Posted by MonicaFL on 2/26/09 8:51am
Msg #278773

Prices of Homes going up

I only know about this because I live here, but my sister (who also lives here) was told by her realtor friend who works here, that prices of homes are going to go up come the first of March. Maybe this means the housing problems are going to start changing and for the better. Sure hope so. Oh, by the way, I know some will ask where do I live? I live in The Villages in Lady Lake, Florida. This is a good thing at least for us that live here. Means the value of our homes will also begin to rise.

Reply by Henry Davidson on 2/26/09 8:57am
Msg #278777

And pigs fly too!

Dont take that as law! It a realtor your speaking with...the same group that said prices were going to go up in 2007..2008..and then said 2009 would be down only 5% or so....NOT! I do give NAR credit for being the eternal optimists in the face of calamity.

Reply by Teddog/CO on 2/26/09 9:03am
Msg #278779

Monica here's hoping that the value of homes will re-coup and do it very soon. So many people are depending it.

Reply by Marian_in_CA on 2/26/09 10:58am
Msg #278787

Personally? I doubt it... and any increase will only be slight. What people don't realize is that many of the markets are correcting themselves. Prices are only dropping down to what they SHOULD be. This is especially true in SoCal. There is NO reason that a dumpy home with no AC or central air in the middle of the San Fernando Valley should have sold for over $900K as one of my neighbors' did a few years back. It needed a new roof, too. There is no way that house was even worth near HALF that amount, but people were paying whatever they could because loans were so easy to get... that drove prices up and up. The homes were never actually worth that much, and still aren't. I have little sympathy for those that borrowed against these ridiculously inflated values now crying that they lost a lot of money. It was never really there anyway! It was just mass hysteria by a lot of uneducated people taking on loans they couldn't afford and being convinced that what they were doing was a good thing. Or those that thought they were educated were being schooled by the wrong people.

Now, I do feel for those who have lost value in a home that still remained reasonably priced, those that managed to see this coming. But even some of those people are crying foul because their home value was inflated...now it's not and they act as if they actually lost money. I kind of get tired of people saying, "My house was worth $1.5 Million... now I can't even get $600K for it. It's not fair."

In many cases, it was never actually worth that much, but they bought in to the market hysteria like everyone else.

I mean, really... if everyone start saying, "Hey this rusty 1981 Ford LTD Station Wagon is worth $20,000!" Would you pay that much just because everyone else was? Or would you look beyond the hysteria and realize you're looking at a nearly 30 yo bucket of bolts that overheats when you look at it?

I get that people are hurting, and it's awful... but so much of it was based on fantasy that some people are still trying to cling to.

Reply by Marian_in_CA on 2/26/09 11:01am
Msg #278789

BTW... yes I understand the market concepts involved, supply/demand, etc. That's why the prices went up. But my point is that it was all based on fantasy and people weren't seeing that.

Reply by JanetK_CA on 2/26/09 3:11pm
Msg #278807

So right!! Fantasy fueled by a combination of: 1) relatively low interest rates; 2) lenders who expected to sell their loans so they didn't care how sound they were; 3) brokers who saw easy money by convincing people to take these loans (and stretching the truth about affordability because they "could always refinance again"; 4) little - if any - oversight by supposed regulating entities, 5) investors and speculators, many of whom were newbies at it who didn't really understand the risks, and bid against each other, helping to raise property values that "could only go up"; and finally, as Marian mentioned, 6) naive borrowers, who didn't get properly informed for a multitude of reasons. I'm sure I've probably left something out. Oh yeah... 7) people forgetting that all markets tend to be cyclical, foolishly and greedily believing that it could go on forever. I guess we'll never learn that history does repeat itself to some extent.

Reply by Dorothy_MI on 2/26/09 11:01am
Msg #278790

Yes and

many Real Estate and mortgage people chanting - "Property values will ALWAYS go up" until it became gospel (NOT).

Reply by MistarellaFL on 2/26/09 11:46am
Msg #278794

"rusty 1981 Ford LTD Station Wagon is worth $20,000"

Funny that you mentioned that, as home values are still low here, but the price for used cars is way up there. My daughter is looking for a vehicle, and we keep seeing these 1991 cars advertised by private parties for thousands more than they are worth (per KBB).
What's up with that? LOL

Reply by Dorothy_MI on 2/26/09 10:59am
Msg #278788

I can believe it only because

it is the Villages (an upscale retirement development in FL). I'm willing to bet that a great many of the existing homes there were cash deals or very small mortgages and probably only come on the market when there is a death. It is still a place that a lot of people want to move to, so prices of new construction can go up (probably most if not all of the spec homes have been sold). I know that they are advertising like crazy in my area on TV (same as some of the retirement places in the Knoxville area). If the people moving there have paid off homes to sell, they can probably sell them for a reasonsable amount, maybe not what they could have gotten a few years ago, but still at a profit (unless they're in AZ, CA, NV, FL or MI That leaves 45 more states for their buyers to come from where less than 15% of the houses are under water. Those of us who live in the above mentioned states think the whole country is that way, but it isn't any wheres nearly as bad as we've experienced and translate our experience onto every other case.

Reply by JanetK_CA on 2/26/09 3:30pm
Msg #278813

Re: I can believe it only because

Even in the states you mentioned, I think it depends on how long a person has owned their home and how often they refinanced to pull out equity. Those at or near retirement age, for example, who have lived in their home for years, didn't spend "fantasy" equity to pay for things they couldn't have afforded otherwise, could theoretically still afford to sell their homes with equity to take with them. I guess it just depends on being lucky enough to find the right buyer, eg. someone relocating to the area, company paying for the move. (That was me thirteen years ago, during that downturn. I'm sure my home is still worth at least double what I paid for it - if I could find a buyer - but I'm not planning to go anywhere.)

Reply by Lee/AR on 2/26/09 12:03pm
Msg #278795

I don't believe it at all. Not yet. Even in Arkansas, not as hard hit as most states, the realtors tell me that everyone comes in 'looking for that foreclosed or soon-to-be-foreclosed Deal of the Decade. Only homes that are selling are those that were purchased years ago &/or nearly paid for and the Sellers can 'afford' to take a 'paper loss'. At least, that's the word on the street (not that they'll admit it, ya' understand~~). Until this nationwide glut of property is gone, it's a Buyer's Market out there. Which is not to say that certain mini-areas (such as retirement properties...the boomers) will not experience an increase in higher costs for new construction or possibly even a Sellers Market for existing properties.

Reply by DebbieT on 2/26/09 12:48pm
Msg #278797

At the auction I worked brand spankin new 3 bedroom homes were selling for 25,000. Yes it was in the city that Obama was rumored to visit while he was here. Foreclosures really bad. 3 bedroom homes with pools here in the Cape were going for 67,000. Even if the prices go up I don't think it will be enough. My friend is closing in March on a 2006 3 bedroom home for 60,000. Did I mention that she will also get an 8,000 tax credit. Yep all hers to keep. Unlike the 7,500 non interest loan for 2008 home buyers that needs to be paid back little by little every year. All free.

Reply by laurielnc on 2/26/09 2:30pm
Msg #278805

Last couple of signings I've done here in Raleigh area, the borrowers have said there homes appraised for more than when they refinanced a couple of months ago. Another couple couldn't believe what their home appraised for because it was for alot more than they thought it would. So this area is not doing that bad. I think I need to get my house appraised and see if it's going up and refinance.

Reply by MW/VA on 2/26/09 5:18pm
Msg #278826

Be careful what you wish for. We were all convinced that are properties were worth so much more than they were actually worth, and we're seeing the result of that. On the other side of the coin, people are crying at having to pay taxes on the higher values.

Reply by MonicaFL on 2/27/09 6:36am
Msg #278871

Well, I live here and have been watching things pretty close and they have already started back up. But, then again, that's here. And, yes, it is a retirement community but a GREAT one at that. Lots, and lots and lots of activities and GOLF. I dearly love GOLF. I am also starting to get a lot more refis here (its been dead since September) I have had six since the first of
february and that's six more than I had Sept, Oct, Nov and Dec. We shall see.

Reply by NCLisa on 2/27/09 10:28am
Msg #278903

Going up? We haven't hit the bottom yet!

Your realtor friend has a sunny disposition and is hoping that prices will go up so she/he doesn't have to look for a job. It will be at least another year, 1.5 years before we pull up out of the downward spiral. It took many years to bring us down, and there is no quick fast fix. To make things worse, there are many many people losing their jobs in this economy, and the ones that are lucky enough to receive unemployment may run out prior to finding another job. When unemployment runs out for the many, then there will be a whole slew of new foreclosures to contend with. Here in our area, values have only dropped about 2%, but I'm expecting them to drop a total of 12 to 15% by fall of 2009. Our Research Triangle is being hit pretty hard with layoffs.

While I'd love for things to get better sooner, it's not going to happen. We haven't hit bottom yet.