patrick.net

Remember that a owner ought to have the absolute right to sell or not. This is an important pillar of property rights.

Randy H,

I only wish there was "something' redeeming about that whole situation? I can't even really "take credit" for it. After you've made your 1,299th call getting some old duffer to sell their Enron shares (former Portland General Electric shareholders) you begin to see a... pattern.

As I recall that conversation evolved around "whom to target for a low-ball offer" and equity fat seniors would (after all) seem like the most logical place to start?

Fear is the most reliable motivator. Equity-fat owners have no fear.

Randy H Says:

> DinOR I have to give you credit. I was entirely wrong
> about something I argued with you about years ago:
> how older, equity rich retirees would react to selling in
> a down market. I argued that they had a low cost basis,
> and would be fine selling a home for say $385K instead
> of $450K because they only paid $90K for it decades
> earlier, and owned 100% of their equity. Well, seems
> even for those who do still own 100% equity (those who
> didn’t reverse out) they are incredibly stubborn about selling
> for even $1 less than their retired neighbor down the
> street got in 2005-2006.

I think that the primary for this “wait and see” is related to the fairly substantial dip and quick recovery of home prices we had here in the Bay Area after the dot com bust…

I’m still waiting for more old people who own free and clear to realize that things will not bounce back as quickly this time and flood the market with homes before prices drop even further.

The California Association of Realtors just reported that the Feb 2008 median price of homes statewide dropped 26% from Feb 2007 to $409K.

If prices keep falling at the same pace for another year I think it will “unstuck” many old people who cash in before prices fall even further.

If prices keep falling at the same pace for another year I think it will “unstuck” many old people who cash in before prices fall even further.

Again, there must be fear. There is still greed and hope in them.

Isn't fear of death enough? That's what I don't get. I would think seniors would eventually, as FAB proposes, want to get out of their houses sooner than later because they have a limited amount of "later" left in their lives.

Isn’t fear of death enough?

They "bought" insurance policies from churches. :)

Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light.

These Bay Area seniors obviously have no concept of the time value of money. Or is it the "money value of time"?

Greedbag seniors to working-class peons:
"You can have my house when you pry it from my cold, dead hands! Which should be coming up rather soon, actually..."

Most seniors are nice people. We should be kind to them.

The mean ones are those who have money but not the understanding of money.

The old stickiness debate.
We talk about psychology but it seems to only resonate one way. To a seller, having a bunch of buyers wanting to buy their house is a natural cue that there is demand for the house. They may go into denial about what the house will actually sell for but it is different than no one expressing interest.
I don't know why, but it is irritating reading about how dumb someone thinks someone else is because they won't act the way they are expected to. I don't know why buyers act the way they do either, just wait until the listing prices fall and then buy a place. It is such a futile waste of energy trying to convince someone that they are overpriced when they have no pressure to move.

Peter P Says:
March 26th, 2008 at 4:16 pm
"Most seniors are nice people. We should be kind to them.
The mean ones are those who have money but not the understanding of money."

My life experience is that it is the broke ones who are the mean ones. They tend to be very bitter and resent people they perceive are doing better than they are or did. They make it very difficult to feel sorry for them.

My life experience is that it is the broke ones who are the mean ones.

But they are comically mean. :lol:

At least, they are not holding something you want.

They make it very difficult to feel sorry for them.

It takes a lot for me to feel sorry for anyone.

Peter P Says:
March 26th, 2008 at 4:30 pm
"At least, they are not holding something you want."

I just don't want to be pushed out of the way when I'm in line somewhere. These old farts are a disgrace. I never butt heads with Gen X or Ys, it is always some grotesque boomer.

Note to boomers - The latest queuing theory is that it is more efficient to have one line with individual stations taking the next in line. So please don't ask me which line I'm in, I'm the next in line period!

My feedback on the stickiness.

I mentioned about the exactly one offer we made in last week of Dec - whihc was rejected. The house is still listed - total DOM over 100 this time. The house was listed for 100K more last year and did not sell - don't know for how long it was listed.

Well, the price has been reduced ... drum rolls please ... by 10K ! Yes, that's like 1%. This was done more than a month ago.

I have no bitterness towards this seller :-) They will help keep the inventory high and pressure the really motivated sellers even more.

I think our offer at 15% below asking was way generous given what has happened since then. There is a fat chance that they will get anywhere close the asking. Most buyers will simply ignore such overpriced listings. Why bother ? Why waste time when there is so much else that is available ?

FormerAptBroker Says:
March 26th, 2008 at 2:17 pm
"I’m still waiting for more old people who own free and clear to realize that things will not bounce back as quickly this time and flood the market with homes before prices drop even further.
If prices keep falling at the same pace for another year I think it will “unstuck” many old people who cash in before prices fall even further."

Overall I think this is the most correct theory. The problem is that it is tough to say a house has fallen in value when the only comp is the one from the last year. I don't know about guessing timeframes, and of course there are other variables like the bank owned and the auctions to make the values suddenly apparent.

Honestly, if renting makes more sense then rent, when it makes sense to buy then buy. I don't get the emotionalism on either side.

StuckInBA Says:
March 26th, 2008 at 4:40 pm
"I think our offer at 15% below asking was way generous given what has happened since then. There is a fat chance that they will get anywhere close the asking. Most buyers will simply ignore such overpriced listings. Why bother ? Why waste time when there is so much else that is available ?"

Exactly, btw, if the seller came back to you today, would you take the house at the price you offered?

That's what is happening to some extent. All buyers know about the bubble burst. The only difference is the depth of the bust. So only houses seriously priced below comps are selling. That makes the unrealistic sellers look even more delusional.

Oh man ... sorry for the italics (2nd time in 2 days) ... and I was answering Malcom's question.

A bit OT.

Another big BA employer reports numbers that fail to delight the investors.

http://finance.yahoo.com/q?s=orcl

ORCL is down 8% AH.

One after another company has indicated that things are not at all rosy. It is actually within the realm of possibility that the super-smart BA techies might wonder about the temporariness of this buying opportunity. Just saying. OK. Not sure. Just saying.

Why would anyone wants to own a software company that is not Microsoft? :)

One after another company has indicated that things are not at all rosy.

How can things possibly be rosy when a large investment bank can go poof in a weekend?

Can social networking sites really save us all? Perhaps they can live entirely in a cartoon world.

2nd time in 2 days

Just one more time...

... and you have to buy me sushi.

Honestly, if renting makes more sense then rent, when it makes sense to buy then buy. I don’t get the emotionalism on either side.

Because, a house isn't just house. It's the Amerikan Dream. And becoming a Loanowner confers higher social status. People will listen to you and respect your opinions, even on matters you clearly know nothing about. Renters, OTH, are permanently relegated to second-class citizenship, and must forever taste the bitter fruit of mortgage-envy. Our long-standing cutural bias against renting is so strong that even Shakespeare once made a reference to it: "neither a renter nor a landlord be"*.

*(not the actual quote)

You shouldn't care if homeowners drop the price or not. They are irrational. The banks will force the issue once they start dropping the prices on their krap houses.

At the end of the day, if they do drop prices, fine.
If they don't, fine.

The market sorts itself out.

If there are more sellers than buyers, then ADAM SMITH tells me the prices will HAVE to drop, all things being equal.

So if the sellers want to vaporize more of their own equity waiting, fine.

There's really nothing you can do.

And all the Fed can do is slow the coming of the "long term," and keep us in the short term turning the crank and installing zombies where there once was banks.

But the "long term" will come, and it will sting, unfortunately.

Now if the Fed could just delay the coming of the "long term" until I'm ready to retire, that would be fabulous.

NOT INVESTMENT ADVICE. YMMV.

The market sorts itself out.

Exactly.

In a sticky viscous market, nothing breaks through (except for a greasy slider hamburger in an unsuspecting bowel) like a few REO's setting their prices >30% below asking of the other properties and selling for even less.

I've seen these low priced REO's and I approve this message

Not investment advice.

And to think that maybe just maybe, the banks haven't even released all there REO's on the market?

Not investment advice! I don't know for sure!!

-there
+ their

Why can't ordinary people depreciate their home on their taxes?

I mean the maintenance etc. is incredible!

And the other thing that drives me nutty is not being able to deduct state income taxes and local property taxes to any significant degree because of AMT!

Please, just make the rules simpler and more transparent. I think many Americans would be more productive if that were the case.

Please, just make the rules simpler and more transparent. I think many Americans would be more productive if that were the case.

My answer: flat tax!

So Obama wants to raise tax AND bailout homeowners? Or is he just saying that to get votes?

http://www.usatoday.com/news/politics/election2008/2008-03-26-obama_N.htm

Tuesday, McCain warned that some proposals for government intervention in the housing crisis would rescue banks and borrowers who acted irresponsibly.

How can one not like McCain?

The duel between Clinton and Obama is becoming ever more entertaining. Come on, take off the gloves already! Time for some serious dirt-digging. :)

Meanwhile, former president Bill Clinton rejected the notion that Sen. Hillary Rodham Clinton might back away from the presidential race to prevent weakening the party's prospects in November.

I would be completely disappointed if Hillary backs out. She definitely still has a chance for the nomination. She just need to really work at it.

I would be completely disappointed if Hillary backs out. She definitely still has a chance for the nomination. She just need to really work at it.

The McCain election campaign by Surfer-X Esq.

First show Bill saying "depends on what your definition of is, is"
Flash to McCain on the USS Forestall.
Then show Bill saying "I did not have sex with that woman"
The flash the word Honor on the screen.
Then just list the Clinton facts.

Done. Stick a fucking fork in that cunt's ass cuz she's done. Elect McCain, and maybe, just fucking maybe we can be done with the boomer hoard.

Fuck you Dennis.

Randy

You are famous man. NYT article is currently charting 2nd most emailed story on the NYT website.

Lots of folks thinking hard about pricing I guess. :-)

And who the fuck names their fucking offspring Dennis? Marty and Flo? Thanks for proving my theory fucknob, every Dennis I have met has been an asshole. Hey man, how's you wifes ass doing? Is it two ax-handles wide yet? Mmmmm big tasty boomer ass.

Thanks StuckInBA, yours is a very interesting and I think somewhat typical situation. As the bubble crested I saw this from the sellers' standpoint. I saw two different parties finally accept offers at about the same amount as so-called "low ball" offers they had previously rejected.

I think what you will see happen is that as buyers you will soon be turning up your noses at prices you would have jumped at. If that happens the psychology will be lagging the trend but like Stuck's case the downward trend will outpace the sellers otherwise you may be tempted to jump in too soon.

revengeofaone Says:
March 26th, 2008 at 5:54 pm
"Why can’t ordinary people depreciate their home on their taxes?"

Don't go there...please....it can get ugly. Although eliminating MID in exchange for deductible improvements might be an interesting debate one day.

I don't understand the undertone of anger against sellers who won't lower their prices. Sellers can do what they want. Maybe they are content to ride this thing out, even if it takes 5 or more years. People who really want to sell or need to sell will lower their price; the others are free to ride it out.

Harm,

Yes, I can relate and understand the underlying reasons people want to own a 'home.' I still believe one has to look at it rationally. Just as you won't hear me disagreeing with your reason I am seeing all sorts of people I know being made miserable by the current downturn. I know someone who literally went from being untouchable because he was a loan broker working directly for a developer humbled and now commuting to the OC on a daily basis from N San Diego. He now has one house losing $200 per month and a new house which by my estimate has lost $50,000.

I disagree with the notion that someone has a right to something they want at a price they think is fair. The POV seems one-sided and it is not rational to get emotional because someone has something that they want but can't have at that moment. I say let the babby choke on his bottle, if the price is high the house will still be there, the seller is taking care of the buyer's house. That's how I look at it. If the house isn't still there, then the buyer was wrong about the price being too high. Patience is a virtue.

northernvirginiarenter Says:
March 26th, 2008 at 7:23 pm
Randy
"You are famous man. NYT article is currently charting 2nd most emailed story on the NYT website. "

That's so cool!