I wasn't quite sure what he was talking about, but one thing I know is that Danny already bought 5 condos for investment in Edison IN CASH! Ok, he said his father prohibit all his families to buy any stock or securities; his father said it was a gamble, look at Bear Stern was $170 then $2 sold (may be more, but if you own Bear Stern, you cried no tears as Danny think)
Anyway, I went to Berkeley recently to eyewitness by myself and document everything I found out here http://berkeleyhousing.blogspot.com/
If I am going to buy a $500,000 condo at Berkeley for my son's 4 year study there, I would rather rent one at $1,500 and buy 2 condos here in Edison. With the same amount, for 2br 2ba condo here, I can get $3,200 a month, why buy there at Berkeley?
So, real estate is local, but it also interconnected with many other places as well.
then in 1971 he was making 50K and bought house for 33K (i.e. .66 times income:)
no wonder house prices were guaranteed to go up then.
now if you are lucky IT guy working in new york earning 100K you buy house for 500K (i.e. 5 times income:(
on top of that yesterday only I got good news that my company is slashing salaries by 10% accross the board :(. and my friends who lost jobs in IT are getting new offers 30% lower.
Interesting that all these answers thave time traveled from Now back to
April and May. Or are the answers now just the same ones given back then? Confusing......I don't know when they will go up or stop going down, but now is the best time to buy. Does not compute, Will Robinson, does not compute.......
Is it the beginning of a trend reversal? Time will tell...
I have no crystal ball and am using no hands either... lol...
The prices will stop declining when demand for homes becomes greater... The laws of supply and demand are directly related to price.
Home prices will begin to rise when... Supply is less than the demand for the product, in this case homes... Unless of course you have the one home on the block that everyone can afford and absolutely MUST HAVE.... (Excuse the Sarcasm)
Dr Cheng's answer really cracked me up.
As far as I know, there is a tight correlation between home prices and Job Creation/Salary Raises/Credit Availability
His answer seems to imply that our salaries and total job creation and credit availability are tightly couple to gas prices. I for sure know my salary is not coupled with gas prices but my mortgage spending power for sure is coupled with gas prices in an inverse fashion, which doesn't bode well for home prices
Also gas price will signal inflation and building cost will inevitably goes up so are price. e.g. when gas price was 80 cents back 90's a 2br 2ba condo costed $80,000 and that's about 100,000 gallons of gas to trade for. Now the gas price went up to $3.50 per gallon, a fair price of 2br 2ba condo in Greater Edison area would be $350,000 (i.e. 100,000 x $3.50)...
It is a matter of US Dollar depreciation, that's why you see around 500 homes sold in Piscataway in 2007 and 1,000 homes sold in Edison in 2007, you will see many other towns start selling well since many people sold their condo/townhouse will move up to buy bigger home, and even several $1.3m houses sold recently in Edison ...
I've started throwing my Realtor trade magazines away without even reading them. I can't take another "Rah-rah Real Estate" article declaring the slump over anymore, so when you see a news item or read a newspaper article, note the background of the person dissemninating the information. Their bias could make that information suspect.
All I know is what I'm experiencing lately and I've posted the following response to another similar thread on this website:
"I've seen evidence in my market that things may be turning around. Last year at this time, nothing seemed to be moving off the shelves at all. The buyers I'm working with at the moment had fourty listings to pick from three weeks ago. Twenty of those listings have now gone to contract. The reason these buyers want to own instead of rent? They don't want to live in someone else's house. These people are first-time buyers.
The most common feedback I got from buyers last year after touring my listings was that they liked the houses, but haven't sold their starter house yet to be able to bump up; therefore, they're not ready to make an offer. It's the starter homes that I'm seeing moving the most now. In my opinion, this will trickle up. Once a seller gets a contract on their starter house, they can bump up to a larger one.
I do not follow economics and the most I know about the stock market is how my 401K balance keeps dropping, but after having some difficulty getting my buyers into homes to view before they go to contract, my gut tells me we may be starting to turn around.
We won't know when we've hit bottom until the prices either start to climb, and once that happens there'll be a lot of people who sat on the fence a little too long saying "woulda, coulda, shoulda."