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[Icky Thump]

Originally posted by Spanky
I have been absent from this board because my source of income is inextricably entwined with this crisis. Property prices have dropped like a depth charge all over the country. They only places they haven't dropped recently are where they have already been dropping (like Michigan). From personal experience I can tell you Texas, Florida, Arizona, Georgia, New Mexico, Nevada and CA are in a free fall. Prices in many cities surrounding the San Francisco bay area have dropped twenty percent in the past four months. Parts of San Francisco have dropped half their value since October. Of course there are always scattered neighborhoods that avoid it, but in general the reports on how fast and hard the property prices have been dropping across the country have been way under reported. I think part of the problem is that in many cities the market has just stopped. Nothing is selling and no one is willing (or cant) to drop their listing anymore. So you can't get a good read of the crisis if you are just looking at prices listed in the paper or on the MLS. In most markets a comparable from September is worthless. It might as well be a comparable from 1752.

My basic rule for buying a house from a bank right now, is looking at a comp from the previous month and offering them twenty percent below that. If there are no comparatives from the last month then I offer them thirty to forty percent below what the comps are from August and September. And I don't even buy the house, I just get a sixty day option to make sure I can flip it. And believe me, many banks jump at that sort of opporutnity to unload a home.

A bank gave me an option to buy a house in Anthem AZ that a year and a half ago sold for $750,000. Five bedroom, three bath, swimming pool, tennis court and sitting on the eight hole of a golf course. They said they would give it up for $300,000 but I couldn't find anyone who would offer me more than $250,000 for it. From what I have heard, Vegas is worse.

Of course, it's the reverse lock theory.

The market plummeted (1) on the day my offer was accepted; and (2) further on the day I signed the mortgage.