Home Prices Cut By $28.4 Billion In U.S., Trulia Says

bloomberg.com:

Oct. 8 (Bloomberg) -- U.S. home sellers cut their asking prices by a total of $28.4 billion to attract buyers as the real estate recovery stalled, Trulia Inc. said.

The average discount was 10 percent as of Oct. 1, the San Francisco-based real estate data provider said today. Homes listed for more than $2 million were cut the most, with owners taking an average of 14 percent off the original price. Luxury homes accounted for 25 percent of all of the reductions.

Read the whole story: bloomberg.com

Comments

[MyTalkRadiou]

Obama needs to do actual reform instead of just talk & plan

good articles: http://br.st/tU

~~

[bynddrvn5]

Most people only need to look out their window to see how bad the housing crisis is!

We are the ONLY ones on our entire street who own the house. Two houses are under construction and have been in the same state of construction for over a year. One has NO siding and there is a wall missing on their new addition. Should be interesting living in that house, through the Northeast winter. Another house, was apparently being re-roofed when they ran out of money. The ladders and tools have been in the same place for almost a year.

Around 10 or so houses have NO occupants, and an increasing number of these houses have been catching on fire.

[AndyAdams53]

Think in terms of "trillions" coming off the housing prices and then you will begin to see the bottom of the housing crises.

This is not a housing mess, this is a housing disaster.

A national write-down of real estate values will be required. Resurrect the "Resolution Trust" process and get to work! Save yourselves before it is too late!

[Cinch]

On the contrary, I think this is good news. From 1999 to 2006, the housing market was a "disaster"; increasing by some 20% YOY in some places while income went no where.

I'm cheering for this good news!!! Perhaps the only thing that I'm not happy about is it hasn't gone down fast enough to be in line with income.

[CaptainVideo]

The fact that sellers have to cut their initial asking prices does not imply that the average price at which houses actually sell is falling. It is an indication that the sellers initially overestimate what they can get for their property and have to adjust.

[Cinch]

You made a good point. However, I also want to add that 10% off is not the actual closing price in a lot of cases.

[adelita01]

RIGHT ON!!! By the time this is over I'll by my first house at 1980's prices!!!

This is the silver lining. Now people like me who sat out the housing boom can walk in and pick up the pieces. And live in really big homes for a fraction of what it cost just 2 years ago.

[KarateKid]

The problem is, prices were inflated 300%, so 10%? BFD.

[yappnmutt]

prices have to come down to 3x gross income minus x% for the over supply and foreclosure effects.

the chart says another 20% may be possible.

[Cinch]

To wit I add, income is a moving target. IMHO, income will continue to go down in the foreseeable future due to unemployment competition. The 3X income is a good historical metric, but I'm beginning to revise my view. In a country with deteriorating living standard, this may not apply. We may have to think 2X income or be mobile by renting to move with the job market.

[mattwin]

I have a house that is priced at 60% of what I have in it. Prospects are pissed that so much is new and updated. How can they get a deal there?

[MadAppraiser]

Your excellent question brings me much sadness, and happiness. The happiness is brought about knowing how to approach the problem solving process. The sadness is peering at very dusty Marshall & Swift Cost Manuals, and thinking about real estate appraisal education expense.

The Marshall & Swift Cost Manual is utilized to calculate existing dwelling depreciation and construction factors (depreciated construction cost new). The Marshall & Swift Cost Manual is then utilized to calculate upgrade depreciation and construction factors (depreciated upgrade cost factor).

A competent appraiser then performs subject market analysis utilizing “MLS” and appraisal sales comp services of recently sold properties with similar amenities, age, maintenance level, and upgrades. The appraiser analyzes the differences in sales prices utilizing amenity factors, and the depreciated upgrade cost analysis as a guide to develop comprehension of the upgrade contribution to sales prices. I purposely avoided discussing units and elements of comparison. No one is interested in being an appraiser, and I will not say any more concerning these methods of comparison.

Utilization of the cost and sales comparison approaches to value minimize sales grid adjustment error. The computer savvy appraiser might perform computerized spreadsheet analysis to impress the client. Computer technology is no substitute for comprehension of appraisal valuation methodology. I rushed through this first draft; and the application process is more difficult than it appears. It is difficult for me to get excited about real estate appraising, and not interested in impressing anyone.

[MadAppraiser]

American real estate mortgage lending institutions could be quietly rethinking their genuflecting to Wall Street free market reverence in terms of the residential real property valuation process that all but excluded the cost approach to value. The lending stores from Countrywide to Chase including secondary market giants Fannie Mae and Freddie Mac bought into Wall Street free market methodology hook, line, and sinker. Fannie Mae effectively restricted the use of the cost approach to value in the residential valuation process through restrictive appraisal guidelines. Real Estate valuation based upon clever financial market magician's manipulation of market data, and transference of mortgage risk became the standard for contemporary real property mortgage pimping!

[bayviking]

We know that recipients of bailout money such as Citicorp have formed subsidiaries which are using their cash to buy up these properties and turn every loser into a renter.

[UtopiaUSA]

I want to comment on this because someone I live with and who helps pay the bills just locked in on another two year lease. I hope the schools are worth it.

[AoC]

So, whats the comment?

[UtopiaUSA]

Just sharing the headline and content here with my fb "family & friends", ;) Thou, I don't think we've seen the worse of the housing market, and as prices go down so do most rents.

[fbs]

Try 50% to 60% loses on home values here in South Florida. I hope the rest of America is ready because no amount of ideological posturing will fix this.

[SizeMatters]

everything has to come back to reality at some point

[JoeBlough]

Housing prices are still too high for most middle class people. Prices have to drop much more.

[Samalabear]

Housing in the Northeast, in particular, is still insane. I have two houses around the corner from me and they both started at $389,000 and only started moving down after about a year on the market. About 8 months into their second year on the market they're down to $349,000 . If you saw what you were getting for $349,000 you would be howling with laughter. Both of these homes are on the main street in this development and right outside their back yard fence is the elementary school. But I live on Long Island and this is one insane place. An identical home that just went on the market this summer started at $349,000 and within two months was down to $315,000. Nobody is looking at any of these houses. We now have a few empty homes around here, as well. This is basically supposed to be a lower middle-class neighborhood. The taxes are typical LI taxes, around $7,000 to $8,000 a year.

I think prices should be coming down much more in places like this. The median income here is about $50,000 and the way most people help pay the mortgage here is converting the attached garage into a small one-room apartment that they rent out for about $1,000, which is ridiculous, right?

[67bug]

Prices here in southern Cal. are laughable too!

[ImmanuelGoldstein]

Indeed, when adjusted for inflation housing prices haven't yet fallen to normal post WW2 historical levels. That said, we are still in the bubble. We have a ways to go still before we reach normal price levels.

[JScott]

Wouldn't buy one at Pacific Northstar the floorplans are just too weird.

[jennylynn]

Thank you B. Frank.