When I am quoting Mr. Warren Buffet with my quote on greed. I truly do feel that guy may know a little more then the rest of us about what is going on in this market.... just a little. ;)
I am quoting my fellow poster Mr. Chalnick in regards to self promoting. My apologies if that rubbed some of you the wrong way.
Non the less some points need to be made.
I should have started out my post with all markets are local, you got to look at the zip codes you are interested in.
(I am sure that a working town that has had its only factory just closed down. Still has a long way to go in its down turn.)
However what I have been referencing is what is taking place in sunny So. Cal, San Diego.
Looking at San Diego - According to efanniemae, the median income is $72,100
And according to housing tacker, the median home price is 351,000
The median income more then covers the median home purchase. Homes here are "affordable".
A family can legitimately afford to qualify and buy a home here again.
The other indicator you have to look at is the price per square foot to rebuild your home.
buildforyou.com pins the number around $125 per square foot (a lot of factors go into this number some homes are $80 sq. ft. some are $200+)
Call your insurance agent... my just told me I should have my home covered for $175 sq. ft..
Homes in the San Diego area a coming back in to line with what it cost to build them. The yen and yang are coming back in to balance.
I agree with Mrs. York a CMA should not go more then 90days and you have got to look for the down trend.
If prices are moving down step away from the house or offer less.
In the North San Diego market. We are seeing homes where the median income of that zip code can afford to buy a median priced home....
prices are making sense again.
Items have core values and the market will determine that cord value.
I am optimistic about our future and what tomorrow has in-store for us.
Bottom line once again - people will always need a place to live and at median home price of $350,000 assuming 20% down you payment comes in
around $1500 a month - That seems like a better deal then renting.
I think there are too many smart people that want to succeeded, then to let us all fall into the dark ages and homeless as has been some what implied in past posts.
I can see how my last post can be taken as "harsh"
However - it is the nature of the beast - markets go up and markets go down.
It is the yen and yang.
In the 90's we had 30-40% drop in home prices much like today.
However unlike what what happened in the 90's we are now faced with a world wide economic down turn.
that scares a lot of people! And it is affecting more then 1 or 2 segments of the markets like what happened in the early 90's.
The bottom line that people need to take home is this.
We will always need a place to live and a roof over our heads - will the market keep going down or will it go up? We flat out do not know!
Looking at the facts, my guess is. We will see a flat market or even another 5-10% fall for the next 2-3 years or so then a slow incline like what we are use to seeing over the last 50 years or appx 8% ROI.
And interest rate have to clime back up around 7-9%.
And that make sense. What we saw during the early 2000's was nuts and was flat out an over inflated market that was fueled by the deregulation of the lending markets of the mid 90's (which help get us out of the mess we were in then) then the drop in interest rates after 9/11 to help the glooming rescission then. They both worked for the time. However they fueled what we now know today. The free money to just about anyone who wanted it.
Historically when we have had a new president take office, interest rates have gone up
Carter, Reagan, Bush, Clinton. (Who remembers 14% interest rates in the early 80's?)
What is in store for tomorrow..... no one know, tomorrow is promised to no man!
In the mean time you can pay 2000 bucks a month in rent
or buy home for your family you can call your own and know that your rent will not go up.
These are unprecedented times, and all unemotional analyses of the data shows we have difficult times ahead of us in the real estate market. Not only in the next 3 months, or 6 months, but for a long time to come. The end of unparalleled gains in real estate are over for a long time. Why some real estate agents have yet to comprehend this and continue to "shamelessly promote their business" at the scourge of innocent buyers is not just unethical, but disgusting at best.
Thankfully, we have open forums like this so we as buyers can learn who to respect and whom to shun. I would even be okay with someone coming in here and justifying why they think the market has capitulated, so long as it didn't entail elementary and asinine statements with no context. James, go hit the Yahoo Finance forums and throw in your slapstick opinions.
that my client just closed on 3/5/09 for 390,000 with 3%RCC?
If I did my math right that is a 40% price drop.
I would have to agree with my colleges before me.
And thus why I too am "shamelessly promoting my business"
This decline is about the same as what we saw in the early 1990.
Home prices have dropped and interest rates are low.
It is a great time to buy!
When people are greedy be fearful, be very fearful.
When people are fearful be greedy, be very greedy.
Never has this statement rung more true, then it does today!
2009 will be the year you look back on and say I wish I would have bought then!
For example, there is a huge disconnect between low and high-end markets. The "real estate market bottom" does not exist because markets are microcosms. Every low-end purchase represents 40% off peak price, while the $700k+ market is about to get hammered. That's a news story in and of itself.
Rather than project BS optimism about how the upper middle class is well insulated, and how the "worst of the sub-prime crisis is behind us" let's put some math behind a definitive projection of where things will be two years from now. Let's talk about the only true unknown variables, which are will the low-end find a definitive bottom and bridge the gap to higher end homes as massive foreclosure displacement ensues in that segment? Or will the government continue to save everybody at the expense of saving nobody while asset devaluation continues across the board? Or should homeowners wait until empirical prices hit the bottom… or be concerned about massive inflation that will boost rates beyond monthly affordability? Or should investors with cash consider making counterintuitive investments in real estate even now, and even though real estate was the catalyst to this mess… because either the devil of inflation or the devil of monetary destruction will result in a boon to property owners since people will always need to keep a roof over their heads?
All of us professionals are here for one purpose, which is to shamelessly promote our business. How about harnessing this resource by researching a few profiles and pinging us for some new sound bytes?