Are prices dropping?

Well of course they are, but a salutary effect of new houses coming on that are priced intelligently is that they’re forcing owners of old, stale listings to do a reality check. Some owners are stubborn, of course and sit in their unsold homes scowling, “nobody’s gonna steal my house!”

Other owners are getting the drift. Just to cite two examples, 11 Mountain Wood, priced at $6.250 million three brokers and three years ago, is currently asking $3.3 million. It still hasn’t sold, but an agent won’t feel like a complete fool showing the place now.

34 Sheffield Way

The sellers of 34 Sheffield Way, off Round Hill, paid $3,475,750 for the place in 2004, paid Hobbs what must have been a fortune to renovate it and put it back up for sale in 2005 for $5.395 million, where it didn’t sell. Five years later it’s down to what they paid for it: $3.495, so all of that renovation is tossed in free. The house may or may not be to your liking, but the price is certainly reasonable.

And so it goes. If this keeps up, we’ll have a vibrant market again, I hope.

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One response to “Are prices dropping?

  1. AJ

    Mortgage apps drop of 24% for 2010 now 40%!!!! —
    yes sir ………… from a 24% drop last month expected this year to now a 40% plunge ………………

    tell me again about that avalanche of GSE mbs that will drive spreads wider ? and how do home builders do better with millions of foreclosed houses or short sales still needing to be liquidated offer far lower prices ?

    ——————————————————————————————————————————————————————————-

    NEW YORK, Jan 12 (Reuters) – U.S. residential mortgage originations are expected to plummet 40 percent in 2010 to their lowest level in a decade, eclipsing a forecast drop made just one month ago, the industry’s main trade group said on Tuesday.

    Lenders will underwrite $1.28 trillion in home loans this year, down from $2.11 trillion in 2009, the Mortgage Bankers Association said in its latest forecast. That would be the lowest since $1.14 trillion in 2000.

    The forecast was downgraded from December, when the MBA predicted originations would fall about 24 percent.

    The forecast decline is worse than what Chase Home Mortgage, one of the largest U.S. lenders, had seen in October. Its chief executive officer, David Lowman, had forecast mortgage originations falling to about $1.5 trillion, saying that a rise in interest rates from record lows would bring mortgage originations “to a pretty hard stop.”

    Interest rates are expected to rise when the Federal Reserve completes its pledge to support the mortgage securities market with $1.25 trillion in purchases.

    The MBA on Tuesday also said it will also encourage creation of a new type of government-guaranteed mortgage security that would be backed by privately owned, government-chartered “mortgage-credit guarantor entities” based off existing U.S. mortgage finance giants Fannie Mae and Freddie Mac. (Reporting by Al Yoon; Editing by Leslie Adler)