As the lending mess continues to sort itself out, home sales slid again nationwide in July. Buyers have more choices than ever before, and sellers must offer serious value to get their properties sold. There’s still a market, but it’s rocky. Even the RGJ didn’t add a whole lot of happy spin to this piece. read
And I’m still trying to get my head around this bit of news… Fed bends rules to help two big banks. read
Sellers, you’d better get used to the new reality as buyers ask for more and more. The art of the aggressive offer is standard operating procedure for any good buyer agent these days. read
And if you still don’t get it, check out Phil Hoover’s excellent post on the five stages of seller grief. read
19 comments
From the RGJ article….
“Reno’s in a unique position that the rest of its economy is solid.”
Haha Lindie will be all over that one. At least they didn’t sugarcoat it too much this time.
So Diane, what stage of the “seller grief” process are we in now?
With sellers asking $800,000 for old barns, $4 million for houses within a stone’s throw of a 10,000 vehicle a day intersection, and 32% mark-up over ‘04 prices when the market has gone nowhere but down since, I would say we are still at the beginning, in denial. What say you?
And, at what stage of the “realtor grief” process are we?
One of the fine things the internet allows you to do is follow the local REIC spinjive from all over the country. Here’s how it goes:
“_________________ (fill in the blank with name of city) is in a unique position in that the rest of its economy is solid.”
” _________________ (fill in the blank with the name of the city) still demonstrates population growth, which will support an expanding local economy.”
“_________________ (fill in the blank with the name of the city) benefits from it’s exceptional geographic location, mild climate, and exceptional natural beauty, insuring a steady rate of growth for years to come.”
The fact of the matter is that _____________ really is special, and will be immune to the economic forces that will impact other locales.
You see, according to the local REIC, and its paid for spokespeople, wherever they happen to be is special, wherever they are is unique, and wherever they are is immune to downturns that will impact everywhere they are not.
Reno is different, Boise is different, etc.
We will be spared the pain of Las Vegas, Florida, California, (insert your own city)
NO ONE is immune from this, guys!
It is NOT different this time!
Ahh now careful, Phil. Comments like that upset some people around here. They will say you must work in a grocery store, and live in a singlewide, and aspire to be a Wal-Mart greeter because they cannot countenance the fact that you speak the truth. Their real estate holdings are going in the tank and their self-annointed status as Masters of the Universe is looking problematic.
dam! I paid 50k for upgrades last year! I did most of the work myself (wood floors, cabinets,tile,fixtures,paint). What will I ever do? My castle is crumbling!
oh yea thats right I plan on living in this house for the next 15 years or so. I sure hope my home is worth more than what I paid for it in early 2002 LOL
You guys need new material…. didn’t I read this same dull comedy from you guys about a month ago?
Derrick, so you installed some “granite and laminate” and now you expect to sell it some day for more than you paid? Doesn’t that make you a flipper?
RGJ posted:
“You guys need new material…. didn’t I read this same dull comedy from you guys about a month ago?”
Have you ever posted anything meaningful to this blog? It seems you show up with some weak attempt to police things, offering absolutely nothing. When it comes to dull posts, yours win hands down. Goodbye already.
Wall Street Journal today:
Summary:
Q1 2007 : YoY prices down 1.6%
Q2 2007 : YoY prices down 3.2%
Article:
The Wall Street Journal
Steep Home-Price Drop Stirs Fears
Market May Get Worse Still As Effect of Stricter Lending Has Yet to Show Up in Data
By KELLY EVANS
August 29, 2007; Page A3
The decline in U.S. home prices accelerated in the second quarter as a glut of unsold homes and tighter lending standards continued to weigh on the market.
Home prices nationwide tumbled an average 3.2% from a year earlier, according to an index compiled by Standard & Poor’s Corp. The decline was sharper than the year-to-year decline in the first quarter, when the S&P/Case-Shiller national home-price index dropped 1.6%.
…
BanteringBear, I agree…. I is time for goodby.
I started reading this blog early last year. The posted blog information seems to continue to have a consistant variety with info on the mortgages, state of real estate and economy, some community events and even an occasional deal of the day. These postings are interesting but 80% of the comments are from the same people saying the same things. No matter the subject, the comments are all DoomsDay Real Estate and some have even gotten pretty critical and disrespectful to the blog host.
So, feel free to continue spending your waking hours scouring the media for articles to support your DoomsDay Real Estate culture. But you should consider a new hobby…you spend too much time on the negativity!
Adios
BanteringBear, I agree…. I is time for goodby.
I started reading this blog early last year. The posted blog information seems to continue to have a consistant variety with info on the mortgages, state of real estate and economy, some community events and even an occasional deal of the day. These postings are interesting but 80% of the comments are from the same people saying the same things. No matter the subject, the comments are all DoomsDay Real Estate and some have even gotten pretty critical and disrespectful to the blog host.
So, feel free to continue spending your waking hours scouring the media for articles to support your DoomsDay Real Estate culture. But you should consider a new hobby…you spend too much time on the negativity!
Adios
SO what effect will the fed cutting intterest rates by a full point, probably with 4 consecutive 1/4 point cuts have on the housing market? Also what about the window loans being cut by .5 point just recently?
Will this help put some stimulation back in the market? Surely bringing that average mortgage from 8.2% down to 7.2% will help…
I don’t think it will help one bit. You can’t stop a bubble from colapsing. It’s like the Nasdaq went from 5,000 to 1,200 despite a series of interest rate cuts. The Reno housing market is still 20% over-valued when looking at historical appreciation and rent/price ratios. When a bubble colapses, prices always go below fair value. This has happened with every bubble in history. Do some research and you’ll agree. The FED can cut, but it won’t do much at this point.
derrick……….
It appears you don’t understand something here. Mortgage rates are not tied to the Fed Funds rate. A 1% decrease in the Fed Funds rate does not mean prevailing mortgage rates will drop by 1%. Mortgage rates are tied to the yiled on the long bond, not the Fed Funds rate. There is a substantial possibility that a cut in the Fed Funds rate will cause the bond market to fear upward momentum in inflation, thus causing a decrease in the price of the long bond, thus causing the long bond yield to rise, thus causing mortgage rates to also rise.
Even if these indexes were tied together, would lowering a jumbo from 7% to 6% matter at all in the current landscape? Not likely.
I wretch each time I hear a reference to the “sub prime melt down”. Way more than 90% of local sub- prime REO’s have nothing to do with rate resets - owners just couldn’t keep up with the initial payments. Go figure. The penalty of stupid loans for the lenders.
But this post is about sales numbers. What would you think would happen to housing values here if volume for August fell 25% from July? Will the 7% over their nut folks cave? Will the 10% down crowd give up their down payment and flee the market? Will the 80/20 crowd just walk? I am actually showing a much more significant drop in closings, but I am reliant on the Assesssor’s and Recorder’s sites.
No, most likely folks will Bambi stare uselessly into the headlights and extend their listings at their break even, and attempt another HELOC. Static lemmings.
If you can’t score at least 20% under 2005, you have a weak agent representing you.
So, what if the sales rate drop is closer to 45% which is really what i’m tracking?
“If you can’t score at least 20% under 2005, you have a weak agent representing you.”
Green, are you saying we should be paying 20% under 2005 prices?
Is that what you mean?
If that’s what you mean, then the house recently listed by Diane, and the subject of the thread below, should go for 20% below $755,000, or $600,000. That means the house is $400,000 overpriced?
I don’t want to put words in your mouth here, as way too much of that happens on this blog. I just want to make sure I understand.
Thanks.
Did you all see that the Office of Federal Housing Enetrprise Oversight (OFHEO) has ranked the Reno-Sparks market as the 10th worst market in the entire US. The only markets deemed worse are in California and Florida.
No doubt Allen or derrick or RGJ will soon be here with some insult about my singlewide, but these are the Feds numbers, not mine.
Lindie, if you look back very carefully, you will notice that I only fire back when someone puts words into my mouth or makes unfounded assumptions. You will also notice that I am not a market cheerleader. I have never said the market is not in decline or that I think we’ve hit bottom yet. I have never made a prediction as to when it will, nobody knows. I think you are mistaking the fact that I make a living in real estate investing here and I continue to do so, as a being delusional. Please don’t put words into my mouth. The only reason I comment at all is because this blog has turned into a bubble blog, which I think the general public is aware, how about some new discourse? What are your thoughts on cold fusion=)?