Posted on 05/29/2011 5:14:57 PM PDT by Jim 726
There's a three-year inventory of homes in foreclosure for sale, and that's devastating home prices.
Las Vegas has so many foreclosures that 53% of all the homes sold in Nevada are in some stage of foreclosure, according to a report from RealtyTrac, the online marketer of foreclosed properties.
Foreclosures represent 45% of sales in California and Arizona, and 28% of all existing home sales during the first three months of 2011.
"This is very bad for the economy," said Rick Sharga, a spokesman for RealtyTrac.
What's more, the homes are selling at steep discounts, especially so-called REOs, bank-owned homes that have been taken in foreclosure procedures.
The average REO cost on average about 35% less than comparable properties, according to RealtyTrac.
(Excerpt) Read more at finance.yahoo.com ...
With default ahead, it would seem that real estate remains a long way from the bottom.
In certain areas, for certain types of houses.
Other places are full up, and prices are starting to rise.
Great news for buyers, though. If there’s anyone who still has a job or money...
“This is very bad for the economy,” said Rick Sharga, a spokesman for RealtyTrac.”
Wrong. This is GOOD for the economy. Oversupply bubbles means prices must necessarily drop for that asset. Lower prices attracts buying, and over time the market works thru the supply overhang to get back eventually to a healthy market.
That is of course the govt and banks don’t screw up the market again with their past practices.
Right now it sucks for the realtors and the banks, but homebuyers right now are getting great deals. People who likely couldn’t afford a home are doing so now. Now we just need to improve the job market.
>>Great news for buyers, though. If there’s anyone who still has a job or money...<<
I’m buying — I just paid off my mortgage in California and it looks like I can pay cash — even BEFORE I sell my current place — for a nice place in Irving, TX.
Cash is king. I am glad I never took a dime out from my refi. That was to get a good interest rate. The whole mortgage took about 12 years to pay off.
I shan’t have another.
A picked up a church friend at his house last week. He and his wife live in a brand new two-story house in a tony part of town. I know he doesn’t make much money so I asked him how much he paid for it. I knew the going price when they were built back in the boom—~$450K. He paid $165K and they gave him $5K in upgrades. The seller was the builder.
It all depends on the area. REO’s here are generally dogs.
You might want to check out the current and future demographics of where you are considering in Irving. Have a friend there and the value of her home is going down.
>>You might want to check out the current and future demographics of where you are considering in Irving. Have a friend there and the value of her home is going down.<<
This is to live — but I’ll look at trends, especially in the schools. I don’t have kids but school trends tell us about the families in the area.
But I have to be near he airport (that is why I am moving).
But if I buy the place cash then it doesn’t matter if I lose a few bucks and have to sell at a small loss after a few years. I won’t like but it won’t matter much.
Real estate has not been devastated yet. It was in a huge bubble. 14 years ago we paid $125k for our house. It is still worth right at $200k but at the height of the bubble it was worth almost $500k. Just look at the numbers.
Daughter is in escrow for a new house right now. They are still doing some rather creative financing. She didn’t qualify but they have a program that if you make no more than $60k a yr you qualify for a no down, no closing costs loan on a$180k house. That is ridiculous.
And therein lies the root of the problem that localities all over the Country are facing; nobody is paying property taxes on those foreclosed homes, or on the ones that are in default right now and waiting to be foreclosed.
The longer those houses set empty, the worse condition they are in and the harder they will be to sell at any price. Even if they do sell, the price is so low that the tax value won’t cover the costs of the City services the house has; water, sewer, street repairs, street lights, Police, Fire...you name it...
Of course the entire landscaping was completely dead and I haven't even discussed the one bedroom monther-in-law suite which had been gutted. Stupid stupid Realtor. My BOE was $100K in rework to bring it to showroom. They wanted $380K for the property.
look in Mansfield (just south of Arlinton, TX) as well, some REALLY good deals there and it’s considered desirable by most people.
For the most part, houses across the board need to drop about another 50%, maybe even more, before they represent what a home price should be (Approximately 2x one’s gross income, as a rule of thumb). The problem is a lot of people mistakenly believe that the price (they say “Value”) of a home should go UP, when in fact it should be stable or go DOWN (as supply increases, and manufacturing improves). There is a 116 year study of prices to back that up.
The price of a home increasing is due to 1) Dollar devaluation or 2) Price manipulation, in general (Especially if it lasts more than a few years). Hence the decades old rule of 2x one’s gross income. Houses are still in a bubble, and need to drop quite a ways to be “affordable” (Read: “Appropriate”). People bought houses they normally couldn’t have through government manipulation. Or we wouldn’t have the bubble we do today. Now that the insane debts people were building are being cleared out, the prices MUST fall to affordable levels, and that’s no where near as high as they are now.
Thanks, amigo! :)
Will that make us neighbors?
People talk about how we’re years from a real estate recovery. I think this country has more potential energy than that, and if we could create a positive business climate, things could bounce back like a rubber band.
It would take government getting their dead hand out of the business world, which is a big if.
“Lower prices attracts buying, and over time the market works thru the supply overhang to get back eventually to a healthy market.”
They’re going to need to be significantly lower, as more and more people lose their jobs. Next up will be more and more multi family homes, creating even more of an oversupply. There’s a long, long way to go before the prices bottom out. IMHO.
Real Estate prices have been in a huge bublle, for about 15 years. But you’re right, once things get cleared out and cleared up, the American Economy can bounce back. But it’s not practical to think that the debt sponsered way of life will continue. It won’t. Prices on all goods must either drop drastically, relative to work hours performed, or they will not be bought, plain and simple. Other citizens in other nations will soon no longer support the U.S. way of life (they have been subsidizing us as long as we have been running a deficit), and when that pull back comes, there will be a sever reduction in lifestyles, accross the board (Except the very rich, or elite, who will profit handsomely, as they will have the prior resources to do so, as always, throughout history).
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