More Negative News on the Housing Front
More statistics came out yesterday showing that the air is continuing to leak out of the nation’s housing bubble. The National Association of Realtors reported that in July sales of previously owned homes hit their lowest level in more than two years, while prices flattened and houses sat on the market longer; not surprisingly, the…
More statistics came out yesterday showing that the air is continuing to leak out of the nation’s housing bubble. The National Association of Realtors reported that in July sales of previously owned homes hit their lowest level in more than two years, while prices flattened and houses sat on the market longer; not surprisingly, the supply of unsold houses also hit a record high. The question the experts can’t seem to agree on? Whether we’re in for a soft or hard landing. Regardless, it seems like a safe thing to predict that the results will vary greatly by local market.
New Signs of Cooling in Housing [NY Times]
Yawn.
oh. I see what you mean.
maybe you can hold onto the house for another year or 2 & the value will return? I am cautiously optimistic that it will.
But see, that’s what I mean– if your house is still worth more than you paid, what is causing you pain?
My concern is that the frame of reference has become skewed by the insane rises we’ve seen– so that we feel like we’re suffering if our gains are only modest. But I say, a modest gain is still something to be grateful for– and the huge gains that we saw on paper just never did seem real to me.
And besides, the alternative to owning is renting, which means losing money no matter what the market does. So, we’re ahead for buying when we did– even if we would be *farther* ahead if we’d bought earlier, or if the market did better, etc. But that’s always the case– and worrying about it too much is a fool’s game. Or maybe a greedy miser’s game. Anyway, I think it’s a mistake.
That said, I do see the point about ppl who borrowed too much on their equity– and I borrowed a little on mine, too, and my house is only 4 years old, so I’m not one of the super-lucky ones who have decades worth of equity to bank on. I am a little worried about that– just not a lot. If I can see modest gains over the long haul, I’ll be happy.
-Pollyanna.
Pollyanna, the problem is that it does not take much to find people who did buy into the idea that real estate only goes up – read blog entries from the past year and articles from folk in the housing industry saying that real estate never goes down, buy now before you are priced out, etc. Sure, if you bought years ago, no biggie, provided you didn’t extract equity counting on gains. If you have a place you can stay in, again, no biggie. But I think we’ll see a lot of folk who bought condos in “gentrifying” hoods and smaller places thinking they would sell and move up be unable to sell and move up if prices drop – if real estate falls, first time buyers won’t need to buy the cheapest one bedroom they can find, but could look for a bigger nicer place in a good location.
I also think a lot of people bought more than they could afford – again, if you hedged with a multi-fam, you may be fine, as rents are rising (thanks inflation). But many did not.
Not a doom and gloomer at all, just a realist.
ok, but even if the Brooklyn market sags by 30%, we’ll be back where we were a year ago– so unless you bought within the last year, you’re still equal to or ahead of the game. Plus, you didn’t throw your money down the rabbithole for rent.
I think the doom & gloom is only warranted if you really bought into the idea that the ridiculous gains we’ve seen recently are locked in. If that’s the case, you probably are in for a rude awakening. But I have a hard time believing that those of us who bought houses we liked & have lived in them for a fair number of years are going to rue the day that we signed the contract.
Call me Pollyanna.
I watched the Abc special and it does not look pretty
“I disagree that the pool of buyers is deleted.”
I think you’re overestimating the number of sideliners and WAY underestimating inventory. There are sideline buyers, to be sure, but not enough to pick up the inventory quickly enough or close enough to today’s asking prices.
More so, while there are echo boomers, they are nowhere near the number that the baby boomers are, and many of them will be retiring. Plus, many boomers have been buying their kids places – haven’t you been reading The Hunt in the NY Times? Seems everyone got $$ from mom and dad.
It’s time now to stop wasting time cheerleading the real estate market and plan correctly – the down cycle is here (acknowledged even by Babs Corcoran on abc this morning).
“We also have to remember that the dollar is still very weak which makes NYC real estate even more attractive to foreign buyers than it is already.”
Only because it was profitable. If it doesn’t provide returns they will put their money elsewhere. i agree if you buy a home as a long term investment its usually a sound one – but speculation, which is what has been driving this market, is another thing altogether.
the echo boom is entering their prime home buying years. The baby boomers may be looking to sell their suburban homes to downsize (some moving back into the city) while their kids are looking to buy their first or second place, usually in an urban area as the suburbs are not as attractive as they once were.
This is fueling continued demand for urban homes that will last for some time.
I think if we look at national numbers there may be some dips but my thought is that demand in NYC will keep prices high, even if some of the outlying areas drop a bit.
We also have to remember that the dollar is still very weak which makes NYC real estate even more attractive to foreign buyers than it is already.