When will real estate prices begin rising again?
Cat:Real estateForum:10622
Cat:Real estateForum:10622Discussion:8507885084261860934
Buying and selling
When will real estate prices begin rising again?
Well, since it seems like the old, "Where are Real Estate Prices headed" thread is broken, here's a replacement thread with a slightly updated title for people to share opinions, data and theories on
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Forums » Buying and selling » When will real estate prices begin rising again?
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Re: When will real estate prices begin rising again?
posted at 9/22/2009 3:06 PM EDT
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Posts: 454
First: 11/17/2006 Last: 10/27/2009 |
Hi all - FHFA (formerly OFHEO) 2Q2009 numbers out today, Boston MSA sees another decline of 3.18% compared to 1Q2009. Still no positive numbers. Note that FHFA uses paired sales method similar to case Schiller, but only looks at conforming loans so misses much of the market in Boston proper. http://www.fhfa.gov/Default.aspx?Page=14 Good luck all! Finance Mike |
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Re: When will real estate prices begin rising again?
posted at 9/29/2009 9:20 AM EDT
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Posts: 454
First: 11/17/2006 Last: 10/27/2009 |
Hi all - Case Schiller for July is out, month over month change is a positive number for Boston MSA! Not a big number (about 0.6%), but an increase nonetheless. Interestingly, if you look at the breakout by price tier, the low price tier (under $250k), the increase is substantial at just over 2%. The other tiers cluster between 0.5% and 0.6% positive. Now if we could just see an increase in sales volume... http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/2,3,4,0,0,0,0,0,0,0,4,0,0,0,0,0.html Good luck all! Finance Mike |
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Re: When will real estate prices begin rising again?
posted at 9/29/2009 9:44 AM EDT
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Posts: 36
First: 7/29/2008 Last: 11/24/2009 |
What? It's been a month with no rebuttals?!?! BS Joe? Sparky? BoomBoom? Did you guys know that...Home prices gain for 3rd straight monthCase-Shiller index shows 1.6% gain in July, a sign that recovery may be in motion.Boston up (again) 1.2% and only down 4.9% YOY! Even Las Vegas hit bottom! The beloved numbers are on the bull's side and the wonks are out of ammo...it seems that this argument is closed.P.S. ...Everyone wants to live here and they are still not making anymore land! |
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Re: When will real estate prices begin rising again?
posted at 9/29/2009 10:36 AM EDT
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Posts: 454
First: 11/17/2006 Last: 10/27/2009 |
Hi CBRB2 - Welcome back! Yes, there is somewhat good news out - note however that the Boston MSA is only up 0.6% seasonally adjusted. There are still a lot of headwinds to a recovery here, however: 1) Sales are still waaaay down compared to history. This implies no market clearing price level has been reached. Until we see buyers and sellers reaching agreements on price at similar rates as the long term average, calling the bottom is premature. We MAY be at bottom, but it's still a pretty risky assumption. 2) There is a lot of speculation that the stimulus plan (the $8k credit) drove a fair amount of activity and also prices. Once that stuimulus ends, it may also stop supporting prices. In Boston, the results are consistent with that theory - the "low" tier (under $250k) showed the greatest gain, which also happens to be where the $8k would make the bigest impact. I think the risks are still more that there will be further declines, although these results are encouraging. Good luck all! Finance Mike |
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Re: When will real estate prices begin rising again?
posted at 9/29/2009 11:05 AM EDT
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Posts: 11
First: 9/29/2009 Last: 10/12/2009 |
Yeah but what about all the resets and option ARMs and liars loans that are going to be defaulted on until the year 2929 ? And the reason that prices are going up is that they put a moratorium on foreclosures and the banks are selling bank owned properties to each other at higher prices to paint the tape. Anyway deflation is coming so sell your condo for whatever you can get and buy it back later for less. You are a house pumper and you probably own a house that you want to go up in price so you pump. |
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The end is near sell everything
posted at 9/30/2009 11:16 AM EDT
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Posts: 11
First: 9/29/2009 Last: 10/12/2009 |
Did the economy just let out some hot air or did it already burst and we are currently entering a recovery? There are facts to support both. However this posting will address the dooms day scenario. If the economy was left uncheck by the government and allowed for economic mechanisms to take place we would have gone through a complete collapse of the economy. However, when private lending froze and the consumer was unable to borrow, the brakes were slammed on against consumer consumption (spending). The government filled this gap with government borrowing and spending resulting in this short term recovery. A couple of facts, first time claims for unemployment continues to decline and consumer spending is growing and as always purchasing imported products. These facts are just direct results of the stimulus dollars that are beginning to flow into the economy. The stimulus money does not in any way change basic fundamentals of the economy, such as capital investments to set a goal of achieving a trade surplus. The stage is set for an economic meltdown. We continue to sell off our country piece by piece to purchase imported goods; soon we will have nothing to sell and no credit. Imported goods continue to climb, while exports are unchanged causing the trade deficit to sky rocket. The government will no longer be able to support the temporary recovery as we will have gone broke. As we approach this breaking point, we will see double digit interest rates, a continue devaluation of the dollar, and double digit inflation as the dollar collapse. A real recovery will not take place until we build capital investment and produce products that are globally competitive enabling us to begin the process of buying back our country from the rest of the world. If things continue down the same path, I predict we will see the breaking point in 2 to 5 years. Gold will sky rocket under this scenario, while equities would be helped along with inflation, it would be countered by a lack of economic growth and earnings.
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Listen to the usuals for the next 30 years
posted at 9/30/2009 11:19 AM EDT
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Posts: 11
First: 9/29/2009 Last: 10/12/2009 |
Economist and advisors all have their opinion and predictions so why not usuals. Seeing how it is their expertise, they should have been able to predict the magnitude of the market collapse. Overall I believe that the average investors knew things were going to decline, just not as bad as it did. As for the experts, I only recall reading a single article in 2006 that stated, you are a fool if you stay in the market in 2007 and should move to 100% cash, and the only option mentioned was to hedge with gold. He was correct; the market began its downward movement in 2007. So here is what I think on the big picture and long term. The consumer buys the cheapest product, resulted in a growing trade deficit in the early 90s and corporations moving overseas in search of lower labor cost to be competitive, resulting in a declining domestic output of real value. 1998 was the turning point where we passed below the breakeven point and began to borrow to sustain our life style. 2008 we maxed out our credit lines on over valued collateral. The market collapse compounded by lack of available credit in order to borrow and disposable income required to make payments on mounting debt on over valued assets. The future is a long road ahead but a great opportunity for those that understand what is about to take place over the next 30 years. 2009: The unemployment rate will reverse its short term downward movement and will go above 10%. 2010-2111: Unemployment stabilizes, but due to the lack of tax revenue and increased cost of programs to help the needy, government debt continues to sky rocket. 2011-2014: Government debt collapse resulting in high inflation (stagflation), probably double digit inflation by 2012-2013 and the devaluation of the dollar. 2014: The devalued dollar result in lower labor cost compared to overseas and creates a profit margin to support domestic products over imports. Plans are developed, capital is invested and factories constructed. This takes a few years to plan, raise capital and construct multi-million dollar facilities. 2018: The capital investment and new factories create jobs and global competitive products resulting in a trade surplus, real economic growth from hard work and investments, not consumer spending from borrowed funds. I predict that you still have another 9 years to build upon your investments and in 2018 you will see the market begin a 20 year continues upward movement. The first 15 years supported by real economic growth and the last five years supported by low supply / high demand for stocks from the next generation looking to get rich quick. The cycle continues. You can’t make a million dollars out of $500, but you can out of $100,000. Start saving now, to have the required investment in 2018 to capitalize on this opportunity. |
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Re: When will real estate prices begin rising again?
posted at 10/2/2009 11:16 AM EDT
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Posts: 2
First: 10/2/2009 Last: 11/13/2009 |
I have been saying the same thing and people look at me like I have three heads. The prices in my town reflect the prices from 2007 for the most part and that could possibly be because Realtors and Banks are using 2009 Assessments as a marker. Which makes me think they do not realize that Assessments in Mass are done on data that is two years out, so that data is from 2007 not the current market. It's very frustrating for buyers because the only thing moving are bank owned properties which have factored in the percentage that the market has decreased in the past two years on top of the assessments. If you take a 2009 assessment and then deduct about 35-40% from the assessed value that is about the range of what your property is worth TODAY. I've examined the data on this and more often than not, this is what the properties are selling for. If the Govt keeps messing with interest rates you could see a suspension of this market. I wish they would just let it take it's course. There are a lot of qualified buyers but they are not going to bite on property that is overpriced because they see the carnage around them and have no desire to join them. In Response to When will real estate prices begin rising again?: Thanks for starting the thread up again FM. Maybe this time the trolls will realize nobody cares what they have to say. As far as when prices will start rising is concerned, I do not believe this will happen for another 7 -8 years. Prices will continue to decline for another 2- 3 years followed by 4-5 years of price stagnation because prices will need to align with other economic fundamentals. Posted by centerfielder |
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Re: When will real estate prices begin rising again?
posted at 10/3/2009 11:20 PM EDT
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Posts: 645
First: 9/3/2009 Last: 11/14/2009 |
For starters it would help to know what towns you're interested in. The affluent towns have not seen any price drop and have generally kept rising throughout this mess, however, with lower inventory and volume. I don't think a camera is unreasonable at an open house. A homeowner conducting an open house will not be home and will have cleaned the place up knowing it affects people's judgement. Usually an open house will have a pamphlet with pictures, but bring your camera and if you want to you can always ask the realtor if its ok to take some shots. Don't worry about fitting in. Most people at open houses are nosy neighbors checking the house out. Just knowing that you're taking this seriously is enough to make the realtor happy. General hints. Use Zillow and Cyberhomes and ask the realtor why the list price is different. It always will be, but you want to pick the realtor's brain as much as you can. You'll learn some stuff but take it all with a grain of salt knowing he's just a salesman. The one thing a first time homebuyer needs to know is to not turn down a prospect simply because its not what you imagined. Try to look at the potential. Most likely any place you look at will need some work done so take any flaws into account understanding you'll be changing stuff anyway. If you are pre-approved and don't have a current home to sell then realtors will love you. Especially in this environment, an existing homeowner looking to buy but that has to sell their current house is a liability. Many many deals fall through because of contingent sales. Since this is not you don't be shy about the fact that you will not need a contingency. Good luck. |
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Re: When will real estate prices begin rising again?
posted at 10/5/2009 1:38 AM EDT
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Posts: 645
First: 9/3/2009 Last: 11/14/2009 |
Ha ha ha!. No, its a picture of Ralph Reed. In all ways the antithesis of me. I wouldn't get hung up on the camera thing. Did they have handouts? A selling broker isn't doing their job if there isn't a brochure, usually with pictures, but definitely with drawings and dimensions. Most listings will have several pictures on the on-line listing. When I was looking I used Coldwellbanker.com. It had, what I believe to be, all the listings, not just their own. It looks like the Globe's real estate section does the same thing. You can always take photos of the outside and take notes as you walk around the inside so together you've got a pretty good method of cataloging what you've seen. I imagine you're pressed for time, but keep in mind that you're new at this. You're going to want to see a lot of properties. I was lucky in that I targetted a specific town, so after a couple months I intimately knew the town and could price the houses myself pretty accurately. We bought this house, with all its imperfections, because I had come to know the street and knew it was a good deal. We had early on driven by the house and kept on driving because the paint was the color of vomit and the roof had moss growing on it. A typical first time buyer response, but all of those things scared away other novices as well, and once we knew what we were doing and the price came down 2 times this house became attractive. We had to fix the inside quite a bit as it was stuck in 1971, from decor to appliances, but that is fairly common. A move-in quality house is very rare unless its a rehab or teardown. There probably aren't a lot of those out there now as "flipping" has become too risky. speaking of flipping, are you watching some home shows on TV? HGTV and DIY have a ton of those shows and they could be educational. Back to your original question. If you can afford to buy now is a great time to do it. Interest rates will not be this low much longer (I'd say by this time next year mortgage rates will be at least high 6% if not 7%+). This will definitley happen as the economy starts to grow again and inflation picks up. Rates can not get any lower. Also, some unfortunate people are desperate to sell because of the economy and job losses. Once unemployment peaks (should be around next spring) people's finances will be improving and prices will likely go up ar at least not go down anymore. Don't listen to people saying prices will drop another 30%. They may in places such as Miami and Las Vegas where things got crazy and there are vast areas of undeveloped land. In Boston there is no more land, so there's a lower limit on how low prices can go and what we're in today is essentially a perfect storm for cheap housing. The economy is bad, there is delfation, unemployment is as high as its been in 30 years. All 3 of these influences are in the process of being corrected, so now is is good as it will be to buy. Its a bad time to sell, of course. One more lesson. The cost of buying a house is affected by the price and the mortgage rate. In normal times as interest rates go up the price of the house must go down. What caused the housing bubble of a few years ago was incredibly low interest rates, so prices shot up. Its a simple equation. If your mortgage rate is high you can afford a less pricey house. If the rate is low you can afford a more pricey house. This is because you don't really care what the house price is, you care what your mortgage cost is and the mortgage payment is influenced a lot more by the rate of the loan than the size of the loan. So its a great time to buy. Even if prices do go down a bit more (and I doubt they will) the rate you will be paying on your mortgage will definitely be higher in the future. Good luck! |
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