The sky is falling!  I think...wait, maybe its not....
by Kaushik Sirkar, Chandler REALTOR®
Chandler AZ Real Estate

During the boom.  You couldn't go wrong with housing.  50% appreciation per year for the next decade.  Now?  RENT!  Get out of your house before it loses all its value!!

Obviously both of the ends of the spectrum are/were somewhat skewed.  Those of us who kept our heads during the boom knew it wouldn't last forever.  And....wait...am I predicting the future...that house prices won't completely collapse?  Well, thats certainly my expectation.  But my point here is, many frenzies (up or down) are driven by media reports.

Supposedly, we are (nationally speaking) seeing median prices decrease.  But this article from money.cnn.com reports that, according to OFHEO (Office of Federal Housing Enterprise Oversight) suggests that prices are up from the same quarter last year.  HUH?  This is in stark contrast to data from the National Association of Realtors and the Case-Shiller index.  Well, if you read in detail, you'll see that OFHEO calculates 'price changes' differently...where NAR uses median sale price OFHEO uses differences in values when homes are resold or refinanced.

Am I trying to make a prospective reader an expert on how to calculate home price gains/decreases?  HECK NO.  I just want to emphasize a few points.

  • Take everything with a grain of salt (it is often never as positive or as negative as the media might portray things)
  • Focus on your LOCAL real estate statistics - they are much more relevant
  • Stick to the basics if you want to buy a home - don't overextend yourself and the likelihood is over 5+ years, historically speaking, you will not lose money.

Thanks for Reading :)

Kaushik Sirkar, Chandler AZ REALTOR
http://www.homesphx.com

 

 
This post has been included in Arizona Real Estate News

10 Comments on The sky is falling! I think...wait, maybe its not....

JUN
04
2007
294,780 Points 11 Featured Posts Outside Blog Attended Rain Camp

Kaushik, I wish I could be in a great market :) my home has not appreciated in the last 3 years, bad eh? but true !

 
11:44pm • #1
293,704 Points 19 Featured Posts Outside Blog
Kaushik, great points. Folks follow the national media doom & gloom talk way too easily, without actually looking around for themselves to see what their LOCAL market is actually doing. As you can see by reading the stats reports in my blog, our local market is still booming and is way up over this time last year. However, there are still plenty of folks around here that believe the end of the real estate world is near, thanks to our national "journalists."  
11:48pm • #2
JUN
05
2007
738,191 Points 231 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Kaushik.....  this is a great point. I am big on stats and I just did a post on foreclosures vs homeownership. We need to educate both the general public, the media, and even those in the real estate industry. OFHEO is giving skewed numbers and the public needs to be made aware of this. Thanks for sharing this.

                                                                                                              jeff belonger

 
12:05am • #3
650,291 Points Localism Sponsor Outside Blog

Good post.

Carolin Benjamin
Bob and Carolin Benjamin - The Benjamin Team
Keller Williams Integrity First Realty
Gold Canyon Arizona
12:42am • #4
9 Featured Posts
Kaushik - Very good post. You are right on...the truth typically lies somewhere in the middle!
3:25am • #5
417,317 Points 63 Featured Posts Outside Blog
We have the same thing here.  Prices are up even though the inventory is high.  It was in the paper just a few days ago.
5:30am • #6
I am seeing that the values are up or down depending on the zip code. I am sure that the realtors are seeing the same thing.
12:55pm • #7
JUN
09
2007
1 Featured Post

The sky is falling... 

Roughly 1/2 of the listing I previewed today were either short sales or bank owned.  The part that I don't understand yet is the banks unwillingness to budge on price.  Many bank owned homes are sitting on the MLS at regular market value paying selling agents regular commissions but not as negotiable on price as I expected.  All of the investment bankers must have gotten together and made a pact not to reduce prices in fear that they would all go under in the process.  Well interest rates aren't going to get much lower and even if they do, with new lender regulations, very few buyers are able to qualify for financing.  What's going to happen if things stay the same and asking prices continue to drop?  I know I'm licking my chops with the idea that I may be able to purchase investment property with little money down and no negative income.  As rents continue to rise, I'm starting to believe that it just might get that bad.  Of course this will help the rich get richer and the poor get poorer.  Almost like it was all planned out.

1:09am • #8
JUN
14
2007

I look at affordability and Rental Return / Mortgage costs

Both are historically still way out of line in most markets

Interest rates are up from bubble, lending has tightened, first time buyers were 'pulled' forward

We will drop in almost every zip code. Anything else is irrational
2:40am • #9
AUG
10
2007
 When times are good, most people tend to forget that the opposite cycle will return again.  In any market, there are people buying and selling so the key is to plan ahead so you can go with the flow! Great topic!
1:04pm • #10


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Kaushik Sirkar

Chandler, AZ

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Call Realty, Inc.

Cell Phone: (480) 600-2808

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