If you don't believe me just drive around the Cape. Thousands of empty new (2006+) houses just sitting there, without power rotting. Also a lot of half finished houses. There are three houses I am watching just waiting for the banks to forclose on them. My real estate agent has contacted the owners (with no response) and the banks won't forclose on them becasue they are overwhelmed and don't have the manpower to process all of them. All three houses have never been lived in, have the ac units stolen, and have their taxes unpaid in 2007. All are 2500 sq ft, on the water, tile roofs, 3 car garages.and are beautiful.
I check on them several times a week to make sure they don't get vandalized any more.
If you are looking for a specific home, perhaps on the water or other location NOW is an excellent time to be putting in offers. The sellers are not sure how much lower the prices will go so they are VERY flexible for the most part. Find a motivated seller & you will very easily purchase a home at a price very close to what the bottom will be.
Also, some areas haven't experienced such a decline. Those areas are good to look into as well. It's all about what you are looking for.
Let us know if we can help!
Yours in Success,
About the best you can do is see if there is anything on the market in your price range that you like and go for it. Once it starts coming back up - you'll be too late, pay more money, have more competition, and likely pay higher interest rates.
Sometimes you just have to be happy with the place you're in and not worry about "if you could get a better deal by waiting" because sometimes you can, sometimes you can't.
It's a gamble either way because nobody can give you the answer to your question.
It's a buyer's market for the non distressed market where prices are still going slowly down IMO.
However, it is a very strong seller's market for the foreclosures and other rehab. Prices are going up little by little for those.
I recently bought a foreclosure with specific features for under $100K and since I can't find any similar ones in the MLS for under $140K already...
Use this as a test of when it is a good time to buy. Find out what the replacement cost of a comparable home is - what it actually costs to build the home. In Lee County, Florida, the cost of a home is far, far below the cost of a replacement home which is why builders are not building new homes now.
Usually when a bottom is called, it is in the past and you've already missed it. If someone buys now, they may not be buying at the lowest price available but they are buying well below replacement cost. When the builders start building again, and they will, the home they purchased today will be worth a substantial sum greater than their purchase price.
Sometimes realtors do get it right!
Realtors may be knowledgeable on current and past prices for their area, but they are NOT experts on future price trends. Realtors are NOT economists and very few have any business or economic training to speak of. They are SALESPEOPLE. The reality is that they only get a commission if you buy, so they have an incentive to be less then accurate as to their assessments. The few competent Realtors with integrity would admit that prices are going down and most buyers could save money by simply waiting for the bubble to further deflate.
If you can afford a home with a large down payment and conventional financing and don't care about prices dropping further, consider the purchase. But DONâ€™T purchase with the expectation of future price gains. This was a huge bubble that needs to finish deflating. If history is any guide, prices will not rebound quickly when the bottom is finally reached.
Best of Luck,
Most importantly, it neglects the fact that a great majority of Americans
buy their houses with mortgages.
And if one buys a house with a mortgage, the most important factor in
deciding what to pay for the house is how much of one's income is required
to be able to make the mortgage payments on the house. Today the rate on a
30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%.
Comparing today's house prices to the 1970s or 1980s, when mortgage rates
were stratospheric, is misguided and misleading.
This is all good news for the broader economy. The housing bust has been
subtracting a full percentage point from GDP for almost two years now, which
is very large for a sector that represents less than 5% of economic
When the rate of house-price declines halves, there will be a wholesale
shift in markets' perceptions. All of a sudden, the expected value of the
collateral (i.e. houses) for much of the lending that went on for the past
decade will change. Right now, when valuing the collateral, market
participants including banks are extrapolating the current pace of house
price declines for another two to three years; this has a significant impact
on the amount of delinquencies, foreclosures and credit losses that lenders
are expected to face.
More home sales and smaller price declines means fewer homeowners will be
underwater on their mortgages. They will thus have less incentive to walk
away and opt for foreclosure.
A milder house-price decline scenario could lead to increases in the market
value of a lot of the securitized mortgages that have been responsible for
$300 billion of write-downs in the past year.
Even if write-backs do not occur, stabilizing collateral values will have a
huge impact on the markets' perception of risk related to housing, the
financial system, and the economy.
We are of course experiencing a serious housing bust, with serious economic
consequences that are still unfolding. The odds are that the reverberations
will lead to sub-trend growth for a couple of years.
Nonetheless, housing led us into this credit crisis and this recession. It
is likely to lead us out. And that process is underway, right now.
Mr. Moulle-Berteaux is managing partner of Traxis Partners LP, a hedge fund
firm based in New York.
You may have read this but finally an article that is not completely doom and gloom!!!
Subject: The Housing Crisis is Over -- Wall Street Journal
From the Wall Street Journal this week....Some positive news about the
current market. Be sure to pass this information on.
The Housing Crisis is Over -- Wall Street Journal
Wall Street Journal, By Cyril Moulle-Berteaux
May 6, 2008
The dire headlines coming fast and furious in the financial and popular
press suggest that the housing crisis is intensifying. Yet it is very likely
that April 2008 will mark the bottom of the U.S. housing market. Yes, the
housing market is bottoming right now.
How can this be? For starters, a bottom does not mean that prices are about
to return to the heady days of 2005. That probably won't happen for another
15 years. It just means that the trend is no longer getting worse, which is
the critical factor.
Most people forget that the current housing bust is nearly three years old.
Home sales peaked in July 2005.
New home sales are down a staggering 63% from peak levels of 1.4 million.
Housing starts have fallen more than 50%, and, adjusted for population
growth, are back to the trough levels of 1982.
Furthermore, residential construction is close to 15-year lows at 3.8% of
GDP; by the fourth quarter of this year, it will probably hit the lowest
level ever. So what's going to stop the housing decline? Very simply, the
same thing that caused the bust: affordability.
The boom made housing unaffordable for many American families, especially
first-time home buyers. During the 1990s and early 2000s, it took 19% of
average monthly income to service a conforming mortgage on the average home
purchased. By 2005 and 2006, it was absorbing 25% of monthly income. For
first time buyers, it went from 29% of income to 37%. That just proved to be
Prices got so high that people who intended to actually live in the houses
they purchased (as opposed to speculators) stopped buying. This caused the
bubble to burst.
Since then, house prices have fallen 10%-15%, while incomes have kept
growing (albeit more slowly recently) and mortgage rates have come down 70
basis points from their highs. As a result, it now takes 19% of monthly
income for the average home buyer, and 31% of monthly income for the
first-time home buyer, to purchase a house. In other words, homes on average
are back to being as affordable as during the best of times in the 1990s.
Numerous households that had been priced out of the market can now afford to
The next question is: Even if home sales pick up, how can home prices stop
falling with so many houses vacant and unsold? The flip but true answer:
because they always do.
In the past five major housing market corrections (and there were some big
ones, such as in the early 1980s when home sales also fell by 50%-60% and
prices fell 12%-15% in real terms), every time home sales bottomed, the pace
of house-price declines halved within one or two months.
The explanation is that by the time home sales stop declining, inventories
of unsold homes have usually already started falling in absolute terms and
begin to peak out in "months of supply" terms. That's the case right now:
New home inventories peaked at 598,000 homes in July 2006, and stand at
482,000 homes as of the end of March. This inventory is equivalent to 11
months of supply, a 25-year high -- but it is similar to 1974, 1982 and 1991
levels, which saw a subsequent slowing in home-price declines within the
next six months.
Inventories are declining because construction activity has been falling for
such a long time that home completions are now just about undershooting new
home sales. In a few months, completions of new homes for sale could be
undershooting new home sales by 50,000-100,000 annually.
Inventories will drop even faster to 400,000 -- or seven months of supply --
by the end of 2008.
This shift in inventories will have a significant impact on prices, although
house prices won't stop falling entirely until inventories reach five months
of supply sometime in 2009. A five-month supply has historically signaled
tightness in the housing market.
Many pundits claim that house prices need to fall another 30% to bring them
back in line with where they've been historically. This is usually based on
an analysis of house prices adjusted for inflation: Real house prices are
30% above their 40-year, inflation-adjusted average, so they must fall 30%.
This simplistic analysis is appealing on the surface, but is flawed for a
variety of reasons.
The past few months have been busy with activity in the City of Cape Coral specifically. Between Januray 1st, 2008 and April 30th, 2008 just over 900 residential (Homes, Condos, Multi-Family) properties SOLD. While gathering this data at the end of April 2008 there were also an additional 900 properties PENDING sale. PENDING SALE is when the buyer and seller have decided on terms and are proceeding to closing.
Take a look at a blog I wrote regarding homes selling in early 2008 entitled CAPE CORAL HOMES SELL http://activerain.com/blogsview/414989/Cape-Coral-Homes-Sell
Consumers are buying properties and many of my customers have encountered multiple bid situations over the past months. Multiple bidding is a good indicator of consumer confidence in their real estate purchase encouraging other potential buyers confidence also. Depending on the property we may have reached somewhat of an ARTIFICIAL LOW in property pricing if the consumer is willing to pay slighlty more that asking prices on property.
For more information concering the Cape Coral Real Estate Market stop by MY BLOG - You will find information about property taxes, exemptions, communities, and a variety of other real estate information.
FREE MEMBERSHIP - MULTITUDES OF INFORMATION Search Today for Your New Real Estate Purchase in Cape Coral FL - Search For Cape Coral HOMES, CONDOS, MULTI-FAMILY
Scott Slocum,Â REALTORÂ®
Florida Future Realty, Inc.
2816 Del Prado Blvd South Unit 2
Cape Coral FL 33904
It's difficult to say....but it would be fair to assume we are getting close. It is our opinon, the next 2-3 months will be an indication of whether or not the end is in sight. We are looking and hoping for a continuation of the increased activity witnessed during the past season. Any thing other than a throw-back to last summers morbid activity could be considered encouraging.
The "Eckler Team"
i wont said yes becouse i may give you the wrong advice .I wont said no becouse Goverment can make their hand on this problem and suddenly all those home on distress can be pull out of the market from night to morning and the next day no more low ball prices and them i give you the wrong answer.
Real Owners can not sell their homes becouse they can not compite with short sales or Bank Owned Properties prices.So if you want to sale becouse you have to relocate or lost your job or own more thatn one property and your income drop you have not other choice to in other words give up and Short Sale it or Forclousure on the house.
Even more discount sales(short Sales or Forclousures) more likelly price to continue to drop.Which is really the big problems banks have at this point.They does not want those homes but even more they discount a property today more they will loose on the next deal .Some bank had realize that and have stop taking low ball offers or they have just decide not to sell at this time waiting for the goverment to step into this mess and sell it when the market improve.Other banks wont sale just one house they will bundle toghether and sale to a Real Estate Investment Firm or Investor so Becouse the home has not sold individually just have being transfer from one investor to another which mean it wont have an adverse impact on the market and these type of transaction are begining to be more likelly to happen.
So if you dont buy today tomorrow could be too late but that is up to you.
If you can Buy a House and paid less of what it will cost you to built it or if you mortgage payment taxes and insurance is less or equal than rent you have nothing to loose.
Eventually the houe will appreciated and i wont even mention tax benefict of owning a Real Estate Property.
Do you know if the price of gas is going to come down anytime soon?
It's all up to the market....you dictate the market. If you see a home that you think is well worth the money than the chances are someone else does as well.
In answer to your question have we reached bottom yet, It is a buyers market, there are short sales, REO's and home owners who need to sell their homes now. The real estate market is supposed to go down another 5-10% over the next year and then level off. If Your a serious buyer here are a fee things for you to consider. The first is that you can negotiate down that 5-10% in several ways. 1) Is the total price reduction by that amount your getting the reduction off current fair market value for the property now, instead of waiting. 2) Ask for seller concessions, such as paying the closing costs or buying down mortgage points. The next thing you may want to consider is financing with interest rates between 5-6% you may save a few extra dollars by waiting but you will loose more money in the long run by paying a higher interest rate. Talk to a rea estate professional who can guide you through the process. Best time to buy is now and use your realtors negotiaitng skills to get your price.
Brian and Diana Caron
Hope this helps,