Maryland Take On Jim Cramer (CNBC) Who Says Don't Buy Now

[km703]

I'm in the eastern shore close to the resort area.
I hear Worcester County had the highest appreciation rate/ tax hike in the state in recent years,,,,something like 48%.


And yes, starr, credit is crucial.
Our recent refi of 6% fixed could not have been without the good credit score- above 700.

[Rmx Christina]

Financing is getting stricter because of all the past predatory lending. But, this could also be a protection for buyers....just think of all the foreclosures and short sales.

Actually, because of these, the market "seems" to be shaky. I personally think in strong areas, like EC area, it's stabilizing.

Definitely excellent time to buy.... if you have to sell, then you have all that great equity to put down on your next purchase.

[km703]

Christina,

If I called my local Remax office inquiring to list my house today, they would probably recommend an initial asking price of 399ish. I know my own area very well and 300 is more realistic, more salable for all parties.

I can't tell how many sellers get disgusted after 6 months because of no showings, no offers, etc. and then change listing companies/agents expecting something better from the subsequent company when the real problem is priced too high.

If we know the inventory is slow moving to the extent of possibly 300 days on market, why aren't sellers advised to price it right from the start instead incremental price reductions?

And in response to predatory lending.
NAR, among many others, profited.

[TuborgP]

Originally Posted by starr71

Chosen, looks we're looking in the same market. I'm also looking for a garaged townhome in the EC/Columbia area (not considering Laurel--want to stay closer to Baltimore). What I have observed is that houses are staying on the market longer, and that prices are indeed dropping the longer they sit. If I could only sell my split level single family in Gwynn Oak, I'd be ready to jump on one the MANY listings that I see in the EC/Columbia area.

Based on what I'm observing, it's just a bad time to be a SELLER. I think most people buy their homes for the long term, or at least for five years, and in that time the market will certainly correct itself. This would make what you buy today a real bargain compared to its price five years from now. Anyone else agree?

I also think it's a bad time to be a buyer if you have bad (or shaky) credit and not a lot of money to put down. Seems like people just can't get financing.

This assumes the area you are buying in will be the same in five years. It could be more or less attractive to buyers. Is the neighborhood you are moving from the same? Traffic is not going to get any better.

[ChosenGSR]

Originally Posted by starr71

Chosen, looks we're looking in the same market. I'm also looking for a garaged townhome in the EC/Columbia area (not considering Laurel--want to stay closer to Baltimore). What I have observed is that houses are staying on the market longer, and that prices are indeed dropping the longer they sit. If I could only sell my split level single family in Gwynn Oak, I'd be ready to jump on one the MANY listings that I see in the EC/Columbia area.

Based on what I'm observing, it's just a bad time to be a SELLER. I think most people buy their homes for the long term, or at least for five years, and in that time the market will certainly correct itself. This would make what you buy today a real bargain compared to its price five years from now. Anyone else agree?

I also think it's a bad time to be a buyer if you have bad (or shaky) credit and not a lot of money to put down. Seems like people just can't get financing.

There are plenty of listings you are right about that, they are however still all listed for around 350k, exactly where they were earlier this year. Either I am blind or prices are not really dropping much at all.

[starr71]

Tuborg, the area I'm moving too has about the same volume of traffic. Overall, it's a more affluent area than where I am now. Better schools, shopping, restaurants, and lower crime. I feel safe in projecting that it will still be a desireable area 5 years from now.

Chosen, actually, I think some of those listings do reflect some price drops. About a month ago, I was driving through EC doing some market research on an area that seemed appealing, and asked one of the sellers why there were so many for sale signs in his development. He said that there was nothing wrong with the development (of course he'd tell me that as a seller, but I work nearby, so I don't doubt him). He just said that houses are sitting longer. He also said that his house had been sitting for 6 months and that he had dropped it $50K since when it first listed. For that reason, when I seach for homes, although I only want to pay around $350K, I'll look at homes listed up to $400K. A lot of these sellers will drop in the face of a buyer with sure financial approval on a loan.

As for myself, I also have a "buffer" in my list price on my home that I'm selling. So far, I've added $11K in closing costs, and after the second open house with no shows, I'm dropping the price $10K. It's been listed since Labor Day weekend.

I think most sellers have a "buffer" and that most of the list prices for newly listed houses have that buffer.

[starr71]

Originally Posted by km703

Christina,

If I called my local Remax office inquiring to list my house today, they would probably recommend an initial asking price of 399ish. I know my own area very well and 300 is more realistic, more salable for all parties.

I can't tell how many sellers get disgusted after 6 months because of no showings, no offers, etc. and then change listing companies/agents expecting something better from the subsequent company when the real problem is priced too high.

If we know the inventory is slow moving to the extent of possibly 300 days on market, why aren't sellers advised to price it right from the start instead incremental price reductions?

And in response to predatory lending.
NAR, among many others, profited.

km, I think the reason people don't price their homes at their "real" price is because they want to have some negotiating room. I know what my absolute minimum price is that I will accept, but if I list it for that price from the beginning, and someone wants a further price reduction, I can't negotiate any further. It would seem that it would make things go a lot faster, but it's also kind of risky. I also think the listing agents want to maximize their fees as well (commissions) by selling the house for as much as they can. Of course, that's pretty difficult in this market.

[TuborgP]

Originally Posted by starr71

Tuborg, the area I'm moving too has about the same volume of traffic. Overall, it's a more affluent area than where I am now. Better schools, shopping, restaurants, and lower crime. I feel safe in projecting that it will still be a desireable area 5 years from now.

Chosen, actually, I think some of those listings do reflect some price drops. About a month ago, I was driving through EC doing some market research on an area that seemed appealing, and asked one of the sellers why there were so many for sale signs in his development. He said that there was nothing wrong with the development (of course he'd tell me that as a seller, but I work nearby, so I don't doubt him). He just said that houses are sitting longer. He also said that his house had been sitting for 6 months and that he had dropped it $50K since when it first listed. For that reason, when I seach for homes, although I only want to pay around $350K, I'll look at homes listed up to $400K. A lot of these sellers will drop in the face of a buyer with sure financial approval on a loan.

As for myself, I also have a "buffer" in my list price on my home that I'm selling. So far, I've added $11K in closing costs, and after the second open house with no shows, I'm dropping the price $10K. It's been listed since Labor Day weekend.

I think most sellers have a "buffer" and that most of the list prices for newly listed houses have that buffer.

Compare the area you are moving to with data from five years ago. You may be surprised by any changes and remember it is relative to price. I can tell you that the overwhelming majority of the people in the Columbia/Ellicott City area did NOT buy their houses at the current valuation. How many would buy them at todays price is questionable. When selling are they moving elsewhere or moving up within their immediate community. You are not buying at the top of the cost scale in that market and you want to ask why it is not at the top of the cost scale. Not saying it will be undesirable in five years but will it be as desirable? Don't see a lot of state forums on here with people wanting to move to and retire in Maryland. Lots want to move from Maryland and Jersey etc.

[TimtheGuy]

Originally Posted by lscalder

This market is the perfect market to purchase a home. If the prediction that the market will rebound in June 08, that is just months away. The rates are lower,house prices are lower why not buy then hold on to your property for the next seller boom which will start june 2008. If you want for the market to rebound interest rates will increase and the minimum credit score will also increase. Right now to purchase a home with any lender the minimum credit score is 640, for other lenders it 680-700. When the market pick back up its thte sellers market and buyers can no longer get their way.

This was all heavy sarcasm I hope.

[Rmx Christina]

Originally Posted by km703

Christina,

If I called my local Remax office inquiring to list my house today, they would probably recommend an initial asking price of 399ish. I know my own area very well and 300 is more realistic, more salable for all parties.

I can't tell how many sellers get disgusted after 6 months because of no showings, no offers, etc. and then change listing companies/agents expecting something better from the subsequent company when the real problem is priced too high.

If we know the inventory is slow moving to the extent of possibly 300 days on market, why aren't sellers advised to price it right from the start instead incremental price reductions?

And in response to predatory lending.
NAR, among many others, profited.

I don't know who you spoke to at your local Remax office. But I can only speak for myself. I never tell a client the price. The homeowners decide. I show the stats and what's been happening in their neighorhood and then I advise. If they decide they want to try a little more than my recommendation, then that's what we list at. It is the seller's decision, I only advise. If they want to sell for an unreallistic price after showing them the data, I probably would thank them for the opportunity, but tell them to try another way to sell (isn't that what FSBO's are for?). I have no desire to burn marketing dollars for homeowners that are unrealistic.