[powayseller]

An $800K house would cost $200K in Omaha. My parents house was featured in Architectural Digest back in the 1970s when it was built. They insist they cannot get a penny over $450K for it. You can get foreclosures in Omaha for under $100K. There are still cheap places to live. But lenderbubblecompany, why are you tired of waiting for prices to come down? It’s already happening. I’m also concerned that the lending bubble will cause home values to decline nationally. I don’t believe there is a risk-free real estate purchase anywhere in the US. By risk-free I mean safety of principal is guaranteed. Even a purchase in Omaha is too risky this year. After a year of foreclosures, what will the market be like? Of course you can find cheaper places to rent.

[powayseller]

I thought they record the land at book value. At least that’s what someone wrote earlier on the forums. If they purchased in the last couple years, and the land is worth less today, do they have to write that off? Centex is doing worse than the others, judging by their huge discounts. So they are not exercising their land options and walking away from new projects?

[powayseller]

Hey, you guys really made my day! I’m glad we’re all friends again. And one more question: are hs, lostkitty, and I the only women here? I feel like back in engineering class – where are all the girls??

[powayseller]

Asianautica, I thought your debate with sdrealtor was skilled and polite.

Please don’t let his comments about your decision to rent mean anything to you. Just as he implies that owning a home provides security, comfort, love, and probably better sex in his view, that is the opinion of a man wearing realtor-colored glasses. I am as passionate about mopping my floors as he is about homeownership. Both passions are purely emotional, and not backed up by any facts or statistics that their pursuit leads to a healthier longer or more passionate life.

Second, I’d like to make a personal request that we refrain from condescending remarks. Things like “I do think it will be difficult to continue saving $12K a year until you are age 86” and thinly veiled advice that you may not be able to keep saving if bad stuff happens, and telling Boston_OC that his boss’ expectations will be raised to unattainable heights due to his stellar sales record, are just unpleasant. I’d like to request that we refrain from giving unpleasant or condescending personal advice to people, and stick to exchanging ideas. Compliments are always appreciated for all sides.

I think sdr feels defensive at times, so he attacks people, and we need to be careful on attacking realtors in this forum. There are plenty of professional knowledgeable realtors, and there are many bad ones. We can’t be prejudiced against realtors just because we’ve encountered a few bad ones. For all we know, sdr could be one of the good ones. He’s operating on the info given him by the NAR, and believes we’ll see a 20% correction, and then continued appreciation. As a salesman, he owns what he sells, and is highly defensive of it. Who can blame him? And he does have guts for coming back on a website where most peole housing is going bust.

Anyway, I hope we can continue exchanging ideas without the personal poking…

[powayseller]

With so much inventory, buyers can be choosy. So they avoid busy streets. That makes sense.

[powayseller]

RealtyTrac shows 4 NTS on the same property, all filed on 12/8/05. Three are for a house on lot 85, 2128 sq ft. and the last is for a house on lot 83, 2099 sq ft.

[powayseller]

It’s the article Rich quoted in his Credit Market Report, and sduuuuude included a link on his opening. I rephrased everything not in quotes.

[powayseller]

Ok, sdr, a little debate for you.

First I consider renting equivalent to owning only now, when houses are at 2x their actual value. I will buy a house when prices correct, and then owning will once again be preferable.

It doesn’t make sense that you say a house is worth much more than a rental. A house must have an intrinsic value, which is the rent-equivalent. You can add 1% or so for the benefit of homeownership, but not 200% or whatever markup you are using. Be honest – your occupation as realtor is causing some blinding to the facts.

I think it sounds rude that you scoff at those who are not in the 28% tax bracket, as being in a “very low tax bracket”, i.e. not as rich as you? My husband earns over 6 figures, but due to deductions, our marginal rate last year was 15% federal. So the tax benefits of homeownership are not as you claim. In our case, the interest deduction is cancelled by not having to pay property taxes. Another thing: with interest rates at record lows, the interest deduction has lost so much of its value. I’m surprised this hasn’t served to reduce housing prices!

Last, where did you get the idea that most homeowners in San Diego are in the 37% tax bracket? Do you even know what the median income is in San Diego? My guess is that less than 20% of San Diegans are in any tax bracket over 28%.

Finally, housing prices have softened 5% – 10% already. And we haven’t even had the bulk of ARMs adjust yet. If we keep going at that same rate of price reduction, we’re in for a 15-20% price drop by the end of 2006.

Geez, I go out for the evening, and I come back to find all this silliness 🙂

Well, I do enjoy the debate sdr. Please don’t feel like you have to defend yourself. You’re in a valid honorable profession, which you can conduct with dignity. You can adapt to the changing market. Just accept the market is taking a nosedive, and adapt. You will be more successful for your openmindedness.

[powayseller]

Good one – did you send it to anyone?

[powayseller]

Unfortunately for housing bulls, realty is not a coin tossing game. If it were, you’d have a 50-50 chance of a soft landing.

But if you want to use statistics, I’ll give it a 99% probability of resales continuing their slide.

Demand for homes is reduced by 25%, and builders have responded by reducing their supply. But that won’t help the resale market, as asianautica already explained. In addition, the resale market will keep adding to inventory, as people try to cash out, speculators get cold feet, and homeowners try to get out from adjusting mortgages. At the rate of 50/day, could we hit 40,000 homes on the MLS next spring?

Just curious, sdrealtor,what leading indicators are you following that give you hope for a flat, rather than declining market?

[powayseller]

What I proposed is a spin on what’s happening already. Realtors would be paid by the seller. A buyer can choose to use a full-commission agent, or a discount agent, or a fee-for-service agent. Depending on the choice, the buyer gets the buyers’ agent commission credited at closing, and then pays his realtor at closing. But hey, you might have a better plan. I was just writing this off the cuff late last night.

I have no problem with realtor salaries going up with this method. I would like to pay only for the services I use. For some folks this means paying more, for others less. Looky-loos would have to pay under this method, for they drive up the prices for everyone, with their constant need for handholding and being driven to see homes.

But enough about my silly ideas. Sdrealtor, I’m sure you’ve given this more thought. If you have an alternate idea, I’d love to hear it. Ideas on changing the mortgage industry? Changing commission strucutre for title and escrow officers?

[powayseller]

Sold signs are picking up. My daily-drive count is up from 2 in Jan-March, to 6.

[powayseller]

This property is listed as Sold 2/6/06.
Sales Price: $640,389
Prior doc info:

Recording Date 8/12/2004
Lender Name First Franklin Financial Corp
Price $720,000
1st Loan Amount $569,800
2nd Loan Amount $142,450

You can get a membership to RealtyTrac for a few bucks a month.

[powayseller]

The Bank of Japan increased bank reserves from 6 trillion yen ($51 billion) to 30 trillion yen ($256 billion) in 2003. Last month, they announced this liquidity will be removed by the end of June.

What was done with the money? Unlike Americans, the Japanese did not borrow it from their banks. Foreigners did. Foreigners borrowed these yen, and bought stocks, pushing up the stock market in Brazil, Turkey, South Korea, Singapore, etc, and bought US bonds, pushing down bond yields.

The article’s reference to assets is later clarified to mean equities and bonds.

“As Japan’s excess liquidity is mopped up, investors that borrowed Japanese yen to fund investments in other countries will find it impossible to renew their swaps. Because international currency and interest-rate swap liquidity is very concentrated in tenors of one year or less (the life of a swap is called its tenor), the majority of these swaps will mature this year. Consequently, investors will be forced to sell the equity and fixed-income assets that these swaps financed. In addition, these investors will have to buy yen to repay their yen loans.

The end of quantitative easing is another factor that will propel a sharp correction in global investment asset values this year. It will also produce substantial yen appreciation against most currencies.”

I think it’s time to get me some yen…..

[powayseller]

I was trying to follow the other post, and it seemed the houses were basically equivalent. A drop to $539K is a 10% drop, and is signficant. The impact is huge, both in reducing median numbers (gee, eventually the data will show what we know is happening) and in reducing future listing prices.

[Author]

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