More Signs the Housing Market is Headed Down

In a recent post, Jason Calacanis notes that housing prices in LA are taking big drops. He says the housing market there is still going down and makes these comments:

There is a still a huge gap between what people are asking for and what people are willing to pay.

At one house the broker told us that the price was going to go down 10% immediately because the client overpriced the house against her wishes. She said that there was another 10% of room from there. So, in other words the price the person was willing to sell for was 20% less than what they listed it for--at least. Of course, we thought the house was worth 30-40% of what they were asking. Interestingly, 35-40% less the (absurd) asking price would put the house at the price it would have sold about two years ago.

Later, he shows two other houses in California in a post titled Flippers in Trouble. Prices there are down 17% to 25%. Yikes!

If you find yourself in this sort of market, you may want to check out my thoughts on what to do in a slow (and slowing) real estate/housing market. In most places, housing prices haven't come down that far yet, though there are certainly signs of desperation out there. Personally, I'm waiting for the right time -- after prices fall dramatically -- to enter the market as a real estate investor.

Comments

[dforester]

Another good "housing bubble" site:

http://thehousingbubbleblog.com/

[Ralph]

I'd guess that the housing slump has a way to go yet in the US - here in Sydney, Australia house prices peaked in 2003 and haven't bottomed out yet. I did a post recently showing the "boom and bust" cycle that my own properties have gone thru:

http://enoughwealth.blogspot.com/2006/09/estimating-net-worth-real-estate.html

A more fightening example of how bad things can get, was in today's paper - a property that had sold for over $230,000 in 2003 that was just sold at auction for $95,000!

[prlinkbiz]

The market is ready for you when you are. Now's the time to get in and help solve problems. I'm moving towards pre-foreclosures. People need help- it's time to get in and help them.