codename47 said:I really think Tx property taxes are helping to moderate price increases.

I've long thought that property taxes would eventually shoot down California real estate prices. Once upon a time, Proposition 13's limit of approximately 1.25% of purchase price per year was a terrific tax break. At today's inflated prices, paying 1.25% per year is like having a mortgage you can never pay off. $1000 per MONTH in property tax on a million-dollar house, which is a fixer-upper in some neighborhoods. And you can't even deduct most of it due to the AMT, a fact that most buyers don't yet realize. That's simply not reasonable or sustainable. As I said, the California market badly needs a 50% correction.

codename47 said:1k per month is what a 5-600k home is going to cost you in Tx. Depends on the local areas and all, but that is the general range, and this is a NICE house.

My point is that a $1M house in California is not necessarily a NICE house. It could be a very average looking 50 year old 3 br 1500 sq ft house on land that would be worth more without the house.

homestracker-------over the last 5 months
median price drops of homes in cities...

....................................................................

median price drop(asking prices) of homes over past 5 Months in these cities..

Virginia Beach, Virginia -0.9%
Washington, DC -6.2% ouch!
Tucson, Arizona -0.2%
Tampa, Florida -5.4%
St. Louis, Missouri -0.5%
San Jose, California -4.2%
Sacramento, California -3.4%
Phoenix, Arizona -3.9%
Orlando, Florida -4.9%
Orange County, California -4.0%
Omaha, Nebraska -2.9%
Newark, New Jersey -2.2%
Miami, Florida -5.3%
Los Angeles, California -2.4%
Las Vegas, Nevada -4.3%
Jacksonville, Florida -6.5% ouch!
Houston, Texas -2.9%
Detroit, Michigan -2.9%
Cape Coral, Florida -8.1% wow poor florida!
Baltimore, Maryland -2.9%
Boise, Idaho +0.9 a city that has actually seen a price apprecation in homes last 5 months!..although very small one it's still an increase and very rare in last 5 months.Their are a couple of larger cities(more than 50,000 people) that have seen prices increases,but when you take into account inflation..I don't even consider +0.9 an increase..

(Remember these prices are just what sellers are asking) I would bet many of these sellers did not/will not get what they ask for them..so that would make final selling price a few % points worse than what is listed.

and when you see a deprecation of -4% over 5 months...you have to factor in just 2 or 3 years ago..you had average appreactions of +5% to +10% over 5 month spans..some places more than that.....so you have to look at it as a -10% swing.

caonima said:rinconshop said:richard612 said:Kashmoney said:I've been through a price "correction" before and its more of a blood bath than it is a "correction".I just realized that I've never seen a single person post to any blog stating that the last downturn wasn't brutal. Medians didn't fall that far, but each person either sold a home or knew of other homes which were changing hands in 1995 at 40% off their 1989 price. Even in Orange County, where Everyone Wants To Live (tm).


That's exactly what I witnessed in some of the richest suburbs around NYC during the last bust. I bought a home in Somerset, NJ in 1993 at 40% off the price original owner paid in 1988.
That 40% off doesn't even count inflation that if the 5 year inflation is factored in, the original owner would have lost over 60% of the money he put into the house.

Somerset county's median income is always among the top 10 in the US and was number one in 2003 or 2004, yet the "correction" there can be so brutal. So-Cal's median incomes are mostly around $65K compared to around $90K in Somerset. So I just can't understand why people there are so willing to overpay for the homes. I lived in Santa Barbara for 9 years after I moved out of NJ and couldn't make myself to buy a home there.

that was old good time, but hard to see it now. IT people use to make tons of money from the Y2K scam, will you see a similar thing again? after all, even a 40% drop is not a big deal comparing to 400% raise in last 6 yrs

if you calculate 400% increase from pre bubble prices and 40% drop from post bubble prices, it will be a significant drop.

OverRuled said:
Last time, it lasts about 7 years (1990-1997). Why should it last only one year this time? The bubble this time even has a lot more air to pop...

possibly because of greater communication speed via the web based news etc. Theoretically I'd think that would make the market more efficient, resulting in faster spread of "never ending profit" and "get out now" memes. I don't agree with that myself though.

They concluded it's now beginning to be a buyer's market.
with 7.5 months of homes available to buyers,and the HUGE amount of inventory(homes on market)..records levels..it will remain a buyers market until you bring those levels down..right now inventories are still climbing more and more,,just adding fuel to it being a buyers market.


Boise,Idaho + 0.9 over last 5 months! woo-hoo....apprecated!

like looking for needle in haystack now to find anything that has actually apprecated in real estate in the country

it's interesting cause average Mortage rate is still around 6.5% APY..I really wonder if that gets up to close 8%..what might happen in real estate---that would take bust to a whole another level..

The median price is falling a tad because the super affordable rates have gone to just really affordable. Thus people are less willing to pay AS MUCH, particularly on the higher end properties.

My price range isn't affected by the market..I would doubt that..if median price of homes fell 10% in your neighborhood for some reason .that would not affect you..buyers would then view your house among the mass...yours will be affected..it's a trickle down theory...

it's all about buyers..they control the market..if they don't buy,inventories go up...and up..and they have more power..until they become contented and more willing to pay a certain price..that right now is not happening..buyers are staying away in large numbers..even the big incentives from builders have not phased them..they are passing them by...saying no

www.homestracker.net is a site
that uses median price -what sellers are asking for for their house..does a good job with it...

homestracker only follows what sellers have asked for over past year..I think scenaro is even worse cause it doesn't tell what home sold for actually...no guarentee they wil get that price.

while the National median price fell 1.7%..that doesn't sound like large amount..from 230,000 to 225,000 now(some places I have seen like in florida,arizona,california and northeast etc..drops up to 7% or 8% in home prices...it doesn't mean everyone fell 1.7%...it's always nervous investers that bust bubbles..and fear...many people will look at that and say that hasn't happened to me ever!!!a price drop on my house!!I better get out now! etc...that kind of thinking..the great despression happened out of fear and nervous investors...

You could read alot more in 2-3 months what it did to people seeing the median price of homes fall..that is something most of them never saw...and frankly they thought they would never see..if you asked them

from above...I agree

I'm talking about the buyers, who are the ones who set median home sale prices, not what sellers are asking asking for or think they can get
.................................

thats why I think that homestracker.net is painting alot more rosy picture than what things really are..they are only posting what sellers are asking for....

and homestracker has some scary inventory and price drops on it...I have seen over 7% and 8% seller asking price drops on there .... if your willing to drop a home 8% without me even trying...you can be damn sure I am gonna try to work that down to 12% or more...off price, once I haggle as hard as I can.

Yes, the median is inaccurate because it does not capture what people are actually getting for their money. As prices decline, people continue to buy whatever they can afford. The transactions are happening at the same price levels as before, but on nicer homes.

The OFHEO index attempts to capture this, but it has plenty of its own flaws, including only tracking FHA conforming properties (doesn't get you much here in SoCal).

Your best bet is to start watching resale homes on your own, both their listing prices and their transaction prices.