Thanks to Smarten for pointing this out over on Chase Nation, but here is probably a better place to share this link. I had another column appear in the paper over the weekend, this time about an experience I had with buyers who made a low offer on an overpriced house. Random lowball offers rarely succeed, but a well-crafted, strategic offer often yields satisfying results. In this instance we created a compelling case to the sellers backed up with numbers galore explaining why we were offering so much less. They ended up countering back, and we eventually came to a fair price. Everybody kept their heads together, and the deal closed. Sure, the market’s down, but stuff still sells if you know how to work it.
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MIke Van H
Selling for more than 200K under asking price is definitely ‘working it!’ Congrats, good article too.
AP released a poll today about Americans’ views on the real estate market…and one thing is for sure; they are confused. 60% said they definitely won’t be buying a house in the next 2 years, yet 59% said it’s a great time to buy right now. Huh?
One piece of possible positive news is the amount who reported they have adjustable-rate mortgages went down by more than half from the same poll 2 years ago.
http://news.yahoo.com/s/ap/20080414/ap_on_bi_ge/housing_crisis_ap_poll_4
Sully
These low ball offers (without knowing how low) are hard to comment on, Chasenation also talks about them, but no one gives a number. Maybe, these low ball offers are really the FMV.
The buyer is the one to determine the price he/she is willing to pay, not the seller or the listing agent. If the buyers, assuming more than one make offers) are bidding lower than thats the price range the market is saying it should sell for.
I have been looking for over a year now, and haven’t seen but a couple of houses I’m even remotely interested in, but not at current price.
I think I’m becoming a professional looker! 🙂
smarten
Well Diane, now I’m going to sound like your colleagues on ChaseNation sucking up to Craig King:
I couldn’t agree with you more!
I’m just curious – is the home you are speaking of in your article the one on your street in Somersett you referenced here several months ago?
I agree with Sully that one man’s low ball offer is another’s wife [sorry ladies]. What I mean by this is sometimes a low ball offer IS really FMV. The fact a delusional seller has priced his/her home over FMV neither makes his/her listing price FMV, nor the buyer’s offer “low ball.” So what exactly is a low ball offer?
One final piece of collateral information insofar as current market conditions are concerned. I’ve been working with a contractor here in Incline Village. Today he told me that the amount of available work for fellow contractors in this area has come to a screeching halt. He estimates that by year end, 45% or more of the contractors in this area will have simply left the area.
SkrapGuy
According to the story on MSNBC today, 60% of Americans say they won’t be buying a house in the next 2 years.
Many point to the top of the bubble as having ocurred when Time magazine ran a cover story about Americans’ love affair with their houses. The story was about how flippers were making a furtune and how so many were using their house as an ATM.
Many have also suggested that a sign of the bottom (here we go again with the bottom) will be when Time magazine runs a cover story about people saying what a huge mistake it was to buy a house. Interviews with the masses about how house ownership brought them financial ruin.
This is probably as good a predictor of the bottom as any.
John Newell
I went to a foreclosure mitigation training in Reno last week, and one of the realtors in attendance told me that he felt that the market “downturn” would strengthen the real estate sales industry in the long run because only the experienced realtors and brokers would survive. I know a mortgage broker in the Bay Area who also believes this, and if I understand Diane’s article correctly, this is part of what she is saying as well. People who are good at selling real estate and finding loans for people will continue to do so, even if they have to work at it a bit harder. People who got in the real estate game when the market was rising or at the height of the bubble may be in trouble because they have no experience with a real estate market that requires sales acumen and is subject to responsible lending standards. So for every Diane out there who can actually bring in a sale for significantly under the asking price, there are likely at least 20 realtors who have no idea how to make the deal in today’s market. Anyone want to bet that it is this population who are most unrealistic about the continuing correction?
On a side note, at that same training I heard a lot of the “no one saw this coming,” “no one could have predicted this,” etc. rhetoric. Even a representative from the San Francisco office of the Federal Reserve told us no one could have foreseen all the sub-primes that have defaulted and are likely to default. And then in passing she remarked that ALT-A interest only loans may be an issue in 2010 if the market is still in decline. Of course, in 2010 when 5/25s from 2005 reset and the principal becomes due on 5 year interest only loans, we will probably be told that “no one saw this coming.”
Sully
John, if they are that stupid – you wonder why we even have a Fed Reserve Board.
Maybe Ron Paul is right in trying to disband it and put the money control back in Congress. Which devil do you want?
GreenNV
Diane, you are in danger of being branded the Hester Prine of Reno Real Estate!
RI, you and I have been pretty close pegging the market at about early 3Q 2004. What do you think about the last few weeks? A LOT of the REO’s are blasting way back into 2003. It is like a memo went out to the lenders to get serious and unload this stuff STAT(8938 Beacon Ridge for instance). Short sales are starting to list at 40% under peak prices.
If you were a buyer today, would you be grabbing at these deals, or would it scare the bejesus out of you and into a sidelines stupor?
Reno Ignoramus
I think we have to recognize that there is really not one monolithic market. The market is segmented by location and neighborhood. Just because the median is down 25% from its high, that does not mean all houses in all neighborhoods are down 25%. Some houses in some neighborhoods are down less than 25%; other houses in other neighborhoods are down much more than 25%. Some neighborhoods, well established and fairly well off like Caughlin Ranch, are clearly not down 25% from the high. Other neighborhoods, mostly new, like some neighborhoods in South Meadows, are down more than 25%.
Now I do believe that a sinking tide lowers all boats. It’s probably accurate to say every house in Reno-Sparks is down from the high by at least 10%-15%. Some are down a whole lot more. I would say even the best of neighborhoods are back to mid 2004. The worst are back to 2003. Posters here have pointed out certain houses that are back to 2002. Which is interesting, because some of the “worst” neighborhoods for depreciation didn’t even exist in 2002-3. I have talked before about Somersett, entirely built on the bubble, and I won’t repeat that here.
If I were a buyer today, which I am not, I guess I would have to evaluate how much it would mean to me to buy into a declining market. We have had some posts here from some sensible people with sensible reasons (for them) as to why they made the decision to buy even though they recognize they are buying into a declining market. I recognize that’s its easy for me to sit on the sidelines when I am firmly esconsed in the house I bought in 1995.
My personal view is that we are not close to the bottom. With all due respect to Smarten and his 1/11/09 call for the bottom, I just don’t see it. We are still seeing only 6% of houses sell, and it’s a lot worse than that if we factor in the hundreds and hundreds of new inventory on the market. We have YEARS of inventory in all price segments, with inventory getting into absurd levels in the higher price ranges. We have 42% of houses sitting vacant. We have NODs flowing. We have entire developments going into default. The banks are going to own a lot more properties one year from today than they do today. I’ve been through this before. It always strikes me how long it takes. Eventually the regulators tell the banks to get rid of the REO, and they just dump it.
We cannot overlook the fact that we are in a place we have never been before. Yes, the housing market has dipped before, always in the past the result of a national or regional recession. Never before has a housing decline been the cause of a recession, as is the case now. We have reversed the law of cause and effect because of the Voodoo nonsense. Never before did so many lenders hand out so much cheap easy money to so many unqualified people to enable them to buy a house they could not afford. NEVER before has that happened. We are in unchartered territory, and all the past maps are not very reliable. Thus, I am reluctant to look back at what has happened in past recoveries and predict it will happen again this time. Anybody who suggests that this is just one more contraction in the ebb and flow of the market over long periods of time, I think is denying some very fundamental differences.
Also, the mood is not improving. Witness the story today on MSNBC about the dour mood of the public. Don’t underestimate the power of sentiment. It becomes a self-fulfilling prophecy.
So, for me, I would stay on the sidelines.
MikeZ
Just read the column … WOW!
Diane, you go, girl!
KB
I have two quotes that make perfect sense in a market that we are in right now
“Buy when there is blood in the streets”
&
“Be fearful when others are gready and be gready when others are fearful”
Right now there is blood in the streets and everyone is very fearful. These only work if your time horizon is longer than 5 years.
Sully
http://www.usatoday.com/money/economy/housing/2008-04-15-foreclosure-filings-march_N.htm?csp=34
DERRICK
Reno ignoramous..
admit it, you want something for free don’t you?
Sorry buddy but your still not going to get your dream house for 150k. Lmfao
Gail
Diane;
I have been following this blog for a while and have only recently started to contribute. I find the blog for the most part to be quite informative with high quality content. For the most part. However, I also find that you allow some posters here to do no more than insult others. Why do you do allow that? For example, earlier on this thread, GreenNV asked RI a question. RI responded in a considered manner. Then Derrick enters a post that does no more than insults RI and offers nothing to the blog. I noticed the other day that you quickly removed a post that was nothing more than silliness. Why do you allow the personal attacks and insults? I suggest that you just simply remove any post that is nothing more than a personal attack and contributes nothing to the conversation. It will really make the blog a more pleasant and cordial place to be. This is just my opinion.
GrandWazoo
I agree with Gail – I think it is well past time that DERRICK was “retired”.
BanteringBear
As much as I dislike Derrick’s childlike posts, and believe me I abhor them, I firmly believe in his right to continue to post. If Diane were to censor him, this blog would be no different than that shill site Chase Nation. Commence the drivel…
Gail
I am not suggesting that Derrick, or anybody, not be allowed to post. I am suggesting that when anybody enters a post that is nothing more than an insult or a personal attack on another person, that such personal attack be removed. How do the personal attacks enhance the content of the blog? In my opinion they diminish the quality of an otherwise excellent discussion. For example, look at Derricks post at 3:12 pm above. How does that add anything to the blog?
I am not singling out Derrick. This would not be censorhip in advance, it would be simply removing the cheap shots that really detract.
MikeZ
No need to delete Derrick, just hand him a pacifier and burp him every hour. And change his diaper after every post.
Utah Homes
Yes, you are on the money. Even though homes are down…we still sell homes too. ITs all about staging, marketing, and pricing.