And to answer my own (implied) question in the previous post:It seems to me that the reason why the NAR, CAR, local agents, and others are pretending to have found honesty and so are warning of the bust is to scare sellers into lowering their asking prices. Why? Because a commission on lowered asking prices is better than a commission on no sale at all. They want the sellers to get real so that their property will sell and they want the fence sitters to get off the fence and buy.
This is why we constantly hear these days of agents and their ilk proclaiming that 'now is a great time to buy'. It's true that the only way our "entitled" sellers will sell is by lowering their asking prices. But to deflate bubble pricing that price reduction will have to be a lot more than what most sellers are currently willing to do. So no, it is not (yet) a great time to buy IMHO. If one absolutely must buy, then sure, it's not just a great time to buy; by definition it is the only time to buy. But for everyone else, it seems to me that only a fool buys now.
IMO, if one can wait, then they should stay where they are and keep living where they are already living; otherwise, play low-ball. In the foreseeable future we are looking at a continuing stand-off between buyers and "entitled" sellers, more declining sales and prices, a "dead cat bounce" (probably in the spring), then more declines. Repeat. IMO, the bottom should be in roughly five years (but given how fast the market has already unraveled that bottom may come sooner).
Disclaimer: The above is not intended to be construed as financial advice. It's just my opinion and my best guess given the information that is available today. Everyone must make their own decision and take responsibility for it.
9 comments:
i heard about a seller in auburn who dropped his price from $570k to $450 k after two months with no offers.it appraised at $570 in february,this is a job transfer and the seller,who bought 2 years ago will have just enough profit to cover transaction costs when he sells...if he gets his price.i am telling people not to even start looking until august next year,and would not be surprised to see another silent spring.the number of problem loans in real estate is almost beyond comprehension,and the cat will be out of the bag and covered in blood come april 1st.
I know a seller right now who has a house on the market in Marin that can't accept the fact that the market is drifting down. The seller thinks they should be getting more of a return for the "updates" and regular maintenance they did thinking of course that this should be paid for buy the buyer even if it is clearly too high.
This seller is spurning the first hit they have had in over 60 days on the market, won't budge, and is sitting on a IO loan with probably a heloc. The buyer is an fence sitter with a ton of cash and low contigencies.
On the seller side - it will be this reality for some time in marin. They really are still in denial despite all the news and information to the contrary while they just sit and wait for their IO to unlock.
You are totally right about why the realtors turned so quickly marinite. When your paycheck depends on it, the turn from a "sellers" to a "buyers" market happens very quickly. Unfortunately the participants won't cooperate in a timely manner, or at least not fast enough to keep the realtors in steady money. You have to keep in mind that there are a lot of people in the market who don't really HAVE to sell. There are many people who don't pay close attention to the markets who just got in very late thinking they could sell and make a bundle. "My counsins sisters uncles aunt told me Joe Blow cleared $120,000 after selling his home two blocks down, maybe I should put my place on the market and make me a bundle so as I can buy a fancy new masion." Some of these folks will get so caught up in the $$$ that they will chase the market down, if the realtor can afford to represent them for that long. I think there are a lot of these in California and in Phoenix as well. On the other hand, there are also a lot of FB's out there as well. "I just HELOCed myself a brand used Corvette, ain't she purrty?"
"The seller thinks they should be getting more of a return for the 'updates' and regular maintenance they did..."
Bzzzt! Wrong answer! Nobody owes you anything for "regular maintenance": that's the cost of owning. And upgrades seldom provide a 1:1 return.
Tom Stone predicts another "Silent Spring" ahead of my impending quarterly predictions. The funny part is other than school schedules what about any market in California is seasonal? If anything they should be anti-seasonal for snowbirds and ski areas and such.
I dabble in futures for educational purposes and it is a very steep tuition believe me. Futures are extremely risky and certainly only for a very small segment. Do you know what futures most closely resemble? Ans; the housing market these last few years. There's millions of people poised to lose more than their original investment
There is so much written about the readjusting arms that will force sellers to sell. How about the fact that HALF of all marriages fail. I think that the financial stress will even inflate the divorce rates.... heres an example from long island.
House bought 11/2004 for $450k
http://www.zillow.com/HomeDetails.htm?city=Miller+Place&state=NY&zprop=59454136
Has been on the market for over a year at 500k! It has just been reduced to $429k
http://www.mlsli.com/uniDetails.CFM?MLNum=1844440&typeprop=1&start=21&rpp=20
I WON'T BUY TIL THERE'S BLOOD IN THE STREETS!
Liz
"Disclaimer: The above is not intended to be construed as financial advice. It's just my opinion and my best guess given the information that is available today. Everyone must make their own decision and take responsibility for it."
WHAT!!! You want *ME* to take personal responsibility? But..But..that means I can't blame the: (choose all that fit)
Government
Banks
Brokers
Friends
Family
Neighbors
God
My dog
...for my decisions.
Seriously, you have a fantastic site and will return often.
Keep up the good work!
For real estate agents it is always "a great time to buy" since they are not doing the buying. Prices have been escalating for years and now they are just beginning to go down.
It would be foolish to buy now. Who knows how much prices will decline? Unless you have to buy for some reason I see no reason not to wait. This has only just begun.
Purchasing for reasons of investment certainly are off the table. However there is always a static demand from people buying homes to live in and trading up to expand from the home they had before.
Talking of buying homes strictly in a conversation of appreciation is a discussion in a vacuum.
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