No Bid = New Realtor
There is a real crappy house in Little Silver that has been sitting unsold at $399k for probably about nine-months now. I noticed the other day that there is a new Realtor sign on the front lawn, which replaced the previous Sotheby's sign. I believe this is the third listing agent change since the house was brought to market last year. I think that the change in real estate agents is reflective of the delusions of riches that some owners might have. In this market, with so many agents around (without much to do) it must be easy for an owner to "fire" an agent who might have suggested lowering the price and hiring another agent that will tell the owner what they want to hear. In other words, in this market, with so many Realtors to list with available, the owner might have 10 agents tell them their house is over-priced by 25% but there is at least one agent out there telling the owner their house is under priced by 10%. Naturally, the novice amateur flipper with delusions of grandeur goes with the Realtor who promises the most, and as a result, asking prices remain high and the number of sales transactions continues to fall, which leads me to the next topic.
If I was a Realtor and I wasn't transacting many sales in this market, I would start to promote more forcefully the concept of the housing bubble. The huge amount of inventory out there would clear much quicker, and Realtor's would make more money, if the bid and ask spread were to narrow. Instead of trying to convince buyers to increase their "bid", Realtor's should be convincing sellers to lower their "ask." In that regard, Realtors should be sending sellers to this website and especially to the thehousingbubbleblog.com to let those sellers know that the house prices of Summer 2005 are not coming back for a long time.
If I was a Realtor and I wasn't transacting many sales in this market, I would start to promote more forcefully the concept of the housing bubble. The huge amount of inventory out there would clear much quicker, and Realtor's would make more money, if the bid and ask spread were to narrow. Instead of trying to convince buyers to increase their "bid", Realtor's should be convincing sellers to lower their "ask." In that regard, Realtors should be sending sellers to this website and especially to the thehousingbubbleblog.com to let those sellers know that the house prices of Summer 2005 are not coming back for a long time.
posted by Little_Silvered at 6:52 PM
13 Comments:
We saw the banners flying over the ocean and my kiddies had fun waving at the planes. No, it did not even cross my mind to go look at any houses. In fact, we are not looking at houses again until after this summer. I did wonder how much the gas cost to fly that thing around though!
Hopefully, the rest of the soon-to-be buyers will not entertain any offers until the prices are reduced by at least 20%.
oops - posted to wrong comment
UPDATE 1-US home loan demand falls as interest rates climb
Wed May 31, 2006 7:01 AM ET
By Julie Haviv
NEW YORK, May 31 (Reuters) - U.S. mortgage applications fell last week, reflecting a decline in home refinancing loans as interest rates climbed, an industry trade group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended May 26 decreased 1.9 percent to 541.9 from the previous week's 552.6.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.66 percent, up 0.05 percentage point from the previous week, and matching a four-year high touched two weeks ago.
The MBA's seasonally adjusted purchase mortgage index fell 0.2 percent to 395.5.
The purchase index -- considered a timely gauge of U.S. home sales -- was also below its year-ago level of 462.7.
The group's seasonally adjusted index of refinancing applications decreased 4.8 percent to 1,409.0. A year earlier the index stood at 2,142.1.
The refinance share of mortgage activity decreased to 34.9 percent of total applications from 35.7 percent the previous week.
Historically low mortgage rates have fueled a five-year housing boom, helping support the U.S. economy's recovery from recession despite uncertain business investment.
Analysts differ on whether or not there is a housing bubble, but most agree that the market is cooling off from its record run.
Fixed 15-year mortgage rates averaged 6.22 percent, down from 6.23 percent the previous week. Rates on one-year adjustable-rate mortgages (ARMs) increased to 6.09 percent from 6.02 percent.
ARMs have been a refuge for cash-strapped consumers seeking to buy a home with low initial mortgage payments. Rates on ARMs, however, have been rising less than fixed rates, which is possibly why demand for floating-rate products increased last week.
The ARM share of activity edged up to 30.7 percent of total applications last week from 30.5 percent the previous week. It was the highest ARM share since late January.
The MBA's survey covers about 50 percent of all U.S. retail residential mortgage originations. Respondents include mortgage bankers, commercial banks and thrifts.
Sure, telling sellers to lower the ask makes sense, but doing it means swimming against the tide, and that tide is strong. Also, whether stated out right or implied through actions, the boss at the real estate office sets the tone, despite not being as close to the market as the agents. To change means to do something different then they did yesterday when they were making money.
I really doubt that seller had to hear 10 "lowers" before finding a "higher."
The last big downturn in Real Estate was almost 20 years ago and few people in the industry are old enough to remember those days. I really believe that many ivestors/speculators/realtors do not believe that there ever could be a downturn, and think that the current conditons are a temporary blip. I think a rude awakening awaits them.
Anybody read the NYT on sunday...Jersey shore real estate strong...the 2 to 5 mill dollar homes selling fast....a little slower at the "low"750-1 Mill range ....like the article said If I were a buyer I wouldn't wait to long !....that about say's it all....with the stock market taking a hit just like in 2000 this is good for the real estate market ...people still pouring $$$ into real estate ....where else do you invest ??
HELLO.....I'm just quoting the NYT..you mention a house that fell through in Allenhurst well if that's a bursting bubble ... that's your small world,I could point to 6, 3+ mill homes that just sold in RUMSON, one over the asking price. you say this house in Allenhurst was appraised for 2.1,appraisel's are useless(except for banks)more importantly, what's the assessed value and when was the last assesment .How much do homes sell above that ?
Sally...o - Do you work in the RE business?
Sally o, you've got to be kidding, right??? You can't possibly really mean any of that. My gut is killing me from laughing at your posts. Tell me you're just joking...
to Anonymous ...I guess if you find humor in my post you must have a very uneventful,lonely , unfulfilled lifestyle ...you should try to get out more and see some of God's beautiful world ..I understand why you would also not want to put your name on your blogs either,your better off staying Anonymous to us all ..Sally o
I am a well qualified first time buyer-excellent credit, downpayment, etc. I refuse to even look at anything in this insane market. When will sellers and agents realize that they've pushed prices beyond where most buyers are comfortable paying.I'm certainly not buying in this market. Hopefully, a slow summer market will wake eveyone up to the fact that the party is over.
Sally o-
Your only metric to define a strong housing market is multi-millionaires buying $3+ million dollar houses? Consider these:
- existing home sales down
- new construction down
- ave selling price down
- mortgage apps down
- building permits down
- inventory doubling
- interest rates climbing
- days on market quadrupling
- asking prices dropping
- realtor's cutting fees
- builders throwing in bogus perks
- $2 trillion in ARM loans readjusting in the next 12-18 months
Not sure of the connection between why I think your post is hilarious and a lonely life, but if it makes you feel better, I'll sign.
-John-
Sally sez:
"I could point to 6, 3+ mill homes that just sold in RUMSON, "
I wonder why she doesn't.
Has anyone found that NYTimes article she refers to? I can't. You'd think she'd post a link if it was such a central point to her arguement.
Memo to sally: no one here takes you seriously since you don't provide facts to support your somewhat outlandish claims.
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