[nychiefsfan]

Originally Posted by SKB

I am telling you one thing, if the government starts coming up with bailouts for these people there is going to be a riot of mass proportions.

I'm with you. Most of these people were looking to cash in on the real estate boom and make a few quick bucks. I, for one, don't feel sorry for them at all. It's turning into Hurricane Katrina revisted...

[nychiefsfan]

Here are some telling supply and demand graphs regarding the sales and prices of existing homes:

Moderator cut: copyrighted images removed; links are sufficient (thank you)

This chart shows existing home sales dropping like a rock (with the exception of a small spike).

Interpretation: Most people aren't willing to overpay for their homes. There will be some spikes in demand, but the market is FAR from bottoming out.

Second chart shows existing home prices, which have actually increased to 2005-05 levels.

Interpretation: Some people are suckers. They say there's always a sucker in the game. If you don't know who the sucker is, then it's you (or in this case, the people who overpaid for their homes).

Link to charts:
http://www.minyanville.com/articles/index.php?a=12940

Eventually, the law of supply and demand will force the current homeowners to significantly drop their prices, especially when new home builders have slashed their prices on upgraded homes and can offer full warranties for their homes.

I'm sure your realtor would beg to differ...

[belovenow]

Originally Posted by rpow53

On the news this morning it reported that the "new" housing market was up more than it has been in 14 years. there is no housing bubble, just a lot of nervous buyers. The only people that will lose their home are the ones that could not afford it to begin with.

Your conclusions are leaps of logic and the data shows invalid - I wonder if the radio show just had the facts wrong. There is a housing bubble in many US real estate markets. Home building conglomerate companies such as Toll Brothers are losing millions every month - the CEOs of several of these companies have come out to share similar news over the past year. This is not smoke and mirrors...

1) you are right that those with bad mortages are going to lose their homes
2) builders are losing money on two ends right now... 1st, they're making less profit off of each home due to price pressures caused by the bursting bubbles, and 2nd the "housing starts" are down significantly across the board
3) many people refinanced or took equity out of their houses in the past few years thinking that the values of their homes would continue to rise as they have throughout most of history... many of these people now owe more money on their house than their house is worth to sellers today.

Consider yourself lucky to not be affected (you sound like you must be one of the lucky few) - timing is everything. Interest rates for conventional mortgages were excellent about 5 years ago and some of us got them. Additionally, about 5-7 years ago in the non-super hot markets you could get a heck of a deal on a house even by today's bubble busting standards. You need to understand this is not representative of most of the US right now.

[Muggy]

http://i117.photobucket.com/albums/o72/muggyFL/CallDon.jpg (broken link)

[bikedays]

Don't listen to realtors. The market price is whatever you're willing to pay for it. Whatever a realtor has it listed for, offer half that amount. Legally, the realtor has to give the offer to the seller. The economy is going to crash so you might as well move into your car.
kris

[nychiefsfan]

I sent an email to Lawrence Yun, the National Association of Realtors Senior Economist, who is one of the people the NAR uses to mislead the public. I used many points from this thread to state my case:

Dear Dr. Yun,

Thank you for taking the time to read my letter. I would like to present the potential homebuyers view of how WE see the market. I can appreciate your optimism regarding the impending future of home sales by anticipating a rebound in sales by the last quarter of 2007. As a potential home buyer, I also share an optimism that the prices will correct themselves to pre-boom levels. I’m not alone in this belief.

I have been watching the market closely since the housing boom. The NAR seems to justify the housing slump by blaming the tightening of lending standards, the weather, bad press, etc, without considering the possibility that the housing market is severely overpriced.

I recently spoke with a Realtor who tried to justify why houses were still selling higher than Just Market Value (the price that a house should sell in a competitive market). She told me I should compare the selling prices of houses in the areas I'm looking that have sold within the past 6 months to get an idea of what to expect to pay for a house in that neighborhood.

I tried comparing a few local areas of interest in the Riverview/Brandon area and there are only a few that are starting to compare at Just Market Value, which is too high to begin with, in my opinion.

You’ve also alluded to encouraging factors, such as wide availability of conventional mortgage products and the 4.5 million jobs created over the past 24 months. Similar to trying to “comp” a house within the last 6 months, the 24 month job statistic doesn’t hold water, especially after unemployment benefits rose by 311,000 last week. 24 months ago, there was still a housing boom, yet you used favorable numbers to justify your stance.

As consumers, we notice the little things. The headline for Thursday was “New Home Sales Soar”. Of course, the Commerce Department didn't mention how the sales have dropped 10.9% from a year ago and how the numbers from a year ago were bad to begin with.

It would be interesting to see a demographic regarding the level of education of potential home buyers. My wife and I both have Master’s degrees and are willing to do the infinite research required to determine the right time to buy a house. Now is not that time. Despite our education, we earn less than $100k per year combined and cannot afford to spend over a quarter million on a house. As you know, it’s much cheaper to rent until the existing home sales fall to acceptable levels.

You recently mentioned, "The existing market is generally much more stable, while new homes are a little more pricey," Now that new homes are dropping their prices, existing homes will have to follow suit. I would much rather buy an existing home versus a new home, but the new home prices are beginning to make it very tempting to consider, especially with many new homes having upgrades and warranties.

NEWSFLASH!!! Until the seller’s “greatly inflated perception of what their home is worth” becomes more realistic, the housing slump will continue for a long time and time is on the buyer’s side. You may justify the decline in the housing market any way you’d like to Dr. Yun, but the bottom line in today’s market is price.

I recently read an article that stated, "The under-pricing game is now over. You are free to bid far lower than the asking price. You might be pleasantly surprised to find out how desperate the sellers are."

In contrast, we were told by our realtor that we should not underbid because it may insult the seller. I'm insulted by the sellers that are still trying to get June 2005 prices on a house when it's supposedly a buyer's market!!!

The rules have changed. One cannot compare prices in an area within the last 6 months, because the most recent month is the most telling statement of what a house is worth in that particular area. And each month, that number continues to drop.

There's no sign in the near future that this will end anytime soon. Economist Gary Shilling forecasts a drop of 40 to 50 percent in home prices in overpriced areas such as CA and FL. While that may not be good news for the realty business, it's wonderful news for us. This downward spiral is predicted to last at least 5 to 10 years, similar to previous housing slumps.

I don’t expect a drop of “40 to 50 percent” but I do anticipate around 30 percent. If you “took 150 steps forward”, how many steps back would a 30% decrease be? (EDITED NOTE: this was a reference to Yun's article "Making a Correction" on the NAR webpage in which Yun stated there was a "150 percent price increase during the boom. Let’s see, that is 150 steps forward and 12 steps backwards (in reference to the small decline in existing home prices)." Yun is minimalizing the price decrease and justifying the post-boom prices. Here's the link: NAR: Research: Real Estate Insights: Chief Economist's Commentary (http://www.realtor.org/reinsights.nsf/pages/economistcommentary?opendocument - broken link) )

My wife and I are in no hurry to buy an over-priced house, especially when prices are continuing to fall while the market is over-flooded with unsold houses. There will be plenty of opportunity to buy a house at a fair price for many years to come.

The NAR must surely realize the grave possibility of a recession, led by slumping home sales. That’s why you HAVE to be an optimist. The NAR doesn’t want to be the reason why the country went into a recession. The hole has been dug by greed, and is getting deeper. They say there’s a sucker in every game. If you don’t know who the sucker is, then it’s you.

It’s not me in the housing game, despite every Realtor trying to tell me, “Now’s the time to buy!!!” This will be their last chance, for a long time, for them to make the hefty commission on an over-priced home. They also have sales quotas and goals to achieve. Of course, in their mind, now is the time to buy. Have you ever heard a Realtor say, “Now ISN”T the time to buy”?

I sincerely respect your optimism, as I am sure you can empathize with my optimism as well. Perhaps each person’s expectations will meet somewhere in the middle, although neither one of us is hoping for that to happen.

I’d appreciate your thoughts or comments on this letter.

Sincerely,

XXXX XXXXXXX
Potential Homeowner

If Dr. Yun responds to my email, I'll post that as well.

[Hondax]

In a perfect world we would expect honestly in all business endeavors. In the real world we can get lies, deception, half truths, and exaggerations blended in with truth. Find a Realtor with honor, they are out there but still you need to arm yourself with data, so do your homework.

It's our responsibility to be informed, not theirs, because ultimately our signature seals the deal.

Caveat Emptor: Buyer Beware.

[nychiefsfan]

OMG...WE'VE HIT THE BOTTOM.......AGAIN!!!!

5/25/06 “This may be the bottom. It appears May is a little better.” David Lereah

Moderator cut: Provide a link instead of copying everything here, please

[SKB]

This week Pat Combs, NAR'S president said "It appears the worst of the price correction is behind us."

It appears they are running out of fresh lines.

Great Post nychiesfan

[nychiefsfan]

Originally Posted by SKB

This week Pat Combs, NAR'S president said "It appears the worst of the price correction is behind us."

It appears they are running out of fresh lines.

Great Post nychiesfan

Thanks!!!

It's kind of pathetic to hear the same thing over and over again. It's reminiscent of the "Boy Who Cried Wolf". One day, they'll be right, but that day is a LONG time form now.

IMHO, this is how I see it:

INTERPRETATION: Everyone sees a recession in the near future and these people of power are trying to influence the public into buying NOW, because we've hit the "bottom".

THE TRUTH: THE NAR doesn't want the finger pointed at them when people place blame on an impending recession. The writing is on the wall. Their logic is to try to convince the public that the housing boom is back and running strong.

THE VARIABLES: They didn't take into account that most of the people who still want to buy homes, wanted to buy homes several years ago, but were intelligent enough to see the end of the housing boom. The suckers who bought at the end of the boom are either greedy or unaware that the longer they wait, the less their house will be worth. Unfortunately for them, they don't have any leverage in their listing price.