Home values dropping in these cities, Now is the time to BUY

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Home values dropping in these cities, Now is the time to BUY

David Krulac
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes

http://www.msn.com/en-us/money/realestate/looking-to-buy-home-values-are-dropping-in-these-markets/ar-BBm5wE6

 
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James Park
Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
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I am a big demographics guy and the numbers / data is what speaks to me. Below are the numbers for population growth from 2010 - 2014. For large metro cities with a population greater than 2M, I believe Pittsburgh and Cleveland are at risk from a population inflow stand point. Cleveland has a net outflow of 13,642 with the metro population of 2.3M.

I think inventory of their perspective markets - supply and demand is what everyone should be looking to forecast where their housing market is moving. I live and invest in the Atlanta market and we have seen 327,595 net population inflow between 2010 - 2014. Back in Sept 07 right before the crash, the inventory levels in metro Atlanta was 138,442 and today that inventory sits at 41,383 as we are currently very close back to the 2007 levels. Information tells me that the builders cannot build fast enough to accommodate the demand of housing. In the Atlanta market, I do not see a bubble yet until I see the inventory levels back up to the 130k - 140k range.

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  • Ben Leybovich
    Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
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    Interesting. 

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  • David Krulac
    OP
    Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
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    @Ben Leybovich

    Lima didn't make the list but Cincinnati did

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  • Ben Leybovich
    Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
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    Originally posted by @David Krulac:

    @Ben Leybovich

    Lima didn't make the list but Cincinnati did

     I saw. I was looking at some apartments and the REIS report provided some interesting data which didn't quite mesh in my mind. I didn't pursue for this reason. I guess we may be starting to see some unwinding, although who knows, David.  One thing is for sure - Ohio ain't TX, and Cinci, nice and improved as it may be, aint Houston :(

    I wish it were

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  • Jon Klaus
    Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
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    Article linked

    1Reply
  • Account Closed
    Roseville, CA · Member since 2015 · 124 posts · 9 votes
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    Thanks for the info.  I see My Sacramento made the list!

    <Insert Snidely Whiplash Mustache Twirl>

    1Reply
  • Account Closed
    Teacher · Sacramento, CA · Member since 2015 · 82 posts · 21 votes
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    Originally posted by @Account Closed:

    Thanks for the info.  I see My Sacramento made the list!

    <Insert Snidely Whiplash Mustache Twirl>

     I'm actually surprised to see Sacramento on the List...

    0Reply
  • Derek Daun
    Investor · Sacramento, CA · Member since 2012 · 289 posts · 151 votes
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    Sacramento has been pretty cyclical the last couple of years, so this doesn't surprise me. I'm guessing we got at least one more nice Spring increase to look forward to in the central Sacramento areas.

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  • Jesse Hinaman
    Lender · Sacramento, CA · Member since 2015 · 112 posts · 62 votes
    11y

    I'm sure the modest uptick in interest rates in late May through July had a correlation in the slight price decrease.

    Again, it all depends on location, though. These articles definitely give you a macro perspective of the entire metro because there were definitely areas of Sacramento that were red hot with absolutely no slow down or price decreases.

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  • Account Closed
    Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
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    Um. you guys realize a .1% DROP is about $200 on a $200,000 property?

    2Reply
  • Cordell Hinton-Brown
    Milwaukee, WI · Member since 2015 · 48 posts · 12 votes
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    Originally posted by @Account Closed:

    Um. you guys realize a .1% DROP is about $200 on a $200,000 property?

     That's exactly what I was thinking. Im brand new and still have a lot to learn, but on a rental property a 1% drop can be a very big deal if you are buy and hold. Correct me if I'm wrong.

    1Reply
  • Account Closed
    Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
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    Originally posted by @Cordell Hinton-Brown:
    Originally posted by @Account Closed:

    Um. you guys realize a .1% DROP is about $200 on a $200,000 property?

     That's exactly what I was thinking. Im brand new and still have a lot to learn, but on a rental property a 1% drop can be a very big deal if you are buy and hold. Correct me if I'm wrong.

    Cordell, this is real estate porn.  Fun to look at but not meaningful.

    "Home values in Sacramento are up 5 percent year-over-year, but falling ever-so-slightly on a monthly basis, down 0.1 percent."

    They are taking year over year numbers and comparing this month to last month.  Really, 5% up in one year but then DROPPED .1% from last month.  Could it have anything to do with the summer vacation timeframe? 

    You are much better to look at the long term trends for your markets.

    1Reply
  • Cordell Hinton-Brown
    Milwaukee, WI · Member since 2015 · 48 posts · 12 votes
    11y
    Originally posted by @Account Closed:
    Originally posted by @Cordell Hinton-Brown:
    Originally posted by @Account Closed:

    Um. you guys realize a .1% DROP is about $200 on a $200,000 property?

     That's exactly what I was thinking. Im brand new and still have a lot to learn, but on a rental property a 1% drop can be a very big deal if you are buy and hold. Correct me if I'm wrong.

    Cordell, this is real estate porn.  Fun to look at but not meaningful.

    "Home values in Sacramento are up 5 percent year-over-year, but falling ever-so-slightly on a monthly basis, down 0.1 percent."

    They are taking year over year numbers and comparing this month to last month.  Really, 5% up in one year but then DROPPED .1% from last month.  Could it have anything to do with the summer vacation timeframe? 

    You are much better to look at the long term trends for your markets.

     Makes a lot of sense lol I appreciate that. 

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  • Pat Martin
    Knoxville, TN · Member since 2014 · 116 posts · 57 votes
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    @Account Closed

    When I saw the .1% that was my exact thought.  Are you kidding me to think thats statistically significant???

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  • Jaime Penix
    Investor · Tampa, FL · Member since 2014 · 104 posts · 32 votes
    11y

    0.1% drop in price signifies it is time to buy? The question is if the pice is 0.1% less now, why not wait it out until the price is 20% less. And even more importantly, why are the prices dropping? Are they dropping because the prices are over inflated as they are presently? Are they dropping because the city is losing population and/or jobs?  This article  seems like a realtor injected hoopla to sell more houses in those quoted areas.

    2Reply
  • Stephanie Garcia
    Sacramento, CA · Member since 2014 · 73 posts · 16 votes
    11y
    Originally posted by @Jaime Penix:

    0.1% drop in price signifies it is time to buy? The question is if the pice is 0.1% less now, why not wait it out until the price is 20% less. And even more importantly, why are the prices dropping? Are they dropping because the prices are over inflated as they are presently? Are they dropping because the city is losing population and/or jobs?  This article  seems like a realtor injected hoopla to sell more houses in those quoted areas.

    I agree with you on realtor injected hoopla. If the article had more numbers and comparisons and maybe some graph I might believe it more, but it does not. The article is pretty short. The website below seems like a really creditable website for all my fellow Sacramento Investors out there.

     Sacramento Appraisal Blog

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  • Dave Passey
    Investor · Missoula, MT · Member since 2015 · 242 posts · 177 votes
    11y

    Here is the list of cities for the lazy

    1. Washington, D.C.

    2. Cincinnati, OH

    3. Baltimore, MD

    4. Phoenix, AZ

    5. Sacramento, CA

    6. Minneapolis, MN

    7. Boston, MA

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
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    Meaningless article... all markets can have little blips like these.. just RE fodder

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  • Greg W.
    Buy and Hold Investor · Alexandria, VA · Member since 2013 · 180 posts · 48 votes
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    Prices would drop because incomes or affordability aren't there to support higher prices. With wages being depressed on the low end, people aren't buying starter homes because they have risen above the low end wage earner's income. That means people who want to trade up have a hard time doing so because they can't sell their home for enough profit to trade up. Then, there are only so many people on the high end and they have mostly purchased again so there isn't the demand on the high end there was in past years. Plus, with the stock market fluctuating a lot, people on the high end may not feel as certain about how much money/stock they have or will have to purchase an expensive home. Unless wages, driven by the economy by way of manufacturing and exports increases, demand will slowly soften. This would cause deflation and that would be bad unless you are sitting on a pile of cash to purchase low.  

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  • Joshua DawsonPro Member
    Real Estate Broker · Dublin, OH · Member since 2013 · 111 posts · 36 votes
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    This article is garbage. The Boston market is up 8.8% citywide over last year. Check out the facts here.

    The article cites Zillow and includes many links to available properties, which I'm sure MSNBC is getting a hefty referral for....

    2Reply
  • Mike HurneyPro Member
    Real Estate Investor · Boston, MA · Member since 2009 · 2k+ posts · 542 votes
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    @Joshua Dawson I guess @David Krulac has Buyers he's prepping in those markets. Good luck with "Home values dropping" in Boston;-)

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  • Account Closed
    Pikesville, MD · Member since 2015 · 12 posts · 0 votes
    11y

    Thanks for the article.  Good info!

    0Reply
  • Anthony GaydenPro Member
    Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
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    Originally posted by @Joshua Dawson:

    This article is garbage. The Boston market is up 8.8% citywide over last year. Check out the facts here.

    The article cites Zillow and includes many links to available properties, which I'm sure MSNBC is getting a hefty referral for....

     I was going to mention something similar. A 0.1 or 0.2% drop in housing prices in a 1 month period when the market is still up 4%+ for the year is hardly cause for concern. 

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  • Krista Walker
    Cave Creek, AZ · Member since 2015 · 51 posts · 13 votes
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    Interesting comments! I'm from Phoenix and am interested in investing here...guess time will tell.

    0Reply
  • David Krulac
    OP
    Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    11y

    @Mike Hurney

    I don't have any property for sale in ANY of the cities mentioned, no horse in the race.  I didn't write the article, or research the article.

    I do think there is wide variance on where different markets are in the scheme of things.  In one market that I'm familiar with, prices quadrupled from 2000 to 2008.  Then dropped 60% from 2008 to 2013.  Prices continue to decline and some properties are currently selling for the same prices as 20 years ago.  Its not a happy place.   

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  • Anthony GaydenPro Member
    Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
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    Originally posted by @David Krulac:

    @Mike Hurney

    I don't have any property for sale in ANY of the cities mentioned, no horse in the race.  I didn't write the article, or research the article.

    I do think there is wide variance on where different markets are in the scheme of things.  In one market that I'm familiar with, prices quadrupled from 2000 to 2008.  Then dropped 60% from 2008 to 2013.  Prices continue to decline and some properties are currently selling for the same prices as 20 years ago.  Its not a happy place.   

    The article is spewing the same old junk about how STEM jobs are great or whatever. I'm sure 50+ years ago when manufacturing and the auto industry were huge, there were similar articles about how places like Detroit, Cleveland, and St. Louis would be leading the US into the future........lol

    In the future, they will probably look back at us and laugh. At that point Bentonville, Arkansas  or Fargo, North Dakota will be the hot place.

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