Frank

use your powers… how’d this one go for 205k?

http://tinyurl.com/yzc8uf

Thanks!

My response to that is, yes it is easier to buy a house if you have no problem paying full price or a tad under. But buyers still have a good amount of risk if this isn’t the bottom. What if the prices drop another $10k in 3 months, or more? That is why it is important to find an agent that will work hard to get you the lowest price possible.

I wish I could post how I did that here, but I can’t since my competition would read my strategies (my clients get to hear it first hand) . I know you might be thinking, “oh just offer $100k under”, it is far more complex than that!

As for the data after a bubble question, I don’t have it. The problem with data is who is writing it. Some like to say “data is data” and you can’t argue with it. I disagree.

But I also don’t believe in timing the market. Just like stocks, a new
high could be time for a pull back or an even new higher high. Only time has been proven to usually be your best shield from a pull back. (I say usually since the Nasdaq is still WAY WAY off the high)

You can look at the Shiller’s graph and look at what past corrections looks like, but then Fannie Mae once tried to show my broker class a graph showing that over the last 40 years there has never been ONE year where housing prices from jan to jan haven’t gone up at least .01%. Trust me, I gave them a lengthy debate.
And with the Shiller’s graph, people will read it and say that those pull backs were because of lack of job growth, something that isn’t a problem today.

Are you saying yet: “Frank, dammit, give me some advice!”

So what does one do?

1) Move away from “your home is your investment” mentality. Drop that from a #1 priority to #3 or #4. You are not a real estate investor.

2) Make sure you have a long enough of a time horizon to ride out any further decline. You should be good with 5-7 years, but I have examples of it taking 10 years, so who knows. I have talked countless friends into renting, when talking purely numbers, renting isn’t all that bad. (but then you don’t have that warm and fuzzy home ownership feeling and a chance at Vegas style riches) I don’t do rentals, use Craiglist.

3) Take some solace that you are buying your $600k place sometimes for $100k UNDER what somebody else paid for it. Maybe it will be $100k OVER the next guy, but I don’t feel that timing the market bottom ever works (look at all the people that sat on the sidelines during the last skyrocket saying every year it must come down)

So if your horizon is long enough, enjoy life and find a great place to live.

ps. Don’t get fooled by % off listing price drops. Even in this market I would rather have a client buy a FULL PRICED new listing (properly priced by a good Realtor) than get $100k off a place that might be $150k overpriced. Value is #1, not the % off list. Rug store clearance 50% off sales don’t fool you, so don’t declare victory just based on getting $50k off on a wildly overpriced home.

(One secret revealed: Smartmoney featured this tip of mine: Have your agent look up the Listing agent’s track record. See if they tend to overprice with their last 5 deals. That might give you some guidance on your offer. If they don’t know how to do this… too bad.)

I agree. I remember a story on a 21 year old “investor” making a killing on internet stocks. Hum, was he so great or did he happen to be investing WHILE the market was skyrocketing?

Here’s another foreclosure, this one’s in Clarendon 1021 where i believe Frank owns, maybe even occupies. will this further hurt comps?

Further – Is there any historical data out there that outlines what happens to yoy sales following a bust? And does this tell us (from a historical post-bust perspective) how good of a great buy that really is?

Anyone?

It seems to me that too many people over the last two years invested in real estate without having any inclination on how to run a business effectively and efficiently. I still have buyers approaching me trying to “flip that house” and though you can lead a horse to water, you can’t make them drink. My advice goes in one ear and out the other.

I think our government needs to establish legislation that would protect these potential would be investors from themselves. Sadly many have already learned the hard way that real estate isn’t as easy as those late night infommercials would lead you to belive.