More Of A Correction Than A Catastrophe
The Journal News reports from West Virginia. “Amid the backdrop of continuing gloomy forecasts for the housing market, a group of more than 25 local realtors, builders and financial institutions gathered Sunday in Martinsburg and Shepherdstown for potential homebuyers to take advantage of a one-day super sale. The event showcased homes, townhomes, land and foreclosures priced to move.”
“Those properties real estate agents showed Sunday were set at the absolute lowest prices. For example, one deal saw up to $100,000 off of a lot in Shepherdstown, while some houses listed in the $225,000 range were being offered for as as low as $169,000.”
“‘I think anything you do is better than doing nothing. In this market, you’ve just got to do something. You’ve got to make it happen,’ said Realtor Tim Hafer, who works in Martinsburg.”
The News Herald from Ohio. “The housing market is hurting from foreclosures in suburban and rural Geauga, Lake and eastern Cuyahoga counties, but not as overwhelmingly as in urban and inner-city areas like Cleveland.”
“Cuyahoga County has recorded 10,000-plus foreclosures so far this year. About 5,300 of those were in Cleveland and 3,800 in its inner suburbs, including Euclid. The Sheriff’s Office said such sales reached 7,461 in 2005 and 10,216 in 2006.”
“‘In 2002, 2003, 2004 and some of 2005, when the housing market was really booming, people were put into a house that they really couldn’t afford,’ said County Auditor Tracy Jemison. ‘Lending institutions were coming up with loans that were easy to make. The housing market stalled, and now, people are stuck with homes and loans they can’t afford.’”
“‘These people were literally afforded more loans than they could afford. That’s had a lot to do with it. It’s really sad,’ said Clerk of Courts Denise Kaminski. ‘We created monsters who wanted only what they want. Unfortunately, the banks were going too far.’”
“When it comes to building a new house, timing can be everything. Just ask Grayson Alexy, who last year started construction on his third new home - this one in Kirtland.”
“‘I made the decision to build a home in Lake County probably 18 months ago, and the economy 18 months ago isn’t the same as it is today, Alexy said.”
“Alexy could have decided to purchase an existing home, but based on timing, he decided to build instead of buy. ‘Would I build a new house right now? Of course not,’ Alexy said. ‘There’s a surplus, and I could probably buy a home cheaper than I could build one.’”
“The dip in housing starts can be attributed to an oversaturated market, said David Payne, VP of Chardon-based Payne & Payne Builders Inc. ‘I think that the market got ahead of itself for a couple of years in terms of new buildings,’ he said, referring to 2003 through 2006. ‘There was an increased level of activity locally, apparently beyond what might have been needed.’”
“‘Much of it is attributed to overbuilding - it was easier to obtain funding a few years ago, said Dan Tasman, principle planner for the Lake County Planning Commission.”
“Houses were being built, and bought, which led to prices going up - but not any longer. ‘It fell like a house of cards, and now you’re seeing home prices fall dramatically in those areas,’ Tasman said, ‘but Cleveland never got that high.’”
From WBKO in Kentucky. “The collapse of risky loans has set the housing market on its ear in some parts of the country. The ripple effect can even be felt here in South-Central Kentucky.”
“‘Guidelines are changing daily. Programs available yesterday will not be available tomorrow, explained Mark Vaughn is a mortgage lender at Citizens First Bank.”
“Realtor Jennifer Misener admits buyers are aware of the turmoil. ‘We do find that buyers are a little more apprehensive now due to the national media attributing this to a sub-prime market, but honestly our market is still very good,’ Misener assured.”
“Economists caution against overweighting the importance of the housing sector on the overall economy. ‘I would argue this is more of a correction than a catastrophe,’ said Dennis Wilson, a WKU Economy professor.”
“The biggest problem is concentrated in seven states–Michigan, Ohio, Indiana, California, Florida, Arizona and Nevada. ‘Over the last eight years you’ve seen real estate prices go through the roof. So to get people qualified to get in those houses, they had to force them into these huge mortgages,’ Wilson explained.”
From KFVS 12 in Missouri. “If you’re trying to sell a house right now you know the market is in a slump and according the the National Association of Realtors, things are expected to get worse in 2008.”
“Record numbers of people are losing their homes to foreclosure because they simply can’t afford to make the payments, but there are some things you can do to avoid foreclosure and to get back on track after one.”
“‘Lenders started getting creative in the last few years because the housing market was so strong,’ said Tammie Goodson, a VP of First Missouri State Bank in Cape Girardeau. ‘Do you ever remember seeing this many foreclosures in your career? No. And we bankers blame it on the sub-prime lending markets.’”
“It’s everywhere. California, Florida and Ohio have the highest foreclosure rates. Stockton, California is the worst top 100 city in the United States for foreclosures with 7000 filings, up 465 percent from last year. Memphis is 14th on the list, St. Louis is number 56.”
The Wichita Eagle from Kansas. “A once-hot corner of the local real estate market has grown chillier than the prairie wind in November.”
“Investors from California, Florida and other warm states used to love Wichita’s duplexes, condominiums, fourplexes and small apartment projects as low-risk, steady-return investments.”
“But with the popping of the housing bubble — most notably in California and Florida…small-time investors from out of state can no longer afford investment property in Wichita. ‘Mom and pop are out of the market,’ said Wichita real estate broker Rod Stewart.”
“Stewart said he did as many deals in the spring as he has ever done. Then the phone stopped ringing. ‘Since May 17, I haven’t made a nickel,’ he said. ‘The market has cratered and burned.’”
“The number of building permits for duplexes has fallen from 36 in the first 10 months of 2006 to 27 through October of this year. As a comparison, nearly 1,400 new single-family homes were placed on the market in the first nine months of 2007.”
“Broker Kirk Short specializes in channeling California investment money into Wichita projects. He said the biggest hurdle is that banks have sharply tightened credit requirements on California investors. Seasoned investors now have to put down 20 to 30 percent of the purchase price or have higher mortgage insurance.”
“Short said that in one twin-home project in Junction City he has marketed, half the units are unsold because the buyers couldn’t get financing. ‘They can’t close,’ he said with disgust. ‘Half the sales in that project are gone because they can’t close.’”
“Agent Brandon Tidemann specializes in matching investors in search of stable cash flow and steady appreciation with small projects. Most are people who have sold out of riskier markets and want to protect their gains with property that won’t fall in value.”
“There aren’t just a lack of buyers, he said, there also is a lack of good properties to sell. ‘There’s a lack of buyers and a lack of sellers,’ he said. ‘For the last six months I haven’t seen any good, quality product out there to buy.’”
‘one deal saw up to $100,000 off of a lot’..West Virginia
‘In 2002, 2003, 2004 and some of 2005, when the housing market was really booming, people were put into a house that they really couldn’t afford…Would I build a new house right now? Of course not,’ Alexy said. ‘There’s a surplus, and I could probably buy a home cheaper than I could build one.’ ‘Much of it is attributed to overbuilding - it was easier to obtain funding a few years ago, said Dan Tasman’…Ohio
‘Lenders started getting creative in the last few years because the housing market was so strong,’ said Tammie Goodson, a VP of First Missouri State Bank in Cape Girardeau. ‘Do you ever remember seeing this many foreclosures in your career? No.’
‘Investors from California, Florida and other warm states used to love Wichita’s duplexes, condominiums, fourplexes and small apartment projects as low-risk, steady-return investments. But with the popping of the housing bubble — most notably in California and Florida…small-time investors from out of state can no longer afford investment property in Wichita.’
‘nearly 1,400 new single-family homes were placed on the market in the first nine months of 2007. For the last six months I haven’t seen any good, quality product out there to buy.’
These are good examples of how the housing bubble is manifested in many different forms. I had a poster just the other day say Ohio saw no bubble. Then what is this 2002-2005 boom the reporter references? It is concurrent with the peak of the bubble elsewhere. And why so many FBs?
If a lot can be cut by $100k in West Virginia, there was obviously a bubble there..
In Missouri, lenders got creative BECAUSE the market was so strong?
And out-of-state buying in Kansas spurs over-building to the point where there aren’t any returns-on-investment? And if these people can’t come up with 20%, weren’t they probably doing 100% loans all along, and therefore speculating on the cheap?
Come on main-stream media, this isn’t that hard to see.
I heard one of those news shows last night still using the phrase “soft landing.” They would be better off saying nothing.
Yeah, soft landing, “whatever”. Prices can drop sharply from 30,000 feet and taper off at “landing” leading to a “soft landing”. I love this RE-tard speak.
“I had a poster just the other day say Ohio saw no bubble.”
I think I was the one who said that. IMHO, yes there was a bubble in Ohio, but only for new or nearly new construction — basically the standard HOA McSpecVilles. For example, rent on a 2 bed townhome is ~$750, cost for new 2 bed townhome is $100K, ratio 133, not too bad for a bubble, and this is a part of Ohio with good jobs.
Compared to California and Florida, existing housing was just frothy. And you can still get ghetto cottages reasonably. Cleveland is more a poster child of job loss, not housing mania.
I was the one that said not much bubble in OH and you are correct, I was referring to older homes. We bought there last year. 1800 sq. ft ranch style on 2/3 acres, 2 car garage, 1600 sq ft basement in older country club area. Had been maintained and infrastructure updated, but needs cosmetic update. Pd $95K. There had not been so much uptick there because of the bad economy. The housing cost to income ratio is great if you are a professional. Everything there costs less.
Wow, now that would have run upper 200s low 300s here in Missoula.
So right Montana: We started looking in late 2005 for houses under $100K anywhere. Started with NYT article about upstate NY. We discovered there are zillions of houses spread all over country even at that time under $100K. We were looking for low overhead so wages didn’t make so much difference. Check out oldhouses.com - for someone in CA it was a real eye opeer.
There was no bubble in Cleveland in the sense that for existing houses prices have been flat for the last almost 10 years. There certainly was no soaring build up of prices.
However if you built a new house since the start of the century, and paid over 600k for it, you will probably lose a sizeable chunk if you sold now.
“Economists caution against overweighting the importance of the housing sector on the overall economy. ‘I would argue this is more of a correction than a catastrophe,’ said Dennis Wilson, a WKU Economy professor.”
“The biggest problem is concentrated in seven states–Michigan, Ohio, Indiana, California, Florida, Arizona and Nevada. ‘Over the last eight years you’ve seen real estate prices go through the roof. So to get people qualified to get in those houses, they had to force them into these huge mortgages,’ Wilson explained.”
Those mentioned states ONLY account for about 93 million people, which is about 1/3 of the entire US population. And those are just the biggest problem areas. Nothing to see here. Just a correction according to the prof. Please move along.
Where do they find guys like this. Your point about the population is great. The other part of it is, Michigan, Ohio and Indiana didn’t have run ups in price like there were in California and Florida. Desptie this their markets are still getting killed with foreclosures. So many people are invested in the notions that “real estate is always a good long term investment” and “all real estate is local” that no matter how much evidence to the contrary is presented they can not be convinced.
Yea, the SoUtah real estate market was suppose to be “local” also.
Driving back from the Post Office Saturday I saw it. A white sheet of paper taped to the front door of a house. The paper listed the following info: “Trustee sale Dec 4th at the Washington County Courthouse”….. “Must have a $5000.00 Cashier’s check, etc…”.
This house was built last year and rented after the builder couldn’t make the sell. This house is one of four built next to each other (all built last year) and placed on the market for sale. After over a year, one is still for sale, the other is posted for rent and the last is being rented off and on.
Michigan, …. didn’t have run ups in price like there were in California and Florida.
Depends on WHERE in Michigan. The tourist areas - the dunes on Lake Michigan - went through an enormous bubble caused by 2nd home buyers.
Foreclosure rate and the amounts in default on the 2nd home toys are now staggerring - $300,000 in defUlt, $575,000, $780,000 - and this in area where the median household income for permanent residents range from $39,000 - 62,000.
Southern 1/2 of the lower penninsula has a high foreclosure/default rate due to job losses.
Nothern 1/2 of lower penninsual has a high foreclosure/defualt rate due to 2nd home buyers from Ohio, PA, IL, WI etc defaulting on their resetting ARMs.
No runup in Grand Rapids. I was from CA (92677) and helped clean out and sell Mom’s house 49506 in 2003. I was very aware of the bubble CA was in and asked the listing realtor was the situation similar in MI? She looked at me like I was from Mars………
I agree Lake Michigan property got bubbly.
‘I would argue this is more of a correction than a catastrophe,’ said Dennis Wilson, a WKU Economy professor.”
Oh Denins, it is such a bad idea to say things like this -before- the black Friday. What are you going to do when BF is a flop?
Why wouldn’t sheeple buy in Shepherdstown?
“Those properties real estate agents showed Sunday were set at the absolute lowest prices. For example, one deal saw up to $100,000 off of a lot in Shepherdstown, while some houses listed in the $225,000 range were being offered for as as low as $169,000.”
Wow! Throw the economics books out the window. Sellers can now set market prices without any input from buyers. I think we should call this the “Seller’s Floor” Theory. It is defined as the seller’s absolute lowest price where someone has to buy it for no less than that price. Of course, the downside of this theory is the seller could keep the item indefinitely.
New Home Construction Up Last Month
http://tinyurl.com/2kokv4
However, all of the strength came in the volatile apartment sector, which jumped by 44.4 percent. Construction of single-family homes fell for a seventh straight month, declining by 7.3 percent in October compared to September.
Now they’re calling apartment towers “homes?” How much of that 44.4% new apartments is actually failed condo projects?
‘I would argue this is more of a correction than a catastrophe.’
I beginning to doubt this. As a result of financial contagion, a necessary and helpful housing market correction may cause an economic catastrophe.
“As a result of financial contagion, a necessary and helpful housing market correction may cause an economic catastrophe.”
Yes. Last night’s NBC Nightly News (which now calls its series “The Housing Bust”) took Orlando as an example and illustrated how the housing bust was affecting the region economically, as the contagion spread from RE related businesses to restaurants and retail in the area. Also note that Orlando has one of the highest violent crime rates in the country, ranking higher than Compton, for example.
The one time I was in the environs of Orlando, it seemed like every 6th business was a titty bar.
“it seemed like every 6th business was a titty bar.”
If you were driving along 441, more like every 4th business.
Dang, alad, I just have to laugh, because that’s so true of Orlando.
Then again, just 30 miles North in Lake County, no nudity and no porn shops, not one. Orlando = Mickey / Lake County = Southern Bible belt.
Tampa holds the FL crown (and it is HOTLY contested) for the most titty bars per capita (or at least it did last time I looked this wonderful little factoid up). Tampa may, in fact, have more tittie bars then any other place in the country (world??).
However, as I mentioned, in FL especially, the title for most strip clubs is like the super bowl. Only the best have come to play (Miami, WPB, Tampa, Orlando) and none of these are “easy wins”.
FL has, imho, a much more tolerant attitude towards sex, and towards the business of sex, than any other place I have lived. I hear that LA is more so, and also Las Vegas is legendary. But FL is certainly in the hunt.
RE: Also note that Orlando has one of the highest violent crime rates in the country
Big-P~
I have never been to Orlando, as I am not a DisneyWorld type.
But when I was down in the Panhandle around Niceville/Ft.
Walton Beach, finishing up some Ivan related disaster inspection work, I was asked if I wanted to transfer over to Orlando.
When I mentioned this to a few locals who I had met…their eyes got wide, and they uniformily stated-Nah, you don’t want to go to Orlando. It’s real bad…couldn’t pay me any amount of money to go to that shithole.
YIKES!
Must be pretty bad when even your fellow Floridians are runnin’ ya down.
Needless to say I didn’t go.
hd, I lived for about two months in the Orlando area and came screaming back to the Tampa Bay area. I was browsing around at an antique consignment shop in Sanford (smaller town outside of Orlando) and the proprietor was on the phone with a friend and started freaking out, because the friend had just gotten home from the hospital after being attacked in broad daylight in downtown Orlando. And then there were my own, although milder experiences, in the area.
Apologies to members of the blog for threadjacking.
Orlando has achieved the distinction of being boring and menacing at the same time. By far the least pleasant of the big FL metro areas. Florida without the ocean is like being in jail.
Mom and pop are out of the market,’ said Wichita real estate broker Rod Stewart.
Boy, when he started recording golden-oldie standards, I thought he had stooped to as low as he could get. But being a real estate agent in Wichita? I so miss the days of “Maggie May” and “Hot Legs.”
Dennis Wilson, a WKU economy professor thinks the bust is more of, “A correction than a catastrophy.” Sometimes my brain goes numb when I hear quotes from idiots like this. Not just because they are simply idiots but because they are in responsible positions. How did this particular idiot get a job as an economy professor! More to the point, who is paying his salary? If it’s the tax payers, they need to start a petition to get the moron demoted to janitor. Realtorwhores making statements like, “Now is a great time to buy,” I can understand. They are just sales peole who lack principles or a conscience but this guy is a “Professor!” He’s supposed to impart knowledge. I pity any student who takes him seriously and then goes out into the world armed with the crap he’s taught them. Mind blowing.
“armed with the crap he’s taught them.”
Actually, these days, people are being disARMed.
Economy professors these days are simply Federal Reserve whores. If they espoused anything different then the fiat currency status quo they would be booted out on their proverbial tushes.
Exactly and a whole ‘nother’ topic. I remember reading a story related by Prof. Antal Fekete about how he was approached and bribed with a 200K “study” (by a representative of the Fed Reserve if I remember correctly) in order to get him to stop espousing a gold standard or the Austrian economic theory (at least that was the unspoken intent of the bribe in his opinion).
This was a tin foil hat theory from years ago. Basically that the Rockefeller institute and other similar institutions had been very active in mandating what academic institutions could teach as well as being involved in setting curriculum for grade schools. You can imagine the intent, if true. That’s the theory at any rate.
I’m hitting the road today for turkey day in Chicago. Happy T-day to all. Adios!
I bet every one of these clowns secretly has posters of Woodrow Wilson hanging in their closets.
‘ Sometimes my brain goes numb when I hear quotes from idiots like this.’
- Agreed. JoeJuan Sixpack is in it so deep that no light can escape from the hole.
The media loves to quote these jackass’s and their ,’everything will be fine - move along now.’
It sounds like the WV real-turds are on the cutting edge of the return to reality for the RE spinmeister complex. I spent some time in WV in 2005 and it was sickening to see all the sneaker-wearing, Euro-Trash driving fools from DC and as far away as NJ coming in to bid everything up. I recall taking an afternoon off from work to drive and get a lay of the land perspective and seeing a yellow license plate (NJ) slowing down and rubbernecking for a “for sale” sign. I was enraged seeing the metro-fool speculating After witnessing the wide swaths of destruction wrought on other states like Delaware and up into New England. But West Virigina? It makes you want to choke the life out the geeky little bastards.
Don’t drive angry.
Nope. Let the nuts go berserk.
‘We created monsters who wanted only what they want.”
Perfect epitaph for the millenium housing bubble.
look at Freddie or Fannie this morning - wow
http://finance.yahoo.com/q?s=FRE
http://finance.yahoo.com/q?s=FNM
Freddie May Need New Capital
By TSC Staff
11/20/2007 8:42 AM EST
Updated from 8:26 a.m. EST
Freddie Mac has hired Goldman Sachs and Lehman Brothers to help it look into raising capital and said it is seriously considering cutting its fourth-quarter dividend in half.
The quasigovernmental company, which buys residential mortgages and mortgage-related securities, made the announcement as it reported a loss of $2 billion for the third quarter ended Sept. 30. Freddie Mac attributed the loss to a higher provision for credit losses and a markdown in the value of its assets.
Shares were slumping on the news, falling 12.8% to $32.69 in premarket trading Tuesday, a 52-week low.
Freddie Mac said it was forced to consider slashing the dividend and looking for new capital in the “very near term” as a result of the quarterly loss and in order to meet its 30% mandatory target capital surplus and to respond to regulatory concerns.
If that’s not sufficient, then the company “may consider additional measures in the future such as limiting growth or reducing the size of our retained portfolio, slowing purchases into our credit guarantee portfolio, issuing additional preferred or convertible preferred stock and issuing common stock,” Freddie Mac said in a press release.
Just going to post this. Ouch!
This is good news, since it will make Chuck Shumer’s plan to let the big boys dump the crap on the GSEs that much harder.
I was telling you guys about Fannie and Freddie taking on all those subprime and Alt-A loans ealier this year but even people here were in denial, bashing me and accusing me of being a wacko.
“‘I think anything you do is better than doing nothing. In this market, you’ve just got to do something. You’ve got to make it happen,’ said Realtor Tim Hafer, who works in Martinsburg.”
Maybe he can wave his magic wand and everyone can get a 50% pay raise, and thus be almost able to afford a house.
I have lurked on this board for quite a while and have seen discussions on whether to use an agent or not before. I remember one post awhile back where a buyer’s agent said that he could negotiate better then first timers who tried to go it alone. Yes that is a self serving argument but since the 6% tax is not going away soon, how best can a one time buyer use the buyer’s agent half to find a home and negotiate a deal? Walk into one of the large real-estate offices and interview a Realtor or sales associate, contact NAEBA, go with an online discount buyer’s agent like Redfin or ZipRealty or tour open houses and sign in possibly giving the sales commission to the seller’s agent? In reading up on buyer’s agents it seems like your hiring a double agent who may or may not be working for you depending upon your contract with them and who you buy from (duel agency, sub agent of seller, etc).
Your first mistake. NONE of them are working for you. They are working for themselves. NONE of them are on your side. Ignore the smiles and the pleasent greetings. They are no different from used car sales people. They are in it for the money. As much as they can get. My next thought is, “Why are you buying now?” We are a long way from the bottom. If a bad recession hits (we are already in a recession) prices will drop further. The “Blood on the streets,” hasn’t happened yet. The credit mess is still in progress. Why would you grab at a falling (very sharp) knife? If you wait at least 2 years, the 6% commission will not matter because the price drop will have absorbed it.
Thanks Mike. To answer your question; Living with in-laws is getting tiresome to my spouse and the children are also growing up. I suspect the credit crisis will probably play out faster then first thought, though spring 2008 will turn into a bear trap in pricing. I’m not trying to buy at the absolute bottom. If I was the only one in the equation yes I would wait but I’m not the only one making the decision.
ocbear,
Uh, so you’re saying the only way to move away from the in-laws is to buy in an overinflated bubble and catch a falling knife? Are you sure you’re reading this blog? Don’t you think you MIGHT want to consider renting instead of becoming another FB?
ocbear,
understand wanting your own place for your family, but think twice before buying now. It is hard to predict how neighborhoods will change, often for the worse, and the schools that service them. And, property taxes in many locales will be adjusted skyward to account for underfunded public pension liabilities for cops, firemen, teachers, etc. Renting is really your best option. Since you have kids, pick the best schools in your area, and start looking for rentals. Even if a house is for sale, talk to the owner, and see if you can can swing a long-term rental–especially if the place has been sitting for a while, or better, if the owner has two mortgages. Check city property records. Good luck.
Sometimes people have needs and have been waiting a long long time. People get fed up of waiting. Take my wife and I. We’ve sat in the sidelines for the past 7 years watching bozos get rich while we were renting. Alot of people who didn’t deserve to make the money they did, did so anyway because the prices went up. We weren’t even considering to buy a home for that reason…we actually wanted a home because we wanted a place to live and enjoy…how about that novel concept?
Instead, as an engineer (myself) and a school counselor (my wife), we had to watch idiot acquaintances (one among many who cleans teeth…not a dentist…and a wife who stays home with two kids) get rich and boast about it.
So some people are getting sick of waiting. If we miss this RE purchase this time around, I doubt we’ll bother to buy anything in the future. It just ain’t worth the effort. People keep telling us to go and get foreclosed properties…why on earth? What a massive headache that would be.
OCBear, if you are in the OC, is renting an option? Rent a house, it should cost less than buying one, as much as 50% less (even taking tax breaks into consideration). Use the money you save to build up a down payments, invest, or skim a bit off for paid-for (as opposed to “on credit card”) vacations.
The other poster is correct. All agents work on commission and work for their own best interests. I have never met an agent that was knowledgeable or helpful. All gave me the same old lines, buy now or be forever priced out, real estate is a great investment, this area is special because . . . Ask them about cap rates, rental v. mortgage ratios, the mortgage crisis, the effects of wall street securitizations, etc. and they stare at you blankly. I wouldnt buy now, but if you must, I have had lots of success targeting particular neighborhoods, deciding which houses you like and write the owner a letter saying you want to move into the neighborhood and if they are considering selling (without any realtor fees). This usually gets about 10% hits with 4% being ppl willing to deal. If you are not sophisticated and feel scared, you can tell a friend realtor or lawyer you will pay them a few thousand to help close the transaction. Also if you see a realtor’s for sale sign for a house you are interested, contact the realtor of that listing and ask how much they will cut the commision if you buy without a seperate agent (they add little help anyway). If the real estate agent says not much, and you are still intrested, bring your own agent but ask them in advance to reduce their commission if you buy this house because you used up very little of their time. Dont worry about insulting agents. They are for the most part uniformed and unethical in my experience.
One additional point. NEVER, EVER, EVER SIGN A BUYERS AGENT CONTRACT THAT OBLIGATES YOU TO USE THEM FOR AN EXTENDED PERIOD. That’s thrown out to trap idiots. Tell the agent that if you are happy with their services you will continue to use them, but see no need to obligate yourself to someone you just met and dont know.
You weren’t using agents correctly. You have to decide when is the right time to buy and how much you have to spend. If you know you want to buy and how much you expect to spend then an agent may be able to find a listing that fits your needs if you can’t do that yourself. You way overestimated what agents can help with and asked the wrong questions.
You misunderstood my comment. I already knew my answers to those questions, and just like to see if they have any knowledge different than mine or anything to add. I know they can search the MLS given a price range, arrange appointments and unlock the door to the house. This takes no knowledge or expertise (a middle school drop out can do it). To suggest that agents should not be expected to be knowledgeable of current events that directly impact their livliehoods shocks me and is one of the reasons I hate real estate agents.
So you dont believe that a buyer’s agent has any responsibility to familarize themselves with the risks of buying real estate, and discuss such risks with the buyer they are supposedly representing intelligently? On the other hand, I guess you see no problem with buyers’ agents pushing for a sale or “helping” the buyer find a way to afford the house if there is affordability issues. That’s exactly what is wrong with the profession and realtors should be cut out of transactions whenever possible. What a bunch of BS.
Negotiation is actually simple - Only Price Per Square Foot Counts.
Everything else is a nice free bonus. But only Price Per Square Foot Counts.
Yep. Who cares about location, lot size and architectural detail?
These are free perks. Only price per square foot matters. But I do have a bridge for you that you, which has excellent location and terrific architectural details.
Yeez, how to answer?
Firstly, I have held a Real Estate license and was a Realtor.
Did my 80 hours of classes make me a proffesional working on your behalf?
Even my teacher pointed out that a hair stylist needs 6 months of classes and a practical exam that took 6 hours, yet in 2 weeks we (the class) would be the only people legally permitted to earn a commission in a Real Estate transaction.
But to answer your question, I will give you some insight. Your best agent is yourself. Why? Because when you approach a sellers’ agent he/she does not need to split the commission and will beat up the buyer to accept your lower bid and close the buyer for you.
All the “expertise” you need are 1st: “comps” and 2nd the ability to walk away and say “no” if they do not accept your offer.
I would respectfully disagree with all those above and said “no way now!”
Why?
This is the perfect time to practice and hone your skills. So long as you accept the fact that you will probably buy nothing.
Find houses you like and offer what it would take to rent as your offer.
Calculate maintenance, insurance, taxes, mortgages and if paying a down payment of say, 20%, then add lost income to what that money would have made in CDs or T-bills, etc.
Since this house will not appreciate in value do not make the mistake of thinking the down payment is not costing you.
I welcome criticism to my suggestions.
But why not buy if he finds a house at or below the cost of renting (real cost of ownership and assuming no appreciation on house?)
Oh, that it’s a waste of time?
I said it would make good practice.
As well as be entertaining
OMG - An honest realtor? Oh wait, it sounds like you got out of the “profession”, and I lose that term loosely. I actually felt sick typing it out.
Freddie May Need New Capital
By TSC Staff
11/20/2007 8:42 AM EST
Updated from 8:26 a.m. EST
Freddie Mac has hired Goldman Sachs and Lehman Brothers to help it look into raising capital and said it is seriously considering cutting its fourth-quarter dividend in half.
The quasigovernmental company, which buys residential mortgages and mortgage-related securities, made the announcement as it reported a loss of $2 billion for the third quarter ended Sept. 30. Freddie Mac attributed the loss to a higher provision for credit losses and a markdown in the value of its assets.
Shares were slumping on the news, falling 12.8% to $32.69 in premarket trading Tuesday, a 52-week low.
Wow, Freddie Mac stock is down 25% today! Fannie down big too!
Now is the time to lobby for them to hold $1M loans…great timing Ben Bernanke!
Ah, yes. Lots of spin and manipulation this morning. Stock market up because, “Investors think there are bargains to be made because of the decline.” Bloomberg reports building starts are up, mainly because of condo building. Jeez. The first part of the property market to get hit in a slump/bust is the condo market. So we can dismiss any thoughts that the property market is “picking up”. Worse, they are building condos which nobody (in a property decline) wants to buy!
Freddie Mac has lost (as I write) over 25% of it’s value this morning. Yes, the USA needs the Freddie Mac’s of the world to take over a large portion of the mortgage industry and have the loan limits increased to $1 million. Maybe they can increase their loss to 75% next time.
Fortunately, Freddie Mac only has a “charter” backed by the government. It basically means nothing. Their loans are NOT guaranteed by the government but (and I’m a liberal) don’t breath a sigh of relief too soon if the Dems take over in 2008 (which they will) and the Barney Franks and Schumer’s get their way.
The usual stock market manipulation stuff going on this morning. Big gap up this morning as The Financial Gangsters of Wall Street steal and plunder as they rob mom and pop of their savings and skim the 401k’s in an attempt to get back the money they have lost.
The guy running the roulette wheel never loses in the end.
Fannie Mae and Freddie Mac are the guarantors on literally trillions of dollars worth of bonds and mortgage-backed securities owned by pension plans, banks, state and federal governmental agencies, and other conservative investors. If the government didn’t step in to rescue them in case of insolvency, I promise you that armageddon would soon follow.
Which is why I’ve never understood why they are publicly traded in the first place.
I suppose it’s possible that the government would simply let the shareholders burn while at the same time bail out the owners of the debt that they guarantee. Any thoughts, anyone?
Anyone?
Bueller? …Bueller? …Bueller?
Bueller?
You are correct about the pension plans, etc. However, the charter they have with the Federal government doesn’t guarantee the Feds will bail them out (at the moment) but again, you are correct in your armageddon comment. The government cannot let FNM or FRE sink beneath the waves so SOMEONE will have to pay the price. Problem is, we are talking big bucks here and the government is in no position to bail out anyone unless it means printing more US dollar confetti money. And that ain’t a good idea at the moment. A few more hits on the dollar and so much green printed paper will flow back to the US as foreign governments AND private citizens dump their dollars for more stable currencies, the US government will need to buy warehouses to store it all.
Signs of the times: The plight of the dollar is so bad that in India, the Taj Mahal has stopped taking US dollars for entrance fees. I never thought I would live to see a third world country, like India, refuse dollars in my life time.
On the pension plan subject……I get the feeling they will try and drive the price up again because, even if a pension fund is well diversified, a 25% on a stock (now a 21% hit as I speak) which was suppoed to be reasonably safe, ain’t chicken feed.
“The dip in housing starts can be attributed to an oversaturated market, said David Payne, VP of Chardon-based Payne & Payne Builders Inc. ‘I think that the market got ahead of itself for a couple of years in terms of new buildings,’ he said, referring to 2003 through 2006. ‘There was an increased level of activity locally, apparently beyond what might have been needed.’”
…..
I know overbuilding plays a role in this but it is not the main reason we’re having the collapse that we’re having. The biggest culprit is simply the price. Housing became utterly unaffordable. It’s that simple.
The constant talk about overbuilding is an attempt to convince themselves that the prices are justified and once the extra inventory gets burned through we will return to those prices. It’s just not going to happen.
There wouldn’t have been overbuilding if there hadn’t been overlending. In the final analysis this has been a monetary problem.
To be a real estate broker in Wichita, in a terrible market, named Rod Stewart?
Some guys have all the luck.
Pretty funny
“Cuyahoga County has recorded 10,000-plus foreclosures so far this year. About 5,300 of those were in Cleveland and 3,800 in its inner suburbs, including Euclid. The Sheriff’s Office said such sales reached 7,461 in 2005 and 10,216 in 2006.”
http://www.youtube.com/watch?v=eg6oWY_v2ro&feature=related
“Mom and pop are out of the market,’ said Wichita real estate broker Rod Stewart.”
Every picture tells a story, don’t it?
He should get out of the RE game and find himself a rock and roll band that needs a helping hand.
Spinal Tap?
They say another 15% must be discounted for the housing market to show a little hope, this number will put more investors into the walk away mode for sure. The public better get ready for the new sign in front of the house not Remax or Century 21 but, BANK OWNED!
The Hudson & Marshall auction held here in Sacramento on Sunday must of been a big crash. Cant find any news on the results. Big pre-hype ahead of time but after . . . ?!?!
Reminds me of when the Tampa Bucs ( howdy Palmetto ) would lose, the tv/paper would not print the score but rather just mention some blurb about the game, but boy howdy if they won that was THE headline, loud n clear; BUCS 99, Green Bay 3 , all over the lead in/front page !
Used to tell the Ex you can always tell what happened afterwards easily by noting this type of contrast of reporting results.
“I made the decision to build a home in Lake County probably 18 months ago, and the economy 18 months ago isn’t the same as it is today”
Yes it was. You just weren’t looking.
Got a question for all you folks here in HBB? How much should a single family home in the Golden Hills Section of Redondo Beach CA (Area: 154) in the MLS be worth?
All property values must be based on rental values in the area. I forget (getting senile in my old age) what the math is but it’s something like X times the average area rent equals the value of the property. I’m sure a few posters know the “X times the rent” number.
Therein lies the disconnect which has taken place during this boom and bust. The sub-prime mess, allowed people to buy (actually they didn’t buy anything because the house belongs to the bank for 30 years unless they pay off early) property where the mortgage payments, even ignoring all the other costs like insurance, repairs, property taxes, etc, which go with owning, were waaaaaay above what the tsunami of new buyers were paying for rent and, consequently, could not afford.
Only when there is some kind of equalibrium between property prices and rents, will this mess be over. For instance, I once worked out that the house I now rent (I sold 2 properties I owned too soon but that’s another story) for $1,800 a month, was actually worth about $275,000 to $300,000. At the peak of the boom, a house on the street like this one, was sold for $725,000. That’s how ridiculous the boom became.
However, here’s the fantasy. People cannot understand (those who are stuck and cannot sell) that prices HAVE to come down to the level which people can afford. Yes, some Greater Fools will buy now but that’s why they are called Greater Fools. The house I live in is now valued at about $600,000….and values are still dropping. At some point rents could rise (in fact I understand some rents for a sfh like this one in this area, are now renting for $2,200) but there is still a long way to go to reach equalibrium and with more property coming onto the market as rentals, rental prices are not going to boom because people cannot afford it.
I’m sorry to say but I don’t think so…there are plenty of idiots out there fully prepared to prove you wrong.
I’m afraid I don’t agree with you…there are plenty of idiots out there that will prove you wrong.
Where we live, in Los Angeles (i.e. Glendale, CA), the housing market hasn’t budged much. People are still paying up the yazoo for a place…home, condo, th, whatever. Now that they are building that AMERICANA place on Brand Blvd, who knows what idiots will come out of the woodwork with money to buy. They are even making condos as part of the shopping center project (much like Paseo Mall in Pasadena).
Point is…alot of you are screaming about prices coming down, this and that. Frankly, I doubt the prices will come down in this area to make any affordability dent. Anyone who hasn’t bought yet will have to do so knowing full and well that they’ll be paying a BIG premium to live here and that is the way it will be from now on. The only people who lucked out are the ones who purchased something a while back while their heads were in the sand….sheer dumb luck and no clue. But they made it out.
“Michigan, …. didn’t have run ups in price like there were in California and Florida.”
Depends on WHERE in Michigan. The tourist areas - the dunes on Lake Michigan - went through an enormous bubble caused by 2nd home buyers.
Foreclosure rate and the amounts in default on the 2nd home toys are now staggerring - $300,000 in defUlt, $575,000, $780,000 - and this in area where the median household income for permanent residents range from $39,000 - 62,000.
Southern 1/2 of the lower penninsula has a high foreclosure/default rate due to job losses.
Nothern 1/2 of lower penninsual has a high foreclosure/defualt rate due to 2nd home buyers from Ohio, PA, IL, WI etc defaulting on their resetting ARMs.
As I recall the northern 1/2 of the Michigan LP near the shoreline depends on the tourist trade for most of its livelihood. I have canceled several trips up there in 2007 due to the cost of motor fuel. I wonder what will happen to the median household income for permanent residents there if the tourist trade falls off?
The southern 1/2 of the LP of MI has a completely different economy.