One theory I’ve been given is that prices are inflated because banks keep foreclosed properties off the market until they receive their federally insured payoffs. There is a market for homes at the right price, but they are hard to come by. A friend who has moved properties for the past twenty years doesn’t deal with bank-foreclosed properties anymore because the banks don’t want to cut a deal for the value of the property – they just wait until the governement buys them out at value of the mortgage. Meanwhile Uncle Sam gets nickles on the dollar on the HUD market if they can find someone to buy a house that has been abandoned to the elements for 18 or 20 months.
A second theory is the gentrification of rural areas as Boomers retire and build second homes. I’ve seen this at work in the Northeast especially following 9-11. Unless you are dealing among family, most people in rural areas can’t afford to live in the communities in which they grew up – and even then money is often thicker than blood.
Or, perhaps people are just holding out. There was a recent Boston Globe article on the high prices ticket scalpers are demanding at Fenway even when the tickets aren’t moving. People may be afraid of being caught up in a crash of their own making – or just out of touch with reality.
But, yeah, I’m still at a loss to understand what’s keeping the prices so high. It’s not all value.
It appears to me from the article that home prices are still above historical levels. Until that is corrected, I would expect housing sales to continue to be depressed. Time will tell.
One theory I’ve been given is that prices are inflated because banks keep foreclosed properties off the market until they receive their federally insured payoffs. There is a market for homes at the right price, but they are hard to come by. A friend who has moved properties for the past twenty years doesn’t deal with bank-foreclosed properties anymore because the banks don’t want to cut a deal for the value of the property – they just wait until the governement buys them out at value of the mortgage. Meanwhile Uncle Sam gets nickles on the dollar on the HUD market if they can find someone to buy a house that has been abandoned to the elements for 18 or 20 months.
A second theory is the gentrification of rural areas as Boomers retire and build second homes. I’ve seen this at work in the Northeast especially following 9-11. Unless you are dealing among family, most people in rural areas can’t afford to live in the communities in which they grew up – and even then money is often thicker than blood.
Or, perhaps people are just holding out. There was a recent Boston Globe article on the high prices ticket scalpers are demanding at Fenway even when the tickets aren’t moving. People may be afraid of being caught up in a crash of their own making – or just out of touch with reality.
But, yeah, I’m still at a loss to understand what’s keeping the prices so high. It’s not all value.
It appears to me from the article that home prices are still above historical levels. Until that is corrected, I would expect housing sales to continue to be depressed. Time will tell.