patrick.net

Yeah, Blanche Evans........

What can I say? After all, 6 1/4% on a 30 FRM is pretty freakin' high. I just know that Dave Seiders and Tom "Can't Even Sell His Own House, The Tool" Stevens are breakin' out the "knee pads" at this hearing!

These people have tapped out every legitimate home owner and "qualified" every GF they could get their hands on and now they need "The Great Free Money Bird" to return to re-ignite sales!

O.K, we'll turn the spigot back on AFTER you open MLS de-regulate commissions, cease and desist your cartel practices and Oh Yeah, get DOM back up!

My mother lived in a little castle in Scotland with thick walls, and it was about 60 degrees in it year ’round. With the heat full and all fireplaces going it was 60 degrees. In a baking, 72 degree day in early September it was 60 degrees inside. I see why the castles are so inexpensive up there.

I love 60 degrees inside. Can it maintain 60 degrees when it is 105 outside?

It was 109 up there this summer, and I turned on the air conditioner because it was 81 inside and I am supposed to run the air condioner at least once or twice a year.

81 is still too hot. 75 is my limit. 65 would be just right. Perhaps I should move to Scotland. :)

NAR Chief testifies before Congress and informs them there is no RE bubble. What a tool. Then afterwards Dianna the CNBC reporter (and yet another byproduct of their evil eugenic breeding program) jumps him with a question about why his own house has been on the market for over a year.

Mr. Stevens' answer: "[smirking] well, I haven't been home very much...I haven't even been there at all for the past 6 months so it's a challenge. People need to listen to their agents."

His home is $1.45M in formerly red hot Virginia/DC.

Hey, Mr. Stevens: I'll offer you $449K right now, sight unseen. lol

Prefab homes intrigue me. If you are subject to floods, hurricanes,etc seems perfect answer. Do these homes meet US building code? Anyone with US experience?

You can also design for passive cooling, utilizing air flow - Draw it in to the building at ground level (ideally below ground level) and vent it from the apex of the roof. There is a little more to it, but thats the basic technique.

Excellent.

Prefab homes intrigue me. If you are subject to floods, hurricanes,etc seems perfect answer. Do these homes meet US building code? Anyone with US experience?

Prefab homes are NOT mobile homes. Prefab is just a building process.

http://www.mkd-arc.com/

Peter P,

Michelle is actually addressing the AIA here in Portland tomorrow! I wish I could take time off to hear her! I really like the "Breeze-house". The Glide-house is cool don't get me wrong but I really like the idea of basically having "two" houses. With the center breezeway/enclosure dividing down the center it lends itself to privacy as well as a shared space.

Living in a geologically active area (like Iceland) would be really great for home heating and cheap electricity. Unlimited hot water and saunas for everyone!

Michelle is actually addressing the AIA here in Portland tomorrow!

I saw her at Sunset in Menlo Park last year or so. I like her ideas.

Somehow I like the Glidehouse better. With two indoor cats we will have to keep doors closed anyway. (Also, I did not like the outdoor too much.)

The Breezehosue is indeed very nice though.

Randy H,

When you get a chance please read Doug H's posts above. He actually affirms your approach to "lowball" offers but with some very interesting wrinkles. Just when you have time.

Peter P,

She claims that the "Breeze" also has energy saving attributes and the "pool" is really more a reflecting pool to draw cool air in hotter months. I've always kind of liked the "haciendas" the Spanish built when Colombia was still a colony. Michelle captures the idea of the courtyard without having to build two additional wings!

Here in Oregon we have so many days is the fall/spring that are too nice to be couped up yet not quite nice enough for shorts. I guess that's why her designs appeal to me.

Gov. Arnold Schwarzenegger signed a bill Tuesday to give California one of the highest minimum wages in the nation.

Sometimes I wonder if he is a true republican.

http://seattletimes.nwsource.com/html/nationworld/2003256333_ndig13.html

The currency is being destroyed.

In the Utopia, there is no minimum wage! :)

She claims that the “Breeze” also has energy saving attributes and the “pool” is really more a reflecting pool to draw cool air in hotter months.

I love reflecting pools. I am not going to swim anyway.

I like the idea of a center courtyard though, but I want it completely enclosed.

*unlurks*
I'm a day behind Robert Coté's and Astrid's most fascinating debate about his dystopia and I find plenty of his points to not make any sense. Rather than force you all to read a very long 1100 word post I'll try to lob it to his blog (exurbanation.blogspot.com) since his comment section isn't very busy.

Robert, sorry for dumping it there (off topic and weird to move discussions one from place to another) but I can't find your email here or there. Look under yesterday's post " Not Peak Oil Again" for my dump. If you prefer you can reply by email (see Patrick HARM, RAndy H or whoever can see my email from admin level) The rest of you can go there to read it...in lengthy detail, if you wish.
*unlurks*

"I am not going to swim anyway"

Even though I happen to like pool parties and doing belly flops etc. most pools get very little actual use. At least with her designs the thing serves SOME purpose!

At least with her designs the thing serves SOME purpose!

Exactly. And you can still have a pool party. :)

TOLurker,

You're still unlurked. We can see you.

After reading the Washington Post coverage on the Senate hearing today I'd have to say that while RE sellers are squarely in the "Anger Phase" the REIC is still in total denial!

Maybe I don't understand their message. There is no bubble (let alone a crash) and things will level off after (two?) overheated years and then resume it's stratospheric ascent? Is that what I heard? Oh, as long as int. rates don't go any higher!

DinOR, Doug H

Great stuff on negotiating. I haven't tried the multiple purchase offer tactic, although I certainly will in the future.

I'm saddened to say that my "lowballing" (not actually lowballing, but reasonable-balling, just way below what many sellers think is reasonable at present) has been suspended. I've run into a wall of unexpected resistance here in South Marin.

I'll explain more later in a thread I'm planning on writing. The short of it is that agents here are very incestuous, and have absolutely no hesitation at breaking either CAR/NAR ethics codes or even the law. Basically, I can seldom get an offer through to the actual seller. Anything that goes to an agent gets ignored or tossed in the trash. When I can find out the actual seller's name & address, I send them the offer as registered mail only to have had all but one of those returned to sender unopened.

It seems the problem here is lots of vacant owners who've delegated entirely to the agents. But strangely, even in one case where the owner occupied the place, wasn't a retiree, and I had their full name, they still refused the certified letter with the offer. Obviously they just did what the agent told them to do. (In this case I sent the offer to the agent and seller simultaneously--ok I made sure the seller got it a few days beforehand, so I conclude that the agent pre-instructed the seller to refuse registered mail or something....maybe because I'm not the first such offer?)

And then there's the "reputation" problem. I'm looking in a narrow range of communities, within a narrow range of home types. Probably half the agents now know what I'm doing and they've added me to their blacklist.

Firstly: who was arguing with me that prices wouldn't be sticky downwards? If only I could laugh.

Secondly: I'm not sure what to do at this point other than wait and hope things loosen up, or hire a pro like FAB as a take-no-prisoners commercial-minded broker.

Oh, as long as int. rates don’t go any higher!

Sounds like the Bargaining phase to me. ;)

I’ll explain more later in a thread I’m planning on writing.

Quick, before I start yet another silly thread!

You and the seller BOTH sue the agent for violation of fudiciary duty.

What's the point? No need to upset more people now.

Randy,

Wow. Talk about "going the extra mile" for your cause. You are to be commended, sir!

Have you considered pitching your story as a "local interest" piece to a local news station? Consumer advocate/investigative reporter types just love this stuff (assuming their station's editorial policy allows them to report honestly on RE). Perhaps they could do a feauture piece on seller's agents who refuse to present legally tendered offers, feauturing you as the "victim". :-)

They could do a Mike Wallace-style spot on you running after fleeing realtor with signed offer in hand: "Hold on, Mr. Watts! Why won't you present a valid legal offer to your client? It's the right thing to do and it's the LAW!"

No reason to complete the transaction, just collect the treble damages and nail the agent’s license to your wall. Who’ll need straw bales for insulation?

:lol:

Randy H,

Thanks for the update. To answer your question....... YES it's incest.

I believe we've already established that not presenting the offer is an offense? Well that's one way to create stickiness! I would send another letter to both the realtor and seller reminding them exactly the chapter and verse of the CA Rev. Statutes applies to this and remind especially the realtor that he/she may be opening themselves up to liability if prices soften further!

Dear Mr. Realt-whore,

Your blatant disregard for (insert statute here) has placed you in a position of culpability if/when your client "the seller" decides down the road that my offer WAS reasonable! If my research reveals that a subsequent offer was accepted at a lower price you "may" be liable for the difference!

(Still feeling so confident?)

From the Law Offices of:

RC,

You weren't the only one. This is a classic example of sticky prices. The time between the sellers asking for a "wishing price" and the sellers actually accepting a market price is the period of stickiness. If this were an efficient market there wouldn't be this delay.

Randy H,

This is the very first problem anyone in retail securities faces.

Client: That POS stock you sold me is going down everyday. Sell it now.

Broker: O.K, SOLD at the market! Anything else I can do for you today?

(Any response other than "O.K" just invites liability)

Unless of course you know for a fact that it will only go up!

Why is it that realt-whores consider themselves above the law in almost every regard? Especially without even opening the envelope! That's balls (or stupidity).

RC,

Uhmm, volume is decreasing. But stickiness as I usually deal with it in models is inverse volume weighted delay in price action. So low stickiness is high volume, fast price movements. High stickiness is low volume, slow price movements.

I don't know about your piece of the world, but here it's definitely the latter occurring.

I disagree about utilizing B-S'ish technique to housing prices. You could use the greeks to model the real-options baked into home ownership (mortgage prepayment, refi, sell, don't sell, etc.). But you can't apply such methods to the underlying market value. That is driven by primary macro/micro interactions, which we collectively call fundamentals.

But you can’t apply such methods to the underlying market value. That is driven by primary macro/micro interactions, which we collectively call fundamentals.

You can never force people to believe in anything (e.g. a new price) if they do not want to.

Now if they do not believe in the new price you have stickiness.

I afraid we have to wait for the wave of foreclosures and other forced-sales to get our prices.

The run-up in housing prices was really driven by fundamentals, not speculation

Let's see how the fundamentals hold up in light of stagnant appreciation.

Honestly, if I can be convinced that current prices are completely justified, it would be good enough for me.

But I am not convinced yet.

Perhaps now would be a good time to re-visit the concept of "Mental Accounting" and how it applies to price stickiness currently being observed in the RE market:

From the Housing Bubble Glossary

Mental Accounting: (thanks to Randy H for much input) Concept referring to the powerful role of seller and buyer psychology in promoting rapid price inflation, but working against rapid price DE-flation (hence the term, “sticky on the way down”).

People think in nominal terms, not in real terms.
People think in numbers, not percentages or ratios.
People think in terms of cost, in this case monthly cost, not in terms of value.

Seller example: Sellers tend to set their mental ‘fair market” value of their own house based on the highest comps they’ve heard about in their neighborhood. If comps begin to fall, they are often very reluctant to lower their price, even if doing so would still mean realizing a huge profit over what they paid only a few years ago –and getting out early enough to prevent suffering an even greater loss of value in the future. Most sellers also do not mentally “book” the erosion of the value of their house due to cumulative inflation. Even though selling a house 10 years later for what you originally paid for it would mean a substantial loss of wealth due to inflation, most sellers do not view it this way. This thinking process is clearly non-rational, but quite natural.

Buyer example: A buyer prepared to spend $4,000/mo on mortgage (buyers don’t even think in PITI, though they should) is still prepared to spend $4,000/mo no matter how much homes drop in price (all else being equal). Unless the buyer loses a job or takes a pay cut, they’ll just buy a higher-valued home which drops into their target price range. They won’t go buy the home they wanted in 2004 for 30% less. In fact, they may have even saved up more $ thinking that they’d need more to buy into a rising market. The fact the market is dipping only means they get an extra bedroom, a hot tub, or a nice yard. This also explains why many buyers do not understand or question the terms of their own mortgages –they only care about the monthly payment and do not “sweat” the fine print. Hence, the dramatic rise of NAAVLPs and “Joe Howmuchamonth”.

This explains a lot of the “anomalies” people intuitively feel about the current statistics, particulary the recent phenomemenon of rising median sales prices in the face of plunging sales volume and exploding inventory.

HARM,

Thanks for the "refresher course"!

The Buyer Example could well describe me except rather than PITI, I looked at the max total amount we were willing to pay for our "re-entry point". The longer I waited (the worse it got, remember I bailed early).

We passed that curve in Oregon this summer and now every week when the local rag comes out I've begun to notice that for what I was willing to pay say this time last year I'm now getting an RV parking space, extra bdr/office AND full landscaping! Hey don't laugh (landscaping can run major bucks!). Since then I've become absolutely fascinated w/ how much further our housing dollar goes on an almost weekly basis!

DinOR,

Since then I’ve become absolutely fascinated w/ how much further our housing dollar goes on an almost weekly basis!

The beauty of price deflation action. It is almost magical. Ask a middle-aged Japanese. This is also why our Fed governors wisely defend against wide price deflation with every $ they can print. Imagine everyone, everywhere not wanting to buy anything because it'll be cheaper tomorrow. After a few months of that and no one's buying anything because they're busy getting into soup lines.

newsfreak,

Those sellers may sit,
with with their hand in a catcher’s mitt,
afraid to play ball.

Keep pitching!

Classic! And that must be my problem. I thought we were playing hockey.

Randy,
At least in Santa Clara County, inventory is back up:

http://bubbletracking.blogspot.com/2006/09/tracking-san-josesanta-clara-county.html

Are the actions of these Marin Cty realtors worthy of reporting them to the CAR or to someone in the Justice Department? Send a letter to Elliot Spitzer. Maybe he can actually be useful for once. On the other hand, the CAR will likely turn a blind eye.

Jon Says:

LOL
“The run-up in housing prices was really driven by fundamentals, not speculation,” Snaith said. “Growth in the Bay Area economy and the state overall was not confined to housing-related sectors.”

I did a little digging - Mr. Snaith is a B-school prof at UOP:

http://www.uop.edu/esb/faculty/seansnaith.html

It seems the B-school there provides Central Valley research forecasting (per their web site):

"The Real Estate Institute performs various research and consulting projects of interest to the region's real estate community. This includes a quarterly survey of regional housing prices and the dissemination of the Index of Central Valley House Prices which is developed in cooperation with the Central Valley Realtors Association."

Well, well, well. Mr. Snaith's word should be quite unbiased and reliable, eh?

DinOR,

Howdy Partner.....just call me Marshall Duncan.....LOL

I've left many a broken seller along the trail as I pass through their territory. I'm an equal opportunity buyer; I "break" them all; car salesmen, house sellers, and I don't discriminate one bit.

All sellers, from all markets, from all walks of life are welcome at *my* table.....I negotiate that as well.

I mention the table to make a serious point; just in case anyone is actually reading what I blab. WHERE you negotiate is a very important "bullet in the six shooter". You do not negotiate in the seller's comfort zone if you can do otherwise. The higher the seller's stress level, the quicker he will agree to your points; and eventually, your terms.

The most money I ever made was during lunch rush at the local McDonald's....talk about an "extra value meal"; that was it....and I "super-sized" it as well. BWG

Here's a nice one:

http://dallasrealestateagent.blogspot.com/

She began bloggin' away, then people found her site and began posting comments. The straw that broke the camel's back was her most current one about the Home Warranty. People blistered her for not reading and understanding what she was signing.........

Result:

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ROFLMAO

In the Utopia, there is no minimum wage!

I didn't realise Utopia was a 19th century satanic mill AND coal mine with a typhoid epidemic running through the town with barefoot children in rags working in t'pit...