Sunday, July 09, 2006

WashingPost Live

Check out the WashingtonPost Live Chat about Real Estate. This was my favorite Q & A:

Ashburn, Va.: I'm so mad at my neighbor. I bought my new home here in Ashburn last summer and plan to sell it next year (after holding two years to avoid taxes) to make a nice return on my investment. The problem is my neighbor is trying to sell his house (very similar to mine) right now and he keeps lowering his asking price. Each time he lowers his price, I see my potential profits next year getting squashed. Doesn't he realize he's hurting the comps for all of his neighbors by doing this? I don't think he is acting very "neighborly" by doing this. I want to say something to him and tell him he should stop putting his interests ahead of his neighbors. Its people like him who are ruining the market for the rest of us. If he would just refuse to lower his price, we could maintain our comps and everyone would benefit. What can I do to stop him?

Kirstin Downey: Wow. Interesting question. There's nothing you can do. It's his house, of course. It's frustrating, to be sure. One word of advice: Don't resort to violence.

Seriously, he may just be desperate to sell. Perhaps he has an adjustable rate mortgage that is rising, or maybe an option ARM that is resetting to a much higher monthly payment. Maybe he's getting a divorce or has lost his job and doesn't want to talk about it. Or maybe he wants to move to Tahiti. (I do sometimes, don't you?)

I hear from many, many buyers and sellers each month, and many sellers are finding the only way to sell a home amid this growing inventory is to cut the price. Perhaps last year's prices were just illusory after all
The Live Chat transcript is well worth the read. Some readers respond to this question as well. Good stuff. :-)

UPDATE: I originally wrote at the beginning of this post that "This was my Q & A:" What I meant to write was "This was my favorite Q & A:" My apologies for the confusion. I did not ask that question on the Live Chat session. Furthermore, I DO NOT falsify information or mislead people. I truly am sorry for any and all confusion caused by my ommission of the word 'favorite'.

58 comments:

  1. So this was your question? I figured it wasn't real.

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  2. David, was that your question?

    I saw that last week and thought it was a real question. Was it?

    A Redskins fan

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  3. So, to be clear, you posted a fradulent question regarding a non-existent situation in an attmpet to convince others of the correctnesss of your views...and this makes you different from the realtors who post here how??

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  4. I didn't think this question was real when I read the transcript. You just lost yourself a lot creditibility, considering you have been quoted by the post at times. The new Jayson Blair.

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  5. "So, to be clear, you posted a fradulent question regarding a non-existent situation in an attmpet to convince others of the correctnesss of your views...and this makes you different from the realtors who post here how?? "


    LOL, translation:

    You (David) posted a fictional question that is happening all around the Metro area, but since it specifically isn't happening to you, David, you are a liar.

    Okay Mr. Anonymous realtor, it's a hypothetical question, Do you know what Hypothetical means??

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  6. I am surprised and saddened that David has squandered his credibility in this way. I've sent a copy of this message board to the Washington Post ombudsman and the Post Express team, for them to keep in mind the next time they consider quoting bubblemeter. I fully agree with almost all of David's message, but fraud is never the way to win a debate.

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  7. David is getting blamed for this question at washingtonpost.com:

    http://forums.washingtonpost.com/n/mb/message.asp?webtag=wprealestate&msg=5697.1

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  8. "I am surprised and saddened that David has squandered his credibility in this way. I've sent a copy of this message board to the Washington Post ombudsman and the Post Express team, for them to keep in mind the next time they consider quoting bubblemeter. I fully agree with almost all of David's message, but fraud is never the way to win a debate. "

    Hey, another realtor, scared that David's hypothetical question got an answer everyone else know is going on. Must be afraid of losing their job. BTW, realtors are a complete waste of time and money. They don't even know simple contract law! Oh, and most have a minimum of High School education, maybe that's why they have trouble comprehending.

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  9. I only use the term "fraud" when someone is making something up with the intent of deceiving others to secure personal gain as a result. David wasn't trying to gain anything here that was going to truly benefit him. At the same time, I don't think it was right to post something like that in their chat room. The chat line should be used for purely factual postings, not what one presumes is factual.

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  10. This comment has been removed by a blog administrator.

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  11. I love this one comment in the Post forum referenced in Anon 7:09's comment above. David's Ashburn personna is being called for exhibiting the same traits a few of us housing heads have been pointing out:

    "From: aarlrenter Jul-7 8:24 pm
    To: HarrietVW (3 of 5)

    5697.3 in reply to 5697.1

    It's hard to believe that's legit. If it is, it's scary that someone with so little knowledge of supply and demand and all that sort of nonsense ends up purchasing a house. Also, Ashburn's sense of entitlement is absolutely staggering."


    Yep, little knowledge of supply and demand, questionable capability of being a homeowner, and finally, a sense of entitlement. In a nutshell, David's personna has captured the likes of Bill aka DC Housing News perfectly!

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  12. I think David said he did not post the question.

    A Redskins fan

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  13. redskins,

    re-read your question to him above and his response to ... You asked if it was a real question and his response was "No. Of course not."

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  14. I think David meant that question was not from him and didn't mean that question is not a real question.

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  15. David says at the beginning of the post "This was my Q&A". He seems to be taking credit for it and is proud of it.

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  16. That's not a atypical reaction. I have a friend who was in the military and they had to sell the house fast because they have to move. So they sold the house just a little bellow the market price in that area and drew the ire of their neighbor who was also selling.

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  17. For a change, some FACTS:

    June sales statistics for DC and MoCo:

    http://www.gcaar.com/statistics/default.htm

    DC condos off by 1% yoy, the rest on pace with, or slightly ahead of, inflation. Still no evidence of prices plummeting...

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  18. Um, I see a median price decline of 4%, (375K to 360K), inventory up 275%, and settlements down 20%.

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  19. If you read the transcript, other callers have the same concerns as David's "fake" question.

    The issue of housing price declines is real and clearly sellers have these worries.

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  20. Haha, well, I'll remember to not take this blog too seriously in the future. I'm not a big fan of people who blatantly lie to those trying to answer questions honestly. I would hope that someone trying so hard to get people to believe what they're saying would not use lies to get their way.

    Of course, we all know real estate agents are the best at that... but still.

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  21. I read David's response as saying he did NOT make the question.

    There is a huge gap right now between inventory and sales (36,000 in the whole DC area based on my calculations off the Home Guide from the Washington Times). That to me indicates that offered prices are much lower than asking prices. So the actual sales prices may not be the best indicator. If you are trying to sell a house in the DC area right now, odds are no one is buying it, NOT that you are getting the same price as last year.

    A Redskins fan

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  22. Let's review:

    Anon - "David, was that your question?"

    David - "No. Of course not."

    Yet everyone is now claiming that David planted the question even though he says he didn't.

    I don't know why the intro to this OP says "This was my Q & A:" so maybe David can clear that up. But David has done nothing to make me question his credibility.

    As ridiculous as the Ashburn comment/question is, I don't doubt that there is someone as idiotic as him out there (probably many such people).

    So David, please clear up for once and for all.

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  23. John, that could also be read as:

    Anon - "I saw that last week and thought it was a real question. Was it?"

    David - "No. Of course not."


    A clarification would be greatly appreciated.

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  24. David: If you posed that question at the Washington Post Forum, admit it and apologize ASAP.

    If you didn't, then say so clearly.

    The quicker the better.

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  25. I did NOT post that question on the Washington Post Live Chat Session. I merely left out the word 'favorite' in my blog post. Sorry for all the confusion.

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  26. When I wrote "No. Of course not." in the comments section, I meant that No. Of course I did not write that question.

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  27. david said - "When I wrote "No. Of course not." in the comments section, I meant that No. Of course I did not write that question."

    I didn't think you did.

    If this Ashburn guy represents even just a small percentage of recent homebuyers, then our market is in for a lot of trouble. People today think of real estate as more investment than home and this is going to produce dangerous results.

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  28. DC Condo WatcherJuly 09, 2006 8:07 PM

    I don't think that David posted that question - but reading the question carefully, it does sound like a fake. I don't believe it came from a genuine first person, rather someone trying to play a role. It's interesting that if I as a non-Wapo paid person can figure out a fake question, why can't the people who are paid to run the chat filter out the real from the fake.

    Anyways, it's all besides the point - the poster of that question was very likely a fake, but I doubt that his thoughts/concerns were not one shared by at least a small percentage of current homeowners who bought recently. I have a feeling a small pool of recent homeowners really do feel - silently, deep inside - frustration when their neighbors put up a place on sale a price that starts or continues a downward trend in pricing

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  29. I don't see how you can say the poster of the question was very likely a fake.

    A Redskins fan

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  30. There was a similar question asked a few months ago in a similar forum (think it was also post related). The lady was complaining about all the lockboxes placed outside her building and was asking if there was anyway that she could make her neighbors stop selling.

    Could be the same prankster.

    Or it could be homeowners that are concerned.

    Unless someone confesses, we can't know.

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  31. I actually have a couple of friends who are selling their homes, who are going to price their very competitvely and are worried about what the price will do the comps and what the neighbors will think.

    They don't care that much, since they just want to sell. But it's certainly on sellers minds.

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  32. "I've sent a copy of this message board to the Washington Post ombudsman and the Post Express team, for them to keep in mind the next time they consider quoting bubblemeter."

    Ha ha -- wow, Lance, you sure are one tough media watchdog!

    Jerkstore

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  33. Regardless of whether or not David posted the question, I was amazed at how fast word spread about David's alleged question spread through the community-- to fellow bubble believers, to realtors, to the washingtonpost. One thing is for sure, because of the original wording of this post, David has lost a great deal of credibility that will not easily be regained.

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  34. anon 10:24pm, are you stupid? David hasn't lost any credibility because of this post. That might be the dumbest thing I have read on this blog. Go sell some more houses. By the way, nice find David. It is amazing to me that people would actually ask a question like this.
    Bob

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  35. When one posts hundreds of posts a year a small slip up like this is very likely. We should give David the benefit of the doubt.

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  36. About 5 years ago at an open house in Alexandria, I remember a similar comment from an owner/invester complaining about his neighbor selling the exact same model as his, for a lower price. He was exasperated and felt victimized by the other's attempt to sell at what was, in fact, the reasonable asking price. There are investors of all types, though I'd guess these folks are in the extreme minority.

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  37. LOL, it's funny how scared Realtors are... one misquote and it blows up, all because the question brought the answer everyone who has been following the real estate market already knew and was validated.

    I can see a lot of uneducated "Johnny come lately" realtors getting their prime panhandling corners staked out in the Metro areas. LOL!

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  38. Oops! I'm anon 10:24pm. Instead of saying "David has lost a great deal of credibility that will not easily be regained," I meant to say:

    "I'm gonna claim that David has lost a great deal of credibility that will not easily be regained because we need to do something to stop people from reading the truth on this blog. If more and more people keep finding his blog and learning that real estate values will plummet in coming years because prices are disconnected from fundamentals, my neighbor might have to lower his price yet again and then I'll really be mad as I watch my potential profits get squashed. David, you aren't being very neighborly by telling the truth. Can't you at least wait till I sell my home next year before you tell the truth?"

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  39. DC Condo WatcherJuly 10, 2006 9:51 AM

    I just said "very likely" - so it's obviously a judgement call. I just looked at the wording/phrasing of the question and don't think it's congruent with that of what a actual homeowner would say. I own a home myself (in another state), and wouldn't care that much about selling prices of homes nearby, as much as I would about the state of the neighborhood (messy front yards, speeding through the street, houses that look like in need of repair).

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  40. Guys,
    David fixed his mistype. Get a grip.

    As for the point of the post. I sold aggressively when I moved out of the area (Vienna). My neighbors hated the fact I didn't ask $1M, but I sold very quickly. One neighbor, friends for almost a decade, won't even talk to us anymore. I think our comp price pushed their mortgage/HELOC under water. My local realtor, also a friend who sold us the house, won't talk with us either and gave dirty stairs at my kids when the house hit the market.

    This does happen and people who got out early will be hated by those going into BK, becuase they caused prices to fall. Think of what a small (20%) price drop over the next few years will do to neighbors and friends. It will get ugly folks and will effect long-term friendships and even how your kids get treated. (Guess who doesn't get invited over when daddy declares BK and you live in an apartment). Divorces will also go up in the highly status conscious DC area.

    Sorry for the misspellings.

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  41. You have got to be kidding, buffpilot! In your bizarro fantasy world, hordes of people will be going bankrupt. Keep crossing your fingers and hoping. That will be the best way you'll be able to snap up that McMansion for only pennies on the dollar. What childish wishful thinking!

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  42. david said...
    I have to make a clarification to my update.

    That actually was me on the Washington Post Live Chat. They edited my question so that they took out the part which made clear this was simply a hypothetical situation.

    Nonetheless, I recognize the great error in posting such hypothetical questions to the Post chat and I apologize to all my loyal bubbleheads for my error. It won't happen again.

    NOW THIS REALLY MAKES YOU LOOK LIKE A BUFFOON

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  43. Are you serious?

    Meh. Not cool, man.

    Oh well, thankfully blogs don't influence the market. So, I don't think this revelation is going to reduce the number of homes for sell or prompt more buyers.

    It does, however, make you look sketchy.

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  44. Jerk said:
    "j_e_r_k_s_t_o_r_e said...
    "I've sent a copy of this message board to the Washington Post ombudsman and the Post Express team, for them to keep in mind the next time they consider quoting bubblemeter."

    Ha ha -- wow, Lance, you sure are one tough media watchdog!"


    hahaha ... nice try but David can see IP addresses for posters. i.e., he can know that it doens't match mine ... I wonder if it matches yours?

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  45. anon said:

    "Nonetheless, I recognize the great error in posting such hypothetical questions to the Post chat and I apologize to all my loyal bubbleheads for my error. It won't happen again.

    NOW THIS REALLY MAKES YOU LOOK LIKE A BUFFOON"

    Not at all. It takes a bigger man to acknowledge his errors. I've noticed David doing so other times on here. 'Course, I'm still waiting for the day the lead thread says something like "Ok, sorry fellow bubble heads, but I've reconsidered my bubble theory, and am now the proud owner of a 2 bedroom, 2 bath house in Silver Spring (no roommates!) and will be renaming this blog the "There ain't no Bubble Meter Blog" ... thanks Lance! thanks Va-Investor! thanks Fritz et al. FU Bill aka DC New Housing Blog!"
    ;)

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  46. That post was NOT real and was NOT by me!

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  47. Fritz,
    It doesn't have to happen to many for it to have an effect. My kids (and I) lost long-term friends becuase I sold a house lower than what the neighbors wanted. I moved to Texas and now own a much better house, better area, better commute, better schools than I had. YMMV.

    My point still holds. Even a mild drop in prices (20%) will hurt many and the effect will be magnified by the huge status conscous atmosphere of DC. I don't plan on ever coming back to DC but have a lot of friends out there who are scared stiff about even a 10% real decline in housing values.

    I saw thw handwriting on the wall when the cost of living in the area (house/commute/etc) prevented me from hiring anyone from outside the area into the area. My company payed GS-14/15 wages and excellent benefits. Yet no takers. That's why I got out of there.

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  48. So, in other words, you have no facts to support your contention that hordes will be going into bankruptcy in the coming years? Hard for your point to stand without any evidence to support it.

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  49. The question must be fake since no one has ever lost money in real estate. Real estate is the perfect investment because it is guaranteed to go up.

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  50. DC Condo WatcherJuly 10, 2006 12:18 PM

    David - as per your policy of deleting messages that are obviously lies, why don't you delete that posting that claims that it was actually you stating that question hypothetically - it really doesn't need to be on here, it's causing major confusion.

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  51. David - The fake postings are getting out of hand.

    You are now seeing why Ben's blog has the commenting format it has. Its one thing when people want to share diverse views. Its another when people take advantage of the commenting format in an attempt to hurt your credibility. Its gone to far.

    IMO, the fake posting HH's are forcing your hand. I think you need to change to a registration only commenting format.

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  52. Fritz,
    I doubt we will have hordes going into BK and did not say that. I did say that even a 20% price drop will hurt a lot of people. A drop in the 50%+ would cuase the hordes of BKs. On the other hand it would bring prices back into line of historical rates (2-4 times median income = median house price).

    And if you don't think people will get hurt or that housing prices are permently going to sit at 10x median income, well we will disagree. I doubt that it will be clear until late '07 early '08.

    I do find the denial by the real estate profession to be amusing. Why does a realtor really care as long as they are selling houses. You make money on the deal. I would be more worried about losing the 6% commissions in h elong run.

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  53. People making fake "David" posts are complaining about an alleged fake WashPost post. Ironic, no?

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  54. No more ironic than people who will never buy a house complaining that they won't buy a house.

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  55. buffpilot:
    "I do find the denial by the real estate profession to be amusing. Why does a realtor really care as long as they are selling houses. You make money on the deal. I would be more worried about losing the 6% commissions in h elong run."

    You have just hit on the reason why I find it so funny when I hear bubbleheads accusing us housing heads of being real estate agents and wanting to effect the market. It is not rational for the very simple reasons you state. What is in the realtors' best interests are to get more sales at any price ... and not less sales at higher prices. If anything, a realtor would be incentivized to get prices to drop if they could so that they could make more sales. In similar fashion, it is for this very reason that I have to question the assertion the real estate agents are behind this runup in prices. It's easier for them to sell a cheaper house, and the marginal dollars they make on the more expensive home are minimal.

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  56. The declines in sale prices and growing inventorys matter big time to realestate agents.
    1. 6% of 800k is a lot better then 6% of 300k for obious reasons. But, even more so because although its a percentage so it technically is equal, lower home prices tend to reflect emphasize high commission prices.
    2. Lowering home prices tend to create more difficult selling arenas, ie. switching from a buyers market to a sellers. Which of course means they will have to work a lot harder to sell. Also, lowering home prices reduce overall commissions thereby reducing the excess cash crop to pay for sub par agents, thus thinning the hurd.

    Any way you look at it lowering home prices hurt real estate agents. Generally realestate volume is pretty constant (except 2003 - 2005), therefore they only get paid more for larger housing prices.
    Bob

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  57. This post is closed. FYI: Someone has been commenting in my name.

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