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Old 03-31-2009, 08:11 AM   #1 (permalink)
Eat your vegetables
 
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Dropping Home Prices

Quote:
Record Drop in January Index of Home Prices
April 1, 2009
New York Times
By DAVID STREITFELD
The decline in housing prices maintained its record-breaking descent in January, according to data released Tuesday.

Standard & Poor’s Case-Shiller Home Price Index, a widely watched measure of 20 metropolitan areas, fell 19 percent in January from January 2008. That was slightly faster than it dropped in December.

The worst hit metropolitan areas have now fallen nearly in half. None of the cities showed month-to-month improvements. Thirteen showed record annual rates of decline.

“There’s no daylight that I can see in this report,” said David Blitzer, chairman of the index committee at S.&P.

Phoenix is down 48.5 percent from its June 2006 peak, with Las Vegas not far behind. Dallas was the city with the smallest decline from its peak, 10.8 percent.

The 20-city index fell to 146.40, its lowest point since September 2003. The peak was 206.52 in July 2006.

It may be spring on the calendar, but analysts said it would remain winter on housing prices for a long time.

“We continue to believe that it is unlikely that we are anywhere near a bottom in nationwide home prices,” Joshua Shapiro, chief United States economist for MFR Inc. said in a note. He estimated the index was perhaps two-thirds of the way through its ultimate total decline in this cycle.

The Case-Shiller report comes on the heels of a Census Bureau release that said sales of new one-family homes in February rose 4.7 percent above the revised January rate. The report was received as a hopeful sign for a bottom in home sales.

Some agents have been reporting signs of life in hard-hit markets, feeding a sense of optimism.

“We’re back off the ledge,” said Jim Klinge in San Diego. “Prices have gotten attractive enough, especially with very low interest rates.” He noted, however, that all the sales were on the low end, which in San Diego means less than $500,000.

That activity did not do much for the local price data, however. San Diego’s rate of decline increased in January from the previous month.

Housing prices traditionally lag sales, giving the market time to clear itself.

“If there were a real, absolute, no-questions-asked uptick in sales in January, we might not see clear price movement until August, September or later,” Mr. Blitzer said.
How have you responded to this recent drop in home prices?
Is your home losing value too quickly?
Are you finding you're finally able to invest in some extra rental property?
What do you feel is driving this continued downward trend in home prices?


__________________________________________

How have you responded to this recent drop in home prices?
My sister's family was finally able to purchase a home of their own. After scrimping and saving pennies for a year (our parents, too), they've been able to afford a nice little home in the community where we grew up. Home prices have dropped an extreme amount in that suburban community - the home they recently purchased for around $400,000 was worth $800,000 just over a year ago.
Is your home losing value too quickly?
I don't own a home. My parents' home has not lost significant value.
Are you finding you're finally able to invest in some extra rental property?
Ha! That would be nice. Unfortunately on a graduate student stipend I don't stand a chance of investing in any property for the next several years.
What do you feel is driving this continued downward trend in home prices?
I'd love to hear what the TFP has to say about this!
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Old 03-31-2009, 12:55 PM   #2 (permalink)
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I guess we're luckier than some since the home prices in my immediate neighborhood have held up a lot better than average. Based on recent local sales, I believe I could still get at least the low end of what my asking price would have been a year or two ago. So we've seen a slow down of the housing price escalation of previous years, but it has not really gone backwards around here. Plus, I don't even consider my house a typical "investment" in that I bought this house to live in and enjoy, not to "make money"...though of course I always assumed I would not loose money on it. In spite of the current economy, I am still optimistic that when I do eventually sell it, it will prove that I have made a decent investment....of course I should add that I purchased this house back in 1978 and the low end value of it today is still at least 10X what I paid for it.

I have little or no interest in owning or managing rental property.

With financing being so tight now, it is harder for people to qualify and get the magnitude of loans they were getting a few years ago, so that basically reduces the buyer pool and lowers "real" demand, i.e., not people who wish they could buy, people who are in the market who actually can buy. Lower demand = lower prices. The prices in my immediate area have held up since the housing is above average price, so only a more afluent buyer will even be in the market here, and there still seems to be more of a demand to live here than a supply of housing because it's such a great area, with no significant new construction possible.

I wish my 401K held up as well as my house
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Old 03-31-2009, 01:00 PM   #3 (permalink)
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In a year, Canadian prices dropped an average of 18.5% or something. In Toronto, it's more like 5%, which is big for a city like Toronto.

I'm banking on this. I'm a renter who is looking to become an owner. We're looking at condos and are expecting to find a deal, even in the neighbourhood we're currently living in, which is one of the nicer (somewhat) affordable ones.

I think a number of factors are driving prices down, but I don't know much about these things to even speculate. I just want to take advantage of it.
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Old 03-31-2009, 01:08 PM   #4 (permalink)
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Prices in our neighbourhood are holding steady (toronto) however, it has definitely turned into a buyer's market. I suspect that there will be a downward tendency soon, as homes stay on the market longer. On a personal note, I am on the 10 th week of a 9 week renovation of my home. Not bad, the contractor is keeping to the schedule, with only a 1 week delay. Is the investment in my home untimely? I don't think so as I expect to be in the place for atleast another decade. Also, some deals are to be had with the contractor.
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Old 03-31-2009, 01:14 PM   #5 (permalink)
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Prices are holding in our neighborhood, but I live in NYC. They raced up to $500k and are holding at that area, but the downside is that there are no sales.

If I had more cash, I'd buy more houses in some neighborhoods. I bought a 3rd house last year as I was timing the market to the bottom. Credit was tightening and normal 20% down wasn't good enough because I was buying in a problem area they wanted an additional 5% to hedge the decline. Some wouldn't even give us a loan with a low debt ratio and high FICO score 750+.
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Old 03-31-2009, 02:32 PM   #6 (permalink)
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I don't think Denver has been particularly hard hit. Or let me rephrase that, Denver prices have not dropped to a level where my $40,000/yr income will buy a house in a decent neighborhood without making me live paycheck to paycheck yet. $150k around here still doesn't seem to buy a whole lot, unless you want to move into a declining 35 year old neighborhood that is miles away from work and recreation.
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Old 03-31-2009, 10:27 PM   #7 (permalink)
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We've lost about 15% of the value of our house since we bought it 3 years ago. Closed about 6 months before the market crashed. The loss seems to have stablized recently as the local sale prices are holding. We have a long way to go before we have any equity in the home.
Not overly worried about it as we have no trouble making the payments, just going to take awhile to get any equity.
Prices in my area are depressed mostly because it is a distance from highways and major cities. Pretty rural which is what attracted me to the house in the first place.
Buying another home for income purposes is not feasible.
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Old 03-31-2009, 11:03 PM   #8 (permalink)
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We haven't lost much on our house, LS had bought it at a really good price for the area. Some parts of NE Ohio have been totally destroyed in the falling prices.

The good news is last year, I looked at a 10 bedroom group home built in 2001 and the 4 bedroom 1922 house next to it that had been foreclosed on. They wanted $132,000 for both properties and LS told me know way.

Today I looked at those properties again and they had changed realtors been thoroughly cleaned up and the price is now $80,000 for both, but the realtor said Chase really wants to get rid of them so I'll probably offer $72,000. This year if I can get the credit, I'm buying them.
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Old 04-01-2009, 03:05 AM   #9 (permalink)
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On the decline it's self. I think much of the markets around the country were, like the stock market, over valued. They had to fall at least some. Many places had no industry or employment base to support the prices. It's fine to have housing in NY or LA going for 500K+ min. there are jobs in those areas to support those prices. But if homes in my home town Salem, Oregon are selling for 500+ min. it's a problem, almost no one in the area makes that kind of cash. It turns out it's not good for you or your banker if you're buying a house that 10 times your yearly income.

That said I still think real estate is a good investment, esp. now with home prices back down to reality. Even less in many places. I've often thought of buying a rental. I have one up in Oregon now and would pick up another under the right circumstances. No one thinks the bubbles going to burst and when it does no one thinks it will ever come back. It will come back and owning a few homes might be much better then having cash in the bank.
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Old 04-01-2009, 03:23 AM   #10 (permalink)
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Prices are dropping over here too, which is supposed to make it easier to find a 'cheap' home. I, like Baraka_Guru, am renting but looking to buy. I've only been renting for 6 months and I already know I don't want to extend my lease when this one's up.

What's making it easier (over here) is that our Reserve Bank has dropped the interest rate by 1.5% in the last 6 months, with another 0.5% drop expected next month.

Unfortunately, the volatile economic climate has made getting credit from the banks that much harder. These days, banks want up to 30% down on a home loan. For a first-time buyer like me, that's a crazy amount of money to be able to out down as a deposit. I'm willing to cut out the luxuries in my lifestyle to afford a home, but I'm not going to bankrupt myself.
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Old 04-01-2009, 05:06 AM   #11 (permalink)
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I have been avoiding finding out specific information about home prices in my area. I bought my house 3 years ago and I'm scared to think it may be many years before I am able to sell it on and make back what I spent. Not that I want to right now, but the thought has crossed my mind. This thread may just prompt me into finally finding out how much I have lost.
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Old 04-01-2009, 07:35 AM   #12 (permalink)
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House prices on houses like the one I live in (real houses in good repair) are holding steady in our neighborhood. I don't expect the value of our house to drop; my folks picked it up for a good price and we're putting in the work to improve it. The house next door recently went up for sale; they're asking more than I thought they would, to be honest. We live in a college town, so houses are always worth something, even as investment properties, but it remains to be seen if houses will actually move at their list prices. One of the houses down the street has been for sale for quite a while; I think the home belonged to an elderly gentleman who died and now his kids are trying to sell it. They don't seem to be in much of a hurry; it's been on the market for months but the price hasn't changed a bit, despite the distinct lack of street appeal (the house is cute, but the yard is overgrown and full of blackberries, so it makes passerby wonder what state the house must be in).

The value of my parents' home in Washington hasn't dropped either. They're going to put it on the market soon, and are asking $600,000. Admittedly, their property is a rarity in their area (an actual home on the waterfront with a double lot), and they've put in a lot of work to improve it (new kitchen, refinished floors, new master bath, new carpets throughout). They're very encouraged, as they've already received a couple of inquiries, even though the house isn't for sale yet.

I agree with Tully--some markets in our neck of the woods are correcting themselves down to levels that are more realistic. This is true here too--but it's true in more of the outlying neighborhoods without the proximity to the university, and true in the neighborhoods dependent on Hewlett-Packard workers to buy homes.
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Old 04-01-2009, 10:21 AM   #13 (permalink)
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Old 04-03-2009, 08:41 AM   #14 (permalink)
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My house has lost at least half of its value. We got a loan modification back in Sept 2008 where we changed our ARM to a fixed before the ARM reset. I'm really wondering if we made the right decision. Yes, we're in our home and we can afford it but it is going to be a LONG time until the value has come back to the point at which we can sell it and move.
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Old 04-03-2009, 11:23 AM   #15 (permalink)
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You can get a 1BR starter home for around 40-60 grand where I am. That's astonishing because that would barely have bought you a cardboard box in a downtown alley a few years back. From that perspective it's nice to see home prices readjust, because they were fetching some truly ridiculous and unaffordable dollar amounts - to the point where responsible first time homebuyers couldn't afford a house unless they turned irresponsible and got one of those famous sub-prime loans.
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Old 04-03-2009, 05:20 PM   #16 (permalink)
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How have you responded to this recent drop in home prices? I bought a home 16 months ago when houses had started to go down.
Is your home losing value too quickly? My home is worth $6000-7000 more than I paid for it. I live in a good area/city still.
Are you finding you're finally able to invest in some extra rental property? No, I don't like dealing with other people paying me for something.
What do you feel is driving this continued downward trend in home prices? Jobs aren't and weren't paying enough for people to easily afford the increased home prices. There have been lots of jobs lost, and the ones that they are being replaced with might be making money for people at the top, but not for the workers. And the media continually tells us that the entire country is in a recession (when certain areas aren't, and certain areas didn't benefit from the good times either).
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Old 04-08-2009, 04:55 AM   #17 (permalink)
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Can anyone think straight ? There is no "we". If "we" existed then it would have been a good thing, too many houses - less homeless people. Or no homeless people.
But no, too many houses is a bad thing for our organization. In fact trough the unbelievable but true workings of our "advanced civilization", too many houses mean - more homeless people ! I say let's demolish them...
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Old 04-08-2009, 05:03 AM   #18 (permalink)
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Quote:
Originally Posted by laconic1 View Post
I don't think Denver has been particularly hard hit. Or let me rephrase that, Denver prices have not dropped to a level where my $40,000/yr income will buy a house in a decent neighborhood without making me live paycheck to paycheck yet. $150k around here still doesn't seem to buy a whole lot, unless you want to move into a declining 35 year old neighborhood that is miles away from work and recreation.

Yeah, I was looking around online out of curiosity.. there are some condos I've seen at 170k, and they're only the size of an average 1 bedroom apartment.
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Old 04-08-2009, 05:58 AM   #19 (permalink)
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My last journal entry was about this. Prices in some neighborhoods around here are down 50%, however they are mostly short sales. There was so much stacking going on with latino families who were basically given fraudulent loans. That is, they were perfectly legal, just like clubbing baby seals is still legal. Because of the multiple families situations, they were told to sign a statement of income. In one notorious case, an hourly Target employee was told by her loaner to just say she makes $100k. She lived in her house for a month before she was turned out.

The really unfortunate thing is that the upcoming relief bills will make it easy for those whose eyes were bigger than there bellies to get out from under their dilemma, while new restrictions placed by the loan companies make it much harder for those with good credit to buy. We have a high FICO, and really had very little trouble getting a loan for our upcoming purchase, except that every time a new restriction comes into place, we have to jump through another hoop because it's not in the interest of the mortgage company to grandfather us in.

We're buying a house that's $25k worth more than what we paid, and sold to us for $155k less than it sold for a few years ago, to stackers who foreclosed. It was bought by an investor who gutted it and renovated, and put it up for conventional sale.

The whole short sale and foreclosure thing is another issue. Unless you have the time and patience to invest in them, don't. Even if you offer full price in cash, it will still take months to sort out the process. We offered full price on a townhomeover a year ago. The bank came back and asked for much more because of the appraisal. That bank is now out of business, the house was foreclosed on, and the trustee is asking for much less, and it's still on the market.

So instead of a townhome with a postage stamp yard, we are getting a two story renovated home with a quarter acre (in the DC area, unheard of unless you're Willard Scott) for about $30k less.

And we get an $8k tax credit.
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Old 04-08-2009, 06:13 AM   #20 (permalink)
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Originally Posted by laconic1 View Post
....unless you want to move into a declining 35 year old neighborhood that is miles away from work and recreation.
My neighborhood is now ~114 years old, established in 1895, and IMO it is an awesome place to live, a very "neighborly", friendly, involved community, etc.; though it is not very rural so if you want a lot of land or just be away from it all this isn't the place. Though it's suburban I'm ~15 min. from center city Philadelphia, I can walk two blocks down my nice, tree-lined, safe street and get anything I could possibly need, there is a commuter train station right there, we have some of the best public and private schools anywhere, parks, recreation, restored old movie house, pubs...all this maintains the demand to live here at a high enough level that real estate values can't really fall significantly unless there is a massive depression far worse than this situation now. If I ever move it will just be to a bigger, nicer house in this same neighborhood.
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Old 04-08-2009, 07:04 AM   #21 (permalink)
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Quote:
Originally Posted by Poppinjay View Post


We're buying a house that's $25k worth more than what we paid, and sold to us for $155k less than it sold for a few years ago, to stackers who foreclosed. It was bought by an investor who gutted it and renovated, and put it up for conventional sale.
I'm always puzzled by statements like this.
How do you know it is worth $25,000 more? Do you have an offer to buy now at that higher price?
Wouldn't the seller have sold it for that higher price if there was an offer on the table?
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Old 04-08-2009, 07:19 AM   #22 (permalink)
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This is an interesting thread, having a look at the cost of housing in different areas. It's a bit daunting for me, realizing how expensive it is to live in Toronto.

We're looking at condos below 900 square feet (1 bedroom + den) at around CAD $250,000 (USD $200,000 equivelant), if not a bit more than that. I'm not sure if the value will go down over the next few months, so we should probably look into buying. If anything, the prices will remain relatively stable here. Normally, they would be growing quite quickly in this city.
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Old 04-08-2009, 07:24 AM   #23 (permalink)
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agreed eribrav, the REO we bought last year appraised for $25,000 more than we paid, yet an identical house in a similar sized lot just 1 block away was selling for $20,000 less than what we paid for it. It closed for $147,000 almost $40,000 less than the home we purchased.

Personally it's all based on what someone is willing to pay for it, not what someone thinks it is, this goes for everything from real property to jewelry, art to automobiles.
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Old 04-08-2009, 09:44 AM   #24 (permalink)
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Originally Posted by eribrav View Post
I'm always puzzled by statements like this.
How do you know it is worth $25,000 more? Do you have an offer to buy now at that higher price?
Wouldn't the seller have sold it for that higher price if there was an offer on the table?
In reality, yes, we would have to have an offer. However, when we checked recent sales on that street, there was nothing under $400k, which was way over what we paid. What I didn't have in my post was that the previous owners trashed the place once they were put into foreclosure and because it was in such poor shape the investor bought it literally for about 2 cents on the dollar. He intended to fix it up and sell it ASAP, and made about a $50k profit.

So it's pretty reasonable to expect it to sell at appraisal price. If the house had been bank owned, they probably would have asked us to come up to that price. Combine that with the fact that the government is about to spend untold sums on the DC area, and we're also less prone to the vagaries of the recession.

The house sold in 4 days for the asking price, so I imagine it's not a stretch to believe it could have gotten more.
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Old 04-08-2009, 12:01 PM   #25 (permalink)
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We live in an area probably hardest hit by the housing bubble collapse. Although we thought we did our homework by waiting 18 months after moving here and watching prices decline, we bought after a 5-month plateau, in April 2007. Prices remained pretty steady for about a year; then the bottom dropped out, and hasn't stopped since.
Asking price for a house similar to ours when we moved here in May 2005 - $325,000
Our buying price in April 2007 - $277,000
Our 2010 Tax Appraisal rec'd 2 weeks ago - $156,000.
Having been unemployed for over 5 months now, this will most likely become our mortgage company's problem shortly - and continue the cycle of oversupply and falling prices.

I must say, though, if you have a secure job (and I know that's a big IF) - with the interest rates as low as they are, and the this-year-only $8,000 tax credit, you'd have to be crazy to not buy a house this year. My hope is that once it starts, it will gain momentum like a runaway train. Home sales have actually been up for the past two months (although prices have still dropped - but this will level out as demand approaches supply) Also, don't forget - there has been a virtual cessation of new home building for well over a year now - once the demand exceeds the supply, it will take a while for new development to catch up - it's a lengthy and expensive process. And prices will rise with the demand.

The next housing boom (and price increase) will involve the people who waited too long to get in on the really good deals.
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Old 04-08-2009, 01:12 PM   #26 (permalink)
 
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i thought folk who are interested in this matter might find this to be useful:

CEPR - Housing Market Monitor

it looks like it updates weekly...
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Old 04-08-2009, 02:17 PM   #27 (permalink)
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So I know this is off topic but say you do buy a house for say, $155k and then it drops down about $30k. Can you get an adjustment? To pay less or what have you?
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Old 04-08-2009, 02:18 PM   #28 (permalink)
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My neighborhood is now ~114 years old, established in 1895, and IMO it is an awesome place to live, a very "neighborly", friendly, involved community, etc.; though it is not very rural so if you want a lot of land or just be away from it all this isn't the place. Though it's suburban I'm ~15 min. from center city Philadelphia, I can walk two blocks down my nice, tree-lined, safe street and get anything I could possibly need, there is a commuter train station right there, we have some of the best public and private schools anywhere, parks, recreation, restored old movie house, pubs...all this maintains the demand to live here at a high enough level that real estate values can't really fall significantly unless there is a massive depression far worse than this situation now. If I ever move it will just be to a bigger, nicer house in this same neighborhood.
I guess I should clarify what I meant by "declining 35 year old neighborhood". One of Denver's suburbs, Aurora went through a monstrous building boom in the '70s. At the time Aurora was one of the fastest growing cities in the country, if not the fastest. Neighborhoods sprouted up like weeds, and many of the homes were cheaply built. Now those neighborhoods are aging badly, the schools are low performing, crime is increasing. The neighborhood I grew up in was built during this time and it has been particularly hard hit. I wasn't trying to say that old homes are bad. My grandparents home in Wisconsin was built right after WWII and it is in a fantastic neighborhood just a 5 minute walk from Lake Michigan, a 5 minute bike ride to a train station that has commuter service to Chicago, and just about every thing else you could want right there. A highly desirable location, and if I got a job in the Chicago/Milwaukee area I would try to find a way to buy that house.
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Old 04-08-2009, 03:45 PM   #29 (permalink)
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Originally Posted by blktour View Post
So I know this is off topic but say you do buy a house for say, $155k and then it drops down about $30k. Can you get an adjustment? To pay less or what have you?
The old (effective Nov '08) homeowners' assistance bill had time limits - you had to have bought your house between January 2005 and June 2007, IIRC. It was also voluntary, at the discretion of the mortgage company. And it was based on income - you couldn't qualify for a modification unless your mortgage payment was over 31% of your gross monthly income. It put the new principal of the loan at 90% of its currently appraised value. There were also strings attached - you had to split any profits when you sell with the FHA. I believe it was 100% to the FHA the first year, and a sliding scale for years after that - but it never went below 50%.

Obama's newer homeowner's assistance package is a joke. I can't believe he had the nerve to unveil the plan in Phoenix - because it is one of the worst-affected areas - yet it only helps homeowners whose currently appraised value is within 5% of their loan balance. Most of us in Phoenix who bought within the past three years have home values less than 50% of our loan. And that includes those of us who thought we were doing it right - I got a 6.4% fixed 30-year loan. I'm one of the "lucky" ones - so far, my house is still worth 62% of my loan balance.

Now - with all that being said, it's still up to the mortgage company. If they think it's in their best interest to modify the loan, they'll do that. If they think it's in their best interest to say, "Fuck you - you signed a contract," they'll do that.

If you've read all the posts on this thread, you'll notice that different areas of the country are suffering to different degrees when it comes to falling home prices. Where the bubble rose the highest, the fall is the worst. If you ask me, I don't think prices anywhere will drop below where they were in 2002 (with a few exceptions, I guess - like Detroit). If you can buy a house for what it would have cost in 2002, I'd say go for it. Home sales are public record - look at either your county assessor or county recorder web sites - it should list the date of sale and the price.
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Old 04-08-2009, 05:17 PM   #30 (permalink)
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I am currently living abroad and renting my house in downtown Toronto. From what I can see, the value of our house is holding steady but for many years, the value of the house had risen around 4% per year. The fact that it was already worth about 100K to 150K more than when I bought it and it is holding steady at that value is good news.

From what I can see, the Toronto (downtown) market is not likely to drop as the demand is still steady. I am just glad that I don't own in the suburbs where there was a real housing bubble.
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Old 04-09-2009, 09:53 AM   #31 (permalink)
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Obama's newer homeowner's assistance package is a joke. I can't believe he had the nerve to unveil the plan in Phoenix - because it is one of the worst-affected areas - yet it only helps homeowners whose currently appraised value is within 5% of their loan balance.
That is only the refinancing part of the package. There is also a loan modification process available to people whose mortgages (principle, interest, taxes, insurance, and association fees) are greater than 31% of their gross salary.

Making Home Affordable - Modification Evaluator
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Old 04-09-2009, 10:21 AM   #32 (permalink)
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I must say, though, if you have a secure job (and I know that's a big IF) - with the interest rates as low as they are, and the this-year-only $8,000 tax credit, you'd have to be crazy to not buy a house this year.
To clarify on this, there is a LOT of fine print there:

It is available to first time home buyers only. In the case of married couples, they BOTH must be first time home buyers. This is the opposite of the rules under FHA where either spouse could qualify as 'first time' if they didn't have an ownership in a primary residence.

This is not really a tax credit, since you have to repay the full amount as return taxes over the next 15 years. Other tax credits do not have to be re-paid.

If you sell before the 15 years is up, the full amount of the credit is due immediately.

It still can be a good deal for someone who is sitting on the sidelines waiting to pull the trigger on their first home purchase. But it is hardly the rosy picture that some people have made it out to be.
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Old 04-09-2009, 11:45 AM   #33 (permalink)
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This is not really a tax credit, since you have to repay the full amount as return taxes over the next 15 years. Other tax credits do not have to be re-paid.
I thought I read that this credit does not have to be returned unlike the previous one.
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Old 04-10-2009, 06:36 AM   #34 (permalink)
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Originally Posted by flstf View Post
I thought I read that this credit does not have to be returned unlike the previous one.
You read correctly.

And this whole mess is why we need to have better bank/inividual regulation on only taking on debt that you can pay back. As well as limiting speculators, landlords, and real estate companies from taking advantage of the situation (and then walking away when things went south). With the job market in Phoenix/Vegas for instance, there weren't a whole lot of good paying long term jobs. And when there was a job, you had to compete with los of people in that city, and around the country who wanted to move there.
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Old 04-11-2009, 12:14 PM   #35 (permalink)
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Just FYI:
"First time buyers" includes anyone who hasn't purchased a home within the past 3 years. It's meant to exclude flippers and speculators. I can't imagine there's a very large group of people who bought a home to live in within the past three years who are looking to buy again. Even if your house has gone up in value, you'd still be lucky to break even after commissions and closing costs. I guess there could be exceptions - like moving from an area unaffected by falling prices to an area hit really hard - that way you could get more house for your money. Good luck finding a job in those areas, though. Unemployment is a big reason for the foreclosures that have driven prices down.

The $8,000 credit is actually "10% of the purchase price; up to $8,000". So if your purchase price is $65,000, your tax credit is $6,500. Any home sold for $80K or over gets the full $8K credit.
The minimum stay before selling without a pay-back penalty is 3 years; not 15.
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Old 05-14-2009, 04:58 PM   #36 (permalink)
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The tax credit is a very nice deal for those who can take advantage of it. Just the other day, it was announced the $8000 (or whatever you can get, depending on income/house purchase price) can be used towards the downpayment of that very house!!
HUD Secretary Announces Monetization of Tax Credit at NAR Real Estate Summit
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Old 05-20-2009, 06:28 AM   #37 (permalink)
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I'm going to be buy a house this year, and had been planning to long before the current economic issues. It works out great for me, as I'll be a first time home buyer, and prices are down ~15 - 20% from normal in this area. It also helps that I'll be aiming for a house that costs about 60% of what I'm told I can afford, even before considering my wife's income (she'll stay home once we have kids.) I think I like this recession
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Old 05-20-2009, 08:40 AM   #38 (permalink)
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After we filed a dispute the county just agreed to reduce the value of our house by $50,000, this should save us between $400 and $500 on our taxes each year. Before we filed the dispute they increased the value by $10,000. I guess they are trying to keep the valuations high to maintain tax revenue. As unemployment rises I expect prices to fall even lower. This is good news for those who own their houses outright and want to pay lower taxes.
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Old 05-30-2009, 03:02 PM   #39 (permalink)
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Toronto House Price Index

Index level: 104.68
Change year/year: -6.78%

Toronto prices are hitting 2006-2007 levels. This isn't as bad as the U.S. 2003 levels.

Needless to say, prices are dropping and this bodes well for a prospective home buyer such as myself. However, look at the trajectory. It's steep. It could be a year or two before things level off.

Renting sucks, but so does buying a home that drops in value the day you move in...especially at that rate.

We will bide our time.
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