Price Declines
Check out this house which has been on the market for 411 days. It was first listed at $799,000 back in 9/18/07. Below is the pricing since listing:
Price Reduced: 09/18/07 -- $799,900 to $770,000
Price Reduced: 10/09/07 -- $770,000 to $755,000
Price Reduced: 11/16/07 -- $755,000 to $739,900
Price Reduced: 01/13/08 -- $739,900 to $719,900
Price Reduced: 02/14/08 -- $719,900 to $689,900
Price Reduced: 05/03/08 -- $689,900 to $669,900
Price Reduced: 06/07/08 -- $669,900 to $649,900
Price Reduced: 06/30/08 -- $649,900 to $624,900
As you can see this seller must really be hurting, or maybe not. Well the owner purchased for $361,245 back in 2001 and I haven't check the mortgage history to know if they withdrew any equity.
A few discussion questions for you weekend warriors:
What do you think this home should be priced at in TODAY'S market?
What do you think this house will be worth 2 years from now?
What do you think this house will be worth 5 years from now?
While we get the discussion going, I'll check on the mortgage history to see if I can dig up any refi's and/or MEWs.
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10 comments:
I am pretty familiar w Woodbine, as my best friend lives there. Lots of post-2000 McMansion construction in the area. Properties in general have not been moving very well in the vicinity. Woodbine is close to Rte 70, but still a haul to either DC or Balto. Two years ago the seller probably COULD have gotten close to 800 for the house. But now? Who wants a 40-50 mile commute one way. But maybe that's just me. I recently saw a 2 BR Woodbine house sell for $350. So this place will probably sell in the upper 500s at this point. In 5 years? I wouldn't even care to guess. But I bet it will be hard to sell.
I agree in the 500 for Todays prices. But I think it will only be worth upper 300's when this is all said and done. I'm dying to know if they were drinking the kool aid and pulled out equity.
around $350K in a sane world - which hopefully is only 2-3 years away
they should drop to $575 and try to dump now
My question is that the house has a tax assessment of 750k, what are the chances the county reassesses it down to 600k if that is the purchase price? The counties are as much into this bubble as anyone....
anon 11:00 am, I noticed the high assessment value too...taxes collections will be falling for years to come. Also the assessed value will reset to whatever is the next purchase price.
This is something that people need to think about when buying a house right now. Property value is going down. By law assessors have to reappraise every 3 years. So that means less money for them as property values go down. This is a scary feedback loop. The counties are most likely going to be significantly raising property taxes over the next 5-7 years. (Like double)County spending and employment is based on peak 2007 money. Now of course they should cut spending and fire people but come on when have you ever seen that?
I think I saw Arnold sign an order reducing California state employee pay to minimum wage as an emergency measure because the legislature would not get serious about fiscal problems. (Or maybe I was just hallucinating because of the long line at the bank.) Of course, I doubt O'Malley would do the same here. And of course property taxes are mainly a county issue.
I think it is worth 520k in today's market. 2 years form now I would say it will be priced at 420K. 5 years from now at 450K . I think the real 6% inflation rate will start filtering back into the home market. Just wild speculation on my part. Big leg down coming,but 6% annual inflation will give support to the home market in the coming years in regard to prices.
What would the price be if there hadn't been a housing bubble and home values had increased at a normal pace from 2002-2006?
How would the value of this home stack up to historically based wage/home price comparisons? (i.e. the home is subjectively rated as being at x% with regards to comparison on a national basis, so the price of the home could hypothetically be valued at 2.5[?] times the income of someone with a salary in x percentile...) There are a lot of subjectives with regards to standards of living and what not, just a thought I had.
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