‘An Offer That’s Not Asking Price Will Be Considered’
The Boston Globe reports on the latest Warren Group numbers. “Sales of single-family homes in Massachusetts declined in July at the sharpest rate for a single month since 1995, and condominium sales dropped off at the fastest pace since 2003, according to a report released Tuesday by a firm that tracks real estate transactions.”
“Single-family home sales dropped nearly 27 percent and condo sales fell 23.5 percent, offering fresh evidence that the state’s housing slump isn’t about to end soon.”
“‘We’re not pressing the panic button yet, but we are watching the trend lines very closely,’ said Timothy Warren Jr., CEO of the Boston-based publisher of regional real estate and financial data.”
“The decline was the state’s biggest in percentage terms since a 29.6 percent drop in April 1995, according to the group, which began tracking sales data in the 1980s. Single-family home sales have now declined for seven straight months measured against comparable months a year earlier, and for 17 of the last 18 months dating to February 2005. Condo unit sales have fallen each month since April.”
“In New Hampshire, a dip in property sales is being felt in the state’s bankbook. State Revenue Commissioner Phil Blatsos told the Senate’s tax writing committee Tuesday that receipts from property sales so far this month are running about ten percent below what lawmakers forecast when they wrote the state budget last year.”
“He said the state could end the year with 13 to 21 million dollars less than it counted on.”
And from the New York Times. “In the calmer market that has taken hold, brokers for sellers and buyers say that negotiation is slowly creeping back into the equation. The two sides are beginning to talk, if not to each other, then through their brokers.”
“‘We’re certainly not where we were in the irrational, exuberant days,’ said JoAnne Kennedy, the COO of Coldwell Banker Hunt Kennedy. ‘Sellers have become more realistic, and buyers are finding they have more time to select, and they can make an offer that’s not asking price, and it will be considered.’”
“Because so many sellers in this changing Manhattan market have overpriced their apartments, Miller Samuel appraisal company president Jonathan Miller said, negotiability can be expected to continue to rise until listing prices fall in line with current market conditions.”
“So now, it would seem, is the time for all parties to brush up on the finer points of negotiating.”
“Ms. Kennedy said that sellers are often happy to get any bid, but a buyer who submits a very low offer and then engages a seller in several rounds of counteroffers risks losing the apartment.”
“Another lesson buyers must always keep in mind is who is working for whom. Buyers often forget that while a seller’s broker may be their intermediary in a deal, the broker’s first allegiance is to the seller. Renee LePore, an agent ain New Rochelle, N.Y., recalled a recent negotiation in which she knew both how high a buyer was willing to go and how low the seller would go, and she used that knowledge to the seller’s advantage.”
“The buyer offered $380,000 on a house listed at $435,000, but told Ms. LePore that $400,000 was her limit. The seller rejected the bid and told Ms. LePore she could go as low as $390,000. When the buyer offered $390,000, Ms. LePore urged her to go higher, even though she knew the $390,000 would have been accepted. The house eventually sold for $400,000. ‘I was working for the sellers, and my job was to get the best price,’ Ms. LePore said.”
“Buyers, especially first-timers, often feel manipulated and pressured by the negotiating process. And why not? Brokers, after all, are salespeople. ‘The one with the owner was a much more positive experience because we were dealing face to face with them,’ Alex Cass said. ‘But in the other one, we felt like our broker and the seller’s broker were playing off one another just to get us to pay more.’”
“Jessica Krnc was even more suspicious. ‘I think they set us up,’ she said.”
“Author Neil J. Binder said buyers have every right to be wary. ‘A seller’s broker’s duty is to get the best price for the seller, and if I’m a buyer’s broker, my duty is to deliver a fair deal,’ he said. ‘Brokers have an agenda, and it’s different from buyers.’”
“A buyer with a long work history, significant liquid assets and the ability to put down more than the typical 10 or 20 percent deposit should play up these attributes, said Deanna Kory, a senior vice president of the Corcoran Group. ‘Especially in a co-op, sellers can be willing to take less money if the person has better qualifications and is sure to pass the board,’ she said.”
“In a new apartment building, developers are increasingly willing to pay transfer taxes, said Dawn Tsien, at Coldwell Banker Hunt Kennedy. On a $1 million apartment, city and state transfer taxes, plus the state mansion tax (which applies to all units $1 million and higher), come to about $28,000 and would traditionally be paid by the buyers.”
“Max Bazerman, a Harvard Business School professor and an author, warned against using brokers as advisers at all. ‘The broker’s most important goal is to close the deal, and that’s not necessarily your goal as a buyer or seller because you care more about the quality of the deal,’ he said.”
“Since brokers are naturally biased, he added, they also should never be told exactly how high or how low you’ll go because they might use that information against you.”
“Bazerman had one final piece of advice. ‘You should always be able to walk away from a deal,’ he said. ‘Fall in love with three houses, not just one, because if you have to have it, you’re going to pay for it.’”
Wishing price not asking price. I “wish” everyone would get this.
Stunning decline apparent in my neck of the woods, according to this just-updated graphic from a local real estate firm:
http://www.ipre.com/trendg/images/palsld.PNG
It appears to show a 62% year-over-year decline in sales in July for the Greater West Palm Beach, FL area. Even I’m speechless. I believe the “official” FL numbers for metropolitan areas will come out tomorrow, same day as national existing home sales. But all I can say is “wow.”
No bubble here. Move along.
Seriously- That is f’n UGLY. This thing is moving like a boulder down Mt. Everest!
Un-freaking believable……….at that sales rate you have 32.6 months supply
What it doesn’t tell you is how many of those sales are investors who just made it to the table. Maybe the July sales # depicts what happens when they head for the hills.
Note:
Doctors report an increase in patient visits related to anxiety, depression and GERD (gastroesophageal reflux disease). They are at a loss to explain the sudden rise in these diagnoses……….
So…go long on pharmaceuticals?
Go short on botox!
It’s amazing to see it happen in real time. If you hadn’t been studying this all along, imagine the shock! Then you’d have to do the research on economics most on this blog have been doing for years to understand the reasons for and the ramifications of a real estate downturn.
It looks like a crash, smells like a crash…time, statistics and anectdotes will tell.
-
reminds me of this -
“Former AT&T Corp. Chief Executive C. Michael Armstrong, for example, remembers gathering his executives for quarterly meetings in 2000 to discuss the huge profit margins WorldCom was reporting. He was baffled that his company couldn’t match those results…At the time, analysts called AT&T sluggish compared with WorldCom, and AT&T’s stock plummeted. The company laid off employees and made other strategic decisions–all based on what turned out to be WorldCom’s phony numbers, Mr. Armstrong says.” - http://www.theconglomerate.org/2005/07/ebbers_sentence.html
Ok, so everyone agrees the bubble is in mid-burst. We’ve all been expecting it for some time.
But does anyone have thoughts on what will be _good_ investments in the post-bust decade? I expect it to take 6-8 years for the RE market to recover; I expect a swing to recession due to the hit from all the RE-unemployed; and I expect inflation to be unabated by the recession in spite of reduced demand (e.g. run 4-6%).
Any thoughts on what will do well in that environment?
Thanks,
Jon
Jon,
I think you answered your own question.
Could you be a bit more specific, please? I’ve never invested in such a period. I’m not trolling, honest–simply unsure what will do well in such an environment.
Thanks,
Jon
check out safehaven.com, they have lots of good articles on this. Lots of people think precious metals was in a bubble, but I disagree. I think precious metals, energy, alternative energy, foreign currency (like the euro or Canadian dollar) are all good places. With all the new etf’s, a lot of those aren’t that hard to do anymore. FXE and FXC are for currency, XLE exposes you to energy, and PBW exposes you to alternative energy. And of course, you can buy paper gold with IAU or GLD or just by gold stock funds like BGEIX
I don’t know much about bonds but there’s probably a place in your portfolio for a conservative bond fund, too. Anyway, hope this helps. But do your own research first!
Thanks much for the tips, Mike!
Jon
to safehaven.com, add prudentbear.com and financialsense.com and you have a trio of extremely good bear market sites. If you want real gloom and doom libertarianism, visit the daily reckoning.
Research, research, research, and then do what your gut and your brain tell you to do
Jon –
No investment guru here, but I’m about 20% investments, 80% cash, and I’m not budging! Did you see a WSJ article the other day about how much cash some of our large companies are setting on (MSFT, XOM, etc)? My feeling is, if they don’t know what to do with their money …….
Nothing wrong with taking that meager 6% gain to keep you at status quo ….. the upcoming housing collapse (4 years) and ensuing recession due to the tapped-out consumer will leave many in this country going backward financially.
And there you’ll be ….. in a stronger position relative to others.
Investment 101 in a modern-day bear or bull market, because housing isn’t the only Ponzi scheme going ……
cash is king IMO. i’m at
CASH - 20%
BONDS - 14%
STOCKS - 66%
Check out Paul B. Farrell’s commentary in his column 8-21-06, in CBS Marketwatch.com. Mentions Gary Shilling’s comment, ‘ With only one clear exception, in the mid 1990s, central bank ease since the mid-1950s means the economy is in a recession, or will be in a few months’. Oh, I forgot, It’s DIFFERENT THIS TIME! You idiots, IT’S NOT! hehehehehehehe
Typical advice would be short term bonds, perhaps foreign and domestic. Cheap hard assets (essentially they types of comapnies that often trade at book value) are good in a higher inflation environment. Your take on how highly correllated the commodity boom is to the housing/construction boom would determine the appropriateness of investments directly or indirectly tied to those. Go back and read about the 70s, but realize that things have changed with regard to global increase in understanding of what risk is and how it’s priced, so the things that carried risk but were massivly undervalued due to risk, probably will not be as generous as they were. The difficult part is your bets would be exactly wrong if your assumption on inflation is off. ie inflation declines due to the strength of the recession.
If this were easy everyone would be rich.
“So now, it would seem, is the time for all parties to brush up on the finer points of negotiating.”
Hint to buyers: You never have to buy, and would be advised to wait if there is any indication that inventory is piling up and prices are dropping in your local market. Your best negotiating tactic may well be to not even show up at the bargaining table for the time being.
“So now, it would seem, is the time for all parties to brush up on the finer points of negotiating.”
The finest point of negotiation is knowing when to walk. Five years ago would have been a better time for “brushing up”. If this “fine point” had been adhered to there would be no bubble to pop.
And where the hell do these real estate folks get the right to call the previous environment “irrational and exuberant”? These scum sucking cheerleading pigs were claiming that these prices were justified the whole way up and now they get to claim irrational exuberance? So I guess when we hit bottom and start going back up they will claim the downturn was based upon “unwarranted fear!”
I want these people selling apples out of shoeboxes in the coming years!
No need to negotiate at this time……..let’s have a buying pause for say 12 months.
That will sure get prices to where they should…………it’ll save a lot of talk as well.
Is there any documented case of a home purchase boycott? Because right now, in the good ole US of A, might be a historically attractive time to organize one…
Gs
IMHO we can do this housing crash in 2 ways……..the quick or the slow.
A buyers boycott would get the desired result real quick……..the immediate fall out would be perhaps a little frightening, but what we face now is no better.
My best advice to people at this point in time is………..if you’re thinking of buying……….”DON’T”
Did you read that post from me?
I posted a very funny anecdote about a certain Huntington Beach Itallian restaurant with all u can eat lasagne and a friend with a big appetite, back when Auction Heaven in 07 was on a sellers: just lower your prices now and get it over with.
The punch line was we can do this the easy way or the hard way!
What ever happened to Auction Heaven in 07 ? Are you around?
Yeah, he posts mostly at OCR’s RE blog and OC Renter’s bubble markets inventory tracking (OC thread).
He probably lurks on occaision here.
I agree.
Sellers will get desperate. With no one to unload to, the correction will occur faster.
Thank you. I am tempted to buy if I find ” a good deal” but it does seem better to wait. I’m in a bubbly area for sure, but there has been little new building, so the crash wil reverberate to this area later than the rest. Note that we are already well into a slowdown on Long Island, though.
Is it just me, or do others get the impression that NYC RE agents are just pretentious POSs? If they are a reflection of the people of NYC, why would anyone want to live there?
Yuk, yuk — reminds me of Kerk’s answer above, “I think you answered your own question.”
NYC agents are very smug. And unfortunately they have been able to get away with it due to the tight market, whether it’s sales or rentals. As a resident of Manhattan I would love nothing more than to see a market crash here… but I just don’t see it happening. There always seems to be someone somewhere with more money than sense. Or someone with parents with more money than sense. The cost of living is outrageous, it’s overrun with tourists, the weather is usually awful, it’s very noisy, it’s very impractical to keep a car, and it reeks to high heaven in the summer. But I’ll be damned if I go anywhere else; I love it here!
It’s funny how people are either rich and live well in N.Y.C. or poor and live in tiny expensive craphole apartments. The rich usually work, during the week ,in the city and live in comfortable apartments well insulted from the enviroment. Then when friday comes they run out to homes in the country, to get away from the city. I could never understand, how if it was so great to live there, people are always so eager to get out of there on the weekends.
I suspect that they live in the city, so they can capture the “in town income” without the “out of town commute”.
I actually know of a few people that are doing that in Boston now. For many people, they have to be in the city to maximize their income and then out of the city to maximize the quality of life.
The mythical lifstyle that is portrayed in the movies and T.V., couldn’t farther from reality for most of the people. It’s a fantacy they apsire to.
Here is a funny one for the hypocrisy files.
The US Greenbuilding council has certain standard for developments to meet their stamp of approval criteria and enhance the property. They encourage some forms of development that certain posters hate.
I saw their CEO speak, he commutes M-F from upstate NY to Washington, DC. I almost fell out of my chair in shock from the bold hypocrisy.
every weekend there is a stream of cars from the suburbs going into manhattan and the railroad is full of people going into the city. people want something different from their everyday lives in their off time
me on the other hand, i drive 30-40 miles out of queens to go shopping in the same stores we have in NYC just for a change of scenery
Summer in the city is nasty. It’s hot and the air is terrible. Hence…:)
I bought an apartment in NYC in ‘96. I paid half of what the previous owner paid in the ’80s, and it sat empty on the market for over a year before I bought it. I was the only interested buyer, and put the only offer on the place. I sold it last year for ten times what I paid. Just because you can only see prices going up in NYC doesn’t mean that they can only go up. I saw them drop by half. When I bought, owning an apartment in NYC was cheaper than renting.
knockwurst speaks the truth. someone in my bldg. just sold an apt for 8x the ‘96 buying price.
Yeah, they are scum, but I don’t think they are representative of the population here. I’ve met agents from other places that were equally arrogant.
What is amazing is how bad some of the agents are…totally clueless about basic finance, taxes, etc. All they can tell you is how fabulous apartments are, who lives in the neighborhood, etc.
They also tell you that prices are going to be x% higher on y propety in z years with absolutely no data or analysis to back it up. They will say anything to sell a place, even if they osensibly represent you, the would-be sucker (er buyer).
I’ll post an amusing email that I received the other day from a NY broker trying to pimp a pre-construction condo in Chelsea. Pretty much sums up how these people operate.
New York is a big and diverse city. If you want to talk about pretensiousness, look no further than your nearest McMansion.
Agree with that. I live in NM and there are a few around. They don’t seem to be selling though.
We’re no more pretentious than folks on this board are smug.
So your pretty pretentious then…;)
listen to this guy Shvo - he’s a piece of work -
Marketing Luxury: An interview with Michael Shvo
September 7, 2005
If Gordon Gekko stepped out of the 1987 film Wall Street and into today’s New York real estate market, he might look like Michael Shvo. The character played by Michael Douglas often touted the sheer thrill of dominating the deal - any deal - and seemed to personify the heady days of the late 1980s stock market.
Shvo, founder and CEO of his eponymous firm, could be considered the embodiment of the New York housing market as its boom continues to reverberate. Reviled by some and admired by others, barely into his thirties and less than a decade into real estate, Shvo, formerly a top producer at Douglas Elliman, is head of a 1-year-old company noted for marketing luxury condos like the Lumiere and Bryant Park Tower as well as for pairing noted architects with developers. The controversial marketer said his edge is bucking conventional wisdom when it comes to understanding buyers, especially younger ones like himself.
The Real Deal recently sat down for a chat with Shvo as part of our regular podcast series.
To listen to the entire interview, click the link below.
http://www.therealdeal.net/podcasts/The_Real_Deal_Podcast_5.mp3
http://www.therealdeal.net/weekly_interview.php
“Ms. Kennedy said that sellers are often happy to get any bid, but a buyer who submits a very low offer and then engages a seller in several rounds of counteroffers risks losing the apartment.”
ok, let’s try this one more time.
step 1) if the seller rejects your offer, say thank you very much, and take your business to the apartment across the street.
step 2) if the apartment across the street rejects your offer, see step 1.
wash rinse repeat
Anybody who starts getting snotty with me when I’m trying to give them money gets the offer withdrawn immediately.
Good for you.
I was negotiating a $15K car (back in 1988), we had been at it for a while and I was on my way out the door, because we were around grand or so apart, not making any headway…so the guy at the dealership asked, very sarcastically, “well, what would you be willing to pay for the car right now?”
I replied, “20 bucks”. (I had already given him my best offer and made it clear that was it.)
He retorted, “that’s a stupid answer”.
To which I replied, “you asked the question”.
Car salesmen and realtors will be fighting for jobs at used car lots. With car dealers, I start the negotiation by first asking long have they had the car on the lot. Usually the answer is less than a week. Then I tell them how much they paid for it, how much they will be getting back from the manufacturer, then I ask them how much do they want to charge for storing the car for a week. The look on their face is priceless.
Hmm..
Now I know how I am going to entertain myself this weekend? Trolling at the dealerships….:)
AMEN!
I recommend this strategy: If you get a counteroffer, counteroffer back–with a price lower than your original offer. That should shut them up quick.
Anybody who starts getting snotty with me when I’m trying to give them money gets the offer withdrawn immediately.
Damn straight. In negogiations such as this, I immediately counter at 1% less than my previous offer. Time wasting is not to be encouraged. Sellers tend to wake up kind of fast
Cereal,
I’ve tried that in Florida over the last six months, when I lowball it is at 50-60% off asking price usaully. Problem is that most if not all are mortgaged up the wazoo and couldn’t accept the offer even if they wanted to. I believe that to get to my valuations which are at least 50% off I’m going to have to wait until the bank takes over and their REO’s are so heavy they will have no choice about it, expecting to take about one to two years at the pace we are now at. Looked at one house which was a REO and their asking 547,500, price should be 250-275 and wouldn’t even give me the time of day after offering them what I thought was fair market value. I think the banks drank the same Kool aid that the realtors did! No matter though, I have one thing they don’t, time and money, he-he.
stillnot,
in that case we go to step 3)
(stucco sez…..Hint to buyers: You never have to buy, and would be advised to wait if there is any indication that inventory is piling up and prices are dropping in your local market. Your best negotiating tactic may well be to not even show up at the bargaining table for the time being.)
I have one thing they don’t, time and money, he-he.
??? That would be two things they don’t have.
Inverse bidding wars! I love it!
> a buyer who submits a very low offer (…) risks losing the apartment
Losing what he does not own? The next apartment is waiting already.
On the other hand, I recommend not to use tactics that humiliate the seller. Just go for the low price and save his dignity. I would also strongly dislike any seller who insist on me feeding any squirrels.
Down 6% YOY. Its getting real ugly outside. I think there might be a storm brewing!
“I think there might be a storm brewing!”
That’s what I told my wife over dinner. We’re both lifelong Floridians and as I see more and more news stories that “break the ice” about the bubble bursting, it feels like it does before a hurricane — kind of eerie, wind’s picking up, sky’s getting dark — you just know it going to hit the fan big-time. No soft landing.
On LA news radio today, an ad pushing an Orlando hotel development for only $79k. Guess the locals aren’t interested!
Hard turbulence with no landing in sight.
The “neutron hurricane.” Wipes out people, or at least their wealth, but leaves the structures untouched.
Equity crash!
“Monthly fluctuations can happen,” said Timothy Warren Jr., CEO of the Boston-based publisher of regional real estate and financial data…
Yeah, sonny boy is a real expert. Check out the Warren group’s new foreclosure search engine on their website:
http://rers.thewarrengroup.com/foreclosure/start_search.asp
Did he go to the Harvard school of real estate statistic spinning? Or the Yale school of talking out of both sides of your mouth while daddy pays the bills?
There’s still a lot of buyers and specuvesters out there that are clueless to what’s happening in the housing market. Which shows that we’re still very early into this downturn. Once the reality becomes broadbased, it’s going to get a lot worse. Their are many who bought this year who will be added to the pool of sellers next year, as they relize they made an impulsive decision at the wrong time. This process should continue to build over the next few years until it makes economic sense to buy over renting. At that point, people will once again take seriously the ramifications of taking on a mortgage. Until then we have major pain coming.
I mentioned in another post that for the past several weeks, the Mortgage Bankers Association’s weekly home purchase application index has been declining even though interest rates have been falling. That’s not normal — there is usually an inverse relationship, for obvious reasons. I’ll have to see if this continues for, say, another month or two before declaring it a bona fide trend. If it does, it’ll be proof positive that investor/buyer fear … a slumping economy … tighter lending standards … and more are overpowering the pure financial lure of slightly lower mortgage payments. And I think it’ll surprise a lot of the “experts” on Wall Street if that happens. Sure will be interesting to watch.
What’s interesting is that home prices usually fall when interest rates are being lowered. When rates are being lowered, the Fed is fearing recession and people aren’t inclinded to buy with a recession on the horizon. Prices go up when the Fed is raising, because people are in a race to buy before rates increase, they trade a higher price for a lower interest rates. I’d rather pay less when rates are high and refinance when rates come down.
So true. A spec builder I know of just turned down an offer that would have let him get out with 10k profit.
Going down with the ship I guess.
Nearly everone on the Central Coast is reciting the same mantra: “everyone from L.A. and San Francisco is going to retire here, so just wait until spring and prices will bounce right back.”
My house is in escrow as we speak (we will be renting, of course) and all of my friends and neighbors think I am an idiot for “throwing money away on rent”.
My mantra: “2009 is goin’ to be fine!”
“‘I was working for the sellers, and my job was to get the best price,’ Ms. LePore said.” “not only was I able to be immoral and unethical, more importantly I was able to pad my commision”
“The buyer offered $380,000 on a house listed at $435,000, but told Ms. LePore that $400,000 was her limit.
How does a buyer so stupid as to show their hand to the seler’s agent get that kind of money in the first place?
They don’t call them “Greater Fools” for nothing. In this case it’s both the buyer and the lender.
How stupid does an agent have to be to announce that she’s a two-faced liar in the newspaper?
There goes the one sale she was going to make in 2007.
She was doing exactly what she is supposed to do — work for the seller. The commission on 10K wasn’t worth risking a sale over. But she did it anyway because that 10K belonged to the seller if she could manage it, and she is legally required to work for the seller’s interests. While we’d all like her to be nice to the buyer too, the law clearly makes it illegal for a seller’s agent to be nice to the buyer if it hurts the seller financially.
Tough cookies to the buyer who thought she was a neutral go-between — they should learn who works for who. When they told the seller’s agent what they were willing to pay, they may as well have told the buyer directly.
Is the agent morally or ethically obliged to inform the buyer that they work for the seller and that any information given about the buyers budget will be used against them ? I say she is human scum who should have recused herself.
If you sue someone and hired a lawyer, your lawyer won’t tell your opponent “you really shouldn’t be talking to me, you should get a lawyer first.” It’s not just because they’re jerks, but rather that they have a legally required to represent the interests of their client above all other concerns and worries. An agent “represents you”: the exact same language that is used with respect to a lawyer, and implies the same level of pet-shark loyalty. The pet shark won’t suggest having mercy on your opponent unless you think to specifically train it to do so ahead of time.
Compare this to a buyer’s agent who arranges for negative amortization financing without checking to see if the consequences of that decision are okay with the buyer: are they doing their job and looking after their client’s interests? No, and I expect lawsuits over it.
That’s incorrect. A lawyer is ethically bound to announce his/her allegiances if the counterparty doesn’t seem to get it. If the buyer directly calls the seller’s lawyer, the lawyer should immediately say, “your lawyer should be on this call.”
Obviously there are dishonest lawyers out there that might ignore this obligation, but real estate agents don’t even have any such obligations, just like they have none of the “fair disclosure” types of duties that people selling securities are bound by.
I think many here will agree, it’s high time the real estate industry was subject to tighter regulatory oversight. They exploit the trust of people who wrongly assume that certain ethical or legal contraints are protecting them, as if they were dealing with other kinds of professional advisors.
With all our new found poker playing experience, buyers should be much better at staring down sellers.
“‘We’re not pressing the panic button yet, but we are watching the trend lines very closely,’ said Timothy Warren Jr.,
HEY! Mo-ron I just want you to know you are correct, you should not be pushing the “panic button” you should be jumping up and down on it! Oh that’s right I forgot the Gubment will fix it …
by the time the panic button gets pressed, it will be too late.
Don’t buy from the seller now. Don’t buy from the bank in six months. Wait a year and buy from the new, improved Resolution Trust Corporation. Ten to twenty cents on the dollar, just like last time.
Bill thanks for turning me on to the Resolution Trust Corporation. I will start doing some research on it. As I was very young back in 1989 I don’t know a lot of the ins and outs of the way the gov bailout worked back then. I assume we’ll venture down the same path this time, only with much larger banks and huge $ numbers.
It’s not just a matter of prices fallin’ in line.
There’s a bazillion homes out there which are now both functionally and economically obsolete.
Builder’s have not been constructing homes reflective of an aging populace; personal high debt loads, and a destablized energy situation.
The era of the McMansion is dead.
Enjoy your white elephant, with it’s attendant monsterous property taxes; energy consumption, water & sewer bills; and maintenance costs.
More propoganda from a talking head trying to minimize the problem.
“In New Hampshire, a dip in property sales is being felt in the state’s bankbook. State Revenue Commissioner Phil Blatsos told the Senate’s tax writing committee Tuesday that receipts from property sales so far this month are running about ten percent below what lawmakers forecast when they wrote the state budget last year.”
Yeah but I bet income from the Interest and Dividends tax is going to be very good this year.
BTW, how’s this for a picture of a seller?
http://www.capitalstool.com/forums/uploads/post-1110-1156194528.jpg
I highly doubt they are going to capture the loss in this manner since the average wage in NH is near poverty levels. There is a large percentage of homes on the market listed at below the assessed values all over NH locally there is going to be serious fiscal problems as the abatements and lawsuits start pouring in. The state has had a steady outflux of businesses and with no sales and personal income tax I would imagine it will start becoming “let’s get the blood out of the turnips” soon. In many hot areas inventories have more than doubled and is serious issue with NH realtors. The foreclosure rates have skyrocketed and many 500k+ homes are entering foreclosure. Much of Maine and NH’s housing prices were propped by the Mass folks buying with bubble monies. That has come to a screaching halt. Going to get ugly, particularly inland!
“…since the average wage in NH is near poverty levels.”
You simply don’t know what you’re talking about.
This is really only a big problem in the southeastern counties (Hillsborough, Rockingham) and with second homes in the mountains and lakes region. The fallout will disproportionately affect commuters to (and recent residents of) Massachusetts and second home owners from Massachusetts.
In 1998, the NH State Legislature (”General Court”) was struggling to close a small deficit while neighboring states had billions in surpluses due to income tax and sales tax receipts from the booming bubble economy. In 2002, neighboring states had massive fiscal deficits as the NH General Court was trying to close a small deficit. NH is always trying to close a small deficit. This story is no exception.