Housing market slump may drag well into next year

Hypothetical question:

Why does this "slump" have to "end?"

What if the current market (prices, and sales volume) is the natural level of real estate?

Who says that this is not a permanent condition? Home buyers have a certain price budget, based on their income and the banks lending guidelines.

What if the current market prices are exactly what is dictated by the demand of the buyers,(and the limits of their lenders?)

In fact, the "real" market level might actually be lower than the current prices and volume. There may be many sellers who cannot sell for the lower price they would like to, but are locked in because they owe more on their mortgage.

Florida had a price stability that was relatively stable from about 1985 - 2000 (adjusted for inflation). Maybe the price will level out at 2000 prices, plus inflation? Incomes have not gone up much since then, so why would prices? Sure, more people have moved into the area, but at least that number of new housing units were built during that time, as well.

Everyone is waiting for the market to "turn around" and get back to normal. Maybe the "turnaround" was in 2005, and it is getting back to "normal" now.

Food for thought.

Thinking wrote:

Maybe the price will level out at 2000 prices, plus inflation?

That is *exactly* what will happen.

Just into next year...your crazy...This slide will continue for many many years to come

It's a new paradigm, and everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.

Renters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas.

This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.

for the next 10 years. the paper does not know what it is writing about.

We are at the point of can't sell the house nor can't buy a house due to bank stricken requirement.

The market is down because old ranch houses were never meant to be worth 500k. Condos built next to dixie hwy for 300k and higher were a joke. Hundreds of people bought into the game and its over.Now the fall has begun.

I think we'll be down another 20% between now and early 2010. Then back to the 4% annual appreciation that is justified.

To the Real Estate Agent - this will not happen as you suggested. Once the inventories are depleted to the degree necessary and the halting of the foreclosures has been effected, Mike is correct. We will see an annual increase of 4% and with this path, hopefully, all potential home buyers will have a much better idea about how and what kind of property they should purchase. If the 4% does not fly, then most properties will at least stablize at a fair market value based on the appraisal districts, assuming they do not take the attitude that the realtor did and as noted above. We made back in the 80's, 90's and we will make it back in the 2000's. But those properties that were over appraised for the sole purpose of sales commissions and mortgage lender/broker commissions, this will not be tolerated at least for the next 10 years. Then the new regime will come in and if the regulatory is not ready, they will pull the same stunt they pulled this time around and let the lenders, realtors, brokers,loan servicers, etc get away with it again. In otherwords, the 80's repeated itself in 2000 because the children of the parents of the 80's are now doing their own thing. Hopefully, ethics will not be thrown to the wind once again.

I just got approved for a mortgage....but with all of these articles contradicting eachother, I have to idea what to do. I don't think I can trust Real Estate agents because I think they are too desperate. Not sure about mortgage specialists either will all the deceit. I'll wait it out.

OMG! In my city foreclosures increased by 200%! Sounds bad till you note that last year there was 1, this year 3. Big deal. The sky is falling too. Media hype at its best.

seniorauthor wrote:

To the Real Estate Agent - this will not happen as you suggested. <snip>

You sound like the typical bitter, priced out renter that cannot afford.

Miss Vanessa, the time to buy is now. A capable RE Agent can always show you why now is a great time to buy.

To Vanessa:

I have been doing all that I can this past three years working with innocent homeowners and also trying to get the feds to enforce the laws they already have. The feds don't get it yet that it was the lenders, mortgage brokers/realtors, appraisers, etc.'s greed that brought us where we are today. You are right. New laws will not be a substitute for ethics and honesty.

I understand your thoughts about who you can trust and who you cannot trust. Always remember, there are some of us out there that will verify your brokers work before you ever close your loan. The attorney general's have set up shop to find the culprits who would participate in wrong doing and take them to task. Our job is to stop it before it happens to anymore homeowners. Good luck. I do believe because we are now involved in this mortgage crises, things will improve for a while before they jump on the band wagon again.

The only housing that is moving out here in Pahokee is moving because if you are poor you can get government assistance to buy a house. Please raise interest rates dramatically, my CD could use a boost.

RE Agent wrote:

<quoted text>
You sound like the typical bitter, priced out renter that cannot afford.
Miss Vanessa, the time to buy is now. A capable RE Agent can always show you why now is a great time to buy.

I think I can trust my agent...it's either cooper city or davie...no other options for me because of my kids.

To the realtor:

As a matter of fact, I have had over 40 years experience in financial services business and have never been a renter although there is nothing nwrong with that. I have all the cases I need that can well support the activities of lenders, mortgage brokers, and mortgage bankers, realtors, etc. I am not a real estate agent, but my investigations have shown me a great deal and that is why it is important to give notice of recognition for those that did nothing to prevent this fiasco. The realtors were on the front line and most realtors had enough sense to know when something was not quite right. Unfortunately, they elected to not do anything. Being on the front line, realtors are vitally needed, but unfortunately, too many have let the homebuyers down and as such, much of what has happened could have been avoided. I am not just talking about realtors, it has now been supported and documented that a good percentage of all participants in the mortgage industry and realty world contributed to this crises. Please don't take it personally. But the hundreds of cases which I have worked on prove out my comments. Things will be better. By the way, allowing Realtors to participate with brokers to find loans and take fees is not acceptable as it clearly is a conflict of interest. and that is why loans were made that should not have been.

seniorauthor wrote:

To Vanessa:
I have been doing all that I can this past three years working with innocent homeowners and also trying to get the feds to enforce the laws they already have. The feds don't get it yet that it was the lenders, mortgage brokers/realtors, appraisers, etc.'s greed that brought us where we are today. You are right. New laws will not be a substitute for ethics and honesty.
I understand your thoughts about who you can trust and who you cannot trust. Always remember, there are some of us out there that will verify your brokers work before you ever close your loan. The attorney general's have set up shop to find the culprits who would participate in wrong doing and take them to task. Our job is to stop it before it happens to anymore homeowners. Good luck. I do believe because we are now involved in this mortgage crises, things will improve for a while before they jump on the band wagon again.

I agree with you....thanks!

seniorauthor wrote:

To the realtor:
As a matter of fact, I have had over 40 years experience in financial services business and have never been a renter although there is nothing nwrong with that. I have all the cases I need that can well support the activities of lenders, mortgage brokers, and mortgage bankers, realtors, etc. I am not a real estate agent, but my investigations have shown me a great deal and that is why it is important to give notice of recognition for those that did nothing to prevent this fiasco. The realtors were on the front line and most realtors had enough sense to know when something was not quite right. Unfortunately, they elected to not do anything. Being on the front line, realtors are vitally needed, but unfortunately, too many have let the homebuyers down and as such, much of what has happened could have been avoided. I am not just talking about realtors, it has now been supported and documented that a good percentage of all participants in the mortgage industry and realty world contributed to this crises. Please don't take it personally. But the hundreds of cases which I have worked on prove out my comments. Things will be better. By the way, allowing Realtors to participate with brokers to find loans and take fees is not acceptable as it clearly is a conflict of interest. and that is why loans were made that should not have been.

Do you think now is the time to buy, or should people wait it out more?

To Fine - we are now better able to work with the lenders because they are running scared from the possibility they are going to take even larger hits as a result of this fiasco. WE had a plan that helped people like yourself work through the issue of trying to sell their property or trying to buy another one. It is really a great feeling when we are able to tell the lenders how to run their business because they think the non profits and most advocates don't know anything about what they are supposed to be doing to help homeowners so the banks kept on taking advantage and would not work with anyone. Again, that is changing. Too bad the feds could not get it done and now we are going to do some type of ridiculous bailout..

In wonderful (old boys club) country of south Florida, the drag will be for more than next year...
Anyone that bought in the last 5-6 years is paying huge amounts of other peoples property taxes and this is aiding in a higher amount of foreclosues.
Are the banks going to sue of SOH, anyone hear?