Tuesday, May 30, 2006

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.

38 Comments:

Anonymous Anonymous said...

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%.

Tuesday, May 30, 2006 7:14:00 PM  
Anonymous Anonymous said...

oops - posted to wrong comment

Tuesday, May 30, 2006 7:15:00 PM  
Anonymous Anonymous said...

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.

Wednesday, May 31, 2006 10:04:00 AM  
Anonymous Anonymous said...

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."

Wednesday, May 31, 2006 11:02:00 AM  
Anonymous Anonymous said...

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.

Wednesday, May 31, 2006 11:57:00 AM  
Anonymous Sally...o's said...

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 ??

Wednesday, May 31, 2006 12:29:00 PM  
Blogger njcoast said...

Hey Sally O-

Yeah those $4.7 million tradewinds houses that are now marked down to $3.7 million are just flying off the shelf. Hurry up and grab yours before the next price reduction!!!!

Wednesday, May 31, 2006 1:17:00 PM  
Blogger njcoast said...

Sally O-

Here's another for you. MLS #10084110- Milwin Farms, West Allenhurst-Just went back on the market for $1.8 million after contract for $1.95 million fell through. Originally listed for $2,398,360. Oh and it's appraised for $2.1 million. But I forgot real estate always goes up!

Wednesday, May 31, 2006 1:25:00 PM  
Anonymous Sally...o said...

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 ?

Wednesday, May 31, 2006 2:50:00 PM  
Blogger njcoast said...

Please list the MLS# of the Rumson houses that sold for more than the asking price. Of the 9 sales in May, 2 were over $2 mill and the one that sold for $4.65 mill had been marked down from $5.6 mill after having been on the market for 345 days. Also the % of list price to sold price is 91.99% in Rumson. So that is almost a 10% reduction and this bursting bubble has only started to leak! And once again aside from the West Allenhurst house, how many of the Tradewinds houses are languishing on the market not to mention the record number of 3+ mill homes for sale in Spring Lake.

Wednesday, May 31, 2006 3:19:00 PM  
Blogger njcoast said...

Sally O-

Lets do some broader numbers to see if we can see a trend.

According to the Monmouth County MLS

May 2003
New listings- 1967
Under contract-1166
Closed-1004

May 2004
New listings-2096
Under contract- 1262
Closed- 1064

May 2005
New listings- 2473
Under Contract- 1282
Closed- 1106

May 2006
New listings- 3057
Under contract- 1036
Closed-819

Hmmm listings up- under contract and closed down-looks like a raging bull market to me!

Wednesday, May 31, 2006 3:47:00 PM  
Anonymous Anonymous said...

Sally...o - Do you work in the RE business?

Wednesday, May 31, 2006 3:58:00 PM  
Anonymous Anonymous said...

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...

Wednesday, May 31, 2006 4:19:00 PM  
Anonymous Sally o said...

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

Wednesday, May 31, 2006 5:43:00 PM  
Anonymous Anonymous said...

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.

Wednesday, May 31, 2006 6:14:00 PM  
Anonymous Anonymous said...

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-

Wednesday, May 31, 2006 6:15:00 PM  
Anonymous Anonymous said...

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.

Wednesday, May 31, 2006 7:27:00 PM  
Blogger pesche22 said...

anyone who thinks the housing market is strong, is either a moron , a shill for the industry,
or a hermit.

Thursday, June 01, 2006 1:37:00 PM  
Blogger pesche22 said...

or delusional

Thursday, June 01, 2006 2:54:00 PM  
Blogger Paul Adams said...

Hi Fellow! I was just searching blogs,and I found your site! I like it!
If you have a moment, please visit my site:
loans center
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Wednesday, June 07, 2006 7:56:00 PM  
Blogger Paul Adams said...

Hi Fellow! I was just searching blogs,and I found your site! I like it!
If you have a moment, please visit my site:
loans center
It covers loans center related contents.
All the best!

Wednesday, June 07, 2006 7:56:00 PM  
Anonymous Anonymous said...

Your are Nice. And so is your site! Maybe you need some more pictures. Will return in the near future.
»

Thursday, June 08, 2006 6:15:00 AM  
Anonymous Anonymous said...

. Be It Ever So Humble: Never apologize for the appearance of your home. After all, it has been lived in. Let the trained agent answer any objections. That's the job of your Realtor�.
Go here for more ideas.

Thursday, June 22, 2006 7:57:00 PM  
Anonymous Anonymous said...

Enjoyed visiting your blog. Good read. Any of your readers want to put in front of thousands of potential buyers immediately. Uniquely. Literally in a way no other real estate experts can ... .

Friday, June 23, 2006 6:09:00 PM  
Anonymous Anonymous said...

Potential buyers have to say "yes" many times to purchase your home ... but a single "no" over a seemingly minor item can kill the deal. You can do something about this.

Saturday, June 24, 2006 12:06:00 AM  
Anonymous Anonymous said...

If a "hot" real estate area cools off, who's going to argue that it does not have larger implications? , Florida, may have some valuable lessons for the real estate industry as a whole.

Sunday, June 25, 2006 12:51:00 AM  
Anonymous Anonymous said...

Hint #3 for . Let The Sun Shine In: Open draperies and curtains and let the prospect see how cheerful your home can be. Dark rooms do not appeal. One trick which always seems to work is to replace 60-watt bulbs with 100-watt bulbs, and have your Realtor� turn them all on, even for a daytime showing (and off again after the showing).

Sunday, June 25, 2006 8:30:00 AM  
Anonymous Anonymous said...

In this "cooling off" real estate market, suggest that the average residence is shown about 4 times a week during the first 3 weeks of a real estate listing. After that, an unsold home goes "stale" ... it gets shown less .

Sunday, June 25, 2006 8:35:00 AM  
Anonymous Anonymous said...

Here's the home buying process into a single weekend. She does it by compressing the real estate marketing budget into a much tighter timeframe than normal .

Monday, June 26, 2006 9:12:00 PM  
Anonymous Anonymous said...

Blackstone, a public company, has a well-deserved reputation as a savvy real estate group. Will their investment blow up in their face?

Monday, June 26, 2006 9:33:00 PM  
Anonymous Anonymous said...

In this "cooling off" real estate market, suggest that the average residence is shown about 4 times a week during the first 3 weeks of a real estate listing. After that, an unsold home goes "stale" ... it gets shown less .

Tuesday, June 27, 2006 4:25:00 AM  
Anonymous Anonymous said...

Blogging is not always a rewarding journey, but I ran across yours on this trip and it was a good break from my own real estate work. Thanks. Keep up the interesting work and visit my site if you have a chance.

Tuesday, June 27, 2006 9:35:00 AM  
Anonymous Anonymous said...

Hint #8 for . Clean Your Closets: Neat, well ordered closets look bigger, suggesting that storage space is ample. One of any home's biggest deal-killers remains: "Not enough closet space."

Tuesday, June 27, 2006 11:30:00 AM  
Anonymous Anonymous said...

The average home is currently on the for about 4 months before it goes to contract. Around 15% of initial real estate contracts never make it to a successful closing ... something goes wrong, and the frustrated seller puts the home back on the real estate market .

Thursday, June 29, 2006 3:24:00 PM  
Anonymous Anonymous said...

Nothing beats a good blogging trip, but I think I have to get back to work on my own real estate sites. May as well stop on a high note, which your blog seems to be. Thanks for the read. Visit my site if you have a chance.

Friday, June 30, 2006 8:11:00 PM  
Anonymous Anonymous said...

. Never Stay In Your House With House Hunters: Let the agent handle it, and remove yourself if possible. Remember that the Realtor� has worked many hours with these people, and knows what they're looking for, and how to work with them. Let the Realtor� do the job without interference.You may feel that an agent isn't showing the important features of your home to the prospect, but the agent knows people aren't sold by details until they've become emotionally involved with the "big picture" of your home. The presence of any member of the seller's family can't help. It always unnerves possible buyers. It often prevents a sale.
Go here for more ideas.

Tuesday, July 04, 2006 10:33:00 PM  
Anonymous Anonymous said...

. Never Stay In Your House With House Hunters: Let the agent handle it, and remove yourself if possible. Remember that the Realtor� has worked many hours with these people, and knows what they're looking for, and how to work with them. Let the Realtor� do the job without interference.You may feel that an agent isn't showing the important features of your home to the prospect, but the agent knows people aren't sold by details until they've become emotionally involved with the "big picture" of your home. The presence of any member of the seller's family can't help. It always unnerves possible buyers. It often prevents a sale.
Go here for more ideas.

Saturday, July 08, 2006 1:05:00 AM  
Anonymous Anonymous said...

Your site is on top of my favourites - Great work I like it.
»

Saturday, July 22, 2006 12:47:00 PM  

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