Will we see a selling panic in housing?

[bob007]

why loan money to people who could not possibly repay them

[Ex-SD]

20% by the end of the year?
I think it depends on:
1) whether it’s a house or a condo
2) the area that the property is located in

There are plenty of new condo’s that are already being sold with 20% reductions in the form of prepaid, association dues, free upgrades, etc. The buyers of these properties are not very savvy because the selling price stays high and that translates to higher, yearly, property taxes and a higher mortgage payment. If they could negotiate the “freebies” as a cash discount, they would be far better off……….but then everyone else who purchased in the same building would be hounding the builder for a rebate and it would establish lower price comparables for the building. If you track the asking prices for condo’s in the more desirable areas of San Diego, you will see that some have already reduced their asking prices over the last six months by 10-20%.

Single family houses in the more desirable areas are probably going to ramp down at a slower pace and my guess is 10% by the end of the year. By September of 2008, reality will probably have set in with most of the people who really have to sell and if they have any real equity in their properties, they will take what they can get and move on………I’m guessing an additional 15% over my 10% prediction for 2007. My guess is that 2009 or 2010 will reveal the bottom which will be another reduction of 10-15% for single family houses. Then, the market will stay flat for quite a few years due to the inability of people with lower credit scores to obtain a mortgage, lack of buyers who can come up with a required down payment and/or prove their incomes to the satisfaction of the lenders who are going to tighten down like a clamp so that this mess doesn’t happen again.

I may be wrong………….but chances are………..I’m correct or darn close to the timeline and percentages.

[Ex-SD]

20% by the end of the year?
I think it depends on:
1) whether it’s a house or a condo
2) the area that the property is located in

There are plenty of new condo’s that are already being sold with 20% reductions in the form of prepaid, association dues, free upgrades, etc. The buyers of these properties are not very savvy because the selling price stays high and that translates to higher, yearly, property taxes and a higher mortgage payment. If they could negotiate the “freebies” as a cash discount, they would be far better off……….but then everyone else who purchased in the same building would be hounding the builder for a rebate and it would establish lower price comparables for the building. If you track the asking prices for condo’s in the more desirable areas of San Diego, you will see that some have already reduced their asking prices over the last six months by 10-20%.

Single family houses in the more desirable areas are probably going to ramp down at a slower pace and my guess is 10% by the end of the year. By September of 2008, reality will probably have set in with most of the people who really have to sell and if they have any real equity in their properties, they will take what they can get and move on………I’m guessing an additional 15% over my 10% prediction for 2007. My guess is that 2009 or 2010 will reveal the bottom which will be another reduction of 10-15% for single family houses. Then, the market will stay flat for quite a few years due to the inability of people with lower credit scores to obtain a mortgage, lack of buyers who can come up with a required down payment and/or prove their incomes to the satisfaction of the lenders who are going to tighten down like a clamp so that this mess doesn’t happen again.

I may be wrong………….but chances are………..I’m correct or darn close to the timeline and percentages.

[Ex-SD]

20% by the end of the year?
I think it depends on:
1) whether it’s a house or a condo
2) the area that the property is located in

There are plenty of new condo’s that are already being sold with 20% reductions in the form of prepaid, association dues, free upgrades, etc. The buyers of these properties are not very savvy because the selling price stays high and that translates to higher, yearly, property taxes and a higher mortgage payment. If they could negotiate the “freebies” as a cash discount, they would be far better off……….but then everyone else who purchased in the same building would be hounding the builder for a rebate and it would establish lower price comparables for the building. If you track the asking prices for condo’s in the more desirable areas of San Diego, you will see that some have already reduced their asking prices over the last six months by 10-20%.

Single family houses in the more desirable areas are probably going to ramp down at a slower pace and my guess is 10% by the end of the year. By September of 2008, reality will probably have set in with most of the people who really have to sell and if they have any real equity in their properties, they will take what they can get and move on………I’m guessing an additional 15% over my 10% prediction for 2007. My guess is that 2009 or 2010 will reveal the bottom which will be another reduction of 10-15% for single family houses. Then, the market will stay flat for quite a few years due to the inability of people with lower credit scores to obtain a mortgage, lack of buyers who can come up with a required down payment and/or prove their incomes to the satisfaction of the lenders who are going to tighten down like a clamp so that this mess doesn’t happen again.

I may be wrong………….but chances are………..I’m correct or darn close to the timeline and percentages.

[PerryChase]

Ex-SD, welcome to Piggington. It’s nice to see new posters here. Your post sounds about right to me. I’m not married to a specified percentage decline, but your post pretty much sums up what direction the market will take.

2009/2010 is the earliest time to buy in my opinion.

I have a friend/acquaintance who moved to LA, bought an expensive house there last year; and because of the housing news, he’s trying to sell his SD house he had previously rented out. He’s asking top price. I’ll be watching his house to see how fast it sells or doesn’t sell. It will be a good gauge of the rate of decline in housing. He bought in 2003 and the house does not cash-flow as a rental. It’d be interesting to see the equity completely evaporate.

Ex-SD, you posted on another thread that homeowners who bought before 1999/2000 will be OK. What level do you think housing will decline to? I’m thinking 2001/2002 nominal prices for SFR, and perhaps 2000 prices for condos.

[PerryChase]

Ex-SD, welcome to Piggington. It’s nice to see new posters here. Your post sounds about right to me. I’m not married to a specified percentage decline, but your post pretty much sums up what direction the market will take.

2009/2010 is the earliest time to buy in my opinion.

I have a friend/acquaintance who moved to LA, bought an expensive house there last year; and because of the housing news, he’s trying to sell his SD house he had previously rented out. He’s asking top price. I’ll be watching his house to see how fast it sells or doesn’t sell. It will be a good gauge of the rate of decline in housing. He bought in 2003 and the house does not cash-flow as a rental. It’d be interesting to see the equity completely evaporate.

Ex-SD, you posted on another thread that homeowners who bought before 1999/2000 will be OK. What level do you think housing will decline to? I’m thinking 2001/2002 nominal prices for SFR, and perhaps 2000 prices for condos.

[PerryChase]

Ex-SD, welcome to Piggington. It’s nice to see new posters here. Your post sounds about right to me. I’m not married to a specified percentage decline, but your post pretty much sums up what direction the market will take.

2009/2010 is the earliest time to buy in my opinion.

I have a friend/acquaintance who moved to LA, bought an expensive house there last year; and because of the housing news, he’s trying to sell his SD house he had previously rented out. He’s asking top price. I’ll be watching his house to see how fast it sells or doesn’t sell. It will be a good gauge of the rate of decline in housing. He bought in 2003 and the house does not cash-flow as a rental. It’d be interesting to see the equity completely evaporate.

Ex-SD, you posted on another thread that homeowners who bought before 1999/2000 will be OK. What level do you think housing will decline to? I’m thinking 2001/2002 nominal prices for SFR, and perhaps 2000 prices for condos.

[JC]

NPR comments this a.m.

On NPR this a.m. it was noted that realtors specializing in foreclosures are doing quite well right now as there are lots of investors looking for bargains.

This may be a stupid question, but what impact (if any) do you think this will have on the correction in our market? Slightly slower decline??

[JC]

NPR comments this a.m.

On NPR this a.m. it was noted that realtors specializing in foreclosures are doing quite well right now as there are lots of investors looking for bargains.

This may be a stupid question, but what impact (if any) do you think this will have on the correction in our market? Slightly slower decline??

[JC]

NPR comments this a.m.

On NPR this a.m. it was noted that realtors specializing in foreclosures are doing quite well right now as there are lots of investors looking for bargains.

This may be a stupid question, but what impact (if any) do you think this will have on the correction in our market? Slightly slower decline??

[NotCranky]

“but what impact (if any) do you think this will have on the correction in our market? Slightly slower decline?”

JC not a stupid question.

It is always true in RE that the top 10% of realtors do a very disproportionately high amount of the sales. In this market those that are getting all the listings for REO are doing relativly well. The market on the other hand, is not. These “investors” are not affecting the volume side of things enough to really sway the market.
Sales are dismal regardless of who the few buyers are. Also the fact that the current buyers are looking for “bargains” bodes poorly for sellers in and of it self.

Hope that answers your question.

[NotCranky]

“but what impact (if any) do you think this will have on the correction in our market? Slightly slower decline?”

JC not a stupid question.

It is always true in RE that the top 10% of realtors do a very disproportionately high amount of the sales. In this market those that are getting all the listings for REO are doing relativly well. The market on the other hand, is not. These “investors” are not affecting the volume side of things enough to really sway the market.
Sales are dismal regardless of who the few buyers are. Also the fact that the current buyers are looking for “bargains” bodes poorly for sellers in and of it self.

Hope that answers your question.

[NotCranky]

“but what impact (if any) do you think this will have on the correction in our market? Slightly slower decline?”

JC not a stupid question.

It is always true in RE that the top 10% of realtors do a very disproportionately high amount of the sales. In this market those that are getting all the listings for REO are doing relativly well. The market on the other hand, is not. These “investors” are not affecting the volume side of things enough to really sway the market.
Sales are dismal regardless of who the few buyers are. Also the fact that the current buyers are looking for “bargains” bodes poorly for sellers in and of it self.

Hope that answers your question.

[Ex-SD]

PerryChase: Thanks for the welcome.
I lived in SD for 30 years but saw this coming and sold my house in early 2005……….moved to the mountains of South Carolina. I’m very interested in the outcome of this whole mess because if prices drop to where I think they will, I will sell my house here and move back.

To answer your question…………I think that SFR will return to (and bottom out at) 2000-2001 prices by late 2009-2010 and condos will return to 1999-2000 prices because they are so overbuilt in SD. I don’t claim to have a crystal ball but I’ve always been very good with my timing concerning buying & selling real estate over the last 35 years.

[Ex-SD]

PerryChase: Thanks for the welcome.
I lived in SD for 30 years but saw this coming and sold my house in early 2005……….moved to the mountains of South Carolina. I’m very interested in the outcome of this whole mess because if prices drop to where I think they will, I will sell my house here and move back.

To answer your question…………I think that SFR will return to (and bottom out at) 2000-2001 prices by late 2009-2010 and condos will return to 1999-2000 prices because they are so overbuilt in SD. I don’t claim to have a crystal ball but I’ve always been very good with my timing concerning buying & selling real estate over the last 35 years.

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