aztecnology
O Rly?
Premium
join:2003-02-12
Murrieta, CA
 ·Verizon FIOS
| reply to dogma
Re: California; More Leaving, Less Coming
Depending on the local market, many areas have already been shaved 10-15-20%, I think another 10-15-20% decline is in order over the next 2 years.
A big key will be when the banks/reo's actually start dropping their prices, right now they are still pricing very aggressivly in the market. As the foreclosure's/reo's keep adding up the lenders will have no choice but to be more proactive in leaning out their balance sheets. This along with the builders/developers that will continue to build housing to move land, because they can still eek out a profit giving $100k in incentives and upgrades, the combination of these two forces will continue to put the squeeze on prices.
Did I forget to mention ARM resets of a trillion dollars coming due this year, for over extendened house atm using mcmansion dwelling exurbanites...
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"Independent thinkers tend to ALWAYS have someone not agreeing with them. It's The non-thinkers that always come in legions." John Callari .:|:. Say no to the IRS Yes to the Fair Tax |
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Bloominite
Premium
join:2004-04-17
clubs:
 ·DSL EXTREME
| If the past is any indicator, any increase in interest rates for newly initiated mortgages will also trigger a drop in selling price to compensate for the higher rate. There was an extreme example of that occurring when mortgage interest rates shot up at the tale end of the 70s. The pool of potential home buyers are, for the most part, classic payment buyers whose budget can only withstand a predetermined monthly payment and the selling prices will adjust downward when rates go up just as they adjusted upward when the rates fell.
I'm of the opinion that most people who bought homes over the last 2 years or so paid too much for them and within a year, we'll see prices settle back to where they were in 03 or 04. |
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aztecnology
O Rly?
Premium
join:2003-02-12
Murrieta, CA
·Verizon FIOS
| said by Bloominite  :If the past is any indicator, any increase in interest rates for newly initiated mortgages will also trigger a drop in selling price to compensate for the higher rate. That's a good point, it will be interesting to see what the Fed does today, and how it will affect mortgage rates. I think a lot of places are hitting 2004 pricing right now, if rates tick up and the rate of foreclosure stays constant, then there's no question that we'll be looking at early 2003 prices...
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"Independent thinkers tend to ALWAYS have someone not agreeing with them. It's The non-thinkers that always come in legions." John Callari .:|:. Say no to the IRS Yes to the Fair Tax |
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