So is the sale of my home hopeless? (Deal: to buy, bankruptcy)

[Amazonas]

Originally Posted by JamesBoyer

Actually those prices are off the least, and in some towns they are off virtually nothing, though that is influenced by what is on the market as well. Currently in Morristown for example, there have been New Construction condos selling 1, 2, and some months 3 at a time. All of them have been selling above the average for their size condo.

In my humble opinion half off peak will be well short of buying anything in this segment of the market.

*****************Anybody who bids half off peak will be buying nothing**************************

I'm not going to deny that despite the economic reality, there are some fools to be had.......these suckers are the one buying now.

[tahiti]

Originally Posted by Amazonas

The fundamentals of our economy are completely dislocated. I don't think is a matter of being negative. I think is a matter of being realistic. Also, it is that "I find it hilarious" mentally that got this country in trouble in the first place. But right about now, I guess that millions of home owners are not finding their current situation hilarious at all.

Depreciation does not happen overnight, and most homes I have checked have sold, the one that have actually sold, for 30-35 percent below the initial asking price. I'm aware that I should not use my own personal experience as an absolute, but again common sense tells me that home are not selling as much as some people claim.

As far as the stimulus package goes, I don't see how people can actually hope any remedies by having the Feds printing more money. That money is not coming to us. Is it really hard for people to understand that the cash hoarding frenzy by private banks will suck up the $850 billion that congress is about to pass? So exactly what activity are you talking about?

I will follow your suggestions for finding out actual sale prices. But again, most people don't have savings, there is no liquidity in the market, credit is hard to come by, at least at a decent rate, and people are loosing their jobs....can you please explain to me how can any industry have sutainable growth under such conditions? If you logically explain this, then I'll have Peter Schiff go to your house to revise his theories.

I totally agree and it's what I've been saying. Am I pleased that the value of my house has down 25% since peak? Hell no (but the value was never really "mine" to begin with, but I digress). But it is what it is - one man's realism is another's negativity.

[JamesBoyer]

Originally Posted by Amazonas

The fundamentals of our economy are completely dislocated. I don't think is a matter of being negative. I think is a matter of being realistic. Also, it is that "I find it hilarious" mentally that got this country in trouble in the first place. But right about now, I guess that millions of home owners are not finding their current situation hilarious at all.

Depreciation does not happen overnight, and most homes I have checked have sold, the one that have actually sold, for 30-35 percent below the initial asking price. I'm aware that I should not use my own personal experience as an absolute, but again common sense tells me that home are not selling as much as some people claim.

As far as the stimulus package goes, I don't see how people can actually hope any remedies by having the Feds printing more money. That money is not coming to us. Is it really hard for people to understand that the cash hoarding frenzy by private banks will suck up the $850 billion that congress is about to pass? So exactly what activity are you talking about?

I will follow your suggestions for finding out actual sale prices. But again, most people don't have savings, there is no liquidity in the market, credit is hard to come by, at least at a decent rate, and people are loosing their jobs....can you please explain to me how can any industry have sutainable growth under such conditions? If you logically explain this, then I'll have Peter Schiff go to your house to revise his theories.

It is quite possible to deal with several of your points. Currently there are a number of bank execs complaining bitterly that the new administration is about to attempt to force their hands. There was on bank exec on the news yesterday stating, his bank does not want to lend money to anyone with a credit scores they don't like. He implied below 720 but above 660 but the regulators are basically telling them lend or risk having the federal money you already got taken back. Basically that would mean said bank goes under if they don't lend.

What many don't seem to yet see, is that what the current policies are attempting to do, are to make it almost painful to keep money in cash. There are lots of people who have cash and are hording it. A survey showed that the last government tax rebate went almost entirely into savings, people did not spend it as was hoped they would do. I met with a person yesterday, he is scared even though his job is totally not in jeopardy but yet he is saving in cash equivalents 25% of his income. That kind of activity is totally not what you want as a government when you are trying to get out of a recesion.

I believe that getting out of a recesion, this recesion, other recessions is more about changing peoples perceptions and moods than it is about some fundamental thing that must be done. You get people feeling good about the future, and they invest and make things happen, it feeds on itself. You make people feel bad about the future, and they contract all their spending, their investments, and if that goes on long enough it really feeds on itself as well.

To your point about some homes selling for 30% and 35% less then their origonal list price. OK, first off Realtors do not set listing price, the home owner does. There are enough home owners out there who believe their home is worth what it is not. There is one in my own neighborhood that is similar to 3 other homes which all recently sold for $675,000 to $710,000, but this home owner is convinced that because they have a in ground pool their home is worth $899,900. I interviewed for the listing last year and could not convince them of a more reasonable list price, so they listed with someone at a much higher price, and of course it did not sell. I have talked to them again this year, and they are not willing to budge on price, so it will go on the market in March probably at $899,900 again with a different Realtor. But that is just life. Do they have to get $899,900 to pay off all their mortgages? I don't know, it does not matter when determining value. I do know they purchased the home about 40 years ago for $51,000

When I look at different market segments in specific towns, such as 2 bedroom condos year over year price action, I am seeing average and median prices 4% to 8% lower depending on the town.

When I look at 3 bedroom homes, year over year I see a different number depending on the town.

When I look at 4 bedroom homes, year over year I see yet a different number.

But this is all stuff that you look at for individual markets, and specifically when considering the purchase of a home. I make it my business to know what is going on. I feel it gives my clients an advantage, and it sure makes negotiating much easier for me anyway.

You see, trying to talk about average price decline spread out over an entire area, and not comparing apples to apples gives you very poor data. When looking at a given town, things can really be screwed up if a totally different type of home is selling in one year than in another year such as small condo, vs large single family home.

[Amazonas]

Originally Posted by JamesBoyer

To your point about some homes selling for 30% and 35% less then their origonal list price. OK, first off Realtors do not set listing price, the home owner does. There are enough home owners out there who believe their home is worth what it is not. There is one in my own neighborhood that is similar to 3 other homes which all recently sold for $675,000 to $710,000, but this home owner is convinced that because they have a in ground pool their home is worth $899,900. I interviewed for the listing last year and could not convince them of a more reasonable list price, so they listed with someone at a much higher price, and of course it did not sell. I have talked to them again this year, and they are not willing to budge on price, so it will go on the market in March probably at $899,900 again with a different Realtor. But that is just life. Do they have to get $899,900 to pay off all their mortgages? I don't know, it does not matter when determining value. I do know they purchased the home about 40 years ago for $51,000

When I look at different market segments in specific towns, such as 2 bedroom condos year over year price action, I am seeing average and median prices 4% to 8% lower depending on the town.

When I look at 3 bedroom homes, year over year I see a different number depending on the town.

When I look at 4 bedroom homes, year over year I see yet a different number.

But this is all stuff that you look at for individual markets, and specifically when considering the purchase of a home. I make it my business to know what is going on. I feel it gives my clients an advantage, and it sure makes negotiating much easier for me anyway.

You see, trying to talk about average price decline spread out over an entire area, and not comparing apples to apples gives you very poor data. When looking at a given town, things can really be screwed up if a totally different type of home is selling in one year than in another year such as small condo, vs large single family home.

There...in the first paragraph you wrote...That's basically what I said about people being in denial. As for the market to be all over the place...Yes, I could not agree more with you.


Cheers!

[NatasNJ]

Yes Real Estate is local. Yes owners create their listing price (usually influenced by Realtors manipulation of data) So depending on the Realtor that data can be DEAD on and fair to market values and some Realtors suggest higher to make the Owners think they can get more money and hence sign with them. So there are good and bad realtors and different approaches and tactics in signing new clients.

And yes each market segment is being affected at different levels. Some more severe than others.

That all being said MAJORITY if not all markets/locations are currently going down in value. All at various degrees but all in the same direction. For how much longer and will it pick up steam are up for debate/discussion.

[JamesBoyer]

Originally Posted by NatasNJ

(usually influenced by Realtors manipulation of data)

Oh please, stop that.

Such conspiracy theories belong in the X Files. They have very little place in real life, and would tend to be extremely difficult to pull off considering getting Realtors to agree on anything other than the raw data is worse than trying to heard cats.

[JamesBoyer]

Originally Posted by Amazonas

There...in the first paragraph you wrote...That's basically what I said about people being in denial. As for the market to be all over the place...Yes, I could not agree more with you.


Cheers!

Gee, that is nothing new. There are home sellers like that every year. I dare say in every town in every state, every year there will be a few home sellers who will not listen to reason and will attempt to sell their homes at prices that are 20% to 30% or more over what is reasonable according to the sold data. As a disclaimer, sometimes there are unique homes which do not have any reasonable com-parables, but these are a very small exception, and they tend to be difficult to price.

Because this is not a new thing, I would not try to use that as a basis of argument for direction or severity of any price changes.

[NatasNJ]

Originally Posted by JamesBoyer

Oh please, stop that.

Such conspiracy theories belong in the X Files. They have very little place in real life, and would tend to be extremely difficult to pull off considering getting Realtors to agree on anything other than the raw data is worse than trying to heard cats.

Get over yourself.

I had 3 realtors come out to my house and all 3 did their Market analysis. I got 3 different suggested listing prices. $250, $285, $329.
Wow. How can that be if they didn't manipulate the data? I am not saying they always do it to ramp up the price or set the price low. Maybe they just picked bad comps. Lots of factors in there. But like you said with all the data shown on here (you can manipulate it to bolster either side)

Example: SALES ARE up 6.3%. YEAH!
Well sales are up in certain locations and yet down in Northeast by almost 2%.

And don't tell me SOME Realtors will inflate market analysis to get the buyer to pick them over the other agent. People in this world are pretty dumb so when two agents walk in the door and one says I think your house is worth $300k and the next agent says $250k which would you take? Well not all sellers will evaluate their market themselves and determine what is realistic and realtors know that.

I have even heard realtors admit to such with the hope that once they list it high that they can talk sense into the seller to lower the price to a reasonable level.

[sholden]

Originally Posted by JamesBoyer

What many don't seem to yet see, is that what the current policies are attempting to do, are to make it almost painful to keep money in cash. There are lots of people who have cash and are hording it. A survey showed that the last government tax rebate went almost entirely into savings, people did not spend it as was hoped they would do. I met with a person yesterday, he is scared even though his job is totally not in jeopardy but yet he is saving in cash equivalents 25% of his income. That kind of activity is totally not what you want as a government when you are trying to get out of a recesion.

I believe that getting out of a recesion, this recesion, other recessions is more about changing peoples perceptions and moods than it is about some fundamental thing that must be done. You get people feeling good about the future, and they invest and make things happen, it feeds on itself. You make people feel bad about the future, and they contract all their spending, their investments, and if that goes on long enough it really feeds on itself as well.

That's simply just not the case. Yes recessions are made worse by people's fear resulting in lower spending and hence less production and hence fewer jobs and hence less spending and so on. But that's a good thing!

This "avoid/limit the recession" by convincing/forcing people to spend money is the cause of the current problems. It does work, it avoids and shortens recessions. However, recessions serve an essential purpose - they free up poorly invested capital so that better more productive investments can be made.

Running an economy build on consumer debt is unsustainable - at some point the debt has to be repaid and at that point consumption must drop. All buying things on credit does is move future consumption to the present, and in fact reduces overall consumption due to interest having to be paid. Note, this only applies to "consumption", borrowing to invest is a completely different beast. Since the interest in that case is paid by the profits from the investment.

Currently the US has managed to put a huge junk of its capital into housing, instead of into productive investments. That needs to change, the only alternative is that the US turns into just another garbage economy like Argentina.

If the the 2001 recession hadn't been "avoided/limited" by pouring money into the system (and inflating housing prices as a side effect) we wouldn't be in this mess. Basically the pain we should have gone through then has been delayed until now, and the longer it is delayed the worse is will be since the bad investments have increased.

People saving 25% of their income would be a wonderful thing. Those savings are the capital that will be invested in productive endevours that bring about future prosperity. Yes it hurts now. Avoiding short term pain is a bad idea, since it's a required part of long term prosperity.

The "make everyone feel good" so they spend and invest is garbage. It would be fine if people felt good based upon good fundamentals, but faking it doesn't work. Faking it means people feel good about investments which are bad - you need a recession to purge the bad investments so that people will justifiably feel good about what remains at the end.

Delaying the pain will turn what should have been a large recession in 2001, into a full blown depression. If the government would stop trying to delay the pain we might get away with just a very severe recession now - but they aren't doing so so depression here we come.

Now, was that positive enough for everyone?

[clevedark]

James Boyer you are a credit to your profession.