Tipping The Market In Favor Of Buyers
The Almanac reports from California. “In the first half of 2014, the median price for a single-family home in every city in the Midpeninsula was above $1 million, with the exception of East Palo Alto, where the median value was $492,000. Keri Nicholas, an Atherton native and sales associate at Coldwell Banker Residential Brokerage in Menlo Park, said homes in the $4 million-plus price range in West Menlo Park and the Lindenwood neighborhood in Atherton are capturing six to eight offers and selling well over the asking price. Nicholas said a recent home in West Menlo Park ended up with two counter offers and sold for $700,000 over the $2.9 million asking price. Another in Lindenwood sold for $1 million over the $3.9 million asking price. ‘People want the schools, and they only want certain spots,’ she said.”
“Hugh Cornish, a sales agent at Coldwell Banker, said downtown Atherton and Menlo Park are also seeing more foreign investors. ‘Definitely, 2014 has been a year where we’ve seen a tremendous amount of money from the overseas market come in and purchase real estate not just to create a home but actually as a long-term investment,’ he said.”
The Times Free Press in Tennessee. “Becky Musgrave and her husband are empty nesters since their daughter went off to college, so they figured it was time to downsize from their Mountain Shadows home in East Brainerd. Their choice was Cameron Harbor. The single-family cottage homes will range from $319,500 to $550,000, depending on size and location, according to the developers. The townhomes, which are slated to come before the condos, will have price points from $1 million to $1.25 million. Musgrave said they hope to move in March or April. The couple debated about taking an apartment, but they like having their own house. ‘Later we could resell,’ Musgrave said.”
The Miami Herald in Florida. “Sales of existing single-family homes in Miami-Dade County rose 5 percent in September from a year earlier, with 1,166 closings; existing condo sales also increased 5 percent year over year, totaling 1,425 closings, according to Miami Association of Realtors. ‘For Sale’ signs are becoming more plentiful across the region. On the heels of three years of strong price increases for both single-family homes and condos, more homeowners have equity in their properties and are opting to list them for sale.”
“In September, Miami-Dade’s inventory of single-family homes rose 20 percent to 6,347 units while the inventory of existing condos swelled 24 percent to 11,133. For existing Miami-Dade condominiums, that amounted to 8.1 months of supply — tipping the market in favor of buyers. ‘Summer production was good,’ said Jaime V. Rodriguez, a loan originator with Universal Mortgage and Finance in Miami Lakes. Some lenders, he said, are providing more mortgage options that make home-buying more accessible.”
The Record in New Jersey. “With three kids born in four years, Amanda and Ryan Marshall were ready to trade up from their Hawthorne bilevel — but they had bought the property in 2007, when housing values were high, and there was no way they could sell it for anything close to the $520,000 they had paid. They ended up selling their first home for $427,500, a loss of more than $125,000, when you count the $40,000 they spent on improvements.”
“The only comfort was that they knew if the value of their starter home was down, the same was true for trade-up homes. ‘I still think about how much we lost in the house,’ Ryan said. ‘I try not to anymore,’ said his wife.”
“Deborah Innocenti, a Coldwell Banker agent in Ridgewood, said that in the most sought-after towns, home values have rebounded more than in other areas, and many boom-era buyers in those towns can now break even, or come close, when they sell. But in other towns, she said, values are still well below their peaks. ‘Those people are suffering,’ she said. Especially hard hit are the people who never had much equity in their homes — buyers who made small or no down payments in a time of looser lending standards.”
“‘I sold a ton of apartments in 2008 and 2009, and these people come to me and say, ‘What do I do now?’ said Linda Stamker, an agent with Prominent Properties Sotheby’s International Realty in Fort Lee. Homeowners stuck in these situations are often disheartened, even angry. ‘I would say they’re bitter; some blame their real estate agent: ‘How could you have sold me this house?’ Stamker said.”
“…But in other towns, she said, values are still well below their peaks. ‘Those people are suffering,’ she said. Especially hard hit are the people who never had much equity in their homes — buyers who made small or no down payments in a time of looser lending standards.”
Easier Mortgages Are Coming Back — Will They Boost the Housing Market or Cause Another Crash?
By Matthew Frankel
October 25, 2014
The Los Angeles Times reported last week that Fannie Mae and Freddie Mac have come up with a new set of looser standards for lenders, designed to make mortgages accessible and affordable to prospective homebuyers who don’t have perfect credit.
Will this have the desired effect of boosting home sales? After all, loans with low down payment requirements are already available to low-credit borrowers through the Federal Housing Administration, or FHA. Also, isn’t it true that easy mortgages caused the mortgage crisis in the first place?
…
‘a new set of looser standards’
looser standards are for loosers
This harebrained announcement was made in a ballroom at the Mandalay Bay Hotel and Casino in Las Vegas….seriously…sounds like something the Onion would publish but they actually did it there.
http://online.wsj.com/articles/what-happened-in-vegas-1413934406
The mortgage crisis was manageable. Falling house prices and deflation are not. They must have ever more borrowing to keep the game on.
The timing for a return of zero-downpayment affordability mortgages couldn’t be better for my family, as we need to sell my parents’ home early next year, 5 miles east of Ferguson, MO.
Be sure to get a “feed the squirrels” promise, in writing!
In Missouri, the saying is, “Trap the squirrels.”
on BLOOMberg this am the commentator was hoping his house in Annapolis would go up so he could refi. Not going to happen-they are electing a Marxist in NOV
“on BLOOMberg this am the commentator was hoping his house in Annapolis would go up so he could refi.”
Commentator planning on a diesel, 4-door, $50k, pick-up truck?
Now they’re into the mid $70k’s.
The insanity continues to darken!
FWIW, they reinflated the bubble under the current “Marxist”.
Do you really believe that prices will continue to rise if Ted Cruz is elected prez next year?
Prices are already headed down and once that happens they don’t go back up for a long while. All these reports of possible future rule changes or programs to be implemented are wishful too late thinking. This last couple of years was all driven by a flipping mentality which no longer works.
Enjoy your bath specu-vestors. What else can be said?
‘People want the schools, and they only want certain spots,’ she said.” ??
Particularly foreign buyers….On the surface, you would ask yourself, “common, you are spending that kind of money so your kid can attend a high SAT school” ?? I have concluded, particularly because there are so many private school options in the bay area, that in some of these enclaves its not about the education…IMO, Its more about having the kiddies schooling and rubbing elbows with other wealthy & influential families…
If I wanted my family to hob nob with the elites, the meat packing area better known as San Francisco is the last place to find them.
That’s realtor hogwash and you know it. It’s their schtick that it’s always about family and the children’s future but it’s about ROI. It always about ROI. They’re talking about MILLIONS of dollars for a house paid for in cash by some “foreign” buyer.
Sure it’s about the schools. Sure it is. I send my kid to the American School in Leysin and it COSTS LESS THEN THOSE HOUSES!
Dave is here solely to perpetuate REIC hogwash.
I’m actually aware of a number of people who avoid certain private high schools for their kids in order to AVOID rubbing elbows with the elite kids. Lots of resources to buy drugs, etc. Kids shouldn’t think that going on vacation via private jet is “normal”.
Homeowners stuck in these situations are often disheartened, even angry. ‘I would say they’re bitter; some blame their real estate agent: ‘How could you have sold me this house?’ Stamker said.”
As much as I hate Realtors I wouldn’t blame them. No one put a gun to your head to buy your current house, and if you paid too much you have no one to blame but yourself.
I don’t hate anyone. But too much is given over to this field. When a UHS goes on about the economy, the media just repeats it as if this person has a PHD. In this CA article, they are telling us why this tech boom is the real thing. Now you are stock experts too? Facebook isn’t even a tech company. Many of these bay area companies are just web pages of one sort or another. And if these stocks are so wonderful, why not buy the stocks instead of paying a million over asking for some shack?
Because you can’t buy stocks with a 30-year mortgage.
I thought they were paying cash?
Agreed. And I shouldn’t have said hate, I just have to laugh when I hear a Realtor speaking about how housing is such a great investment, how fixes are easy and how great tax advantages are. The best thing you can do is separate all of the different housing departments into their own specialty. (I wouldn’t ask my plumber about interest rates, I wouldn’t ask my mortgage broker about installing a new hot water heater). Why people trust Realtors to be an all encompassing full service clearing house is beyond me. And it’s the buyers fault if you do.
There are up to three professionals that I want to have advising me on a potential house purchase:
1) A lawyer, to review my contract and assist in negotiating
2) A certified (or at least well experienced) housing inspector
3) A residential GC, in the event that I’m buying distressed or heavily discounted property badly in need of major refurbishment.
Notice that a real estate salesperson and a professional appraiser are nowhere to be found on the list. They can’t help me with any of the above.
I prefer to pay these people myself, so I’m assured they’re doing my bidding and looking out for my interest. A ‘buyer’s agent’ paid for by the seller is just a second sellers agent and is not acting in my interests any more. But this is the way most sales are transacted, with the results such as being discussed.
Have #3 perform task #2.
Get your own trusted housing inspector. In my case, I pay an extra $100 for every major flaw they find.
You may as well hire a realtor.
Some of these people in the NJ article didn’t have to be convinced; they are running out buying even more expensive houses! 20 to 40 going through an open house? They only look for someone to blame when they get burned. Something Mel Watt should keep in mind.
He doesn’t care. An overpriced, oversized house with a 30-year obligation is now an entitlement, that’s what he’s after in the first place.
Increasingly in my forecast, the decisions as to which defaulters to let stay indefinitely will be political decisions. There will be millions (more) given a free pass in the years to come, so the political effects will be significant. Think of (what are now) swing congressional districts. Deadbeats living in these areas will be the least likely to be forcibly foreclosed upon. Minimizing monetary losses from defaulted properties no longer seems to be of much concern to the banks, they’re bailed out in advance now.
Not a very hopeful forecast, I realize. I’m having difficulty in seeing this play out any other way, though.
I thought it was a bit loony that one of the NJ characters would advertise his cluelessness in 2007 given that he is a “Certified Financial Planner”…but perhaps that will save “discourage” someone from doing business with him.
“The Marshalls have a similar story. Ryan is a certified financial planner in Wyckoff, Amanda a fifth-grade teacher in Hawthorne. The couple, both 32, were high school sweethearts who grew up in Hawthorne, married soon after college, and bought their first home in Hawthorne — a few doors away from Amanda’s mother’s house — in 2007.
Almost as soon as they signed the papers, they began watching their home lose value. That was discouraging, Ryan said.”
“Not a very hopeful forecast, I realize.”
It’s a long fugg’n way from hopeful, but I appreciate the honesty.
And buyers all think it is OK to pay 6% to these clowns to enter some data and take bad photos.
It’s like blaming a mosquito for giving you West Nile virus or a tapeworm for causing diarrhea.
Better to avoid blame and simply eradicate the parasites.
“Homeowners stuck in these situations are often disheartened, even angry. ‘I would say they’re bitter; some blame their real estate agent: ‘How could you have sold me this house?’ Stamker said.”
To which she answered “You were foolish enough to buy it, and I needed the money.”
It’s like blaming a car salesmen when you buy a car you can’t afford.
Can’t afford used to mean, “don’t have either the savings or sufficient income”. Now it means “couldn’t get approved for zero down financing”.
No.
Now it means deliberately abdicating their responsibility of thinking through and performing the math before making a major decision and transferring that responsibility onto individuals who stand to profit.
ATT HA
From March 2009 through June 2014, the S&P 500 has increased 4.7 percent a quarter, about five times faster than gross domestic product, That’s the biggest gap since at least 1947
yeah…… after collapsing 53% from Oct 2008 to Mar 2009.