Housing Tracker: Median Asking Price Drops 19.2%

Saturday, December 01, 2007

Housing Tracker: Median Asking Price Drops 19.2%

Source: Housing Tracker

32 comments:

KTM 300 said...: The drops seem to be concentrated in areas that anyone with a choice does not want to live in. Please let me take you back, for a few seconds to your high school guidance counselor’s office. Remember when you were told the following.

If you don’t get good grades and go onto college, that you would have a horrible life, never amount to anything, and live in the worst part of town.

You would be a nothing, a zero, always poor.

You would have children out of marriage, and your children would run around dirty and hungry. Your wife would be fat; your husband would have a beer gut, and would beat you.

Ok, now wake up 10-15 years later. You’ve kept your nose clean, went to school, or learned a trade. You’ve paid your bills, have excellent credit. You may even be a mid level professional in Sacramento, CA.

Reality check: If you fall into the above descriptions, you probably feel pretty good about yourself right now, may even laugh and look down on those bums in those bad neighborhoods, and may have an opinion about those losers. Guess what? YOU CAN’T AFFORD THE HOOD.; Saturday, December 01, 2007 9:52:00 PM
Cmyst said...: I know that I'm being overly dramatic , but for the last week I've felt that I'm never going to own a home again.
The prices will come down, I'm sure of it, but by the time they do I just think I'll be totally out of home buying phase, because I'm moving in that direction already.; Sunday, December 02, 2007 12:04:00 AM
wrong moves said...: I agree with both previous comments. I feel like I am living a paradox. I have exceeded my low expectations for myself, but still can not afford what a family of our means should be living in. I can't shake the perceptions I have from my up-bringin'.; Sunday, December 02, 2007 8:03:00 AM
Anonymous said...: What a depressing list of comments. You guys should be thrilled by that graph - the sellers have capitulated in the last 3 months, they probably think the world is going to end and they just want out to stop the pain.

So...get out your calculator and figure out what you think the houses are worth and then start writing offers. You might surprise yourself with what a seller will take. (the last home I purchased was for 82% of asking - and expectations weren't as bad)

I wrote an offer for 45%(yes 45%) of asking last week and the realtor actually presented it...I was 20k under the balance - minus cash they had to put in, but I was amazed we were on talking terms after that kind of offer.

Get over all your expectations of what you deserve,etc.. It just doesn't work like that. My first place was 495sq ft. because that's all I could qualify for with my first job. I did all the right things(according to KTM) - but took a job in silicon valley. It was pretty tight with the 3 of us...

So pick a house and write an offer and your dream price!; Sunday, December 02, 2007 9:22:00 AM
KTM 300 said...: Sacramentia,

I was just a little over the top with my last post, but two years ago, I think that my rant was right on point. I know, two years ago, is two years ago. I have seen some nice places in the Antelope area that are about 10 years old, and appear to be in good shape per the MLS photo. Your posts have some very good points, and you seem to have some valuable experience that is an asset to this blog. Thank you for your contributions here, your knowledge and experience will help me make better choices. KTM 300; Sunday, December 02, 2007 9:54:00 AM
Perfect Storm said...: ktm 300,

Your first post is right on, not over the top at all. If you feel Antelope is your area than look there, but this market will crash a lot further.; Sunday, December 02, 2007 1:54:00 PM
Buying Time said...: We make well above average income now(even for EDH), so yes I hear you....I feel we played the game the way it was taught to us (put ourselves through college...ate ramen noodles etc)....

I have been getting discouraged a lot lately as well. I know a lot has changed in the last year, and we can certainly get a semi reasonable home now within our budget. Perhaps my expectations are too high as well.; Sunday, December 02, 2007 5:41:00 PM
smf said...: Why are some of you giving up hope that prices will come down further? Are some forgetting how far they have already fallen?

I sold my house for $245K in late 2003. The most expensive for the same floor plan was SOLD, not listed, for $370K. The same model can be had for $250K TODAY. I bought it for $115K in 94. That is progress.

It is very hard for ANYONE to admit that they have made a mistake in the hundreds of thousands of $$$s, banks included. You will have to drag it out of them kicking and screaming.

But wishing that prices stay up does not reflect the reality that prices are coming DOWN. And the we have spring 2008 coming up...

As further info comes in, I have an idea that a true bloodbath will occur next spring, when most everybody realizes that prices WILL NOT come up anytime soon, and will try to unload the phantom inventory ASAP.

Even for some that realize that this WAS a bubble, many still believe that this decrease is temporary, and that prices will not reach the same level in our lifetime.

Once you acknowledge that this was a bubble, there is only one possible end to it, and that is prices returning to the mean.; Sunday, December 02, 2007 9:01:00 PM
Mike said...: "As further info comes in, I have an idea that a true bloodbath will occur next spring, when most everybody realizes that prices WILL NOT come up anytime soon, and will try to unload the phantom inventory ASAP."

I completely agree with SMF, I think there are lot of people (flippers from bay area) that took their house off the market back in mid/late 2006 after house being on the market for months. They rented the house out for an year (with most of them taking negative cash loss every month). I personally know few of these types of people myself.

They are planning to re-list the home during spring selling season of 2008 with the hope that prices would be bouncing back by then. Once they realize there is no hope of prices coming back anytime soon. They will either walkaway from the house or dump the house with big cash loss.

I am expecting inventory to grow significantly during 2008 spring due to those flippers from 2006 trying to put those house back on market.

Let the Bloodbath Begin I say !!; Sunday, December 02, 2007 9:38:00 PM
smf said...: There for a while I thought inventory level was going to be about the same. Lately, some stories have convinced me otherwise.

There are not only the flippers out there, there are those who bought foreclosures with 'instant equity' that will be ready to cash in when the market goes back up.; Sunday, December 02, 2007 10:40:00 PM
Cmyst said...: Maybe what's going on with me is that I was as caught up in the whole RE nonsense as any flipper. My basic common sense and frugality kept me from buying, but deep down I believed right up 'til last week that someday it would be a good decision to buy.

The only way it would make financial sense for me to buy is if I can get a place as nice as what I'm renting for the same monthly cost, and asking prices would have to drop by about 50% -- and I'm talking from prices right now, not in 2005 -- for that to happen. It might happen, and next spring might bring precipitous drops in the asking price in decent neighborhoods. I guess we'll see.
This probably has something to do with me deciding that my best financial choice was to stay in my current rental home instead of moving to a rental that is exactly the model/builder I want to buy. I had to make a decision based solely on logic and take emotion out of it, and coming to the conclusion I did carried over into the entire house-hunting experience.; Monday, December 03, 2007 12:12:00 AM
norcaljeff said...: Stop the drama. Prices are still falling. Time is on your side. Wait another 12 months, save your money, and you'll be right where you need to be to get into a house. And rates will be even lower. Relax.; Monday, December 03, 2007 12:13:00 AM
Diggin Deeper said...: The nice thing about graphs is that they visually tell us where this market's been and, over time, and gives a strong indication on where it's going. This one's basically dropped off the cliff since June '06. That's 17 months of data that has given a very clear picture of where we've come relative to pricing. Several questions come to mind.

1. Is anything forseeable in the next six months that will turn the data positive? Is anything forseeable in the six months that will continue to pressure prices?

2. Is there a counter long term trend emerging that will change the economic climate in favor of a bottom?

3. Have inventory levels dropped low enough to break the fall of current prices?

4. Is it a high quality inventory to begin with, or a highly distressed inventory that will continue to hold prices in check?

Agree wtih you Norcaljeff..."The trend IS your friend" ...and until that trend is broken, given 17 months of pricing information, patience is key.; Monday, December 03, 2007 7:11:00 AM
PeonInChief said...: I guess I have it easier than other people here, since I'm not planning to buy at all. I've run the mortgage calculator and it tells me that the price of a house I'd want to live in couldn't cost more than $175,000, allowing for 10% rent increases per year for the next 7 years, before it made sense for us to buy. So you all have probably run these calculators and thought, I'm going to lose money for the next 15 years for THAT.

Second as the prices get closer to what you might be willing to pay, you actually become more critical. It's like any shopping--products that looked really good when they were pie-in-the-sky wants become much less appealing when you actually have your credit card in hand.

And that's a good thing, as it keeps you from running off and purchasing the first thing you see in your price range. You should become much more critical when you're thinking that you might actually buy something.; Monday, December 03, 2007 7:19:00 AM
Anonymous said...: I'm more concerned then anything. While I'm still shocked that any pol would touch a bailout project at this point, they are doing it. That right there tells me things are far worse then we realize.

Emotionally, the fed and state plans can be a downer but it's bandaid on a sucking chest wound. I look at the data and there is nothing to stop the decline such as wage increases, industry coming to Sac, positive population growth, nada. -

As for owning a home, I dip my toes in every month or two and give a property a critical look and they've all come up wanting, particularily on price. Often the picture on the MLS really fail to show how distressed the property is.

The only people who seem to realize what needs to happen on pricing are the builders and they are hosed until the existing homes begin to move. Will the builders begin offering a non-HOA 3/2 that is affordable to J6P (150k to 190k)? If they do, you'll see movement but not until.

I'm very cautious because I expect certain formerly decent working class neighborhoods to deteriorate as economic hardship accelerates.

In the meantime, I'm just working on my credit score which I want over 750. I have the reserves so it's just a waiting game and the boomers time is limited. I am always reminded this exchange from "the Lion in Winter".

Henry: Fight me, and you'll lose.

Phillip: I can't lose, Henry. I have time. Why, just look at you. Great heavy arms. But each year they get a little heavier. The sand goes pit-pat in the glass. I'm in no hurry, Henry. I've got time.

Henry: Suppose I hurry things along. Suppose I say that England is at war with France.

Phillip: Then France surrenders. I don't have to fight to win. Take all you want... this county, that one. You won't keep it long.

http://www.youtube.com/watch?v=CxZdTLa4CWA&feature=related
**about a minute in**; Monday, December 03, 2007 9:34:00 AM
Anonymous said...: "The only people who seem to realize what needs to happen on pricing are the builders and they are hosed until the existing homes begin to move. Will the builders begin offering a non-HOA 3/2 that is affordable to J6P (150k to 190k)?"

Honest Question - Would a 1000 sq/ft version of this home on a 4500ft lot work for you @ 190k?; Monday, December 03, 2007 9:50:00 AM
2cents said...: "While I'm still shocked that any pol would touch a bailout project at this point, they are doing it. That right there tells me things are far worse then we realize."

Either things are worse than we realize, or it's an election year.

Now they're proposing to use public funds to refi these toxic mortgages:

"Today, we are proposing to allow state and local governments to temporarily broaden their tax-exempt bond programs to include mortgage refinancing," Paulson told a housing conference sponsored by the Office of Thrift Supervision.; Monday, December 03, 2007 10:12:00 AM
Diggin Deeper said...: ..."there is nothing to stop the decline such as wage increases, industry coming to Sac, positive population growth, nada."

It might different if we had one of those segements working in our favor, but all three in combination, really deal a blow to the the overall health of Sacramento real estate in general.

I agree with smf...a return to the mean is in order. The question is to what mean pricing level, must we go to, considering that the area may have to withstand a softer economy next year?

Buy if you must, but realize that Sacramento is one of the highest risk markets subject to further declines...for the very reasons Gwyn outlined above.

Maybe the savior will be that prices drop so low that businesses are forced to look at Sacramento, because it creates a competitive base from which to launch from. Lower wages + lower home prices + a few other percs the city could add in, might be just lure businesses to come. Unfortunately, we'd have to feel the pain ahead of their arrival.; Monday, December 03, 2007 10:13:00 AM
Diggin Deeper said...: This comment has been removed by the author.; Monday, December 03, 2007 10:26:00 AM
smf said...: Would a 1000 sq/ft version of this home on a 4500ft lot work for you @ 190k?

Not when existing homes that small will be $50K less than that.

Smaller homes were sold because prices went so high that that is what some could afford.

There are plenty of indications of the mix of homes that is required, if you only look around and see what was typically built prior to the bubble, and a 1000 sq.ft home IS NOT IT, at least in more areas.

If we look at past developments, it was really hard to find any track homes bigger than 3000 sq.ft.

But there are A LOT of homes bigger than that that were built. I hope that soon enough one of those may entice us to move out of our current home, since we are in actual need of a larger home than we have.

Three kids, a home office, plus enough space for my toys adds up to a lot of space.; Monday, December 03, 2007 10:46:00 AM
Anonymous said...: Sacramentia,

You assume much. No 1000 sqft home would tempt me unless the lot was huge and the house a total tear-down and and the price reflected that.

A 1600 to 1800 sqft house would tempt me. Like I have said over and over, I have time and reserves. I can wait.; Monday, December 03, 2007 11:06:00 AM
Diggin Deeper said...: Housing Execs Warn the Worst Is Coming
http://biz.yahoo.com/ap/071203/risky_mortgages_executives.html?.v=3

"Mark Zandi, chief economist at Moody's Economy.com, predicted that, if the economy slips into recession or if efforts to modify loans don't pick up substantially, the housing market downturn could last through the end of the decade.

"This is the most serious housing downturn since the Great Depression," Zandi said.

Many analysts say next year is likely to be worse."; Monday, December 03, 2007 1:57:00 PM
Cow_tipping said...: So di I and even better, I dont ahve a vested interest in sacramento either. SD, SFO, LA, any other sunny and not deathly cold places ... I am available to the highest/best bidding employer.
For now, my existing house in Charlotte is a freaking boat anchor ... but when its sold, I am freebird.
Cool.
Cow_tipping.; Monday, December 03, 2007 2:21:00 PM
Anonymous said...: "I have time and reserves. I can wait." yawn...

"since we are in actual need of a larger home than we have.

Three kids, a home office, plus enough space for my toys adds up to a lot of space." yawn...

I'd rather lose money than be a renter. After all, it's just consumption.; Monday, December 03, 2007 11:45:00 PM
Diggin Deeper said...: "I'd rather lose money than be a renter. After all, it's just consumption."

Now that's just red-blooded American...the ultimate consumer captivated by new found paper wealth that seems endless in its power...that sentiment goes all the way up the food chain leaving a strong legacy for our children to follow....yawn.; Tuesday, December 04, 2007 8:37:00 AM
Anonymous said...: LOL Diggin

Methinks Sacramentia is part of the REIC. I seem to remember this from their SacBee comments postings.; Tuesday, December 04, 2007 9:43:00 AM
patient renter said...: "I'd rather lose money"

I've got a bridge to sell you. Call me.; Tuesday, December 04, 2007 11:04:00 AM
Anonymous said...: I don't even know what REIC stands for....the response was predictable...what if it takes 10yrs for the market to bottom out?...put some value on your life, painting your walls, making your house a home the way you want it...nobody can predict the future. What if we're all wrong?

If you really think the market is going down forever, are you short homebuiders, PMI (for sure), maybe Freddie and Fannie. Have you loaded up on foreign currencies?

That's a decent hedge for home values.

Or are you just runnin' scared and not sure?

Do you worry about losing money when you buy a car? clothes? It's all relative.; Wednesday, December 05, 2007 9:33:00 PM
Diggin Deeper said...: If you really think the market is going down forever, are you short homebuiders, PMI (for sure), maybe Freddie and Fannie. Have you loaded up on foreign currencies?

Not forever...but not today either. Why "lose money" when you don't have to? Why not let the market hand you a gift, rather than take a chance where all the indicators say you'll lose?

Yes, if you're smart you'd hedge against the dollar. Why not make the best of the opportunity presented? The dollar has been weakening consitently for the last 35 years. Why fight the tape?; Thursday, December 06, 2007 7:12:00 AM
Anonymous said...: shorted homebuilders - done
shorted financials - done
got out with a nice profit - very done
still putting money into tax free funds and non-us currencies- done
renting for 1/2 cost of owning - done

Mentalia, You really need some fresh talking points because this is all old news.; Thursday, December 06, 2007 11:39:00 AM
Anonymous said...: "shorted homebuilders - done
shorted financials - done
got out with a nice profit - very done
still putting money into tax free funds and non-us currencies- done
renting for 1/2 cost of owning - done"

That's an impressive record. If you added an understanding of people to your excellent mind and analytical skills, you would probably be so rich that you wouldn't even care about housing prices.; Thursday, December 06, 2007 2:48:00 PM
Anonymous said...: Not impressive, just something a lot of us old time housing heads from Ben's site did.; Thursday, December 06, 2007 4:59:00 PM

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Saturday, December 01, 2007

Housing Tracker: Median Asking Price Drops 19.2%

32 comments:

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