Problems In The Housing Market

Problems In The Housing Market

There are 7 comments on the Hartford Courant story from Aug 29, 2008, titled Problems In The Housing Market. In it, Hartford Courant reports that:

As a prospective home buyer, I have advice for sellers struggling to sell their house.

Join the discussion below, or Read more at Hartford Courant.

Free Homes Wanted

Woodbury, CT

#1 Aug 30, 2008
Just a comment to Kevin P. Fahey of Andover, what planet do you live on, you state that a home purchased after 1998 will be sold to show a possible loss. A home built in 1998 for $200,000 had a peak price of about $400,000 a year ago, it will still fetch $369,000 -$379,000. You would have the owner drop the price to, what, about $190,000? I suppose that a home purchased for $8000, in 1950 would now sell for $7000? Get a life, you sound like a wannabee home owner who can't afford to purchase a home. My advice to you is work hard, save your money and buy a house you can afford.
Jim

Naples, ME

#2 Aug 30, 2008
Kevin, If everything seems overpriced by $25K to $50, they are pretty much in line with the value. Reducing prices by 17% to 50% because the news says so, isn't correct at all. It depends on your neighborhood. While many places have seen drastic reductions such as these, just as many have had no change, and some have appreciated such as in Oregon and North Carolina.

The national news generally focuses on the worst cases. If everything seems overpriced to you, it is most likely priced correctly. Similarly, if everything thing seems underpriced to someone who's selling, they're probably priced right at what the market is commanding at that point. The only thing the seller can do is either wait until the market recovers, or sell below market value if they have to sell now. But, they have to have equity in the home in order to be able to do that. A seller cannot sell their home for less than they owe without permission from the bank(s) who hold the mortgages, so it's not a case of them trying to make you pay their loans.

As a buyer, you can hope that the market will fall further, or try to find a way to increase your income. But if you've been around for awhile, you know that your income has not been keeping up with the cost of living for a long time. In fact, now is probably the least you'll ever pay for a new home. Most materials have gone up dramatically in cost, and contractors really have to just dump them at cost or less to avoid bankruptcy. Once the market recovers, it's unlikely you'll ever see even these seemingly high prices again.
Seth

Woodridge, IL

#3 Sep 4, 2008
Housing is seriously over-priced in many markets. A house bought in 1998 for $200,000 shouldn't be worth a dime over $298k today giving the owner 2.5% growth a year.

Who says houses should appreciate anyway. Market values are perception. Real value is at most about $110 a square foot and for that much, I mean a real nice custom home all brick, 3 car garage, full basement.
Seth

Woodridge, IL

#4 Sep 4, 2008
I think you neeed to re-read what the author is saying. He's exactly right. Anyone that bought a home after 1998 probably paid too much and they need to accept they may have to sell it at a loss.

These idiots that think housing should appreciate at 10% a year are the reason why housing is screwed up.

Since: Jul 08

Portland

#6 Sep 4, 2008
Seth wrote:
I think you neeed to re-read what the author is saying. He's exactly right. Anyone that bought a home after 1998 probably paid too much and they need to accept they may have to sell it at a loss.
These idiots that think housing should appreciate at 10% a year are the reason why housing is screwed up.
and the fact that many people bought "investment" properties to sit on for years also driving up housing costs and now there is a glut of homes on the market since so many of these investors are losing all of their houses
Korry

London, UK

#7 Mar 26, 2014
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Since: Mar 14

Kolkata, India

#8 Mar 27, 2014
I would like to say there are two key problem for the housing market one is the excess supply of existing housing units and another one is negative equity.The excess supply is keeping pressure on residential investment, and therefore on employment and economic growth. As new households are formed, the excess supply will be absorbed - but this is happening very slowly.

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