The residential real estate market is starting to turn around...

Parent Cafe
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<p>My wife had her best year ever last year. She handles both sales and rentals and saw a big upswing in sales.</p>

<p>I think there is a lot of pent up demand, but so much of what is on the market around here is just not very appealing. So a lot of inventory sits for a while.</p>

<p>I think buyers are starting to retreat as a bit from the mentality where everything must be in perfect, move-in condition, where if they don’t like the wall color they move on to the next house because repainting is out of the question. And if there’s wallpaper, you might as well just tear the house down. :slight_smile: This bodes well for getting some of the older inventory moving.</p>

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<p>Notrichenough…which part of the country do you live in?</p>

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<p>The market is blazing hot in certain areas of the Peninsula and South Bay (San Francisco Bay area). I talked to my Realtor yesterday and he confirmed this. One additional data point :slight_smile: </p>

<p>My own recent experience is having to bid against 3-5 other buyers for small homes in a good location. Those houses ended up selling 5-8% above asking. I was in an open house over the weekend and overheard another buyer telling the agent that he’d recently bid against 15 buyers for a house. So the buyers are out there. And inventory seems very low in some areas, but I think that will change as we move into spring.</p>

<p>Two houses went on the market in the neighborhood where I’m currently renting. One was $888,888 (lucky 8s for the targeted buyers!) and the other was $935,000. They went pending sale within a week. Another house came on the market today priced just a bit above the other two. I’m guessing the sellers saw the action and decided to test above $1 million. That house was listed at $929K and sold at $1,058K in 2005, another time of bidding wars. It’s now listed at $1,098K. So it looks like the market is coming back to the levels of the bubble in some areas.</p>

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<p>I really really hope the title of this thread is true. The For Sale sign is going up in the yard of my house this weekend. I had it for sale in the fall and got good feedback but no offers. :frowning: I’m dropping the price and expecting it to sell for about the same or a bit less than I paid for it in 2003. Depressing.</p>

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<p>Vballmom…yep…you ,ive in one of the hottest areas of the country. i was watching the news…and a house in Atherton was featured. Not because it was as expensive…becauseit was cheap…a tiny 2 br dump for almost $1 million…There is so much money flowing aroind that the govt is hoping that Facebook helps solve the state deficit problem…at least for one year. Amazing.</p>

<p>Suzy100, good luck…</p>

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<p>^ I am in the burbs west of Boston.</p>

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<p>No VA is a unique market because we have so many military. However, I will tell you my old home that I sold for 550K, 3 hrs on the market with 4 offers, has larger homes on the same street going for 275K, less than we bought at in 2002 with a much smaller home.</p>

<p>As I stated my neighbor across the street is taking a huge loss. Our friends just bought an 8 yr old home in Stafford VA. 8500 sqft, 5 acres, home theater, finished basement, 5 bdrms, 4 1/2 baths for 600K.</p>

<p>My close friend that is a realtor in Vegas, is doing great. Reason why is because her market is military and they are expanding Creech. Vegas is a bad market, however, they have VA loans and are buying up foreclosed homes for a song.</p>

<p>My colleagues in VA have listings, but listings last 6 months at best, and the avg DOM is way over 180 days. They are spending money promoting properties (broker open houses, traditional open houses, Zillow, Trulia, Military By Owner) and 180 days later lose the listing.</p>

<p>Bullet and I own a home in NC. We had a contract to close in 08, 2-3 days prior to closing it fell out. We have rented it since that time. This past December we were willing to fire sale it just to get rid of the property. The contract in 08 was 229K, sold in days. We were told 185K and avg DOM would be 180. We couldn’t accept not only 6 months carrying a mtg (1K a month), but add in closing costs off of 185K (5%) we would have settled at 170K…60K less.</p>

<p>We just couldn’t swallow that loss. We placed it back up for rent, had 3 contracts within 24 hrs, all willing to pay 1350 a month + every utility, including trash, sewer, water. Our mtg is 880 a month, minus property mgmt of 8% and we still are making money.</p>

<p>People are willing to pay 1 yr in rent if it means next yr the price of the home will drop. Buyers do not believe the housing market has hit bottom. They have yet to buy in that it is cheaper to buy than to rent from a long term perspective.</p>

<p>I would love to move from my home in VA to a smaller home, but I am not going to be like my neighbor and suck in a 300K loss when you have a 4% interest rate, which they have. I would suck it out.</p>

<p>I want this to turn and turn soon. I don’t want to own a home in NC.</p>

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<p>Notrichenough…thanks…</p>

<p>We have some pockets of real estate that are showing strength.</p>

<p>bulletandpima…I guess the areas you descibe aren’t…</p>

<p>Buyers aren’t going to get it right…</p>

<p>These are some of the same people that couldn’t get enough during the bubble years.</p>

<p>Obviously…this is just an opinion…</p>

<p>I can see prices up 10 to 20% as an average for the country in the next 4 years…
10% wouldn’t be that great…but 20% would be pretty good.</p>

<p>One thing though…</p>

<p>A home goes from 500,000 to 300,000 and then goes up 20%…
That just gets you to 360,000…</p>

<p>Still quite a bit off the peak…</p>

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<p>Dstark, what happens if interest rates rise as economy gets better? Does housing still appreciate as you describe?</p>

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<p>A rise in rates from 4% to 6% on a 30 year mortgage lowers the amount you can borrow by 20% to keep the same payment.</p>

<p>So it will depend in part on how sensitive people are to the payment, or how close they already are to the debt/income ratio limits.</p>

<p>When will rates go up? That is the question…</p>

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<p>Notrichenough, i was just curious to see if dstark still believes housing can appreciate if interest rates were to increase, i don’t think interest rates will move up in any significant way</p>

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<p>I think housing can increase if rates go up…to about 5%.</p>

<p>6%…I think that would be problematic…</p>

<p>So…I don’t think rates are going to 6% for awhile.</p>

<p>I keep reading about all this shadow inventory…But i don’t see it in a lot of areas.</p>

<p>And some areas aren’t coming back much for a very long time…</p>

<p>but…at some point…people are going to get tired of renting…people want their own place…and with so many places cheaper to rent than to own…well…this wasn’t the case 6 years ago… ;)</p>

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<p>Good! I want to sell my house sooo bad. As soon as we do I will be able to quit my job and do something else.</p>

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<p>Hmmmm…Ohio…hmmmmmm</p>

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<p>‘And some areas aren’t coming back much for a very long time’ …hmmmmm Ohio…hmmmm. :)</p>

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<p>“During the bubble years, 06 and 07, his home was worth twice that.”</p>

<p>I lived in S. California and sold my house in Sept. 2006. The peak in my area was fall 2005. By the time I put mine up in July 2006, prices where steadily falling and inventory growing. And it has continued since. Hope it has bottomed out. My CA neighbor sold hers for $714,000 in Oct. 2005. I sold mine for $647,000, Sept. 2006. It was incredible (the steady drop in such a short time). At least it only took 2 months to sell. I bought in Ohio. My Ohio neighbors sold their house in less than 6 weeks one year ago, for $20,000 more than what I paid for mine. It’s a desirable area, so hopefully I’ll do okay when I sell and move back to California (maybe).</p>

<p>BTW, I bought my Ohio home for considerably less than what I sold CA home for, but I think if I were to put my Ohio home on market today it would sell for more than my CA home would today. Strange, but true.</p>

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<p>I noticed the price of one of my rentals at the peak was $670K and now similar house in the same neighborhood is listed for $345K(I beleive this is 2003 price). The area is SoCal, coastal communities but not the most expensive coastal communities in SoCal.</p>

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<p>^^ It has been improving since 2010 in the SF BAy Area, but only in pokets of areas. Banks are causious, they are holding their cash and do not want to depart, even they have high margin on the money 1-2% cost, 4-5% lending. They only want to lend to top tier borrowers with high income and high score. Foreclosures are still rampant in CA, even in the SF Bay area, few steps from ground zero(Palo Alto, Downtown SF) you can buy all the REOs you want in South San Jose, East Bay, Daly City-South City, nevermind the outliner cities. If the price is low enough, you will get a feeding frenzy, buyers with cash are out there in our area for sure.</p>

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<p>I don’t see any deals in southern or most of central marin…</p>

<p>Maybe there are in San Rafael and Novato…</p>

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<p>*Hmmmm…Ohio…hmmmmmm *</p>

<p>I am in Ohio and I think your skepticism for this market (if I’m reading that correctly) is well-placed, unfortunately. Still, I have hope.</p>