Pricing Has Become Critical
The News Times Live reports from Connecticut. “In the United States, the housing market is still locked in a slump that began a year ago. In Connecticut, it’s been more of a slowdown than a crash. Area Realtors said they think the market will straighten out this summer, after being overheated for several years, then hitting the wall in 2006.”
“‘There was a hiss in the balloon, not a bursting,’ said (realtor) Betty Hensel in Brookfield. ‘There’s still a good market for sellers who are realistic about it.’”
“Others don’t share Kidder’s optimism, or her good numbers. In Danbury, Sean Hearty, director of the city’s Permit Center, said housing starts are down ’substantially.’ ‘Overall, it’s going down,’ he said of new home construction in the city.”
“Linda Hannah, president of the Ridgefield Board of Realtors, said Realtors are still dealing with a big inventory of homes on the market. ‘We have 317 homes on the market, 24 of those have a bid accepted on them,’ she said. ‘Normally, that number is 200 to 225.’”
“‘There’s an oversupply,’said Realtor Matt Rose Lombardi in Danbury.”
“Hannah said in 2006 an average price for a single-family home in Ridgefield was about $934,000. In 2007, that price has dropped to about $855,000. Hensel also said sellers, who a few years ago could market their homes without worrying about dust or crabgrass, have learned they have to prettify the place.”
“‘You have to put on your best face,’ she said. ‘The house has to look perfect…A couple of years ago, that didn’t matter.’”
The Providence Journal from Rhode Island. “The weekly staff meeting ran long in Coleman Realtors office this recent spring morning. The chief topic was something real-estate agents across the country are grappling with. What to do with sellers who bought at the top of the market but now can’t even get the same price they paid?”
“‘What can we do for them?’ Sue Erkkinen, Coleman’s top seller statewide, says with a sigh after the meeting. ‘It reminds me of the 1980s.’”
“‘A few years ago ‘you’d have an open house and collect five or six offers,’ she recalls. ‘Now we show [homes] over and over and over. Buyers are finding fault with the smallest things.’”
“‘Pricing the listing has become critical,’ Michael Young, a former president of the Rhode Island Association of Realtors, says. ‘With such a large inventory of homes, there is a great deal of competition among sellers. The correct price is the key marketing issue.’”
“In early May, there were 6,085 single-family houses listed for sale on the statewide MLS. For the same period last year and in 2005 the numbers were 5,711 and 3,472 respectively.”
The Telegram from Massachusetts. “Worcester had the third-highest foreclosure numbers in the state, trailing only Boston and Springfield.”
“Worcester had 237 filings for foreclosure in 2003, followed by 308 the following year and 445 in 2005, according to data provided by ForeclosuresMass.com. Last year there were 850 foreclosure proceedings initiated in the city, and the city is on track to pass 1,100 this year.”
“Jeremy B. Shapiro, president of ForeclosureMass.com, said the problem will not get better in the short term, even with government relief efforts. ‘When you look at the increase from last year, it’s astronomically high, and even if it remains flat, it’s still double what we’ve seen in the past year,’ he said.”
“‘I have seen cases where people bought over their heads,’ said Scott M. Hayman, director of housing for the city. mentioning a borrower who should not have been a candidate for a loan, but received one, then took out another to make repairs on the second floor, which was uninhabitable when he bought the property.”
“When higher rates kicked in when the loan reset, the owner didn’t obtain help or work with the lender and was foreclosed upon, he said.”
“Francis D. Paquette, director of the NeighborWorks Home Ownership Center, which provides foreclosure prevention counseling, said he is getting an increasing number of calls. ‘It’s getting to be a rather large problem,’ he said.”
“Mr. Paquette said some lenders were careless in reviewing loan applications, awarding mortgages to clients who would run into trouble when their interest rates adjusted upward. ‘In some cases there were bad lending practices by some lending companies. They probably knew they (borrowers) wouldn’t have been able to make payments down the road, but they got their payment and commissions, and the mortgage has probably been sold a couple of times.’”
“Homeowners trying to dodge foreclosure by selling their property have another problem: A slumping real estate market marked by falling prices and a glut of homes.”
The Record from New Jersey. “The public auction ended as abruptly as the final episode of ‘The Sopranos.’ The developer’s principal admitted the auction was a marketing gimmick, created to kick off a sales campaign for the luxury condo complex on Hoboken’s quickly changing west side.”
“As of a week ago, Remi Cos. planned to put 40 of the 128 units on the auction block Sunday to see what the market would bear. However, by the time proceedings began in a Jersey City hotel ballroom, the list had been cut to 16, and without notice, it was cut to nine after about a half-hour of spirited bidding.”
“The apartments that were sold brought in $3.6 million, about two-thirds of what developers said was their last asking price, but a third higher than minimum prices they had set.”
“About 200 people showed up, and some viewed the sudden end to proceedings as a sign that the condo market is hurting. ‘It’s bad P.R.,’ said Sean Munroe of Ridgewood, who predicted that Sunday’s results would push prices down. ‘There’s a glut of condos here.’”
“Even before the auction was halted, Deedre Miranda, who rents an apartment in Hoboken, had left. Like many of the attendees, she was looking for a bargain, but the bidding was ‘a little past’ her price range.”
So were those 16 condos in Hoboken really bought by the shills in the audience?
Its not helping to spark demand…btw only 9 were ’sold’. Do the math = 9+ 30 = 39 sold out of 120. Not a good number.
Hey, don’t forget that place was sold out until the builder couldn’t deliver on the committed time. Anyone with half a brain got out when it was obvious that prices were coming down.
This sounds like desperation set in, as they went from 40, to 16, to finally 9 condos…
That means nobody really cared, except for those that extinguished one of their nine lives, in buying one.
First mistake was holding the auction in Jersey City. Half of the bidders probably got mugged, or worse, on their way into the ballroom.
Mostly likely you’re right. If the whole thing was a marketing gimmick as admitted, then they would have been sure to have some paid ‘buyers’ seeded in the audience.
Builders are in trouble in the exclusive CT suburbs of NYC. My broker has been sending me list each week of land for sale that was previously held by builders to build spec houses. There about 15 lots in the Westport area alone.
Still the builders want $50K over what they payed in Jan of this year. An acre lot is wishing for $990K so no bargains yet exist. The glut of $2-5m spec homes is breathtaking. One builder told me he won’t budge on price because Wall Street bonuses will bail him out!!
“One builder told me he won’t budge on price because Wall Street bonuses will bail him out!! ”
To paraphrase Gordon Geckko, Greed makes good sport for posters.
The question is what will throw cold water in the face of buyers in this finance-oriented metro to wake them up and have them look at homebuying rationally. The housing meltdown in the rest of the country, and its effect on hedge funds, Wall Street profits and Wall Street bonuses might do the trick.
That means he is counting on nothing really bad happening in the finaincial markets between now and December. Good luck with that.
Area Realtors said they think the market will straighten out this summer….
I’m always amazed that anyone bothers mentioning what the fake-a-tors think. In my experience, they ain’t the brightest bulbs on the string. They can’t tell you how old the roof is or what kind of heating system a house has, but they know what the market is going to do? Puhlease.
Don’t forget the always witty:
“this unit is six years young”
They go to Realtors because they are cheerleaders and their marching orders are to write a story about this, but don’t make it “that bad”. If you read the interview by the economist from MSNBC on Housing Doom, it is an eye opener of how a realist with honesty is looked at and treated in the MSM. These people have to put a positive spin on it to keep those 55% housing isn’t in a slump sheep to keep believing that.
They don’t call it Yellow Journalism for nothing.
(sneaking up behind Betty, bearing a rather large sized pin…)
“‘There was a hiss in the balloon, not a bursting,’ said (realtor) Betty Hensel in Brookfield. ‘There’s still a good market for sellers who are realistic about it.’”
I have friends that just moved to Rhode Island. I recommended they sit out of the housing market for awhile, and then take their time making friends with the REO department of banks. I also directed them to this blog. I hope I have saved them from financial suicide. Both husband and wife said they would rent for a long time.
‘Now we show [homes] over and over and over. Buyers are finding fault with the smallest things.’
Whatsamatter with these buyers? Next thing you know, they wont agree to feed the squirrels!
nothing you’re just a maneguin
5% ? who would pay these dopes
“‘What can we do for them?’ Sue Erkkinen,
And number one, in terms of pronouncability…
“Worcester had the third-highest foreclosure numbers in the state, trailing only Boston and Springfield.”
Its pronounced WUSS-ter.
Yeah, blame us Brits for that
The ‘cester’ bit is pronounced ’ster’, for no apparent reason.
Its from the Latin ‘caster’ meaning ‘camp/fort’. So, any place with ‘cester’ in the name used to be a Roman settlement.
I.E “Leicester” - which should be pronounced ‘lye-kes-ter’ ( and actually was pronounced that way, by some American tourists I overheard once) is actually pronounced ‘lester’
Same with Gloucestershire - not “Glue-kester-Shyre”, but “Gloss-ter-SHEER” (as in ’sheer curtains’, not ’shire-rhymes-with-fire’).
The only exception I can think of is Cirencester - pronounced ‘Siren-Sester”. Go figure.
Also - my personal pronunciation peeve - Greenwich is pronounced “Grinnich” not “Green-WHICH”.
But I digress…..
Yeah. BTW, Amherst, MA is pronounced [@mest] - those who actually pronounce the ‘h’ are recognized as out-of-staters and given a more expensive menu in local bars :).
Question. Does placing one’s home in a revocable trust protect it in the event of a foreclosure in CA? I am noticing a number of neighbors who ATMed their homes showing up in the IE county records as revocable trusts and family trusts.
I’ve never practiced in this field of law, but from what I remember in law school, revocable trusts (even irrevocable ones) don’t really mean much until the asset owner dies. It sounds like people might be lending money to their family members to bail them out of their ATM stupidity in exchange for a claim on the house in the event of the borrower’s demise. At death, I would guess that the trustee can negotiate with the loan holder and perhaps keep the house, whereas without a trustee, the house would end up oin the hands of the loanholder.
I’m not an expert on mortgage law…
But the loan puts the asset (house) as a pledge against missed payments. If the payments are missed… the home is still legally the banks unless the trust pays off the bank.
The only benefit I see is the FB has one more layer of legalese to protect their FICO. But would that really help?
This is going to get interesting… the use of the home ATM will devastate communities. Which is why I smirk at the number of Ferrari’s and Massarati’s on our streets. Every downturn was proceeded but an upspike in Ferrari’s on the road.
Got popcorn?
Neil
Let’s stop calling it an “ATM”. That would imply that the money doesn’t have to be paid back. It’s a loan, not a withdrawl.
I like the term, “Housing ATM” - it’s snarky, implying that the loans would/could never be paid back; thus, for all intents and purposes, they are just withdrawals.
No, it is just an estate planning tool. Avoids probate costs and time, plus there is no public display of assets and liabilities.
This is New Jersey we’re talking about? I thought Hoboken was a national joke where the tires vanish from your car the minute you park it on the street. Who in their right mind would pay $500,000 for a mere 2 bedrooms. Where I live in Ohio, $500,000 would get you 7 bedrooms and 7 bathrooms. Hoboken! I have to laugh!!
Ohh yeah? Well, NJ is #1!
Umm….#1 in waste treatment and toxic dumping sites in the US, the whole state is a super fund.
Actually, Hoboken has been improving for 15 years or more, especially the first 10 blocks from the waterfront/public transportation hub/main commercial street. West side is much less desirable, but I lived on the Jersey City waterfront and wished I could afford Hoboken.
Not that it isn’t in a bubble - it is. But don’t think of it as a 2 bedroom in no man’s land. Think of it as a two bedroom that is a 20 minute walk from where you actually want to be.
And park in Hoboken on the street? Park? You can’t find a parking spot on the street in Hoboken. If anyone is stealing tires it is statistically unlikely that they will get to your car any time soon. I always parked out on Observer Highway at the southermost boarder of Hoboken and no one ever took my tires or anything else off my car.
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“‘A few years ago ‘you’d have an open house and collect five or six offers,’ she recalls. ‘Now we show [homes] over and over and over. Buyers are finding fault with the smallest things.’”
“‘Pricing the listing has become critical,’ Michael Young, a former president of the Rhode Island Association of Realtors, says. ‘With such a large inventory of homes, there is a great deal of competition among sellers. The correct price is the key marketing issue.’”
Wow… even as we’re now in “Fear” by my estimation… there is still an amazing amount of denial.
Buyers are picky… sure! The prices force them to stretch a ridiculous amount. So they want a great condition home…
Now… if a hedge fund fails, what’s the wall street bonus?
Interesting times ahead.
Got popcorn?
Neil
There are still lots of people with money around. I perused through the county database in my neighborhood and fully half of the homes are paid in full. You can’t underestimate how many people inherit paid off houses and live in them. So figure 50% of houses are paid off, and 80% of the mortgages of the remaining 50% are easy for their owners to pay, so you end up with 90% of the houses in good shape and maybe 10% that could face foreclosure. The problem with the internet, and this blog in particular, is that you are “self-selecting” the information to match your belief system. A true inquiry involves balancing both sides of the coin. A lot of people who post here are bitter because they cannot afford a home. I don’t see a housing correction helping those folks very much. Taxes and insurance alone price many people out of owning a home.
Yes, we are indeed bitter renters that are unable to afford a house. Instead I go to my local whole foods once a week to splurge on good food, eat steaks every couple of night done on my coal grill, have 2 collector cars, and I am free to roam around the country if I decide to move, without having an albatross hanging around my neck. No, owning a house is for the birds, or if you are rich enough to hire out the maintenance and upkeep. If not renting provides the maintenance and upkeep of the house on a third party….
Bitter, Nah, really enjoying life while watching my landlord at 2:00 am clening out my clogged drain.
Cheers.
Oh, BTW did I mention that we actually have savings… Viva la vida loca!!!
WE ccurrently owe around $20,000 on our house. I would like to sell next year to get out of the headaches of ownership and to be free to move whenever we like. I don’t want to be responsible for repairs when I’m 80. I watched my father-in-law od that. No thanks.
My landlord just spent most of his Sunday yesterday fixing my toilet while I went to the beach. Renting never felt so good.
Nice idea, but like almost anything sold on an open market, housing prices are set at the margin. If everyone sold at once, housing would immediately be worthless. The price is set by the dynamic of how many are selling and how many are buying, moderated by the available options (such as renting costs and income).
What also is interesting is that if people *are* paid off in full, and they want to cash out of their long term or inherited investment, they can undercut other sellers and move to a palatial setting in a lower cost area (such as most Northeasterners used to do by moving to FL which used to be a crazy ass cheap place to live until recently). Having most people paid off gives them as sellers a lot more flexibility when they want to retire or cash out.
I agree to a certain extent, but that “10%” will affect the other 90%’s price if they sell.
So if the only housing is selling at 30-40-50% off the peak, doesn’t that set the Market price?
Also many of those homeowner with fully paid mortgages would sell at 40% off because they would still make a profit. my landlord could sell at 70% off peak and still make a nice profit…but he owned the house for 40+ years and not had to make many improvements. Plaster walls are nice and quiet.
I’m guessing you need to read this blog a little longer before you attempt to skewer it’s posters. ‘Bitter’ is a funny term if applied here, and though the use of self-selected data points is a real concern, the information stream out of this blog has virtually nothing to do with buying a home. It deals with the industrial-sized process of the current money-laundering scam known as the housing bubble.
which is a symptom of the bigger debt timebomb
Judging from the posts here, I’d imagine that there aren’t many folks here who can’t afford a home. But since we’re making assumptions, here, I’d assume that the esteemed “George c” is either an elderly man who lives in a neighborood of oldsters who have paid off their houses in their old development or is the fortunate only-child heir to one of them. Perhaps he is looking to sell and is disappointed that he is unable to command the high price that he mistakenly believes his house is worth. And he’s stumbled on this blog in his quest to determine why he can’t sell. Don’t blame me, George c, neither of my homes are on the market competing with yours….
George,
Many people here own their own homes. If you spent any time at all reading here, which maybe you have, you would realize it is more about the economic phenomenon of the housing bubble, its consequences, and how it is to evolve and unravel, than it is about “bitter renters” venting.
The overwhelming evidence, at this point in time, suggests that housing on a national scale is overpriced due to loose credit, and that a price correction is underway.
Remember also, that the housing market is set on the margins. The issue is not whether 90 percent of the houses are in good shape or not, but to what degree the 10% of borrowers who will be foreclosed on will re-adjust the market.
“So figure 50% of houses are paid off, and 80% of the mortgages of the remaining 50% are easy for their owners to pay, so you end up with 90% of the houses in good shape and maybe 10% that could face foreclosure.”
George, you could have made that argument during the last downturn…but it happened anyways. Sure, the economy was in the tank then, but not everyone was living in SoCal and being employed by aerospace companies. Why did prices go down (and by so much) back then. After all “50% of houses were paid off, and 80% of the mortgages of the remaining 50% were easy for their owners to pay”.
Right now we have skyrocketing notices of default, and we supposedly have a gangbusters/Goldilocks economy. In other words, WITH EVERYTHING PERFECT (growing economy, low unemployment), WE HAVING SKYROCKETING NOTICES OF DEFAULT.
“A lot of people who post here are bitter because they cannot afford a home.”
As well they should be (bitter). However, a lot of us own a home (or two or three, or apartment buildings, or are RE moguls in the true sense), and STILL we have negative views on real estate prices.
In a way, I am bitter, because I would (eventually) like to move out of the house we are renting and into something we can add to and change as we see fit. However, I am saving $2000 a month renting vs. buying (assuming a fixed rate loan), even taking the tax consequences into account…so i am not TOO bitter.
And yes, I can “afford” to buy a house right now (and we currently own two others). However, I don’t want to try to “afford” at these prices. I don’t *have to* buy right now, or for a great while.
george,
can you post information that would conclude otherwise? newspaper articles, television, NAR material, etc. Present the other side of the story to us ignorant fools. Nevertheless, I see so many house for sale and for rent signs that it speaks volume. Price correction is not only long over due but is a good thing. First-time buyers, like myself, can actually afford a house/condo that is not 6x or 7x our income or in the ghetto. Yes, to live in too! Not as an investment or a get-rich scheme, but to live in. And actually have money left for you know gas, food, the usual.
Price correction is not only long over due but is a good thing. First-time buyers, like myself, can actually afford a house/condo that is not 6x or 7x our income or in the ghetto.
I’m still waiting to buy my first home, and I agree completely. Hubby is chomping at the bit to buy, but prices are way too high. If we were to buy what we’re renting now (1 bed with an office, 5 minutes from the bus), our housing costs would triple. I don’t want to raise a child in a 1-bedroom condo. I don’t want to commute 2 hours (each way) to work. I’ve lived in the ghetto, and I’ll live on the street before I do that again.
Dear George C,
Wrap your head around this George C…. I can write a check for any modest house anywhere between the pacific and atlantic and I’d be willing to be there are many more here who can do the same. In a typical RE bull fashion, you fail to understand the concept that if any price of a consumable exceeds the price of inflation for any length of time, it becomes unaffordable and ultimately has no market. This errant “bitter renter” theory doesn’t hold water in that realtors have plain run out of buyers and those who didn’t buy have the means to buy but refuse to engage in herd market psychology….
We choose our articles? We look for only the negative? Let me guess, you also believe that there is a ton of good coming out of Iraq and the media is only reporting the negative?
We talk about trends and the obvious perfect storm coming in real estate and there is not enough people with money to absorb the inventory or to qualify to get the loans….so that is going to be a big problem for the RE business. There is no denying that, facts are facts.
George C,
I simply choose not to over-pay more than a house is worth. It’s The Price Stupid. This is why I have dropped out of the buyer pool. These housing busts take years to play out. I suspect it will be a long while before I jump back in, while I wait for the market to sort itself out, without any help from me. Revision to the mean is called for.
I bid on three houses in 2004. They were each about 1.5-2x my annual salary, which was the most I was willing to pay. I lost out on all three due to bidding wars, and I am VERY THANKFUL today.
George C
I knew that this housing bubble would set the stage, for what would soon be a much bigger saga…
In some ways, I feel like a later day Pliny the Elder, who watched the destruction of Pompeii & Herculaneum, from afar.
“Soon afterwards he received from Vespasian the appointment of praefect of the Roman Navy at Misenum. On August 24, 79 A.D., he was stationed at Misenum, at the time of the great eruption of Mount Vesuvius, which overwhelmed Pompeii and Herculaneum. A desire to observe the phenomenon directly, and also to rescue some of his friends from their perilous position on the shore of the Bay of Naples, led to his launching his galleys and crossing the bay to Stabiae…”
http://en.wikipedia.org/wiki/Pliny_the_Elder
George C,
You sound old enough to know better. Common sense is an uncommon thing, so yes, this blog appeals to a select crowd.
Do you follow the news? If so, could you comment on the fact that recently, foreclosures in MIchigan, Indiana, Nevada, Florida, California, Massachusetts, and Arizona are increasing monthly at exponential rates? That 84 sub-prime lending businesses have imploded nation-wide? That existing home sales are sliding to the lowest level in 15 years? That Bear Stearns is working overtime to shore up a mortgage fund with 3.2 billion based on 2006 mortgages that have already soured? That the dollar is tanking?
That cumulatively Americans owe credit cards 9K each. That the deficit is soaring?
And you wonder why we worry?
Just call us patriotic Americans, concerned about the economic health and prosperity of the country.
Well I own my home and am aware of confirmation bias (and there’s some of that here for sure) but I wouldn’t bother with this site if I didn’t routinely find NEW information and ideas here.
Guess I’m a moron.
George, while it is true that many of us are bearish, it is not because we are self-selecting, it is because we are smart enough to have read the tea leaves.
Most of us own. And most of the renters here are so by 1. choice or 2. they choose not to flush $$$ down the drain at this point in time.
Most people here are probably the smartest person in their respective rooms. You do not have to agree; however, don’t think that we self-select anything.
Look at the dolts in the articles Ben posts daily- truly simpletons all - very few exceptions. why should I agree with a buffoon? To be fair and balanced?! lol
The next 2 to 5 years, minimum, are going to be a very brutal “Learning Experience” for many of the Greedy…but STUPID that Gambled with Scared Money to make their mark in the world.
A whole lot of Fools are going to be Eaten Alive
“‘Pricing the listing has become critical,’ Michael Young, a former president of the Rhode Island Association of Realtors, says. ‘With such a large inventory of homes, there is a great deal of competition among sellers. The correct price is the key marketing issue.’”
Hmmm. If all it takes to sell a house is correct pricing by the seller, then what do they need RE agents for? To bake the cookies?
Most RE agents have never seen anything but a high-flying market, and now they have no idea how they’re supposed to react. They’re spinning themselves in circles. They keep telling us the market has bottomed, but then they tsk-tsk sellers for not pricing their homes more realistically. Well, if the market has bottomed, why should I cut my price again?, a seller is asking himself.
Then RE agents essentially say the key factor in selling the house is pricing it right. If it’s that easy, a RE agent is superfluous. Of course, then the REIC pulls out the old saw that “you’re leaving money on the table” if you do a FSBO.
RE agents and their fellow REIC spinners are spinning themselves right out of a profession. They will soon be obsolete.
– The Judge
The thing to remember is most of us underestimated to power of the bubble as it inflated, and unless we are all very careful, we will do the same as it inflates.
The depth of this plunge in prices will shock most. When you find yourself thinking this cannot go any lower, wait 90 days. More than likely the price drops will have started again.
And don’t forget, the media, government and the realtors are going to call any positive the bottom. They will be wrong.
Stocks Rebound After Existing Home Data
http://biz.yahoo.com/ap/070625/wall_street.html?.v=22
“The data shows the housing sector is still sluggish — existing home sales are taking place at the slowest pace in four years, housing inventories rose by 5 percent to the highest level since 1992, and the median home price fell for a record 10th consecutive month.
However, a tepid housing market is something stock investors have gotten used to, and meanwhile, jitters about subprime lending kept bond yields from resuming their surge.”
I now realize that I live in Bizarro World. Bad news lifts the stock market. Good news lifts the stock market. No news lifts the stock market (because, well, at least there wasn’t any bad news).
Coming bubble anyone?
“Bizarro World.” LOL. That’s about as good a term as I’ve heard.
If you’re not familiar with Bizarro World, here’s an introduction. It’s really a very helpful analogy to what’s going on economically.
“Weakest home sales in 4 years
Slowest pace since 2003 sends glut of homes to 15-year high; prices slide as buyers shy away from battered market.”
OK, how’s the NAR going to spin this?
Like they always do. Set the ‘normal’ market point to a year before the weak point, i.e. ‘the market is returning to the normal market of (insert year). We are just fine.’ I’ll bet 2002 was a great year, and NAR has the data to prove it. And 2001, 2000, 1999….
OK, how’s the NAR going to spin this?
“It’s a great time to buy! (If you’re stupid) Get in before interest rates go any higher” (and prices come down even more)
Here’s an excerpt from his watch site:
“Here’s an example of spin, stupidity, lies, distortion and, well, just outright laughable idiocy from Mr. Yun, on current rising home prices (really, he said it):
“We continue to experience a temporary distortion in comparing median existing home prices’, said Yun. ‘Because the sales volume has shifted from many high cost areas to moderately priced markets, we’re not getting a true apples-to-apples comparison. When you look at other measures, such as this week’s price index from Freddie Mac which is based on repeat sales, overall home prices are rising slowly.
Spooky.”
Here’s an excerpt from his watch site”
“Here’s an example of spin, stupidity, lies, distortion and, well, just outright laughable idiocy from Mr. Yun, on current rising home prices (really, he said it):
“We continue to experience a temporary distortion in comparing median existing home prices’, said Yun. ‘Because the sales volume has shifted from many high cost areas to moderately priced markets, we’re not getting a true apples-to-apples comparison. When you look at other measures, such as this week’s price index from Freddie Mac which is based on repeat sales, overall home prices are rising slowly.
Spooky.”
Here’s an excerpt from his watch site”
“Here’s an example of spin, stupidity, lies, distortion and, well, just outright laughable idiocy from Mr. Yun, on current rising home prices (really, he said it):
“We continue to experience a temporary distortion in comparing median existing home prices’, said Yun. ‘Because the sales volume has shifted from many high cost areas to moderately priced markets, we’re not getting a true apples-to-apples comparison. When you look at other measures, such as this week’s price index from Freddie Mac which is based on repeat sales, overall home prices are rising slowly.
Spooky.”
I’ve followed what started out to be a 400 house spec project by a large local builder in the Antelope Valley in L. A. County. They stopped expanding at about 75 homes built in March. Last night I drove through the area of smaller homes that were priced around $300k. Out of 47 completed houses, it appeared that 19 were occupied. These houses have been completed since April, so I assume that none are selling. They are very cheaply built, nothing very nice about any of them. I figure they are overpriced at $150k. JMHO
“The problem with the internet, and this blog in particular, is that you are “self-selecting” the information to match your belief system. A true inquiry involves balancing both sides of the coin. A lot of people who post here are bitter because they cannot afford a home ”
Well, George, I read your comment & understand your point of view but I want to take a moment to give you some insight into why myself ( and perhaps others) enjoy this housiung blog:
The internet really gives a quick, unfiltered feedback of situations. Housing, cars, art, gossip, Paris Hilton, whatever … yer gonna get peoples unfiltered, uncensored remarks. That’s almost impossible in this age of sponsership beholden media, which HAS to limit accurate feedback to a few letters to the editor or ombudsmen section.
That type of info is invaluable, especially when making some of the most important financial decisons of the average joe’s life. The info I read on this blog starting a few years ago confirmed my suspicion about the craziness of this whole housing madness. Some also find value, some don’t. Depends on your perspective & interests in life.
But George, speaking for myself, the biggest thing isn’t that I was forced to rent for years while deciding to refrain from the housing hysteria, no George, the thing that chaffs me the most is the smug, condescending, remarks & attitude from people who decided that they were somehow a better person by simply buying a house, and had no hesitation, indeed enjoyed heckling rentors as some sort of sub-class of humans.
THAT’S what I despised most about the whole housing bubble, to be honest with you George. The snotty attitude. If housebuyers would have just been gracious about it all, I would not have the lingering resentment & sense of
“comeuppance” watching the same jerks losing their house when they never should have bought them in the first place.
One final note to you George, is this: many ” bitter renters ” CAN buy a house, but choose to …wait for it …. wait for it … exercise FINANCIAL PRUDENCE buy NOT becoming a slave to a huge debt just because everyone else is acting like a mindless lemming !! If you have to drive 2 hrs each way to afford it, never have free time to enjoy it, and worry constantly about it, where is the advantage to owning?
Summary: Watching greedy people drive up the price of housing just to speculate, then get caught unable to make a profit after boasting to peers. That’s not bitter renters, thats sensible people shaking their heads at reckless greed & foolishness.
“But George, speaking for myself, the biggest thing isn’t that I was forced to rent for years while deciding to refrain from the housing hysteria, no George, the thing that chaffs me the most is the smug, condescending, remarks & attitude from people who decided that they were somehow a better person by simply buying a house, and had no hesitation, indeed enjoyed heckling rentors as some sort of sub-class of humans.”
Keep on preaching, brother.
My college buddy bought a condo after graduation. I moved in to save a couple hundred bucks each month, but I tired of hearing his smug comments about him being an owner while i’m a “poor renter missing out on the housing boom”. I then saw my rent payment diverted to buying his new SUV and decided it wasn’t worth the agony to save a couple hundred each month and moved out on my own.
He was able to time the market well and make a $50,000 profit after buying a place I thought was overvalued by about $20k. He immediately turned around and sunk the money into a 4/3 in the suburbs over an hour away from work. I continued to hear the smug comments like ‘you’re wasting money on rent, etc’.
Now the comments have stopped, now that his neighbor’s same house is priced more than $50,000 less than he paid for his house, and has been on the market for over a year with no sale in sight.
I get no personal satisfaction from this - I only report because people who assume themselves to being real-estate geniuses and spout of lines like ‘re never goes down’, etc, are finally getting comeuppance.
I plan on leaving MA anyway, and I’ve seen foreclosure up close (Mom lost the house after she and Dad divorced) so I’m appy to rent. Articles like this one made me more determined not to buy. It’s easy to praise high home prices when you already own a home.
Am I a bitter renter? You bet I am! Based upon housing prices in the area when I moved to Maryland back in 2000, I had a downpayment and everything saved up by 2003. Too bad the dang Bubble was in full force by then. Prices were going up fast and I could never catch up. So, here I am, 4 years later, still stuck in a mediocre apartment building inhabited mostly by various dimbulbs and slobs. Quite frankly, I am sick of it.
This Bubble infuriates me because it was all greed and stupidity, and while the media prattles on about the bums who are losing their “investments” because of their own mistakes, they never bother to interview honest, hard-working people like me who have been completely priced out of the market. As usual, hard work and prudance make you a pariah and nobody cares what happens to “those” people. I could “get on the debt train” like the rest of my overleveraged coworkers, but I am not that stupid… so here I wait… and wait… and wait… for prices to return to being in line with salaries.
I agree with Aqius about how much the attitude problem of the idiot “homedebtors” contributes to my enjoyment of watching them get what they deserve. For the past 5 to 7 years straight I’ve had to listen to the yammering of fools with the financial sense of lemmings about: What house they bought, then how they had to sell that house because it was too small (3,000 square feet for 2 adults and 1 baby) and buy a BIGGER house (4,000 square feet) because they need more room, how everyone should buy a house, how “it’s different here” and “prices don’t have to be based on salaries,” and how “renters are losers” and so on. Between that, and listening to them run their mouths about their $50,000 cars, their vacations, their McMansions, and then their complaining about “not having any money.” I really have no sympathy for them. These types make twice what I make (2 incomes) and have saved NOTHING and are home-debtors, but to them, I am the “sub-human” renter.
So, yes, I am bitter, and with good reason.
Historic mega housing boom becomes historic mega housing bust. Accurately described without the use of the word bubble or balloon, to ease your understanding.
Evidently in Silicon Valley - contrary to popular belief that people are educated here, thus should know better - people are still buying up a storm…………and the prices are staying flat and even increasing. This is truly depressing, because I don’t want my kids even considering paying $700,000 for a 3 bedroom ranch style fixer upper. Maybe an exodus out of the valley instead?
The price declines in the Bay Area are rolling closer and closer to the heart of silicon valley. It’d be neat to have an animated map showing housing price yoy changes from 2000-2012 to watch the bubble grown and pop.
Pondering the Mess stop being angry! it’s not healthy for you. You’ll have your time to talk to them about:
1. how rents are going down… thanks to the fact that home prices are going down (in a year from now)
2. how difficult is to buy given that owners are desperate to sell, too much stuff to shop around (as we speak)
3. how difficult is to say no to a homeowner friend that begs you for a loan (it already happened to me with an ARM friend who bragged about his new, although ephimerous, riches)
buying or renting is a personal choice, like religion, and should be respected. people don’t seem to understand that there’s no way you can get rich in the same way as ten million others are trying to do. there’s too much catching up with jones in this society.
For sellers all you have left to sell your property is the price point of it. The buyers don’t care about your new steel kitchen anymore or your one of a kind floor or countertops they want to know if they buy your home what can they get for it in the future.
Look at your home, if you have the same or close to it every third house for example take the last home like yours to “close” and list yours below what that house sold for. At least you will get looks, but trying to sell your home for 50K or much more then the last comparrable homes to yours is suicide in this climate of real estate, the only hope is pricing to get your home sold and on to living life again.
A unsold property can cause you health and realtionship problems it isn’t worth it, cut your profit or loss and get from under it?
George, All your home are belong to us.
Julia: Hehehe… interesting ideas!
I am just getting tired of waiting. I have no illusions of housing being some sort of path to riches or anything else like that. I just would like a place to call my own: a place for my garden, and place where I could plant a few trees, and a place where I don’t have to live elbow to elbow with slobs, noisy bums, and dimwits.
Prices are slowing heading down, but the wait is so frustrating. I am also concerned that Maryland’s proximity to DC will lead to some sort of propping up of the Bubble - endless drones from DC buying up all the houses or something… I don’t know, but the longer the Unwinding takes, the more time government has to muck it up for us “evil” savers who dared to live within our means and not get on the debt-train.
Pondering the Mess, my wife and I live in the D.C. area also, and share your frustration. In our case, student-loan debt and job troubles prevented us from getting into the market while prices were sane. I eventually started researching the bubble when I first learned about interest-only loans and wondered “what kind of idiot would get themselves into something like that?” It really did seem like we had missed the boat, eh? As it turns out, all we missed were seats on the Titanic. Relax, things will come around, and those of us who are financially responsible will come out ahead in the end.
“Area Realtors said they think the market will straighten out this summer”
In the Land of Oz
Glad to have found this article. A guy I work with was at this Hoboken auction and was one of the few people who actually bought, from what I understand he bought a place for under $400K but I don’t know what the details of it are. I honestly have no idea whether he got ripped off or not but he isn’t the sharpest tool in the shed and this was his first ever real estate purchase. My guess would be that he overpaid considering there are so many very experienced real estate investors in the NYC area and none of them were bidding against him.