Central NC residential real estate – knife still falling

As I’ve stated before, I’m in the housing market (sort of) as a potential buyer in central NC, but it looks like I’ll be on the sidelines at least through 2012. The knife is still falling here, and it’s obvious. The reality of real estate deflation is much worse than the concern that the dollar might maybe could go Wiemar in 2012.

I’m seeing people dropping their list prices by 30% in some cases. Typically their first drop will be 4%, then after about 6 weeks another 4%, then then after another couple months they reluctantly begin to understand the reality of the situation and drop it 20%. In between the price drops they often slap a coat of paint on and maybe even re-shingle the roof.

You know the realtors are desperate if they are willing to put up with the B.S. of listing a house which is 30% over the market.

Also, in the last 30 days I’ve seen a bunch of houses come on the market in the 600-800K range. You know these people are desperate. If you and your neighbor and the guy across the street all have $800k houses on the market at this point in economic history, it’s only because you have no choice but to sell.

The shadow inventory here is still huge. It’s easy to compare the bank-owned REO to the REO being actively marketed, and the actively marketed portion is probably only 20% or so.

I don’t have much way of judging commercial RE, but I had a quick chat with a very knowledgeable person last week who said that a lot of stupid commercial deals made in the 2004-2005 time frame are about to blow up. On the flip side of that, some large apartment deals around here have recently been sold at pretty strong prices. I don’t know if the sellers made anything, but the reported sales prices were not fire sale.