Posted by solvingadream on June 16, 2008 at 11:40 a.m. (Suggest removal)

What happened to the massive surge in sales the Realtors kept telling us was happening during the spring months?

Posted by tsetsaf on June 16, 2008 at 12:01 p.m. (Suggest removal)

There usually is a seasonal pick up but prices are still too high. The 300 k level is arbitrary it really is based upon the affordability index and rental rates. I rent a nice place for half what it would cost to purchase (assuming 20% down and 6% 30 year mortgage); and the advantage is that the owner is taking the depreciation in price :).

Bottom line is that a home is a place to live not a securities investment. Anyone who misunderstood this is now upside down and screaming for a bailout.

Posted by B8R_N4MD on June 16, 2008 at 12:56 p.m. (Suggest removal)

A recent article stated past history shows homes usually are worth 4 times of the average income, and past history has showed that prices will always readjust when that ratio has gotten out of whack. Thus readjusting to around 300k would seem resonable. I am patiently waiting.

Posted by IslandHopper on June 16, 2008 at 2:05 p.m. (Suggest removal)

Double edged sword here--prices will go down a bit more but rates are going to go up 2nd half of the year--bank on it.

Posted by pyro152 on June 16, 2008 at 2:19 p.m. (Suggest removal)

"Double edged sword here--prices will go down a bit more but rates are going to go up 2nd half of the year--bank on it."

And home prices will adjust to compensate for the rate change. This will just accelerate the decline in prices. Prices will stabilize when people can reasonably afford their monthly payment which is the combination of selling price, interest rate, insurance, tax, etc. If one goes up, the others will adjust.

Posted by jon-venturastar on June 16, 2008 at 2:47 p.m. (Suggest removal)

Anyone who understands the most basic tenets of economics knows that as the cost of money rises, asset prices must be lowered in response. So, can we please stop repeating the inane realtor mantra that interest rates are going up and houses will be more expensive as a result.

People who took economic advice from a realtor in the past 5 years are now facing financial ruin.

Posted by IslandHopper on June 16, 2008 at 2:59 p.m. (Suggest removal)

Totally agree--did not mean to imply housing prices will go up as interest rates go up and I am certainly not a realtor. Economics aside here--I guess the key ingredient is affordability along with living within your means. My thoughts are that as long as you can afford your mortgage and are not trying to live above your means, it is not a bad time to buy.

Just so many people sitting on the fence trying to wait until prices come down even further when with interest rates as low as they are right now with the depreciation in the last 18 months--if you can buy now (and afford your payment), why not buy?

I see comments like "anyone who buys now is crazy to buy in this market"--I just bought but I bought something I could afford with a low interest rate that is fixed for 30.

Posted by vae4usc on June 16, 2008 at 5:40 p.m. (Suggest removal)

Beat that horse!!!

Posted by Fred on June 16, 2008 at 6:45 p.m. (Suggest removal)

island,
so - how much did you get your house for (roughly...)

if you bought at the low end at 40% off peak I might agree with you. If you bought a million dollar box in Newbury Park then I think you could have got it for 700 in a year.... thats why not.

fred

Posted by Tyrone on June 16, 2008 at 11:05 p.m. (Suggest removal)

Don't forget the Moises from Dec '07. Sometimes it pays to be patient.

http://www.venturacountystar.com/news...

Posted by live_for_purpose on June 16, 2008 at 11:29 p.m. (Suggest removal)

Interest rates have already spiked in the past few weeks. As the prospect of inflation gets worse, long term rates will of course rise. The credit market will take care of that alright.

With weak demand, that means house prices will generally fall. When rates were down several years ago, prices generally rose because even though folks were obviously incurring much more indebtedness, they would just look at their monthly payment and say, "No big deal--I can afford that." Now it will be "No way--I can't/won't pay that!" So prices will generally go down. Let's play "How low will it go!?!?!?!?!?!"

Lower selling prices for properties will mean decreased tax revenues and therefore government services and wages paid to public employees will suffer. Other taxes may go up.

If prices go way down it seems like a couple could sell their house from one spouse to the other and then take advantage of a lower sales price and then pay less in property taxes. Can that be swung?

Posted by mikeb6804 on June 16, 2008 at 11:47 p.m. (Suggest removal)

IslandHopper---when you see a statement like "anyone who buys now is crazy to buy in this market," you have to consider the source. You'll never see a rocket being built in his backyard.

Posted by IslandHopper on June 17, 2008 at 7:38 a.m. (Suggest removal)

Fred--

Under 450 in 93004 but it was a short sale that needs about 20 to be a diamond (to me) but I will do most of the work myself. For me, had the rate been a half a point higher or more, I wouldn't have been able to swing it without giving up all hobbies.

Mikeb6804- Noted--thanks.

Posted by Fred on June 17, 2008 at 1:21 p.m. (Suggest removal)

island,
I think your rationale is pretty good. Even if you could have got it for 350 in a year, you are settled in a place that will be a diamond I am sure.

I just dont get who is buying all of the million dollar homes.... my wife and I make 200k and this is clearly out of our range. Do that many people really make 300?

On the flip side, I rent for about 3/5 of a mortgage, I save a fair amt each month (although admittedly inflation will eat it up due to Bernanke), and I can move if jobs go south. I just cant seem to want to be married to a high monthly payment..... seems like renting is fine [for me].

Posted by IslandHopper on June 17, 2008 at 1:40 p.m. (Suggest removal)

Fred,

Wife and I had the same questions--who in the world is buying the million dollar homes. I will tell you that in the 3 months we looked (all but one home was a short sale) there were tons of speculators with the backing who were trying to snatch up most of these short sales. The short pay lender/s were willing to work with them because most sales were as is. And obviuosly lending is getting real tight--our escrow stretched to 45 days and no credit problems or problems with debt to income.