CNN reportes couple of days ago that real estate prices are decling.
2006-06-09 19:03:05 · 6 answers · asked by a100 1 in Business & Finance ➔ Renting & Real Estate
according to reports I read few months ago. 25% of housing transaction that happened in 2005 were made by investors. basically, people who wanted to buy and hold for few months and then sell for profit. these 25% are all out of the market now, because the housing prices have at least stabalized, if not declined in most of the hot markets. therefor with simple economics of suppply and demand we know that the demand has declined by 25%, therefore supply has increased, which is exactly what we are seeing now. Every real estate agent says that now it is the buyers market and not the sellers. which means, the buyer can look around for many properties and can gice offers less than the list price because the enventory is very high.
the other indicator that the prices will decline is most properties stay in the market on average 3 months before they get sold compared to 3-4 weeks last year. and in many cases the house goes for a price less than the original list price.
the 3rd factor that will contribute to the decline of the housing prices is, in the last 3 years over 60% of the finances were done either no down, or interest only loan, or negative amortization, these loans usually have 3-4 years fixed rate, then it will jump to the market interest rate, which in most cases would mean almost doubling the monthly mortgages, when people have no, equity in their property and their monrhtly payments double, if they can not afford it, they have no choice but to give the property back to the banks and therefor you will notice the increase in the forclosure properties.
However since the dollar value has declined in the past 5 years, therefor the housing values will not go down as it was in the 90s, but it will go down as low as 2002 values which is almost 40% decline from the peak values of early 2006.
this is my opinion, and observation.
2006-06-09 19:17:54 · answer #1 · answered by a_ece_99 2 · 6⤊ 3⤋
There is no bubble. Do you know they were talking about the real estate bubble in the 1970s? It is a myth, and it doesn't exist. People will pay more for a home 10 years from now than they will today. Period.
2006-06-10 09:20:08 · answer #2 · answered by Serving Jesus 6 · 0⤊ 0⤋
I am a re/max realtor in the southern california area. Anyhow we won't see a BURST bubble. We will only see appreciation to stagnate in alot of areas. People won't have the growing amount of equity that they had in past years. Also home inventory is rising because many sellers are listing their homes at unrealistic prices. With rates on the rise and inventories rising it only means one thing.... a conversion from a sellers market to a buyers market. We'll see a steady market for the next 2-3 years with inventory rising and rates steadily going up.
Bottom line: time to roll up our sleeves and make them mortgage payments, it could be 20-50 years until we see what we saw in the past 5 years.
2006-06-10 02:09:59 · answer #3 · answered by ondreforsure 3 · 0⤊ 0⤋
Yes
2006-06-10 02:10:42 · answer #4 · answered by ag_iitkgp 7 · 0⤊ 0⤋
the economy food production bubble should come first
2006-06-10 02:07:19 · answer #5 · answered by Anonymous · 0⤊ 0⤋
It has already burst in several US Cities.
2006-06-10 02:42:18 · answer #6 · answered by fatsausage 7 · 0⤊ 0⤋