[betting on fall]

Now, neither Joe Homeseller nor his realtor is checking the status of the ABX market and basing his selling prices on how it moves.

So I think some analysis is in order here: what does this mean for the day to day housing market and when will the impact be felt?

Playing amateur economist (and inviting others to do the same) I think it means that the business model for most lenders- to cheaply package loans and sell them for a big profit on Wall Street- is done. No sane investor is touching mortgage bonds for a while- at least not until there is some confidence that they know what they are really buying. Wall Street moves in herds and the herds are running from anything mortgage related.

So just when more people need to re-finance or find a willing buyer, the mortgage lending market is in a new level of chaos. Easy money being cut off just when its needed to keep things from getting worse.
Demand for homes further reduced, supply of homes further increased.
It does look like the perfect anti-bubble storm is brewing. We might want to remember- “be careful what you wish for”

[betting on fall]

Now, neither Joe Homeseller nor his realtor is checking the status of the ABX market and basing his selling prices on how it moves.

So I think some analysis is in order here: what does this mean for the day to day housing market and when will the impact be felt?

Playing amateur economist (and inviting others to do the same) I think it means that the business model for most lenders- to cheaply package loans and sell them for a big profit on Wall Street- is done. No sane investor is touching mortgage bonds for a while- at least not until there is some confidence that they know what they are really buying. Wall Street moves in herds and the herds are running from anything mortgage related.

So just when more people need to re-finance or find a willing buyer, the mortgage lending market is in a new level of chaos. Easy money being cut off just when its needed to keep things from getting worse.
Demand for homes further reduced, supply of homes further increased.
It does look like the perfect anti-bubble storm is brewing. We might want to remember- “be careful what you wish for”

[betting on fall]

we recently had good experience with manpower movers http://www.manpowermovers.com
Two guys worked very hard for five straight hours. The only charge we paid was their hourly rate ($95 for two guys and the truck). I think they charge double time for the drive between houses if its more than 15 min, but otherwise no bs fees like with most movers.

Wife noticed a few scratches on some furniture (IKEA, so no biggy) Otherwise it was a delightfully stress free experience.

[betting on fall]

we recently had good experience with manpower movers http://www.manpowermovers.com
Two guys worked very hard for five straight hours. The only charge we paid was their hourly rate ($95 for two guys and the truck). I think they charge double time for the drive between houses if its more than 15 min, but otherwise no bs fees like with most movers.

Wife noticed a few scratches on some furniture (IKEA, so no biggy) Otherwise it was a delightfully stress free experience.

[betting on fall]

Countrywide owns (or at least has listed for sale) 1748 homes in CA as of today.
see http://www.countrywide.com/purchase/f_reo.asp

[betting on fall]

Countrywide owns (or at least has listed for sale) 1748 homes in CA as of today.
see http://www.countrywide.com/purchase/f_reo.asp

[betting on fall]

I think the future of real estate will be people listing and finding homes without realtors, but then hiring a lawyer, escrow company or out of work realtor to do the closing process for a flat or hourly fee.

Yes, realtors still hold a monopoly on the MLS, which is still the best place to list homes or get detailed info on for-sale homes. But every year more and more useful information is available for free at other website, and this tread will inevitably continue. The “value” of the MLS will continue to fall.

The only remaining value of a realtor is expertise in managing the paperwork and hassle of the buying and selling process. The process is complex enough that expertise is required, and I don’t want to waste the time educating myself on a process I will engage in once every 10 years or so.

But why is paperwork expertise worth 3%? A lawyer would happily do it $200 an hour, probably about $4,000 total. And we think lawyers are overpaid?

Future of real estate: No more full service realtors. Instead “sale consultants” who charge a flat fee to get your home ready to sell and list. Hourly-paid “agents” who take you on home tours with their lock-box key or who babysit your open house. Then the paperwork expert who manages the actual transaction. All for less than $10,000 per transaction total.

[betting on fall]

I think the future of real estate will be people listing and finding homes without realtors, but then hiring a lawyer, escrow company or out of work realtor to do the closing process for a flat or hourly fee.

Yes, realtors still hold a monopoly on the MLS, which is still the best place to list homes or get detailed info on for-sale homes. But every year more and more useful information is available for free at other website, and this tread will inevitably continue. The “value” of the MLS will continue to fall.

The only remaining value of a realtor is expertise in managing the paperwork and hassle of the buying and selling process. The process is complex enough that expertise is required, and I don’t want to waste the time educating myself on a process I will engage in once every 10 years or so.

But why is paperwork expertise worth 3%? A lawyer would happily do it $200 an hour, probably about $4,000 total. And we think lawyers are overpaid?

Future of real estate: No more full service realtors. Instead “sale consultants” who charge a flat fee to get your home ready to sell and list. Hourly-paid “agents” who take you on home tours with their lock-box key or who babysit your open house. Then the paperwork expert who manages the actual transaction. All for less than $10,000 per transaction total.

[betting on fall]

I’m a newer member here and think this might be a good place to tell a short version of my story. (yes, below is a short version)
We just sold our house bought in 2002. Let’s just say that we bought because it was the only house in our favorite neighborhood that was for sale and in our price range at the time. A few years later, we decided it just was not the right house to spend the rest of our lives in. Rather than invest more into it, we decided to put it up for sale and leave that for the next owner.

Our sale price was about 7-8% ($50,000) less than I know we could have gotten at the peak. But one nearby sold at $50,000 less than list price a few weeks before we got our offer. So I do think the price we got was fair for today, but it does hurt to have “lost” $50,000.

We were willing to immediately buy a new house costing somewhat more than our sale price. But it seems that no one else realizes that they need to mark their house down around 10% from peak prices. (we want to stay in the same central San Diego area, so we don’t have the same number of quality for sale choices as, say, someone in Otay Ranch or San Elijo.)

So we just signed a lease on a house near the one we are selling- rent equal to our old mortgage payment. I figure we will just relax there, and bet on the fall of the market. I do want to buy again soon because I value the stability (have two small kids).

Our still-substantial profits will go into to savings account getting 5+% interest. We already have our eye on a few places we like in our preferred area, but are waiting for them to face reality and lower the price. I am sure our non-contingent, half cash offer will be very attractive to a desperate seller soon.
Of course, now I am debating if I should even bother looking for a “bargain” this year, and should just wait to 2008-2009 when things really crash. I know we are on the downslope, but I’m more and more sure that slope is going to be a long one. Thus the name “betting on fall”

[betting on fall]

I’m a newer member here and think this might be a good place to tell a short version of my story. (yes, below is a short version)
We just sold our house bought in 2002. Let’s just say that we bought because it was the only house in our favorite neighborhood that was for sale and in our price range at the time. A few years later, we decided it just was not the right house to spend the rest of our lives in. Rather than invest more into it, we decided to put it up for sale and leave that for the next owner.

Our sale price was about 7-8% ($50,000) less than I know we could have gotten at the peak. But one nearby sold at $50,000 less than list price a few weeks before we got our offer. So I do think the price we got was fair for today, but it does hurt to have “lost” $50,000.

We were willing to immediately buy a new house costing somewhat more than our sale price. But it seems that no one else realizes that they need to mark their house down around 10% from peak prices. (we want to stay in the same central San Diego area, so we don’t have the same number of quality for sale choices as, say, someone in Otay Ranch or San Elijo.)

So we just signed a lease on a house near the one we are selling- rent equal to our old mortgage payment. I figure we will just relax there, and bet on the fall of the market. I do want to buy again soon because I value the stability (have two small kids).

Our still-substantial profits will go into to savings account getting 5+% interest. We already have our eye on a few places we like in our preferred area, but are waiting for them to face reality and lower the price. I am sure our non-contingent, half cash offer will be very attractive to a desperate seller soon.
Of course, now I am debating if I should even bother looking for a “bargain” this year, and should just wait to 2008-2009 when things really crash. I know we are on the downslope, but I’m more and more sure that slope is going to be a long one. Thus the name “betting on fall”

[betting on fall]

Good point. If 95%-100% financing dries up even for people with good credit, then the pool of first time home buyers will shrink to almost zero. It will be people who can get big down payments made by Dad and Mom, or people with great jobs who have also been renting for several years.

Of course, if comps are based on prices of closed sales from 3-6 months ago, and the current sales price is 5-10% less, then there might be the illusion of less than 100% financing. That might let these no-cash down first timers buy for a little while longer.

[betting on fall]

Good point. If 95%-100% financing dries up even for people with good credit, then the pool of first time home buyers will shrink to almost zero. It will be people who can get big down payments made by Dad and Mom, or people with great jobs who have also been renting for several years.

Of course, if comps are based on prices of closed sales from 3-6 months ago, and the current sales price is 5-10% less, then there might be the illusion of less than 100% financing. That might let these no-cash down first timers buy for a little while longer.

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