Pat Vredevoogd Combs, a Grand Rapids Realtor who became president of the Ntional Association of Realtors this month, said the current market transition -- what some call a slump -- is good news for buyers.In other words, 'BUY NOW' or else prices will rise and there will be less choice. Don't be fooled by the Housing Industrial Complex.
“‘This window of opportunity will continue into the new year, but inventories are starting to decline and sellers will be less willing to negotiate when conditions begin to balance in most areas around early spring,’ she said.”
Wednesday, November 22, 2006
More Scare Tactics From the Despicable NAR
Despite a change in gaurd at the National Association of Realtors, the deception and scare tactics continue:
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Today's report is out on Atlanta and it's first for AnalysisGuy. No big bubble.
ReplyDeleteDaily Home Price Analysis
The truth of the matter is, house prices are too high for most people to buy. Without the first time home buyer in the mix, you have nothing more than horse trading going on. Most Realtors I have met and talked with are liers and scum bags. Next time you run into one, ask how their morning power sale meeting went today!
ReplyDeleteIt's a new paradigm, and everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.
ReplyDeleteRenters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas.
This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.
theroadtodisaster said...
ReplyDelete"The truth of the matter is, house prices are too high for most people to buy."
hmmm ... interesting, so you think Realtors were right when they said a couple years ago "buy now, or be forever priced out"? Are you a shill for the NAR? Sorry, when you look at bottom line monthly payments, homes for first time buyers are about the cheapest they've ever been. I only wish homes had been that cheap back when I was a first time home buyer. People who just look at the nominal price being asked out there completely overlook (a) the very very very low interest rates available today and (b) the relatively very very very high starting salaries people are taking home today. I had a twenty-something complain to me the other day that he was "only" earning $45K a year and couldn't afford to buy anything.
This whole bubble was created by fraud and as realtors and appraisers go to jail it will continue to deflate until it becomes a real market again. Hopefully, it's the demise of the real estate industry (the largest organized crime syndicate in history)
ReplyDeleteLance said: "when you look at bottom line monthly payments, homes for first time buyers are about the cheapest they've ever been."
ReplyDeleteStop it Lance!!! Look at Lereah presentation at the NAR which noted that affordability is an issue, and I say the issue. And look at his slide 12, where he says there is finally an improvement in affordability. Then make up more "facts." LOL
USA today had an article on how the rich are trading homes while working families are priced out. Does it mean anything? Not yet.
ReplyDeleteBut all the signs are looking at a "spring chill" instead of a "spring bounce." In 270 days the homes I'm looking at have dropped $250k in price... almost $1k/day. I think I'll keep waiting (I know too many people who cannot afford it when their mortgage resets.)
Neil
Out of curiosity, is that perspon that complained about making 45K in the DC area and what price house do you think he can afford?
ReplyDeleteLance said...
ReplyDelete“Sorry, when you look at bottom line monthly payments, homes for first time buyers are about the cheapest they've ever been.”
And yet foreclosures continue to rise.
"(a) the very very very low interest rates available today and (b) the relatively very very very high starting salaries people are taking home today. I had a twenty-something complain to me the other day that he was "only" earning $45K a year and couldn't afford to buy anything."
ReplyDeleteHow do you explain the relatives I know who were working as waitresses or "low wage" jobs 15 or 20 years ago were able to buy a decent starter homes while the interest rates were very high ? That was without ARM or these other exotic loans mind you. Minimum wages haven't gone up for years.
THREADKILLA said:
ReplyDelete"p.s. 45K a year can afford about a 200K house which means THEY CAN NOT AFFORD A SHACK HERE IN SOCAL"
I'm talking DC salary and DC real estate. You can get a decent starter condo here for 200K. Go in with a wife, partner or friend and ypu can afford a premium condo or starter house. And THAT is affordable for someone just getting out of college. Take into account interest only loans and ARMs and it is MUCH MORE AFFORDABLE for someone just starting out than it was 20 - 30 years ago with the higher interest rates back then AND the scarcity of these affordable payment mortgages.
I like to comment on the condition of this market as some of you are mixing apples & oranges.
ReplyDeleteThe real estate maket might be finding a bottom, to many investers were looking to make a 25% highter return on properties that normally increased no more thna 3% a year. It is true that Realtors do tend to make a mess out of the houseing markets for their personal gains. I could never understand why people would pay someone a 6% higher commision based on that they have the credentals of no more than what a 30hour course with a passing on a standard test? WOW that makes them a qualified professonal doesn't it? Why not hire a lawyer for a few thousands dollars and get more for a whole lot less??
Second... (ok, I vented above) ...
The New Home sector is not going to bust unless we see something like a major depression in the intire country. Simply put, land is running out close to the city, and the local goverments have jumped on the band wagon making cost extremly highter for the process.. Did you know the adverage permit cost with water and sewer connections cost are at an adverage of 25k? And don't you think that is passed thru the cost of the house? As well as the taxes accociated with the selling of a home... to sell a house in MD, your probally looking at around another 15k being conservite, and lets use what the Realtor is pulling away from the deal... another 30K.... add that up, yor almost pushing 80-100K for what is known as soft cost.. in the new homes, that's gonna be made up in the purchased priced paid by the buyer, and than you got to add in the cost to build the house... than lets not forget the cost of the land to put that house on.
I am willing to bet in the long run, if your looking for a new home, you can't touch one for under 450K (single family), and when exsisting homes price, they base that on what New Homes are selling for, so figure a little less, but not much more.
There is no such thing as affordable housing in the Washington DC area, and the slow down, is based on the fact that only 20% of the buying market can purchased what is available, the other 80% is simply sittign holding onto thier private parts waiting for something that is not going to happen.
Insteed of banking on a bubble to burst, lets try to make some noise on the local goverments to curve some of these soft cost to us. They relize that if thay can give us some relief on the taxes, maybe not be so greedy for permitting, and put a F***ing lease on the rate that seem to have us hostage by the realtors, than maybe we can see cost correct.
Wanna see a bubble burst, or as I rather call it, a decline in house prices, than give something up that can justify the cost to decline.
It's just one big stand off... I don't see much happing to change either positions.
Just my thinking, maybe totally not approciate in this thread, but I do get bugged with this intire inverment.
How about some of these realtor tactics?
ReplyDeletehttp://smhbn.blogspot.com/2006/11/how-to-screw-homebuyer-remax-style.html
anon 7:31, good post! You've hit the nail on the head. I've been trying to pass this message along to BHs now for something like 6 months. It's not getting through. Perhaps it is easier (and more comforting) to put one's hopes in a general economic disaster than in addressing things that really could make housing more affordable for them? Also, I have come to realize that a large part of this blog is for them to vent against those they feel either have (1) put them in this position (Realtors and the rest of the so-called Real Estate Industrial Complex) or (2) those who have managed to keep themselves above water despite the high prices (i.e., current homeowners.) I agree 100% with your suggestions regarding getting costs down. Additionally, I think the BHs need to focus far less on the "financial returns" of being a homeowner and far more on the "stability returns" of being a homeowner. I suspect part of the problem is that many of them having been raised post-Reagan era can only think in terms of dollars and "dollar return on investment" ... and because of this really can't understand that the best things in life are free and that you can't put a dollar value on the stability afforded to you by being in a home that is truly yours ... and not your landlord's. In my humble opinion, THAT is the value of owning your own home. And you pay for that. A home is an expense --- pure and simple --- and NOT an investment. The money a lot of us made off of our homes in the last ten years was an anomally. Don't expect it to happen again in this generation. And for those of us who bought a home to have a home, the money we made wasn't really money made. Moving up (or laterally) meant "re-investing" that money into one's new home. All it meant was paying capital gains taxes on the excess over the capital gains tax exemption on sale of residence gains. It didn't mean havig extra money to spend. So, irrespective of what a lot of BHs think, I don't think you'll find an honest homeowner who really thinks he can "make money" off of his/her home ... unless of course they aren't seeing the big picture and are doing something risky such as "waiting out the crash to re-buy" as a few BHs on here have stated.
ReplyDeleteLance, I cannot believe you started out praising 7:31 with "good post!" I am willing to forgive a typo or two, but that mess takes away any cred that poster might have.
ReplyDeleteYou and 7:31 can keep hoping.
Lance and Anon,
ReplyDeleteI'm going to disagree with you. Companies are having a tough time hiring into bubble markets. We either see home prices correct to what salaries can support or we see jobs transition to new locations.
Every home owner I know thinks they're going to keep making money. But I don't know anyone excited to buy.
Eventually mortgages will go back to normal. Why? Defaults are going up exponentially. Eventually the risk premium will return. When it does... most bubble market sales rates will slow. (Note: it isn't slow... yet.) This alone will force good price delines.
I'm not expecting a depression. But I am expecting quite a relocation. Many areas that were *only* attractive due to their affordability are no longer attractive. But there are still a large number of locations that are affordable.
Maybe I'm pessimistic as my employer is talking about selling of campuses in *many* bubble markets and relocating. DC is included. Commercial land is worth more as Condos/townhomes than as offices. Cest la vie.
The decline isn't over. DC is going to drop at least 30%. LA? More.
There is no stability in owning a home you can't sell. Do recall the average American moves every 5 years... at 6%... Its a losing game as people buy at 6X + of income.
This doesn't get interesting until 2Q 2007.
Neil
Lance said...
ReplyDelete“I've been trying to pass this message along to BHs now for something like 6 months.”
I thought your message was:
Lance said...
“there is never a bad time to buy”
July 28, 2006 3:14 PM
Lance and Anon,
ReplyDeleteI'm going to disagree with you. Companies are having a tough time hiring into bubble markets. We either see home prices correct to what salaries can support or we see jobs transition to new locations.
Every home owner I know thinks they're going to keep making money. But I don't know anyone excited to buy.
Eventually mortgages will go back to normal. Why? Defaults are going up exponentially. Eventually the risk premium will return. When it does... most bubble market sales rates will slow. (Note: it isn't slow... yet.) This alone will force good price delines.
I'm not expecting a depression. But I am expecting quite a relocation. Many areas that were *only* attractive due to their affordability are no longer attractive. But there are still a large number of locations that are affordable.
Maybe I'm pessimistic as my employer is talking about selling of campuses in *many* bubble markets and relocating. DC is included. Commercial land is worth more as Condos/townhomes than as offices. Cest la vie.
The decline isn't over. DC is going to drop at least 30%. LA? More.
There is no stability in owning a home you can't sell. Do recall the average American moves every 5 years... at 6%... Its a losing game as people buy at 6X + of income.
This doesn't get interesting until 2Q 2007.
Neil
Lance said...
ReplyDelete“I've been trying to pass this message along to BHs now for something like 6 months.”
I thought your message was:
Lance said...
“there is never a bad time to buy”
July 28, 2006 3:14 PM