CR, I appreciate your blog and the work you do.
This pertains to the Jim the Realtor video:
I have a question: you currently believe that the government has pushed forward demand because of the tax credit...indeed, there is evidence that is the case, but it doesn't necessarily square with the fact that we are seeing housing activity increase across the board.
It also doesn't square with Jim's own statements that many of the buyers are all cash, essentially well qualified, and at all points of the price spectrum.
I can tell you that I have gone to contract on a house in NY and I do not qualify for the tax credit due to income. Indeed, at really any house above $650k (precise amount partly depends on the property tax regime), I find it hard to envision someone qualifying for the tax credit with 20% down and the required income.
Yes, for the very, very high end things are just sitting and transacted sales are pushing down the comps.
However, now that we have a floor on the lower end, it's actually not too difficult to extrapolate based on historical ratios where the high end should fall to.
The high end will see its bottom sometime in the Spring. Clearly, the low end and high end can't cross, although the market is so f*cked up right now, you can actually buy houses in top tier areas at a historically low premium to middle of the road areas due to the financing situation.
In my business, we call that "Arbitrage"... |
