Housing Softening: MPLS Leads the Way in Price Cuts. (renting, mortgage)

[moving123456]

Originally Posted by west336

There are also a lot of pending/impending foreclosures on the horizon, esp. as unemployment continues to lag. Not to mention a pending/impending commercial foreclosure crisis. So if you're truly searching for the bottom, IMO wait 6 months to a year.

I believe 5 Year ARMs were still being approved for anyone with a pulse in 2005.

[Camden Northsider]

Like previous poster said, it really varies by area. SW quadrant of mpls really hasn't experienced much of a drop in values, whereas other areas I think did hit rock bottom in 2008, have been rising somewhat since then (and esp with the tax credit and under 200K market), went down a little as a result of the tax credit expiration but still aren't near the rock bottom they were at. Probably too soon to tell but I know houses in my area seem to still be listing above 2008/2009 values (knock on wood).

[designer/builder]

Homes that are priced right are still selling. One of the main reasons there are a lot of properties seeing price reductions is because a lot of sellers were optomistic that prices were on the rise because transactions were on the rise, and therefore listed their properties at unrealistic price points thinking they could take advantage of rising consumer confidence. Once the tax credit relieved the market of pent up housing demand, consumer confidence sank again catching sellers in thier folly.

On the other hand, there seem to be a lot of potential buyers that think prices must go lower in order for them to buy a house right now...which also fuels price reductions for those sellers that need to sell. It's a vicious cycle right now...buyers expecting unrealistic prices in order to make a purchase and sellers unwilling to come down as far as they need to sell their home. Until unemployment gets back to "normal" levels...with a return to "normal" wages...we will continue in this vicious cycle.

[designer/builder]

Originally Posted by Camden Northsider

Like previous poster said, it really varies by area. SW quadrant of mpls really hasn't experienced much of a drop in values, whereas other areas I think did hit rock bottom in 2008, have been rising somewhat since then (and esp with the tax credit and under 200K market), went down a little as a result of the tax credit expiration but still aren't near the rock bottom they were at. Probably too soon to tell but I know houses in my area seem to still be listing above 2008/2009 values (knock on wood).

Keep in mind that list price and sales price are different. Sellers can ask whatever they want but buyers determine the market value of thier home. Right now buyers are saying that prices need to go lower.

[northstar22]

I'm definitely looking to buy in the next 5-10 months. I'm sick of flushing money down the toilet on rent (and paying exorbitant prices in the process). I've also had it with apartments - the incessant noise and lack of space are getting to me. Low prices are good for me. I guess I'll just have to take the risk of prices dropping further. For what it's worth, I don't plan to buy in the Metro.

[nick is rulz]

lol@"flushing money down the toilet on rent"

No, what you are doing is exchanging funds for a good or service. Flushing money down the toilet on rent would be if you signed a lease, paid the rental cost, and slept in your car.

I figured that awful expression died out along with "guaranteed return on your investment". Im sure many an individual that bought into that heap of crap are now flushing their money down the toilet on an upside down mortgage

[MN-Born-n-Raised]

Originally Posted by designer/builder

Keep in mind that list price and sales price are different. Sellers can ask whatever they want but buyers determine the market value of thier home. Right now buyers are saying that prices need to go lower.

Kind of... Buyers and Appraisers decide the value. Let's say you have a home loaded with a fancy theater, central vac, multizone audio, sprinkler system, a pool, nicer lights, great landscaping in a nice area. Your home is in the middle of the pack but the recent comps are thin.

You might have $50K of adders (excluding the $50K pool) or $100K. If a buyer says "I'll offer $380K cause homes with a lot less sell for $350K" and the appraiser says it is worth $345K.. Guess what it is officially worth?? $345K!

Before Appraisers were over valuing property. Now they are under value (on average) because they are mixing in distressed property that might have a missing air conditioner etc. In summary, pricing pressure is a result of poor appraisals that now are hard to question.

[sondra_finchley]

In terms of flushing cash down the toilet on rent... I figure its a premium to be able to pack up and go whenever I need to. Had I bought a house in my last place of residence I would have been screwed when the job went away and there were no others in town that were right for me.

If I knew I had job security and had been at my job for at least two years then yes, I would consider buying in the near future. I wonder how many folks are like me (young professional, laid off at some point in the last two years, getting back on my feet) who would like to buy but can't because they were burned by job market in the past and are gun shy about committing to anything long term OR are rebuilding savings and career after the past two years OR haven't had a chance yet to even get on their feet.

[golfgal]

The problem most of you are having is that you are looking at a home as a short term investment vs what is REALLY is, a LONG term investment. I am quite confident that in 30+ years when we move into our retirement home that our house will appreciated significantly. I am equally as confident that our home won't increase in value next year but in the mean time, we are still paying down our mortgage and still owe less than what our house is worth even after the price drops because we built up equity in other homes that we owned and used that for down payments on subsequent homes. I am sure our house payment is a lot less than most people that have bought homes for LESS than ours because of the equity we have built over the years.

[Cruz Azul Guy]

I don't look at it as an investment as much as a place to live. The investment aspect comes secondary. As much as I like paying into equity instead of handing my money to a landlord, it's all about the freedom and flexibility that comes along with home ownership. Also, I feel it creates a larger sense of pride and responsibility in the neighborhood and community that I didn't feel when I was renting for a jerk landlord on a street full of rentals or when I was renting out of my buddy's house and never really planned on staying there for very long.