‘There’s Been A Noticeable Shift’
A housing report from the Boston Globe. “Only now, months into a soft market, are home sellers finally beginning to concede on prices, but only so much. ‘I realize this is a buyers’ market, but it’s not a seller’s suicide market,’ said Georgi May, a realtor based in Lowell.”
“Certainly it is acceptable to offer several thousand below the seller’s asking price to begin negotiations. Donna Coffin, an agent in Marlborough, said some potential buyers have come in with unrealistically low offers. ‘What they’re hearing is, go in low,’ Coffin said. ‘They think the prices are going to come down further.’”
“After buying and moving into a new home in Carlisle, Denise Galejs has been unable to sell the family’s four-bedroom home in Chelmsford, which has been on the market for several months. She has tried tempting buyers with price reductions and money toward closing costs, but finds potential buyers to have cold feet.”
“‘Sealing the deal is very hard to do,’ Galejs said. ‘I think [buyers] must be very unfocused.’”
The Philly Burbs from Pennsylvania. “If there’s any doubt in your mind that the local real estate market has slowed, ask a seller. ‘It seems like people are coming and looking, but nobody’s making an offer,’ said Terri Kiriakidi, who has been trying to sell her mother’s Warminster house since June.”
“Or a real estate agent. ‘I’ve never seen anything like this in my life,” said Herman Petrecca, a real estate agent in Warminster. ‘I’ve got a bunch of properties sitting on the market.’”
“The number of homes sold in August, 521, was off 25 percent from a year ago. And they show that the local inventory of homes for sale hit an all-time high in August of 3,565, almost double December 2004’s level of 1,814.”
“Kiriakidi recently reduced the price of her mom’s four-bedroom house from $349,900 to $309,900, to no avail. ‘Nobody’s even offering anything,’ Kiriakidi said. ‘I don’t understand.’”
“The only homeowners likely to lose money in the current market are those who bought last year and are selling now, Thompson said. ‘If they bought their home any time prior to last year, they’re still going to make money,’ (broker) Sue Thompson said. ‘But those multiple offers of the past are just that.’”
The Middletown Press from Connecticut. “Houses across the region, and the country, now are taking longer to sell. Owners are lowering their asking prices and, in many cases, still finding it difficult to coax offers from buyers. There’s been a noticeable shift, from a seller’s market to a buyer’s market, in the region, said Jim Porto, president of the Greater New Haven Association of Realtors.”
“Gus and Charlotte Kardaras can’t wait to move into the new house they finished building in Guilford last month. There’s just one problem, they have been trying since March to sell the two-story home they’ve lived in for the past 21 years and are having no luck despite cutting $25,100 off the listing price.”
“‘We’ve had very few lookers. We’ve gone weeks with no lookers,’ Gus Kardaras said. He paid $160,000 for the house when he bought it in 1985. Now he is asking $449,900.”
“Tricia Monaghan of East Haven has lowered her asking price for the 1,800-square-foot Cape she has been trying to sell since early July from $334,900 to $329,900. ‘We haven’t had one showing,’ she said. ‘We never expected that we wouldn’t even have a showing yet.’”
“Discouraged now that the spring and summer buying seasons have passed, she doesn’t expect the house she paid $145,000 for five years ago to sell until at least next spring. ‘I don’t think anybody’s looking for a house now,’ she said.”
‘Unlike many other regions and states across the country, however, southeastern Connecticut’s economy remains diversified and healthy, Egan said. Savvy Northeast borrowers tend to avoid the trap of ‘exotic’ adjustable rate loans with artificially low mortgage payments that balloon a few years later, he noted. ‘It’s not gotten to the point where foreclosures lead to fire sales and discounts,’ he said. The increase in troubled properties does, however, ‘drag down the real estate market. Banks take a hit. The last thing banks want to do is be sitting on real estate.’
‘Real estate attorney, Lloyd Langhammer of Waterford, fears the housing market will get worse here before it gets better. ‘People are being qualified (for home ownership) that are ever more close to the edge,’ he said. Some banks are offering 50-year mortgages in which the buyers are making such small monthly payments that they are not investing in the home’s equity, Langhammer said. ‘By jiggling the numbers, (a buyer) can be qualified on paper for a mortgage. But one, two, three, four, years down the pike, these people will probably be foreclosed on,’ he said.’
“The increase in troubled properties does, however, ‘drag down the real estate market. Banks take a hit. The last thing banks want to do is be sitting on real estate.”
This is exactly why smart buyers will wait for REO sales to drag the market down. REO sales of foreclosures are likely to spike over the next couple of years thanks to underwater owners who could not make their resets. Sellers in denial will not accept offers anywhere near the depths of price declines soon to be plumbed with a deluge of REO sales. But if a buyer is really, really anxious to be an owner today, then maybe it makes sense to dicker around with an offer at $10K below wishing price, and settle for a purchase price 10% over next year’s comps.
Exactly, we witnessed this very thing in the article from Australia the other day where the condo that went for 260K sold for 95K at a bank auction.
Many people are STUCK! They can’t come to closing with $$ they don’t have if they sold, so it follows that these properties will go back to the lenders, this takes time, but these same properties will be offered at discounted rates so the lenders can take the writeoff and get them off their books.
Moral of the story…patience grasshopper…patience…
When they do go that low, speculators will come back into the market and start bidding them up again. Same old cycle, buyers will be buying on the way up again. I wouldn’t wait for dead bottom if I were buying, but I wouldn’t buy just yet either.
Patience
Patience is a virtue. The lesson of this distress sale is that the prices revert to a pre-bubble level. In Japan land prices went down 90% form the peak in 1990 to 2005 and reverted to 1982. The current US credit bubble started about the same time. The buyers should go on strike (except for those who MUST buy) for the next two years. Then they should only offer 1985 prices, which is about 20%-30% of today’s level. Discounting 50% would only bring it to the 2002 number. When we reach this point unemployment should be north of 10%, and will help a lot to negotiate 1985 prices.
I think what only a few here realize is that many marginal “owners” aren’t merely underwater on ONE property. as we’ve seen not only in the stories from the main stream press but personal stories from professors, adivsors, etc. Many “owners ” have multiple properties underwater. When they finally drown, they will put mulitple distressed properties on the market. If that won’t put a strain on this market in a manner that is truly different this time, I don’t know what will.
I cannot wait to find out how many owned, say, 5+, or 10+, investment properties. I am quite convinced at a gut level that the number will astonish on the high side.
“She has tried tempting buyers with price reductions and money toward closing costs, but finds potential buyers to have cold feet.”
Lady, expect buyers to have cold feet for some time. I think this thing has a long way to go. People will hold off in a down market longer than you think. For most people, the fear of poverty is always greater than the greed of monetary gain. It’s human nature.
…spring and summer buying seasons have passed, she doesn’t expect the house…to sell until at least next spring…
Sales plummeted 50% in most markets and prices remain relatively flat. IMO, this was probably the last chance for some owners to get out unscathed. Coming next Spring the big price plunge.
Unless she’s HELOC’d, she’s got plenty of profit locked in. Just another example of Greed, Entitlement and Denial. Lower the price, get on with your life.
Greed, Entitlement and Denial. I guess that means many sellers are still trying to get their GED in real estate.
Finally some articles that not only talk about the reductions sellers are making on their listing price, but also telling us what these people orginally paid for the house and when.
A lot of these people have already purchased their next house at recent market prices, which are basically the top, speculating that it would be safe to purchase the new one without first having sold the old one.
“‘Sealing the deal is very hard to do,’ Galejs said. ‘I think [buyers] must be very unfocused.’”
There you go - keep insulting those you depend on. The buyers have the money the seller needs - who are the ones without the focus and with unrealistic expectations?
I do not feel bad and will not feel bad for any of these people.
‘I think [buyers] must be very unfocused.’
Quite the opposite. I’m very focused and know exactly what kind of house, lot size and location I want. I also know several different cities/state that would meet my needs. Further, I know what price range I’m willing to pay and am willing to wait for prices to drop for as many years as necessary to reach that point.
The sellers are the ones that aren’t focused yet on getting serious about selling and significantly lowering their prices.
Yeah what a laugh! “[buyers] must be very unfocused.” Ha ha!
Huggybear, you hit the nail right on the head!
If that seller would get the price down the real market levels, maybe they’ll find some “focus” by buyers; till then, who wants to “focus” on a house that’s way over the parket price range? (Again, as we see over and over on this blog: “If it ain’t sellin’, that means it ain’t at market price!”
The nightmare of putting people on loans that set them up for foreclosure or needing to sell within a short amount of time . No wonder there are so many listings out there. I have never seen anything like it . The industry is churning real estate as if it was the stock market .
“‘Sealing the deal is very hard to do,’ Galejs said. ‘I think [buyers] must be very unfocused.’”
The first rule of finance is: don’t lose money. The second rule is, act very unfocused when the possibility of losing money is apparent. C’mon lady - can you take any responsibility for the fact that your house remains unsold, or are you going to continue to blame potential buyers?
A friend of mine says the first rule of finance is “never get emotionally attached to your investments.”
I believe that is the reason why RE prices tend to be sticky on the downslope - owners just can’t “give away” their “special” properties. Many will ride the market right to the market because of their emotional attachments to their houses.
Interesting footnote. There have been recent articles in the WSJ suggesting that a number of hedgefunds have been fueling the subprime lending binge by investing in the lowest-rated tranche of MBS debt. I would be very curious to know how they ‘hedge’ the risk (if they do). At any rate, there is some indication that some really rich guys are indirectly setting up some marginally poor guys to become really poor in the future.
I’m sure the housing index futures is part of it.
Good point! Maybe fueling the subprime lending beast was not the use that Shiller had in mind when he promugated these — LOL
“promulgated”
I doubt that they are using the housing index futures–the open interest on them is still very small. Check out the numbers–only ~100 contracts open in most of the cities.
Jon
Don’t they use credit default swaps (CDS) to mitigate this type of exposure?
Yes. There’s a lot of info on the various bear sites about all of this. One could do a lot worse than reading Succo on Minyanville.
? I figure cape cod/ bahstin will have 2004 pricing soon
CA central valley looks like 2004 pricing now
The only homeowners likely to lose money in the current market are those who bought last year and are selling now, Thompson said. ‘If they bought their home any time prior to last year, they’re still going to make money,’ (broker) Sue Thompson said. ‘But those multiple offers of the past are just that.’”
‘If they bought their home any time prior to last year, they’re still going to make money,’…..
….at least for the next couple of months. After the beginning of 2007, this statement will be revised to “anyone who bought prior to 2004 are still going to make money”. repeat the process until the remarks state “anyone who bought prior to 2001….”
True, and this doesn’t take into account the untold billions that was ‘liberated’ via MEW’s…
“Tricia Monaghan of East Haven has lowered her asking price for the 1,800-square-foot Cape she has been trying to sell since early July from $334,900 to $329,900. ‘We haven’t had one showing,’ she said. ‘We never expected that we wouldn’t even have a showing yet.’”
She paid a whopping $145,000 5 years ago. That means she put at most $30,000 down. In 5 years she’s probably paid off about $10,000 towards principal. She has $40,000 into this house and thinks she should get back a $180,000 profit.
That $5,000 reduction in price sure was a big potential sacrifice on her part. How sweet of her. How will she live with such a loss in “potential windfall profits”.
I don’t care how harsh it sounds. I don’t care if all of these greedy homeowning jerks lives or dies. If I see obituaries of idiots like this in the paper, I’m just going to smile and take another bite of Honey Comb.
i feel you nyc
http://www.sun-sentinel.com/business/local/sfl-sbharriet17sep17,0,5895107.column?coll=sfla-business-front
Escrow Bomb ticking in S. Florida
Harriet Johnson Brackey
Personal finance
September 17, 2006
You’d be smart to keep a close eye on that escrow account attached to your mortgage. There’s a good chance many Florida property owners won’t have enough money squirreled away this year.
If you have an escrow account and your property taxes or insurance rise you get a nice letter in the mail saying here is the calculated shortage, pay this lump sum amount now or the shortfall will be applied to your monthly payment. Paying the shortfall does not insure your payment will not rise anyway.
This happened to my friend’s specuvestor sister ; her monthly pmt went up 33%; Now, she is screaming for the exit and willing to sell at cost. Her flip turned flop turned rental sits unrented while her monthly expenses increases.
Why are people always “willing to sell at cost?” Why not willing to sell at the best price I see in 45 days? The first price over 200K in 30 days or an auction price after that? People who can’t take a loss without being forced to by a third party are demented.
BTW, one of the few benefits of historically high inflation societies (e.g., Brazil) is that people understand that a cost basis in the past has nothing to do with selling at the same figure today and getting out even.
We receive one of those escrow letters every year…a windfall of living in NY with the highest tax rates per capita in the country.
NYCityBoy,
Why take prices down to 2001 level?. Why not turn the clock and roll them back to 1985 numbers, which was the previous RE bottom. Lets wring all the excess liquidity/funny money/asset inflation out of the sysytem. Lets reward the savers and crush the borrowers. Lets teach the society that one can’t get “wealthy” by printing money forever. PAY BACK TIME IS HERE.
sorry to post ben, but south florida is exploding.
According to figures on the Broward County Web site, the total taxable value of Broward property has gone from $91 billion five years ago to a projected $158 billion for the upcoming budget year. That’s a 73 percent increase.
According to a recent South Florida Sun-Sentinel analysis, 15 of 31 Broward cities have doubled their property tax collections in the last five years. The county’s share has gone from $670 million five years ago to a proposed $978 million, a 45 percent increase.
“It takes a lot to get a guy like me off the couch out to a meeting like this,” Gary Lopez, of Weston, said after he addressed the county commission. “I’m pretty fat and happy. But now I’m out here pounding on tables. I just don’t get the economics of what’s going on. How would they be getting by if there wasn’t this huge increase in property values?”
Two things spurred Lopez to speak. Besides his home he owns a condo, which his son now lives in, and the tax bill on that went up 20 percent. And he wanted to move to Palm Beach County to be closer to his job, but balked when he discovered his tax bill would go from $5,000 to almost $20,000 for a comparable home.
Lopez has been in his house since 1997. Because of the Save Our Homes amendment, his assessment can’t rise by more than 3 percent a year. His assessed value is reduced $25,000 because of Florida’s homestead exemption for primary homes.
“My home is worth more than I’ve ever dreamed of,” said Lopez. “But we can’t afford to move across the street. We’re stuck.”
It’s gonna be bad when those valuations DECREASE by 73%. By then, the politicians will have spent most of that windfall.
…and they will want to increase taxes some more to close their deficit gap
“‘I realize this is a buyers’ market, but it’s not a seller’s suicide market,’ said Georgi May, a realtor based in Lowell.”
The sellers of Mass lead lives of quiet desperation.
So why would it be suicide if they bought for $150K in 2000, and won’t sell below 600K now? Seems like there’s at least 400K of breatheable air in there.
It depends on how many treated their home equity gains as their third household income source, which they have already tapped through home equity ATM loans.
You know, i don’t really care how much they took out in equity.
It’s not my problem.
When I see a previous sales price of less then half the current asking price, all I see is greed and that fabulous ’sense of entitlement’ which is so prevalent at the moment.
Much like the previous poster, I have a simple caulculation I do to help show the ‘worth’ of a house: take the sales price nearest to 1999 (or extrapolate it) and add 5% per annum appreciation.
OK, 5% is generous, but I’m not trying to fleece anybody. There’s nothing wrong with making a little bit of money on your house…but in both of the examples in the header the sellers are looking at well over 100% - which by my calculations would take around 20 years of ownership!
How can sellers be ‘insulted’ by doubling profits in less then 10 years?
Home values. Setting a percent increase is hardly different from saying that, since the stock market has gone up something like 8% per year for the last X years, I won’t sell my stocks until or unless they show an 8% gain. Sometimes prices go up much faster than reason and fairness can justify sometimes, like over the next few years, they really go down. It’s true that over 50 years, they usually show a reasonable gain. Anyone who looks at Robert Shiller’s graph of housing since the 1890’s knows that the market is now heading down a lot.
I tend to use a formula similar to yours . Some homes and areas deserve a premium to be fair . A seller I know of put a 40K new kitchen in ,( that deserves something ). Some lots have better views or size,(that deserves something ). People do pay extra to be near the ocean or closer to employment centers or high rated schools.
Course in a true down bottom market you can pick up property that is undervalued .
“Art is in the eye of the beholder” There is something about homeownership that goes beyound numbers. It seems that there is some maternal instinct that tells a women she must own a house to feel secure. I find many of my men friends in private wishing not to be tied up with a mortgage, but to keep peace on the homefront, they buy a house.
The second part of home buying that truly bewilders me, is the house has to “feel” right for the women. Forget the appraisal, the comps, the numbers, she knows what she wants, and is willing to pay for it. Even today, in the face of mounting evidence of a decline…houses are being bought because of the right school district, the right neighborhood, the right feel. I never made any money in real estate using a formula.
You know, i don’t really care how much they took out in equity. It’s not my problem.
I completely agree. Price previous owner paid (if bought before 2001/2002) plus ~1% over inflation rate sounds fair to me. If the house is in fabulous shape, obviously it’s worth a bit more. But at the end of the day it’s about a reasonable appreciation rate for the house, not about saving the personal finances of someone who tapped the home’s equity dry during the runup.
“You know, i don’t really care how much they took out in equity. It’s not my problem.”
If you are in the RE market, it is you problem. Not this or that individual, but as a whole. This is not an isolated incident. Therefore it affects you.
If these people are upside down and have no money to bring to the table, they can’t sell. That affects you. They are screwing themselves with each passing day, but they are also prolonging the decline.
‘Nobodys even offering anything,’ Kiriakidi said. ‘I don’t understand’
This is the true sphincter-tightener for sellers, not ridiculous (in their eyes) lowball offers.
This statement absolutely made my day. I just can’t get enough of hearing things like this because it means the bubble bursting is in full swing. With mid-terms coming up, Oct/Nov is probably going to be one of the most wildest rides we’ve ever witnessed in history in many different ways but housing is starting to get some serious attention in the media. I’m so glad I have a front row seat.
I’ve read that the first offer is usually the best offer you’ll get so not getting any offers as long as that has to mean the house is way overpriced, so overpriced that its not really on the market.
“…so overpriced that its not really on the market.”
What a great description. This describes thousands of listings in every market. The prices are so far out that there is no hope for a showing, let alone an offer.
Prospective seller in Clemsford, Ma says: “‘Sealing the deal is very hard to do,’ Galejs said. ‘I think [buyers] must be very unfocused.’”
Time for some straight talk. Look around the home selling bargaining table. There is always one person who is the stupidest in the room. If you cannot glance around and in 5 seconds point out the stupidest then YOU are that person. For the last few years, with increasing frequency, this was the buyer. Remember this in a situation that sometimes included amateur flippers, fly-by-night mortgage brokers and newly minted realty agents and still the buyer was everybody’s prison block girlfriend.
Time to take off the gloves. These people are stupid. They think that when the tide mysteriously went out all the free fish they picked up in the exposed shoals became a birthright. At the same time they didn’t worry aabout the tide coming back in because they were told they were protected by a permanently high plateau.
That’s a terrifying analogy (you will notice I’m not saying it’s wrong).
Many of these stupid sellers were stupid buyers just a few years ago.
I’m wondering if some of the sellers’ frustration comes from the fact that although home sales are 50% down from last year, 50% are still selling.
Since there are still stupid buyers out there, maybe the frustration comes from “why aren’t the stupid buyers interested in my house?”!
We’ve already answered this;
“Wanted someone with a bigger bucket of money and bigger box of stupid.”
Time for more clear thinking on our side of the discussion. I don’t care what the stupid people are doing (now that I’ve sold out). As long as the stupid people are not hurting us anymore leave them alone to hang themselves. They’ll help clear out the excesses in the market everybit as much and as fast as they priced in those same excesses. When the Great Equity Flush Out of 2007 stops swirling in the bowl that’s when we’ll be the only person left in the room. And best of all once again being the smartest person in the room will mean something.
“When the Great Equity Flush Out of 2007 stops swirling in the bowl …”
i think the tank will still be flushing and the bowl still swirling strong into 2008 and 2009 — at least in my secluded neck of the woods on this condos-to-the-sky manhattan isle.
Robert, It’s easy being the smartest guy in the room when you’re the only one.
As I mentioned above, the folks with an I/O loan and a box full of stupid affect the market by prolonging it. A seller in denial will look at the highest recent price and think their home is worth that, even if a similar home sold for 20% less more recently.
What if the bowl overflows.
That’s what the savings and loan bailout amounted to. Spread the mess. Yuck.
“Certainly it is acceptable to offer several thousand below the seller’s asking price to begin negotiations. Donna Coffin, an agent in Marlborough, said some potential buyers have come in with unrealistically low offers. ‘What they’re hearing is, go in low,’ Coffin said. ‘They think the prices are going to come down further.’”
They are only unrealistically low right now when compared to the subjective pricing that you pulled out of your ass when you did a market analysis using last year’s sales. Wait a few months and they will seem reasonable. Keep trying to convince yourself and sellers that prices won’t come down and you will find yourself with no sales and much lower prices, this isn’t last year and the market is in a freefall. Deal with it. You are not going to be able to manage this market so stop trying. Dolt.
This is a really important sentence: “‘What they’re hearing is, go in low,’ Coffin said. ‘They think the prices are going to come down further.’”
It speaks to psychology, which I love. At this point, unless you live in a swamp, you have HEARD that real estate is slowing at the least, cratering at the most.
This psychology of “wait and see” will just get stronger over time, this is the psychology that literally KILLS real estate. No one wants to buy a depreciating asset, especially an OVERPRICED depreciating asset. We are past denial in most areas, and acceptance is proving harsh indeed.
i’d say sellers are still in the late stage of ‘denial’ … barely flirting with ‘panic.’ they’re just finishing setting the table for this vulture’s banquet. start saving your canned food, grease up your generator and pack in plenty of antibiotics and ammo — for the winters of 2007-2009, when the economy will likely be losing a few wheels. and the ice age should be setting in to nyc by then … and lots of people living in shopping carts … and documentaries about the first bubbleburbs to bulldozed …. get ready for great depression 2!
god these people are funny! “unfocused buyers”, “unacceptable offers”",”i just don’t understand” no,no i didn’t have sex with that woman,it was simply a gesture of respect,it’s traditional in arkansas,ask any of my major contributors.
Boy the party of personal responsibilty has none….the answer to all of our countries ills is Bill Clinton’s Peni$…..
Hey doncha know that the clenis has been in charge of every branch of government for the last 6 years.
Too bad we didnt have an MBA president who could figure out an asset bubble is “against us”
“Once she moves, Kiriakidi may renovate her Warminster house to improve its sales prospects.”
Chasing good money after bad.
Or in reality she has no money, just dream money in phantom equity. She thinks that by getting a loan for more debt leveraged by the equity, she will be able to extract that phantom equity.
Yes, extremely stupid. Digging a deeper hole does not help one get out of it. Someone on this blog had a good quote in regards to that.
“Real estate agents advise potential buyers to pursue homes they like rather than to continue hunting. Not only does a buyer risk losing the property to another bidder, many brokers also fear that waiting for a while longer could mean dealing with rising interest rates, which could ultimately mean higher monthly payments.”
I thought that interest rates were falling with commodities imploding. When rates are going up, buy before rates go up. When rates are falling, now is the time to buy because rates are low and you can always refinance.
“Not only does a buyer risk losing the property to another bidder”
I *love* how the RE industry keeps playing the emotion card. “Sure you can wait and browse with so many listings to look at, but you risk losing your ’soul mate house’. How would you feel if that happened?”
How about this…in a few years, I’ll be looking to re-enter the market for both a primary residence and investment property. What I’ll do is I’ll find several houses that fit my needs (since I can always modify them to be ‘the perfect house’), and inform the sellers that they are in a reverse bidding war, and if they want me to buy thier house, they will have to bring better offers to the table than their competitors. I will probably ask them to include a well written letter on why I should buy *their* house, and I will require the winning bidder to provide squirrel eradication services for length of time that I own the home. And they should act quickly, or risk losing out on yet another ‘perfect’ (cough-cough) buyer.
“Not only does a buyer risk losing the property to another bidder”
How about something like bankruptcy auction, starting at 20% of the asking prices. When the time is right it will not matter what the buyer paid, what kind of improvement they have put in, what the view is or how the wind is blowing. The prices will be dictated by the state of the economy, uneployment rate and most importantly LIQUIDITY/ACCESS TO MORTGAGE CREDIT. Without credit nobody buys anything. People with cash, able to put 50% (only at this level terrified lenders will part with their money) down will dictate the prices.
- ‘I realize this is a buyers’ market, but it’s not a seller’s suicide market,’ said Georgi May, a realtor based in Lowell.”
- Donna Coffin, an agent in Marlborough, said some potential buyers have come in with unrealistically low offers.
Hey Georgi and Donna … the market will dictate pricing - NOT YOU!
You two had NO problem with the run-away UP market. But suddenly, you two think that things went upside down. Idiots.
Just saw the show property ladder or flip thi shouse last night.
I had seen it months ago when everyone was making money. This time, flippers have yet to sell their house and they are trapped.
It made the reality of the struggle for folks stark and a bit frightening. I want prices to go down at least 50%, but its going to devastate folks if it does.
Simmssays…10 Easy Ways to Avoid Getting Dumped
http://americaninventorspot.com/self_improvement
I want prices to go down at least 50%, but its going to devastate folks if it does.
They will, and more then 50% in nominal terms. Be patient and give it a few years. Who cares about the folks. They have to pay for their stupidity and greed. Did they care during the run up that my savings were destroyed and my kids were priced out of the market? It is our turn to kill them financialy.
25% decline? Sounds to me like plenty of houses are still selling. Why not price it right, and be part of the 75% of the market that is still functioning?
“‘Sealing the deal is very hard to do,’ Galejs said. ‘I think [buyers] must be very unfocused.’”
Noncommittal, yes. Unfocused, no. Just focused on the long view, which too many sellers clearly are not.
That lowball offer is as good as it’s going to get, sellers. It only gets worse from here. See you in 2008 at the firesale. How’s that for laser-like focus?
Certainly it is acceptable to offer several thousand below the seller’s asking price to begin negotiations. Donna Coffin, an agent in Marlborough, said some potential buyers have come in with unrealistically low offers. ‘What they’re hearing is, go in low,’ Coffin said. ‘They think the prices are going to come down further.’”
GET USED TO IT!!! You had no problem raping the buyers on the way up the ladder and now you expect order on the way down. may you should not be in REAL ESTATE. A good agent will present all offers and let the seller decide. If I were a seller I would fire you in a minute!
This was our experience: We bought a house in 2000 that had been on and off the market for over a year with no offers. It started at $475K and by the time we saw it, it was $399K. We saw potential but a lot of work to be done. We wanted to offer
$340K, an offer we could afford and still have $50K to update the 30 year old bathrooms, replace all the old carpeting, replace some windows, etc.
Our real estate agent didn’t like that a bit. She thought SHE would be embarrassed to present that offer. Fortunately, the seller’s agent stopped by while we were at the house and the next day, we heard that the seller thought he could “work with us,” counteroffering at $355K and that was good for us. It was a fair deal for everyone though at the closing, the seller was visibly pissed with his real estate agent and had some tart comments about the commission. IMO, she did him a favor and if he didn’t want to sell at $355, no one was holding a gun to his head. The cosmetic repairs are always obvious and you can estimate them but in the 6 years we’ve owned the place, we’ve had to replace a septic tank and lines ($15K), well pump ($2K), water softener, appliances, windows, etc. etc. etc.
“Gus and Charlotte Kardaras can’t wait to move into the new house they finished building in Guilford last month. There’s just one problem, they have been trying since March to sell the two-story home they’ve lived in for the past 21 years and are having no luck despite cutting $25,100 off the listing price.”
“‘We’ve had very few lookers. We’ve gone weeks with no lookers,’ Gus Kardaras said. He paid $160,000 for the house when he bought it in 1985. Now he is asking $449,900.”
These sellers just does not get it. They think that reducing their asking price by 5% every six months (from peak pricing +20%) they are going to find a buyer. If you have are now moving into some other palace and do not want to carry the costs on your previous castle indefinately then how about reducing the asking price (from peak pricing) on the 21 year old building by 15% every six months? How does $336.5k sound to yah? If that does not work after 6 months then how about $286k? You can always remind the few lookers that the lower the price the lower their costs for taxes and insurance.
This one could be a very interesting long term project for someone in FL to follow because I know these “entitlement freaks” will not do what I am suggesting. They are gonna keep on dickering with 5% every 6 months until they “realize” that “renting is a really great way to recover our carrying costs” until “the market recovers.”
Great luck trying to sell your 25 year old POS rental 4 years from now when the FL market has not yet bottomed!
oops - these clowns are in CT - my bad!
…she doesn’t expect the house she paid $145,000 for five years ago to sell until at least next spring. ‘I don’t think anybody’s looking for a house now,’ she said.
LOL. No one is looking at her overpriced dump, and even fewer will consider it next spring. These idiots played the RE market as if it were the stock market on the way up, and now they’re going to find out that it can go down like the stock market just as easily.
Unfortunately for them, however, they’ll learn too late. Instead of dumping their investments and taking a minor loss, as many do regularly in stocks, homeowners will hang on to their “investment” homes and ride the market all the way to the bottom, blaming everyone but themselves on the way down.
Their sense of entitlement will become a self-fulfilling prophesy as they’ll deserve what they get, but differently from what they expect.
When she’s carrying that second house for another six months, perhaps the double mortgage payments will bring this seller into focus.
“‘all you need is a price correction, a price adjustment, to bring the market back,’ Lereah told the crowd.”
He’s almost right! A 50 to 70% price correction followed by a few years of foreclosures, bankruptcies, recession and REO hell will bring the market back!