What Sort of Realtor BS Is This?

Ok, check this out. Here is a realtor who is claiming that 'it is never a good time to hold off buying a house' because their market is weakening, buyers are "holding off", and so realtors are having trouble selling people's houses.

So let me get this straight as I am a person of very little brain...when the market was going up it was "Buy now or be priced out of the market forever". Ok, got it; fear is a strong motivator and fearmongoring is worthy of a realtor. And now that markets are just starting to come down (which casts some doubt upon the first assertion) the mantra is "It's never been a better time to buy". So in other words, it's always a good time to buy a house. Do I have that right Mr. Realtor-man?

What sort of BS is this?

Whose interests exactly are such realtors serving? Yours, the buyer's? Or theirs, the realtor's commission? Duh.

The Marin Market Heat Index is now at an all time low of 0.52. And yes, I know that Vision RE practically soiled their collective pants when their estimate of June's median and average prices went up. That move should not come as a surprise because:

a) the majority of sales were in the priciest of Marin's markets (e.g., Tiburon, Sausalito, Kentfield) (and what's up with that 500% increase in YOY sales in Greenbrae -- so only 1.2 houses sold in June of 2005? If it was a typo, what other typos are there in their data? Hmm...)

and

b) if you look at the chart of DataQuick's data, Marin's appreciation rate has been bouncing around like a superball in an ever shrinking room and if the pattern holds true then you would expect June to be an up month. So not too surprising.

All that this means is that the market is like what Michael Shedlock says in his post for today -- it's a "procrastinator's market", not a buyer's market. The people who will do well are those who know to wait it out. If anything, it is currently a "fence-sitter's market"...the impulsive people who have been itching to buy a house and who jump in thinking it's the bottom when they see a small drop in prices. Hence, the superball-bouncing-inside-of-a-shrinking-room analogy.

When all of the impulsive fence-sitters have been shaken out, who is left to buy? The only people left are the folks who had the intelligence, the common sense, and the intestinal fortitude to wait this thing out to buy their home to live in at a reasonable price.

The realtors are just scared. They are scared of people like you who know to wait.

Anyway, then that realtor goes on to say that you have to buy now because interest rates are only going up. Hold on, wait just a minute. Why should rising interest rates convince you to buy now? As interest rates go up, the amount of monthly mortgage that you can afford just went down (assuming, of course, that your income has not gone up appreciably). That means, all things being equal, prices have to adjust down to compensate (albeit with a time delay which is some sort of proportionality function based on seller stubbornness/hubris and the amount of BS that realtors can make sellers swallow). And, as we all know, in today's market folk psychology all that matters to people is the monthly nut, not the total loan amount. Here is one good reason why the total loan amount should matter to you: property tax. The lower the purchase price, the less you have to pay in property tax year after year after year. Furthermore, the longer you wait as prices come down, the more you can save, the greater your potential downpayment, and ultimately the smaller your loan. Additionally, the higher the interest rate, the greater the likelihood that you will be able to easily refinance that loan down to a more palatable interest rate. It's a win-win situation for buyer's who can restrain their impulsiveness and buy when sanity has returned to the market.

Oh, you don't think Marin's market has gone insane? Then check this out.