Sellers here have yet to realize just how bad the market is, compared to their two year old expectations.

I recently made an offer on a house that originally listed in December 06 at $629k, and dropped to just over $500k in early May. My offer was another $70k lower, and I considered it generous for the comps in the nieghborhood. The tax asessment is $319k. The seller would not even counter. His agent mentioned that the seller had, “significant expenses to cover, along with a generous 9% commission.” I hope that goes well for the both of them.

Now I’m looking, none too closely, at a rehab-flip that ran out of money, 13 blocks from the home metioned above. The bank owns it, listed 9 days ago for $399k, dropped 4 days ago to $339k, and dropped yesterday to $329k. It assesses at $469k.

It’s a mighty enticing deal, right next to a bazillion dollar condo development (right downtown), and across from an older (less than five years) loft style condo building. Great ‘hood, great location, great price.

Another one, zoned commercial, l2 blocks away from the first and listed at Christmas at $500k, just dropped for the third time. Cuts of $70k, 50K, and 50k bring it to $330k. It assesses at $466k– My wife is interested now.

But I’ll wait, thank you. There are still a few bidding wars going on (on very particular homes), and this just encourages the rest of the sellers to hug even more tightly to their crazy expectations. Something’s gotta give, and when it does, I’ll get us a house.

It’ll still lose money against inflation over the term I’m in it (10-15 years), but it’ll be my love and my hobby. And by then, it’ll be paid for.

Check out this article about condo buyers who bought on spec and are now looking for ways to back out:

http://tinyurl.com/2hfdha

It’s a two-page article, so be sure to read page 2.

Are you sure you are out the full down payment if you walk? Since it sounds like new construction and you put the money up two years ago you probably are, but be sure to double check the contract. There may be a liquidated damages clause that specifies an amount you owe if you breach. It could be the down payment, but it could be something less – perhaps a % of the purchase price.

Florida is ground zero for this housing debacle. Too much inventory. In my opinion, the market has a long way to go down. Here is my perspective; no one has a crystal ball. But if you asked me if prices would be the same or less in summer of 2008 I would say yes. This isn’t some gut response. This is based on the fact that Tampa is way overbuilt and rates are massively resetting (Florida has a large number of ARMs). REOs and Foreclosures (read good deals) are starting to hit the market in significant numbers.

My suggestion is wait it out and buy in the dead of winter if need be (best time to buy property folks, this applies to all states). I would start saving up, rent in the area you plan to buy, and if all is well in 2008, drop the cash into a place.