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and i am thrilled to see our local scumbag realtors UNEMPLOYED!
Real estate agents are hired to help their client's achieve their real estate objectives.
Real estate agents are not financial advisors and during the bubble, millions of consumers of real estate drank the kool aide and determined real estate was going to appreciate at double digits, forever. This is mania.
Those who purchased while inside the bubble generally paid market value at that time. Markets are never fair. They are always right at any point in time.
This mania also caused a heck of a lot of otherwise reasonable people to prematurely pull the equity out of their homes and use the money to sustain lifestyles they otherwise could not afford. In other words, their homes became ATMs. This drove the economy, while it lasted.
We have been in hangover mode for 5-6 years, now.
Some areas did not fall as fast or as far as others. And some areas have and will continue to recover faster and better than others.
It varies greatly by region. Our value went down about 20% but at the bottom was still worth more than double what we paid for it. Since the first of this year we are back up halfway to the peak already. Friends in CA went down nearly 60% and has still not gone back up at all. Areas with jobs, and homes under $700,000 with good schools are selling fast with multiple offers. Will that last? Who knows, but as long as employers like Amazon keep adding thousands of people from other states
demand is strong.
Not all markets in California tanked to the same degree and some California markets once again favor sellers because there is more buyer demand than available inventory.
I'm a lender in TX, and despite the "everything is great here" spin, we have problems, too. What I'm seeing the past year is folks underwater through no fault of their own. True, many over-bought, got home equity loans, etc. but those people pretty much walked away the year or two right after the crash. The people who were responsible (had good jobs, never late, bought responsibly, down payments, savings, etc.) are finding themselves underwater because they are appraised against the selling price of shorts and foreclosures. It's frustrating for them and us. Many want to sell and are "stuck". The other thing you have to remember is the Mortgage Debt Relief Act is set to expire at the end of the year, so we are seeing shorts getting pushed through. Once pre-existing homeowners who want to sell don't have to be appraised against the messes, we'll turn around. We need to get them cleared out.
Have you ever bought a new car, OP? Did you know they drop in value the min. you drive it off the lot? Shame on those car salesmen. If you buy something, hopefully you felt it was worth what you paid and you can afford it. What someone else says its worth shouldnt matter to you. Like Middleaged Mom pointed out, I blame the folks who ATM'd their homes to death as much as anyone.
I do wonder about the folks who dropped and ran from their homes. IF they were to spring back up in value, would they cry foul and think they should get them back? Buying any large ticket item is like playing the stock market, imo. You make killings and you lose your shirt. I'm totally against making others pay for your mistakes.
Have you ever bought a new car, OP? Did you know they drop in value the min. you drive it off the lot? Shame on those car salesmen. If you buy something, hopefully you felt it was worth what you paid and you can afford it. What someone else says its worth shouldnt matter to you. Like Middleaged Mom pointed out, I blame the folks who ATM'd their homes to death as much as anyone.
I do wonder about the folks who dropped and ran from their homes. IF they were to spring back up in value, would they cry foul and think they should get them back? Buying any large ticket item is like playing the stock market, imo. You make killings and you lose your shirt. I'm totally against making others pay for your mistakes.
I dont think this is a fair comparison. Cars are not meant (or built these days) to accommodate you for the next 20 or even 30 years. Cars are depreciable assets, meant to get you from Point A to Point B, with some drivers leasing them every 3 years to get the newer model and avoid potential repair/maintenance bills, and others buying in cash or financing them for 1-5 years and then driving them into the ground. For many, a car is a luxury and not a necessity, unlike a home which is a necessary roof over your head.
In the bubble, people were flipping houses because it was profitable [back then]. People used the rising equity from home purchases/sales as their ATMs and piggy banks. I doubt you can EVER do that wth a car. Once you buy it new - you will never recoup that cost. Its comparing apples to oranges.
Last edited by LegalDiva; 08-28-2012 at 02:41 PM..
I'm a lender in TX, and despite the "everything is great here" spin, we have problems, too. What I'm seeing the past year is folks underwater through no fault of their own. True, many over-bought, got home equity loans, etc. but those people pretty much walked away the year or two right after the crash. The people who were responsible (had good jobs, never late, bought responsibly, down payments, savings, etc.) are finding themselves underwater because they are appraised against the selling price of shorts and foreclosures. It's frustrating for them and us. Many want to sell and are "stuck". The other thing you have to remember is the Mortgage Debt Relief Act is set to expire at the end of the year, so we are seeing shorts getting pushed through. Once pre-existing homeowners who want to sell don't have to be appraised against the messes, we'll turn around. We need to get them cleared out.
This is exactly the situation my husband and I are in, as well as my parents. My parents live in middle class neighborhood that turned south over the past 10 years and where people bought right into the subprime mortgage mess (people with 60K incomes buying homes with mortgage approvals of up to $ 300K - RIDICULOUS). 3 houses in their area were foreclosed on, and another house down their block was sold for $100K below value in a short sale. What equity they had built over the past 20 years has slowly eroded down to a pathetic $ 100K, which isnt enough to get them out of their house and into another retirement home mortgage-free.
My husband and I are stuck right now and can't sell our house until the appraisal value increases. Even though my husband put down 65% as a DP when he bought it in 2004, the houses on our block have even faced foreclosure/short sales which have brought down the value of our house a good $ 50K or more. Even though such losses can be claimed on our income taxes, it does not diminish the fact that if we sell it now - we must face only a $80K gain from the sale vs. a potential gain of $ 120-140K if we wait for the market to improve (*knock on wood*).
I can only fathom other parts of the country where real estate completely tanked - where houses worth $300K circa 2003-2006 are now selling for a rock bottom price of $ 90K.
There are alot of military people in the same boat here in San Antonio. They bought, not so much thinking they could MAKE money, but at least confident they could break even in 3-4 yrs. Then the bubble burst and many are now stuck being long-distance landlords. What I see here is about 12-20% loss for buyers who bought at the top; of course housing here is relatively cheap, but it still hurts to write a $30,000 check to close just because some loser next door walked away. At least we are now seeing buyers come in prepared with downpayments and sure they can stay put much longer.
I thought I would also add that not everyone underwater got home equity loans, either. There is still alot of misinformation about being underwater. Many times it happens through no fault of the homeowner. I'm betting there are millions of people who have NO idea they are underwater b/c they don't need to sell and have seen the appraisal comps. I just don't want to see another "wave" of people mailing keys in because they are fed up with trying to do the right thing and need to sell.
I assume that you, or perhaps a close friend or relative, must have bought property near the height of the bubble, in which case your sentiments are quite understandable. However, it would not be realistic to expect sales people to recommend that people not buy their product. Sales people are there to make sales, and as such their advice should always be taken with a huge grain of salt, whether we are talking about real estate, cars, drugs, or any other product. Realtors simply matched up willing buyers with willing sellers and facilitated the transaction. Of course that involved dishing up a certain amount of reassuring b.s. to nervous buyers who were concerned about the insane values that real estate had climbed to near the height of the bubble. Let the buyer beware!
that isn't why i called them scumbags.
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