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Wild & Wacky Housing Market

December 20th, 2007 at 11:24 am

Housing market ... blah ... blah ... blah!
I'm sure many of you sick to death of hearing about the housing market, right? If so, I understand. However, as I am "on the ground" right now in the market (house hunting), it's on my mind almost constantly, and so I'm gonna keep blogging about it. Sorry.

So much going on since my last update.

1. Went back & looked at the "more than we originally wanted to spend" house that DH was getting dreamy-eyed about. Had a serious talk, and reconfirmed that it is indeed more than we want to spend. It's out of the picture for now.

2. A couple of houses we've been looking at have taken one or two price drops, and still have not sold.

3. We have expanded our search to include not only Austin but also San Antonio and all points in between.

4. A small to mid-size builder whose homes we had looked at and liked stopped all operations last week. Still uncertain whether they will declare bankruptcy or what. They have quite a few homes under construction, some under contract to buyers and some are spec homes. I feel incredibly sorry for those buyers whose homes are sitting there half-finished. What happens in a situation like that? And I feel sorry for the people who live next to half-finished homes when construction ceases; I am guessing that most of them haven't yet figured out what is going on. DH & I had thought we might consider buying a house that was almost finished, but now we are committed to not making an offer until the last nail has been pounded in!

5. We both have a list of our "top 3 houses we have seen so far" and we have 1 house in common. However, we don't feel we have a clear enough grasp of the market yet to make an offer.

6. DH & I have had some disagreements about how far we think the market will fall. But Suze Orman said something on her show about a week ago that we could both agree with: She said that if you could buy a house at 2002 prices, you are getting a good deal. The question for us is how to determine what 2002 prices were. Sales prices are not published here in Texas, and we haven't yet figured out a way to get the hard data we need. Back in good old King County (Seattle), you could find data on what every single home sold for, although you knew there was a bit of fudging because of buyer's bonuses, mortgage point pay-downs, throwing in the appliances, etc, etc. But at least you could get a decent general idea. [Note to Texas Realtors: If you would cease your lobbying against making house prices public record, maybe some of us fence-sitting buyers would climb off the fence and buy that house you are so eager to sell! Since when did non-transparency make a housing market better?]

7. Speaking of realtors ... It boggles my mind when they do not return calls from potential buyers. Two homes we wanted to see, the agents never called back. [In one case I was so interested in the house that I actually called twice.] In a third case, the agents called back 3 days later explaining they had been out of town ... Don't they know how to retrieve their voice mail? [Note to sellers: If your house is priced right and houses in your area are selling while yours is not, take a long hard look at your agent.]

10 Responses to “Wild & Wacky Housing Market”

  1. debtfreeme Says:

    Have you tried services like Zillow.com? They show lots of property in Ca and other areas. Just put in the homes address adn it pops up with lots of information including the last couples time the house has been sold and the property taxes.

  2. Ima saver Says:

    well, being a builder's wife, I am always interested in what you have to say. When we build a spec house, we commit to only one. We finance our own homes, so when we start one, we have the cash to finish it.
    Also, we are not set in stone about the price either. If my husband can make his wages and we can make back the interest on our cash not being in the bank, we will sell at no profit!

  3. monkeymama Says:

    Interesting.

    #4 - when we bought a new home we didn't have to foot more than a $3k deposit (very easy to get back) before the house was substantially finished. Then we put in deposits for upgrades. I am sure those would be somehwat refundable. You don't actually buy the house until it is finished.

    But yeah, that would make me nervous to look at some of the new homes. Around here they are all going out of business left and right, though I haven't heard anything about not returning deposits.

    I would do what I could to figure out the market. Ask around. (It is hard to get historical data. Indeed). I know here when it turns, it turns. If I Was buying here I'd buy now, if things were in my price range. But it's unique here. Who knows how Austin is. It could be a very different market than you are used to. So it's good to talk to people who've lived there a while' pick their brains.

    & in the end it is just a crapshoot anyway. You can't time the market. Just don't go over your budget and that's the best you can do. Wink
    My husband was telling me the other day he was still so upset our condo went down $100k right before we sold. I had hardly given it a second thought. We moved somewhere cheaper to live life easier. Sure I would be thrilled to have only a $100k mortgage today. Was our original plan. But it is still a good $300k cheaper than it would have been if we hadn't of moved. You just can't get too caught up if you buy and regret it or wait and regret losing a few dollars. Remember the big picture. Buy what you think you can afford, and makes you happy, and then it really shouldn't matter.

  4. merch Says:

    i agree. Don't be penny wise and pound foolish. If you like the house and plan to live there for a long time, do you care if it drops another 5%? 10%? on a house your going to live in for 20 years?

    It's like the stock market. You'll never get in at the bottom or out at the top.

    Also, those house out of your price range that you look, I would put offers on them that you feel comfortable with. So if I liked a 700k house and offered 600k, I might get it . Especially a builder looking for quick cash. Might wan to get out with a small or no profit. If your relator won't place the bid, get a new one.

    What have you got to lose? In my neighborhood, the builder wanted 880K for a house and sold it for 750K. The family then moved out (because of job), it's on the market for 699k, but I bet an offer of 650k would be considered. The issue is you don't know why the people are selling. Is it a messy divorce, death in the family, close to be foreclosed, guy lost his job? I say lowball those dream houses, you just never know.....

  5. Amber Says:

    First I will say good luck with your hunt, but do not buy the one that is not in your budget, that is what caused a lot of this housing mess.

    If you are not in a rush I say take your time and look for what you guys really want

  6. scfr Says:

    debtfreeme - Yes, we do check Zillow, but no sales data here. As I understand it, Zillow sucks information from publicly available sources (such as county records), but in Texas sales prices aren't disclosed. We can get property tax info, but it is notoriously unreliable.

    Imasaver - The way you and your husband do business is so smart ... One house at a time, and nothing more than you can handle if it doesn't sell for awhile. The builder I mentioned has multiple projects on the ground, and was relying on an investor for much of their financing. What I can't understand is why, after being in business for a pretty long time in a strong real estate market, why didn't they have enough cash saved up to get them through this tough time?

    And regarding market timing, thanks for the comments. We aren't trying to buy at rock bottom, just somewhat close to the bottom. Smile When we sold, we didn't sell at the very peak, but it was close enough, and we were happy.

  7. baselle Says:

    I know, I know, broken record... Big Grin
    Check out thehousingbubbleblog, its pretty useful with a California/ West Coast thread, a Florida thread, a banking thread and sometimes a texas thread. I'm renting in Seattle, and I plan on doing so for at least another two years.

    I don't think that you have to worry about the bottom being a "V" like stocks are - more like a "U" or even an "L". I think you have plenty of time.

  8. monkeymama Says:

    Oh I just had to add new houses are so great in a rising market. Because you lock in prices WAY ahead of time with little risk on your part.

    But on the way down, you risk locking in too high a price, and the builder going bankrupt. Ick. It's just so different!

    Any way, I don't envy you. We hate house shopping. We are both so picky. We looked at the most beautiful home on 1/2 acre last year. It was a STEAL. Dh just "didn't like it." So it goes. We did want to move and decided we will never agree on anything. Lord knows how we agreed on this house. Good luck!

  9. Mulyanto Says:

    Some people can afford to be picky, some people can't. It just doesn't make sense to be picky when you can't afford to be. But it looks like, you can definitely afford it. I would say "good call" on not buying out of your price range...That's how this housing mess all started anyway. Anyway, I'm always conservative when it comes to loans. We bought a house last year, and we were approved for $300K mortgage, but we settled for a $140K 30yr fixed mortgage, after putting 20% down for $900/mo payments.

  10. EnglishTeacher Says:

    Please keep posting on house hunting. It seems like this should be a good time go buy; let us know how it's going!

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