Many layoffs coming in housing, economists say

[w¡n9Nµ7 §£@¥€r 123]

Charles,

If you buy a home for 475K with 15K cash back and zero closing costs, is that worse than buying it for 460K and bringing a 15K check to closing?

Only if the interest you pay on the mortgage in the former case exceeds the interest you pay in the latter case by more than (15K+ investment return on 15K).

This is not as cut and dry as you may think.

[one...two...tree 2,762]

I was in the market for a house and looking at some condos and townhouse, There are a lot of shams going on,

THe market was already going down and the realtors were doing ILLEGAL Stuff to keep the price HIGH. One such examples on a townhouse i was interested

The other realtor

price

$460,000. the realtor said you give us $475,000 with $15,000 Closing cost assitance, I told him we were not interested we want to buy at $460K, for the owner he's still going to get his $470,000 but since the realtor works on commission he will get a bigger cut 14,250 instead of 13800

For the owner

15000

-29,250

His net gain

$445,750

For the owner he only gets $420 extra while the realtor comes up with $450 but the bottom line the BUYER is the one that's screw because His property nice will be base on a $475K purchase instead of 460

I hate that sh!t! At least with car salesmen, they have to deal with the fact that a car depreciates so in a way it keeps them in check if you are a savvy customer. With real estate, the contention is that it ALWAYS appreciates in value.

Edited February 8, 2007 by Steven_and_Jinky

[w¡n9Nµ7 §£@¥€r 123]

With real estate, the contention is that it ALWAYS appreciates in value.

And of course, the contention is false.

A special prize for the VJ poster who can identify the 100 year period where home prices barely moved (after adjusting for inflation).

ETA: The silver lining from that graph is that real estate is a remarkably good hedge against inflation.

Edited February 8, 2007 by Gupt

[one...two...tree 2,762]

With real estate, the contention is that it ALWAYS appreciates in value.

And of course, the contention is false.

A special prize for the VJ poster who can identify the 100 year period where home prices barely moved (after adjusting for inflation).

ETA: The silver lining from that graph is that real estate is a remarkably good hedge against inflation.

What maintained the boom of the housing market for so long? My guess is these 'funny' mortgages - nothing down, and interest only which essentially sidestepped the reality that many buyers were already priced out of the market. Like a house of cards, it was bound to collapse.

[w¡n9Nµ7 §£@¥€r 123]

What maintained the boom of the housing market for so long? My guess is these 'funny' mortgages

Sure, they played a role. Another factor (a much bigger factor IMHO) were the low interest rates.

I also happen to believe (I have no way to back this up so don't ask me to ) that after such a long time of barely inflation-trend growth, affordability was at an all time high and coupled with low interest rates and exotic mortgages and speculators...things just took off. Classic bubble.

[Fandango 1,440]

The whole real estate market seems like a sham. Brokers have way too much influence on inflating housing prices when people are buying. Everyone is this country should have the opportunity to own their own home with reasonable income.

I agree that realtors are a scam. Zillow.com (or a copycat site that shows up on the scene later) is going to end up changing the game completely.

As for everyone having the opportunity to own a home, I disagree. Prices should be driven up and down by the market. The problem with the market as it stands today is that it is based on an imbalance of information. The realtors have access to MLS and the rest of us have to bow down and fork over 6% for that information. That is obscene. Free up the sources of information and let the market function without the encumbrance of realtors.

Wrong, just so wrong and completely insulting. Both of you.

There are bad agents out there, but there are a loaaaaaaaaad of good ones who work damn hard to help people get into homes. I'll be damned if it's a fcukin sin that we expect to make a living...jeez.

Appraisers determine the value of the home, but they factor in the selling price of nearby homes and the realtors will inflate the selling price as much as they can because most of them work on commission, so it takes on a snow ball effect when people are buying homes. That's the problem with leaving the value of homes entirely of the market - people will always need a home. That to me is a sham and it is why the housing market is usually the fastest way to grow capital, which in turn attracts investors.

There needs to be regulations to ensure that families with reasonable incomes have the opportunity to afford buying a home.

Fyi, we don't set prices...the market does. Well, to be technical, the customer does, but the house will sell somewhere in 'market value' That includes appraised values, because let's face it...unless everyone's payin cash for homes, then there are mortgages. If there are mortgages there are appraisals. If the house wasn't worth what the loan was for, there'd be no loan.

No loan=no sale. No sale=no inclusion into a market analysis of CLOSED properties within a certain timeframe. Therefore it would have no bearing on CURRENT MARKET VALUE.

Oh, and if someone's buying a house and is bringing a fair bit to the table, and the house is overpriced, yet the loan funds because the appraised value is still lower than the loan amount, then that buyer has determined the price for the home. I never in my life saw an agent twist someone's arm or put a gun to someone's head and forced them to buy anything.

I love how you're sat here casting aspersions on characters of people you don't even know.

Oh, and if you can actually figure out HOW to sell an overpriced home, do let us know. You think we hold guns to people's heads? You think we sit here and force people to set the house at a certain price? You are a sanctimonious prat, Steven, and tbh, I've always tolerated your little 'free the people' nonsense, but to sit here and essentially call ME a thief and an unscrupulous character has crossed the line.

It's all well and good for people to have a 'hey my agent was ####### because....' story, but to sit here and speculate and make some horribly incorrect, ignorant, and slanderious assumptions is just absolutely disgusting, and tbh, I'm disgusted.

[Ban Hammer 14,293]

The whole real estate market seems like a sham. Brokers have way too much influence on inflating housing prices when people are buying. Everyone is this country should have the opportunity to own their own home with reasonable income.

I agree that realtors are a scam. Zillow.com (or a copycat site that shows up on the scene later) is going to end up changing the game completely.

As for everyone having the opportunity to own a home, I disagree. Prices should be driven up and down by the market. The problem with the market as it stands today is that it is based on an imbalance of information. The realtors have access to MLS and the rest of us have to bow down and fork over 6% for that information. That is obscene. Free up the sources of information and let the market function without the encumbrance of realtors.

lisad is so gonna kick your butt for that

eta: i see she already did

Edited February 8, 2007 by charlesandnessa

[GaryC 7]

With real estate, the contention is that it ALWAYS appreciates in value.

And of course, the contention is false.

A special prize for the VJ poster who can identify the 100 year period where home prices barely moved (after adjusting for inflation).

ETA: The silver lining from that graph is that real estate is a remarkably good hedge against inflation.

Can I venture a guess? How about 1830 to 1930.

Opps! I didn't see the graph when I replied. Ok, point taken.

Edited February 8, 2007 by Iniibig ko si Luz forever

[Fandango 1,440]

Oh, and if someone's buying a house and is bringing a fair bit to the table, and the house is overpriced, yet the loan funds because the appraised value is still HIGHER than the loan amount, then that buyer has determined the price for the home.

there was a typo there. I put lower so now it's corrected

I've been meaning to say: Nikita...that may not have been done to score an extra $500 in commission. I can't really comment too much though because I'm not familiar or licensed with the laws of your state....but it sounds like it was someone who seemed a bit cash poor and wanted to finance closing costs.

But I came back to say one thing: if an agent has somehow treated any of you so badly to the point that you wanna call the entire profession 'scams' or anything of that nature, please realize that the universe does not revolve around you....and that there are many many many other agents whom you've never met...so trashing a whole industry of ppl is really not so cool.

Oh, and you should report the people to the real estate commission in your state. Let them be the judge of the actions, and if you are right, the agent will be punished. You can either be part of the solution, or sit back and ignorantly trash everyone cos of your experiences.

Edited February 8, 2007 by LisaD

[Thingee 0]

Just wanted to say you guys are scaring the ####### out of me with this bubble talk. Just bought my first house in November, and considered myself very lucky to have done so. Sellers had it on the market for 8 months before I came along. The initial asking price was 85k more than I ended up paying(they dropped the price more than once before I 'found' the house) Moving in I had 30k worth of equity according to a governmental appraiser(I was told they tend to be conservative?)

See, I thought I was getting a doozy of a deal as the sellers HAD to sell quickly or pay capital gains taxes. Somebody tell me I did OK? Please?

[Ban Hammer 14,293]

Just wanted to say you guys are scaring the ####### out of me with this bubble talk. Just bought my first house in November, and considered myself very lucky to have done so. Sellers had it on the market for 8 months before I came along. The initial asking price was 85k more than I ended up paying(they dropped the price more than once before I 'found' the house) Moving in I had 30k worth of equity according to a governmental appraiser(I was told they tend to be conservative?)

See, I thought I was getting a doozy of a deal as the sellers HAD to sell quickly or pay capital gains taxes. Somebody tell me I did OK? Please?

my thoughts are you did good, as the price came down 85k. it could be they realized it was overpriced. you can check to see how good a deal you have by comparing it to houses in your neighborhood that are comperable to it. i'm also assuming you had a full inspection, so odds are it was not dropped in price due to an issue with the house (like foundation etc).

eta: if the appraiser said it was 30k over what you paid, it also means the seller was overpriced by 50k maybe.

Edited February 8, 2007 by charlesandnessa

[Nikita2Charles 33]

Don't take it personal, I don't think anybody here are saying ALL REALTORS are BAD. I had a great guy as my realtor, very nice fellow from Ziprealty.com, He was very attentive, listen to what kind of property I was looking for, and most of the houses he showed us were really nice, and made offer on most of them, too bad at the time there would be multiple offers, but at time If he finds out some agent are not acting properly He would let us know and more move on, but still he always gives us that option, like we were always in control and he was there to guide us. I don't regret a bit the house we bought even though prices have come down quite a bit, but it's part of the risk.

Contrary I had a different agent 2 years ago, who would only show me houses from her porfolio and those houses didn't match my profile, what I was looking for, I felt like I was waisting my time, I did my own search and When i found something i really like she was not too enthusiast to show me the property, I let her go and gave up after I found a nice place, ask her to write an offer for me, she sat on it for 3 days, by the time the other party finally got my offer 2 more had come in and I didn't get the place due to her procastination. AM I to say all agents were not like NO WAY.

The whole real estate market seems like a sham. Brokers have way too much influence on inflating housing prices when people are buying. Everyone is this country should have the opportunity to own their own home with reasonable income.

I agree that realtors are a scam. Zillow.com (or a copycat site that shows up on the scene later) is going to end up changing the game completely.

As for everyone having the opportunity to own a home, I disagree. Prices should be driven up and down by the market. The problem with the market as it stands today is that it is based on an imbalance of information. The realtors have access to MLS and the rest of us have to bow down and fork over 6% for that information. That is obscene. Free up the sources of information and let the market function without the encumbrance of realtors.

Wrong, just so wrong and completely insulting. Both of you.

There are bad agents out there, but there are a loaaaaaaaaad of good ones who work damn hard to help people get into homes. I'll be damned if it's a fcukin sin that we expect to make a living...jeez.

Appraisers determine the value of the home, but they factor in the selling price of nearby homes and the realtors will inflate the selling price as much as they can because most of them work on commission, so it takes on a snow ball effect when people are buying homes. That's the problem with leaving the value of homes entirely of the market - people will always need a home. That to me is a sham and it is why the housing market is usually the fastest way to grow capital, which in turn attracts investors.

There needs to be regulations to ensure that families with reasonable incomes have the opportunity to afford buying a home.

Fyi, we don't set prices...the market does. Well, to be technical, the customer does, but the house will sell somewhere in 'market value' That includes appraised values, because let's face it...unless everyone's payin cash for homes, then there are mortgages. If there are mortgages there are appraisals. If the house wasn't worth what the loan was for, there'd be no loan.

No loan=no sale. No sale=no inclusion into a market analysis of CLOSED properties within a certain timeframe. Therefore it would have no bearing on CURRENT MARKET VALUE.

Oh, and if someone's buying a house and is bringing a fair bit to the table, and the house is overpriced, yet the loan funds because the appraised value is still lower than the loan amount, then that buyer has determined the price for the home. I never in my life saw an agent twist someone's arm or put a gun to someone's head and forced them to buy anything.

I love how you're sat here casting aspersions on characters of people you don't even know.

Oh, and if you can actually figure out HOW to sell an overpriced home, do let us know. You think we hold guns to people's heads? You think we sit here and force people to set the house at a certain price? You are a sanctimonious prat, Steven, and tbh, I've always tolerated your little 'free the people' nonsense, but to sit here and essentially call ME a thief and an unscrupulous character has crossed the line.

It's all well and good for people to have a 'hey my agent was ####### because....' story, but to sit here and speculate and make some horribly incorrect, ignorant, and slanderious assumptions is just absolutely disgusting, and tbh, I'm disgusted.

[Thingee 0]

Just wanted to say you guys are scaring the ####### out of me with this bubble talk. Just bought my first house in November, and considered myself very lucky to have done so. Sellers had it on the market for 8 months before I came along. The initial asking price was 85k more than I ended up paying(they dropped the price more than once before I 'found' the house) Moving in I had 30k worth of equity according to a governmental appraiser(I was told they tend to be conservative?)

See, I thought I was getting a doozy of a deal as the sellers HAD to sell quickly or pay capital gains taxes. Somebody tell me I did OK? Please?

my thoughts are you did good, as the price came down 85k. it could be they realized it was overpriced. you can check to see how good a deal you have by comparing it to houses in your neighborhood that are comperable to it. i'm also assuming you had a full inspection, so odds are it was not dropped in price due to an issue with the house (like foundation etc).

eta: if the appraiser said it was 30k over what you paid, it also means the seller was overpriced by 50k maybe.

Yes, I did indeed have it inspected. They actually had to make quite a few repairs..new circuit box, new furnace etc. Homes in the neightborhood actually go for a heck of a lot more than I paid (100k to 200k more), but it's a 'fixer upper'. All cosmetic work needed, nothing structural.

[Nikita2Charles 33]

zillow.com is your best friend, it gives you a range of the recently sold house prices nearby

Also

Ditech.com has an area for free appraisal

but of course all of these depends on the market and how bad someone like the house.

[w¡n9Nµ7 §£@¥€r 123]

Wrong, just so wrong and completely insulting. Both of you.

There are bad agents out there, but there are a loaaaaaaaaad of good ones who work damn hard to help people get into homes.

Fair enough. I didn't mean to slander individual realtors, although I can certainly see how it sounded like I did. I apologize.

What I meant to say (really) is that the way the real estate business is structured, and this involves realtors as well, the end consumer doesn't have the transparency that would make the marketplace work efficiently. When you have to pay a realtor for MLS access just so you can find out how long a home has been on the market (including all the times its been pulled off and relisted), there's something wrong. That is key information and it is kept from the consumer. Even if you pay a real estate agent, there is no guarantee you will get the right information - after all, the incentive on the realtors part is to sell at the highest price possible, not at the lowest price (whos interests is the realtor representing again?). Bottom line, the real estate professionals have rigged the game in their favor by creating an asymmetry of information and that scheme can't last long.

Edited February 9, 2007 by Gupt