Homes 50% OFF everywhere-Don't be a "chump"
Be careful of the crap Wall Street is peddling right now!!!!!!!
Right now, homes are selling for 50% off peak all over America. We are getting to the point where many Americans can no longer afford a home because of rising expenses.
Homes will only sell for a price that people can afford to pay.
For example, take a two income two car family earning $70K per year. If they had $15K allocated for PITI in 2000 initially obtained a $200K mortgage. Seven years later, its Food, Fuel, Insurance, Property Tax, and Interest Expenses have increased $15K but income has remained stagnant...that family can no longer afford its house. Imagine if one of the family members got released from their job?
In my opinion, based on the rise of non housing related expenses, and factoring in job insecurity, fewer and fewer Americans can afford to buy any house. As a result, even with the current 50% price reductions in many areas....we are likely to see AT LEAST another 50% reduction before this baby bottoms out. Maybe more if interest rates keep rising and inflation goes unchecked while incomes are constrained by economic pressures.
That's right, homes that were selling for $1 million dollars at the peak will likely be able to be purchased for sub $250K.
Builders will likely be losing money for many years to come if they continue to build. There is so much inventory right now, if builders shut down for two years, we would still likely have too much. We are experiencing NEGATIVE absorbtion in many areas. NEGATIVE absorbtion!!!!!!
“Josefa Ramirez and her husband, Juan Carlos, both 43, spent 10 years moving in and out of San Francisco apartments before buying their two-bedroom, one-bath Antioch home in 2006 for $375,000.”
“Paying $2,700 a month for their ‘fixer’ required a new roof, wiring and landscaping. Their loan adjusted in June to more than $3,200 a month.”
“Ramirez, a hair stylist, said business has been slow and Juan Carlos was laid off from his construction job with a local contractor. Recent houses in their north Antioch neighborhood are now selling for around $150,000. They stopped paying in February.”
“‘I had a property that was purchased in January 2007 at $706,000 in Silver Spring. Now it’s being sold at $363,080. That is just phenomenal,’ Perez said.”
“‘People don’t want to buy a $250,000 house and, a few months later, see a similar house in their neighborhood sell for $150,000 in foreclosure,’ he said. ‘You feel like a chump. Until we get that chump factor out of the market, things won’t improve.’”
“The average asking price for homes in The Retreat plunged 46 percent from an estimated $1.3 million in June 2006 to $705,000 today, according to data recorded with a MLS. Six resale transactions in the community this year averaged $675,916 on houses that sold for an average $1,123,000 at their peak, a decline of 40 percent.”
“And prices continue to drop, with about seven homes currently listed between $475,000 and $500,000, said Pat Patton, an agent who has listings at The Retreat.”
The above articles were obtained from thehousingbubbleblog.com