‘Price Counselors’ Tell Clients Of ‘New Market Realities’
The Lewisboro Ledger has this report from Connecticut. “With inventory up and house prices leveling off this year, the local real estate market is swinging inexorably in favor of buyers. Sellers are growing increasingly uneasy, wondering exactly how long it will take for their ‘For Sale’ signs to be retired.”
“Many have seen their original, often overly optimistic, asking prices whittled away with the passing months and are now reducing their financial expectations. The anxiety level is on the rise.”
“Realtor Ken Sobel (said), ‘one of the most important things I can do for my clients is to help them set the right asking price for their home,’ he said. ‘There is a kind of disconnect. I try even harder to make my clients aware of the new market realities.’”
“Mr. Sobel said that he presents plenty of figures..to his clients, but still meets resistance at setting an asking price many of them deem as ‘too low.’ ‘At the beginning of 2006, the perception was that this was going to be another big year, but it has not materialized,’ he said.”
“Mr. Sobel said his hours as a ‘price counselor’ have increased since last year.”
“‘A lot of them want to price their homes on anecdotal evidence and neighborhood gossip, but hard numbers tell the real story,’ he said. Although many sellers still insist in ‘trying out’ an unrealistically high asking price, Mr. Sobel counsels against it. ‘Home inventory is up sharply. Your home sits there and you end up reducing the price anyway.’”
“Jackie Ruby, agreed with Mr. Sobel and added, ‘Sellers have to realize that the market has changed and buyers are not jumping at any one particular piece of property,’ she said. ‘There are plenty of beautiful properties for sale and buyers can pick and choose.’ As far as setting the proper asking price is concerned, Ms. Ruby said: ‘Six weeks, tops, at the original asking price is all that I recommend. After that, with no offers, the price must be dropped.’”
“Ms. Ruby said with a few truly stubborn sellers, she would ‘try out’ a too-high asking price for two weeks only. ‘After that, it’s really over,’ she added. ‘If they insist on keeping the same unrealistic price, I will politely steer them somewhere else.’”
“The price reductions that come over time do not have to be steep, but Ms. Ruby said that sometimes they are inevitable, given the large number of unsold homes on the market. ‘I now see myself as a counselor, adviser and unofficial financial planner, in addition to my usual role,’ she said. ‘Sometimes my clients don’t want to hear what their house is really worth in this market. But, as Realtors, we don’t make it up. The numbers are the numbers. They tell the truth and determine the ultimate selling price.’”
“Sales associate Ed Cantine told The Ledger that the Lewisboro market peaked about 18 months ago. ‘The market is very slow now,’ he said. ‘In fact, it’s the slowest that I have seen it in many years. And it cuts across all price ranges. Inventory is twice, maybe three times greater, and proper pricing has become absolutely paramount.’”
“Mr. Cantine said buyers withdrew last spring and that sellers have been forced to make price reductions as inventory swelled. ‘Some houses have been reduced multiple times and are still unsold,’ he said. ‘If you want to sell your home, you have to adjust to the new realities of the current marketplace.’”
“‘If a reasonable offer comes along I advise my clients to seriously entertain it. You might be able to negotiate upward and you don’t want to let a serious buyer just walk away. If you do, you can end up with an unsold house that stays on the market for many more months to come,’ he said.”
‘I now see myself as a counselor, adviser and unofficial financial planner, in addition to my usual role,’ she said.
Really? I see you as a pimp. Setting up a deal where you make money while someone else gets fu*ked. But that’s just me, what do I know?
hey auger, speaking of “setting up a deal”…
The Homebuilders have fallen out of bed. In one week will be the exact one year anniversary of the DJUSHB’s peak in 2005 at 1115. A week later it tried to exceed that peak and formed a double top a just a whisker under the previous high.
I wish I had a dollar for every homebuilder CEO/COO that has talked about how things were going to turn around as they themselves were selling everything that wasn’t nailed down.
I’m looking forward to next Thursday; I’m hoping to be able to see that the DJUSHB officially tanked a full 50% since it’s peak of one year ago.
With one week left, it’s already down over 47%. Burn, baby, burn. Let’s hear it for how stocks always lead the performance of their underlying assets.
Anyone who scoffs at the idea of a 50% decline in RE values is now officially a fool.
Stocks are not houses. Don’t get me wrong just don’t make the mistake of confusing stock, company, product and the market for each.
Thanks Robert, but I’m confused as to what I “confused”. I was just observing how stocks lead the price performance of their underlying assets, which I understood to work like this:
Energy stocks / crude oil price (energy companies own energy “in the ground”)
Mining stocks / metals (gold, silver, zinc) prices (mining companies own metals “in the ground”)
Homebuilder stocks / housing prices (homebuilders own land, current inventory, and building/operations infrastructure)
With the DJUSHB tanking close to 50% in one year, Mr. Market appears to be saying that lower housing prices are on the way.
You aren’t confused. Soory for any implication. Stocks don’t track big deal. Companies don’t traclk sectors again big deal. Finally neither tracks the price of the product. Just because the stock tanks 50% as expected at this point it doesn’t translate to home prices now or even in the future. I wasn’t critisizing in any way just pointing out stock prices dropping 50% probably has little to do with home prices.
Mining stocks / metals (gold, silver, zinc) prices (mining companies own metals “in the ground”)
SHBL,
please don’t think of stocks in this way: it will cause you no end of pain.
A mining company has gold in the ground with a cost to extract of $X/oz. In an ideal world, if gold is selling for less than $X, they sit idle, selling for more, and they get to work. The price of the company is not the price of the gold in the ground, it’s basically an option series on the price of gold !
This means, for a mine with cost to extract higher than the current price, it’s stock price is largely determined by the volatility of the price of gold, not the actual price of gold. Actually, it’s quite a bit more subtle than that: the mine can write options and make money on the cheap delta hedge, and extraction cost changes with the price of gold (because there is a limited supply of mining equipment.)
I’m sure both you and Robert are correct in your points; in technical terms I do not presume to be an expert.
But yet I do not see any problem in interpreting overall price action, especially with regards to indexes such as the HUI (miners) or DJUSHB (homebuilders), as a commentary on future expectations of price performance by the underlying asset.
The HUI leads gold and silver as the expectation that gold and silver prices will climb causes the miner stocks to become more or less desirable (in a general sort of way). Same with homebuilders, although in the opposite direction at this time!
I didn’t say anything as specific as “the price of the company is the price of gold in the ground”, I’m simply maintaining that the price action of these indexes is reflective of the market’s attitude towards the future performance of their underlying assets. But, the fact is that miners own properties that are at certain stages of exploration and development, and “gold in the ground” certainly does come into play in terms of their claims as to reserves. Same as the homebuilders with their inventory of land and completed houses.
I don’t mean to be argumentative, I’m just trying to clarify what I’m claiming as opposed to what it might be thought that I’m claiming. I do appreciate you guys taking the time to set me straight because that is the only way I will learn to unlearn bad assumptions.
Hi SHBL,
I don’t consider you argumentative, I’m just concerned that your thoughts are someone else’s opinions
But yet I do not see any problem in interpreting overall price action, especially with regards to indexes such as the HUI (miners) or DJUSHB (homebuilders), as a commentary on future expectations of price performance by the underlying asset.
E.g. What do you mean by ‘price action?’ Prices are prices, they have no action. Do you mean volatility, historical prices, or something more subtle?
The HUI leads gold and silver as the expectation that gold and silver prices will climb causes the miner stocks to become more or less desirable (in a general sort of way). Same with homebuilders, although in the opposite direction at this time!
What do you mean by ‘leads?’ Can I short HUI and buy the underlying? If so, what risk, if any, am I taking?
I don’t mean to be mean, I’m just trying to understand your POV…
hey gorobei, thanks for the ongoing conversation and although everyone has probably already left this room, if you’re still around let me try again.
“Price action”: can be daily, weekly, monthly, short term trend, long term trend. Could be anything, really, but price action is just “what’s going on”. The “price action” in the DJUSHB has been pretty crappy over the last year, measured on any yardstick (daily to long term and everything in between). This becomes a commentary on where the “market” believes that housing prices are headed. If the consensus was that housing was still on its way up, common sense would follow that this index of homebuilders would still be on its way up due to expectations of future profits. Please excuse this explanation of what is probably obvious, but that is my POV.
With regards to the term “leads”, this is a observation that I thought was fairly common among the more street savvy investors. I didn’t invent the observation, but I do follow several good analysts. My opinions are my own, however!
Looking at long term stock price performance of, say, the miners versus long term price performance of gold and silver, you can make some pretty decent observations about how the stocks usually lead the underlying asset up or down. Often we see the stocks bottom first, then rise in price as the market anticipates a further rise in the underlying asset, even if the underlying asset is still tanking.
A picture perfect case in point is the performance of the HUI over the last three months versus gold and silver. The HUI broke the 50 dma and 200 dma before gold and silver did, the HUI bottomed before they did, and it has recovered back over these moving averages before the physical gold and silver did. Gold is only now back up over the 50 dma and looking good again, and silver (which tends to lag gold but has incredible volatility) is still simmering under the 50 day, although back up over the 200 day.
Go to stockcharts.com and compare the last six months of “price action”
for $HUI, $GOLD, and $SILVER, with the 50 dma and the 200 dma turned on.
I interpret the trend from the Housing index. I use it as one of my major factors in determining future pricing for houses. I used this index to purchase put options on some HB stocks. It has worked well over the last 12 weeks. It has also been a leading indicator to go along with fundamentals, such as the fact that in my market, the months of April, May, and June have shown the highest number of sales over a 6 year period, but this spring buying season was 20% sales below last year, and listings were up 25%. By using both the chart of Hosuing Index and fundamentals, I projected a really bad month of July for house sales in my market. And just as I suspected, beginning July 6, sales of condo’s have stopped dead in their tracks, and prices of motivated sellers are down 10% from the last sale. Where this price erosion will end is anybody’s guess.
But Dec and Jan have been the absolute worst months for sales in my market, and if the Construction index keeps trending down, I could see a panic develop, where prices could dump near 50%.
I see this as a realtor who has sold off all their investment properties in the nick of time (whew!) and no longer has their ass flaggin’ in the wind. Now to the task of making some money, and in order to do that, they need to start preaching the gospel of price reductions. Never mind 6 months ago, when they had three or four flippity-do-da’s sitting on the market. Back then they would tell everyone they met that double digit appreciation was in the bag.
That’s what cracked me up in our area. It didn’t take a lot of research to find out that a bunch of properties that were on the market were being dumped by realtors. Yep, the rats were jumping off the burning ship. But no one reasoned “HEY! If these guys are gauranteeing big returns in the near future, why would they sell out?”
I’m sorry, anyone who has bought in the last year had it coming.
The funniest thing is that the very last investment property I sold (in April) was sold to a realtor/broker. I got full price minus broker fees. That gives him an extra few percent, I’m not stupid, but I closed and the check cleared.
Realtors don’t make money on higher sales. They make MORE money. They are still makimg money on any sale. They really don’t care about price except for bonuses.
These realtors are looking more like travel agents circa 1994.
Price counsellors? You need to pay someone to tell you what should be obvious?
You do in this country.
Someone on this blog predicted long ago that realtors would cry the loudest for price cuts . Or else:
‘I will politely steer them somewhere else’
The underlying question is at which point does it become a conflict of interest: maximizing the commission vs. making a sale, and how many individual houses an agent can realistically carry.
Like every other middleman, the Internet is about to severely decimate that industry. I suspect that’s why Century 21 has ratcheted up their ad buying– trying to convince people that they’re still relevant in today’s world of instant database access.
‘I will politely steer them somewhere else’
Where ? Is there an infinate supply of dumber agents willing to take on an overpriced listing that can only cost them money and time to market ? The RE business would be better off at this point not only refusing the listing but refusing to recommend another agent. Time for some tough love.
I know one semi-retired couple here in Arizona that have had a home for sale in Fairfield, Conn. coming up on 3 years. I asked them about it a year ago, and they had just raised the price!
The guy who built a spec home across the street…..he was asking $350K for about 220 days - then he went up $355K (saywhat?)…it continues to sit [this is NW San Antonio (actually Bexar County) in a subdivision where only a year ago it took some cujones to buy a $200K house] I don’t get it………
There’s a gorgeous (6000 sq. ft.) model home in a development nearby that’s been vacant for two years. Not even on the market, but the gardeners and housekeepers come by regularly. The neighbors are quite confused about that one.
Unfortunately yes, there is an near infinite supply of idiot realtors. You’ve probably only got 6-12 months, though. Then they’ll all be former realtors.
Without naming names, an older friend with a long-held second home asked his older realtor friend to sell it. He priced it to move 6 months ago, but a younger colleague at the same RE company said she could get more for the place, just let her do the work. They both decided to let her have the listing (he refused to try to sell it at that price). Needless to say it’s now below where the vetran had priced it, and he’s been forced to do major fixes.
If you know anyone who still too stubborn NOT to buy, beg them to get a vetran realtor who’s been through a downturn. These young ones are practically criminals. I could tell you other stories, but I won’t.
The quote I remember about down markets from a real estate agent on one of these bubble-boards was “It is better to be the second wife and the third agent.” The idea being that it took trying two different agents before people realized “Maybe if I lowered my expectations….”
Yes, I believe that RE agents will help prices come down. Inflated prices mean nothing for commissions if the house doesn’t move. Sales are everything, and you need to price the house right.
Seems from these stories that these new “investor moguls” don’t understand how to cut your losses.
Evidently you’ve never met a sociologist.
Sorry, that was supposed to nest under Michael’s comment.
Use the “repy to this comment” thingamagiggy.
This is the real estate industry making up new monikers as they go….pretty soon we’ll see “anxiety managers”, “rage rehabilitation”, and of course, “stupidity superintendent”
roflow !
they get 1% in UK
HOW???
OT:
Intel slashing 1,000 manager jobs
Represents 1 percent of work force; analysts speculate lay offs could be as much as 10,000.
July 13 2006: 2:35 PM EDT
SAN FRANCISCO (Reuters) — Intel Corp. said Thursday it will lay off 1,000 managers, or about 1 percent of its work force, in an effort to streamline its business amid heated competition with rival Advanced Micro Devices Inc.
The world’s largest chipmaker could end up cutting over 10,000 jobs in the process.
“This morning we informed our employees that Intel is reducing the number of managers by about 1,000 worldwide,” said Intel spokesman Chuck Mulloy. “This action is designed to both reduce costs and improve communications and decision-making across the company.”
Bad news for Oregon’s bubble.
Intel is the states largest employer. All property on the westside of Portland and the suburbs is hugely at risk.
Then Nike, then the health systems (hospitals and clinics).
So it begins. Many on here have speculated when this would occur. Add in the SUN $hit can job and Silicon Valley will be different - NEGATIVE job growth and overpriced homes!
Ranks right up there with “life coach.”
Incidentally, another feel-good article from the Eureka Times-Standard about how great housing is doing. Note the lack of referencing numbers with a disclaimer such as “minimal number of sales explains the excessive month to month variability.” I agree that most of the home sales seem to be centered around the high end of the market, thereby pulling the averages up.
http://www.times-standard.com/business/ci_4045745
I couldn’t resist pulling up Zillow to see what some FB just paid for a house in the neighborhood I’m renting in McKinleyville (near Eureka, CA). This home had been on the market for many months, was owned by some old couple, and finally sold in May. Interestingly, the people who bought were from Texas (#1 how could they even afford it and #2 doesn’t this work the other way around with Californians moving to Texas?).
Anyway, address is 1680 Camellia Drive, 95519.
12/20/96 161,000
7/1/98 161,000
5/2/06 455,000
These buyers from Texas didn’t even negotiate the price downward by much; my recollection is that the flyer in front of the house had it listed for $469,000 or something to that effect!
People around here still don’t “get it.” Real estate speculation, particularly among aged baby boomers, is still running rampant along California’s North Coast. Quick, someone take away the punch bowl!
The reference to aged baby boomers recalls a bubble related experience I had late last year. I was traveling in Nicaragua with my wife and daughter. We stopped at a city in the center of the country for a couple of days (sorry I can’t recall the name and don’t have my atlas handy). Anyway, we noticed several groups of americans staying there and meeting with nationals at the tables in the dining area. We were told that they were there to buy houses and that there was a high demand for RE lately. We went on a tour with a realtor to see what was going on because it was so unlikely a place to be doing this. We were shown and quoted 400K for old homes in the middle of this 3rd world city that were surrounded by poverty. It was crazy. We were shown a lot that had a crumbling house with about a half acre going for 100K. I’m guessing the average income was probably $50/month there. Anyway, there was an older couple from california there and they were acting all secretive about what they were doing and what RE they were looking at (like we gave a rat’s ass or were going to bid on it). They apparently were under the impression that this area was going to be the next hot travel destination for the world and I heard that they spent quite a bit of money snapping up the kind of RE I described earlier. It was quite amazing actually.
I was in Nicaragua for a surf camp. Pretty decent surf, very poorly run camp.
One interesting thing to note was that the biggest impact the locals reported from the civil war was the complete and utter death of any form of service (it is/was perceived to be beneath them to serve anyone).
The camp’s owner was known locally as El Diablo Blanco. The surf camp was really a loss leader for selling beachfront RE, in a country 10 years out of a civil war, massive poverty issues and NO infrastructure.
I had to listen to these wannabe moguls talk about buying 5 lots, developing 4 and selling them and using the profits on own their beach house free and clear.
There was an article in the least commercial surf magazine (The Surfer’s Journal) about the surf and land rush in Nicargua.
I sent them an angry note about further feeding the housing bubble and promoting El Diablo Blanco’s businesses.
Overall, the Nicaraguans are very nice people, they hadn’t yet learned to hate the ugly Americans, but don’t worry it will only be a matter of time.
The local wages in Gigante were about $6/day for a fishing captain and double that for a boat captain in the surf camp.
I tipped big and they were grateful, the owner didn’t like it because it inflated wages/expectations and costs in this little out of the way place he colonized.
Overall, an adventure but grimy from an infrastructure point of view and from a slimy expat RE investing point of view.
Interesting. I’m going to surf camp too, but in Mexico.
are you doing Surf Divas?
My wife is from Nicaragua.
Nicaragua is the second-poorest country in the Western Hemisphere, right behind Haiti. If the RE bubble has reached Nicaragua, the world really has gone insane. People have no idea just how poor the country is.
My wife grew up in Masaya, the second-largest city. Before the Communists took over, her family was “rich” (in Nicaraguan terms), and while they lost all of their money (had to move to an 800 square foot 2br house in Monterey Park, CA), for whatever reason they were able to keep their house in Nicaragua.
It’s a huge, huge place. 6,000 square foot McMansions look tiny next to it. In your mind’s eye, picture the house of a rich person in a third world country. The heavy wooden double doors, the couryard with a fountain, the tiled floors, the soaring ceiling, maids truding up and down the stairs with fresh linens — that’s the house. It’s probably 10,000 square feet and magnificent in every way. It’s one of the two or three nicest houses in the second-largest city, in the best possible in-town location.
My mother-in-law put her house on the market three years ago and finally sold it about six months ago, to a wealthy Nicaraguan. The sale price was…$80,000!
Any American buying a place for $400,000 is getting taken to the cleaners. I only wish that my mother-in-law had found a CA equity locust to buy her place! Wow.
http://www.surflasolas.com/2_01safaris.html
There are places in Mexico now where modest city houses are selling in the seven figures. All to Gringos, of course. Go to San Miguel, on almost every block you’ll see pairs of dorky caucasians walking around with brochures and an agent (who’s usually a Gringo also). And this is a country where a candiate who preached serious wealth redistribution just lost the presidential election by less than 1% !
Some people are truly to stupid to be saved.
And the Eureka Times-Standard didn’t even report that YOY prices increased only by 3.6%, and actually fell once adjusted for inflation. That’s the first time real prices fell YOY since 2000. Despite the slight drop in real prices, sales were down 25% YOY in Humboldt County.
Delightful! I’d like to buy in Humboldt someday. What a gorgeous landscape. Hope I don’t get shot by the growers, tho!
There seems to be quite a homeless problem in Arcata. Tweakers and such. Ewww
Oh, make that final sale only $445,000. Pity the sellers.
“‘If a reasonable offer comes along I advise my clients to seriously entertain it.”
Who determines if its a “reasonable offer” me the buyer or the seller up to their eyeballs in debt on an option ARM?
Well…if they think by low-ball 50% of the asking price is not a “reasonable” offer then they can just move on to the next buyer in line (supposed to be sarcastic)
“Many have seen their original, often overly optimistic, asking prices whittled away with the passing months and are now reducing their financial expectations”
What?!?! You mean I can’t sell my house and live in luxury for the rest of my life on the proceeds? What a letdown. Now I may have to resort to working for a living. Life is a real bitch.
More likely, “you mean, I have to pay for all this consumer crap I bought out of current and future income, rather than getting it for free via the HELOC train?”
Wonder if I can hire one of those “price counselers” to speak to the owner of my house. I like it enough to buy it but I want a 30% discount.
” Sellers are growing increasingly uneasy, wondering exactly how long it will take for their ‘For Sale’ signs to be retired.”
There is a real disconect here. First I’m going to put you in a house you can’t afford so I get my commission. You are so greedy you question nothing. Now I’m going to come to the rescue on my white horse to save you by asking you to lower your expection of greed so that I can put bacon on the table for my wife and kids. But, gee whiz, I’m a Realtor(tm) and I took an ethics course, so you can’t fault me….it’s, it’s that damn BB who keeps raising the rates, that’s it, blame him, him not me……
Be fair, the buyer chose the most expensive property he could or could not afford because he “deserved it” and “prices allways go up” . A Realtor is under no obligation to save you from yourself, just show you the properties and make the offers.
Where have you been?
“‘At the beginning of 2006, the perception was that this was going to be another big year, but it has not materialized,’ he said.”
Now where in the HELL did that perception come from….not this blog site!
“‘A lot of them want to price their homes on anecdotal evidence and neighborhood gossip, but hard numbers tell the real story,’ he said. Although many sellers still insist in ‘trying out’ an unrealistically high asking price”
Isn’t this how housing price got to where they are today? I didn’t hear any crying or weeping on the way up. I can only hope that RE agents like the ones above have to M&C and hotdogs for the next ten years while camping out in a tent in a public park.
Lewisboro? Where is that? I live in CT and do not know. It must be some small podunk area of a larger town…
Lewisboro, NY borders Connecticut near Stamford, New Canaan, Ridgefield — think Pound Ridge up past the Merritt — this area is no joke and is mucho expensive.
Sounds like some sellers are getting their stools adjusted.
don’t worry salinasron,more than half the real estate agents in california washed down their own horseshit with koolaid.i know many of them here in the whine country…put a few of them together and it sounds like a convention of mosquito’s…..what they carry is fear and greed,uglier and more dangerous than west nile virus.
Check out DR Horton (DHI) in after hours trading. Unless I’m getting bad data, it’s down 11%. They revised their guidance down.
11%?! Let the good times roll.
one thing i noticed since i read this blog is somebody from these realtors is the absence of how to help the buyers. you all hear them talking about asking (demanding) a seller to be realistic about pricing, but never being public about advising a buyer to, say, bid 50% of the asking price and start from there. is this an unwritten rule they stick to when they get their realtor badge?
Part of the difficulty is that the agent’s and the buyer’s interests are probably not coincident. For a serious buyer, the best move is probably to give an “insulting” 50% bid on say, 30-40 diffeerent houses. Then go back in a 2-3 months after they’re rejected and see who really wants to sell. But this would involve the agent schlepping the buyer to a huge number of homes just to get one sale. At the end of the day, even buyer’s agents are SALESWOMEN, the idea that they’re lookg out for the buyer’s best interests is probably unrealistic.
At least in MA they have to disclose that they work in the best interest of the seller. This stacks the deck against any potential buyers in all aspects as any transaction will be heavily weighed towards the seller. The seller is also the one that gives them the check once the house has sold, but it is really the buyer paying for the services. Talk about a F*cked up way of doing business.
Momo….yes I agree that the buyer has a lot of responsibility to bear, but having said that, the RE agent and his select cronies bent over backwards to put him on the hook (probably just a hair from illegal) to finance their life style….I have no problem with telling the schmuk upfront what will happen to him as he’ll probably buy anyway and then he bears the full weight of his decision.Now I don’t want to hear any stories about RE agents crying the blues, I just want to see them in the bread lines…….and the good ones who’ve been in the business over the years will survive quite well!
You can visit Ken’s site through this link:
http://www.lookingaround.com/html/Real-Estate-New_York.htm
Go check out some of his low (gag) priced (wheeze) listings.
Read about Buying your home shouldn’t require psychic powers.
Something that NOBODY talks about (or realizes) is that the “buyers” are also the sellers.
There are lots of houses for sale right now, right. So what do those people do for a place to live ? They buy another property. I’ll bet that they are getting a great deal on the property they are buying, but, of course, they want full price for the house they are selling.
Better yet are the flippers who are buyers that aren’t buying at all. They are getting out of the market.
Something needs to be said to the sellers. Would you buy your house at this price, given what the other houses are priced at ? Be honest.
If they are honest, they will say no.
The party is just beginning.
An analogy that I came up with a few years ago when I realized things were gettting out of control with housing prices, was to ask yourself this simple question, “Could I afford to buy my own house at today’s prices”, i.e. someone like me at my income level, etc….the answer almost across the board is NO. Once you priced out all the entry level buyers, the pyramid colapses as all the rest of the home sales have been reliant on “bubble” money from a previous sale. I think what we have happening now is that the perpetual merry go round of bubble money has stopped and there are very few buyers (i.e. “real people who intend to live & pay for their home”) who can afford to buy.
Read about KBH bought back $300M worth of stock and incurred another $1B of additional debt in only two quarters according to the cash flow statements.
This does not sound good…
Read about Low-rate loans for UC’s elite on homes. Some less than 2 percent — system won’t divulge names.
This makes me ill
What don’t you understand? You are a serf whose function is to support the bureacratic and political elite in style. Just wait till you see the pension and health care obligations you are on the hook for.
It’s not like it’s a big secret, that benefit has been on their web site for years, and is UC’s way to attract decent faculty. UC schools pay the same as good mid-western schools, and it’s their way of attracting professors from places like Michigan and Illinois.
The UC system also owns subdivisions and condos, which is the only way you are going to attract professors to expensive places like Santa Barbara. In the end, it’s a helluva lot cheaper to give them a cheap loan or rent them a subsidized condo than to double their salary.
Westchester can’t not soften. Inventory has exploded and continues to pile up. I watch Katonah, and clearly sellers are in trouble. What’s really scary is many haven’t figured this out yet.
But in my humble opinion, the area in NY that will suffer the most pain and the deepest price reductions is the East End of LI, aka the Hamptons. You have these tiny beat up ranches in places like Shinnecock Hills which three years ago were inhabited by janitors and security guards - the low end of blue collar, that have sold for $700,000 - $800,000. They are within blocks of the Shinnecock Indian reservation which despite its romantic name is a high crime ghetto. Violent crime is not uncommon and despite all this, the pathetic wanabees have driven prices through the roof. Most of these homes are toys and when the loans reset and these rocket scientists realize they owe substantially more than what the home is worth and that the neighborhood and it’s prices are on a fast downward path, there will likely be some serious panic. Thesmart money has been quietly getting out for almost two years and the mass exodus has only started. For the mega wealthy it won’t matter. But for the 90% of the owners that are overextended wanabees, it should be quite the spectacle. Put on your seat belts.
Pure greed has driven this mania and I for one will enjoy watching all these aholes lose it all.
Thank god they changed the BK laws.
You need to price your house right. WTF does that mean? I can’t stand generic statements like that. Like the government saying their lowering taxes. They sound like a bunch of morons. Which of the thousands of different types of taxes are they lowering? They think that we were all born yesterday. How about elaborating on your statements about, “pricing your house right”, you stupid idiotic commentators. GIVE A CONCRETE EXAMPLE FOR ONCE. OR IS THAT TOO DIFFICULT FOR YOU?
Speaking of new market realities, the BOJ just moved to increase its interbank rate by 1/4 point, ending its five year policy of keeping this key interest rate near zero. Can anyone besides me hear the giant sucking sound of liquidity draining out of the world’s coffers?
http://tinyurl.com/znvpo