Housing now undervalued?

Reader Tom K. sent along this link to an article suggesting that house prices have come down enough to be fairly valued and are now plunging below that level. Read it and decide for yourself but it does accord with my own thoughts this morning triggered when I saw the sales reports for new vehicles. Honda and Toyota sales are each down around 33%. think what you will about Detroit’s offerings, these two brands offer great value and excellent cars. If they’re not selling, there’s something other than price that’s wrong: in this case, consumer confidence.

Eventually, I hope, people will resume buying cars and at prices that will probably be close to where they are right now (we’ll ignore the $20,000 rebates being offered by Cadillac – we’re talking Honda and Toyota here). It’s possible that the same thing will happen with Greenwich house prices. I have my doubts about that but I think many of our sellers who are clinging steadfast to their prices do believe it.

In which case, this article should give them some cause for cheer.

2 Comments

Filed under Buying/Selling Greenwich Real Estate

2 responses to “Housing now undervalued?

  1. Retired IB'er

    To point to national numbers and draw any conclusions about the NY metro area is complete folly.

    The NY metro area has not seen significant, rapid correction like other bubble areas. Think CA,AZ,FL where values are off 30-40% and are the driving factor behind lower national numbers. The NY metro area has yet to make its contribution to lowering national prices, but rest assured it will.

    The adjustment process is just starting here compared to CA for example. You will know the market is really correcting when you, Chris, no longer comment that a price cut is still some portion of fat (ie cuts off inflated, unrealistic asking prices) and are only real bone.

    Moreover, there is no question tighter lending standards have started to bite in the NY metro area real estate market. However, from what I can tell, the tighter standards have only really caused the market to come to a stand still (ie very little transactions).

    The next shoe (more like industrial strength boot) to drop will change the deer in the headlight standoff occurring IMHO. That shoe is the economic fall out of Wall Street. This has yet to work its way through in any substantive way in the region’s economy and it will make matters far worse.

    To think otherwise about the NY metro economy, and real estate, is wishful thinking.

  2. Today

    When the experts said about two years ago, “Greenwich is different… what is happening in the SW, CA and FL will never happen here”. Forgot to factor we a global economy now. Recessions here impact the rest of world, high income people out of work/prospects of no work, no/little bonuses, banks not lending, untested new administration, fright to spend any serious money for the Holidays … impacts all of us. Like securities, do you buy when there seems to be new lows every day? No! The prudent (non trader) approach is to wait until there is certainty.

    In my view, it will be shaky throughout 09.
    So hang on tight.