It’s Friday- are you thinking about running out and buying a house now that they are affordable and you can use a $8,000 tax credit? Perhaps they are not as affordable as you have been led to believe:
Prospective buyers eying real estate deals in foreclosure-ridden Florida, where home prices have plummeted and unsold properties clog the market, might find fewer bargains than they’d expected. That’s because sellers in Orlando, Miami, Jacksonville and Tampa are likely to put their properties on the market for more than what they’re worth.
They’re not alone. In these markets and elsewhere across the country, homeowners still have an inflated sense of what their properties will fetch. Only 49% of U.S. homeowners believe their home’s value has decreased in the past year, whereas prices have plunged for 72% of homes, according to a survey released last month by Zillow.com.
"Sellers are notoriously slow to adapt to declining market conditions," says Jonathan Miller, president and CEO of Miller Samuel Real Estate Appraisers. "Another way to look at it is that they’re chasing the market down."
Forbes lists the top 40 cities on their website, but here’s the top 10 from their list- plus a few of our favorite markets:
1. Orlando-Kissimmee, FL Metro Area
2. Miami-Ft. Lauderdale-Pompano Beach, FL Metro Area
3. Jacksonville, FL Metro Area
4. Baltimore-Townson, Md Metro Area
5. Chicago-Naperville-Joliet, IL-IN-WI Metro Area
6. San Antonio, TX Metro Area
7. Denver-Aurora CO Metro Area
7. Tampa-St. Petersburg-Clearwater, FL Metro Area
9. Indianapolis-Carmel, IN Metro Area
10. Austin-Round Rock, TX Metro Area
10. Nashville-Davidson-Murfreesboro- Franklin, TN Metro Area
12. Phoenix-Mesa-Scottsdale, AZ Metro Area
35. San Diego-Carlsbad-San Marcos, CA Metro Area
37. Las Vegas-Paradise, NV Metro Area
The problem isn’t just that sellers are delusional however:
Take Phoenix, the No. 12 most overpriced city, where 64% of homeowners are underwater, according to Zillow.com’s most recent Negative Equity Report. In that metro, homes are listed for 22% more than when they are sold, among the highest spread of all the cities we surveyed. Homeowners there simply can’t afford to drop their prices.
Is there anything else out there of interest today? Feel free to comment on this or any other story. This is an open thread. The floor is yours.
i own here…..my brother owns in miami…..and my mom owns in ponte vedra (suburb of jacksonville). LOL!!! i guess we are trying to cover the top 12 cities?
Left a note on the Forbes site. This is flawed analysis in that it uses median prices (median list / median sale), and not SAME house listing/sale price ratios. The Orlando ratio is 96%. A 4% discount from the listing price, and not the ridiculous 43% in the article. Their analysis does not consider the bifurcated market (about 50/50) of regular organic sales versus the foreclosure and distressed sales.
This from a “respected” business magazine. And they wonder why blogs like Doom are eating their lunch.
I think more people than just sellers are out to lunch. Here in Southern California nothing related to housing makes sense. Inventory is way down but foreclosures are sky high. Sales are up but unemployment is at record highs and the state is broke. Median prices are creeping up but most of the sales are foreclosures, short sales and REOs. Welcome to the twilight zone, but not for long. Read this link and I think you’ll get an idea of what the future of real estate, and the economy holds in store for us. No amount of government manipulation, propoganda or just plain foolishness will prevent the ineveitable invisible hand of supply and demand from equalizing the nonsense.
http://www.freerepublic.com/focus/f-news/2394991/posts
btw, imho u have a superb blog – keep it up despite the few comments. I have consistently read Housing Doom for a couple years now and have now just commented. I’m just fed up with the bull the media and uniformed people have spouted about ‘green shoots’ and ‘bottoms’. It’s time people woke up and realized we’re heading into the Great Depression II – it’s only a matter of time when, not if. Prepare for it or prepare to suffer!
I just wanted to echo Scoob’s sentiment. This is a fantastic blog which I’ve been reading 3-4 times a week for months. I’m yet to comment 9til now)because I’m a complete housing and econ neophyte.
Strangely, despite my being completely green, thanks to folks like y’all, HousingNewsLive and FundMyMutualFund I seem to have a better handle on the realities of the coming years than anyone I know.
Thanks again to all the contributors and commentators for being a great resource for my self education and a seemingly endless font of grim hilarity.
Thanks for the kind words guys. Be careful though- we seem to have lost our naysaying posters to keep us in our place. I appreciate Tobby’s criticism of the Forbes article. Be sure and keep us on our toes!