Gotlots is going to love this one (and, oooooo, I can hardly wait for all the I-told-you-so’s to follow)… read
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Gotlots is going to love this one (and, oooooo, I can hardly wait for all the I-told-you-so’s to follow)… read
gotlots
No I told-you -so here.
I commend you for your willingness to make this blog a place where people can come and post about the real estate market as they see it. There is no other blog about Reno real estate that accepts comments, as yours does.
Even as recently as three months ago there were folks saying there is no bubble in Reno, nope, not here in Reno. Now an organization like Moody’s says that not only is there a bubble in Reno, but it is going to fall the second hardest in the country. And you have the integrity to post it.
This blog is a refreshing contrast to the still WAY too common blather coming out from most realtors in Reno. You know, it’s still such a great time to buy, it’s a buyer’s market now, seller’s are so motivated, and remember, it’s still special here in Reno because we are so close to Lake Tahoe and everybody still wants to live here.
Meanwhile, their clients reduce the asking price of their bubbled up house by 1.2% from $499,000 to $495,000, as a sign of their motivation.
No I told you so, but I do have to say that if one seeks to lock in declining value in a house in Reno,there has never been a better time to buy. Just ask Moody’s.
EyesWideOpen
It’s like when you hear the same song on the radio every day. You don’t really like the song at first, but after a few weeks, you learn all the words, you hum it at work and then EUREKA! You *get* it!
Today I transferred a mountain of cash into a CD. On Saturday I plan to sign a lease on a luxurious apartment that sits just a few blocks away from the neighborhood where I would like to buy. I negotiated a great price by offering to pay the entire lease up front.
Even if prices drop only moderately, I will save more than enough to pay the rent on the apartment. FREE RENT! H E L L O O O!!
I *get* it now. Thank you Diane for the great blog. And thank you Gotlots and RI for singing the same song week after week.
This buyer is officially off the market.
Reno Ignoramus
Folks, we are entering the Twilight Zone in the housing market. This today from David Lereah, the “chief economist” for the National Association of Realtors, and up to now the biggest bubble denier in America:
“The downturn is caused by falling confidence among buyers who are fearful of paying too much. Buyers are just not buying. We need to have a correction. Prices need to come down.”
For anybody who has followed this bubble over the past 3-4 years, this is astounding. Mr. Lereah, who himself coined the phrase “new paradigm” to suggest real estate would appreciate 10-15% a year for the rest of our lifetimes, and then sent it out to his legion of six percenters to spread far and wide, is now saying prices need to come down.
(Here play the theme from the Twilight Zone).
Jury and Judge
Guess what? You don’t get to say I told you so until what you’ve been telling is actually so. Let’s revisit in 15 months when 2007 is actually over.
Perry
It’s all becoming painfully obvious except to those on the listing end. I keep hearing people say, oh my house is worth $$$(insert crazy value here) but I can’t sell right now becasue the market is slow (read tanked). Doesn’t that mean that your house is not worth $$$? The bottom line is a house is not worth what it’s appraised for or for whatever crazy amount you think it is, it’s worth what someone will pay you for it right now.
7795 PEAVINE CREEK CT listed at $505,000 in Lakemont Canyon Pines. 11/21/2005 paid $440,234. Lakemont is virtually begging people to come up there as it is.
Do people really believe they can get these prices or are they in denial?
Reno Ignoramus
Perry:
Think about something. Why would people be so resistant to dropping their prices? Well, for the last five years the real estate industrial complex spent millions of dollars in advertising saying that:
1. Real estate in Reno never goes down.
2. They aern’t making any more land in Reno.
3. It’s always a good time to buy.
4. Reno is a special place, and everybody wants to live here.
5. You better buy now, or get priced out forever.
6. Reno houses always go up in value.
Do you think I exagerate when I say millions of dollars? Hardly. Look at any edition of the RGJ. Ninety percent of the TOMA ads, those little square ads that are all over the paper, are for realtors or mortgage lenders. Then there are the Friday, Saturday, and Sunday real estate inserts every week. The only other industry that spends more on newspaper advertising than the REIC is the car dealerships.
Then there are the weekly realtor televison programs hawking their houses.
Then there are the billboards all over town for the new developments and individual realtors.
Then there are the high gloss fancy real estate magazines we get in the mail and see in restaurants.
Then there are the never ending mailers and fliers and brochures.
All of this is very expensive. But the trade of the REIC is to create illusion. Illusion that the real estate market is great. That buying a house is the best investment one can ever make. The illusion that real estate in Reno never goes down, the illusion that it’s different in Reno. The illusion that, well, see 1-6 above.
And, it worked. People bought it. People believe that their house cannot go down in value. That it always just goes up. So they cling to their illusions.
And even if people come around to recognizing that the market as a whole is tanking, they still cling to the illusion that THEIR house is special. Even though it is exactly like the cookie cutter version across the street.
“I will be damned” they say, “if I am going to give this house away.” And thus shall they ride the market down. So far, the ride down has been 10%, and they will continue the downward journey.
gotnone
If someone says “house prices will fall” for long enough, at some point they will be right … just like if they say “house prices will go up”. Gotlots and Reno Ignoramus seem to revel in the fact that house prices are collapsing but I wonder if it’s just a case of sour grapes. Maybe next housing boom they should just buy some property instead of being bitter about what people are asking for their houses. I guess it would be interesting to know how much they think prices need to drop from their current levels before they would be ‘tempted’ to buy … is it 20%? 50%?
I know many people in the Bay Area who ‘missed out’ on the bubble because already 5 years ago they thought houses were completely overpriced. Those people feel pretty dumb now. Maybe this is what happened to Gotlots and Ignoramus in Reno.
Something is worth whatever people are willing to pay, no matter what the seller paid for it, or when they bought it (or what other people think).
nvmojo
gotnone, thanks, you made me feel better. I’ve hard those same memes. Glad I’m renting at this point. But, when I finally go for a bite of RE, I will give Diane a call. BTW, Diane, thanks for the blog!
Phoenix Robson
Great post.Truly looking forward to read more. Really Cool.