glenn
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This question is based on a false assumption.
There is no national real estate market. There are only thousands of small local markets. I drove through a small college town in Texas yesterday that has a large number of apartments under construction everywhere because of a shortage of housing A month ago I was on the island of Maui and saw condos and houses under construction in several places on the island. I have heard of lots of vacant houses standing with no buyers in California, Florida and other places.
I think in some of those places where there are new homes sitting vacant and a record number of foreclosures it may be 2009 before the demand catches up with the existing supply.
In my area of North Texas it seems to be fairly balanced. Maybe a weak market in new homes, maybe a weak market in condos and in smaller homes, but a pretty balanced market in the middle range of prices. |
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Anthony S
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I think you should re-focus this news special on the question: Which markets have not fallen. Or Which markets are recovering.
There are no news reports on people buying homes, builders constructing new apartment buildings, or an owner selling his home by himself within 30 days.
It has all been one-sided coverage.
I know horror stories sell. But you need to look on the brighter side of things too. People do love a happy ending. |
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samjad03
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The market will not recover, not until probably the end of 2009 or even 2010. The real estate market collapse has been a long time coming - everybody was profiting from the business boom, so even though most companies had underwriting guidelines and policies ( which supposedly lessened risk ) in place, the lender mentality became "let's make it work, no matter how", which is how we got into this mess. As an mortgage underwriter, I have seen borrowers with a 550 credit score obtain 100% financing, on a stated income or no doc loan. If an automated system approved the deal, it was a done deal, likewise if I declined it - somebody higher up would overturn my decision, and approve the loan. That mentality, and the preponderance of mortgage loans with the potential for negative amortization (the so called Option ARMS) or with an initial period of interest only, allowed many people who would not have otherwise qualified for a mortgage to obtain one. I've been saying for the past 10 years that it was a matter of time; and it's finally happened. The market decline will continue, as lenders and the investors buying the loans they generate tighten their guidelines, and borrowers continue to default on mortgage loans they never really qualified for. Only a select few, with decent credit, verified income, and a downpayment, will qualify, which means more builders out of business, and more massive layoffs in any of the industries that feed off the lender business (title companies, surveyors, appraisers). When the market does recover, it will be to the level that it was back in the early eighties, when I first got into the business and mortgage rates were 21%. |
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thedomesticgodess
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we live in pittsburg county, oklahoma.. My 21 yr old son (home from afganistan) just bought a fixer upper house for 18,500 not bad for his 1st home it will take about 5,000 to make it real nice. and he is in town. fixed up it will sell for $40,000 we got very lucky.. But looking for house for him got us looking into maybe selling our place.. the snag is we live walking distance to the lake beautiful area .. but u would have to drive 35 to 45 miles to the nearest big towns for a job and oklahoma gas just went down round here to 2.89 a gal and I would never get a buyer. people wont drive that far to work if they could find work.. i work locally and have met alot of people trying to sell to move closer to their jobs in tulsa or okc that are 1 1/2hr to 2 1/2hr drives. When gas was low these people had no problem driving . so to live rural any more the real estate market wont move. we also have alot of "weekenders" that have places here and over the past 5 yrs have noticed that they have sold there places here on the lake and given up there 2nd homes and the ones that have stayed dont come down every weekend during the summer they come mayb once a month..this year has been the worst for our "weekenders" . so to look at real estate from my point of veiw and not a realtor, it all depends on where you want to live. we didnt see places locally in oklahoma having a problem in town selling but did in the rural areas.. so to lump real estate into 1 bundle isnt right to panick people. My hubby just getting a motor cycle to solve our problem..lol |
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Marilyn I
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Yes, they will recover because the government (i.e., unwilling taxpayers) are going to bail out the irresponsible and greedy again while the responsible people will be forced to pay for their nefarious activities.
The lenders policy of lending money to people with a history of not paying it back (i.e., criminals) and lending money to the unwise consumer who wants a lifestyle beyond their means will be one of the biggest scams paid for by taxpayers in American history.
Yes, they will get away with it - the deal has already been worked out.
This just highlights the disrespect the American government has for responsible people's money.
And of course the lenders will now be charging the responsible people much more in the future to make up their irresponsible judgements in lending. You didn't think they would pay for it did you? |
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KevinR
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I think it will keep falling because their is know way the economy can rebound within a year unless our government give us credit amnesty. |
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Earl Allen B
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It will keep falling. Regarding Home Values across the nation,
Expect additional losses ranging from
10% to 15% thru 2008 and beyond. The damage to secondary financial markets, investors, existing homeowners already in default and the real estate market
has already been done. Any rate freezes or bail-out plans are too little to late. Look for recession to follow. |
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NC
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The Real estate market will not recover because for the last 5 years if you breath you could get a home loan. I blame the real estate problem to the mortgage company's. They do not educate their customers. I understand the customer should check it out but they do no know which questions to ask. |
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mchchien
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House price is too high. The only way for the house to recover is for the house price becoming affordable for many young professionals. The government should have help reducing house price rather than keep house price floated so that there are more people can afford the house. Unfortunately, they did the wrong thing. Instead of letting the house price correction be done in 1-2 years, now they make the correction a more than 5 year process with the 5-year rate freezing. Young professionals just have to wait for 5 more years to buy the house. |
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Michael B
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Housing shall raise by 10 per cent because the congress has to pass a law forcing all house to go up at least 10 per cent a year.
This law will make sure everyone shall make money in housing. |
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Jeff S
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I believe it will stabilize and begin to slightly improve. Fear is the greatest impactor, not necessarily reality. Fear always oversteps it's boundaries. While Wall Street's $ are sophisticated, they have a good track record of erring on the downside of fear. A greater concern could be: Will all participants in the sub-prime challenge learn to "pull-in" or will they learn that the government will eventually mitigate the greater financial risks of these expensive types of lending vehicles? |
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bob h
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I think the Real Estate Market will take another three years before hitting the bottom. If the government offers to freeze rate adjustments and also help all of the people who may have gotten bad credit in the process we may be able to recover in 2 years. I don't think we will see the home prices at where they were for another 10 years. |
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Bravhart
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Obviously it will keep falling and never recover. How can people afford such over priced homes when good paying jobs continue to evaporate! Our corporations and goverment have so erroded our economic future that real estate will probably devalue some 40% over the next 10 years. |
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walter chaos
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The real estate market will only show increased decline as the lenders -- banks and mortgage companies -- continue to raise the interest rates to offset the foreclosures. When these ""lenders"" wake-up and reduce the rates to allow these home owners to continue making payments then this tight money situation will begin to ease up on the mortgage payers. The banks and lenders should ""see"" by now that the empty home is a target for thieves and dismantlers. In my estimation it would be better to allow that owner to stay in place by "agreement" and lower payment and become a renter status until the house can be sold . |
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ML S
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The real estate 'market' has been vastly inflated for the past decade. I'd say a 30-40% correction would be about right. Of course, the gov't wont let this happen, it will intervene and make matters worse in the long run. |
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magoolacutti
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I think the recovery will be later than 2008. I believe that the market has not hit bottom yet and when it does it will remain flat for a period of time before the recovery takes place. We have record foreclosures and the Federal government is stepping in to stall foreclosures on a million homes that are in trouble. Stalling the foreclosures will help the ailing financial markets and slow the decline in home prices but will prolong the time to recover. US Governmental debt is moving upward towards 10 trillion. Interest expense is a growing percentage of the US budget while interest rates on treasuries have been historically low. There are some black clouds on the horizon for the US: if foreign governments stop buying our treasuries, inflation imported from China, immigration issue tightens the labor market, ongoing war costs add to the national debt and any related slow down in the economy will increase our borrowing rate. While there are always black clouds looming somewhere, I believe that these clouds are moving closer and the likelihood that we are hit by these storms is increasing. The real estate market could be a five year flat period or more if we hit an extended recession. The government's weapons for limiting a recession: lower interest rates, increase spending, and lower taxes have already been fired. |
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singinintheraino
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They haven't fallen at all here in Maryland... and I seriously doubt they will, but elsewhere in the country I don't see it correcting in 2008.
To be honest, I don't think that the falling real estate market is bad for everyone. My fiance and I are looking to buy a house this summer, after our wedding. We are looking to move to Pittsburgh because housing prices are so low already, with the dropping prices it is even better for us. For those who have good credit and have been looking for a home this "slump" as it were is a God-send. Bring on the lower interest rates and home costs!!! |
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Edward W
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Sure, if God intervenes houing gets better.If not? The small amout of people getting bush relief-those who can pay present bill but not a reset, is stiffled by a little issue called "-it applies only to those who have been paying on time(late payments or missed payments,(bye ,bye)or they to will not be allowed relief. |
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ansh_72
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It will surely recover because there is a shortage of approx. 14.3 mn units of residential houses out of which approx. 6.7 mn units is required in the urban area.
Surely the rising interest rates are a major concern but the rising per capita income and growth of commercial segment of the real estate will quite comfortably compliment the issue e.g., By 2010 India needs 227 mn sq. feet of Retail space of which now only 18mn sq. feet is available and another 90 mn under development, still lacking 110mn sq. feet.
In addition to that Real Estate sector specific Mutual Funds opening up and Barclays and Citibank like biggies raising fund to invest in Indian Real Estate sector and create different pool of funds;
Nakheel Group of Middle East to invest US $10 bn in DLF and other Global Real Estate Companies like Lanco , Emaar, etc. trying to get a foot-hold in the Indian market helps to create a speculation giving an aid to recover and grow. |
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rustybye
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Real Estate will always be the same as long as they are able
to buy and sell peoples mortgages to other lending programs
we lost our home because our mortgage was sold 2 different times. And each time it was sold they went up on our payments till we couldn't afford to pay them. |
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Tom M
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If it does not fall more, it will stay steady till first quarter of 2009 |
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Home Owner
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As soon as Hilary is nominated Democratic Contender the house prices and confidence will rise in USA. |
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Wendy A
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There is a glut of inventory on the market: resale homes, builders with standing inventories, homes in pre-forclosure & bank-owned/foreclosed properties. I've heard quoted 11 mos. - 26 mos. of inventory so, if the latter, projections of a stagnant market would impact the market beyond '08. We are, unfortunately, in the beginnings of this horrific real estate meltdown. |
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real estate is the best!
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Yes, Of course it will.... The need for housing isn't going away... The lenders will be a little smarter... And the rates will continue to be great. Real Estate is the best investment period. With the stock market looking scary (I call them the "LEMMINGS".. if one jumps over the cliff, they all panic & jump too.)........Investment people are starting to look hard at property. You just can't beat land as a investment. |
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Dolores L
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I sincerely hope not. But according to the news reports, they believe that the housing market will fall for another six months. |
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TAS
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That would really depend on what area of the US you are in. Some cities have not been affected in a major way, others slightly. It's sort of give and take.....ok we create a way to help SOME people to keep their home and we make it harder for ALL people to get in a home. Either way they are still setting people up for failure. Without money and good credit underwriters make guidelines for qualifying stricter, almost impossible. What happened to "The American Dream"? It's out the door just like Bush is about to be. The mortgage freeze Bush proposing probably won't help alot of people when compared with the rate of defaults on mortgages. I think the natiional market will recover right before summer of 2008, maybe even as soon as late March, mid April maybe. Best advice for 2007/2008 .......... you never know what the market will do, invest wisely, never buy a home on an ARM, put money down if you can and make sure you can afford the home you are purchasing. |
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iknowgodcu2
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Prices and values WILL NOT return before 2010.
Personally as an Investor and Developer of homes in the residential markets...........I feel prices will plunge to the pre 1995 levels if we continue to let the market(s) be swayed by Banks, Lenders and the powers to be. In the best National efforts for the markets to correct themselves, it appears we need to offset losses and have EVERY taxpayer foot the bill by Making loans available to everyone regardless of social levels and regardless of where the properties are located......this in turn will have a major impact on homeownership by turning renters into buyers...........there are a lot of people who would and could purchase a home but are discouraged or freightened from entering the homeownership foray because of mis-information from the Lenders.
Now don't get me wrong........the Subprime mess we are in was not caused by the buyers themselves.......it was perputrated by greed from the top of the mortgage chain and the fallguys are deemed the subprime borrowers. What we need is a National Mortgage Pool unlike FHA where everyone could go for mortgages, but a cap would need to be put on the rate of home value escalations to keep the program viable, I believe this will make the market(s) grow and remain relatively stable and we show then see the market back in the mainstream before 2010. |
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iammymothersdaughter
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I don't believe we have hit "bottom' yet. in florida some prices have dropped 20,000. Yet some are trying to hold out for full inflated prices.
Why would you pay 230,000 for home when you can have your choice for 175,000.
It is much more than real estate. Jobs or lack there of is driving force behind this.
another factor is mortgages. When 2 working people can't afford a mortgage, something is wrong.
It is coming to the point that working families can't afford to live in Florida. It will be a place for only the rich. The retires will just be squeezed out, same as the working families.
I think it will be 2010 before the economy begins to even out. |
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Tanya M
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I have a Real Estate License in Illinois, and although our market is not as disrupted as maybe the south or west coasts, one factor that can predict the longevity of this correction is wages. Inflation on items such as gas and oil, have effected the American family in a way they had not anticipated. Sure there is talk of being Green now, but where were these readily made available products 6 years ago, when people had the money to spend? I believe if congress can negotiate a long term, of five years or more, suspended rate hike, people can begin a new budget and planning for their future. This could remedy the market in the spring of 2010, if big business can not make a needed sacrifice, I believe this will be a lingering market problem for the next decade. |
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newtonslogic
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You are going to see a major downswing (some say a depression..circa..Jim Cramer) in the economy due to the failing housing market. Leading economists estimate a 1.2 trillion dollar loss in the upcoming year as a result of the estimated 2-7 million more foreclosures coming next cycle. By May of '08...they're predicting a serious problem with not only housing... but all the related industries...construction, building supplies..etc.
Every real estate broker and agent I know is heading for the hills...circling the wagons as it were...and I live in an area that is not only experiencing growth...but record growth in the housing market. Contrary to popular belief, the markets across the US are not independent of one another..but very much affect each other in various ways...ever hear of a ghost town? Those still occur...one need only look at Flint, Michigan to see the results of economic strife on a city..localized or otherwise... |
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climm2
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Glut of unsold houses and bank money is tight. |
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