If I would give you 100k more... (flat fee, real estate market)

[8 SNAKE]

Originally Posted by JustAGoodPerson

i guess you'd have to see cali's houses that are just carpet wood on ground that costs 300k for a ****ty dump.... and that no first time homebuyers young adults or new couples can afford. or they get into a loan that digs them in backwards...

then you'd understand why i say it is brainwashing to tell someone that land should costs money just cause a developer buys it first...

i say that a house should cost what it costs.

well, septic, electric hook up, material and time...

not the fact that someone with more cash can buy it for more so therefore it costs more...

do they do that with food, cars, clothes... if so we'd all be hungry and naked...


its a house.. a roof over a families head. shelter...

some are nicer, and some aren’t but still a house.

i as a realtor am in escrow with clients buying thier first time house. i have told them not to. they dont have cash for closing costs, for buying the interest rate down, for even a down payment. its a $360k home thats not been updated since it was built over 50 years ago.

yet they insist. they want the american dream, they are willing to stress over thier 2500 month payments that they will have. fireman with two young children. closes tomorrow. and they cannot even afford the first payment that'll come before they know it.

they too disearve a home and a place to raise thier children. and to retire without a mortgage... around thier necks.

i am feeling awefully sad today about it to say the least...

I am shocked that you are a realtor, yet have absolutely no grasp of the factors that influence the price of a home. You want to claim brainwashing and conspiracy theories, yet you won't take the time to educate yourself. Do yourself (and most certainly your clients) a favor and google "supply and demand" and do some reading.

When you finish that, you'll need to look at a few markets; not just the ones in CA and MT. Try looking at the markets in WV, AL, MS, TN and KY. You'll see that in each of those places, the market is completely different than the ones that you are looking at. Why? SUPPLY AND DEMAND!

[GiftShoppeGuy]

Sure.... The "cost" of things are way out of line.

The cost of "materials" that is.

Our materials markets are extremely over inflated.. Home builders aren't making much on these newer mid range homes..... as a matter of fact, most are selling "at cost", just to dump them.

I don't see as to where an extra 100k would make much of a difference other than to use in a "just in case scenerio", like it's being presented here.

There are any good number of variables that come into play when building a new home. Where you get your materials and from whom can make all of the difference. Nevermind that most distributors and suppliers are marking up the materials by as much as 200%, citing, of all things... the cost of oil/fuel/delivery.
The fact of the matter here is that it really doesn't "cost" more to deliver, than it did 3 years ago, and if so, we'ld see a bare 4% increase in the real cost.

Banks have also jumped on the bandwagon with this... now offering 40 year mortgages over their 30 year.... hoping to attract new home buyers with a lower payment....

This is alot like the internet bubble.. we buy into a hot market at a very inflated price, only to discover that once the market adjusts itself, we are paying 500% more for ours, than our neighbor down the road is paying for theirs. Were stuck with 40 years at 8.25, while our neighbor gets 30 years at 4.34.....

Anyone with any kind of good sense would leave the housing market alone right now.... give it a year, or the time needed to let this inflated "bubble" market, adjust.

When the "materials" market adjusts...... these 325k homes will only be worth half.... and the new home owners of today, will have to take it on the chin when they sell..... or, ride it out for the next 40 years.

I didn't buy into the internet market until after the "bubble burst"... I knew better than to spend money I didn't have.... so I waited..... and now, I can do the business and turn a profit..... Houses are no different than this....
Though I can get get financed for a brand new house.... why should I?
Screaming hot materials cost won't last forever..... and I'm a patient man.... I'll wait for the market to bust, and then I'll swoop in for the kill..... with the money I have, and on my own terms.

In answer to your question....
I wouldn't take 100k over the current market value of my home, because mine, and others aren't worth the current market "inflated" value...
The current "inflated" values aren't worth the paper they're written on...

I've been around long enough to know, that if I sell my home, I "will get" what I paid for it, plus the real appreciation, and that's fine with me.
Even after the markets adjust, I will still make money if I decide to sell, so I'm not worried about it.

I don't do "bubbles"....... I leave the gambling in Vegas, where it belongs.

[8 SNAKE]

Originally Posted by GiftShoppeGuy

Sure.... The "cost" of things are way out of line.

The cost of "materials" that is.

The fact of the matter here is that it really doesn't "cost" more to deliver, than it did 3 years ago, and if so, we'ld see a bare 4% increase in the real cost.

While I agree with your general sentiment, I disagree about the inflated cost of materials and the shipping costs.

If you look at the markets for raw materials like lumber, steel, aluminum and copper they aren't inflated. They are experiencing a lot more demand because developing countries like India and China are buying huge quantities of raw materials. This factor is not going to change in the near future.

With respect to shipping costs, they have most certainly changed. I am a freight coordinator in the flatbed transportation industry, so I have first-hand experience in this market. I negotiate rates and contracts with suppliers every day. We have fuel surcharges built into our contracts that adjust every week with the national average price of diesel fuel. A couple of years ago, our fuel surcharge averaged a bit more than 20 cents per mile. Right now we are billing 35 cents per mile. That's a big difference.

[fbcobrn]

Originally Posted by jimj

You are taking from those that made it and giving it to those that didn't. That's like someone walking into your house and since you had the money to buy 10 boxes of cereal and put it away they are going to take 3 or 4 and give them to the guy standing on the street with the "will work for food" sign since how much cereal do you really need.

Everyone talks about how good 'ole Montana used to be but I am sure that back in the good old days you either worked to fend for yourself or you starved.

Jimj...............what an excellent analogy !!!!!!!!!!!!!
I'm d*** tired of working hard, paying my own way, just to have bleeding hearts beg money for the unfortunate.
Many of the unfortunate are destitute by choice and habits.
Maybe they should have stayed in school and got that free education...(yes I realize many things that go along with Jr and Sr high school have a price tag on it, but that's the extracurricular stuff, not the general Ed.)....they might have that car and home in adulthood. $45.00 cartons of cigarettes and $20.00 30-packs of beer will put food and clothing on their kids. Quit expecting us working stiffs to do it. We have our own to take care of.

....and what's wrong with 10 boxes of Tony the Tiger Flakes in one cupboard anyway...hey. It may be the only thing in there....LOL

[GiftShoppeGuy]

Originally Posted by 8 SNAKE

While I agree with your general sentiment, I disagree about the inflated cost of materials and the shipping costs.

If you look at the markets for raw materials like lumber, steel, aluminum and copper they aren't inflated. They are experiencing a lot more demand because developing countries like India and China are buying huge quantities of raw materials. This factor is not going to change in the near future.

With respect to shipping costs, they have most certainly changed. I am a freight coordinator in the flatbed transportation industry, so I have first-hand experience in this market. I negotiate rates and contracts with suppliers every day. We have fuel surcharges built into our contracts that adjust every week with the national average price of diesel fuel. A couple of years ago, our fuel surcharge averaged a bit more than 20 cents per mile. Right now we are billing 35 cents per mile. That's a big difference.

I was speaking of averages, across the board, nationwide on average shipping cost increases. These would be 4% tops on average.

As far as oil and other likeminded raw materials, China exports very little by way of timber, much less even than Japan did back in the 80's..... probably because they have their own..... most of the oil that China imports, comes from Russia 65%, Argentina 12%, Iran 9%, Domestic 14%.... they don't export out of the middle east at all.

It's our inability to meet demand at home that's causing our crisis anyway.. There are no new refineries on the drawing board and the refineries we already have aren't being maintained as they ought.... they've been running at 100% capacity for at least the past 3 years. When one facility goes down for maintenence, we feel it with a nickel spike in prices.

And then, the environmentalists have quite effectively shut down our timber industry, thus leaving us to having to depend on the much more expensively produced Canadian timber.

Blame places like China if you must, but it's nothing to do with China or anywhere else at all...China and some of these other countries are doing what we should be doing... by that I mean that we should be "taking care of our own", logging our own forests, building our own refineries and so on and what not ... we created the mess we have all on our own... and we didn't need any help doing it... we cut ourselves off at the pockets on this one.

It's not China's fault that timber prices are so high... it's ours (we don't log or otherwise harvest our forests anymore).
It's not India's fault that fuel prices are so high, it's ours (we don't even refine enough to meet our own demand).

Our prices are a direct result of what we "aren't" doing at home.... and not what others around the world "are" doing.

We can only sit around and do nothing for so long, before someone gets the bright idea to start taking care of our own... Our base markets can't handle this for very long, case in point, "the 1920's"... and we all know what happened there. The bottom will indeed fall out.... it has to..... and it will..... it's just a matter of time... and I'm not above waiting.

[JustAGoodPerson]

Originally Posted by 8 SNAKE

I am shocked that you are a realtor, yet have absolutely no grasp of the factors that influence the price of a home. You want to claim brainwashing and conspiracy theories, yet you won't take the time to educate yourself. Do yourself (and most certainly your clients) a favor and google "supply and demand" and do some reading.

When you finish that, you'll need to look at a few markets; not just the ones in CA and MT. Try looking at the markets in WV, AL, MS, TN and KY. You'll see that in each of those places, the market is completely different than the ones that you are looking at. Why? SUPPLY AND DEMAND!

i have read on supply and demand. and in California that doesn’t exist. we lived in a neighborhood where more and more homes were being built every day. no demand on more housing at all. yet our home price went up daily in the 1000's. because of the cma's. have you read on that?
as a realtor i studied supply and demand. are you telling me that that is the only reason why we are in a bubble?
then that’s stupidity!

[JustAGoodPerson]

Originally Posted by GiftShoppeGuy

Sure.... The "cost" of things are way out of line.

The cost of "materials" that is.

Our materials markets are extremely over inflated.. Home builders aren't making much on these newer mid range homes..... as a matter of fact, most are selling "at cost", just to dump them.

I don't see as to where an extra 100k would make much of a difference other than to use in a "just in case scenerio", like it's being presented here.

There are any good number of variables that come into play when building a new home. Where you get your materials and from whom can make all of the difference. Nevermind that most distributors and suppliers are marking up the materials by as much as 200%, citing, of all things... the cost of oil/fuel/delivery.
The fact of the matter here is that it really doesn't "cost" more to deliver, than it did 3 years ago, and if so, we'ld see a bare 4% increase in the real cost.

Banks have also jumped on the bandwagon with this... now offering 40 year mortgages over their 30 year.... hoping to attract new home buyers with a lower payment....

This is alot like the internet bubble.. we buy into a hot market at a very inflated price, only to discover that once the market adjusts itself, we are paying 500% more for ours, than our neighbor down the road is paying for theirs. Were stuck with 40 years at 8.25, while our neighbor gets 30 years at 4.34.....

Anyone with any kind of good sense would leave the housing market alone right now.... give it a year, or the time needed to let this inflated "bubble" market, adjust.

When the "materials" market adjusts...... these 325k homes will only be worth half.... and the new home owners of today, will have to take it on the chin when they sell..... or, ride it out for the next 40 years.

I didn't buy into the internet market until after the "bubble burst"... I knew better than to spend money I didn't have.... so I waited..... and now, I can do the business and turn a profit..... Houses are no different than this....
Though I can get get financed for a brand new house.... why should I?
Screaming hot materials cost won't last forever..... and I'm a patient man.... I'll wait for the market to bust, and then I'll swoop in for the kill..... with the money I have, and on my own terms.

In answer to your question....
I wouldn't take 100k over the current market value of my home, because mine, and others aren't worth the current market "inflated" value...
The current "inflated" values aren't worth the paper they're written on...

I've been around long enough to know, that if I sell my home, I "will get" what I paid for it, plus the real appreciation, and that's fine with me.
Even after the markets adjust, I will still make money if I decide to sell, so I'm not worried about it.

I don't do "bubbles"....... I leave the gambling in Vegas, where it belongs.

i agree with 100%!

[Jacks Dad]

I will be moving to montana in september. I have a four month old son and I hope to be able to raise in a healthy safe environment. I am from New Jersey so I obviously cant stay here. I hope to learn the culture in montana and contribute to the traditions that already exists. I think a great thing that might already even be in place for all I know is a meetup group along the lines of "Learn Montana Living" . a forum for natives to explain concerns and newcomers to know exactly what they can do to respect the community so as not to be resented. If the resentment is purely financial then your answer is simple. The root of every financial problem is the paper currency, the federal reserve system and the IRS. I would bet that if you did not have to pay federal income tax you would be able to buy property. I wonder if you know the federal income tax is completely illegal and is a fraud perpetrated on us by foregn bankers. A letter to your congressman regarding this larceny may go a bit further than yelling at californians who cant hear you anyway cause the saab windows are rolled up with air on in april.

I think part of this resentment is just the fact that folks are seeing he small 200 person towns grow to 1500. They lose the memories of their own home towns as they were when they were children. In missoula i would imagine people are in total shock. It happens everywhere. Not just Montana. At the jersey shore the charming old victorians have been torn down in favor of plastiuc quadraplexis. It is a horror to the eyue.Ruining beach views for people who have been here for generations. I hope this never happens in Montana. I have vowed to my landlord to care and keepup his property as he has farmed it and kept it for years. I will keep my word. I am not from Frisco. In Jersey you keep your word or you get shot. Last good thing about the place.

The side that doesn't get looked at so much is the fact that the increase in jobs will allow native montana families to stay there for generations instead of having to move to nightmare creations like cleveland just to earn minimum wage. The property tax problem is everywhere. It is systematic. We are being bankrupted intentionally by foreign interests. Better to educate and fight back than find yourself in a bathhouse in orange county one day.
See you all in September.

[JustAGoodPerson]

ok-
i personally know many builders, developers, investors, and even have interviewed the guys who take raw land and develope it, build on it and sell the home back when i sold advertising to get thier bottom line and profit margins. there is a mark up on this. its not about supply and demand only. not when this whole real estate boom went from a home being worth 110 to 435 in less then 5 years...!

i do speak of only cali. thats because thats the market that the middle class is having such a hard time in.

as a realtor i look at a privlage site daily. this site shows how many homes are for sale, sold, pending, off the market daily.

that number in the county of sac and all surrounding counties did not change for what was for sale each day when the market was "good" or now when its "bad". the number of solds, pending, and off the market did.

for example on day 1 the number of homes to pick from were 100 in the market that was going up and up.

on day 2 the number of homes for sale were also 100 in the market when things were going down.

the interest rates going up has slowed things.

that's caused the first time home buyer to stop buying, which causes that home to not sell that causes that seller to not move up to the next level of a home...

that haulted everything.

today there are the same number of homes available to purchase.

just no buyers.

therefore sellers start to reduce in price out of desperatness to compete.

buyers watch and wait.

trickling down.

thats what causes the prices to change. not supply... and demand... not today.

anyways... the other issue is realtors themselves.

i have spent over a year comping homes for housevalues.com.

everyday i would go onto the site to see who wanted to know how much thier home was worth in my area.

i would take their home's details bedrooms, acreage, sqft and age and tell the what they could sell for.

i never saw them, i only did a comp.

a comp is a comparable to other homes that have sold in the last 6 months that’s similar to theirs...
so if my home sells for 440k then another home in this area with similarities will also or can sell for 440k. that defines the price.

i know this because that is what realtors do to define a price for a client.

then an appraiser always agrees to make everyone happy.

and to top it off if someone gets preapproval for a price they will bid to max it... ego thing.

For example if I were approved for a 355k house, then I end up looking at homes for 355. how many people do you know who’s approved for 355k and yet buys a home for 200k. that too increases home prices.

i have seen this first hand.

i don’t have to read in a book about the history of real estate on supply and demand. i live real estate.

if you dont believe me, call your nearest realtor. my broker has been in the business for 30 years, he sees it. you should too. he always encourages realtors to not over comp a house, to not over sell your clients, to not allow a buyer to max themselves or let a home go for more then its worth in a bidding war. but people will be people and repeat history time and time again.

[jimj]

It's funny you should mention the over buy thing, I have been approved on several occasions for mortgages for way more than I was looking for and bought the less expensive ones. I always looked at it and thought wow, they approved me for let's say 500k but did they forget I have to eat and pay other bills that they never seem to ask for or take into account on the loan apps? I know what my expenses are and what nut I think I can crack every month better than any lender so I refused the higher loan amounts and bought what I was comfortable paying for. I agree, there are many who when approved for 500k will spend the whole thing and end up house poor or running to forclosure when there is any financial hiccup.
I would also have to add that realtors play a role (sometimes a big one) in the housing inflation game. Not only to some (not all) inflate the price they tell their clients to sell for or underprice to get a quick commission most will not move off the 6%. Since I am sure we can agree that FISBO's are almost impossible to sell in most markets people inflate their house to cover the commission just as every retailer does their product. This adds quite a chunk of change to house prices.
If I had a reasonable chance of selling my house myself I would not have a problem paying 2-3% to the buying agent and lowering my price, but realestate is being run as a monopoly, you have to pay a realtor to get on the MLS, there is no other way and here realtors will not show FISBO's unless the client forces them. How do I know this? They've told me many times.

The thing that I don't understand is why should I have to pay a realtor 30-60k to get the same service the guy down the street pays 12k for? Nothing different was done, same marketing, same service etc. jsut mine costs more.

There should be a sliding scale for commissions that as the price of the house hits a certain point the percentage drops if you want to control some of the inflation in housing.