I hope everyone had a Merry Christmas. :)
What I couldn't help but notice is that *everyone* whom is looking to buy is saying they'll buy in a year. Not a month more... not any less. Everyone expresses it as "one year." But not only that, aerospace transplants are coming home and bragging to their friends about their new standard of living; this will accelerate the transfer of people out of the bubble markets.
Now the 'one year' timeline seems to be the limit of how long the typical J6P can delay their thinking. My wife, god bless her, won't push out buying more than a year. But it keeps sliding. ;) I went over the math on how buying in a year lets us buy in our 3rd choice zip code while buying in two lets us buy in our 1st choice... Oh well, I have a year to work on it. ;)
Friends who were actively bidding on homes (rejected by greedy sellers) have decided to take a year off. Mostly as they're seeing REO's in their favorite neighborhoods. REO's priced to sell! Not many... but enough to make one realize the banks must be needing cash flow. One after another friend/aquantance told me how they'll wait to buy for a year.
But aerospace is going to continue their consolidation. Oh, there will be some counter-consolidation too. What? Well... I'm at the 3rd aerospace corporation that hires heavily from Pen State. We've finally decided to open an office near their campus! Easy recruiting. Less for the work there than to have a large sign advertising our corporate name. Where are the seed engineers coming from? LA and DC.
With how giddy the recent transfers to Denver have been (all are finally selling their old 'home market' homes and accepting they're in Denver for life), I see little resistance to shipping a few thousand more jobs out there in 2008.
My company has bought options on a large chunk of Houston land. Well... it looks like in the 3rd month of the year a few thousand will get marching orders to go there. But expect a delay. Big relocations take a long time to sell the old homes. A person gets the relocation offer, they then usually spend 60 days negotiating. Then the house is appraised and sold to the relocation company. Its generally six to nine months after the first notice that the home gets into the hands of the new owner. So patience... these will be long slow moves that will still be going on in 2009. Heck, the transfers in 2008 will only wet our appetites. In a year, we'll all know about more companies leaving the bubble markets.
So my predictions for 2008? Further slowing in home sales. More people getting fed up paying the bank rent on an underwater asset and thus more keys on the roof. But no bottom in home prices for a long time.
I'll do my real estate emotions later this week.
Got popcorn?
Neil
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6 comments:
tomorrow, tomorrow, you're always a day away.
tomorrow, tomorrow, you're always a day away.
lol. Is that what Realtors (tm) are singing about their paychecks? ;)
Got popcorn?
Neil
Considering how fast and furious the housing market has imploded in Florida and Phoenix AZ, and how the housing bubble is deflating all of the housing market nationwide, maybe you Can find a house with a sane price in a 1st choice zip code area, Neil.
Of course you may have to knock on wood hourly, get 4 rabbit's feet, pick 4 four leaf clovers, hang four horseshoes up to find the house you want for the price you want.
(What am I saying? Those are the things the SELLERS need to do to get their wishing price, and I suspect they still won't end up with any profit after the deal is done.)
Looks like for these sellers getting rid of their money pit will be like hitting the lottery, goodbye headackes, hello freedom (from the monthly alligator).
If you hadn't already leased a new place, I would've suggested renting where you want to buy... and spending what you roughly expect your monthly owning cost would be (PITI + maint - tax credit).
Not only would you get a better feel for your prospective neighborhood, but you'd also get a taste for what you can eventually afford vs. what you can get now. I guarantee you'd both want to wait.
Oh... I'll wait. 2010. By then the downside risk is small enough to ignore. But... I'll look at the numbers. If I have to change my buying window again, I shall.
As to where I'll buy... I know all the neighborhoods well enough. (You cannot know every block, of course.)
But sellers have to wake up.
Time to start thinking about my real estate emotions article.
Got popcorn?
Neil
I enjoy your comments, and look for them on the bubble blogs! Thank you for your insights. You are correct in your comments about NoVa housing costs. I moved TO NoVa eyes open, after striving to escape CT for ten years. I left an isolated, stagnant, overpriced wasteland populated with former middle managers RIF'd in the early 90s. Most of my fellow souls are still wandering about, having shot through their 401Ks, "networking" with the other RIFfers, still thinking that the next corporate job will appear within commuting distance, after over a decade of underemployment. I am so glad to be in a place where I could get a good job. The energy is different, and I feel like I have gotten a life back. I was glad to trade down in housing for an infinite trade up in hope, interesting work, and dignity. For now, that is a great deal.
I'd love to know the books you read - maybe you could post a list of them in your profile?
Thanks for the great work, and the sharp thinking.
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