Monday, August 17, 2009

Its the price stupid...

Real estate used to be about location, location, location. Now it is about price, price, price.

NEW YORK (Reuters) - One in four U.S. homes for sale on August 1 had their prices marked down at least once since landing on the market, data compiled by real estate website showed on Friday.

A total of 24.4 percent of homes had their prices reduced in July, up from June's 23.6 percent. The average discount was 10 percent from the original price, or $40,173 of a median house value, said in its monthly price report obtained exclusively by Reuters prior to its release.

When will these home debtors get it? Your house is not worth what your neighbor sold his for in 2006. It is not worth what you paid for it in 2004, and it probably can't even sell for the amount needed to pay off your outstanding mortgage balance if you bought it in the last five years.

Welcome to the new reality folks. I paid $87,000 for my condo in 12/2005. Now it is worth about $47,000. In fact my whole 20% down payment has been eaten through and I am still underwater.

Buyers don't care what you paid during the bubble. They don't care that you have had your house staged, or that you have granite counter tops. They simply want a house for as cheap as possible and with foreclosures everywhere they will not be looking at your house until the stream of foreclosures has dried up which will not be anytime soon.

Its the price...stupid.

1 comment:

Malcolm said...

One of my hobbies lately has been checking out commercial real estate prices in the Detroit area. (and FYI, I love Google Earth Street View)
If someone had a good chunk of money, there are SO MANY bargains right now. You’d have to sit on it for a while, but if you had the inclination, you can buy out entire blocks.
But… what to do with it? That would take a lot more money.

View My Stats