Sellers Writing A Check When/If It Sells
The Landmark reports from Illinois. “Despite hopes that the local real estate market would begin to recover three years after it began to crash, the bottom still hasn’t been reached, according to the latest sales figures for Riverside, Brookfield and North Riverside. Through Aug. 31, the median home sale price in Riverside plummeted to $307,000 - down 20.5 percent since Dec. 31, 2010, according to Midwest Real Estate Data LLC. By Aug. 31, the median sale price in Riverside for a single-family, detached home has fallen 39 percent from its high of $503,500 at the end of 2007.”
“‘From my perspective, there were sales a month ago and it’s dead in the water, and it shouldn’t be,’ said Karen Skiba, a Brookfield resident who is a real estate broker. ‘There are no showings. There was a big push a month ago and, now, nothing. And I don’t think it’s going to pick up.’”
The Register Mail in Illinois. “The number of homes sold in Illinois dropped by 34 percent, when comparing 2007 to 2010. The average home price also dropped sharply, by 19 percent. Mike Cratty, president of the West Central Illinois Association of Realtors, said banks will have to tighten some of their lending practices, beginning today, because of requirements set by the federal government. ‘What they’re doing is probably the way it was 20 or 30 years ago,’ he said. ‘There for a while, when things were really booming, banks and the government loosened up on their lending practices.’”
“According to Cratty, one of the results in Illinois is the state ranking as having — on a percentage basis — the ninth highest rate of foreclosures in the country. His opinion is that potential borrowers who can afford the payments should be OK. ‘I think in the (recent) past, yeah, it was a great thing to lend (people) money, but they were strapped. Unfortunately, the American public was spending more than they were making,’ Cratty said.”
The Des Moines Register in Iowa. “Here are excerpts of an online Register discussion with Holly Olson, director of the Neighborhood Finance Corp., and Kurt Schade, president of the Iowa Association of Realtors. Q My house has been on the market over a year and the main feedback from prospective buyers is that the kitchen is dated, needs granite countertops, hardwood floors, new cabinets, etc. And a new back and side deck. I am getting mixed feedback regarding the wisdom of making an investment in this overhaul. Some say it will be money lost and the house is priced to reflect the need for updates, and others say it won’t compete with newer homes without these amenities if I don’t. With the way it is priced now, I’ll already be writing a check when/if it sells.”
“Schade: I do agree that sellers need to understand the new mentality of buyers. For buyers, if everything is not perfect, let’s keep looking until we find that one that is. Therefore, deferred maintenance is just not acceptable in this market. We are seeing so many sellers in a position of writing checks. Unfortunately as there were a few years of zero-down mortgages and then some correction of property values, a lot of sellers just cannot sell. It is a business decision. I just sold my home and made about $80,000 less than had I sold it five years ago. We decided it was best to take the loss now instead of making another three to five years of payments not knowing if or when it will get better.”
“Q: I see some new construction. What, if anything, are the lenders offering to decrease the glut of ‘used’ homes on the market? Olson: I am not sure the lenders see the ‘glut of used homes on the market’ as their issue, unless they have a foreclosed home they are trying to sell. This is a seller issue and they have to realize what their competition is.”
“Q: In my area there are several abandoned homes. What can I do to limit their effect on my home’s value? Schade: That’s a loaded question. If the properties are not being maintained, I suggest you call the city to enforce such.”
The Grand Rapids Press in Michigan. “Economist Ted Jones has an idea to help the economy. ‘Allow every homeowner that is current on their loan to refinance at today’s interest rates,’ said Jones, the chief economist with Texas-based Stewart Title Guaranty Company at the Michigan Association of Realtors Convention & Expo. ‘I don’t care if they’re under water,’ he said. ‘Make Fannie Mae or Freddie Mac buy them all since they or a bank is already on the hook for them.’”
“Lowering interest rates on an existing loan is not a simple matter and would have huge, negative implications in the future lending market, said Mitch Stapley, chief fixed income officer for Fifth Third Bancorp, reached by phone after the speech. ‘If you say unilaterally I’m taking that 7 percent rate and lowering it to 4 percent, you would basically abrogate contract law,’ said Stapley. ‘The government would have to be the provider of basically 100 percent because there is no way private capital would ever be directed again to provide a mortgage out there. The devil is so far in the details on this one.’”
The Plain Dealer in Ohio. “Once just another step in the sale process, appraisals are attracting ire from real estate agents, builders, homeowners, buyers and sellers. The National Association of Realtors says appraisals that don’t meet the contract price are delaying and derailing deals. ‘When an appraisal comes in low, it puts doubt in the mind of the buyer as to the true value of that property,’ said Richard Kassouf, the broker-owner of New Hope Realty in Brunswick. ‘And it gives them a crisis that they have to deal with, where they have to come up with more money for the down payment to allow that transaction to be completed. Or they have to negotiate the price down.’”
“Representatives of the appraisal industry hotly rebut the claims about low appraisals hurting the housing market. Jonathan Hall, an Ohio appraiser based in St. Marys, says members of the national Realtor association’s appraisal committee plan to complain about the group’s finger-pointing during a gathering in November. Hall is the committee’s vice chairman.”
“‘Appraisers were blamed for the run-up of the market when prices were high, and now they’re being blamed because prices are low,’ said Ken Chitester, a spokesman for the Appraisal Institute. ‘Both can’t be true. Appraisers are doing the same thorough research and thoughtful analysis that they’ve always conducted. So, in short, don’t shoot the messenger.’”
The Pioneer Press in Minnesota. “Mike Kinning looks out the window at the industrial park in Hastings and points out building after building that once held thriving businesses but now sit vacant. There was a packaging company over there. A building supply company there. An architectural business is long gone.”
“The housing market crash affected sales at home building suppliers like Intek. In 2007, the company had two plants in Hastings after closing a plant in Eau Claire. Even with one less plant, Intek was operating the two with 30 percent to 40 percent unused capacity. ‘We started to see we had too many eggs in one basket,’ Kinning said. Still, ‘Nobody predicted that it would fall to the depths it would, but we reacted and we reacted quickly.’”
“The following year, the company consolidated the two Hastings plants into one. Some production lines were closed and others were transferred to the remaining plant. The idled plant was sold. At the same time, the company was searching for new markets outside of home building.”
“Clarence Chapman, the lead extruder, recalled the old days of overtime and a lot of spending money. ‘We were busy. We had all kinds of overtime. I was actually getting burned out on overtime.’ At the time, people were buying homes or property. ‘We were living the high life back then,’ he said. ‘The money was there, so people purchased cars, they purchased homes and they purchased vacation property.’”
“When an appraisal comes on low, it puts doubt in the mind of the buyer as to the true value of that property.”
This “true value” is determined by comps. The value of comps is determined by what other people have done - not by what they think but by what they do.
If what other people have done is drag down the price of the comps for a particular house then down is where the price of that particular house should go.
This was even worse:
“And it gives them a crisis that they have to deal with, where they have to come up with more money for the down payment.”
How is this an F’in crisis for the buyer?? This is GREAT for the buyer. Why should the buyer come up with a down payment to feed a seller’s price that was just proven by the appraiser to be a wishing price? Just walk away, fast. It’s a crisis for the seller.
It’s also a crisis for the Realtor.
“And where would you get this, ‘Saved money’?”
http://www.youtube.com/watch?v=VL3KuaFvOSc
A truly timeless classic…
It’s a crisis for the buyer since buyers today are flippers, not residents. They have no intention of living there for long, or even of living there in the first place. They are only going to live there for a fairly short period of time, compared to their lifespan, and then they will sell and generally try to buy a more expensive house. Or they will hold onto the empty or rented-out place and then flip it for massive profits only a few years down the road.
People still think all that is normal. That’s why the housing crash is far, far from over. The housing crash will finally be over when people who are buying, always insist on the lowest purchase price, nearly without exception. In my darker days, I believe that such a trend will never come to pass, ever again, since there’s always enough money sloshing around the world to spark housing bubbles anywhere that it likes. In my darkest hours I can’t believe that people will return to buying housing for the purposes of living in them for the rest of their lives.
Comment by oxide
2011-10-05 06:24:23
This was even worse:
“And it gives them a crisis that they have to deal with, where they have to come up with more money for the down payment.”
How is this an F’in crisis for the buyer?? This is GREAT for the buyer. Why should the buyer come up with a down payment to feed a seller’s price that was just proven by the appraiser to be a wishing price? Just walk away, fast. It’s a crisis for the seller.
———————–
Exactly right, oxide.
After years of being frustrated by arrogant sellers who wouldn’t entertain a true “market value” offer (and then watching it sell later after some idiot offered higher than we did, but then beating the price down during escrow), we decided to offer list price, and then let the appraiser dish reality to the sellers.
Guess what? It worked! They weren’t happy with it, but they did want to sell, and we did want to buy.
Good thing it worked, too, because another house just came on the market for far less. Ours is a better lot and location, but the other one was a bigger house.
The listing agent almost botched the deal because she told her sellers — who were from out of state and were relying on her “expertise” — that they shouldn’t accept our offer. They even pulled out of escrow for a couple of days, then decided to take the offer already in hand (ours).
This “true value” is determined by comps ??
Comps and a appraisers opinion and adjustment to those comps is what determines the final “opinion of value” in the appraisers eyes…
“true value” is what a willing buyer & willing seller (without duress) are willing to settle on…Really, the only reason we have an appraiser is because it is required to get a loan…
I always found an appraisers opinion to be very subjective and at times completely incompetent and in my personal experience I have given it little credence in my decision to buy or sell…
An appraiser will seek enough data points to be able to justify his/her conclusion of the FMV…If you have done your homework, you are likely to have a better opinion of the value than any appraiser would…
The contract price is what the greatest fool is willing to pay (or at least willing to agree to pay). The appraisal is at best, an educated guess as to what the second greatest fool is willing to pay.
Confused by your comment..What’s your point ??
‘This “true value” is determined by comps.’
That works so long as the bottom hasn’t dropped out of demand so badly that almost nothing whatsover is selling. In this liquidity gap case, the only thing you know about true value is that it lies somewhere to the south of current wishing prices; how far south is anybody’s guess.
This post reminds me that I should muster the courage to ask my neighbor at work whether they have any offers yet on their home, which they put on the market about four months back…
If you know the address you can look in Zillow. If offers were officially accepted, Zillow may list that a sale is “pending.”
“By Aug. 31, the median sale price in Riverside for a single-family, detached home has fallen 39 percent from its high of $503,500 at the end of 2007.”
Remember when 40% drops were unthinkable? Do you remember when such potential drops were unfathomable? I do. These suggestions seemed very extreme at the time, but now it is the reality.
Yep. When I used to tell people that prices would drop by 35-50%, they would literally laugh at me and call me crazy.
Then, they’d arrogantly inform me that “real estate always goes up.”
Not kidding.
There are three methods of determining value on a property.
Comparable Sales, Replacement Cost, and Income Valuation.
the three methods may result in different valuations, and the appraiser will make a decision as to which should be used in accordance with the instructions of his client
See how simple it is?
“According to Cratty, one of the results in Illinois is the state ranking as having — on a percentage basis — the ninth highest rate of foreclosures in the country.
I am sure the recent massive tax increases in Illinois will help with that…
Hey - anyone see that Michigan - MICHIGAN - might become a Right-to-Work State?
There is hope for American. And yes - miracles can happen in the darkest of deep blue union goon controlled states.
If this passes - I will put a case that Michigan recovers much faster than Illinois. Actually - Illinois will never recover with it current leadership coupled with its union goon control.
www DOT washingtontimes.com/news/2011/oct/3/right-to-work-drive-gains-steam-in-traditional-lab/?page=all#pagebreak
miracles can happen in the darkest of deep
bluered [non-] union goon controlled states.“Miracles” happen every day south of the Mason-Dixon line, each time a commercial plane with hundreds of passengers lands safety without any “Federal Gov’t or union assistance. “Miracles” happen every day when thousands of foreign logo bearing cars cross bridges built by $6.25 former hog lot workers/.
You’re kidding, right? FedGov doesn’t regulate airplane safety south of the M-D line. lol.
Who runs the FAA control towers, Birmingham, Al. city hall?
2b, there are days when your shtick about the evils of organized Labor wears thin. Today is one such day.
Unions are a parasite that kills the host withe help of upper management. There is a reason there are less and less union jobs /shops out there.
less and less union jobs /shops out there ??
Assuming you are talking about the private sector you are correct…
Look, let’s just send ALL the jobs to China and be done with it. We’ll all be indentured serfs living in huts, and you would STILL complain that union goons drove us to this pass.
Oxide, that’s pretty much what motivated my original comment. That and the fact that he’s gloating about my home state, my beautiful and so FUBAR Michigan, going the route of the Southern hillbilly states.
Elanor, IMHO that is beneath you.
Union or no union, there is no call to disparage others as “hillbillies”.
We live in troubled times. They will reduce us all with Darwinian effectiveness. What I have observed, in my union goon-most-recent-erstwhile-home-state, CT, is that there is no dawning realization among said goons. That supporting them by extorting increased taxes on decreased salaries is proving increasingly burdensome. Yea, verily, like unto a 500 pound millstone carried on one’s back.
Instead, we get the entitled resentment of the truly arrogant. Because they deserve it, doncha know.
I’ll stand with the hillbillies, thank you. A hardscrabble life, if you survive it, will give you vastly superior survival skills.
And those dwindling salaries are due to the union goons?
I guess the corporatists had nothing to do with it, right?
“‘Allow every homeowner that is current on their loan to refinance at today’s interest rates,’ said Jones, the chief economist with Texas-based Stewart Title Guaranty Company…”
Is Jones willing to pony up to help make the screwed bond holders whole again?
Make no mistake Pbear…The lenders and even many holders of bundled securities are making a boat load of money on existing loans, at very high rates (6%+) that cannot be refinanced in the current underwriting environment….
If the plan is to bring back private sources of loanable funds to the mortgage market, screwing over the owners of existing MBS is not a step in the right direction.
What makes you think the “screwed” bond holders have any legal right to be “made whole”?
Why would they not be made whole in a refinance ??
The idea is to refinance with either a writedown of the debt to the current value of the house, or to make the new loan only partially secured. Somebody is taking a haircut, either the original bondholders, or or whoever is issuing a loan with only partial collateral.
I took CIBT’s point to be that since the loans are paid off in the re-fi, the bond holders stop being able to collect the interest that is currently coming from above market rate mortgages. That has been his whine for months. Since the bonds clearly state that one of the ways that the bonds can cease to exist is by people refinancing the mortgage and thus ending the secured income stream, this result is fully disclosed to all bond holders.
If he thinks that there is some guarantee that there will be no refinancing that can be partially attributable to government interference in the mortgage market, he is saddly mistaken. For there to be a legal right, the debentures would have to say something absurd like, “We declare that these bonds will not be subject to refinancing at a significant rate because the underlying real estate is being sold at a highly inflated price which will collapse soon making the loans in the pool “under water”. Since under water loans have not been able to be refinanced in the past, we can state with assurance that the loans that are securitized in these bonds will pay out to the full extent of their mortgage terms.”
So, ya know, really no risk that there is a legal action available.
So the bond holders want 100% the bank wants 100% and the homeowner squats rent free for 5 years till somone comes up with a solution….dammm I’d love that deal.
“That has been his whine for months.”
I wouldn’t exactly call it a whine. As I have mentioned often, I don’t have a dog in the fight.
Or to put it another way, unlike some posters here, I really don’t have a political agenda, aside from promoting the interests of fairness. I just don’t see what is fair about top-down game-changing intervention to screw one side of the lending transaction (MBS investors) in order to give something away to the other side (homeowners), while pretending the money is free.
More generally, I don’t buy into the “free money” theories that seem to often carry the day in policy circles. I don’t even believe the Fed’s printing press can be run on high blast without redistributional effects. I would prefer if politicians were more up front about who their financial engineering schemes are going to stick with the tab for whatever money they are giving away.
“Since the bonds clearly state that one of the ways that the bonds can cease to exist is by people refinancing the mortgage and thus ending the secured income stream, this result is fully disclosed to all bond holders.”
Those who bought the bonds doubtless were aware of this risk. But top-down, game-changing intervention is most likely something which none of them could have seen coming. If you don’t get the difference between the risk of random, market-driven refinancing and mass financially-engineered refinancing to force bond owners to pay for cramdowns, then I guess I have nothing more to say…
March 09, 2011
The seductive but flawed logic of principal reduction
The idea that a program to reduce principal balances on mortgage loans will cure the nation’s housing ills at little or no cost has been kicking around since the very early stages of the foreclosure crisis and refuses to die. If news stories are true, the administration, in conjunction with the state attorneys general, will soon announce that lenders have agreed to write down borrower principal balances by a grand total of $20–$25 billion as part of a deal to address serious procedural problems in foreclosure filings. Policy wonks and housing experts will greet this announcement with glee, saying that policymakers have ignored principal reduction for too long but have seen the light and are finally going to cure the epidemic of foreclosures that has gripped the country since 2007. Are the wonks right? In short: we think not.
…
Real Estate Research
About
The Atlanta Fed’s Real Estate Research blog provides analysis of topical research and current issues in the fields of housing and real estate economics. Authors whose work is analyzed will have the opportunity to provide a response.
Authors for Real Estate Research are Kristopher Gerardi, Atlanta Fed, and Christopher Foote and Paul Willen, Boston Fed.
‘What makes you think the “screwed” bond holders have any legal right…’
The more important question is whether it is a good idea to use heavy-handed government interference to shut down private markets. I suppose this is of no consequence, provided Uncle Sam is happy to remain mortgage lender of last resort for an extended period of time.
The policy may be a disaster, but no one gets “made whole” unless there is a legal remedy. If there is no violation of law (code or common) and no breach of a contract, the idea of making someone whole is irrelevant. It simply has no place in the discussion.
The wisdom of putting tax payers on the hook for when the borrower defaults on the new loan is an entirely different discussion. The least they would have to do to justify the refi is make the new loans non-dischargable in bankruptcy (like government guaranteed student loans). I wonder how many borrowers would be willing to sign up for those terms?
I wonder how many borrowers would be willing to sign up for those terms ??
I would if they reduced the rate but, I happen to be in a recourse state so I am already all in…
Non-dischargable in bankruptcy is only equal to recourse loan if you have money. A recourse default plus declaring bankruptcy gets a broke person out from under the whole thing.
is only equal to recourse loan if you have money ??
Which is exactly why I would sign up for those terms…
“The wisdom of putting tax payers on the hook for when the borrower defaults on the new loan is an entirely different discussion. The least they would have to do to justify the refi is make the new loans non-dischargable in bankruptcy (like government guaranteed student loans).”
As usual when I discuss legal matters with an attorney, I get the feeling I am missing something basic here. Aren’t something like seventy percent of all mortgage loans already federally guaranteed?
Opposition From Freddie and Fannie Stalls Debt Reduction
A foreclosed home in Phoenix, Arizona.
By SHAILA DEWAN
Published: October 5, 2011
Home values have fallen so much in Arizona that almost half the people with mortgages there owe more than their homes are worth. So when federal money became available to help stem the tide of foreclosures, the state flagged that group for help.
…
Only three homeowners have been approved for debt reduction since the program began in September 2010. A major obstacle has been that the two largest mortgage guarantors, Fannie Mae and Freddie Mac, will not participate. No loans are eligible if they were bought and held or securitized by the two companies, which are now under government control and guarantee more than 70 percent of the country’s home loans.
…
“It simply has no place in the discussion.”
It does seem somewhat related to the question of what limits Uncle Sam’s discretion to interfere in private contracts.
Banks should accept mortgage principal cuts: Bernanke
Fed’s Mishkin sees ’significant’ US economic risk
Tue, Mar 4 2008
Fed’s Fisher: Slower growth preferable to inflation
Tue, Mar 4 2008
Fed’s Kohn: money center banks have enough capital
Tue, Mar 4 2008
Fed’s Kohn: U.S. bank losses won’t threaten viability
Tue, Mar 4 2008
New banking rules might keep light touch-Bernanke
Tue, Mar 4 2008
U.S. bank regulators eye credit cards, construction
Tue, Mar 4 2008
Bankers’ gathering to offer glimpse of reform plan
Tue, Mar 4 2008
Bank of Canada slashes rates on gloomy U.S. view
Tue, Mar 4 2008
Fed’s Kohn says don’t widen the discount window
Tue, Mar 4 2008
By Barbara Liston
ORLANDO, Florida | Tue, Mar 4 2008
4:55pm EST
ORLANDO, Florida (Reuters) - Banks may have to swallow reductions in the principal of some troubled home loans to ward off greater losses that could result from outright default, Federal Reserve Chairman Ben Bernanke said on Tuesday.
Warning that mortgage delinquencies and foreclosures are likely to rise, with more declines in house prices, Bernanke called for active measures from both the public and private sectors to stabilize housing markets.
“This situation calls for a vigorous response,” Bernanke said in a speech to the Independent Community Bankers of America, referring to government and private-sector initiatives to slow the rate of home loan failures.
“Measures to reduce preventable foreclosures could help not only stressed borrowers but also their communities and, indeed, the broader economy,” he said.
…
“Appraisers are doing the same thorough research and thoughtful analysis…..”
….that they should have always done.
The appraisal guy is named “Chitester”! That’s just too funny.
Bah to remodelling just to unload your place. Before selling this summer friends repeatedly told me to repaint, recarpet, and fix some broken odds and ends. My feeling was to invest a little elbow grease and clean it up, but otherwise leave it alone.
Wanna sell? Run the numbers and undercut your comps - lot less headache.
Besides, as a buyer, wouldn’t you appreciate a lower price much more than some hurried shoestring remodel? And don’t these sellers understand the concept of “cost basis”?
It’s the HGTV philosophy of home selling: superficial cosmetics are all-important. Amazing how pervasive and persistent that belief has become over the years.
It serves Home Depot well. They make money on the pre-sale remodel, and then again when the new owner tears it all out and puts the stuff they really wanted in.
Agree. House next door to me was bought for $300,000 in 2004. They did way too much remodeling and then tried to sell it for $600,000 (the same price as the house next to them that was twice as big and on the historic register and for sale at the same time). The have been renting their place ever since, no doubt waiting for the market to return.
I’m with you, edgewaterjohn.
And, from a personal perspective, it’s much more than just an opinion to me. Before too long, I’ll be knee deep in dealing with what happens to the house I grew up in. My folks are both in their mid-eighties and let’s just say that my dad has seen better days.
So, what happens after he’s gone? Mom may decide that the house is her toe-tag house, and so be it. I’ve never had any success with getting my mother to change her mind on anything.
But let’s say she decides. I’ll be the one telling her to sell it for what she can get for it and be done. No remodeling adventures for my mamma, TYVM.
OTOH, if she decides that a remodeling adventure is what she wants, well, it’s her money and her choice. See above note on my inability to get her to change her mind.
As stupid as it is, it may well pay to do crappy, mostly cosmetic upgrades on the cheap to get the house to sell. There is an assumption by buyers that if the cosmetic things aren’t in good shape, the underlying maintenance hasn’t been done either. New kitchen = new car smell, and people will pay too much for either.
I have to agree with Jim A and Elanor. Remodeling the kitchen may turn off some buyers (like HBB) who are willing to rehab to what they like, but the majority of buyers want movie-in HGTV condition.
But honestly, I consider new paint and carpet to be basics that need to be done for almost any buyer. Or, I guess you could offer to pay for new carpet for a buyer to choose the color. Just IMO, I’d rather have crappy carpet, since I have my heart set on hardwood, even if I have to pay through the nose for it.
They want it move in ready because after they close, they won’t have any cash to pay for a remodel and can’t really afford what they are going to be paying for PITI. If you expect to have nothing in the bank after you close and barely enough to cover your new expenses once you move in, you want the stuff to be something you can live with for a while - you aren’t going to have the ability to change it any time soon. The exact details of what they want is just that, details.
“Besides, as a buyer, wouldn’t you appreciate a lower price much more than some hurried shoestring remodel?”
With a cost discount in place of a hurried shoestring remodel, the new owner also has full discretion over how to refurbish the place.
Agreed. One of the biggest reasons we bought the house we did was because it wasn’t remodeled. Still has those cool 70s hanging lamps by the bed in the master bedroom.
I fail to grasp the argument that shadow inventory keeps home prices depressed. I thought it was the fact that it is held off the market that prevents home prices from bottoming out?
Shadow inventory keeps home prices depressed
By Adam Belz, USA TODAY
Updated 4d 20h ago
DES MOINES – It used to be when someone was moving out of a house along mail carrier Rob McGregor’s route, he’d see a “For Sale” sign quickly go up in front.
Now, when houses along his northern Des Moines route empty out, it’s not unusual for them to stay that way. There’s no sign or Realtor’s phone number or house-hunters stopping by for extended periods.
Stagnant home prices have become part of the new normal nationwide, and one of the big reasons is the nation’s giant shadow inventory — the hundreds of thousands of homes like those on McGregor’s route that are either in foreclosure or repossessed by banks, but not yet on the market.
Already, more houses are for sale in America than people want to buy, and the roughly 1.6 million homes in the nation’s shadow inventory promise to drag down home prices for years, experts say. States like California, Florida, Illinois, Georgia, and Ohio have the largest shadow inventories, according to RealtyTrac, a firm that tracks foreclosures and delinquent properties nationwide.
…
“I just sold my home and made about $80,000 less than had I sold it five years ago. We decided it was best to take the loss now instead of making another three to five years of payments not knowing if or when it will get better.”—an unrealized gain is not the same as a loss. Now except for possible tax consequenses the distinction shouldn’t affect the sell/hold decision, but still….
“Schade: I do agree that sellers need to understand the new mentality of buyers.”
The new mentality of buyers is no different from the old mentality of sellers. Suck it up.
Amen!