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In our neighbourhood most of the homes are relocations. The husbands are as far away as Oklahoma, while the women folk <G> wait for the house to sell. A couple of places the companies bought the houses and they have them up for sale.
I have heard of someone commuting to south Illinois, another man Colorado. Some have chosen not to move until the economy is more stable, others have their house for sale -- waiting.
Certainly the value of an asset is strongly dependent on supply and demand. There are still home buyers in the market, only fewer than there were in the past. Generally if demand drops for an asset, there will be downward pressure on the fair market value of that asset. However, a home is a little different than an asset such as common stock which generally trades each market day and thus the "fair market value" of a particular stock is quickly and directly affected by demand and supply. In a "normal" real estate market, the average "days on market" time may be 100 days. During this time, the value of that home may not change substantially or at all. A home is also different from many other assets, because of the utilitarian nature and emotional attachment to a home. These factors make it much more difficult to predict the effect that a lack of buyers(demand) for a home and increased supply will have on it's fair market value. Over time, the lack of buyers and increasing supply should put downward pressure on the value of a home. However, how much and over what time period the effect will be noticed is what is so hard to predict.
Value of an asset (stocks, homes, etc) is TOTALLY dependent on supply and demand.
Unless you are actually pulling the mortgage data for each listing, you really have no idea how much equity the owners have in the home. What's more, in an environment with declining prices, equity is a moving/dynamic number that to date is only heading in one direction - down.
No offense Joe, but I'd be surprised if anyone here takes you seriously anymore. You've been so wrong, so many times, that I presume most here simply ignore your posts or take them for what they are - propaganda from someone with a financial interest in obfuscation.
Value of an asset (stocks, homes, etc) is TOTALLY dependent on supply and demand.
Quote:
Originally Posted by USCJoe
Certainly the value of an asset is strongly dependent on supply and demand. There are still home buyers in the market, only fewer than there were in the past. Generally if demand drops for an asset, there will be downward pressure on the fair market value of that asset. However, a home is a little different than an asset such as common stock which generally trades each market day and thus the "fair market value" of a particular stock is quickly and directly affected by demand and supply. In a "normal" real estate market, the average "days on market" time may be 100 days. During this time, the value of that home may not change substantially or at all. A home is also different from many other assets, because of the utilitarian nature and emotional attachment to a home. These factors make it much more difficult to predict the effect that a lack of buyers(demand) for a home and increased supply will have on it's fair market value. Over time, the lack of buyers and increasing supply should put downward pressure on the value of a home. However, how much and over what time period the effect will be noticed is what is so hard to predict.
USCJoe, I have no idea what you are even trying to say. The only real purpose of your posts lately seems to be obfuscation, misrepresentation and generally trying to mislead buyers into believing the situation is not as dire as it really is. As others have pointed out in previous threads, you are a perfect example of why most people do not trust Realtors.
My advice to anyone reading is to ignore USCJoe and his obfuscations and lies. The truth is out there. Learn it and embrace it. Realtors are not on your side if you're a buyer. Remember that and act accordingly.
USCJoe, I have no idea what you are even trying to say. The only real purpose of your posts lately seems to be obfuscation, misrepresentation and generally trying to mislead buyers into believing the situation is not as dire as it really is. As others have pointed out in previous threads, you are a perfect example of why most people do not trust Realtors.
My advice to anyone reading is to ignore USCJoe and his obfuscations and lies. The truth is out there. Learn it and embrace it. Realtors are not on your side if you're a buyer. Remember that and act accordingly.
What are you talking about? USCJoe's comments made perfect sense. He explained how the market effects real estate. You must be anti-realtor. There are good realtors and bad realtors. True, they are certainly paid by the seller, but many try to be fair in the transaction and represent both the buyer and the seller's interests.
A buyer must be careful what he/she tells the realtor, as it may be repeated to the seller--that may be covered in the contract you signed with your realtor. READ the contract. Do not show over-enthusiasm to your realtor if you are interested in a house. Just play it cool and agree to make an offer if you are interested. No need to be blabbing all your situation, etc. to your realtor. Be professional, but pleasant.
.... umm, not exactly. Technically they are - yes, but many times a seller will raise the asking price to cover the cost of Realtor commissions - even if the price is not warranted by current market conditions. I am not sure how that practice could be quantified. So in that case the commissions are covered by the buyers with the increased price they are paying for the property.
I can give a prime example of how the commissions would have been paid by me, a buyer. Recently I made an offer on a property a little bit below what was paid for the property. The sellers came down from their asking price considerably after a couple rounds of negotiating; however, they would not meet my price. Their rock bottom price was what they had paid plus about 6% - covering the commissions, but essentially I would have been the one paying for it. The price I offered was in line with what other properties were selling for in the neighborhood. I imagine that house will still be sitting there for some time until they come to terms with this market or until someone is daft enough to pay the sellers bottom line price.
I hope the buyers out there are more educated than to fall for that.
USCJoe, I have no idea what you are even trying to say. The only real purpose of your posts lately seems to be obfuscation, misrepresentation and generally trying to mislead buyers into believing the situation is not as dire as it really is. As others have pointed out in previous threads, you are a perfect example of why most people do not trust Realtors.
My advice to anyone reading is to ignore USCJoe and his obfuscations and lies. The truth is out there. Learn it and embrace it. Realtors are not on your side if you're a buyer. Remember that and act accordingly.
Would you kindly point out what comments or statements that I may have made in any of my posts that are inaccurate, misleading or lies. The statement that you made that "Realtors are not on your side if you are a buyer" is certainly evidence of either a misunderstanding of agent-client relationships or an unwillingness to believe that there are professionals who put the interests of their clients in front of their own. You advised forum members to ignore me and my alleged obfuscations and lies. It would be nice if you could give forum members a little credit in their ability to make up their own mind about my credibility.
Unless you are actually pulling the mortgage data for each listing, you really have no idea how much equity the owners have in the home. What's more, in an environment with declining prices, equity is a moving/dynamic number that to date is only heading in one direction - down.
No offense Joe, but I'd be surprised if anyone here takes you seriously anymore. You've been so wrong, so many times, that I presume most here simply ignore your posts or take them for what they are - propaganda from someone with a financial interest in obfuscation.
I did pull the mortgage data on each property for sale in Belle Hall to determine the approximate equity that sellers have in their homes. Unlike others, I do not pull figures and statistics "out of the air" to support my opinions and observations. As most of us cannot predict the future, I can only use current data and not rely upon future speculation.
.... umm, not exactly. Technically they are - yes, but many times a seller will raise the asking price to cover the cost of Realtor commissions - even if the price is not warranted by current market conditions. I am not sure how that practice could be quantified.
There is no way it can.
The FMV appraisal doesn't take into consideration the RE commission as it is an expense rather than an asset (value).
Here's an example with lots of Assumptions....for illustrative purposes only!
You sell your home, appraised at $400K, for $400K and you pay $24K (6%)as commission. The value of the home isn't $376K; it's $400K. That $24K is an expense to the seller. House lists for $400K and sells for $400K resulting in 0% off list price in the MLS stats.
Conversely, you try to sell the same house for ~ $425K but this time you try to build in the commission in ths sales price. House still appraises for $400K because the appraiser doesn't value an expense in the FMV.
House that listed for $425K now sells for $400K or 6% off list price in the MLS stats. You still pay $24K in a RE commission.
Trying to build in the commission is something we all want to do as sellers but doesn't hold water.
This is an interesting thread, and I enjoy reading everyone's post, so keep posting Joe! Of course, readers will form their own opinion about one's credibility and biases.
I am curious is mortgage data available to the public?
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USC Joe makes perfect sense
