Home Prices Dropping...

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Posted by DjPiLL

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Posted by dleeny

We put a bid on a condo which was accepted and withdrew for various reasons. Now, a month later, that same condo is $10K less. So we would have essentially LOST money on it had we bought it. the buyers dictate the market.

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So big deal... you temporarially are down 10k. Big deal.

You can't treat real estate the same way you treat a stock purchase. Its a long term investment.

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one of the main reasons we withdrew our offer on that condo was because we thought we could do better than this place. now that it is worth less and so are several other properties we have seen, we are in no rush to buy. our rent is relatively low considering what DH and I bring home. we're just putting it all away in the bank right now.

Years ago before the real estate boom, people bought homes to live in. They weren't counting double digit appreciation. They bought their houses and planned to live in them a while. Real estate is always a good investment no matter what. Typically it has the highest rate of return for any investment-plus you get to live it in it!

If you are buying a house because you want appreciation and don't plan on living it in for long then don't buy here. If you plan on living in your house for a while, it doesn't matter if the house appreciates or depreciates over the long run and for the big picture. Historically, you will end up in the plus column.

It doesn't matter what the seller is asking. If you feel the home is priced well for the area and for the comps around it then, it is what the market dictates. If you go into thinking that if your home doesn't appreciate within a certain time frame then you got screwed then you aren't looking at it right.

If a seller decides to lower their price to sell it, it doesn't mean that it's not worth more. Sellers have all kinds of reasons for lowering prices. They may need to get rid of it faster than originally planned..etc.

Just adding another perspective.

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Posted by DjPiLL

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Posted by dleeny

We put a bid on a condo which was accepted and withdrew for various reasons. Now, a month later, that same condo is $10K less. So we would have essentially LOST money on it had we bought it. the buyers dictate the market.

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So big deal... you temporarially are down 10k. Big deal.

You can't treat real estate the same way you treat a stock purchase. Its a long term investment.

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OMG Rich! We agreed on something...read my post.

I wonder what all the 'bubble waiters' are going to do if/when the interest rates do hit 7+ percent... but prices DON'T drop.

And don't say that will never happen because believe me... there are TONS of people out there with the 'I can't stand paying someone else's mortgage philosophy'. You read it all the time on this forum. Some people will live the ramen diet in order to be able to afford these houses.

Those people that are waiting could be left in the dark and will end up paying a lot more in the end.

bottom line, everyone is in a different situation.

we've opted to wait.

but prices are already dropping- espeically the ones priced over $600K- or what people try to get away with calling 'luxury'

I can afford to buy a house today- if I found something that was worth what the people are asking- and no I wont be eating ramen-

I am not going to pay $800K for a 4 bedroom coloinal that needs work - I will leave the state before that happens- sorry

your a smart guy- you have to understand the cycle- if home prices and interest rates keep going up there is going to be bigger problems for the economy than I think you realize

the young a being chased off the island - when 10 years ago LI had the highest rate of it's young people staying of anywhere in the country- you can't say that today

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Posted by Beth1210

we don't want to buy a house for $600K and have it worth $550K 2 months later

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Why would you let this bother you?

If my house depreciated 50k in two months (hell... it probably already went down 30k )... I really wouldn't care.

In fact I DONT care. Why? Well first off I am not selling so even if the house appreciated 30k... its not like it would greatly impact my life.

I don't care because I love owning a house. I love the fact that I have a house. Love that I am doing work in my house.

Every month you wait to buy is a month less you have to enjoy your house.

Enjoy you don't have to deal with annoying neighbors.

Enjoy that I have a nice big backyard to do whatever I so please.

Enjoy that I can park in my driveway and not blocks away every day looking for spots.

my husbad explained it all to me- but I can't cleary remember it enough now-

he believes that prices are going to drop even more then $50K- for the type of house we want to buy- and I have to agree with him-

he doesn't think starter homes are going to drop very much- I will give you that

the bottom line for me is when we find something that is priced right we will buy it- I am not in a rush- and I certainly don't feel like I am being left out of the second most over priced market in country -

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Posted by Beth1210

I can afford to buy a house today

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Forget the fact that you hubby is a morgage broker ....

If you want to wait... thats fine.

But if you are currently renting... and you claim you can afford to buy a house now... every financial planner that even has SOME knowledge will say you should buy.

How do you think the rich get richer? Its not from 4% CDs and MMAs... thats for sure. I made the majority of my wealth buying and selling real estate for the past five years.

Even with this inflated market... there are deals out there! In your price range... you can easily offer way less than asking. One of your offers may even get accepted if they are quick to move.


I always say there is never a bad time to buy... only bad WAYS to buy. You won't be buying in a bad way... so you should be buying!

Rich, would you buy a car you didn't like b/c you got a good loan on it?

I refure to buy an 'ok' house. DH and I either love it, or we're not buying it.

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Posted by Beth1210

my husbad explained it all to me- but I can't cleary remember it enough now-

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Judging by a lot of your posts... I really disagree with alot of things you claim your husband says or believes in. I really think he is overestimating how much the prices are really going to drop. Nassau home sale figures only dropped 1% from January to February. Thats peanuts for what is considered the slowest time of the year.

Your husband is predicting price drops of close to 20% and more! Thats about as unrealistic as the other group of people that believe we will still see double digit appreciation every year.

And its nothing personal against your husband either. If he wants to believe in what he believes in... thats fine he is entitled to it.

If you two are on the fence about whether to buy or not... perhaps you should get a recommendation for a good financial planner. They may be able to give you a tip or two, especially since he is in a sales field.

You should also find a good RE agent. Somebody that can do the work for you... and tip you off on home sales that the RE knows the seller is 'very negotiable'.

to be honest with you- I don't see anything wrong with waiting

1. Jake theory is that if/when prices drop- regardless of the interest rate he doesn't want to own something worth negative ( since we can re-fi for free-:)

this is his opinion- you have yours- you guys disagree- you think prices are going to keep going up- he doesn't feel this way

2. the chanes of us staying in the same house for more then 5 years are slim- I want out of NY- I hate the weather and to be honest with you if we move out of state I will be warm, close to my family and not have to work-

3. I haven't found anything that meets what I am looking for - I see plenty of homes I like- but they are over $1M- Jake wants to live on the water- this limits us to neighborhoods- and we want to stay in Nassau county- we both work by Rooseveltfield

I want nothing more then to own a house- but I don't want to buy one just to buy one-

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Posted by dleeny

Rich, would you buy a car you didn't like b/c you got a good loan on it?

I refure to buy an 'ok' house. DH and I either love it, or we're not buying it.

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Thats not an accurate assumption because like a house... you can take your loan with you to find the RIGHT car or the RIGHT house.

With the car... just like a house... you secure your financing and then go shopping for the car that you want.

There are deals out there to be had *if* you have the cash to save up.

If the down payment issue is really a difference maker... then you can hope prices drop.

But before you do that.... do a search for all the home posts on this site from 2003 and 2004 from people expecting the 'bubble to burst' back then. Some of them are now kicking themselves for not acting sooner.

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Posted by Beth1210

to be honest with you- I don't see anything wrong with waiting

1. Jake theory is that if/when prices drop- regardless of the interest rate he doesn't want to own something worth negative ( since we can re-fi for free-:)

this is his opinion- you have yours- you guys disagree- you think prices are going to keep going up- he doesn't feel this way

2. the chanes of us staying in the same house for more then 5 years are slim- I want out of NY- I hate the weather and to be honest with you if we move out of state I will be warm, close to my family and not have to work-

3. I haven't found anything that meets what I am looking for - I see plenty of homes I like- but they are over $1M- Jake wants to live on the water- this limits us to neighborhoods- and we want to stay in Nassau county- we both work by Rooseveltfield

I want nothing more then to own a house- but I don't want to buy one just to buy one-

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Well... if you don't plan on being here for more than 5 years and are buying in that price range... then you should wait.

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Posted by DjPiLL

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Posted by Beth1210

my husbad explained it all to me- but I can't cleary remember it enough now-

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Judging by a lot of your posts... I really disagree with alot of things you claim your husband says or believes in. I really think he is overestimating how much the prices are really going to drop. Nassau home sale figures only dropped 1% from January to February. Thats peanuts for what is considered the slowest time of the year.

Your husband is predicting price drops of close to 20% and more! Thats about as unrealistic as the other group of people that believe we will still see double digit appreciation every year.

And its nothing personal against your husband either. If he wants to believe in what he believes in... thats fine he is entitled to it.

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I don't care if you agree are not- Jake is entiled to his opinion on the LI real easte market as are you-

I have yet to read one article claiming that prices will raise- if if someone wrote one I would have to conisder the source - it's probably a real estate agent

Jake didn't just get into the mortgage business this year- he has over 5 years experince and before that he was a stock broker- when it comes to finace I defer MY decesions to him

he is predicting in the LUXURY market a drop of 10% or more- which is $100K- on a $1M home-

and I can see for myself that the same houses in Long Beach are sitting there and sitting there- some for about a year now- b/c they are over priced

you do what's best for you- and we will so what's best for us

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Posted by DjPiLL

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Well... if you don't plan on being here for more than 5 years and are buying in that price range... then you should wait.

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exactly Jake's point- if we were here for the long haul- it wouldn't matter if prices dropped for a year and then rebounded

if we decide to stay- then that's one thing- but we don't want to

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Posted by DjPiLL

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Posted by dleeny

We put a bid on a condo which was accepted and withdrew for various reasons. Now, a month later, that same condo is $10K less. So we would have essentially LOST money on it had we bought it. the buyers dictate the market.

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So big deal... you temporarially are down 10k. Big deal.

You can't treat real estate the same way you treat a stock purchase. Its a long term investment.

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stock purchases are supposed to be a long term investment too.

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Posted by DjPiLL

I wonder what all the 'bubble waiters' are going to do if/when the interest rates do hit 7+ percent... but prices DON'T drop.

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why would that happen?? The real estate market has historically been like the bond market. As interest rates rise, prices fall.

Who is going to be able to afford a house is prices continue to rise with interest rates?

Your therorys have lots of holes in them. Look a few posts back, you gave some scenarios with prices decreasing and int. rates increasing and I did the math and proved that you didnt look at the opportunity cost of the lower dp and the interest you'd make on it ifyou invested it.

Agree to disagree!

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Posted by Meaghan729

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Posted by DjPiLL

I wonder what all the 'bubble waiters' are going to do if/when the interest rates do hit 7+ percent... but prices DON'T drop.

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why would that happen?? The real estate market has historically been like the bond market. As interest rates rise, prices fall.

Who is going to be able to afford a house is prices continue to rise with interest rates?

Your therorys have lots of holes in them. Look a few posts back, you gave some scenarios with prices decreasing and int. rates increasing and I did the math and proved that you didnt look at the opportunity cost of the lower dp and the interest you'd make on it ifyou invested it.

Agree to disagree!

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I made this point a few posts back and his answer was to say that my Husband doesn't know what he is talking about