‘Prices Are Still High For The Way Things Are Going’
The Daily Times reports from Maryland. “Rows of new houses sit for sale in neat, upscale new subdivisions like Decatur Farms and Glenn Riddle, but a glut of new projects like them and a slowing real estate market in Worcester County has left them feeling a little lonely.”
“In February 2005, there were 396 houses listed with Realtors in Worcester County, but in August 2006 there were 765, a 93 percent increase. Condos on the market have grown at an equal rate with 1,870 being on the market in the county in February 2005 and 3,541 in August 2006, an 89 percent increase.”
“‘We’re a little saturated right now, but I think we’ll catch up,’ said new Coastal Association of Realtors President Kevin White. White said he felt inventory was up because of the combination of so many new projects, such as Decatur Farms and Glenn Riddle, but said the inventory wasn’t ‘completely out of whack.’”
“The problem is that saturation of the market with new homes isn’t about to stop. Glenn Riddle has only built about 100 of 600 planned homes. Summer-field developer Mark Odachow-ski plans to build its first 300 homes in Snow Hill in the next 15 to 21 months while the entire development is planned to be 2,000 homes.”
“If the downswing goes beyond the next year, an ADC Builder’s Inc.-proposed 1,000-home development in Showell, developer Troy Purnell’s proposed 150-home development in Berlin and a Highland Development Corp.-proposed 127-home division near Pocomoke City could all see slow returns on their substantial investments.”
“‘I would not want to be sitting on a big project right now,’ Realtor and County Commissioner Bud Church said. ‘One of the things we’re seeing with major projects and developments is a lot are dropping their prices $100,000, $150,000, even $200,000 (per house).’”
“And the slowdown is going to start affecting jobs, experts predict. Part-time real estate agents will drop out of the industry because of the difficulty to sell and construction workers will have less work as builders trim back the size of planned projects.”
“‘There are currently 1,300 members of the (Coastal) Association (of Realtors),’ said Church. ‘A few years ago that was 700 and it doubled because of the market. But we’re going to see a thinning out of agents.’”
“In Worcester County, the average listing price of homes in August 2006 was about $361,000, while the selling price was much less at $341,000. The average condo was listed at $457,000 and sold at $431,000; a drastic change from the boom when Church said units were literally going for above the listing price.”
“‘What happened nationally and in our market, prices have gone up so dramatically that people got sticker shock,’ Church said. ‘(The market) is like a skydiver jumping out of a plane and falling, and you’re waiting to see when they’re going to open the chute. I don’t think we’re going to hit the ground, but I don’t think we’re going to see the market change into next spring or summer.’”
The Evening Sun from Pennsylvania. “Karen Berube stood at the kitchen counter, looking through a pile of papers. ‘I’m just looking at the mortgage,’ she said, sighing. ‘And that depresses me.’ Her husband, Louis, explained, ‘We just had another house built, so now we have two mortgages.’”
“The Berubes put a ‘For Sale’ sign up in front of their current house and tried to sell it themselves this June, in time for the traditional peak of the real-estate season. They are asking $319,000. The couple never had any problems selling on their own before. Other houses they had lived in and sold went in a couple of days.”
“But the ‘For Sale’ sign stood in front of the Littlestown house for a month and no one called.”
“A real-estate agent, who has been advertising the house, showing it and holding open houses since July. Only two people came to the open house last Sunday, and neither made an offer. The Berubes are supposed to settle on their new house next week.”
“‘It’s just a bad time right now – that’s what they keep tellin’ us. It’s a buyer’s market, not a seller’s,’ Karen Berube said.”
“Home values across southcentral Pennsylvania, like those across the country, have soared in recent years. The median value of homes sold in Franklin County has climbed 65 percent in the past four years. In seven years it has doubled, from $92,325 in August 1999 to $185,000 in August 2006.”
“But with interest rates going up and higher gasoline prices, a lot of buyers these days are waiting in the wings, watching for prices to drop. ‘Prices are still a little high for the way things are going,’ said Joe Tondo, who is shopping for a home near Chambersburg.”
“Already, there are plenty of houses on the market. More than 1,000 homes were listed for sale last month in Franklin County alone, nearly twice the number available a year ago.”
“The buyer’s market has also been fueled by the number of new houses being built, adding 25 to 30 percent to the number of homes traditionally available, according to broker Bob Hickey. ‘National builders from the south have been moving in during the past three years,’ Hickey said. ‘They probably built too many at once.’”
“One market force that appears to have slowed is the rush of Maryland buyers who, in the past, have helped drive the area’s residential real estate sales. Real estate agent Dominic Arcuri said higher gas prices have caused some potential buyers from Maryland to rethink their moves.”
“‘I don’t think it (the switch to a seller’s market) will happen until winter,’ said Margaret Byrd, broker in Hanover. ‘And it’s going to be a long winter.’”
“White said he felt inventory was up because of the combination of so many new projects, such as Decatur Farms and Glenn Riddle, but said the inventory wasn’t ‘completely out of whack.’”
Inventory + prices + lending standards = ‘completely out of whack’
That’s it Mr White….Keep up the ‘Happy Talk’.
You make Zig Ziggler proud.
Haha, finally the first report in our local media about the “correction”. But it’s different here because it’s the beach, they arent building any more Ocean.
Truth beknown, tourism is the only industry in this area. There are no solid jobs, median income is maybe in the $40K’s and average housing prices are in the $400,000’s. (For Condo’s!) The place I rent for $790/month are……I mean were……. selling for $230-$280. They sold new in ‘96 for $60K and just 4 years ago were still under $100K.
Data from the Coastal Association of Realtors:
http://coastalassociationofrealtors.com/statistics/default.htm
Listings are up 100%, sales are down 50%, AND THEY ARE STILL BUILDING!!!!!
haha
‘(The market) is like a skydiver jumping out of a plane and falling, and you’re waiting to see when they’re going to open the chute.’
Waiting… waiting… waiting… SPLAT!
Skydiver jumping yes but in this case the FB’s parachute was rigged by those clever bankers and the ripcord will come off in their hand with no back-up chute. Surprise FB! What color is your parachute?
What a stupid analogy. When the chute opens, the parachuter keeps going DOWN anyway. So, the market will keep going down? That’s what she’s trying to say?
“‘I don’t think it (the switch to a seller’s market) will happen until winter,’ said Margaret Byrd, broker in Hanover. ‘And it’s going to be a long winter.’”
Winter!! Ha ha ha ha ha ha…what year?
Now why Mrs Byrd would it switch to a sellers market in winter?Does Mrs Byrd know something that we don’t know . Are you saying that more greater fools go out in the winter time and buy houses than in peak selling season ?The amazing part is people actually think these people are experts .
In answer to “what year” — my guess is the winter of 2014. I know many of you will think that is way too soon, but by then there will be a new generation of fool borrowers.
No, summer, of the Kondrotiev persuasion.
There is a big rumor going around that the interest rates are going to go down within the next three months and it will kick up a rally in the housing market . It would have to go down to 4.5 % to kick up a excess inventory market like this one in alot of states .NOT GOING TO HAPPEN .
I was talking about the Kondrotiev Summer (financial reference) which won’t be here for another 30 years.
I could see a bit of a dead cat bounce happening because realtors/brokers/NAR liars will use a lowered FED rate as a great tool to talk the final few fools off of the fences. Any housing market recovery from lowered interest rates would be short ived I would think…and then the decline will probably be worse.
There was an optimistic spike of the internet stocks back in 2001 too - there are plenty of people that still WANT to believe everything will go back up.
Check out this graph on the Investech homepage. It’s so similar it’s eerie but tells me human nature drives these bubbles.
[linknew=URL]www.investech.com[/linknew]
(hope the link works, my first attempt at embedding HTML)
Dang, nope.
I think the Fed will have to lower rates either late this year or more then likely early next year. They need to pump some air back into the market so that panic does not ensue. They wanted to pop the bubble, but they did not realize, in todays flat world - where the average person has so much access to media and the actual statistics (once held only by the so called experts), that it is deflating quicker then in the past. They will need to respond to allow the dead cat to bounce and hopefully lessen the depth of the decline. If they are successful they will allow inflation in housing to accelerate a little which will raise rental rates at a rate higher then recently (except markets where there is a huge oversupply). If this happens it will be a long protracted decline in real housing prices. If they are not successful it will be pretty quick and ugly for many. It will be interesting to see how this plays out.
“‘I don’t think it (the switch to a seller’s market) will happen until winter,’ said Margaret Byrd, broker in Hanover. ‘And it’s going to be a long winter.’”
At what point do you stop calling it a long winter and start calling it a new ice age?
White said he felt inventory was up because of the combination of so many new projects, such as Decatur Farms and Glenn Riddle, but said the inventory wasn’t ‘completely out of whack’.
Just ‘mostly out of whack’.
Been hearing that term “Whack” a lot lately. Mainly when it refers to taking a couple dozen g’s off the asking price.
There may simply be TOO MANY HOUSES for the number of buyers around.
Some stuff might NEVER sell.
Been hearing that term “Whack” a lot lately.
For a moment there I thought you were going to bring up Sen Mark Foley’s e-mails.
Oops, I meant Ex-Rep Foley.
“‘I don’t think it (the switch to a seller’s market) will happen until winter,’ said Margaret Byrd, broker in Hanover. ‘And it’s going to be a long winter.’”
As in winter of 2010 perhaps? I really don’t understand the high prices in Marlyand. I think most of Maryland is pretty creepy, and I really doubt there are enough well paying jobs to support the high housing prices in Baltimore and the bedroom communities of DC without FBs using toxic loans.
Who is buying those houses in southern Maryland? It would be easier to commute to Dover than DC. And to drop the price 200K, they must be million-dollar vacation homes.
‘I’m just looking at the mortgage,’ she said, sighing. ‘And that depresses me.’ Her husband, Louis, explained, ‘We just had another house built, so now we have two mortgages.’
This story depresses me. The lending industry seems altogether willing to help stupid people borrow money they will never be able to repay to buy stuff they can’t afford. I have a sinking feeling that the US taxpayer is going to soon be forced to pony up the money that is currently getting poured down these rat holes.
One of the great benefits of the welfare-warfare state is that no one is responsible or accountable for their own actions. America has shifted from creating wealth to transferring wealth through lawsuits, taxes, government programs and bailouts. I somehow doubt the founding fathers would be pleased to see what America has turned into.
I somehow doubt the founding fathers would be pleased to see what America has turned into.
You mean middle aged white guys running the country into the ground with their greed and corruption? I think they (the founding fathers) would be very pleased.
Was watching an old Clint Eastwood movie last night–Josey Wales–and would love to see all these lenders, brokers and broke buyers given a Missouri boat ride.
That would be sweet. Would probably cause some kind of nasty water pollution though as they fell over board. Manure and other waste tends to have detrimental effects on waterways.
On point!
Most of the white guys running the country look well past middle age to me.
nov 7th dems will offer free health care and 52% will vote for it
1/2 pay taxes and 1/2 get free sht
To be followed soon by 1/4 pay taxes, 3/4 get free sh!t….
As opposed to now? 70% homeowners = 70% get free sht.
Kill the deduction, stop subsidizing this madness.
Right, so that does make texas seem attractive. I remember not long ago when Philippine nurses’ aides were agitating for more free training, some TX legislator had the guts to say to them, “If Texas raises taxes, the retirees who are going to pay your wages will not come here.”
There is no such thing as a free lunch. However, the day you face a life and death choice for yourself or a family member based on the cost of medicine, you may change your tune. In fact, the people of every other Western nation have decided that the cost of health care is up to the commonwealth to provide for the common good. Which may explain why other Westen nations usually have better overall medical outcomes.
and in every one of those countires health care scks
let’s try deregulation
the housing bubble is from gov “making housing affordable ”
via hud,raines etc……….
They have better outcomes. What more do you want?
No, the bubble is mostly from dishonesty, greed, and fraud, which unfortunately is becoming an American tradition.
flatffplan, you don’t know what the hell you’re talking about. virtually every mordern euro country as well as cananda has better health care than we do.
stop reading the WSJ, it poisons the mind.
Tortious,
Show me the math whereby you add the cost of another level of government bureaucracy to a service and somehow claim that it will be cheaper.
Any time you pool money together it just makes easier for bigger crooks to steal.
I pay cash for my medical bills. You should try it some time and see just how cheap it can really be.
Brooklynite.
Canada’s healthcare isn’t better they just ration their heathcare commodity differently.
A provider can only give you 2 of these 3 things:
Quality
Speed
Low Cost
America’s system uses cost to ration the available heathcare. We provide QUALITY (or what passes for quality in the medical world) and SPEED but at a HIGH COST.
The Canadian system provides QUALITY and LOW COST (if you pay no attention to the high taxes you pay) but you have to wait forever for service.
I’ll find the full report but here is a snippet.
“Finally, the promise of the canadian health care system is not being realized. On the contrary, a profusion of recent research reveals that cardiovascular surgery queues are routinely jumped by the famous and politically-connected, that suburban and rural residents confront barriers to access not encountered by their urban counterparts, and that low-income Canadians have less access to specialists, particularly cardiovascular ones, and have lower cardiovascular and cancer survival rates than their higher-income neighbours.”
My uncle is a medical doctor in Colorado. While on vacation in Germany he had a heart attack. In his opinion the medical services in Germany were superior to that in the US. He was not billed for his hospital stay, they paid for everything.
Now my only medical experiences are UK and US. I’d take the US system over the UK, but maybe that’s just me.
waahoo’s comments on Canada’s medical system seems to pretty much describe Australia’s. I’m very unimpressed with Australia’s public hospitals, the private ones seem much better.
baculite,
How many heart attacks has your uncle had in the US to compare against?
You seem to be stating that because your uncle didn’t pay the heathcare is better. But why should a perfectly healthy German citizen have to pay for your uncles poor health?
Yes, when someone is in need you help them, but I don’t want to make a habit out of paying for tourists healthcare, and I certainly don’t want to saddle my children with that kind of debt.
Waaahooo:
Well, the fact is that the best-rated hospital healthcare system in the United States is the Veterans Administration Healthcare system. Surprise! As you know, it is run by Americans who are employed through our federal government. Further, about half of all healthcare is funded through some government source in this country.
A single payor system is known to be the most cost efficient in healthcare, and is supported by the American Medical Association (AMA).
Further, any single payor system in this country will include an option for people such as you to pay out of pocket for healthcare if you so choose. Of course, you should realize that paying cash for medical care carries the most expensive price tag in this country. No insurance companies or government agency to negotiate cost through their bargaining power.
Further, health care in this country is rationed by ability to pay, as well as by HMOs and insurers on a cost basis. You do know that most people who file for a medical bankruptcy are insured; they simply run out of money and assets to make the co-payments.
Next, every other Western nation has its own version of universal medical insurance. No two are exactly alike, in terms of funding and paying, as well as access. So too, our system will not be exactly like other systems. In fact, we can choose the best aspects of the programs used by other Western nations. Today, the United States spends the highest percentage of GDP on healthcare, and does not have the highest level of medical outcomes.
Finally, anyone can find information on the Internet than can support virtually any assertion. There is always someone who doesn’t like something. So, a snippet doesn’t mean very much.
You must look at medical outcomes, not anecdotal information.
T,
“Further, about half of all healthcare is funded through some government source in this country.”
No surprise there that’s why it is so expensive. Strip away government inefficiencies and it will be cheap.
“A single payor system is known to be the most cost efficient in healthcare, and is supported by the American Medical Association (AMA).’
Bull!@#$ I say. Known by whom? If the AMA supports it it is because they like to see all the booty in one place. Makes pillaging easier.
“paying cash for medical care carries the most expensive price tag in this country. No insurance companies or government agency to negotiate cost through their bargaining power.”
Double bull!@#$. Here’s some actaul recent examples.
Pediatrician visit = $40 vs $90+ if paying through insurance.
root canal $400 vs $800 + quoted over the phone.
The idea tha a goverment agency can negotiate lower costs is lunacy. Think about the pentagon and defense contracts. It may start out well but it’s only a matte of time before the goverment agency gets staffed by industry insiders.
“Today, the United States spends the highest percentage of GDP on healthcare, and does not have the highest level of medical outcomes.”
Agreed. Because of government and insurance interference in what should be a doctor / patient relationship.
“So, a snippet doesn’t mean very much.”
Agreed. I was short on time. Here’s one report I can get my hands on the lays out the problems with the canadian system. Take what you can out of it.
http://www.fraserinstitute.ca/admin/books/files/HowGoodCdnHealthCareComplete.pdf
Bottom line? Show me the math. Any savings you do manage to squeeze out of a universal savings will be consumed by the cost of managing that system.
Here’s a little thought game to illustrate how stupid the idea of a universal health plan is.
Imagine a universal House plan - after all what could be more important to your health than shelter- where housing is free to all who need it, but paid for by a universal tax.
Waahoo:
You just gave a lot of boilerplate anecdotes with little meaning. The source you refer to is a comparison of Canada’s system to other Universal care systems, not the United States.
You look up the data, I don’t care if you believe it or not.
Try kff.org , if you are interested in some facts.
No, it is not like a universal house plan, it is like insuring a car wherein the risk is spread through the entire group of drivers and owners being insured by a company. You are using what are known as faulty analogies.
By the way, Toyota will build a new manufacturing plant in Canada rather than the United States. There main reason: the cost of providing the healthcare for the workers in the United States.
Well said, Tortious!
My mother is from a socialist country where their healthcare is covered. The difference btwn their care and our is astounding — theirs being MUCH higher quality.
Some people are too ignorant to understand that a sick/dying/bankrupt population WILL NOT BE PRODUCTIVE.
One of the main differences between first and third-world countries is easy access to quality, affordable, widely-available healthcare.
If someone wishes to “upgrade” they are always free to do so, but we need to make basic care available to all people (we could argue about the need for them to be citizens/legal, as one thing that WILL throw off costs is paying for large numbers of people who do not pay into the system).
Very well put, bairen! Time to run for cover!
“Other houses they have lived in have sold in a couple of days….”
I don’t believe this. There was a short window of opportunity when houses sold quickly. Unless they were swapping houses every two-three months a couple of years ago (how could they have actually lived in each?), this could not have happened.
As far as the other part of their story, “it’s just a bad time right now… nothin’s sellin’….it’s a buyer’s market…”
They ought to add a few “g’s” to the end of their words and subtract a few G’s from their price.
WHY do these people buy a home before the other one is sold? We have built and sold about 4 homes in my life and we never started the next one until the first was sold.
These are most likely the folks who are insurer up the ass on everything to guard against loss.
Same who make sure little Johnny has a helmet on and a cell ph so they guard his safety.
Stupid.
I remember when my mom bought her condo back in 1989 (bad timing). She was still making payments on her house (bought the house for around $30K in 1964, valued at around $200K in 1989 - no HELOC, just original debt balance), which she was going to keep and rent out. The bank made her pay off the house in order to get approved for the loan to purchase the condo, which had a purchase price of about $180K. (While she could have paid off the house easily before, she actually liked writing the check for the monthly payment, which was about $125/month). Apparently with their lax lending standards today, banks aren’t too concerned about FBs having two mortgages.
- Her husband, Louis, explained, ‘We just had another house built, so now we have two mortgages.’”
Is this the new trend - carry two mortgages? Idiots.
Isn’t it better to carry 2 mortgages then throw money away renting one place? I’ll have to ask Suzanne and my local mtg broker this.
Of course. Your just throwing the money away on rent; you will never see it again. In 15 years, that house will be back up to what you paid for it today; and you will be able to get all that money back out of it.
Its always a good time to buy.
Duh.
Suzanne Researched This. This listing is special. This couple put that equity to work, unfortunately that equity turned out to be a lazy conartist. Not to worry, they can always become landlords and ransom the old a house to the ever increasing stream of poor, bitter renters since they aren’t making any more land and the last house to ever be built is being built by this couple.
I FINALLY watched that “Suzanne” ad. It’s on YouTube now.
Wow!
I’m sure that couple is divorced by now!
Does that man have any balls? And is that wife stupid? Only *you* can know if you can afford something.
Does that man have any balls?
No, he was neutered after their 2nd child. It’s a new trend amongst FBs who can’t afford to have anymore kids.
“This listing is special”
Not only is it a special listing, but it’s a “rare opportunity”. Funny, there are a lot of “rare opportunities” here in Tucson these days.
Rare Opportunity from who’s standpoint? Yea I agree they are rare opportunities. They have a rare opportunity to find that last buyer willing to pay them the exorberant price they are asking. Good luck winning the “Last Dumb buyer lottery”
I love that clip of “Suzanne: This listing is special”. I listen to it almost every day. http://www.forsakencraft.com/proof.htm
Really though.. How MANY of these articles talk about people who are holding two mortgages and have trouble selling one of their homes?? It doesn’t seem like these are 2nd homes or vacation homes. It usually seems like they have moved into a bigger and more expensive home WITHOUT having sold their old one. What are these people thinking?! I’d be worried enough just about the mortgage on the new house. Dealing with 2 mortgages is insane.
I wonder if there will be an explosion of cases with people HELOC all the equity on the 1st house either before or after purchasing house 2, and let the 1st house get foreclosed if they can’t sell it? Would the lenders for the 1st house have a claim on the 2nd house, even if the properties are in different states?
can’t get way w that- heloc isn’t even protected in CA (peoples republic of)
I personally have seen it in a large portion of the relatively small pool of people I know. I posed the question to this blog about how many people knew homedebtors in this situation. Turns out there’s quite a few.
The interesting thing to me is that they don’t plan on being investors, so they don’t want to be a landlord, but they can’t afford to carry both mortgages. They hold out for full price on the first house. This means they can’t sell short, even if they wanted to, once they run out of savings. I predict both houses go on the market eventually. The inventory fuel will really get piled on after another winter without selling house #1.
Yes, multiple mortgages is the way to go. You have more interest to deduct.
WSJ on consumer spending in declining housing mkt:
http://online.wsj.com/public/us
I thought WMT would report ok, since gas is SO CHEAP NOW !
Well, gas is cheap. But you’re seeing past numbers from WMT from months when gas was higher. At least, that’s the common wisdom, to pin sagging sales on high gas prices.
Franklin County?!! Geez, where do people who live in Franklin County work? Harrisburg? Winchester? Frederick? Surely they don’t commute all the way to the Baltimore or DC.
Well, maybe they do. Even when we lived in NoVA in the 80s, there were people commuting to the Tysons Corner area and even into DC from West Virginia. What they saved in home mortgage costs by buying a cheaper house was more than consumed in higher commuting costs, including having to buy a replacement auto more often.
Is there ANY part of the country where excessive building hasn’t occurred?
They work in Montgomery County, just north/northwest of DC. Seriously. It’s a nasty commute, but no worse than what the people from Hagerstown do.
And yes, I know some who do that. And you can spot more with a quick drive-through of Montgomery County corporate lots and look for the Pennsylvania plates. There’s even some in NoVa! (Wow, these people are idiots with no life outside their car, IMHO, but they say the cheap cost of housing “is worth it”.)
I know Franklin County pretty well. It’s mostly farming, with some light industry. It is 100 miles to DC, 200 to Philly or Pittsburgh. You can drive up there in two hours - off rush hour. It will take four hours, each way, at rush. Go figure.
Re: Evening Sun Article
“With gas prices coming down, I’m getting more calls,” said Chambersburg Realtor Welty. Lower fuel prices can free up a couple of hundred dollars a commuter can apply to a monthly mortgage payment, he said.
Don’t people realize that the drop in fuel prices is only ‘TEMPORARY’? WTF!
Next year prices will probably bump up to $4.00 a gallon. Why do folks think that since gasoline prices are down - that they somehow got a real raise in salary? and proceed to piss off every dime.
Who the hell is using so much gas that with prices going from $2.90 to $2.25 per gallon, they’re saving “hundreds of dollars” per month??
Did Welty even think about how dumb this sounds before he made up this lie?
Yeah, okay, maybe an over-the-road truck driver would be “saving hundreds”, but not average people.
You try commuting everyday from Chambersburg to Washington in a Hummer .
OK, I ran the numbers. Hundreds, plural? Well, ONLY if you’re driving a Hummer or similar behemoth. For a typical Hummer on that commute, it comes out to $249/month:
(96mi*2ways*20days/mo)/10mpg*($2.90-$2.25)
But really, there are not that many Hummers on the road to DC, at least not the times I’ve been commuting. There are lots of sedans and SUV’s, things that get 15-25 mpg. That works out to $100 to $165 per month saved. Not insignificant savings, but not enough to send on someone out on a house buying spree.
You have to multiply by two, since there are generally two income earners needed to afford the house.
Mort - I’ve a buddy in Franklin County. He’s a farmer. Drives an F-250, when he MUST. And a small sedan the rest of the time.
Forget the gasoline. The very idea of “commuting to DC” from up there is preposterous, time-wise.
add this to the realtor “HALL OF FAME’
wow they’re dumb hens
…and they can save even more if they just RENTED AN APARTMENT CLOSE TO WORK!
honover, berlin, worchester county are nowhere on the way to the beach
=worthless
What is the deal with people carrying two mortgages? I thought EVERYONE knew that you sell the house you are in BEFORE you buy your next house. Are people so afraid of selling their house and then not having anywhere to live for a few months that they feel they must always buy the new house first? Or perhaps buying the new house is an impulse purchase, and they don’t want to wait for their old house to sell before they get the instant gratification? Banks/brokers should permit a mortgage to be taken out unless the old one is closed out OR the income can justify two mortgages indefinately. Stupid, stupid people. Stupid, enabling banks/brokers. Everywhere I look I see stupid people…
I know a couple in the two-mortgage pickle right now. Believe me, they’re not much fun to be around these days.
I know a couple like that, too. They aren’t being as sociable as usual, so I can’t yet report on further details of their travails trying to sell a NoVa condo as they prepare for their first payments on the overpriced Herndon house they just bought. Ouch. I’m almost waiting to hear them say the old “we’ve decided to rent it out” that I’ve heard from other FB friends who can’t unload their places.
herndonistas’
hope they don’t a kids going to school
Yikes! They don’t have kids now… but they plan to!
No no no…you don’t understand! It is en vogue to say that you’re “trading up.” It IS in fact part of The New Paradigm.
And of course when your dream “trade-up” house hits the market, you must bid first and highest to guarantee your place in FB-dom.
Let me, just for a moment, defend the thinking of someone who would sign a contract for a new house before selling the old…something I did last year (signed for to be constructed house in 10/2004 and sold old house in April 2005). With a 7-9 nine month build timeframe for a typical house, it does make some sense to stay in your current house and try to sell to minimize your ‘homelessness’. In our case, we were able to rent back for a month after closing and move directly from old to new house. Yes, we were lucky, but we also did not go into it with blinders on. We had a realestate agent in November 2004. We began to complete the cosmetic repairs (carpeting, painting) in December 2004. We used a very conservative equity number when calculating what we would have to put towards the new house (50% equity,30 fixed, 5.25).
I will admit that I lost some sleep over the thought of not selling in time as the spring approached (35 days from list to close) and I was extremely relieved as I depositied the equity check in my bank account, but it worked out.
Does this approach have an element of risk..yes. Should one decide to do this lightly..no. But if you understand the risks, work to position yourself well for the sale, and give the house enough time to sell it is a good strategy.
It isn’t a sin to buy a house before you sell yours but, as noted above, you need to be very conservative about what you expect to get from your sale. After all, you are in total control of your selling price. If you’ve been dilligent about what properties have sold for around your area, priced yours at or below those prices and have can take a 10%-15% cut of your price and comfortably handle the new transaction there’s no reason not to buy before selling.
Of course, everything depends on how quickly things can go bad. In today’s instance, things went bad very quickly. I guess the moral of the story is; if your contemplating a major transaction you better get very well informed and be able to afford a high degree of risk over that which you cannot, fully, control (i.e. having sufficient buyers in your market).
I have the new-neighbor (realtor) who is still trying to sell his former home nearby. I think the former place may be on the market a while. Seems like a nice guy. We’ll see what happends.
Maybe they think they got a steal on a new house with $100k in incentives (Shhh… don’t tell the new neighbors/older buyers) from an HB.
They may also be so deluded as to think they can get the same price their current neighbors got a year ago, maybe plus 20% Likely no research done to reinforce that belief. Sad!
This just in from Tucson:
Reality Bites: The Real Estate Agent Edition
http://www.azstarnet.com/business/149037.php
BTW, you’ll enjoy the comments that follow the story.
easiest thing I’ve ever sold- of course I was doing w/o an agent-
I love the picture of Ed Hall and the house he is trying to sell. Looks like a cozy Mexican jail. Sweet.
“The problem is that saturation of the market with new homes isn’t about to stop. Glenn Riddle has only built about 100 of 600 planned homes. Summer-field developer Mark Odachow-ski plans to build its first 300 homes in Snow Hill in the next 15 to 21 months while the entire development is planned to be 2,000 homes.”
So what did Mr. Realtor Guy Kevin White say when you pointed this out to him???
What??? …you did NOT point this out to him??? I thought a good journalist never passed on the opportunity to see someone squirm.
snow hill , md
berlin , md
there’s no there, there
nothing
Anybody see CNN lastnight call the RE market Boom to Bust?
A number of posters comment that they expect a taxpayer bailout. I suspect this crisis is going to be a lot bigger than the S&L crisis. I am curious what kind of number$ everyone thinks would be involved in such a bailout. And if a taxpayer bailout occurs where is this money going to come from? Already stagnating wages? The shrinking savings of Americans? Pile on some more debt financed by China? What if China tires of financing our debt (I think we might be okay though at least until the 2008 Olympics)?
We might have to gut it up on this one.
No bailout. On a national perspective, the numbers of victims are few, dispersed, and perceived as not 100% innocent. Really, the vast majority of the country’s homeowners are not affected. They did not stand to make a lot of money and resent those who did, or thought they could.
Even in those metro areas where things soared greatly (zip codes starting with 9 or 1…), I’m betting the majority of citizens are unaffected by the fallout.
by my guest a ment,
18 million homes sold last 3 years.
say 9 million are 50k underwater,
450 billion lost in thin air to date?
anyone else have an idea?