April 13, 2007

Harsh but true: "You should be happy if you can get '04 prices."


Ah, gotta love it. We're dialing back the clock, and it's 2004 part time again! Soon it'll be 2003. Then 2002. Then 2001. Then 2000. Then 1999....

House buyers driving discounts - Flood of inventory results in some offers below asking price

"With flooding inventory out there, it's not uncommon to see offers at 10 percent below asking price,"
said Greater Milwaukee Association of Realtors President Dave Schmidt Jr.

Double that price cut if the property is in danger of foreclosure, said Robert A. Jansen, president of the Milwaukee listing service ForeclosuresWI.com.

Post-boom conditions have put home buyers in the driver's seat, agents report, and they've flattened sales prices.

"We're seeing many people writing offers at 10 percent to 20 percent below asking price. Buyers are less afraid to insult sellers," said Roy Scholtka, broker-owner of HomeSale Realty in West Allis.

"Everybody I talk to is wondering, 'Why isn't my house selling?' It's because they're still thinking they should be getting 5 percent price appreciation a year," Moore said. "You should be happy if you can get '04 prices."

23 comments:

tmaioli said...

I'd go in at 25 to 30 percent less, you might have to wait for seller to get short sale approval, but it will be worth it to the buyer.

David in JAX said...

10-20% under asking? That is complete garbage. With the exception of part of 2005, homes were going for 10-20% under asking during the boom in Florida. I bought my first home during the early part of the boom in 2003 (and sold it of course) and got it for 20% below asking which was standard for buyers at that time. Now that we are well into the crash, nobody in their right mind would only offer 10-20% under asking unless the home was already discounted to pre-boom levels. Homes in NE Florida are going for much much less.

Stuck in So Pa said...

looks like if you want/need to unload that underwater turkey its time to "Party like its 1999"
Oh damn, I meant to say sell, SELL like its 1999. My bad!

there I got a name, happy? said...

AL-QWEEFER,

I wouldn't get all worked up to much anymore over foreclosures rising. The news about foreclosures, subprime, new century etc has put a chill in sales. But it's all psycological. People read all this shit and think whoa I better wait before I buy and see how this whole thing plays out.

Now with news of the bailout coming it will have the reverse affect. Suzie Homebuyer will figure worst of it is over, government's not going to let anyone foreclose anymore, might as well buy before I get priced out. Even if there is no real bailout, just the percetion of one will be enough I think.

And despite all the news I've read about subprime lending effectively stopping, I still see and hear ads for $0 down, 1.9% for 6 months, $400,000 mortgage for $800 a month....nothing's changed.

AMIGAUSER said...

You are dreaming if you think the Fed will allow the market to ever return to 1999 levels. It would totally cripple the American banking industry and may bring about a deflationary depression, something the fed has said they WILL do everything to prevent.

Witness that FHA loan standards are being changed.

What is to stop Fanny mae from buying up sub prime loans, esp if this is a way to buy influence in washington.

THe real estate market has only dropped 6%, after many years of >10% increases, the vast majority of home owners are still in the money, and congress will make sure that this continues to be true.

anonymous wimp said...

Hey, you government-salvation dreamers:

The .gov bailout of the "oil patch" S&L crisis didn't stop home prices from tanking in places like Houston, where prices dropped 30-50% and stayed below nominal price for up to 15 years in some places.
Anything the government does is too late and at best will delay the inevitable. Is it willing to spend $2 to $4 TRILLION dollars to support house prices at the current level? (By the way, that's the amount of the federal budget per year--just for the subprimes...the Alt-A and fraudulent primes are next.)
Once again...look to Japan. Their Markets peaked in the late eighties and still haven't recovered despite government bailouts and ZERO interest rates for years. And our problem is chicken feed compared to theirs.
The greed-fueled fantasies of some of you guys are of great entertainment value to me.

cow_tipping said...

In 2002 and 2003 and probably 2004, I was making offers for 30-40% less on houses and was getting them accepted or getting the arguments going.
By saying 10-20% under skaing, the realt-whores are hoping that you dont drop the anvil on their head and offer 50% of asking ... yea they can hope, but at 50% of asking, you can still lose your ass.
Cool.
Cow_tipping.

Anonymous said...

"We're seeing many people writing offers at 10 percent to 20 percent below asking price. Buyers are less afraid to insult sellers," said Roy Scholtka, broker-owner of HomeSale Realty in West Allis.

Sheesh Roy...Most of these OVER PRICED POS houses you are selling are from 50 to 100 PLUS years OLD. Many need to be Condemned, visited by an REAL inspector or at least Spring cleaned by a large angry Bulldozer.

Forget the RE Crap about "old world Charm" and "character" as my I know you, the houses and where you work Roy.

honica jewinski said...

The jews at the fed will never let the market return to 2003 prices. They're printing money like they're gonna take it outa circulation soon. Housing prices will remain nearly the same in most of the country, but the dollar will only be worth about 75% of what it is now.

Anonymous said...

I bought my home in late 2003 for $289K. By late 2004 home in the hood were going for $350K. I sold it in 2006 for $470K and now the homes are going for around $450k.

I'm hoping for as big a crash as anyone but I'm also willing to admit I may have made a mistake selling since so far prices have held up very well.

You lose credibility when you dismiss any counter data.

Anonymous said...

They won't starve in Milwaukee because they've got all that cheese...

Anonymous said...

Lol!

And why do you think the government 'let' the Great Depression happen, ace?

Keep supping that Kool-aid.

SeattleMoose said...

We'll be at bottom when we have 1997 prices (last sane year) plus 3% per year for appreciation plus 50% of improvement costs.

50% for improvements because they were done at inflated prices (labor/materials) and were probably of "Flip This House" quality.

boston observer said...

These realtors absolutely crack me up. Offers 10% below ask... are you kidding me. Most properties moving west of Boston are selling for 10-30% below ORIGINAL asking price. I emphasize "original" because this is another scam the industry perpetrates. They lower the ask price 3-4 times (by a total of 20-25%) then sell the house and claim that it sold for 3% below asking price when, in reality, it sold for 20-30% below the true ask.

I have seen a few houses sell for about 40% below ask after sitting on the market for almost 2 years (a couple of examples in a nice metro west suburb - a nice older home on a fancy street that originally listed for $1.85M and sold for $1.07M. Another dropped from $2M to $1.23M). New homes still seem to be selling high here (perhaps with lots of extras) while existing homes are getting punished.

torjusgaaren said...

Common trader's sense: You don't buy until the market is turning back up. Just like you don't sell until the market is on it's way down again. Otherwise you are guaranteed to be left out at a regular basis.

Sold at Peak said...

I once heard prices are just going to go up in 2006. Now we are at 2004 pricing all over again. Once again the REIC says we are just in a temporary state. Bullshit this is like jumping off a building and thinking you are not going to die. Wake up idiots of course this thing is going to plummet and go splot all over the street just like the lady who jumped off the building.

POed said...

"We're seeing many people writing offers at 10 percent to 20 percent below asking price. Buyers are less afraid to insult sellers," said Roy Scholtka, broker-owner of HomeSale Realty in West Allis.

So glad that I'm apparently supposed to PROTECT the ego of the seller, by not offering too LITTLE. Funny how that principle didn't work in reverse a few years ago, when sellers routinely set asking prices that are way more than what was rational at the time!

Oh, I guess I'm supposed to sacrifice my future, buying an over-priced asset that is guaranteed to become an equity black hole, just so the guy who bought the house a few years ago can net hefty profits to pay for HIS retirement? Wouldn't want to crush HIS fragile ego here, eh?

Anonymous said...

Now with news of the bailout coming it will have the reverse affect. Suzie Homebuyer will figure worst of it is over, government's not going to let anyone foreclose anymore, might as well buy before I get priced out. Even if there is no real bailout, just the percetion of one will be enough I think.



There is not enough $$$$ to fight Iraq, Iran, bail out RE gamblers, pay Baby Boomers, AND keep Violent Urban Africans from becoming more violent!

No bail out for you!

Anonymous said...

AMIGAUSER said...
You are dreaming if you think the Fed will allow the market to ever return to 1999 levels. It would totally cripple the American banking industry and may bring about a deflationary depression, something the fed has said they WILL do everything to prevent.



You are assuming that the American banking sys is not crippled right now bec of this ponzi bubble.

Might be too late.

Anonymous said...

I'm in a suburb of los angeles and in my neighborhood (1400 sq ft homes, decent quiet neighborhood) homes for sale are sitting.......for months. Asking prices are in the high 500's but haven't seen a "sold" sign in a while. Guess these sellers are holding out. Haven't seen any big price reductions around here.

Not sure what the gov't will do re bailouts but common sense says prices will drop as supply grows. Maybe prices will drop as more and more ARMs reset. I'd say by year's end. And as for foreclosures, its a lengthy process (6 mo+ if homeowner can drag it out and live rent free). Maybe 2008 foreclosures will flood the market - just in time for all the idiot politicians to make bailout promises during their campaigns.

Anonymous said...

House prices did not go up, the value of savings and the dollar went down, and the methods of calculations changed, whereby debt is wealth, house ownership is savings and inflation numbers tally nothing one needs, and the U.S produces nothing, and beleives it is free, independent, and self sufficient

Anonymous said...

and government wants to and will help

stuckinthecity said...

I'm watching asking prices in Chicago Chase-the-Train-Down-the-Tracks.

$5,000 here

$10,000 there

STILL over priced. STILL sitting around collecting dust.