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Old 03-25-2010, 03:19 PM
 
3,283 posts, read 5,196,901 times
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Quote:
Originally Posted by housingcrashsurvivor View Post
In fact, I think if anything that the shadow inventory is what is keeping prices up, not driving them down. For if that shadow came to light (came to market) then supply/demand would reduce value of all inventory.

So we have to look at who owns these now, the banks. Finally someone who can actually afford them (being propped up by taxpayer money and all that). Banks are in the business to make money, literally and literally because they make money (charging fees, selling assets, etc) and they make (manufacture) money (originating loans).

So what are the odds of the banksters shooting themselves in the foot, after they've been so careful to take aim at us. Why would they flood the market with shadow inventory. Plus, with our backing, they can afford to hold on until prices come up or at least just release the inventory as the market stablizes.
it shouldn't have been up to the banksters. they should've been liquidated like any other business which is insolvent. i had to file about 20yrs ago because of a failed business venture. i lost everything that i had. the bailiffs (sheriff) came in took my business equipment and machinery, car, bikes, instruments, tv's... basically every possession i had other than my clothing and a few other items which were exempt. i didn't have the luxury of setting 'reserve' prices for my stuff. i would've loved for them to have given me time to wait until the classic car market recovered, but that luxury was not available to me.
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Old 03-25-2010, 03:23 PM
 
3,283 posts, read 5,196,901 times
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Quote:
Originally Posted by chi_tino View Post
No, the realtors have some blame.

In your case, 58robbo, that seller asking a gazillion dollars is probably being represented by a realtor who is putting his/her name and reputation behind the asking price. realtors are not required to take listings from unreasonable clients.

When I see agents listing properties for ridiculous prices, that tells me that the agent is either clueless or is willing to work for free, becuse that property will never sell.

it's not in the realtors interest to over value a place as it won't sell and they don't earn commission on places which don't sell. the problem is that the banks are hiding all their inventory. what they do have is listed at prices which will never sell but other sellers take their cue from the banks list prices
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Old 03-25-2010, 03:28 PM
 
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Quote:
Originally Posted by 58robbo View Post
it's not you that's frustrating me it's the situation. i've been sitting on the fence for so long because i don't think that the places listed are worth what they're asking in most cases. i've been looking for a few acres for nearly 4 years and can think of hundreds of lots that were there when i started looking and are still listed today. as far as i'm concerned if a seller wants to list his hut for a gazillion dollars, that's their right. what annoys me is that there are tons of reo's and the banks have not been forced to liquidate in the same way that ordinary people would've been forced to if they were in a similar position. this is distorting the market wildly and giving both buyers and sellers the wrong signals. the sooner the banks are forced to clear out their closet, the quicker we find bottom, the quicker homes become affordable and those sitting on the fence can get off and we can once again experience a little price stability and people can buy without the fear of the rug being pulled out from under them
As to everything overpriced. Some things are and they will not sell. Some are not and someone will buy them. If someone has the money to pay their taxes and insurance for the next 20 years, then they might eventually get their price. The acre I just bought was certainly not overpriced, rather, by the 1999/2000 price to rent ratio it should have sold at twice what I paid to have been considered fair value.

Regardless of asking prices, according to the selling prices, Tampa is currently about 16% undervalued, no longer overvalued. (I posted the source on another thread.) So we are already below bottom, whatever that means.

As to the banks being "forced to clear out their closet", understand that once they foreclose the banks don't hold the mortgages, they hold the deeds. They don't owe anybody for those houses as they are the originators of the loans. So unless they go bust, there is no reason for them to be forced to sell the assets they own.

Now whether or not they should be showing the current value of those assets on their books is something that could be argued should be forced, but not the selling of their assets as long as they are solvent.

For now, it does look like they have cornered the market on housing and so they will be able to control prices a bit by controling inventory available for sale. Might some owners try to ride those coat tails? Only the ones who can afford to and who hope someone with cash comes along. So buy from those who can not and these then become the comps which will be used to appraise the others, eventually forcing their prices down too.
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Old 03-25-2010, 03:38 PM
 
1,500 posts, read 3,322,023 times
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Quote:
Originally Posted by 58robbo View Post
it shouldn't have been up to the banksters. they should've been liquidated like any other business which is insolvent. i had to file about 20yrs ago because of a failed business venture. i lost everything that i had. the bailiffs (sheriff) came in took my business equipment and machinery, car, bikes, instruments, tv's... basically every possession i had other than my clothing and a few other items which were exempt. i didn't have the luxury of setting 'reserve' prices for my stuff. i would've loved for them to have given me time to wait until the classic car market recovered, but that luxury was not available to me.
I also might have thought the bank bond holders should have lost but they control this country, this economy. If you recall, the United States Congress was threatened with a complete collapse of the economic system if they were not bailed out and Congress was not about to give that up. I would also venture to bet that given a vote on the matter, most American citizens would not have opted for the ensuing carnage of all that. Not everyone has a 10-year supply of canned tuna and who would even want to live like that. No thank you. We've already done the 17th century.

So maybe they can't be let to fail, maybe they are us. But that we haven't figured out how to regulate ourselves, these banks, after this disaster, during this calamity, there should be the outrage.
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Old 03-25-2010, 03:58 PM
 
3,283 posts, read 5,196,901 times
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Quote:
Originally Posted by housingcrashsurvivor View Post

So maybe they can't be let to fail, maybe they are us. But that we haven't figured out how to regulate ourselves, these banks, after this disaster, during this calamity, there should be the outrage.

most people give more thought to where they're going for breakfast than which bank they invest their life savings with. i believe if there was no govt guaranteed deposits, there'd be a whole lot of homework being done and people would be much more reluctant to deposit their life savings in a bank which was doling out millions to walmart cashiers to buy mcmansions! people will regulate themselves when they have their skin in the game.
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Old 03-25-2010, 09:10 PM
 
30,260 posts, read 21,027,304 times
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Quote:
Originally Posted by Mike Peterson View Post
So your first post was based on no actual facts.

Not really helpful when someone asks where home prices are heading.
I gave ya facts buddy. Try DOWN.
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Old 03-26-2010, 08:27 AM
 
1,500 posts, read 3,322,023 times
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Quote:
Originally Posted by 58robbo View Post
most people give more thought to where they're going for breakfast than which bank they invest their life savings with. i believe if there was no govt guaranteed deposits, there'd be a whole lot of homework being done and people would be much more reluctant to deposit their life savings in a bank which was doling out millions to walmart cashiers to buy mcmansions! people will regulate themselves when they have their skin in the game.
I'm not real into throwing out the baby with the bath water....

Move Your Money


YouTube - MOVE YOUR MONEY
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Old 03-26-2010, 08:37 AM
 
1,106 posts, read 2,276,938 times
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Quote:
Originally Posted by housingcrashsurvivor View Post
Regardless of asking prices, according to the selling prices, Tampa is currently about 16% undervalued, no longer overvalued. (I posted the source on another thread.) So we are already below bottom, whatever that means.
If you are referring to the IHS study, that is a statistical failure. They looked at annual price changes over the past 20 years and assumed that prices will revert to the mean. There is no fundamental analysis in that study at all.

Already below bottom? Then why does inventory and potential inventory (as measured by properties in foreclosure + seriously delinquent) continue to rise every month? With 1 out of every 6 mortgages in the Tampa Bay area delinquent, you think that things are getting better?

Um, okay.
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Old 03-26-2010, 09:52 AM
 
1,500 posts, read 3,322,023 times
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Quote:
Originally Posted by chi_tino View Post
If you are referring to the IHS study, that is a statistical failure. They looked at annual price changes over the past 20 years and assumed that prices will revert to the mean. There is no fundamental analysis in that study at all.

Already below bottom? Then why does inventory and potential inventory (as measured by properties in foreclosure + seriously delinquent) continue to rise every month? With 1 out of every 6 mortgages in the Tampa Bay area delinquent, you think that things are getting better?

Um, okay.
Here is the article.

http://money.cnn.com/2010/01/27/real_estate/most_overvalued_metro_areas/index.htm

Yes, it looks like their info is from IHS. I don't know where you get your information from on their study, but according to the article "These judgments are determined by comparing median home prices, local interest rates, population densities and income, plus historical premiums or discounts that areas have exhibited over time."

So it does indeed, contrary to your assertion, seem to derive its assessment from some reasonable fundamentals.

Also, falling below bottom would not be unusual considering how much over the top the market here climbed. Below bottom also does not mean there is not further to fall, we won't know any of that until we see prices climb again in a reasonable & sustainable way.

I don't know why you would assume that because I used the appropriate phrase "below bottom" that I meant that (in what you say are my words but they are not) "things are getting better". particularly when what I said was "below bottom, whatever that means."

I've seen other people on this forum play your little game so I wonder how some of you manage to communicate in real life and actually maintain a relationship. What you seem to be doing is taking your own thoughts, putting them in my mouth and then arguing against yourselves. Because I never said what you are saying I said.

Please, take a chill pill and read twice what I have written before you attack next time what I have written. Um, Okay?
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Old 03-26-2010, 11:27 AM
 
1,106 posts, read 2,276,938 times
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No, I went back and read the original valuation methodology in the study.

Their assumption was that the "historical premiums or discounts that areas have exhibited over time" have an impact on current and future prices.

They absolutely do not.

They are claiming that because prices have fallen so far, so fast, they MUST be due for a rebound because they have never fallen like this before. Yeah, tell that to people that bought dot-com stocks a decade ago. How's that Webvan and Peapod stock working out for them?

They also neglected to look at fundamentals that impact real estate markets: delinquency and foreclosure rates, inventories, unemployment rates, etc. Instead, they looked at minor variables like population densities.

This reasoning is logically and mathematically flawed. Unfortunately, the media and other non-economic types picked up their study and ran with it.
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