Falling prices trap new homebuyers

The Orange County Register ^ | December 13, 2006 | JEFF COLLINS

[GodGunsGuts]

Wednesday, December 13, 2006

Falling prices trap new homebuyers

Neighbors in a new Garden Grove tract say a developer's plan to slash prices by about $140,000 has left them owing more for their homes than they're now worth.

By JEFF COLLINS

The Orange County Register

[Moonman62]

So a small development had to lower prices to sell their last few homes. That's hardly a story of national significance.

[montag813]

If they were in the market in order to flip the house, tough cookies.

That San Antonio family of flippers on "Flip this House" are doing very well. Saw one house last week they bought and renovated for $80k and sold for $140 17 days later via a front-yard auction. Incredible.

[montag813]

And one-sixth in the midwest.

But then you have to actually live in the midwest.

-New York Snob

[DH]

Real Asset Value (RAV)= The actual price you can sell it for when forced to or in a pinch.

Up until 1982, when the Texas oil depression occurred, I was fat, dumb, and happy with the belief that the valuation of my business and personal assets were worth what normally would be accepted as a good appraised value.  Then, when the dark cloud of the "Texas oil depression" hit in 1982, I suddenly learned a lesson about RAV.  I now think that a whole lot more people are "fixin" to learn the painful formula too.

This formula is not taught in any University or College.  It is only taught at "the school of hard knocks."  Once learned, the lesson will never be forgotten.  (Compare it to sticking your finger in the fire.)  It has guided every financial decision and evaluation that I have made since 1982.

I feel that in the short future, a whole lot of people will learn the formula when they try to liquidate assets at the value they think they are worth when actually, the buyer will set the value by actually purchasing it at "fire sale" prices.

[Dixie Yooper]

Democrats in Congress will have a plan for dealing with this

They will have a senate hearing with photo ops and speeches while they pretend to tear into the big shot developers and realtors that are stealing everyone's money. Harry Reed will chair this hearing.

[montag813]

Toll Brothers hasn't dropped prices in NJ. In fact, they have increased the prices from $500,000 to $800,000 in the last 3 years.

But are they SELLING? I see prices dropping like a rock all over Bergen Cty.

[Tribune7]

PS. What your home is worth today is irrelevant unless you sell it today.

If your home is assessed at more than it's worth you will pay more in taxes than you should.

[RSmithOpt]

Wish the county tax assessors and the government would be in line with you P.S. statement. Across the nation, tax assessors and the gov have decide that homes are worth more than what they usually sell for. In Franklin Co., NC, we have 'drive-by' picture assessments. Funny thing, how much is a home really worth if it's trashed inside and in dire need of repair and maintenance? This is never taken into account for tax purposes.

[montag813]

It's not happening in CT. No bargain hunting here.

I see houses that have been on the market for nearly a year in CT in places like Bethany, Ansonia and Woodbridge. In Milford they go fast.

[Kenton]

I've lived in the same house since 1976, and it's long since paid for. It's worth about 4 times what I paid for it.

I'm retiring next year, maybe prices on housing will be affordable just at the time I'm considering becoming a "snow-bird" to flee from these Ohio winters.

I guess how this affects you depends on where you are in your life more than anything else.

[Moonman62]

Exactly. And it will turn into more than just an "ouch" as this thing spreads.

How is it going to spread? Fixed rate mortgages have been going down since last summer, and variable rates will start going down next year. The dollar is weak which brings in more foreign buyers.

[100-Fold_Return]

Falling prices trap new homebuyers

ROTFLM*O!!!! What a scare!!! Oh my! Guess the doom-and gloom mongers need work, hahahaha!

[100-Fold_Return]

Falling prices trap new homebuyers

ROTFLM*O!!!! What a scare!!! Oh my! Guess the doom-and gloom mongers need work, hahahaha!

[GodGunsGuts]

It's happening all over the place. Foreclosures and inventory are way up and housing prices are falling. Orange County is typical of what will be happening in the expensive areas across the country.

[nascarnation]

I'm astounded by what folks on the coasts pay for housing.
A friend's daughter just paid 400k for a middling condo in N. Virginia.

Flyover country may not be glamorous but 400k buys a beautiful 3000+sf brick home in a nice suburb in Indiana.

And in the story, the guy's mortgage is 3k/month and will double soon when he goes off the teaser rate. Those folks who work at Google must make some serious bucks.

[hawkaw]

Owning is still better than renting ....

[GodGunsGuts]

Ever hear of pushing on a string? When Japan's real estate bubble popped, they lowered their rates to zero which attracted exactly zero new demand for real estate.

[thinkthenpost]

Not all of Texas: With Fort Bliss growing the way it is prices in El Paso won't be coming down for a while, of course if property taxes get too much higher there will be folks looking to sell because they can't afford to pay their taxes. I don't too many are there yet, but with near runaway appraisals it is getting close for some.

[100-Fold_Return]

Looked at property yesterday and needs some roofing work and imho the septic motor may need replacing or tank dredging, but even so could write a personal check for that. Six figures 18 mon. ago South of Ft. Worth.

[Garvin]

Prices in Eastern, North Carolina have doubled in six years due the the infestation of "Half Backs" (Northerners that move to Florida then move half way back up the coast)in our once quite area.