Hang in there Matt… many people are still in the denial stage… they also get reenforcement from the realtor. They price their home from sold comps from the spring or even prior to that… they are stubborn… they are emotional… they think spring will save them…they here that it will bottom out in 08… they hear NAR…

The REO account managers you would think, would be smarter but they are not. Also as long as auctions get sheeple to buy at higher prices the account managers will keep the MLS homes priced high and if they don’t sell, they pull em off the MLS and send them to auction rather then keeping them on the MLS for a cut rate price….

It will take time but it will happen. It is frustrating.

SD Realtor

It’s happening already. From what I’ve observed, the only homes that are actually selling are the ones that are way under last year’s prices. All the others just sit on the market.

I think a lot of the banks don’t want to lower the comps in the neigborhoods because they know that the rest of their 100% financed borrowers will then have no hope of refinancing and would have a high probability of walking away. Corporate America runs on short-term profitability, so I think the lenders know they are just pushing the inevitable losses into the future by listing the REO’s high and letting them stagnate on the market. Little by little, some banks sell houses at what the market will bear and the comps get lower each time that happens. At some point, the banks will have to unload these places en masse unless they want to become landlords for a long time!

It’s happening already. From what I’ve observed, the only homes that are actually selling are the ones that are way under last year’s prices. All the others just sit on the market.

I think a lot of the banks don’t want to lower the comps in the neigborhoods because they know that the rest of their 100% financed borrowers will then have no hope of refinancing and would have a high probability of walking away. Corporate America runs on short-term profitability, so I think the lenders know they are just pushing the inevitable losses into the future by listing the REO’s high and letting them stagnate on the market. Little by little, some banks sell houses at what the market will bear and the comps get lower each time that happens. At some point, the banks will have to unload these places en masse unless they want to become landlords for a long time!

It’s the lender owned stuff that has me confused. I looked at one over the weekend I was driving by that was having a repo open house, it sat for six months at 400k, didn’t sell, went back to the lender. Now that some appliances are missing, lender puts it up for sale at…………400k, genius. I am fairly certain it is CFC’s and they blame everyone else, including the fed for their woes (and stock price). Market rent is $1700 to $1900, new construction for the same sq ft in walking distance is 300 to 360 with 15-20 in incentives. I told the realtor that there aren’t any turnip farms in the area and I have never seen a turnip truck use that street let alone anyone falling off the back near this house, but good luck with that. When they asked what I thought it should be priced at I cited the above info and then said at 350, I would still laugh but I wouldn’t need any seizure medicine. At 300 it stood a chance and would be inline with the other ones I’m not buying yet but at least I would give my real name and only change one or two digits of my phone number.

You may be seeing the combined impact of no/low money down loans and California foreclosure laws. People have no incentive to lessen the harm of a decline in prices by dropping their list prices.

Think about two different scenarios:
-You buy 500k$ house with no/low money down to flip, but you apply for your loan with the house as a primary residence. If your house is foreclosed on, it doesn’t matter to you whether the market price after foreclosure is 475k$ or 200k$– in either case, your loss is identical. The only “skin” you have in the game is your credit rating- the bank takes the financial hit. So you list the house above your purchase price, keep paying the teaser rate (which is comparable to rent anyway), and hope that some fool takes it off your hands before your loan resets.

-Compare this with a purchase of a 200k$ house that appreciates to 500k$ and that you now want to sell. All of the sudden, it matters immensely to you whether you sell at 475k$ or 200k$. You actually have some incentive to “chase the market down” and lower your price. A speedy sale becomes important because you actually have skin in the game.

You may be seeing the combined impact of no/low money down loans and California foreclosure laws. People have no incentive to lessen the harm of a decline in prices by dropping their list prices.

Think about two different scenarios:
-You buy 500k$ house with no/low money down to flip, but you apply for your loan with the house as a primary residence. If your house is foreclosed on, it doesn’t matter to you whether the market price after foreclosure is 475k$ or 200k$– in either case, your loss is identical. The only “skin” you have in the game is your credit rating- the bank takes the financial hit. So you list the house above your purchase price, keep paying the teaser rate (which is comparable to rent anyway), and hope that some fool takes it off your hands before your loan resets.

-Compare this with a purchase of a 200k$ house that appreciates to 500k$ and that you now want to sell. All of the sudden, it matters immensely to you whether you sell at 475k$ or 200k$. You actually have some incentive to “chase the market down” and lower your price. A speedy sale becomes important because you actually have skin in the game.

next month, go around and start making low ball offers. really low ball…

i figure, people with equity dont care yet, people without equity cant reduce, bank reo’s are in limbo with potential bk’s or unknown write off’s.

builders might play ball, but if they plan on bk anyway, then no…

having no shame and not giving a rats ass about other people’s opinion of me, i plan on doing just that. sept/oct then next year same time. i might drag my friend/re agent along for the ride… force her to grow some balls…