Homegirl, Home Buyer in Brooklyn, OH

Is is true that home prices will decline this month and continue trending downwards until the end of the year?

Asked by Homegirl, Brooklyn, OH Wed Aug 3, 2011

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The weather cannot even be predicted more than a few days forward. The groundhog is like most other prophets; it delivers its prediction and then disappears.
Web Reference: http://www.clovelake.com
0 votes Thank Flag Link Sat Aug 13, 2011
Hello, no one has a crystal ball to know what's going to happen with the market we can only think we know. There are to many factors that go on in the world right now to know a definite timeline. I always tell my buyers that if you can take advantage of the low rates and low prices and your financial situation is solid long term then this is the time to go for it.
Web Reference: http://www.RhondaHolt.com
0 votes Thank Flag Link Fri Aug 12, 2011
If we go by the illogical but very familiar suggestion from the NAR that you should buy a home when interest rates are heading up, then you should avoid buying a home while interest rates are heading down, as they are today.

But, if we ignore that nonsense, what's leading home prices to continue declining is the steady high unemployment rate and potential reductions in availability of mortgage financing, which comes from the recent downgrade in the credit ratings of Freddie Mac and Fannie Mae. They indirectly support the financing of 90% of all home purchases.

Until the national unemployment rate drops below 7.5%, it's hard to imagine any noticeable recovery in housing prices, since people simply are too worried about their job security to buy. At the same time, the big overhang of distressed inventory will only grow as home prices spiral downward by another 5% this year, feeding a vicious cycle.

Still, real estate markets are really local in nature. So, depending on how far the unemployment in your area is below 7.5%, there could be modest to strong price appreciation. Just get a broker who's not too shy about digging deep into local trends and data sets.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Thu Aug 11, 2011
The prices are going to follow supply and demand. The supply is high at this time and that helps the buyers with many choices. As the stock markets trend up and down you will find more investment in real estate. With home prices depressed, buying on the low side of the trend line is attractive. The market will see more buyers coming into real estate as the economy stabilizes.
All of these factors can increase the buying activity and that will slow the price declines and will allow the sales prices to stabilize in the coming months.
0 votes Thank Flag Link Thu Aug 11, 2011
Homegirl,
Real estate is local, but your thoughts are sound. Generally, there is a decline expected until the end of this year.
0 votes Thank Flag Link Thu Aug 4, 2011
Also your property tax bill will be going UP!
0 votes Thank Flag Link Thu Aug 4, 2011
The latest reports I read show that Distressed property is still going down, but at a very slow rate. Whereas non-distressed homes are actually going up.

The problem is that the price of the house is only one factor in your monthly payment:
If the Interest Rates go up appreciatably, it will more than counteract the lower prices.
Also, many City and County agencies are helping First Time Buyer's with Programs for both Down Payment and even Grants. These tend to disappear quickly.

Good luck and may God bless
0 votes Thank Flag Link Thu Aug 4, 2011
@Homegirl,

It's impossible to predict for sure. If you are asking about the month of August, summer as a whole is always seasonably slow. People travel, they vacation, no one is thinking of buying real estate at 100 degree weather. Come Fall, things tend to pick up. Sales in NY for example have been off by 15% over the last 90 days, (but this doesn't mean market has dropped by 15%). Experts are saying that market should remain flat, but with inflation this may change.
One thing I can tell you is that money today is extremely cheap to borrow. Once the interest rates start going up, what’s affordable today, suddenly becomes less affordable tomorrow.
@ Dan...What was the point of your entire comment?

Call it chanting, singing or drinking the juice, facts will remain facts. YES! Markets are local whether you choose to believe this statement or not.

You can't compare South Florida with Manhattan. And you also wouldn't compare the West Village/Tribeca with Harlem or Washington Heights. One area sells $5M plus apartments like it’s the last day of sale while other neighborhoods can’t sell $2M apartments with similar finishes, amenities and sizes.
0 votes Thank Flag Link Thu Aug 4, 2011
Depends on the area. Real estate is a very localized industry and each area can be broken down into "micromarkets". some go up and some go down.
Probably the best way to forecast your individual area is to look at how many unsold houses are on the market in your area compared to how many have sold in that same area over the past 3 months. You can also tell if your area has a lot of foreclosures in the area or not.
0 votes Thank Flag Link Wed Aug 3, 2011
The realtors are singing the NAR chorus and cannot stop:

"Real estate trends are extremely regionalized and can vary greatly from one street to the next depending on the market."

"Hi, All real estate ois local so be careful when listening to national trends."

"Hi Homegirl, agree completely with prior poster - markets are entirely local and so the answer to your question will lie in the local stats"

Housing prices are local? Is this a religious chant ? What would happen if a you(realtor) refused to say, "all real estate is local" Would space collapse?

Can I chant, "all water is wet" and expect something to happen? Would people look at me like some kind of weirdo the way I look at realtors when they claim that realty is local?
0 votes Thank Flag Link Wed Aug 3, 2011
Hi Homegirl, agree completely with prior poster - markets are entirely local and so the answer to your question will lie in the local stats. Truia is a great place to start your search for a local agent - identify several, you can start with the "find a pro" tab and search in your specific area. Then interview them, and find the one that embraces the qualities that you are looking for. Based on your question, I'd be sure to include market knowledge and an ability and readiness to work with market data to provide you the input you need to make good decisions.

Good luck to you!
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Wed Aug 3, 2011
Hi, All real estate ois local so be careful when listening to national trends. Prices will most likely continue downward in many markets because of the increase in distressed property sales. i recommend connecting with a local agent in your market so they can help you identify the local trends. If you are planning on buying and feel there are great deals out there, go for it. Rates are great and the last thing you want to do is wish you had taken advantage of a good deal.

Chris
0 votes Thank Flag Link Wed Aug 3, 2011
We are seeing declines still in the Las Vegas area even though we have no inventory. As of right now the declines are miniscule compared to recent past but we are still declining. It does depend on what residential sectors & niches you are looking at.
0 votes Thank Flag Link Wed Aug 3, 2011
Real estate trends are extremely regionalized and can vary greatly from one street to the next depending on the market. Just because prices are going down in one market it doesn't mean they are going down every where. The same is true for the opposite. Just because some are seeing a slight improvement in home values & sales, do not take it as a blanket statement for real estate as a whole in the US.

Too many people get caught up with what they hear on CNN, FOX, MSNBC, etc. When you hear real estate news on any media channel they are not talking about your specific area. They are typically rehashing general data that is not always market specific.

Take the Case-Schiller index: The S&P/Case-Shiller Home Price Index is a popular measure for the US residential housing market, tracking changes in the value of residential real estate both nationally as well as in 20 metropolitan regions. 20 regions only.

This is index is sort of a cheat sheet for media outlets/pundits that are not very familiar with real estate. Most of the time that outlook is a bit gloomy so that is what they report. Even when they report "good news" I don't pay too much attention because as I mentioned, it's only a 20 region index. If you were to look at one of those regions more closely you would find pockets of strong deprecation AND appreciation.

So what I would do rather than pay attention to general unformulated blanket answers from people that do not know anything about real estate is to go local. Find out what is going on in your market and if it's going up or down. Not sure how to do that? Talk to a few agents in your area. The good ones love to talk about their respective market(s) and what is going on there.

There is a lot of good info out there. It's just a matter of talking to the right people.
0 votes Thank Flag Link Wed Aug 3, 2011
I predict that home prices in real terms will decline a minimum of 20% in 12 months. In the event of a US dollar currency collapse, there may be almost no bids for real estate. Such a scenario will wipe out real home prices altogether. See the gold price for confirmation.

The amount of empty home in shadow inventory is mind boggling.

Visit goldseek dot com for more opinion on this.
0 votes Thank Flag Link Wed Aug 3, 2011
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