Will we see a selling panic in housing?

[garysears]

It seems like the ability to accurately measure the drop is lagging. I could see a 20% drop “effectively” if you want to talk value for the money. I think a good indication is builder price reductions. It is hard for me to imagine a market wide YOY median price drop of 20%. I know it is misleading in a rapidly moving market but it is the most widely reported barometer and considered by many to be THE measure of market performance.

If the buyers are going to have to be more financially sound in the future I could see the median moving pretty slowly. Here is my theory: Most people have a price range or payment in mind when looking for a home. Most people aren’t real estate savvy and are looking to spend X amount of money. The amount is almost “pre spent” if you will. This is how the monthly payment theory of our economy seems to work. I think people are looking to maximize the quality of the home for the price they feel comfortable paying. If prices continue to decline it would seem that the natural inclination for many would be to get a lot more value for their money rather than spending less. I’d just throw that out there as an assertion that could be ridiculous. I will do the same thing if and when I buy. It’s just that my “comfort” price is about 50% of the current asking prices.

[garysears]

It seems like the ability to accurately measure the drop is lagging. I could see a 20% drop “effectively” if you want to talk value for the money. I think a good indication is builder price reductions. It is hard for me to imagine a market wide YOY median price drop of 20%. I know it is misleading in a rapidly moving market but it is the most widely reported barometer and considered by many to be THE measure of market performance.

If the buyers are going to have to be more financially sound in the future I could see the median moving pretty slowly. Here is my theory: Most people have a price range or payment in mind when looking for a home. Most people aren’t real estate savvy and are looking to spend X amount of money. The amount is almost “pre spent” if you will. This is how the monthly payment theory of our economy seems to work. I think people are looking to maximize the quality of the home for the price they feel comfortable paying. If prices continue to decline it would seem that the natural inclination for many would be to get a lot more value for their money rather than spending less. I’d just throw that out there as an assertion that could be ridiculous. I will do the same thing if and when I buy. It’s just that my “comfort” price is about 50% of the current asking prices.

[lindismith]

I believe 20-40% is unrealistic also.

I believe Bugs once posted something about, ‘3-4% declines per quarter’ is reasonable. Effectively these losses add up to about a 10-12% decrease per year.

That actually “feels” realistic to me. Anything greater, and I think I would be very anxious (despite wanting prices to drop so I can afford something decent,) about the state of our economy.

[lindismith]

I believe 20-40% is unrealistic also.

I believe Bugs once posted something about, ‘3-4% declines per quarter’ is reasonable. Effectively these losses add up to about a 10-12% decrease per year.

That actually “feels” realistic to me. Anything greater, and I think I would be very anxious (despite wanting prices to drop so I can afford something decent,) about the state of our economy.

[The-Shoveler]

Yea Scoreboar,

Pigs will fly before prices drop 20%

You been to Temecula or Arizona lately ??

LA_Renter

I always wonder what Ben really thinks of Greenspan. THANKS AL! I’ll handle it from here……A**hole.

Priceless !!

[The-Shoveler]

Yea Scoreboar,

Pigs will fly before prices drop 20%

You been to Temecula or Arizona lately ??

LA_Renter

I always wonder what Ben really thinks of Greenspan. THANKS AL! I’ll handle it from here……A**hole.

Priceless !!

[no_such_reality]

I believe Bugs once posted something about, ‘3-4% declines per quarter’ is reasonable. Effectively these losses add up to about a 10-12% decrease per year.

That would be 12-16% per year. Prices are going to drop, and while I think 20-40% on individual homes is possible, you’ll never see that kind of drop on the sale statistics.

In all actuality, I’ll be completely happy taking 10-12% drops annually. I’ll be estatic once the typical measures and media start reporting that home values really are down 10-15%. When that happens, the herd will realize the gravy train is over. They’re getting a whif of it now with the inability to reappraise and refinance, but once they get it in their face that like for like homes are really down 10%+ and that homes in general are down, the final psychology will dramatically shift.

[no_such_reality]

I believe Bugs once posted something about, ‘3-4% declines per quarter’ is reasonable. Effectively these losses add up to about a 10-12% decrease per year.

That would be 12-16% per year. Prices are going to drop, and while I think 20-40% on individual homes is possible, you’ll never see that kind of drop on the sale statistics.

In all actuality, I’ll be completely happy taking 10-12% drops annually. I’ll be estatic once the typical measures and media start reporting that home values really are down 10-15%. When that happens, the herd will realize the gravy train is over. They’re getting a whif of it now with the inability to reappraise and refinance, but once they get it in their face that like for like homes are really down 10%+ and that homes in general are down, the final psychology will dramatically shift.

[Tone]

I believe 20-40% is realistic. Not by year’s end, but a year from now.

It’s all about the ability of the common Joe to get access to money. Cut off that access, restrict the flow, and prices will plumet. There was an unprecidented euphoria on the way up, there will be some sort of panic phase on the way down.

[Tone]

I believe 20-40% is realistic. Not by year’s end, but a year from now.

It’s all about the ability of the common Joe to get access to money. Cut off that access, restrict the flow, and prices will plumet. There was an unprecidented euphoria on the way up, there will be some sort of panic phase on the way down.

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

In Places where there is still a lot of Development going on (big projects that are beyond the committed phase) .

The Developers will drop the prices to move inventory,

(as has been said before, Got to move inventory to eat,
Got to eat !!).

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

In Places where there is still a lot of Development going on (big projects that are beyond the committed phase) .

The Developers will drop the prices to move inventory,

(as has been said before, Got to move inventory to eat,
Got to eat !!).

[SD Realtor]

Wow 20-40%! That is truly insightful.

I will tell my wife we can get that house in Solana Beach by Christmas. Actually maybe we will wait until Easter and go for Del Mar instead. Forget about this Scripps Ranch area. It is west of 5 for me!

See you there!

SD Realtor

[SD Realtor]

Wow 20-40%! That is truly insightful.

I will tell my wife we can get that house in Solana Beach by Christmas. Actually maybe we will wait until Easter and go for Del Mar instead. Forget about this Scripps Ranch area. It is west of 5 for me!

See you there!

SD Realtor

[The-Shoveler]

Well not quite “SD Realtor”

I think we will need a full on recession before we see 20-40% drop in the better area’s, but on the out skirts things could get ugly a lot faster.

[Author]

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