True Sales Or A Gimmick?
Readers suggested a topic on housing sales tactics. “I’ve noticed over the last few weeks that more housing sales on Redfin.com carry a pending sale (Monterey, Salinas, PG, etc). Are these true sales or is this a RE gimmick to scare fence setters to jump into the market? Certain neighborhoods have an appeal for some of the locals and pricing has come down, but some of the better houses in these neighborhoods are sitting idle while the poorer quality ones are pending.”
“We are still talking the range of $300K to $500K, built in 1930’s to the 50’s and not updated and need roofing. Perhaps it is the result of the lowering of mortgage rates and/or people tired of low bank CD rates jumping into RE hoping to score big. I’ve noticed a lot of grey haired types looking at housing in Monterey, PG and Carmel with no garage, flights of stairs, and high maintenance. Surely they are not planning to move into these properties!”
“The other type of property with pending is rural on 1 acre or more in brush/fire potential areas. Water rates are rising, maintenance costs are going to be high and most of the areas are gated with fees. Yet housing at $400K to $500K are listed as pending. These are not houses you could find renters for.”
A reply, “Redfin changed their default to ‘active/under contract/pending.’ It use to default to ‘active’ only. They discuss it in their forums, and most people didn’t fall for or appreciate the trick. In respect to short sales and REO’s (foreclosures), does anyone here know what the banks are targeting as a recovery rate? Recovery rate as in short sale sold price vs. loan (or REO extend and pretend) price. I was wondering how low the % is at this time?”
Another said, “One house we looked at our realtor told us had 3 offers already on it although all low. We went into the house and said to each other later we wouldn’t possibly buy it for anything more than what those numbers reportedly were. Sellers/realtors are still pretty unrealistic at recognizing just how much deterioration they’re insisting their new buyers should just take on while still paying the higher price. That was a few months ago and the house is still sitting despite a few minor reductions.”
One added, “I’m see more pendings than usual. I tend not to trust it because these usually disappear for X months and then get relisted as a new listing. Until the Housing Crime Syndicate is dealt a blow, I remain skeptical of any trend.”
One asked, “Mortgage Interest rates are the driver right now… Which, then, compels the question, what happens when interest rates rise significantly OR tax policy changes in a negative way for housing OR both..??”
