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So I was reading in Newsday...

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Kate07
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Kate

So I was reading in Newsday...

The days of hot housing are behind us, most agree. Now the question is: How far will the housing downturn go? Long Island Association chief economist Pearl Kamer predicts long-term interest rates could hit 7.5 percent by mid-year, after three years near 6 percent, and prices might be expected to decline after that.


I don't know if I'm ready for the days of ultra-high interest rates. I think my parents first mortgage was 11.6% in 1979 and this woman in my college finance night class was paying at 16% in the early 80s. That's rough but I guess it is all relative. I don't know what the housing market was like then. I can't imagine it being very good.

Posted 1/5/06 10:13 PM
 
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Gertyrae
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Re: So I was reading in Newsday...

My best friend bought her house in 1988 and paid $135,000 for the house and 12% interest. She refinanced last year for 5.625% interest and they appraised her house at $390,000.
That will give you an idea of values compared to interest.
I don't think the price of houses are going to drop that much though, I am figuring about a 10 to 15% drop in housing prices...it should stop there.

Posted 1/5/06 11:36 PM
 

DjPiLL

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Richard

Re: So I was reading in Newsday...

7.5% interest by June? NO ****ING WAY! Chat Icon

Don't be surprised if you see the housing values go up again once the summer hits. The winter is always the "slow time" for real estate.

Posted 1/6/06 1:42 AM
 

Redhead
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Re: So I was reading in Newsday...

Posted by DjPiLL

7.5% interest by June? NO ****ING WAY! Chat Icon

Don't be surprised if you see the housing values go up again once the summer hits. The winter is always the "slow time" for real estate.



true but i highly doubt they will go up

Once the interest rates start skyrocketting...
the house prices will go down or at MINIMUM stay the same

Posted 1/6/06 7:55 AM
 

MrsProfessor
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Re: So I was reading in Newsday...

Posted by Redhead


true but i highly doubt they will go up

Once the interest rates start skyrocketting...
the house prices will go down or at MINIMUM stay the same



I think they'll go down too, but not a lot. I think demand on LI will always be strong and keep the prices high.

Posted 1/6/06 7:57 AM
 

Redhead
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Re: So I was reading in Newsday...

Posted by MrsProfessor

Posted by Redhead


true but i highly doubt they will go up

Once the interest rates start skyrocketting...
the house prices will go down or at MINIMUM stay the same



I think they'll go down too, but not a lot. I think demand on LI will always be strong and keep the prices high.


yup...i agree

But to be honest i would rather pay less for a house with higher interest rates and in the future re-mortgage...

than pay a higher amount for a house with low interest rate...then there is nothing that you can ever do

Posted 1/6/06 8:01 AM
 

danielleandscott
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Re: So I was reading in Newsday...

I doubt the market is going to get that low, and by summer, I gotta agree with Rich that the prices for house will go back up again. It happens every year. The winter is when the prices get lower and the mortgage rates go up.
Scott

Posted 1/6/06 9:03 AM
 

Redhead
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Re: So I was reading in Newsday...

Posted by danielleandscott

I doubt the market is going to get that low, and by summer, I gotta agree with Rich that the prices for house will go back up again. It happens every year. The winter is when the prices get lower and the mortgage rates go up.
Scott


Yes they will go back up
But once the interest rates start to really jump
prices of houses will have to stay put or drop
They were dropping before the winter season started.

Posted 1/6/06 9:05 AM
 

DjPiLL

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Richard

Re: So I was reading in Newsday...

Posted by Redhead

true but i highly doubt they will go up

Once the interest rates start skyrocketting...
the house prices will go down or at MINIMUM stay the same




People have been saying this for the last three years and they have been wrong every time.

For those that are trying to "time the market"... they are most likely going to miss out.

The interest rates will NOT skyrocket until the overall job economy improves. And thats not happening anytime soon.

Posted 1/6/06 11:25 AM
 

DjPiLL

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Richard

Re: So I was reading in Newsday...

Posted by Redhead
But to be honest i would rather pay less for a house with higher interest rates and in the future re-mortgage...

than pay a higher amount for a house with low interest rate...then there is nothing that you can ever do





Sure there is. You simply STAY in the house.

People think re-financing is no big deal. Refis cost money.

Since you are paying mostly interest in the beginning... if you re-fi after say 5 years... even though you are paying a lower interest rate... you still will get slammed with mostly interest charges in the beginning again.

If you would have stayed with your original loan... by the 5th year of making payments you start to really accumulate equity.

People are only fooling themselves when they say "well you can always refi". Closing costs can exceed 10k in some cases... and the cost of interest you are paying in the beginning with a higher interest rate... and the fact that you have to "start over" when you refi doesn't make waiting the better option.


Housing would have to drop at least 20% for it to be worthwhile to buy a house at a higher interest rate then refi.

Posted 1/6/06 11:28 AM
 

DjPiLL

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Richard

Re: So I was reading in Newsday...

Then lets say the interest rates NEVER go down to where they were.

But you decided to wait to save that 20-30k on your house.

Do you know how much more interest you pay on a loan going from a 5.25% interest rate to a 7% interest rate?


Its a LOT more than 30k. Try 150k more on a 400k mortgage.

Posted 1/6/06 11:30 AM
 

Redhead
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Re: So I was reading in Newsday...

then i got to wonder why soooooooo many people remortgage?

Posted 1/6/06 11:46 AM
 

DjPiLL

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Richard

Re: So I was reading in Newsday...

Posted by Redhead

then i got to wonder why soooooooo many people remortgage?




I think a lot of people underestimate the TRUE cost of refinancing.

Yeah it does make sense in some situations. But a lot of times all they look at is the interest rate... when there are soooooo many other things to consider.

But a lot of people simply are just not informed enough. A lot of people are stuck refinancing because they made a poor decision on their 1st mortgage.

Then they get caught in the never ending interest trap.

Posted 1/6/06 12:12 PM
 

DjPiLL

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Richard

Re: So I was reading in Newsday...

Plus while many think interest rates are going to skyrocket... in the past month interest rates have been going DOWN.

National average is at 5.66% now... where at the beginning of November it was at 5.92%.

If the rates stay this low... do you really think the prices of houses are going to continue to dip once the spring hits?

I doubt it. You will get all the nutsies that will be overpaying for housing because (like every year) they feel this may be the last time to get in on those untra low interest rates.

Hell... I was one of those nutsies... Chat Icon but I felt getting the super low interest rate that I got and saving about 150k on the life of the mortgage was worth overpaying say 10k or so on the house.

Posted 1/6/06 12:17 PM
 

DRMom
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Melissa

Re: So I was reading in Newsday...

Also pricing has gone down a bit maybe 5% of what houses were being sold for a year ago, but there will NOT be a drastic jump. It will be slow, steady and evident over time.

Posted 1/6/06 3:47 PM
 

MommyofG
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Janice

Re: So I was reading in Newsday...

I dont think the prices are gonna go that much down at all.

Hmm I think it was 2 weeks ago on 1 of those shows 60 minutes or 20/20 they were talking about how housing has become so expensive and they interviewed people in VA on how they had their houses for sale way too high and they are not selling and they said the most expensive houses are in New York, Tampa and Washington, that they dont see the values of homes changing much in these places that the high prices will remain there but anywhere else its coming down.

Posted 1/6/06 8:53 PM
 

Salason

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Re: So I was reading in Newsday...

Posted by Redhead

Posted by DjPiLL

7.5% interest by June? NO ****ING WAY! Chat Icon

Don't be surprised if you see the housing values go up again once the summer hits. The winter is always the "slow time" for real estate.



true but i highly doubt they will go up

Once the interest rates start skyrocketting...
the house prices will go down or at MINIMUM stay the same



i agree. i dont think they will go up in the near future. the housing market is already showing signs of softening (albeit it's been small changes so far but its an indication of the direction prices are going to go in). then again the fed is watching all of the economic indicators (like employment) closely and have indicated that they may stop raising rates soon. some economists even think by the end of the year they could start lowering rates again Chat Icon

Posted 1/7/06 5:06 PM
 

Salason

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Re: So I was reading in Newsday...

Posted by girlygrl33

I dont think the prices are gonna go that much down at all.

Hmm I think it was 2 weeks ago on 1 of those shows 60 minutes or 20/20 they were talking about how housing has become so expensive and they interviewed people in VA on how they had their houses for sale way too high and they are not selling and they said the most expensive houses are in New York, Tampa and Washington, that they dont see the values of homes changing much in these places that the high prices will remain there but anywhere else its coming down.



didnt see this show so out of curiousity what kind of experts did they have talking about this? what was their rational that prices wouldnt come down in these areas?

Message edited 1/7/2006 5:15:22 PM.

Posted 1/7/06 5:08 PM
 

Redhead
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Jennifer

Re: So I was reading in Newsday...

Todays newsday article:

Housing market in surplus
About the market
Jan 6, 2006

BY RANDI F. MARSHALL
STAFF WRITER

Want to buy a house?

You have plenty to choose from.

The number of homes on the market at the end of 2005 rose 58 percent across the region, compared with 2004.

That's the most significant sign to date of a slowing real estate market, experts said. The likely explanation: Homeowners are trying to sell their homes for prices they would have gotten in a boom -- but buyers aren't paying, experts said.

The latest data released Friday from the Long Island Multiple Listing Service shows there were 14,679 Long Island residential listings last month, compared with 9,423 in December 2004. There were 6,522 listings in Queens, compared with 3,975 in December 2004.

"It's a glut of housing right now," said Martin Cantor, the chief economist of Sustainable Long Island, an area advocacy group. "And if interest rates go up, the glut will continue."

Nonetheless, prices across the area continued their upward march, rising by 10.3 percent over the year in Nassau County, to a median price of $482,000 and 10.5 percent in Suffolk County, to a median price of $400,000.

"I think you're seeing the turn of the housing market," said Pearl Kamer, the chief economist of the Long Island Association, one of the region's largest business groups. "And I think you'll see much more of the turn by spring."

The biggest evidence is in inventory. Queens had 64.1 percent more homes on the market last month than in December 2004, when residential inventory had fallen by 5 percent, compared with December 2003.

Those figures underscore another important point: The jump in number of homes for sale is up from incredibly low levels.

"You're comparing it to a time when there was no inventory," said Dorothy Herman, president and chief executive of Prudential Douglas Elliman. "We were at an all-time low."

But the increase in available homes means significant changes ahead for the real estate market. Sellers will have to price their homes more competitively, and soon, buyers may have their pick of the litter.

That tide hasn't turned completely just yet. Right now, in fact, may be a Goldilocks housing market of sorts -- according to some, it's just right.

"At the moment, it's a good market for buyers, it's a good market for sellers," said Christopher Armstrong, the president of the Multiple Listing Service and broker-owner of Century 21 Princeton Properties, which has offices in Holbrook, Bayport and Ronkonkoma.

The market will stay strong, Armstrong said, if "mortgage rates stay where they are."

But economists have predicted that mortgage rates, which are now about 6 percent, could reach 7.5 percent this year.

In that case, the story could change again to include even price declines. "The question is will sellers react to a point where there will be a panic, with reductions like we saw in the early '90s," Cantor said. "If employment holds and wages go up with the cost of inflation, I don't expect to see that. But those are a lot of big ifs."

Message edited 1/7/2006 7:54:24 PM.

Posted 1/7/06 7:53 PM
 

Kate07
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Kate

Re: So I was reading in Newsday...

It just amazes me. I mean this is dangerous territory - DH and I make a pretty good combined salary, but to see the prices of some of these homes and some of the work that is required to make them livable.

I think it will be YEARS before we end up owning a home. The salaries just can't keep the pace with those prices.

I can see the appeal of moving elsewhere - but I love it here too much!

Posted 1/7/06 9:49 PM
 

danielleandscott
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Re: So I was reading in Newsday...

Yesterdays article is correct - People price their houses way too high. The real estate agents come to see their house toget them as a listing and then, if they are an honest agent, they tell the person what the house is worth. A Lot of people that are selling their homes will say what they think their house is worth, and if the real estate agent just wants their listing will say fine - then after a month of the house not selling the RE agent will tell the home owner they need to lower the price.

The agent I bought my house from was the opposite. He told the seller what the house was worth, and the seller agreed. That is why we got our house at such a great price. We bought from an honest agent. A rarity if you ask me.

The reason people think the house prices are coming down, is because people price their houses to high, and then within 2 weeks or a month the prices of the houses are coming down, because they were too high in the first place. If the house was priced right in the first place then their would not be any lowering of the price.

The sellers agent was at our house yesterday, and he told us we could ask a lot more for our house now if we wanted to sell it, since we renovated the inside of the house......

Scott

Posted 1/8/06 9:41 AM
 

Redhead
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Re: So I was reading in Newsday...

lets face it....ALL HOUSES are OVER PRICED.

How can you really say anymore which ones are not.

YES there are some grossly overpriced houses but those are easily recognizable...

The house prices that were acceptable say, 6 months ago are NO LONGER being sold as such. Agents would rather have a house that SOLD quicker than waste their time with signing a contract to a grossly over-priced house knowing that it will take them LONGER to close the deal. Sellers think they can still try to sell their houses accordingly and they are finding out that this isn't the case. That if they are going to try for it....it is now MOST CERTAIN they will come down in price...
House sellers are trying to get in under the wire in th fear of the prices dropping, which is why we are seeing soooo many houses for sale now!
IMO the above is more the of scenario. Should the Agents now know this...YUP. But what the house starts its selling price isn't always the agents doing...it is stupid to say such. People want to get as much for their houses as they possibly can. So they try for the highest. I am pretty sure whether an agent tells them right off the bat or not...THE SELLER KNOWS DAMN WELL they most likly won't get it...But hey it just may be worth the shot...Which i agree. Unless you need to move quickly. Then you should price to sell...

that is the difference

ETA.. AS a recent seller i know the price i wanted to get for my condo. I went for 10K higher than the price i wanted to sell for. Buying 99% of the time usually involves compromise of some sorts so you might as well start off high so that if an offer comes in you have room to get the price you want...

WHICH I DID Chat Icon Chat Icon Chat Icon

Message edited 1/8/2006 6:17:43 PM.

Posted 1/8/06 3:19 PM
 

MrsERod
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Re: So I was reading in Newsday...

Posted by danielleandscott

The agent I bought my house from was the opposite. He told the seller what the house was worth, and the seller agreed. That is why we got our house at such a great price. We bought from an honest agent. A rarity if you ask me.

Scott




let me ask you something, were you working with a Buyers Agent?????

were you there when the agent "told the seller what the house was worth"???

Posted 1/8/06 8:39 PM
 

DjPiLL

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Richard

Re: So I was reading in Newsday...

I can understand the new Newsday article saying there is currently a house surplus.

But for them to say we will see 7.5% interest rates by June... that is simply not likely.

The national average right now is around 5.7%. Does this mean we will see an entire 2% rate hike in the span of five months?

Not happening. Especially when the Fed says they plan on stoping the bi-monthly quarter point interest raises they have been doing for the past two years.

Posted 1/9/06 10:48 AM
 

LIgirl2007
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Re: So I was reading in Newsday...


what about this article?


http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=AP&Date=20060110&ID=5406741

Message edited 1/10/2006 7:46:17 PM.

Posted 1/10/06 7:45 PM
 
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