[lostbuyer]

but they just raised minimum wage 70cents,so that should make up for the 40% decrease in the dollars value since 2000,and also should be enough money to make houses affordable again.OR NOT

[JimKing]

Originally Posted by Mike Peterson

And it never has included closing costs or free upgrades.

There is really no such thing as a free upgrade, it is always built into the price somewhere. Builders have been offering them a long time, maybe a bunch more right now but it is not a new thing.

Most larger builders have a preferred lender and offer to pay $x amount towards closing costs if that lender is used. This has also been going on a long time.

Sold price is the sold price.

Sold price is sold price....utter nonsense. The incentives and givebacks are getting larger and larger...and are not deducted from the reported sales price. Incentives were 5% in bad markets like Florida in 2006 and growing. So many reported sales prices are inflated by 5% and growing. When the numbers come in from 2007 these figures might be 10%.

[lostbuyer]

what incentives they used to offer.but now they give away vehicles and other expensive things.my wife was driving past the mall this weekend,and told me their was a guy out there holding a five foot sign that said,"buy a new home,get a free harley"i remember telling her there should be someone across the street holding a sign that said.buy a new harley, forget the new home.

[Mike1306]

Originally Posted by JimKing

Sold price is sold price....utter nonsense. The incentives and givebacks are getting larger and larger...and are not deducted from the reported sales price. Incentives are 5% in bad markets like Florida and growing. So many reported sales prices are inflated by 5% and growing. .

I have been writing sales contracts with 3%-6% back towards closing costs long before the boom. In is not a new phenomenon.
Also, most of the incentives are through the new home builders not on the existing home sales which comprimise the majority of the sales.

So please tell us how many sales are inflated by 5%, how many by 4%, how many by3%, how many by 2%, how many by 1% and how many not at all?

[JimKing]

Originally Posted by Mike Peterson

I have been writing sales contracts with 3%-6% back towards closing costs long before the boom. In is not a new phenomenon.
Also, most of the incentives are through the new home builders not on the existing home sales which comprimise the majority of the sales.

So please tell us how many sales are inflated by 5%, how many by 4%, how many by3%, how many by 2%, how many by 1% and how many not at all?

Credit Suisse and other analysts are in the business of tracking markets. They are reporting the historical rising level of incentives, they are reporting the vast number of ARMs dues to reset.

So because you have reported inflated sale prices 3-6% over your career....that means what in regards to this bubble? Those numbers are irrelevant when analysts are calculating the overall rise in give backs. It does not matter how many 1%,2%, whatever...trends are trends. And you said toward closing costs...okay...what does that have to do with car give aways? Golf club memberships? Complete basement finishing? And all the elaborate give back schemes being hatched across the country?

This has become comical. The Titanic is sinking and real estate folks are trying to pretend hitting an iceberg is all part of the show.

[Mike1306]

Originally Posted by JimKing

Credit Suisse and other analysts are in the business of tracking markets. They are reporting the historical rising level of incentives, they are reporting the vast number of ARMs dues to reset.

So because you have reported inflated sale prices 3-6% over your career....that means what in regards to this bubble? Those numbers are irrelevant when analysts are calculating the overall rise in give backs. It does not matter how many 1%,2%, whatever...trends are trends. And you said toward closing costs...okay...what does that have to do with car give aways? Golf club memberships? Complete basement finishing? And all the elaborate give back schemes being hatched across the country?

This has become comical. The Titanic is sinking and real estate folks are trying to pretend hitting an iceberg is all part of the show.

Almost all incentives are in new home sales.

New home sales account for approximately 14% of total home sales.

Even if 50% of those new home sales, which would be 7% of the total home sales, were offering 5% in incentives the increase in median price due to this would hardly be noticible.

[JimKing]

Give backs are not confined to new homes. Used home sellers are also getting into the act. Many anecdotal stories are posted on blogs about sellers offering to leave cars and boats and other incentives. I doubt all these stories are made up. These obviously do not show up in the reported sold prices and it would be impossible to quantify them.

[magellan]

Most of the data that came out yesterday closely matched the housing slowdown in 1979, which took until 4th Qtr 1982 to works itself out. Difference then though was that the median income/median home price was not nearly as out of whack like it is in most of the country.

If continued tightening occurs on mortgage lending practices, especially if Freddie Mac and Fannie Mae change their policies, then it could be even more prolonged. Most people who are getting into homes now are doing it with little down, using HELOC's or 80/20's instead of PMI, and using ARM's or interest only loans because it's the only way they can get mortgage payments to where they can afford them.

A lot will depend on who gets in the White House next year and the make up of the legislature. Amazingly, I bet we'll hear very little about the housing market in next year's election craze, despite the fact that the slowdown will strip Trillions of dollars in wealth out of the American economy.

Also, on the topic of incentives, I just read that incentives have skyrocketed on existing home sales, to almost a majority of home sales involve some kind of kick-back incentive to the buyer. It's not just builders doing it now. There is very little data available because most realtors do not report it on the MLS, according to the article I read.

[JimKing]

Originally Posted by magellan

Most of the data that came out yesterday closely matched the housing slowdown in 1979, which took until 4th Qtr 1982 to works itself out. Difference then though was that the median income/median home price was not nearly as out of whack like it is in most of the country.

If continued tightening occurs on mortgage lending practices, especially if Freddie Mac and Fannie Mae change their policies, then it could be even more prolonged. Most people who are getting into homes now are doing it with little down, using HELOC's or 80/20's instead of PMI, and using ARM's or interest only loans because it's the only way they can get mortgage payments to where they can afford them.

A lot will depend on who gets in the White House next year and the make up of the legislature. Amazingly, I bet we'll hear very little about the housing market in next year's election craze, despite the fact that the slowdown will strip Trillions of dollars in wealth out of the American economy.

Also, on the topic of incentives, I just read that incentives have skyrocketed on existing home sales, to almost a majority of home sales involve some kind of kick-back incentive to the buyer. It's not just builders doing it now. There is very little data available because most realtors do not report it on the MLS, according to the article I read.

Exactly, we have no way of knowing the true numbers as these kick backs can not be quantified accurately. What we do know is the anecdotal evidence that we hear.

Honestly, getting the White House in 2008 may be the ultimate booby prize. There isn't much to do except to let the credit bubble unwind, as nasty as that will be.

[NY62]

All of these Loans are getting tougher to get, most banks are making it very hard to do them,and they all have there place if used for the wright reasons . the problem is to many abused these loans. the problem people will have in Florida will be appraisals on homes. As homes sell for less apraisals will drop so if a bunch of your nieghbors sell for less you can bet you will have to also if houses are compareable.