Price Drops and Inventory

[30ashopper]

You're right...no need to rush into this market and catch the falling knives. Even if one "misses the bottom"-- as old traders would say: "It is easier to make up lost opportunities than lost capital."

Shel, do you sell t-shirts?

 

[full time]

You're right...no need to rush into this market and catch the falling knives. Even if one "misses the bottom"-- as old traders would say: "It is easier to make up lost opportunities than lost capital."

If a few points makes a difference in the buyer's mind between a good buy or not, the buyer has no business buying (and probably never will). What you're arguing is a purely academic exercise that isn't really playing out in the reality of today's market. Every reasonable person I know thinks we're at the low end of the spectrum and whether it drops another 10% or goes up 10% from here is of little concern.

 

[Pirate]

If a few points makes a difference in the buyer's mind between a good buy or not, the buyer has no business buying (and probably never will). What you're arguing is a purely academic exercise that isn't really playing out in the reality of today's market. Every reasonable person I know thinks we're at the low end of the spectrum and whether it drops another 10% or goes up 10% from here is of little concern.

What if the average asking price drops another 40%?

 

[SHELLY]

If a few points makes a difference in the buyer's mind between a good buy or not, the buyer has no business buying (and probably never will). What you're arguing is a purely academic exercise that isn't really playing out in the reality of today's market. Every reasonable person I know thinks we're at the low end of the spectrum and whether it drops another 10% or goes up 10% from here is of little concern.

Then I can assume that all the "reasonable people" have already pulled the trigger--leaving a glut of properties for the "unreasonable--and well capitalized--people" to scoop up at a bargain as the prices continue to tank farther into the future. Works for them.


.

 

[Miss Critter]

From this article in Feb 2008 issue of Harper's magazine:

http://www.harpers.org/archive/2008/02/0081908

Because all asset hyperinflations revert to the mean, we can expect housing prices to decline roughly 38 percent from their peak as they return to something closer to the historical rate of monetary inflation. If the rate of decline stabilizes at between 6 and 7 percent each year, the correction has about six years to go before things stabilize, leaving the FIRE economy in need of $12 trillion. Where will that money be found?

What if this is true?

 

[Pirate]

From this article in Feb 2008 issue of Harper's magazine:

http://www.harpers.org/archive/2008/02/0081908



What if this is true?

To revert to the mean in SoWal 38 percent won't even come close.

 

[scooterbug44]

I am not overly worried about a 38% price reduction because I took a second and thought about how overinflated prices have gotten in the last couple of years.

I have been looking for an affordable piece of property in Sowal for years and my idea of a reasonable offer (1.5-2x their purchase price a few years ago for vacant unimproved land) vs. the seller's idea (typically 4-50x) are finally getting close to each other.

IMO it's a much needed price and fiscal management readjustment that is unfortunately affecting many hard working and responsible people.

 

[30ashopper]

... Every reasonable person I know thinks we're at the low end of the spectrum and whether it drops another 10% or goes up 10% from here is of little concern.

I'm not sure about that. I mean, 10% decline off a $750,000.00 purchase on a beach house is $75,000.00. That's a lot of money to just throw away. Plus, 10% on some properties is overly optimistic. If sale prices haven't dropped much off 2005-2006 comps, the property hasn't corrected yet. I see that right now in areas here. It's due to a lack of shake-out of the speculative buyers who are still holding on but are seriously underwater. When those folks finally get flushed out of the market through whatever means (that foreclosure graph is indicative of one exit strategy) we're going to see additional depreciation in price more in line with the rest of the Florida market. I think a 30-40% number is reasonable to expect off 2005 comps. Maybe even more.

Not to be too down beat though, I do see property selling. But most of it was purchased pre-2003. The sellers are listing at reasonable prices for today (not next year IMHO) and throwing in things like all the furniture to move the sale.

 

[30ashopper]

WATERCOLOR
1352 WESTERN LAKE DR
SANTA ROSA BEACH, FL $1,300,000 --> $840,000 -35%
SHORT SALE

The shake-out continues... beautiful house too.

 

[fisher]

WATERCOLOR
1352 WESTERN LAKE DR
SANTA ROSA BEACH, FL $1,300,000 --> $840,000 -35%
SHORT SALE

The shake-out continues... beautiful house too.

At $420 per square foot, it is still priced much higher than several recent sales. Under $400 per square foot is where that one will sell.

A little larger, brand new home just sold in Phase III for $695k.