Havasu Housing Market

[havasumimi]

Hi! I posted this earlier as a response in a different thread...then I was thinking it actually might make for a good conversation and to get some idea of what others are thinking about the subject....
So please read, and feel free to respond, ask questions or move on :)
We are all wondering how low it can go here. We have gotten to the point of sellers coming to escrow with cash to close just to save their credit and prevent forclosure. So, how much lower can it get?? Most people can't sell for less than they owe. It is unfortunate for the sellers but it does make for a perfect market for buyers. There may be room for some older homes to come down but the market as a whole here is LOW and there are MANY homes on the market that are for sale for just what they owe plus closing - that's it. They are even willing to loose their down payment from when they bought it. There is no more room to come down on many of the homes....
So, sure you could wait and see what happens but I think some people will be missing the boat if they don't pick up on something that has bleeding sellers willing to net zero - right now. We haven't had any luck with short sales with the banks so even the forclosures are asking the same as many of the current sellers..... Who knows what interest rates will be like 18 months from now too....If everyone waits to buy when everyone else is buying they are sure to pay a higher price. Just my thoughts....

[riverfun]

You have people willing to lose their down payment because they most likely put very little down, they did not come in with a 20% down like the old days. You will have luck with short sales in the future because the companies holding these properties cannot do it forever, they have to answer to sombody (stock holders, creditors etc.) and will need to come up with some cash. I think their are some good deals out there but they are still not good enough with the economy uncertain.

[Cole Trickle]

Why are so many people dumping there houses? I would expect the market to stabalize and start appreciating slightly in the next 1-2 years.
Were all the people that bought second homes way over stretched or employed in the housing/mortgage business?
What percentage did 3-5 year arms that are about to get burned?
There are deffinatley some deals but I think it will continue to drop...also alot of those people that are just looking to come out even are in for a rude awakening since thats not the way the world works.(I owe this so thats what I want)

[INSman]

Why are so many people dumping there houses? I would expect the market to stabalize and start appreciating slightly in the next 1-2 years.
Were all the people that bought second homes way over stretched or employed in the housing/mortgage business?
What percentage did 3-5 year arms that are about to get burned?
There are deffinatley some deals but I think it will continue to drop...also alot of those people that are just looking to come out even are in for a rude awakening since thats not the way the world works.(I owe this so thats what I want)
Yes to a lot of your points above, same to be said with boat purchases and using HELOC's like an ATM machine. I have a beautiful fixed for my HAVI house and could care less really how much lower the market goes out there, which my guess is maybe another 10%. Only a problem if you NEED to sell or can't make the payment,

[Cole Trickle]

Yes to a lot of your points above, same to be said with boat purchases and using HELOC's like an ATM machine. I have a beautiful fixed for my HAVI house and could care less really how much lower the market goes out there, which my guess is maybe another 10%. Only a problem if you NEED to sell or can't make the payment,
yeah....your smart:D
I think everyone jumped in not really looking for a vacation house but a quick investment.
Over time you will be fine.The days of making 100K in a year on property has dissapeard until the next surge.
BTW...where the hell have you been? (They must be working you like a dog at the new job:))

[djunkie]

Yes to a lot of your points above, same to be said with boat purchases and using HELOC's like an ATM machine. I have a beautiful fixed for my HAVI house and could care less really how much lower the market goes out there, which my guess is maybe another 10%. Only a problem if you NEED to sell or can't make the payment,
Same hear. I'm just glad my house payment out there is less than some peoples car payments. I don't plan on selling anytime soon thats for sure. :D :D

[Cole Trickle]

Same hear. I'm just glad my house payment out there is less than some peoples car payments. I don't plan on selling anytime soon thats for sure. :D :D
No worries......
No one wants that P.O.S. damaged house with the huge poolless back yard;):D

[djunkie]

No worries......
No one wants that P.O.S. damaged house with the huge poolless back yard;):D
It aint for sale anyways. :D :D

[INSman]

yeah....your smart:D
I think everyone jumped in not really looking for a vacation house but a quick investment.
Over time you will be fine.The days of making 100K in a year on property has dissapeard until the next surge.
BTW...where the hell have you been? (They must be working you like a dog at the new job:))
Been working like crazy and haven't used the boat as much this year, maybe because I like my backyard so much :D All is well ...;)

[Mandelon]

I was talking to a friend about this just today. Southern California's market still has a long way to go down...Havi will go the same.
I'd expect $50,000 drops to be common on lower priced homes and drops of several hundred on higher priced homes. The worst is yet to come. This is going to last all through 08, and until mid 09 according to the folks I talk to and based on the numbers I am seeing sent my way from lenders and those in the foreclosure industry.
Homes in some areas of Chula Vista have dropped almost a third of their overinflated values. Example, 1.5 million dollar homes a year ago....are now sitting on the market for $799,000............Condos down from the mid $400's are now in the $200's. Granted, many Havasu owners are in better financial shape, but if money gets tight, most folks would rather lose their second home than their primary residence.
Homes will be aplenty under $200K a year from now out there, and many of those will be lender owned. If you don't have to sell, don't. But I sure wouldn't buy yet.....
Sorry. Just one fool's opinion.

[INSman]

whatever Mandy, don't really care .... Go spread your doom & gloom somewhere else.

[Mandelon]

Keep your head in the sand...its safer there. :rolleyes:
I hope you're right, but everything I read says its getting worse. Eh, What do I know, I've only been in the REO business for 15 years........

[INSman]

Keep your head in the sand...its safer there. :rolleyes:
I hope you're right, but everything I read says its getting worse. Eh, What do I know, I've only been in the REO business for 15 years........
You may be right, but it won't effect me either way. I prefer cautious optimism. Working for Countrywide, I am sure it will get worse before it gets better, but we will be become stronger as a result and wind up wth a bigger piece of a smaller pie.

[Lavey29]

I was talking to a friend about this just today. Southern California's market still has a long way to go down...Havi will go the same.
I'd expect $50,000 drops to be common on lower priced homes and drops of several hundred on higher priced homes. The worst is yet to come. This is going to last all through 08, and until mid 09 according to the folks I talk to and based on the numbers I am seeing sent my way from lenders and those in the foreclosure industry.
Homes in some areas of Chula Vista have dropped almost a third of their overinflated values. Example, 1.5 million dollar homes a year ago....are now sitting on the market for $799,000............Condos down from the mid $400's are now in the $200's. Granted, many Havasu owners are in better financial shape, but if money gets tight, most folks would rather lose their second home than their primary residence.
Homes will be aplenty under $200K a year from now out there, and many of those will be lender owned. If you don't have to sell, don't. But I sure wouldn't buy yet.....
Sorry. Just one fool's opinion.
I agree with your opinion Mande. I think the market here in Cali has not reached bottom and neither has Havasu. Prices on new and used homes will continue to come down over the next one to two years. I am looking to buy a second home in Havasu but am waiting it out to see where the prices end up and will still low bid on top of that. I see 300K homes up there going for under 200K in the near future. I am not an expert but just siding with all the info that is pointing in that direction.

[Buddy]

This isnt just Havi and Cali, look at Fl . Our prices have slid close to 50% and they say more to come. I paid $110000 for my home in Ft Lauderdale 7 years ago, 2 years ago it was worth $400000, today $270ish. The whole nation is in for a suprise for the next couple years.

[CoolCruzinCobra]

I was talking to a friend about this just today. Southern California's market still has a long way to go down...Havi will go the same.
I'd expect $50,000 drops to be common on lower priced homes and drops of several hundred on higher priced homes. The worst is yet to come. This is going to last all through 08, and until mid 09 according to the folks I talk to and based on the numbers I am seeing sent my way from lenders and those in the foreclosure industry.
Homes in some areas of Chula Vista have dropped almost a third of their overinflated values. Example, 1.5 million dollar homes a year ago....are now sitting on the market for $799,000............Condos down from the mid $400's are now in the $200's. Granted, many Havasu owners are in better financial shape, but if money gets tight, most folks would rather lose their second home than their primary residence.
Homes will be aplenty under $200K a year from now out there, and many of those will be lender owned. If you don't have to sell, don't. But I sure wouldn't buy yet.....
Sorry. Just one fool's opinion.
Not a fool
What you just said sounds a real out look for the real estate market.
The market is just over priced. Way over priced

[local805]

Keep your head in the sand...its safer there. :rolleyes:
I hope you're right, but everything I read says its getting worse. Eh, What do I know, I've only been in the REO business for 15 years........
ITS AMAZING THE SAME PEOPLE ALWYS RESPONDING TO THIS ISSUE,IF THEY ALL WANT TO BE IN DENIAL,SO BE IT,I LOVE HEARING HOW A PROPERTY OWNER IN HAVI DOESNT CARE ABOUT FALLING VALUES,YEAH RIGHT,SEE WHAT YOUR COMPS SAY WHEN YOU DO GO TO SELL,YOUR POOL AND OVERPRICED UPGRADES MEAN NOTHING,ITS ALL ABOUT WHAT HAS SOLD,AND IF ITS 200K LESS THAN YOU PAID,NO ONE CARES?????!!!!SURE YOU DONT,JUST KEEP TELLING YOURSELF THAT AND ALL WILL BE FINE.:) :)

[INSman]

ITS AMAZING THE SAME PEOPLE ALWYS RESPONDING TO THIS ISSUE,IF THEY ALL WANT TO BE IN DENIAL,SO BE IT,I LOVE HEARING HOW A PROPERTY OWNER IN HAVI DOESNT CARE ABOUT FALLING VALUES,YEAH RIGHT,SEE WHAT YOUR COMPS SAY WHEN YOU DO GO TO SELL,YOUR POOL AND OVERPRICED UPGRADES MEAN NOTHING,ITS ALL ABOUT WHAT HAS SOLD,AND IF ITS 200K LESS THAN YOU PAID,NO ONE CARES?????!!!!SURE YOU DONT,JUST KEEP TELLING YOURSELF THAT AND ALL WILL BE FINE.:) :)
Don't know if you are referring to me specifically, but just in case you are:
1. Bought the house a few years back, not at the peak
2. Bought for a long term property investment
3. Real Estate is cyclical and I need the tax write-offs
4. Not on an adjustable loan and don't need to sell
5. Some of us can afford to lose money and not care too much, whether the loss is just on paper in the interim or an actual loss on a hard transaction
Thank you for your concern ;)

[Mandelon]

I am selling a rental property I own, and just fell out of escrow due to the lender tightening up and the buyer no longer qualifying....just this minute I was handed the fax cancelling the deal. :(
I will now put it back on market....likely I'll end up taking a lower price.....downward pressure on prices.....and that's how its going to go.
This is not a huge surprise, I was wondering if it was going to happen.
If buyers can wait, they probably will. If they can't....they'll save a lot over what prices were a couple years ago.....but not as much as if they wait longer....

[PBOCOP]

I agree. The market will continue to drop but I think it just depends on your area. I don't think the area I live, Claremont, will drop much at all. Some of the overbuilt areas will drop in big big ways. A majority of the houses in those areas that you see for sale, are repos and foreclosures. My wife has over 75 repo listings right now, and yes they are selling. So people are buying, and even more are losing their homes. Most are due to the slight decrease in values in the past year, along with the ****ed up loans people had. Most did 1sts and 2nds with nothing down and then realized they couldn't afford it. The others have the ARM's that are maturing and then as the payments go up, they realize they can't afford the payments. Both just end up walking away.
Havasu is a mess I think. Tons of houses on the market and it's only increasing. I think in the next few years we will see a drastic decrease in prices. Like i said before, it depends on the area. I only paid 120K for my house in Lakeridge Estates so I'll be fine forever and it's paid off anyways.
I just still think that the market fluctuation will be severe in some of the overbuilt areas and will maintain with only a slight decrease in the areas that don't have the property to expand, and have been maxed out on land for many years.
Time will tell.
PBO

[bohica]

I got lucky, bought my house 14 years ago when it really was dirt cheap. Only 1 more year of payments and then it's all mine. There's a spec house that's been on the market for 2 years now right next door. I hope it stays on the market, I kinda like enjoying the pool they put in after not being able to sell it for a year.

[INSman]

I am selling a rental property I own, and just fell out of escrow due to the lender tightening up and the buyer no longer qualifying....just this minute I was handed the fax cancelling the deal. :(
I will now put it back on market....likely I'll end up taking a lower price.....downward pressure on prices.....and that's how its going to go.
This is not a huge surprise, I was wondering if it was going to happen.
If buyers can wait, they probably will. If they can't....they'll save a lot over what prices were a couple years ago.....but not as much as if they wait longer....
Sorry to hear this Mandy, not the greatest to be a seller in this market. I assume you would not be selling if you were running positive ?

[Mandelon]

Its actually about $700 a month positive, but I need the $$$ for two other places I am working on. I am remodeling a SFR into a duplex and buildng a house on the lot I own next door. Its not going to appreciate for many years at this point. Heck its down $150K from the peak a year and a half ago. That's kind of a bummer, But... I only paid $72K for it and it will still sell for over $400... :idea: not the best timing, but I am sick of the tenant hassles.
I just want to get rid of it. Finish the other two places and will invest in something less time intensive. I'm thinking orange metal flake paint futures... :D

[Mandelon]

Its actually about $700 a month positive, but I need the $$$ for two other places I am working on. I am remodeling a SFR into a duplex and buildng a house on the lot I own next door. Its not going to appreciate for many years at this point. Heck its down $150K from the peak a year and a half ago. That's kind of a bummer, But... I only paid $72K for it and it will still sell for over $400... :idea: not the best timing, but I am sick of the tenant hassles.
I just want to get rid of it. Finish the other two places and will invest in something less time intensive. I'm thinking orange metal flake paint futures... :D

[meaniam]

mimi i have t wonder if you looked in your mls lately? to say the price slide has ended, in a second home market is crazy. i bet there are listings on market 180 days+. it is the slow part of the season nationwide. september is usually the end of the years peak. banks have relaxed on short sales, keep trying. make sure seller is in guidelines. usually 3+ months late.
sellers have most likely bleed as much as they can. but banks are willing to bleed more. prices will most likely decline months after the 08 elections.
i hope for a quick turn around

[havasumimi]

mimi i have t wonder if you looked in your mls lately? to say the price slide has ended, in a second home market is crazy. i bet there are listings on market 180 days+. it is the slow part of the season nationwide. september is usually the end of the years peak. banks have relaxed on short sales, keep trying. make sure seller is in guidelines. usually 3+ months late.
sellers have most likely bleed as much as they can. but banks are willing to bleed more. prices will most likely decline months after the 08 elections.
i hope for a quick turn around
I didn't mean to imply that EVERYTHING is at the bottom, yes you are right - there are still many out there that have a lot to room to come down. What I was trying to say is that there are also a lot of homes available that are already priced better than the forclosures, sellers going to closing now with cash just to sell. Those homes aren't going to go lower. The banks still won't talk to us on short sales, they just aren't ready. If the seller qualifies (after completing a huge hardship application), the bank wants them to sign a promisory note for the deficiency amount and we know thats just not going to happen. So, we are trying to get the bank to forgive the deficiency but then the seller receives a 1099 at the end of the year. I still don't have a clear answer from an accountant as to if the seller can offset that income with a loss from the property. Maybe you know and can share?
Forclosures - most of the homes that are going to forclosure are just crap so if that is what someone wants, I would wait too. I completely agree with you on the timing of the elections and the banks being more open to taking a loss then. We still have the tax issue to figure out. We have 27 forclosures listed with our office and there are only a few even worth looking at.
Thanks so much for your post - :)

[TCHB]

You can never pick a bottom or a top of a market. You have to have assumptions on the investment and time for it to play out. Is this good time to buy?
1. Do not panic
2. Think long term
3. Maybe it is a great time to buy
Traders do this everyday with products like Energy.
Havasu market may get a big bump due to baby boomers leaving the big cities in the next 4-8 years. If does not take many of them to change a market like Havasu.

[bigq]

I didn't mean to imply that EVERYTHING is at the bottom, yes you are right - there are still many out there that have a lot to room to come down. What I was trying to say is that there are also a lot of homes available that are already priced better than the forclosures, sellers going to closing now with cash just to sell. Those homes aren't going to go lower. The banks still won't talk to us on short sales, they just aren't ready. If the seller qualifies (after completing a huge hardship application), the bank wants them to sign a promisory note for the deficiency amount and we know thats just not going to happen. So, we are trying to get the bank to forgive the deficiency but then the seller receives a 1099 at the end of the year. I still don't have a clear answer from an accountant as to if the seller can offset that income with a loss from the property. Maybe you know and can share?
Forclosures - most of the homes that are going to forclosure are just crap so if that is what someone wants, I would wait too. I completely agree with you on the timing of the elections and the banks being more open to taking a loss then. We still have the tax issue to figure out. We have 27 forclosures listed with our office and there are only a few even worth looking at.
Thanks so much for your post - :)
There is only a few ways past the 1099 and it is hard to do if the 1099 is from real estate.
1. Bankruptcy – the debt was already discharged through a bankruptcy proceeding.
2. Insolvency – your total debts exceed your total assets at the time your debt was settled or deemed non-collectable.
3. Indebtedness is due to a qualified farm expense.
4. Indebtedness is due to certain real property business losses.
5. Discharge of your debt was treated as a gift. (Extremely rare)
Unfortunatly it looks like the feds just put another nail in the coffin the other day.:(

[INSman]

You can never pick a bottom or a top of a market. You have to have assumptions on the investment and time for it to play out. Is this good time to buy?
1. Do not panic
2. Think long term
3. Maybe it is a great time to buy
Traders do this everyday with products like Energy.
Havasu market may get a big bump due to baby boomers leaving the big cities in the next 4-8 years. If does not take many of them to change a market like Havasu.
I like your thinking, pretty sound advise.

[meaniam]

There is only a few ways past the 1099 and it is hard to do if the 1099 is from real estate.
1. Bankruptcy – the debt was already discharged through a bankruptcy proceeding.
2. Insolvency – your total debts exceed your total assets at the time your debt was settled or deemed non-collectable.
3. Indebtedness is due to a qualified farm expense.
4. Indebtedness is due to certain real property business losses.
5. Discharge of your debt was treated as a gift. (Extremely rare)
Unfortunatly it looks like the feds just put another nail in the coffin the other day.:(
im glad someone answered this. and i heard someone mention bk before. but it didnt make sense to me. i have always heard you cant bk taxes. but you cant bk before a short sale. so how does someone do this?
i also wonder what the % of homes in havasu are owned out right?

[Cat Daddy]

It's darkest just before the light...
Hopefully it isn't going to get much darker.
It might be time to to start buying.
Any more thoughts?

[havasumimi]

It's darkest just before the light...
Hopefully it isn't going to get much darker.
It might be time to to start buying.
Any more thoughts?
Yep! It may only be temporary but it has picked up in Havasu the last few weeks. Prices are still low and there is still plenty of homes to pick from! We just received the projected second home market update from NAR and it seems, second homes are still going strong - contrary to everything we had been hearing and with more and more baby boomers retiring and looking for warmer climate, we are expected to see more and more of a turn around.
We will see.....:)

[HocusPocus]

Yep! It may only be temporary but it has picked up in Havasu the last few weeks. Prices are still low and there is still plenty of homes to pick from! We just received the projected second home market update from NAR and it seems, second homes are still going strong - contrary to everything we had been hearing and with more and more baby boomers retiring and looking for warmer climate, we are expected to see more and more of a turn around.
We will see.....:)
I am a home owner in Cali ( 10 years) and Havasu (18 years) and would like to see the housing market at least stabilize but i wouldn't put any credence to anything the NAR has to say. There hasn't been too many things they have been right about and I wouldn't consider them and objective source on the housing market, more like a cheerleader.
I agree home prices have dropped especially on existing homes and it may be a great time to buy, the problem is going to be getting financing, lenders seem to be holding on to the money pretty tight.
With foreclosures setting record highs and home sells setting record lows each month i don't think anyone can predict when it will hit bottom, for now its a waiting game to see what will happen next. Lets just hope this happens soon and the borrowers/lenders learn from their mistakes so we don't run into the same situation again 10 years from now.

[TCHB]

1. Prices down next 12 months
2 . Market turns
3. Baby Boomers and people wanting a change from the city will move to Havasu.
4. Prices will increase by 25 percent in the next 24 to 36 months from today lows

[INSman]

1. Prices down next 12 months
2 . Market turns
3. Baby Boomers and people wanting a change from the city will move to Havasu.
4. Prices will increase by 25 percent in the next 24 to 36 months from today lows
Pretty safe bet and I may just find myself in the number 3 category above in about 5 years to help the cause.

[beernut]

looks to me with the secondary lenders going belly-up and the primarys wanting 20% down, full doc, no stated income loans,its going to be harder for anyone to qual. and that means more inventory, when sellers need to sell ,the price will come down, i dont see a turn-around until the lenders can play again, and thats going to be awhile,...we listed a home to late in the game and had to drop the price $80k just to get some action, just my .02

[Not So Fast]

We found out the house across the street is in foreclosure so we tried to look it up, never found it but one website had what looked like over 500 foreclosures here in Havasu:jawdrop: Can that figure be correct??:idea: My neighbor has had his house listed for over 2 years and dropped the price from $535K to $450K and not even a lowball offer, hell, nobody even looks anymore!! It's gonna get worse IMO. NSF

[bigq]

We found out the house across the street is in foreclosure so we tried to look it up, never found it but one website had what looked like over 500 foreclosures here in Havasu:jawdrop: Can that figure be correct??:idea: My neighbor has had his house listed for over 2 years and dropped the price from $535K to $450K and not even a lowball offer, hell, nobody even looks anymore!! It's gonna get worse IMO. NSF
That seems like a lot to me:confused:
I know one thing, the price of land sure has dropped for R1:jawdrop:

[havasumimi]

That seems like a lot to me:confused:
I know one thing, the price of land sure has dropped for R1:jawdrop:
Yep, that is number is not right (500).... not yet anyway! We have one of the larger REO agents in our office and he has about 30 forclosures right now. There are probably less than 75 real forclosures at this point listed in Havasu. What happens is certain websites (not naming names) promote as being "forclosure list sites", they contract with companies to supply them with all homes that have received late notices that have been filed with the county as a "pending forclosure" - the majority of those home owners get their homes current and never go to forclosure so it's a lot of bogus information. Once they are really forclosed on, they list with an REO agent and it's in mls open to all of us.
You are so right about the R1 lots. It took them awhile but, they have come down!

[EAZYKILLER2006]

We found out the house across the street is in foreclosure so we tried to look it up, never found it but one website had what looked like over 500 foreclosures here in Havasu:jawdrop: Can that figure be correct??:idea: My neighbor has had his house listed for over 2 years and dropped the price from $535K to $450K and not even a lowball offer, hell, nobody even looks anymore!! It's gonna get worse IMO. NSF
I THINK YOU ARE RIGHT...
guess we will wait and see;)

[HemiDude]

Yup...unfortunately.

[TCHB]

It is a great time to Hold onto cash (limit toy spending) and enter the housing market when you think the trend will turn.
1. timing is critical again
2. Pick the right house that has what people like (RV Garage).
3. Location Location Location

[hava life]

I am not seeing a big change in the asking price yet. I have only seen IMO homes that are way to over priced going down a little. One that I looked at was cut $45,000 but this only put the price closer to what they payed for it less then 2 years ago. Until I see prices that are more in line with a slow market I will be waiting.

[Havasu Carrera]

Keep your head in the sand...its safer there. :rolleyes:
I hope you're right, but everything I read says its getting worse. Eh, What do I know, I've only been in the REO business for 15 years........
Wow thats a long time:confused: Its funny according to most of my friends its been a bad time to buy since high school. (20 years ago.) Well thanks to thier ignorance (and yours) I got EQUITY!!! and stability. Sorry your lifes so tough mr gloom.:D

[havasumimi]

The Havasu Real Estate market has had a sudden change, or I should say spark of buyers -The Canadian dollar is up, our market is down and we are seeing a change with contracts and offers coming in.....

[riverfun]

Sucks for us! The dollar being down hurts us more than most people know. A little up tick in foreign investments will not compensate for the higer prices in all consumable goods that we all pay for.

[bigq]

The Havasu Real Estate market has had a sudden change, or I should say spark of buyers -The Canadian dollar is up, our market is down and we are seeing a change with contracts and offers coming in.....
Yup a big story about htis because of the $ value.
http://www.msnbc.msn.com/id/21739273/
Take it while you can, unless the dollar totally collapses and we go euro then youll be set;)
Bad thing is guess how fast they pull out and leave even more empty houses.

[Mandelon]

Wow thats a long time:confused: Its funny according to most of my friends its been a bad time to buy since high school. (20 years ago.) Well thanks to thier ignorance (and yours) I got EQUITY!!! and stability. Sorry your lifes so tough mr gloom.:D
I can make it simpler for you. Its not a great time to buy when values are decreasing. A real estate investor will make more money by buying at times when the market it distressed. Then hold the property until the market goes up. It runs in cycles you see.
It depends on what your goals are. If you don't intend to sell it, then the market value is irrelevant to you. As long as you can afford the payment and you feel you are getting the value of use out of it, then that's great.
If your goal is to make money off of it, either through rental income or flipping it in a few years, it is logical to try and buy it at a time when prices are down, rather than at their peak.
Ignorance.....I think not. Experience. I've bought and sold many homes and currently own several pieces of property. I am glad you have equity. Stability, you must have a fixed payment and no need to buy or sell.
Wait a while longer before you buy, if thats your plan. I suspect you will be getting better deals in the months ahead.
I am not gloomy about foreclosures. I think they're great. The worse things get, the more my business makes! :D

[bigq]

I can make it simpler for you. Its not a great time to buy when values are decreasing. A real estate investor will make more money by buying at times when the market it distressed. Then hold the property until the market goes up. It runs in cycles you see.
It depends on what your goals are. If you don't intend to sell it, then the market value is irrelevant to you. As long as you can afford the payment and you feel you are getting the value of use out of it, then that's great.
If your goal is to make money off of it, either through rental income or flipping it in a few years, it is logical to try and buy it at a time when prices are down, rather than at their peak.
Ignorance.....I think not. Experience. I've bought and sold many homes and currently own several pieces of property. I am glad you have equity. Stability, you must have a fixed payment and no need to buy or sell.
Wait a while longer before you buy, if thats your plan. I suspect you will be getting better deals in the months ahead.
I am not gloomy about foreclosures. I think they're great. The worse things get, the more my business makes! :D
Sounds like a good way to make money in real estate or you could buy and hold and have "EQUITY!", just hard to retire and pay bills with equity.:rolleyes:
I heard renting for profit is not easy though?

[Mandelon]

prices are still too high to buy with a low down and rent out for positive cashflow. I used to be able to pick up a duplex or fourplex for a reasonable price. Rehab it, rent it out, and refi all my money back out, and still get positive cashflow! Those days are long gone.
Who would pay so much for a rental property that they go negative every month? And if its not appreciating and actually dropping in value? Its silly.
Prices need to get back to where they belong, and its going to happen. And it won't be quick. Its not gloom, its reality. Every one complains about how housing is so expensive.....well now the prices are coming down and we still complain... kinda ironic I'd say.
Year over year double digit price increases are just not sustainable, nor should they be.

[Outnumbered]

prices are still too high to buy with a low down and rent out for positive cashflow. I used to be able to pick up a duplex or fourplex for a reasonable price. Rehab it, rent it out, and refi all my money back out, and still get positive cashflow! Those days are long gone.
Who would pay so much for a rental property that they go negative every month? And if its not appreciating and actually dropping in value? Its silly.
Prices need to get back to where they belong, and its going to happen. And it won't be quick. Its not gloom, its reality. Every one complains about how housing is so expensive.....well now the prices are coming down and we still complain... kinda ironic I'd say.
Year over year double digit price increases are just not sustainable, nor should they be.
What he said. Look for at least 2 more years of price declines in most markets.

[riverfun]

I have been looking for almost two years now for a duplex, triplex or fourplex that I could put 20% down and have the rents pay for it on a 30 yr. fixed rate loan and have not been able to find anything even close. But I see them getting closer and closer within the last 4 months, hopefully within the next year I will be able to pull this off.:)

[Mandelon]

I have been looking for almost two years now for a duplex, triplex or fourplex that I could put 20% down and have the rents pay for it on a 30 yr. fixed rate loan and have not been able to find anything even close. But I see them getting closer and closer within the last 4 months, hopefully within the next year I will be able to pull this off.:)
This is the key to long term gains and plentiful retirement income.
I used to be able to get one and two bedroom units for 30K to 50K a door even in San Diego....in the late 90's....:(
Prices are ( were ) out of whack. They will decline until back in equilibrium with wages and income. Typically 4x your income is the loan you should be able to get. Rents should be like 1% of the home value per month. there will be higher times and lower times....but the market will return to "normal" for a while....then boom again.....then drop again......that's the way it works.

[csorensen]

I have not read all the posts here but it sounds like everyone has a good idea how the market works until now - due to the fact that the stupid !ss goverment wants to get involved and probably screw everything up. Dont mind them helping to save the economy and don't know all the details but sounds like they only want to help the people who had a pretty good idea they shouldn't have been buying in the first place and leave the rest of us high and dry with a tab to pick up in the long run. Does anyone know what the actual details ended up being on this whole fixing the arm rates for five years while the rest of us were scared to death of these it sounds like the ones who did it are going to get a pretty good deal and save a lot of money while I'm still paying on a high fixed of 6%.

[new2cats]

This is the key to long term gains and plentiful retirement income.
I used to be able to get one and two bedroom units for 30K to 50K a door even in San Diego....in the late 90's....:(
Prices are ( were ) out of whack. They will decline until back in equilibrium with wages and income. Typically 4x your income is the loan you should be able to get. Rents should be like 1% of the home value per month. there will be higher times and lower times....but the market will return to "normal" for a while....then boom again.....then drop again......that's the way it works.
Just to clarify.....4x annual earning???? Then a person with a net of $250K should only be in a $1M house????? WOW, no wonder we are screwed now!!!! I have buddies making $150K in $1.2-$1.4M homes......by your post, this is TWICE the value they SHOULD be in!
???-Rent should be 1% of the home's value per month????? Not sure that applies. Most newer homes in Ventura County go for $1 per sq. ft. EG: 4,000 sq. ft. home for $4K per month lease/rent. The same house values (still) at around $1.2M in the better areas.....under your theory, rent should be $12K per month????
Not arguing, just wondering!!!:idea: :D

[bigq]

Just to clarify.....4x annual earning???? Then a person with a net of $250K should only be in a $1M house????? WOW, no wonder we are screwed now!!!! I have buddies making $150K in $1.2-$1.4M homes......by your post, this is TWICE the value they SHOULD be in!
???-Rent should be 1% of the home's value per month????? Not sure that applies. Most newer homes in Ventura County go for $1 per sq. ft. EG: 4,000 sq. ft. home for $4K per month lease/rent. The same house values (still) at around $1.2M in the better areas.....under your theory, rent should be $12K per month????
Not arguing, just wondering!!!:idea: :D
Well why you are pondering that soak this in too:
Study Says 63% of U.S. Housing Markets Are Overvalued
To determine what house prices should be, Global Insight considered interest rates, household income, population density, current and former house prices and historical data.
The 20 Most Overvalued Housing Markets
Metro Area 2007 Q3 Home Price Overvaluation
Merced, CA $248,300 56.6%
Prescott, AZ $237,600 53.6%
St George, UT $257,700 51.0%
Flagstaff, AZ $269,200 50.3%
Miami, FL $304,000 48.0%
Medford, OR $279,100 47.8%
Portland, OR $316,600 47.5%
Eugene, OR $251,700 44.8%
Riverside-San Bernardino, CA $329,600 44.6%
Bakersfield, CA $219,300 42.0%

[czarmarz73]

Why hasen't the maket in havasu come down yet? Been looking at some bank owened and forclosureses there and nothing worth deal with. What's up?? Are banks waiting till summer time when they probably know the peak of the season and know they would get the highest dollar amount?

[acatitude]

I have been watching the havasu Market and I have seen a drop in prices the last few months on single family res. Also when you look at the recently sold, most are way lower then the original listed price... Maybe some of the asking prices havent dropped but the accepted prices have..AT least on the ones i've seen.

[ChumpChange]

Just to clarify.....4x annual earning???? Then a person with a net of $250K should only be in a $1M house????? WOW, no wonder we are screwed now!!!! I have buddies making $150K in $1.2-$1.4M homes......by your post, this is TWICE the value they SHOULD be in!
???-Rent should be 1% of the home's value per month????? Not sure that applies. Most newer homes in Ventura County go for $1 per sq. ft. EG: 4,000 sq. ft. home for $4K per month lease/rent. The same house values (still) at around $1.2M in the better areas.....under your theory, rent should be $12K per month????
Not arguing, just wondering!!!:idea: :D
First of all, when someone says income, they are generally talking in Gross terms which I am sure Mandelon is speaking of as well.
For income producing properties, prices are currently going for about 15x annual gross rents. I have seen up to 20x in certain areas which is just plain astronomical. As a starting point, a property that will have good income where you only have to put 20-25% down will have a gross rent multiplier of 9 or 10x. This means that if the total annual rent is 24,000, the sales price would be $240,000. Currently, that property would go for about $360,000 in today's market which will still see a correction. At a 15x gross multiplier, generally, you will need 40-45% down in order to find financing.
Let it be known that I am generally talking in either commercial property or residential properties with five units or more. Each instance is different and thus needs to be structured different. I have seen some crazy things out there.

[CA Stu]

I was talking to a friend about this just today. Southern California's market still has a long way to go down...Havi will go the same.
I'd expect $50,000 drops to be common on lower priced homes and drops of several hundred on higher priced homes. The worst is yet to come. This is going to last all through 08, and until mid 09 according to the folks I talk to and based on the numbers I am seeing sent my way from lenders and those in the foreclosure industry.
Homes in some areas of Chula Vista have dropped almost a third of their overinflated values. Example, 1.5 million dollar homes a year ago....are now sitting on the market for $799,000............Condos down from the mid $400's are now in the $200's. Granted, many Havasu owners are in better financial shape, but if money gets tight, most folks would rather lose their second home than their primary residence.
Homes will be aplenty under $200K a year from now out there, and many of those will be lender owned. If you don't have to sell, don't. But I sure wouldn't buy yet.....
Sorry. Just one fool's opinion.
:D
Thanks
CA Stu

[Mandelon]

I was out there last weekend and what do you know? Lots of homes around $200K... :D Those were the ones that used to be around $300K...
Lots of places for sale. Thousands of em. Same as in Southern Cal. Prices are starting to make sense again. Still a lot of downward pressure coming though.
Is it doom and gloom? :rolleyes: or just the cyclical reality of the housing market....
Lots of opportunities for folks with cash. :idea:

[TCHB]

I feel you can get a lot for your money for the next 12 months. A lot of nice homes for sale and prices ok.
A lot of inventory
Interest rates ok
Home prices down
You can never pick the top or bottom of a market so my advice is to pull the trigger soon if you are looking.

[CA Stu]

I was out there last weekend and what do you know? Lots of homes around $200K... :D Those were the ones that used to be around $300K...
Lots of places for sale. Thousands of em. Same as in Southern Cal. Prices are starting to make sense again. Still a lot of downward pressure coming though.
Is it doom and gloom? :rolleyes: or just the cyclical reality of the housing market....
Lots of opportunities for folks with cash. :idea:
:D
"But NOW is the best time to buy!!!!!" <--Every moonbat realtor.
GMAFB
You were right, and so was I.
I still think it's another 9-18 months of price erosion before we see a bottom, and I reckon it'll be 20 years before we see a peak like the one of 3-4 years ago.
Baby boomers downsizing from their current houses won't buy a 4000 sf home in the suburbs, and there will be zillions of them on the market.
Thanks
CA Stu