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Home sales dropping


By Bubbabear   Follow   Sat, 10 Nov 2012, 10:46am PST   4,737 views   57 comments
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For the third straight month, sales on preexisting homes dropped, leading realtors to call it a "buyer's market." Here are some strategies sellers are using to entice buyers:
■Dropping price by 50 bucks
■Carrying around wad of money; acting like owning this house got them that money
■Pointing out dishwasher several times
■Explaining to potential buyers how fulfilling it is to make mortgage payment on time
■Telling long, touching story about how grandmother needs $312,500 for kidney operation
■Letting third blouse button go
■Drowning out sound of noisy furnace with soulful vocals of Michael McDonald
■Reassuring buyers that people purchase things they can't afford all the time

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SubOink   Mon, 12 Nov 2012, 5:08am PST   Share   Quote   Permalink   Like   Dislike     Comment 18

and for the guy above claiming that you can only own for same or less in those few crappy areas (no pun) -

just go and look it up - here is just one random one for you in an awesome neighborhood in agoura hills

http://www.zillow.com/homedetails/6309-Aquarius-Ave-Agoura-Hills-CA-91301/19883884_zpid/

549k pending sale - if you go to rental listings in that neighborhood , they rent for $2600-2800 . You can do the math what the mortgage is with current rates.

There are tons more...

Goran_K   Mon, 12 Nov 2012, 5:19am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 19

SubOink says

549k pending sale - if you go to rental listings in that neighborhood , they rent for $2600-2800 . You can do the math what the mortgage is with current rates.

There are tons more...

$1950 + 460 in tax + remodeling cost/maintenance on a 35 year old house + opportunity cost of not having $110,000 to invest... not exactly a great deal.

You're in the hole.

SubOink   Mon, 12 Nov 2012, 5:35am PST   Share   Quote   Permalink   Like   Dislike     Comment 20

Goran_K says

SubOink says

549k pending sale - if you go to rental listings in that neighborhood , they rent for $2600-2800 . You can do the math what the mortgage is with current rates.

There are tons more...

$1950 + 460 in tax + remodeling cost/maintenance on a 35 year old house + opportunity cost of not having $110,000 to invest... not exactly a great deal.

You're in the hole.

you forgot the tax deduction - and nobody forces you to remodel a house - after all when you are renting, you are renting that exact same 35 year old house for $2600-2800 a month -

I consider the fact that I can remodel a big plus. We lived in those shitty rentals with cheap everything, old dishwasher, old washer/dryer, old A/C that barely pumps out cold or warm air. And when you call the landlord and ask him to improve it he goes "It's working though, right? - well, its an old house..is what it is"

the 110k is not gone, dude. It's not like you spent it...like your rent. THAT is actually gone. So after 10 years you may have had your 110k to invest but you wasted 310k on rent (case of 2600/m rent) -

YOU are in the hole!( ...and then rents go up...)

Goran_K   Mon, 12 Nov 2012, 5:45am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 21

SubOink says

you forgot the tax deduction - and nobody forces you to remodel a house - after all when you are renting, you are renting that exact same 35 year old house for $2600-2800 a month -

Well most people these days wouldn't want to live in a home with 35 year old counters, leaking roof, rotted plumbing, floors, and broken water heater. They pick and choose what awesome neighborhood they want to live in, and in 6 - 12 months if they don't like it, they go shop for another awesome place to live.

You're stuck in a 35+ year old home that probably has at least $50,000 to $100,000 in deferred upgrades to bring it up to modern standards and finishes.

You also forget your 6% of realtor commissions you automatically give up when you have to sell the place. On a $550,000 home, that's $33,000. Combine that with the cost to upgrade such an ancient home, you are blowing $100,000+ dollars right there.

You're definitely in the hole.

SubOink   Mon, 12 Nov 2012, 6:04am PST   Share   Quote   Permalink   Like   Dislike     Comment 22

Goran_K says

Well most people these days wouldn't want to live in a home with 35 year old counters, leaking roof, rotted plumbing, floors, and broken water heater

It doesn't matter what you want or desire , its the money you can spend that will determine that - if you have $2600 a month - that's what you get in those neighborhoods. Renting or Owning.

We were comparing rents to mortgage, remember? Can you rent a 2500 sqft house with a brand new kitchen, brand new bathrooms in Agoura Hills for $2600...NOPE!

Bringing up the realtor cost is a moot point. What if I don't sell.

Scenario 1: I stay in it and pay it off...then live rent free
Scenario 2: I need to move because of job or just because I want to ...I rent the house out (even if you just break even)

In both cases, the house will be paid off at some point in time. Either you pay it off yourself, or you have someone else like yourself pay it off for you. No realtors commission of 6% paid.

Once again, we are talking about somebody that is renting and a first time buyer. You have to live somewhere...maybe you don't. "War" seems to be renting a spot under the bridge for half :)

Goran_K   Mon, 12 Nov 2012, 6:06am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 23

SubOink says

Scenario 1: I stay in it and pay it off...then live rent free
Scenario 2: I need to move because of job or just because I want to ...I rent the house out (even if you just break even)

Scenario 3: You're unemployed long term, can't find work in your area, can't sell the house. Go bankrupt, and lose the house to foreclosure.

That's actually a very common one these days.

SubOink   Mon, 12 Nov 2012, 6:13am PST   Share   Quote   Permalink   Like   Dislike     Comment 24

Goran_K says

SubOink says

Scenario 1: I stay in it and pay it off...then live rent free

Scenario 2: I need to move because of job or just because I want to ...I rent the house out (even if you just break even)

Scenario 3: You're unemployed long term, can't find work in your area, can't sell the house. Go bankrupt, and lose the house to foreclosure.

That's actually a very common one these days.

Scenario 4: You get completely f**ed up in a car accident, loose all your teeth and can't ever work again...

Let's face it - if shit hits the fan, you are screwed. Renting does not protect you from it. You sign a 2 year lease, put down a huge deposit...and when you loose your job, you do what? Move where? If you cannot afford rent anymore...

If you are in the position of thinking that your job is very much on the edge of ending...DON'T BUY A HOUSE ...obviously

SubOink   Mon, 12 Nov 2012, 6:13am PST   Share   Quote   Permalink   Like   Dislike     Comment 25

This is why you always should have 1 year of mortgage/rent saved , eh?

SubOink   Mon, 12 Nov 2012, 6:56am PST   Share   Quote   Permalink   Like   Dislike     Comment 26

Sounds like an assumption to me...

Goran_K   Mon, 12 Nov 2012, 6:57am PST   Share   Quote   Permalink   Like   Dislike     Comment 27

SubOink says

Let's face it - if shit hits the fan, you are screwed. Renting does not protect you from it. You sign a 2 year lease, put down a huge deposit...and when you loose your job, you do what? Move where? If you cannot afford rent anymore...

Not really. Someone can move into a shared apartment situation renting a room for $500 - $800 a month, and live comfortably off unemployment insurance for 2 years+ while looking for work. Can't do that when you have a huge mortgage. Renters have less liability overall, so it's easier to adapt in a tight situation.

everything   Mon, 12 Nov 2012, 7:02am PST   Share   Quote   Permalink   Like   Dislike     Comment 28

Lol, interest rates dropping, credit easy, home sales booming, builder stocks are up. Suburbia is popular again, inner city junk is overpriced and sitting. It's kind of like the run up all over again, just happening quicker. Why, I don't know, interest rates are not going up until 2015. Still, often the rush is investor money, 40 MBS billions a month has to be spent so we should see continual improvement (if you can call it that), on the RE front, problem is..

It's more artificial than real. Especially when you consider that this economy is built on debt, fueling growth that is ..

Fueled by debt obligations.

SubOink   Mon, 12 Nov 2012, 7:18am PST   Share   Quote   Permalink   Like   Dislike     Comment 29

Goran_K says

Not really. Someone can move into a shared apartment situation renting a room for $500 - $800 a month, and live comfortably off unemployment insurance for 2 years+ while looking for work. Can't do that when you have a huge mortgage. Renters have less liability overall, so it's easier to adapt in a tight situation

There is always a way.

What stops you to add some roommates to your mortgage situation in a crunch. If you can move into a tiny apartment in emergency, you can also add some roommates in your house and keep the house and keep paying the mortgage.

There are a lot of situations. If you bought a house you can afford than you can easily live thru some tough times with your savings and unemployment.

SubOink   Mon, 12 Nov 2012, 7:19am PST   Share   Quote   Permalink   Like   Dislike     Comment 30

everything says

It's more artificial than real. Especially when you consider that this economy is built on debt, fueling growth that is ..

Fueled by debt obligations

oh, its real. Very real!

SubOink   Mon, 12 Nov 2012, 7:47am PST   Share   Quote   Permalink   Like   Dislike     Comment 31

Reader says

SHAM AND SCAM AND DESTROY that is what all greedy Shylocks live their lives off of doing but as the book says what you give out comes back ten fold.

FUCK SOMEONE OVER YOU GET IT BACK TEN FOLD! Remember that one.

wtf??

CDon   Mon, 12 Nov 2012, 7:58am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 32

Billybigrig says

All the fed and congress can do is extend their balance sheets to prevent the liquidity trap by keeping credit deleveraging.

Here is the error in your thinking. You assume the rules of the game are fixed when reality is they are changing all the time.

Remember, rightly or wrongly, the thinking among TPTB is that a true honest to goodness liquidity trap is so dangerous that it simply cannot be allowed to happen. Revolutions are borne on the shoulders of such events. Thus, before they have to roll out the tanks to defend the status quo, ask yourself what they will do to prevent this possibility.

5 years ago, deflationistas were thinking bernanke shot his last bullet with zirp. Then, they simply changed the rules of the game and came up with QE.

Once QE works no longer, do you think thats it? Nope. Instead, they will change the rules yet again. And again, if the fear (rightly or wrongly is a liquidity trap will mean tanks in the streets) imagine how many times they will keep making incremental changes to prevent this from happening.

Interest rate changes
Changes in Discount rates
ZIRP
QE
TARP
QE2
Operation Twist
QE3 (we are here)
QE to infinity
Nationalization of industries or sectors of the economy.
Debt Jubilees
Selective Defaults
Printing of checks to every man woman and child in the US (remember, the moniker "helecopter ben" isnt mere hyperbole - read his position paper on how far he would go to prevent deflation).
The Sale of govt controlled assets.
Privatization of licenses.
The sale of Alaska.

Think that last one is unlikely? Its not like it never happened before. Imagine the way those Russians felt when the woke up some on morning in 1867 and were told they were now living in America. Depending upon the muptiple, Selling Alaska to China could buy us another 50+ years of can kicking. After all, the Brittish have been doing this for over 200 years - selling off the periphery to extend BAU in the core.

So again, the error in your thinking is all the fed and congress can do is expand their balance sheet is because you think they cant change the rules of the game at will. The reality is, they can and will do so in ways you cant imagine.

True, if they thought deflation was no big deal then yes congress and the fed would roll over and let the liquidity trap set up and resolve itself. However, so long as they are (rightly or wrongly thinking liquidity traps = tanks in the streets), you will continue to underestimate how far they are willing to go to prevent that from happening.

Goran_K   Mon, 12 Nov 2012, 8:01am PST   Share   Quote   Permalink   Like   Dislike     Comment 33

SubOink says

What stops you to add some roommates to your mortgage situation in a crunch. If you can move into a tiny apartment in emergency, you can also add some roommates in your house and keep the house and keep paying the mortgage.

Yeah I guess you could live with 5 other people in your house and double bunk, then you have to ask yourself what's the point of owning a house? Not to mention if anything breaks, you as the owner are still on the hook for the maintenance, which would be plentiful with that many people living in the same place. Also your tenants would be limited to college guys, former drug addicts, or pedophiles. No family or couple is going to move in a shared house with some dude who is behind on his bills.

Much harder to maintain a large house than downsize from a big apartment to a smaller one.

SubOink   Mon, 12 Nov 2012, 9:23am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 34

Goran_K says

No family or couple is going to move in a shared house with some dude who is behind on his bills.

Sorry to hear that you have no friends other than drug addicts and pedophiles.

lostand confused   Mon, 12 Nov 2012, 9:46am PST   Share   Quote   Permalink   Like   Dislike     Comment 35

Japan is in QE8 or 9 and their real estate is still near 1981 lows-per the other thread?

Why would we be any different. Oh, unlike the Japanese, whose debt is held mostly by their countrymen, ours is held by China and Japan.

SubOink   Mon, 12 Nov 2012, 11:14am PST   Share   Quote   Permalink   Like   Dislike     Comment 36

War says

SubOink says

Sorry to hear that you have no friends other than drug addicts and pedophiles.

You're a nasty little underwater realtor.

I was just repeating what he said...see below

Goran_K says

Also your tenants would be limited to college guys, former drug addicts, or pedophiles.

E-man   Mon, 12 Nov 2012, 11:30am PST   Share   Quote   Permalink   Like   Dislike     Comment 37

lostand confused says

Japan is in QE8 or 9 and their real estate is still near 1981 lows-per the other thread?

Why would we be any different. Oh, unlike the Japanese, whose debt is held mostly by their countrymen, ours is held by China and Japan.

And yet home prices in Japan still tripled from its run-up even with a constant decrease in population. Go back and look at the extent of its price run-up before comparing it to us.

E-man   Mon, 12 Nov 2012, 11:44am PST   Share   Quote   Permalink   Like   Dislike     Comment 38

War says

E-man says

And yet home prices in Japan

Yet prices in Japan continue to crater.

It depends on what time horizon we're talking about.

E-man   Mon, 12 Nov 2012, 11:54am PST   Share   Quote   Permalink   Like   Dislike     Comment 39

War says

E-man says

It depends on what time horizon we're talking about.

It doesn't depend on anything other than the fact the prices continue to crater in Japan.... and the US.

What do you do when the market finally broke above its long term down trend line? Do you jump in or do you continue to wait?

SubOink   Mon, 12 Nov 2012, 12:13pm PST   Share   Quote   Permalink   Like   Dislike     Comment 40

War only see's what he wants to see

E-man   Mon, 12 Nov 2012, 12:20pm PST   Share   Quote   Permalink   Like   Dislike     Comment 41

War says

E-man says

Do you jump in or do you continue to wait?

I don't do anything except champion dramatically more affordable housing.

I guess you don't know where the HAI is currently at. Carry on with your champion.

E-man   Mon, 12 Nov 2012, 12:24pm PST   Share   Quote   Permalink   Like   Dislike     Comment 42

War says

E-man says

I guess you don't know where the HAI is currently at. Carry on with your champion.

I guess you don't understand that housing is a depreciating asset and a loss ALWAYS.

Carry on with your rapidly depreciating houses.

You're talking to the wrong guy. I own rentals. I depreciate them on my taxes annually. I know for a fact that they are a depreciating asset. What's your point again?

E-man   Mon, 12 Nov 2012, 12:27pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 43

War says

E-man says

I own rentals.

They own you. You're not bullshitting anyone here.

I'm more than happy to be their bitch. Give me some more please.

Bigsby   Mon, 12 Nov 2012, 12:35pm PST   Share   Quote   Permalink   Like   Dislike     Comment 44

War says

I guess you don't understand that housing is a depreciating asset and a loss ALWAYS.

Yes, my friends who bought homes in the UK in the early 90s have seen massive depreciation in the value of their homes. Or not.

SubOink   Mon, 12 Nov 2012, 12:45pm PST   Share   Quote   Permalink   Like   Dislike     Comment 45

E-man says

War says

E-man says

Do you jump in or do you continue to wait?

I don't do anything except champion dramatically more affordable housing.

I guess you don't know where the HAI is currently at. Carry on with your champion.

When you're income is $20k a year , houses are just not affordable...especially those 4000 sqft, fully updated ones...

APOCALYPSEFUCKisShostikovitch   Mon, 12 Nov 2012, 12:51pm PST   Share   Quote   Permalink   Like (10)   Dislike (1)     Comment 46

Realtor® scumfucks! DIE!

No one believes that a 2/2 townhouse in Stockton is going to be worth $1,000,000 in ten years. No one cares. There's an unlimited supply of squats available and rents are crashing.

Your criminal careers are over and all that's left for you is the job you were born to do: lick toilets clean at truck stops.

SubOink   Mon, 12 Nov 2012, 1:46pm PST   Share   Quote   Permalink   Like   Dislike     Comment 47

War says

SubOink says

When you're income is $20k a year

I guess you better find a worthy career my realtor friend.

Hellz no. 20k a year is more than enough!! 1920's prices are coming back...I am a snatch a BIG house up soon. All Cash!! Yeah Babeee...you watch! You are just a loosing homeowner. Don't hate the game, hate the player...or vice versa.

Prices are going down...oh yeah...I mean...they should..or..ah...I think they could...I hope they will...ah...uh...DOWN!! YEah..DOWN!!!

:)

Bigsby   Mon, 12 Nov 2012, 11:32pm PST   Share   Quote   Permalink   Like   Dislike     Comment 48

War says

Of course you conveniently avoid all the costs associated with holding onto a depreciating asset for 20 years.

So what? Add them in (even though they are irrelevant in assessing whether the actual asset has depreciated) and their homes still haven't depreciated, have they? Very far from it.

Bigsby   Mon, 12 Nov 2012, 11:36pm PST   Share   Quote   Permalink   Like   Dislike     Comment 49

LiarWatch says

Bigsby says

So what? Add them in and their homes still haven't depreciated, have they? Very far from it.

Sure they have.

Ah yes, that must be why house prices in the UK have risen over 400% since 1983. Massive depreciation but only on planet Darrell.

Bigsby   Mon, 12 Nov 2012, 11:46pm PST   Share   Quote   Permalink   Like   Dislike     Comment 50

LiarWatch says

And just think of the losses to interest alone. Massive.

Wow, I didn't realize that interest payments amounted to that much. Let me just check.... Oh my, they don't. Not that that has anything to do with whether the asset actually appreciated or not.

RentingForHalfTheCost   Tue, 13 Nov 2012, 12:29am PST   Share   Quote   Permalink   Like   Dislike     Comment 51

War says

SubOink says

Scenario 1: I stay in it and pay it off...then live rent free

Scenario 2: I need to move because of job or just because I want to ...I rent the house out (even if you just break even)

Truth 1: Your losses are massive and growing.

No such thing as free rent. You just are trying up your money in your house, rather than having it in investments. There is opportunity costs lost, and that is then your rent. Sometimes actually renting is cheaper.

Bigsby   Tue, 13 Nov 2012, 12:42am PST   Share   Quote   Permalink   Like   Dislike     Comment 52

LiarWatch says

And with the natural depreciation that occurs with ALL manmade items, the losses just continue to grow.

Presumably classic cars, very many houses etc. etc. don't constitute man-made items on planet Darrell.

Bigsby   Tue, 13 Nov 2012, 1:39am PST   Share   Quote   Permalink   Like   Dislike     Comment 53

LiarWatch says

And with the natural depreciation that occurs with ALL manmade items, the losses just continue to grow.

Ah, all man-made items.

LiarWatch says

Presumably "classic" cares are less than 0.0001% of all the cars on the planet my realtor friend.

Oh, not all man-made items.

Bigsby   Tue, 13 Nov 2012, 1:51am PST   Share   Quote   Permalink   Like   Dislike     Comment 54

LiarWatch says

ALL manmade items. ALL.

It's all now, is it? So I guess all those pesky works of art, like those Van Gogh painted and had such difficulty selling, are now presumably not really selling for the rather high prices I see reported in the news.

SubOink   Tue, 13 Nov 2012, 2:18am PST   Share   Quote   Permalink   Like   Dislike     Comment 55

LiarWatch says

You have a point. $20k/yr salary will be more than adequate to buy a house over the coming years and decades.

Enjoy the ride down.

Good for you. Unfortunately, you won't buy then either...

SubOink   Tue, 13 Nov 2012, 3:08am PST   Share   Quote   Permalink   Like   Dislike     Comment 56

LiarWatch says

ALL manmade items. Including your depreciating shanty.

I am definitely depreciating it. :)

The Professor   Tue, 13 Nov 2012, 6:26am PST   Share   Quote   Permalink   Like   Dislike     Comment 57

Bigsby says

like those Van Gogh painted and had such difficulty selling, are now presumably not really selling for the rather high prices I see reported in the news.

Don't buy Van Gogh! Wait for prices to crater!!!

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