off peak. Perhaps a better indication is the rate of change towards 50-50 on both the upside and downside. Nevertheless, my general point is not to get too hung up on negative macroeconomic news because they don’t necessarily drive or mean anything. Let’s look at one example. Yes, aggregate SD unemployment is near 10%, but if you scratch below the surface you see only low income areas like El Cajon, Chula Vista, IB, etc are well above 10%, whereas higher income areas like CV, Solana Beach, Poway, etc are only 5%-7%. The majority of folks in El Cajon are not going to be buying a home in 4s ranch, never have, never will.

What if interest rates rise to 7%-8% and homes have started to post a modest increase like they are now? My response is so what. People will find a way. They will borrow a bigger down from relatives, cash out the 401K, take the 40 yr amortization schedule, and opt for the 5/1, 7/1, or IO option to get the lower rate just to get that house. I’m also not concerned about the next wave of alt-a recasts, nor Chinas reluctance to buy our debt. China is in a catch 22 as they hold trillions in foreign debt, with the majority in dollar denomination. Any hint of divesting or unwillingness to buy more debt would instantly kill their investment. I do agree the one wild card is the duration of this unprecedented government intervention bubble, in all its forms. I’ll reevaluate after the outcome of the midterm elections. If the Dems hold power, my sense is it’ll keep going unless the economy show signs of becomes self sustaining.

On your second point, I would disagree that the Pigg pen is a fair representation of the general population. I would say the group is in general more educated, inquisitive, like to challenge the status quo, and willing to do tedious research to better understand a given situation. The danger of course, is being conditioned for so long by all the negative news and becoming permanently brainwashed to reside at least one sigma point to the bear side of the bell curve. The challenge is to stay neutral rather than become polar opposites of permabulls during the bubble. There are a lot of analytical engineer types here who like to crunch numbers and post stats. I say crunch all the numbers you want, that’s a good thing, but balance that against understanding the psychology of humans and what motivates them to take action. Also, most people simply just want a home to raise a family and move on with their lives. They don’t live and breathe RE 24/7 and visit Piggington 3 times a day. Finally, a few Piggs have already purchased while many are apparently actively looking. What does that mean ?

[cabal]

[quote=qwerty007][quote=Cabal] Every month ask 100 people of diverse backgrounds if they think it’s a good time to buy a house. If the answer is 50% positive, we may have turned the corner.[/quote]

I agree with a lot of what you say, but if you asked the same 100 people during the bubble peak what they thought, many would have been positive, otherwise why did they buy, but look how wrong they were.

However, if posters here are representative of the market, then it’s pretty clear that not everyone believes were close to a bottom. The very fact that we are still discussing price declines means that there is still so much uncertainty, which is not a harbinger of confidence. Below is apparently what Robert Shiller thinks.

HOME prices in the United States have been falling for nearly three years, and the decline may well continue for some time …something is definitely different about real estate. Long declines do happen with some regularity. And despite the uptick last week in pending home sales and recent improvement in consumer confidence, we still appear to be in a continuing price decline. ROBERT J. SHILLER June 6, 2009 New York Times

So without going out onto the streets and asking a 100 people, I’d say we have not turned the corner yet.[/quote]

Qwerty – That was just a simple rule of thumb to foreshadow the bottom. I didn’t say it also applied towards predicting the peak. I agree with you it would miss predicting the peak, however at some point on the downside it would surely suggest it, maybe 10%? off peak. Perhaps a better indication is the rate of change towards 50-50 on both the upside and downside. Nevertheless, my general point is not to get too hung up on negative macroeconomic news because they don’t necessarily drive or mean anything. Let’s look at one example. Yes, aggregate SD unemployment is near 10%, but if you scratch below the surface you see only low income areas like El Cajon, Chula Vista, IB, etc are well above 10%, whereas higher income areas like CV, Solana Beach, Poway, etc are only 5%-7%. The majority of folks in El Cajon are not going to be buying a home in 4s ranch, never have, never will.

What if interest rates rise to 7%-8% and homes have started to post a modest increase like they are now? My response is so what. People will find a way. They will borrow a bigger down from relatives, cash out the 401K, take the 40 yr amortization schedule, and opt for the 5/1, 7/1, or IO option to get the lower rate just to get that house. I’m also not concerned about the next wave of alt-a recasts, nor Chinas reluctance to buy our debt. China is in a catch 22 as they hold trillions in foreign debt, with the majority in dollar denomination. Any hint of divesting or unwillingness to buy more debt would instantly kill their investment. I do agree the one wild card is the duration of this unprecedented government intervention bubble, in all its forms. I’ll reevaluate after the outcome of the midterm elections. If the Dems hold power, my sense is it’ll keep going unless the economy show signs of becomes self sustaining.

On your second point, I would disagree that the Pigg pen is a fair representation of the general population. I would say the group is in general more educated, inquisitive, like to challenge the status quo, and willing to do tedious research to better understand a given situation. The danger of course, is being conditioned for so long by all the negative news and becoming permanently brainwashed to reside at least one sigma point to the bear side of the bell curve. The challenge is to stay neutral rather than become polar opposites of permabulls during the bubble. There are a lot of analytical engineer types here who like to crunch numbers and post stats. I say crunch all the numbers you want, that’s a good thing, but balance that against understanding the psychology of humans and what motivates them to take action. Also, most people simply just want a home to raise a family and move on with their lives. They don’t live and breathe RE 24/7 and visit Piggington 3 times a day. Finally, a few Piggs have already purchased while many are apparently actively looking. What does that mean ?

[LAAFTERHOURS]

[quote=sdrealtor]Its different on the Mainline. The Mainline is the RSF of Philly but even the biggest nicest estates rarely exceed $4M. For $1 to 2M you are talking about a really nice home in Villanova, Gladwyne, Penn Valley etc. Most of the folks in those homes can afford them quite handily.[/quote]

Ok I should have mentioned I wasnt speaking of Gladwyn type areas. Those areas have been expensive forever. Speaking more of the Berwyn, Haverford, Paoli, Wayne type areas where the building has been massive the past 5 years. Places that werent the upper tier in the Main line but there has been a trend of people moving further from the city.

To the rittenhouse sq comment, thats a nice location. I would expect those to be inflated. But i think you both get my point. Will the above mentioned areas that havent been hit like the Northern VA, Socal, Vegas, Phoenix and Florida ever come down?

[LAAFTERHOURS]

[quote=sdrealtor]Its different on the Mainline. The Mainline is the RSF of Philly but even the biggest nicest estates rarely exceed $4M. For $1 to 2M you are talking about a really nice home in Villanova, Gladwyne, Penn Valley etc. Most of the folks in those homes can afford them quite handily.[/quote]

Ok I should have mentioned I wasnt speaking of Gladwyn type areas. Those areas have been expensive forever. Speaking more of the Berwyn, Haverford, Paoli, Wayne type areas where the building has been massive the past 5 years. Places that werent the upper tier in the Main line but there has been a trend of people moving further from the city.

To the rittenhouse sq comment, thats a nice location. I would expect those to be inflated. But i think you both get my point. Will the above mentioned areas that havent been hit like the Northern VA, Socal, Vegas, Phoenix and Florida ever come down?

[LAAFTERHOURS]

[quote=sdrealtor]Its different on the Mainline. The Mainline is the RSF of Philly but even the biggest nicest estates rarely exceed $4M. For $1 to 2M you are talking about a really nice home in Villanova, Gladwyne, Penn Valley etc. Most of the folks in those homes can afford them quite handily.[/quote]

Ok I should have mentioned I wasnt speaking of Gladwyn type areas. Those areas have been expensive forever. Speaking more of the Berwyn, Haverford, Paoli, Wayne type areas where the building has been massive the past 5 years. Places that werent the upper tier in the Main line but there has been a trend of people moving further from the city.

To the rittenhouse sq comment, thats a nice location. I would expect those to be inflated. But i think you both get my point. Will the above mentioned areas that havent been hit like the Northern VA, Socal, Vegas, Phoenix and Florida ever come down?

[LAAFTERHOURS]

[quote=sdrealtor]Its different on the Mainline. The Mainline is the RSF of Philly but even the biggest nicest estates rarely exceed $4M. For $1 to 2M you are talking about a really nice home in Villanova, Gladwyne, Penn Valley etc. Most of the folks in those homes can afford them quite handily.[/quote]

Ok I should have mentioned I wasnt speaking of Gladwyn type areas. Those areas have been expensive forever. Speaking more of the Berwyn, Haverford, Paoli, Wayne type areas where the building has been massive the past 5 years. Places that werent the upper tier in the Main line but there has been a trend of people moving further from the city.

To the rittenhouse sq comment, thats a nice location. I would expect those to be inflated. But i think you both get my point. Will the above mentioned areas that havent been hit like the Northern VA, Socal, Vegas, Phoenix and Florida ever come down?

[Author]

Posts