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July 24, 2007 at 11:59 AM in reply to: NEED your input, About to buy a new Pienza home in 4S Ranch #67413July 24, 2007 at 11:59 AM in reply to: NEED your input, About to buy a new Pienza home in 4S Ranch #67478
cyphire
ParticipantMy own guess based on long term interest rates, economic weakness, rising taxes, and the money supply lead me to guess that real estate will go down by 3-5 percent per year and have hiccups of 1% raises during these periods.
I feel that this trend could continue for 10 years (or more).
Looking at historic bubbles, risk aversion, and the changing capital markets (as well as Middle class America taking on huge debt and outsourcing) – I’m making my guess that this is what is going to happen.
Also with the baby boomers retiring, and their incredible lack of savings, this leads to long term economic malaise.
Just a guess! But I wouldn’t be even thinking of buying for 2 years. That is my personal time period to assess the market.
Who really knows? But looking at the unsustainable price increases, the investor speculation and the number of sub prime, low equity, highly leveraged mortgage market, I see long term, not short term corrections with a snowballing sentiment.
ParticipantHey SD…
A little confused. I’m not saying that there is a specific fraud being committed by the owner of the house in question, or even prudential. I’m also not saying that it was Prudential’s listing (It was on their sheet and I spoke to the broker about the specific listing). They probably did take it off the market for a day, then relist it. They did switch brokers, etc. This is probably within the rules – that is my point. They are manipulating the rules to change the days on market. No one wants to have admitted that they house was on the market for 200 days, so they gamed the system.
But what is worse in my opinion, is that the broker who made the advertisement knows that the data is wrong. They specifically called out how the days on market is dropping when they know that the house has actively been for sale for 200 days or longer.
The DRE would just say that as it came back on the next day they are allowed to show days on market at 0. These rules are perpetrating the fraud. Why would anyone trust the real estate establishment anymore?
If you ask me, it’s the Realtors who should take a stand. And by taking a stand I don’t mean contributing to any pro-real estate politician, I mean try to fix corrupt and misleading industry practices to make their own profession not look like whores.
As stated ad nauseum on this board before – most of the public doesn’t realize how much of the data is wrong, misleading, or downright fraudulent. The ones that do include the Realtors themselves – but try talking to most of them! They will defend the most egregious of practices – and people wonder why they have no credibility!
I also understand that brokers have access to cumulative days on market. Why isn’t this data presented to the public?
ParticipantHey SD…
A little confused. I’m not saying that there is a specific fraud being committed by the owner of the house in question, or even prudential. I’m also not saying that it was Prudential’s listing (It was on their sheet and I spoke to the broker about the specific listing). They probably did take it off the market for a day, then relist it. They did switch brokers, etc. This is probably within the rules – that is my point. They are manipulating the rules to change the days on market. No one wants to have admitted that they house was on the market for 200 days, so they gamed the system.
But what is worse in my opinion, is that the broker who made the advertisement knows that the data is wrong. They specifically called out how the days on market is dropping when they know that the house has actively been for sale for 200 days or longer.
The DRE would just say that as it came back on the next day they are allowed to show days on market at 0. These rules are perpetrating the fraud. Why would anyone trust the real estate establishment anymore?
If you ask me, it’s the Realtors who should take a stand. And by taking a stand I don’t mean contributing to any pro-real estate politician, I mean try to fix corrupt and misleading industry practices to make their own profession not look like whores.
As stated ad nauseum on this board before – most of the public doesn’t realize how much of the data is wrong, misleading, or downright fraudulent. The ones that do include the Realtors themselves – but try talking to most of them! They will defend the most egregious of practices – and people wonder why they have no credibility!
I also understand that brokers have access to cumulative days on market. Why isn’t this data presented to the public?
ParticipantThanks for the welcome back Rustico and all! I’ve been a bit busy in my life lately, and have neglected the forum’s for a while. I also plan on being more relaxed and “kinder and gentler”!
I appreciate all the arguments so far, for and against the days on market info as well as the many other factors which comprise getting reliable information.
I just want to focus on this one thing though:
– I received a flyer.
– The Days on Market data was a complete lie.
– The Realtor knows this (that the two houses I knew of were on the market for 200 days each but say 44 and 40 days respectively).
– The Realtor crowed about the great reduction in days on market to show the market’s strength, even though knowing that the data is a complete fabrication.Can you really explain that away SD Realtor?
This is fraud. This is specifically a broker lying and misleading – sending out advertising material which they know to be wrong. Just because this profession does it all the time doesn’t make it right, and it doesn’t say much for it’s trust.
Have we lost all grip with reality? This is sanctioned fraud. Stating (as did the Realtor when I called her up) – that they would run a complete history on any house which a buyer is interested in doesn’t fix it – it’s still fraud.
Example: A used car lot has cars with all sorts of problems. They use a mechanical service to state that the cars are 98 percent defect free. They know that the average car is 75% defect free. They claim that the advertising of the 98% number is ok, because any specific car can be reexamined to find out the truth about it…. But they use the 98% number to mislead the public about the quality of their cars… This is FRAUD!
These folks at Prudential (and probably many others) are specifically making claims which are untrue – because there is no recourse to their falsehoods – other than people making dangerous financial decisions based on Realtors painting a fake, rosy picture.
When will there be recourse to this type of behavior?
p.s. I looked at the listing brokers web site (a different agency) which shows my house as sold at 10% higher (our listing price) then we actually sold at. More deception. and it goes on and on and on!!!
ParticipantThanks for the welcome back Rustico and all! I’ve been a bit busy in my life lately, and have neglected the forum’s for a while. I also plan on being more relaxed and “kinder and gentler”!
I appreciate all the arguments so far, for and against the days on market info as well as the many other factors which comprise getting reliable information.
I just want to focus on this one thing though:
– I received a flyer.
– The Days on Market data was a complete lie.
– The Realtor knows this (that the two houses I knew of were on the market for 200 days each but say 44 and 40 days respectively).
– The Realtor crowed about the great reduction in days on market to show the market’s strength, even though knowing that the data is a complete fabrication.Can you really explain that away SD Realtor?
This is fraud. This is specifically a broker lying and misleading – sending out advertising material which they know to be wrong. Just because this profession does it all the time doesn’t make it right, and it doesn’t say much for it’s trust.
Have we lost all grip with reality? This is sanctioned fraud. Stating (as did the Realtor when I called her up) – that they would run a complete history on any house which a buyer is interested in doesn’t fix it – it’s still fraud.
Example: A used car lot has cars with all sorts of problems. They use a mechanical service to state that the cars are 98 percent defect free. They know that the average car is 75% defect free. They claim that the advertising of the 98% number is ok, because any specific car can be reexamined to find out the truth about it…. But they use the 98% number to mislead the public about the quality of their cars… This is FRAUD!
These folks at Prudential (and probably many others) are specifically making claims which are untrue – because there is no recourse to their falsehoods – other than people making dangerous financial decisions based on Realtors painting a fake, rosy picture.
When will there be recourse to this type of behavior?
p.s. I looked at the listing brokers web site (a different agency) which shows my house as sold at 10% higher (our listing price) then we actually sold at. More deception. and it goes on and on and on!!!
Participantjg… I’ve been nice and have ignored the dozen or so of your posts where you have been both rude and boorish. I don’t care if you need to express your religious identity – you can even spell things out if it makes you happy. If you could consider toning it down a bit I would appreciate it.
It takes 2 to have an argument… I’m not interested… Besides – I love garlic and currently live in Bird Rock. I’ve met lots of nice people here who dislike Bush, think that the religious right has a lot of moral issues to answer for and would like to see a fairer society. That being said… Have a nice evening.
Ciao
p.s. Will be traveling tomorrow – will check in on Sunday night or Monday night. Keep the venom to a minimum. Thanks.
Participantjg… I’ve been nice and have ignored the dozen or so of your posts where you have been both rude and boorish. I don’t care if you need to express your religious identity – you can even spell things out if it makes you happy. If you could consider toning it down a bit I would appreciate it.
It takes 2 to have an argument… I’m not interested… Besides – I love garlic and currently live in Bird Rock. I’ve met lots of nice people here who dislike Bush, think that the religious right has a lot of moral issues to answer for and would like to see a fairer society. That being said… Have a nice evening.
Ciao
p.s. Will be traveling tomorrow – will check in on Sunday night or Monday night. Keep the venom to a minimum. Thanks.
ParticipantVolume does precede price. Also – housing prices don’t drop like stock prices, there will be a constant drop to the downside. Right now all the marginal properties are taken off the market and the good houses are selling. They are selling at a discount, but not falling like crazy. This takes time. There may even be some price recoveries, and then they will fall again. Look for a LONG TERM drop in price. It could take 10 years or more. With a snowballing effect as the sentiment of the consumer gets darker and darker. Interest rates will be the real killer. I think that should (I think they will) interest rates creep up, perhaps by 2-3 percentage points over the next few (5?) years, that 30 years will go up also to at least 1-2% minimum and that will be a HUGE driver of house price collapsing.
I think that there is somewhat of a house of cards effect and that any large disruptions, oil crisis, war, political effects, food crisis, health scares, terrorism, will be a tipping point to a new downward trend.
Note: I am not an economist, I am generally an optimist. I think though that the country is still tipped toward a non-existent trickle down tax rationale, and that the middle class is being destroyed. The wealthy areas will not be hit as hard (at least the nice properties) and even the poorer properties will be protected because there is so much money in the various expensive towns. The middle class and even heavily developed upper-middle (Carmel Valley) will start to feel the pain in a year or so. The middle end and lower will fail dramatically. Real wages are not going up, but inflation is (true inflation) and the current mind set of the corporations and the government is to keep the high end in obscene wealth.
Consumer confidence is truly the real measure, and there is still the lagging effect and credit crunch. Credit is still open and the crunching is only starting to happen. Major buyouts and mergers are pointing to lower salaries, not employment – but the trend is increasing.
It’s not a good time to be an optimist – optimists get killed in the early stages of a long-term downward trend!
Just my thoughts… the future will tell!
ParticipantVolume does precede price. Also – housing prices don’t drop like stock prices, there will be a constant drop to the downside. Right now all the marginal properties are taken off the market and the good houses are selling. They are selling at a discount, but not falling like crazy. This takes time. There may even be some price recoveries, and then they will fall again. Look for a LONG TERM drop in price. It could take 10 years or more. With a snowballing effect as the sentiment of the consumer gets darker and darker. Interest rates will be the real killer. I think that should (I think they will) interest rates creep up, perhaps by 2-3 percentage points over the next few (5?) years, that 30 years will go up also to at least 1-2% minimum and that will be a HUGE driver of house price collapsing.
I think that there is somewhat of a house of cards effect and that any large disruptions, oil crisis, war, political effects, food crisis, health scares, terrorism, will be a tipping point to a new downward trend.
Note: I am not an economist, I am generally an optimist. I think though that the country is still tipped toward a non-existent trickle down tax rationale, and that the middle class is being destroyed. The wealthy areas will not be hit as hard (at least the nice properties) and even the poorer properties will be protected because there is so much money in the various expensive towns. The middle class and even heavily developed upper-middle (Carmel Valley) will start to feel the pain in a year or so. The middle end and lower will fail dramatically. Real wages are not going up, but inflation is (true inflation) and the current mind set of the corporations and the government is to keep the high end in obscene wealth.
Consumer confidence is truly the real measure, and there is still the lagging effect and credit crunch. Credit is still open and the crunching is only starting to happen. Major buyouts and mergers are pointing to lower salaries, not employment – but the trend is increasing.
It’s not a good time to be an optimist – optimists get killed in the early stages of a long-term downward trend!
Just my thoughts… the future will tell!
ParticipantNeighborhoods considering: Birdrock, Lower Hermosa (LJ), possibly Del Mar.
House/Condo: House with privacy
Size: 2,500-4,000 sq ft.
Price: 1.4M-2.5M
Rent/Own: Sold house in Olivenhain in 2006, renting now.
Shopping the Market?: We have been looking hard and have decided that we will rent for 2 years, possibly 4-5. Renting a great house at 40% (nut) vs.owning. Hoping that prices steadily drop and interest rates go up (for personal goals, not for pain in others). Believe that the air will keep getting let out of the tires as more and more economic issues keep playing out in the market. Had 2 acres, more interested in short walks to town, ocean view, NO MAJOR CONSTRUCTION PROJECTS!ParticipantNeighborhoods considering: Birdrock, Lower Hermosa (LJ), possibly Del Mar.
House/Condo: House with privacy
Size: 2,500-4,000 sq ft.
Price: 1.4M-2.5M
Rent/Own: Sold house in Olivenhain in 2006, renting now.
Shopping the Market?: We have been looking hard and have decided that we will rent for 2 years, possibly 4-5. Renting a great house at 40% (nut) vs.owning. Hoping that prices steadily drop and interest rates go up (for personal goals, not for pain in others). Believe that the air will keep getting let out of the tires as more and more economic issues keep playing out in the market. Had 2 acres, more interested in short walks to town, ocean view, NO MAJOR CONSTRUCTION PROJECTS!ParticipantLook in Olivenhain (Encinitas), on Lone Jack Road.
I meant that some people who put down 20% to not get hit with PMI really don’t have the cash left over to do anything. So they get a line of credit, and a line of credit is a dangerous thing!
ParticipantLook in Olivenhain (Encinitas), on Lone Jack Road.
I meant that some people who put down 20% to not get hit with PMI really don’t have the cash left over to do anything. So they get a line of credit, and a line of credit is a dangerous thing!
ParticipantI agree – we shouldn’t bash anyone on these forums – we should recognize that it is both an emotional purchase as well as a business purchase in buying a home.
Each person is different and each person has different levels of risk, stability, long term, short term goals, ect. For me (a person who keeps buying and selling with a bit of wanderlust) it would be ludicrous to purchase now. Why? Because I am not sure what my time horizon is. I don’t think that any house I purchase will hold its value (including the cost of selling) over the next 3-8 years.
If I was in it for 10-20 years, it would be a more difficult decision, and for 20 or more years an easier one.
I would like to buy a house – but am too risk adverse right now. I think that from a purely financial point that almost no one should buy now, that is only because I feel (my guess) that while prices might stay stable, there is a very good chance that they will keep going down or plunge. The weighted average of my risk scenarios show a much weaker RE market in the next 2-6 years.
To keep my wife, kids, and myself happy, I committed to a very expensive rental which is still 1/2 of what i would pay for a similar house in today’s market.
If you can afford it and don’t feel that prices will erode too much more, AND are going to stay there for 15 years or more then perhaps you should buy. Of course when I say can afford it, I really mean can afford it. That means at least 20% down, 20% more in the bank, and a mortgage that suits your time horizon. It’s my opinion that most people can’t really afford it… They think that 20% down, almost nothing left in the bank, and getting a second mortgage is normal…. It’s not… It’s very foolish with the potential volatility in the housing market and economy right now.
Just my opinion.
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