2006-08-20 01:44:41 · 6 answers · asked by sruly m 1 in Business & Finance ➔ Renting & Real Estate
NEVER LISTEN TO Real Estate Agents or Investors...You want someone with an Economic background...Like me :D...You will see 25 to 33% in areas such as the midwest and other bluecolar cities...Places which the real estate rally took longer ot reach... Areas like Los Angeles, Miami, etc....where people love to live and were at the start of the rally, you can expect to see 40 to 60% drops over the next 18 months... Look at the real estate market as a four engine plane flying...A few months ago is when the engines started to smoke, and sputter...Right now is when all but one of the four engines have not burst into flames and the one is smoking and sputtering....though the plane can not fly on one engine, because it is still going, you have the pilot and crew (real estate agents and investors), saying...Look one engine.,,still hope...:D... when the truth is you are starting to fall out of the sky like a safe...as the months go by over the next 18, the wings will fall off, panels will break lose, and people will start to get sucked into the night sky until full economic panic is in effect...think crash of 89...but with a little (not a lot or full blown) great depression to spice it up.
I am looking at a 1.4m three bedroom a couple of blocks from the Beverly Center/Beverly Hills-Los Angeles border...It has been dropping about 40K a month (think of it 10grand a week) for the last 45 days...The true value of that home in the current market is about 940K which I expect to be 560K after all is said and done...Now, if you were a buyer who could afford the 1.4, would you purchase now knowing your home value might fall even by $100? No you sit and wait until you know that you will not lose any money....MAYDAY...MAYDAY!!!!
2006-08-21 11:19:05 · answer #1 · answered by bigdaddy_longstroke_2000 6 · 1⤊ 0⤋
There will be no percentage drop, across the board. When the stock market "crashes" it means the market value of stocks, on the average in a particular exchange, drops 20% or more. Not all stocks decrease in value under those circumstances. It's just an average. Some companies may go "bust" during a crash and lose all of their value. The value of stocks is easily measured.
That is not the case with real estate. While it is unlikely, the average selling price per home in a given area can drop 50%. But you then have to do a comparison to see if you are measuring sales of similar homes. In a down market, cheaper homes will sell quicker than luxury homes, therefore "skewing the curve."
For homes, a second factor affecting sales in a down market, is the mortgage balance. People cannot sell homes if they have to accept a price lower than what they owe. Where would they get the money to pay off the balance? Nowhere. In cases like that, on the average, people hold onto their homes until the market goes back up. It always does. Like the stock market.
2006-08-20 01:59:48 · answer #2 · answered by regerugged 7 · 0⤊ 0⤋
real market is a very speculative sector,it advances faster than any thing,and goes down also so quickly.if crashes more than 30%,time to getout,normally they move in a narrow range,unless something happens,.value of property may go down from 10% to 30-35 % ,but keep 10% as standard
2006-08-20 01:54:15 · answer #3 · answered by manoj p 2 · 0⤊ 0⤋
I think 15% to 25%
2006-08-22 14:59:34 · answer #4 · answered by vrazumniy 2 · 0⤊ 0⤋
Each location will be different.
Keep in mind...........
Times and markets are changing!
In California with average homes selling well over $500,000, a 20% decline is $100,000! In any market 'timing is everything'! So, could you afford a loss of 25% of your investment all because of poor timing???
This last up cycle was 10 years in many parts of the country. The downcycle now started in CA, Wash DC, NYC, Vegas and other hot areas of the past are all soft and getting softer.
From 1990 to 1996, the average home in San Diego lost 20% of its' value! The cycle we are now enterng looks like it could well exceed that on the downside!
With all the 100% financing, interest only loans, EZ qualifing etc...even a slight decline will cause many to be unable to sell for the amount due on their loans!
For some great 'insider' articles on the San Diego real estate market, which I believe will apply to any of the hot real estate markets of the past five years.....visit:
Times and markets are changing!
In California with average homes selling well over $500,000, a 20% decline is $100,000! In any market 'timing is everything'! So, could you afford a loss of 25% of your investment all because of poor timing???
This last up cycle was 10 years in many parts of the country. The downcycle now started in CA, Wash DC, NYC, Vegas and other hot areas of the past are all soft and getting softer.
From 1990 to 1996, the average home in San Diego lost 20% of its' value! The cycle we are now enterng looks like it could well exceed that on the downside!
With all the 100% financing, interest only loans, EZ qualifing etc...even a slight decline will cause many to be unable to sell for the amount due on their loans!
For some great 'insider' articles on the San Diego real estate market, which I believe will apply to any of the hot real estate markets of the past five years.....visit:
http://www.brokerforyou.com/brokerforyou
http://www.downtown-san-diego-real-estate.com/san-diego-real-estate-article-index.htm
http://www.brokerforyou.com
http://www.san-diego-for-sale-by-owner.com
http://www.la-jolla-ca-del-mar-san-diego-real-estate-encinitas-california.us
http://www.brokerforyou.com/blogger/index.html
http://san-diego-coastal-real-estate.blogspot.com
http://sandiegofsbo.blogspot.com
http://downtown-san-diego-real-estate-views.blogspot.com
http://san-diego-coastal-real-estate.blogspot.com
http://sandiegofsbo.blogspot.com
http://downtown-san-diego-real-estate-views.blogspot.com
http://www.brokerforyou.com/san-diego-real-estate-sales.html
http://www.poway-real-estate.info
http://www.del-mar-real-estate.info
http://www.la-jolla-real-estate.info
http://www.los-angeles-real-estate-brokers.com
http://www.san-jose-real-estate-brokers.com
http://www.orange-county-real-estate-brokers.com
http://www.san-francisco-real-estate-brokers.com
http://www.sacramento-real-estate-broker.com
2006-08-21 04:43:06 · answer #5 · answered by Anonymous · 0⤊ 0⤋
take a look into the crystal ball
2006-08-20 04:47:08 · answer #6 · answered by vitriol for the masses 3 · 0⤊ 1⤋