miss sam, thanks for the great story! it gives me hope that we will eventually find something up here.
i have thought about looking at foreclosures. i guess i need an agent somehow connected to that part of the market. the agents i have spoken with do not show that type of home to me. i suppose i should prod them in that direction. it sounds like you found a great place. your place doesnt seem to match the description of foreclosed homes i hear from agents (totalled, poor locations, lower end, etc etc)
responding to kathy, i found a lake arrowhead agent site with data showing the july yoy decline for lake arrowhead at 32%. dataquick in april showed 40% decline. - Thu Jul 30 2009, 00:31
thanks for the feedback! (btw, we still haven't purchased a house yet)
here's my thinking:
1. re: the 800/600K home issue, i simply looked at the following:
a) last sale price and amount of work done on the house since that time. for example, we were going to make an offer on a place in lake arrowhead. it last sold in late 06 for 740K then listed in early 08 for 970K (and not much work was done on the place). certainly 06 was the peak down the hill and probably close to the peak up here. i would think a price significantly less than 740K would be a proper end price. on top of that the house has wood shingles that will prob need to be replaced. if i suggested making an offer for 600K i think the realtor would either argue or refuse. this happened with several houses we considered making offers on.
b) prices down the hill (dth) v. up here. i have heard from a few realtors that prices up here lag dth. if this is true i would expect prices to continue to fall up here for a bit even after dth bottoms out. i can see prices falling substantially up here over the next year. first in the spring when a bunch of houses come back on the market, then in sept if they are not selling (kind of like in 2008). historically most houses up here were cheaper than their dth counterparts (in decent areas).
c) as a project in early 2008 i took _initial_ list prices of all houses between 600K and 1M. i got this data from a realtor from the local mountain mls. for all houses that sold i figured the % difference between list and sold price. the difference in early 2008 was 17%. this also does not factor in listings that are "freshened" by taking off mls and placing back on at a dif price.
i would think that regardless of dom etc one can determine a peak month and price, if they are willing to make some assumptions or choose a specific metric. for example, lots of areas show housing price trends as median price. certainly that can be done for the mountain area. i would bet that the median price is falling right now, which implies that there was a month where it peaked. i have actually found this data on zillow etc but was hoping for something a little more substantial, like dataquick, so any tips on that would be appreciated. it sounds like you are saying that since it is a closed system up here i won't be finding this data any time soon.
ultimately, you are right, we just need to figure the price we think a house is worth and make an offer at that price. of course, to make an offer we will be working with a realtor and that realtor will probably argue with us about our methodology for determining our offer price, basically thinking we are unrealistic/cheap.
also, interesting that you ended up getting the house for around 25% off list price, which is about the same % diff as 800K/600K.
thanks for taking the time to respond! - Tue Feb 3 2009, 21:37