Weak housing market? I don't think so.... - Lateral-g Forums

JKnight · #1 06-06-2011, 10:25 AM

So my Fiance and I are trying to buy our first house right now. I held off on buying a house out of college in 2005 because I felt like housing prices were unsustainable. Turns out I was right and it has been one of the best decisions I ever made.

We will be staying in the Phoenix area, so we figured with all of the news of the soft housing market, short sales, foreclosures, and bank owned properties, we would have no problems finding a decent place with a little potential.

Reality of the situation is that there are absolutely no indications that the housing market is still soft. Some even go so far as to call it a buyer's market. I don't think so. Every decent property has 4+ offers by the 3rd day on the market, all of which are significantly above asking (35-50%) and many are full cash offers (investors?). Its no wonder the supply of homes isn't going down. The investors buy these places up by the handful and relist them the next week for a 10% premium. Many of these places still need a good bit of work to be livable.

It's starting to seem as though there is very little opportunity for normal buyers to buy a humble house to live in. We are prequalified, first time buyers with no skeletons in our closet and USAA as a lender. Why in the sam h$ll I can't seem to buy a decent house is beyond me.

Thank you for allowing me to rant....

wmhjr · #2 06-06-2011, 10:52 AM

Come on out this way. The housing market is indeed weak here, and we're considered one of the less affected markets in the US. The problem is a lack of available credit keeping buyers at bay. Plenty of cheap houses.

In other places, my dad has a winter place in FL. There are tons of places that are now hundreds of thousands of dollars cheaper than they were 3 years ago. I have 2 friends who just purchases homes that were bought less than 5 years ago by the sellers. In one case, a $650K small home 4 yrs ago was just sold for $275K. Just examples.

Hope you have better luck, but I'm sure that there are deals out there. I've got friends who are building contractors, and they would unhappily agree.

JKnight · #3 06-06-2011, 11:16 AM

There's no doubt that the home prices are down significantly from 2006 levels. But the fact is those high watermark prices were absolutely insane three years ago. I guess I just thought the days of bidding wars and people making offers sight unseen were over. It appears I was wrong.

I'm not looking for a "steal", just a decent place that doesn't require $40k in renovation in the first couple years to make it liveable. I guess this would be a bit easier if I sold the Camaro and upped our budget, but what fun is a new house with a garage if you don't have anything to put in it?

Ralphlovs72chev · #4 06-06-2011, 01:31 PM

Try placing an offer anyways. That is what i did and even though i was going in with less than other people the bank liked our offer best... You just never know. O and if you plan on selling the camaro it will came back to Haunt you later on just like it did me.....just my 2cents....

jocko124 · #5 06-06-2011, 01:32 PM

The other thing you have to keep in mind is price point. I would venture to guess that housing priced above $500K is in more of a Buyer's market versus sub $400K housing may be in more of a seller's market.

NOPANTS68 · #6 06-06-2011, 02:01 PM

I feel your pain man. I just made an offer on an investment property Saturday in the sub- $200k market. I've looked at 22 homes and it's been a war just keeping up with what's available and what isn't. By the time we made walk through appointments on some of these houses, they were locked up in escrow. It's totally insane. I've got my fingers crossed in that we found this house in the first four days since being listed, and got our offer in. I've already been warned that it's one of many though. I've also been beaten out by full cash investors three times this year.

Having said that- my broker did say that everything north of $500k in our area is pretty dead.

orangevert · #7 06-06-2011, 02:04 PM

If you qualify for a FHA loan, I hear you can buy a house that needs a little work and put the cost of the remodel into your loan and pay to get it done.

**camcojb** · #8 06-06-2011, 02:33 PM

My area near Sacramento is very soft now. Custom homes that sold for 1.1 million in 05/06 are now offered at under $500K, and have been for sale for a year or more.

chr2002ca · #9 06-06-2011, 02:36 PM

Yep, that's gotta be very frustrating to not be able to buy a home because of all the investors jumping in. You may see that start to slow down shortly though and more opportunities opening up for buyers like yourselves. The housing market continues to slump(not all areas are the same) as the double-dip is in full effect with no end in site. Very recent economic numbers are looking bad also so that's only go to add the housing woes as more homes come on the market. Fortunately, rates continue to dip so the situation just keeps getting better for those who wish to finance. This 'good opportunity to buy' will be around for quite a while, and prices may get even better as we progress towards the end of the year. Spring time and early summer is typically a very busy season so I'm sure that's not helping you either. I'd stay patient and persistent. You'll get one eventually.

**Flash68** · #10 06-06-2011, 03:15 PM

Quote:

Originally Posted by JKnight

So my Fiance and I are trying to buy our first house right now. I held off on buying a house out of college in 2005 because I felt like housing prices were unsustainable. Turns out I was right and it has been one of the best decisions I ever made.

Actually, buying in 05 and then selling in 07 would have been a better decision.

Back to your current situation... I don't know your price point, or your interpretation of "decent" and "reasonable" but I will venture to guess you are shopping at the low end where, yes, plenty of buyers and investors are fighting for deals. This is going on in a lot of places, and low low rates are helping tremendously.

I have just begun looking at foreclosures/short sales in my area after exiting the market in 07 and happily renting since then.

A recent example maybe similar to your experience: a short sale single family house, dated but livable on a decent lot in a decent nabe, sold for $850k in 05, asking $350k now... in contract in less than a week and likely over asking by $50k I'd venture to guess... and likely an investor, or maybe not.

I would say don't mistake common cases of intentionally underpricing properties to generate activity and offers with a "strong market".

Your results may vary.