Showings dropping off in 2nd/3rd week. How can I improve showings in this market? (Plano: leasing, homeowners insurance)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Rakin you may be on to something cause I am seeing something weird going on in this Buyers market! Has any other Agents been dealing with competing mutiple offers? I know an Agent friend has written 14 offers for her buyers. What we have figured out is the price range they are falling into is becoming very competitive. Just wondering if this is happening anywhere in the Dallas area, it could just be an isolated Cali thing???
I worked with 3 buyers over the last 3 days and 2 of them wrote offers. The first one, we were in a multiple offer situation with 2 other offers (Plano) and the other ones in Rowlett with one other offer.
2 weeks ago, we bid on a fourplex in Garland and there were 5 offers in addition to ours. That property sold over asking price.
My husband and I were having this discussion about running into these multiple offer situations a lot this past few weeks. When the house is priced right and it shows well... It will sell for top dollar!!
A few places don't necessarily mean the whole big state of TX, or even Dallas. Prices going up... in reality... how much... 5% 10% a year.. maybe more? No one would consider that a big increase... that would be a house going from 200k to 240 in 2 years... and to 300k in 5 (actually a little more) has that happened?
"5% 10% a year.. maybe more? No one would consider that a big increase..."
^^^I think I found the cause for the real estate meltdown!^^^Sure, no one would consider a 10% annual return a big increase! Doesn't real estate always go up 20% a year? Aren't we entitled to at least this miniscule amount? Reminds me of what a friend told me in 1998 - "I can make 18% every year in the stock market."
I worked with 3 buyers over the last 3 days and 2 of them wrote offers. The first one, we were in a multiple offer situation with 2 other offers (Plano) and the other ones in Rowlett with one other offer.
2 weeks ago, we bid on a fourplex in Garland and there were 5 offers in addition to ours. That property sold over asking price.
My husband and I were having this discussion about running into these multiple offer situations a lot this past few weeks. When the house is priced right and it shows well... It will sell for top dollar!!
Naima
Wow! thanks nsumner, I think we are about to see a shift a lot sooner than most predicted. What a difference a few months make. I had a buyer that closed at the end of Feb and we started looking in January. There was no competition and tons of short sales to make offers on. I also know that sales pick up in the 2nd quarter but I am just amazed that it's getting so competitive so fast.
what I was sure that $$ I put into my 401k was tax deductible (anyone help me here).Oh wait, it lowers my taxable income you're right, but for math purposes....
If I can put away 20,000 a year in an investment
Or the same into housing in TX, where am I going to make better after short and long runs?
How much are you currently diverting into your 401K? Or are you all talk?
Also, keep in mind that if you put $20K into an investment, you still have to put money into rent unless you're living in a box. Someone renting for $1000/month -vs- owning for $1300/month can only claim to divert the $300/month extra into their investments..
Then you could buy less home than you can afford to "only" make 5% per year on that investment (-vs- 0% on rent) AND invest into your 401K (with the tax deduction + company match). My wife and I both work, so we do this path. We live in Lake Highlands, which is a "close in neighborhood" to downtown, so I think 5% returns will be a safe assumption for the next 5 years. We both max out our 401K and max out IRA contributions, along with invest in efficiency in our home, which has cut our energy use by 40% (can't make a rental more efficient - your at the mercy of your land lord).
We can talk in 20 years to see who's theory worked better - because in the end, only time will tell who's right. I have a tendency to think my quality of life will be better both now and in retirement than compared to chasing 10+ % returns in housing, having to move out of that home and presumably the bloated market to an area with a lower cost of living... and start over making new friends in retirement... oh God, that just sounds horrible. I'll stop there.
houses over stocks argument works if a person makes the RIGHT choice--that is always the person who comes out on top
someone who bought Warren Buffett's stock at the beginning would not have to worry about where to buy a home now---but plenty of people did not---
if you buy a house, pay a fair price, and the area appreciates in value (the city does its thing right, the schools do their thing right, other people want to continue to buy/move into that area, then that was a smart play--but you may not always see 5-10% appreciation (we certainly haven't in our neighborhood)
but if things change--maybe even something you or anyone can't forsee now--then you might feel really stupid--and wind up wishing you had bought stock
Renting rocks. My advice to the original poster is to beat the comps and sell it now. That "it will get better next month" attitude caused a lot of people to lose their life savings when tech crashed.
Here are some goood reasons to rent.
It's still much cheaper to rent than to own the same thing. Yearly rents are less than 3% of purchase price. Mortgage rates are 6.5%, so it costs more than twice as much to borrow money to buy a house than it does to rent the same kind of house. Worse, total owner costs including taxes, maintenance, and insurance are about 9%, which is three times the cost of renting. Buying a house is a very bad deal for the buyer. Put in the numbers for your own area here.
Salaries cannot cover current house prices. This means house prices must keep falling or salaries must rise much faster. You probably noticed that your salary is not rising much, and that inflation in food, energy, and medical care has been more than 20% per year. This leaves less money available to pay for housing. A safe mortgage is a maximum of 3 times the buyer's yearly income, but most mortgages are well beyond that. Anyone who buys now will suffer losses immediately, and for the next several years at least, as prices keep falling.
Prices disconnected from Gross Domestic Product. The value of housing in the US depends a lot on the value of what the US actually produces.
Buyers borrowed too much money and cannot pay the interest. Now there are mass foreclosures, and senators are talking about taking your money to pay for your neighbor's McMansion, even though no one in the US has been made homeless by foreclosure. In fact, forclosed owners end up far better off: they go reap large savings every month, since it costs less than half as much money in rent as they were paying to "own" the very same thing.
Banks happily loaned whatever amount borrowers wanted as long as the banks could then sell the loan, pushing the default risk onto Fannie Mae (taxpayers) or onto buyers of mortgage-backed bonds. Now that it has become clear that a trillion dollars in mortgage loans will not be repaid, Fannie Mae is under pressure not to buy risky loans and investors do not want mortgage-backed bonds. This means that the money available for mortgages is falling, and house prices will keep falling, probably for 5 years or more. This is not just a subprime problem. All mortgages will be harder to get.
A return to traditional lending standards means a return to traditional prices, which are far below current prices.
Interest rates increases. When rates go from 5% to 7%, that's a 40% increase in the amount of interest a buyer has to pay. House prices must drop proportionately to compensate. The housing bust still has a very long way to go.
For example, if interest rates are 5%, then $1000 per month ($12,000 per year) pays for an interest-only loan of $240,000. If interest rates rise to 7%, then that same $1000 per month pays for an interest-only loan of only $171,428.
Recent lower Fed inter-bank lending rates do not directly affect mortgages rates, nor do extra Fannie or FHA guarantees. The 30-year fixed mortgage rate actually went up after the Fed's rate cut, because rate cuts cause higher inflation.
Also note that unlike the last few years, most lenders now require a 20% downpayment. That will eliminate many buyers from the market, driving down prices.
Extreme use of leverage. Leverage means using debt to amplify gain. Most people forget that losses get amplified as well. If a buyer puts 10% down and the house goes down 10%, he has lost 100% of his money on paper. If he has to sell due to job loss or an interest rate hike, he's bankrupt in the real world.
It's worse than that. House prices do not even have to fall to cause big losses. The cost of selling a house is 6%. On a $300,000 house, that's $18,000 lost even if prices just stay flat. So a 4% decline in housing prices bankrupts all those with 10% equity or less.
Shortage of first-time buyers. High house prices have been very unfair to new families, especially those with children. It is literally impossible for them to buy at current prices, yet government leaders never talk about how lower house prices are good for pretty much everyone, instead preferring to sacrifice American families to make sure bankers have plenty of debt to earn interest on. If you own a house and ever want to upgrade, you benefit from falling prices because you'll save more on your next house than you'll lose in selling your current house. Every "affordability" program drives prices higher by creating more debt for buyers to use. To really help Americans, Fannie Mae and Freddie Mac should be completely eliminated, along with the mortgage interest deduction. Canada has no mortgage-interest deduction at all, and has a more affordable housing market because of that.
The government keeps prices unaffordable through programs that increase buyer debt, and then pretends to be interested in affordable housing. No one in government except Ron Paul ever talks about the obvious solution: less debt and lower house prices. The real result of every "affordability" program is to keep you in debt for the rest of your life so that you have to keep working. Lower house prices would liberate millions of people from decades of labor each.
Surplus of speculators. Nationally, 25% of houses bought the last few years were pure speculation, not houses to live in, and the speculators are going into foreclosure in large numbers now. Even the National Association of House Builders admits that "Investor-driven price appreciation looms over some housing markets."
Fraud. It has become common for speculators take out a loan for up to 50% more than the price of the house he intends to buy. The appraiser goes along with the inflated price, or he does not ever get called back to do another appraisal. The speculator then pays the seller his asking price (much less than the loan amount), and uses the extra money to make mortgage payments on the unreasonably large mortgage until he can find a buyer to take the house off his hands for more than he paid. Worked great during the boom. Now it doesn't work at all, unless the speculator simply skips town with the extra money.
Baby boomers retiring. There are 77 million Americans born between 1946-1964. One-third have zero retirement savings. The oldest are 62. The only money they have is equity in a house, so they must sell.
Huge glut of empty housing. Builders are being forced to drop prices even faster than owners. Builders have huge excess inventory that they cannot sell, and more houses are completed each day, making the housing slump worse.
The best summary explanation, from Business Week: "Today's housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra-low interest rates of a weak economy. Either the economy's long-term prospects will get worse or rates will rise. In either scenario, housing will weaken."
How much are you currently diverting into your 401K? Or are you all talk?
We can talk in 20 years to see who's theory worked better - because in the end, only time will tell who's right. I have a tendency to think my quality of life will be better both now and in retirement than compared to chasing 10+ % returns in housing, having to move out of that home and presumably the bloated market to an area with a lower cost of living... and start over making new friends in retirement... oh God, that just sounds horrible. I'll stop there.
Brian
LOL!!! I agree. Some people are all talk. I'd love to know the REAL investments some of the "renting is the only way to go" have and the gains they have made in them.
Why not talk now . I'll use several of my family members as an example. Here are 4 examples and only 1 of these had a high earning 6 figure income while the other 3 were "blue collar".
1. My parents. Being a truck driver I'd safely say my dad was a TRUE blue collar worker. In his lifetime now has owned 3 homes. Has suffered setbacks due to layoffs but toughed it out, had always saved as a family so had savings to weather the rough times. Found a job locally so no uprooting the family to chase a better circumstance during those times - an advantage to living in an area that is diverse and always expanding. Now in their mid-60's they recently sold their PAID OFF home for a profit and bought a house with CASH that was about $100K MORE than the one they sold. In their mid-60's they are comfortable, no financial worries as they learned to watch what they spent and purchased quality over quantity as well. Fairly new cars - paid for. Savings - check. Retirement - check. 401K - check. Insurance - check. Planned ahead for nursing care - check. Hmm, not bad considering how they started out as a young teenage couple w/ not much to be said for college. I'd say they are MUCH better off than many of those MUCH younger than them. Basic expenses of homeowners insurance, utilities and property taxes. As a renter you would STILL be paying ALL of those to a landlord and not get to write it off your taxes. OUCH!
2. In-laws. Another "blue collar" family. Retired to their country property that was PAID OFF while still in their 60's! They had more and rougher setbacks than my folks due to health. Still able to rough it thru and did the same as mine by always being careful on how they spent every penny and SAVED during the good times. Living in what was their "2nd home" now full time w/ no expenses but ins, taxes and utilities. Savings, insurnace, retirement all saved for and taken care of as well as nursing care should it become needed.
3. Aunt & uncle. This is the high earner in the family for that generation. Been retired since their late 50's and they have not had a house payment since. Moved to Florida and paid cash for a house there. Sold it a few years later to move back to the Big D (it was nothing but "old people" according to them ). Bought a nice custom home on a golf course and paid cash. Savings and retirement all taken care of. Same scenario as those above in that they have planned right.
4. Inlaw aunt & uncle. Paid off their 1st house in 15 years (that was MANY MOONS ago). Only had 1 income coming in too thru the years. Paid cash for every car they ever bought (only kept them about 6 years). Moved to Texas at retirement and paid cash for a house on the lake. Only bills related to providing shelter are insurance, utilities and property insurance.
Gosh, I'm sorry but I'd MUCH rather know that at the age of 50ish I DO NOT have a rent or mortgage payment. I'll pay for that in my younger years while I'm earning money and it is going to be LESS to BUY a house then than it will be 10-15 years from now AFTER I retire. And trying to qualify on retirement ONLY! YIKES!! Good luck
How much are you currently diverting into your 401K? Or are you all talk?
Also, keep in mind that if you put $20K into an investment, you still have to put money into rent unless you're living in a box. Someone renting for $1000/month -vs- owning for $1300/month can only claim to divert the $300/month extra into their investments..
Then you could buy less home than you can afford to "only" make 5% per year on that investment (-vs- 0% on rent) AND invest into your 401K (with the tax deduction + company match). My wife and I both work, so we do this path. We live in Lake Highlands, which is a "close in neighborhood" to downtown, so I think 5% returns will be a safe assumption for the next 5 years. We both max out our 401K and max out IRA contributions, along with invest in efficiency in our home, which has cut our energy use by 40% (can't make a rental more efficient - your at the mercy of your land lord).
We can talk in 20 years to see who's theory worked better - because in the end, only time will tell who's right. I have a tendency to think my quality of life will be better both now and in retirement than compared to chasing 10+ % returns in housing, having to move out of that home and presumably the bloated market to an area with a lower cost of living... and start over making new friends in retirement... oh God, that just sounds horrible. I'll stop there.
Brian
Well actually my wife and I have pensions, which are very pricy. Try 15k a year which thank goodness are paid by the employer. We do have a 401k but contribute little (less than 5k a year)
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Doesn't real estate always go up 20% a year? Aren't we entitled to at least this miniscule amount? Reminds me of what a friend told me in 1998 - "I can make 18% every year in the stock market."
). Bought a nice custom home on a golf course and paid cash. Savings and retirement all taken care of. Same scenario as those above in that they have planned right.
