RANT: I can't believe they can't figure out why homes are not selling!

[KillCapitalism]

I just heard a realtor on a talk radio program going on about how she can't believe that homes are not selling right now given the fact that interest rates are dropping, and that this is a "buyer's market."

I'm not a particularly bright person, but I see the reasons why homes aren't selling:

1. High unemployment.
2. Low wages paid by jobs that are available.
3. Homes are still overpriced.

I have recently seen that average home prices in the US have dropped to ~$210,000 from around ~$225,000 or so IIRC. Big whoop! If you are unemployed/laid off, or are lucky enough to have a McJob, $8 an hour is not gonna get you a mortgage on anything.

These people must be living under rocks.

[ursi]

1. totally living under rocks!

[Javaman]

33. I heard the price for affordable rock living is going up. nt

[MADem]

2. 4. Banks have NO MONEY to make LOANS!!!! nt

[dkf]

3. Who wants to buy now...recession just starting.

[Skittles]

4. when you hear home values will drop 25% in the next three years

doesn't make you wanna go out and buy one, ya know? :o

[dkf]

10. Yeah I was thinking about it in early Jan.

But the stocks went PFFFT so I said forget it.

[Rockholm]

18. They are dropping like that in some places, sure,....

Not in places where people want to live. Article in the Boston Globe today discussed while the number of homes sold in Greater Boston was down 20 something percent, prices were down 1.5%
The thing is, prices are still high here, but people earn a good bit of money here. Cities like New York, San Francisco, Chicago, Boston...economic hubs.

Funny thing about real estate...When the stock market was tumbling last week, all the financial talking heads said not to panic and stay put. The market goes up, the market goes down. If you are in it for the long term, things will be fine. But why are the talking heads not discussing real estate that way? We all need housing. I would say that most of us, if not all, on DU who OWN HOMES will keep positive about real estate. Those who rent are gleeful about real estate falling the way it is being reported.

[havocmom]

27. Santa Fe, NM is a nice place to live

We have been watching homes for sale in New Mexico for about three years now. Prices dropping like rocks in Santa Fe and other areas of that state. It is a lovely place to live. Lots of empty homes. Really sorta scary.

Yep, the homes WERE overvalued. Thinking people just figure the value goes up 30% when they wanna sell and they have been getting away with that for a while now, all over the country. Now, reality is hitting along with SERIOUS economic woes hitting the middle class.

Not everyone wants to live in Boston.

[Rockholm]

40. That's a good thing!

Although, if everyone wanted to live in Boston, there would be a tremendous shortage of homes and prices would go through the roof!
It is scary to hear of the boom areas like Denver, Phoenix, etc that are experiencing tough times as far as real estate goes.
The truth is, the middle class is getting killed by this. The middle class who have been in their homes for at least five years should be fine. The big challenge are the people who used their homes as ATM's, refinancing and taking money out, expecting the market to continue to keep accelerating up. That my friend, is where the overvaluation figure comes into play. Just because someone cashed out their home's equity for cars, trips and college for the kids, does not mean that they should recoup all of that money from the sale of the home...and then some.

[eridani]

41. If you regard your home as shelter instead of a credit card--

--you prefer lower property values because that = lower property taxes.

[Rockholm]

47. Maybe that is how it is where you are.

My 2008 assessment went down slightly (which is OK, not great, but OK) however the tax rate went up. It was a break even. My water and sewer rates up 25%. I would rather my property taxes go up because I see a direct benefit to that. With sewer, we it's all down the toilet anyway. :)

[eridani]

48. Yes, there is that rate thing.

My property has increased in exchange value, but not a lot has happened to its use value.

[Johonny]

44. I agree

Looking at 1 million starter home and being told the owner just lowered the asking price 30 K doesn't get me all excited.

[madokie]

19. yes our little 1200 sq ft two bed two baths worth will only go up in response

these people who will be pushed out of their big assed houses will have to find somewhere to live so my future housing potential is looking better every day.

The last 20 or so years of my work life was finishing concrete and let me tell you we placed and finished many huge houses, 3 and 4 thousands sq ft and bigger and I have been telling the guys I worked with that these big assed houses will be selling for nichels on the dollar one day in our future. No one will be able to afford to keep them up nor pay for the utilities, let alone the high price they're paying. I heard more than one owner say that the cost for heat and cooling will be astronomical on these houses and I agree with them.

[tsuki]

50. I heard that some of these megamansion were paying 800-1000

a month to cool last summer.

[K8-EEE]

5. Well algebra flashback: Here in CA it's 3333333333333333

LOL I used to always get that answer....Is it a repeating decimal, I was always wrong.

Not wrong here though: the prices in SoCA are RIDICULOUS!!! For the past 5 years I'm CONSTANTLY barraged by lenders wanting me to "take money out" of my modest 2 br bungalow. I'm told I have $475,000 equity that is CRAZY!!! BUT PEOPLE DID IT! And now they are hocked up to the gills and you know what? It's not a mistake. Just like Iraq wasn't a mistake. They want to enslave you. That's what I really think, and the more distressed people all (with job losses, pay cuts, price increases etc.) the more vulnerable they are to the "fix."

[Greyhound]

9. What do you think has been driving the Cali economy for the last decade? n/t

[K8-EEE]

32. smoke & mirror "rising house values" - people using homes as wallets

It's all escrow, refinancing, that type of thing....

[pink-o]

45. The Bay Area is even more ridiculous!

And the poster speaking of Boston is absolutely right: prices here aren't going down much at all.

When you can get into a grungy studio condo in a drive-by-shooting neighbourhood like Visitacion Valley for less than 350,00, I'll believe there's a housing crisis here!

[Jed Dilligan]

6. I've actually been called "immature" and "irresponsible" on this board

for renting instead of buying. :rofl:

[Skittles]

11. ? who the f*** said that

what jerks

[Jed Dilligan]

35. I try not to remember who says this stuff

It's not really people on here, mostly, just their bad sides.

[FunkyLeprechaun]

16. Who said that?

I wouldn't call you immature, just that the fact I had such a terrible experience with a landlord that I now prefer to have my own house (just got on the ladder in October of last year).

I hope your landlord treats you well! :-)

[zanne]

31. Jed....

If that's the worst you've been called, you're doing great by DU standards!

[El Pinko]

7. It's not just that homes are "overpriced"?

Even the average layperson has the strong sense that prices will not be bottoming out for a long time to come. My guess is that prices will fall to about 2003 levels before they bottom out. Why buy when prices are just barely off their bubble peak? IN many cities there is like TWO YEARS of housing inventory sitting unsold. You'd have to be nuts to buy right now, unless you get a sweet deal at a foreclosure auction...

[Greyhound]

8. Show me a realtor that ever told a client "this is not a good time to buy" and that's the one

to hire. The problem with the whole real estate industry is that they only talk to each other and they all lie about how great things are for them. The result is that they all believe everything is always great and tell everybody that will listen about it.

That, and the endless supply of hackneyed cliches...

[Indenturedebtor]

12. They don't believe it

They're not public servants they're salespeople who are shitting bricks over the fact that their ARM loans are going through the roof and there's little to no income coming in. Pity them. They're screwed along with the rest of us. It's the banks not the realtors that are to blame. And no i'm not a realtor.

[El Pinko]

13. Well, there is definitely some blame due the realtors, as well as speculators/flippers.

The National Association of Realtors and their shills were doing their best to keep the bubble inflated even as it started to deflate.


2005


2006

http://en.wikipedia.org/wiki/David_Lereah

David Lereah was chief economist for the National Association of Realtors (NAR). Lereah served as the association's spokesman on economic forecasts, interest rates, home sales, mortgage rates, as well as other policy issues and trends affecting the United States real estate industry. Lereah's penchant for putting out positive spin on dismal housing numbers led critics to dub him the Baghdad Bob of real estate.<1>

[Indenturedebtor]

14. Ok right you are

Guess I just felt a pinge of sympathy for the realtors.

[gasperc]

29. that house landed on those homeowners

well I suspect that guy is out of work

[Greyhound]

15. Sorry, I know too many of them to have any pity for them. They, like most salespeople

(myself intermittently included), operate in a fabricated (delusional?) world of their own creation. They feel no remorse in selling a property they know to be seriously defective to people that they know cannot afford it. They play an endless game of "how much can I get away with without jeopardizing my license or ending up in a lawsuit", collect their commissions, and move on to the next deal.

Like the auto financial and legal industries, they have spent decades buying politicians to get one-sided laws passed to shield them from the consequences of theft and deception. I'm certain that there are a few "honest brokers" around, but on the whole, we would all be much better off without them and on the rare occasion that they get their comeuppance, I shed no tears for them, for they have prospered at the expense of those foolish enough to trust them.

[Rockholm]

20. Too bad you have dealt with bad brokers.

[bullwinkle428]

28. I've bought and sold 4 different properties over the last

15-20 years, and have to say the majority of the brokers I've dealt with have been either lacking in competence, underhanded and sleazy, or just out-and-out assholes!!

I had one broker in particular that was absolutely wonderful, an older gentleman that was the listing agent for the first property I owned when I wanted to sell it. He totally went above and beyond the call in trying to get through some difficult obstacles I had encountered along the way, and made things happen. Unfortunately, he suffered from a heart condition and passed away a year or two after my transaction with him.

[lumberjack_jeff]

34. Hire them to do what?

If I'm a seller, I would select a broker who conveys the idea that the house I'm selling is a good investment.

On the other hand, if I'm a buyer, and I believed that "this is not a good time to buy" it's irrational to be a buyer, isn't it?

A broker's only job is to connect people who want to sell with people who want to buy.

[Greyhound]

49. LOL!

[Thothmes]

17. One other thought

There is money available for mortgages. However, the lax lending practices of the last several years are no more. You had better be able to prove beyond a reasonable doubt that you can afford to pay for the house. You had better be able to plop down a healthy down payment. Your credit record had better be as pure as the Virgin Mary. Otherwise no one will lend you a red cent for a house. JMO

[spinbaby]

22. They're still advertising like maniacs

Seems like every time I turn on the TV, there's an ad for Ditech or Countrywide.

[Thothmes]

25. This is true, I have seen them also

but I will be willing to bet that the requirements to get a home loan from these businesses today is considerably different from what they were at this time 12-18 months ago. Again this is my opinion

[Skittles]

43. that's the way it should be

that's the way it used to be

[Echo In Light]

21. In order for many to be "successful" they have to believe their own poison jive

Many corporate ladders wouldn't be climbed if people didn't really want what it offers and entails. There is a massive movement among our species that has created, and is contingent upon, an entire catalog of "Newspeak" semantics attached to the notion of social/monetary "success," used to disguise the reality of the desires, choices and actions.

[PA Democrat]

23. Uncertainty is another factor. People are less inclined to take on a big mortgage payment

if they are worried about their jobs.

[RB TexLa]

24. Home prices were up about 6% here forQ4, and of course we are waiting on our appraisal for this year

If it's up 6% in the market then we'll probably see a 9 or 10% increase in the taxes.

[rucky]

26. Getting qualified for financing, too.

Conditions have tightened up, wages aren't increasing in proportion to the home prices, and people's credit scores are probably in the shitter after the holidays.

[iamthebandfanman]

30. nobody has money?

that woulda been my guess ;)

[JustABozoOnThisBus]

36. New homes are built too big

I don't see many "normal" homes being built around my area. I'd guess 2000 sq ft is the absolute minimum, and they get much larger. Anyone see any 1500 sq ft houses going up?

Paying for a big house is just the start. Then try heating or cooling the thing. Or putting furniture in it.

[spinbaby]

37. This is why they're selling that monster furniture

If you go into a furniture store nowadays, you see all that huge, outsized furniture that McMansion owners need to fill up all those giant spaces. IKEA is just about the only place anymore that sells normal-sized furniture.

[lumberjack_jeff]

38. We had the exact same experience.

Are peoples' asses really that big?

[kwassa]

39. yes, people's asses really are that big.

Puttting the Mac in MacMansion.

Which is another problem, of course.

[Skittles]

42. same here

the houses are bigger than many apartment buildings with 8 units

[Carni]

46. You forgot *ruined credit* as a poll option

A lot of gainfully employed people have it in bushit's wake

[AP]

51. Also, people are saving no money, so they have no money to put down on a house,

and they're too heavily leveraged and in too much debt.