Friday, August 27, 2010

A History of Home Values Chart - Updated

The chart has been updated.  With the weakening economy and low home sales, prices may drop another 25%,

Click for larger image in new window.

15 comments:

Anonymous said...

We all know the blip in 2010 is government stimulus. Real estate markets tend to overcorrect, which is exactly what I expect to happen.

I recently obtained a list of every parcel in Albemarle with delinquent real estate taxes. Quite interesting. Also interesting is looking at delinquent taxes by subdivision, but this takes a little work.

Name/URL said...

Fed Ready to Prop Up Economy

http://www.nytimes.com/2010/08/28/business/economy/28fed.html?_r=1&hp

Humpty said...

"Fed Ready to Prop Up Economy"

Thank God for that! Now I feel safe and comfortable. Time to buy real estate!

People, ask those schmucks who got burned in the Tech Bubble of 1999/2000 how the Fed saved them. The Fed will not be able to save the real estate sector. It might be able to create a new bubble in another sector, as Greenspan did in 2002.

Even the big tech names, which are still considered as great companies, that survived the 2000 bubble have terrible valuations 10 years after. Names like EMC, Intel and Cisco.

For example in September 2000 EMC was trading at $99/share and it closed yesterday at $18.37/share.

Cisco in March 2000 was $77.31 and closed at $20.81.

Intel in September 2000 was $74.87 and yesterday closed at $18.39

These companies are the equivalent of location, location, location in the tech sector.

My point is not to compare the tech sector to real estate but to show the effects of a bubble even on a solid and good investment.

Bleeeeeeed It said...

Price it right and it will sell - hahahha. To whom?

Everytime the one in 100th house that was priced "right" sells, it reconfirms that all the other houses should wait out the market.

It's going to be a long cold winter in Charlottesville.

John Doe said...

"TARP and the continuing problem of toxic assets" - WSJ. Google this to get link, and you'll receive the paid content article. Why "Mark to Make Believe" in housing etc is holding back the "recovery."


(A link won't work b/c WSJ wants you to either subscribe or enter via Google).

Humpty said...

@Greg Slater

"My basic advice to potential buyers: Make sure buying is the right decision for you. Educate yourself to what it means to buy a home and what is available in your price range. Follow some of these properties to see how fast they sell and at what price they sell. There are opportunities in this market."

Sound advice. I would add that when you make an offer, base it on sales data from 1995-1998 because this way you will protect yourself from any downside.

"My basic advice to potential sellers: Price your home correctly to start. This is the mistake that could hurt you the most, especially if you really need to sell. If you don’t need to sell right now, consider not putting your home on the market."

Why would this mistake hurt you? He didn't elaborate! But I will. If you really want to sell price it right because if you don't and you need to sell you'll get far less the longer you wait. Even Greg knows it's heading south fast but he cannot openly admit it!!

Anonymous said...

We're looking to buy but are obviously concerned that prices have (a lot?) more to fall in this area.

That being said, it's slowly been dawning on us that we're "unusual" buyers just because we have a year's worth of rent / mortgage and living expenses put away in case of emergency. That's in addition to what we will use for home buying.

And now I see the prez of a well-known local real estate company trying to incentivize a move-up by showing a profit of $6k. So does this mean the average buyer is really really really strapped for cash?! Does this describe most buyers?

I know the savings rate nationwide is low, but wow.

Anonymous said...

i doubt the average buyer can even pay closing costs unless they're getting the money from selling their current home.

just think what would happen to prices if the government got out of the mortgage business and 20% downpayments were required.

it would be a great opportunity for those who know how to save

Anonymous said...

I NEED OPINIONS...How much should I go per sq ft for a "used" house in the City? One owner. Needs updating or replacement except for 5 yo water heater. built in '50's. Thoughts?

C'ville Bubble Blog said...

You will find prices at levels of the early 2000's, or even the 1990's, if you buy a foreclosure:

www.homepath.com Fannie Mae REO (bank-owned)

RealtyTrac.com

These are the most "affordable" properties in this area. Short Sales typically have the opinion of a local RE agent guiding the price.

A property that is owned by the bank costs less because the bank wants to unload it asap.

Humpty said...

"A property that is owned by the bank costs less because the bank wants to unload it asap."

Which is the "real" market price, where a willing buyer and a willing seller mutually agree on a number.

Anonymous said...

it's sad to think you can get excited over a house in this area just because it's priced for the market..

Humpty said...

"it's sad to think you can get excited over a house in this area just because it's priced for the market.."

Yes Mr Realtor! I'm supposed to go Gaga and fall in love with the house so you feel empowered to shaft me more! There should be enough homes priced at market for me to choose from.

Your above statement speaks volumes about you as a realtor, you should be ashamed! You're not just selling a home, you're selling an investment, an investment to most folks is the biggest one they will make in their lifetime. Clearly, you feel so long as the buyer loves the house the investment part doesn't matter!

The first rule in buying property is location, location location and the second is don't fall in love with any one property!!!!! Of course if money is no object and you are rich enough to satisfy your whims, and only see the house as a home and not as an investment, then yes by all means humor yourself. Regrettably I am not in that position.

Unfortunately, too many realtors abuse their knowledge, as buyers show their emotions, likes and dislikes because they are naive. I get sick everytime I hear a homebuyer tell me we told the realtor "we have to have this house". "It's one of a kind". My response to them is by telling the realtor this, you have just told the owner to hold his price! The realtor works for the seller and his/her fiduciary duty and loyalty are to the seller. The seller pays the commission.

I apologize to the professional salespersons who don't think like this "anonymous" real estate agent.

PS. Yes, I would never buy a house or a property unless I thought I was getting a bargain price. I don't care how fantastic it is it has to be the right price. So far to date I have never lost money on a property deal for this reason alone. I also never bought anything between 1999 and 2009, again for this very reason.

rfs said...

"seller pays the commission"...but the buyer finances it in the contract sales price, so wouldn't the buyer be paying the commission, really?

Humpty said...

"but the buyer finances it in the contract sales price, so wouldn't the buyer be paying the commission, really?"

It's a valid point but the seller is the one that signs a contract with the agent. If the agent brings a ready, willing and able buyer for the asking price and the seller changes his mind he is still liable for the commission.

There is actually a term known as the buyer's agent, where a separate agreement can be signed between the agent and a prospective buyer. However, the agent still gets paid by the seller, and yes you can assume the payment is indirectly coming from the buyers funds.

I actually find the commission thing and the sellers and buyers agent concept an oxymoron. There are so many conflicts of interest, most of which fly over the heads of many RE salespeople, either wishfully or because of ignorance. Lots of grey areas!