Can the housing mkt get any uglier?

Question

Here in Orange County there are no buyers, we dropped our house from 975,000-825,000 and not a bite? yikes, is this the bottom??

Answer 1

Going to get worse.

Why? Because what is going on in Texas, Florida, or in Russia is NOT California.

Prices in California from 2005 to 2006 increased in some places by almost 75%-80%. This was after increasing 45%-55% the year before. Homes over a 5 year period tripled in value while incomes did not for the average person in California. The reason prices in Texas are increasing is because Texas is ranked the 2nd cheapest state to live in with housing prices at about 75% of th national average. OK is #1 in case anyone was interested. California is 49th and housing is over 205% of the national average. People in the other 48 states are moving to places like Utah and Texas, driving up prices. Homes for $400k in California are only $100k in Texas. So if I am from California and I am more than willing to pay even $120k for that $100k house, as it is a bargain compared to what I just left.

The foreclosure market has just started in California and expect it to get worse as variable rate mortgages continue to increase, the unemployment rate continues to climb, more lenders close their doors in California and put even more people out of work and make it harder for people to get out of adjustable rate mortgages as loans get harder and harder to qualify for.... the value on home prices in Fresno CA dropped 12.2% according to a local report and appraisers I work with agree with those numbers.... the expected decrease over the next year is from another 5%-10%.

California as a state is out of money and state and local goverments are making cuts which mean more layoffs, more foreclosures, and more people unable to purchase homes.

The big problem is sellers still see last year prices... there is a reason the MLS shows more price reductions every day, more listings withdrawn than there are new, and only a few sold in the 24 Hour Market Watch. (And I am a MLS member of 5 counties in CA) Homes are not selling because there are no QUALIFIED buyers left in California.

Guess what... that house that was worth $100k five years ago? It realy should only be worth maybe $150k now but they still have it listed for that $320k and they owe $310k on it.

Blame the appraisers and investors for pushing prices to ridiculously stupid levels that cannot be supported by the incomes of the average home owner.

Answer 2

You bet it can get uglier. The RE market in southern California is notorious for its amazing bell curve. The key here is to be able to keep the home till the market goes back up. I have been through several of these cycles. I anticipated this trend and sold my properties last year in may. I am actually fairly pleased with myself because, for once, I seem to have called the market trend fairly well. Now is the time to have money available to purchase foreclosures. Your home is going to be worth a lot less before it becomes valuable again. If you can afford to hang in there your money will come back to you. If forced to sell now you might end up taking a bath. If the interest rates go up again prices are going to plummet. But... The good thing about so cal is that people always want to move to and live here. So your property values will go up in the future. Generally this is about a five to seven year cycle. With the advent of the Internet the market is under some stresses that have not been around for the previous fluctuations. So be ready for a painful market for quite awhile. It could get a lot worse.

Answer 3

It can get worse. There is a record number of foreclosures now, due to the easy mortgage money with low intro "teaser" rates that was being handed out like candy a few years ago. It's been like a train going 200 mph coming to a screeching halt. People are working two and three jobs to try to hang on to their houses, after the "teaser" rate expires and the real adjustable rates kick in.
If possible, you should consider offering buyer incentives like partial owner financing, or covering some of the buyers' closing costs. A lease-purchase type of sale may also work out better for you, if you can do it- don't know if you need the cash from the sale to put into buying another home for yourself.

Answer 4

I am a Realtor in Cape Coral/Fort Myers Florida since 15 years, i have seen markets like this before but i have also seen markets bounce back almost over night. I do not have a crystal ball either but slowly we are seeing a light at the end of the tunnel, at least here in our area. Investors and first time home buyers are coming back since properties are priced right so investors see the gain in value and first time home buyers can afford to buy. In our market here we are seeing the low priced properties selling and the higher end properties as well. The middle price range is still struggeling but i think that will change soon as well. It is a great time to buy and a lot of people realize that now.

Answer 5

It's going to get worse.

Why?

Mortgage re-sets next year are going to double

Think I'm blowing smoke?

Check these numbers out from Bank of America.

Look at the mortgage resets for the subprime mortgage market next year.

Aug (07) 52 Billion Dollars
Sep 58
Oct 55
Nov 52
Dec 58
Jan (08) 80
Feb 88
Mar 110!!! WOW
Apr 92
May 72
June 75
July 50

Answer 6

Yes and it will get worse. Also just wait till there are allot more homes on the market that are in foreclosure. Your home that your trying to sell at full price will not look like a good deal against a foreclosed homes price.

As far as selling your home? Dont get greedy in this market. If people are looking for a home in your area they are aware what the homes are going for and what is a good deal.

Answer 7

Here is Houston if you live in my area(memorial villages) there is a shortage of homes and some houses are going over the asking price.