November 04, 2007

HousingPANIC Quote of the Day

"Homes are only worth what someone is willing to pay for them, and right now, most homes on the market have no buyer in sight. Prices may have to fall much more to bring supply and demand back into balance."

Rex Nutting, MarketWatch, November 2007

17 comments:

Agent #777 said...

First, let me say this is so obvious, yet so many STILL don't get it!

Frank@Scottsdale-Sucks.com said...

Silly Keith, all the desperate homedebtors tell me their home is worth what they say it is, or what they owe on it!

Silly you for posting sound economic principles on here!

Homedebtors can't understand the concept that if I put a "for sale" sign on my car asking a million dollars for it, that does not mean the car is actually worth a million dollars.

A home's worth has nothing to do with the asking price. Why don't homedebtors get it?

Anonymous said...

Homes will be worth 50% less in a year from now because thats what they will be getting then.You want to sell? Then lower the price
Keith is right on the money.

Anonymous said...

Anyone know more about this?

As of 11-15-2007, there will be a new tool for figuring out how much toxic waste is in investment banks' balance sheets. The new US accounting rule SFAS157 requires banks to divide their tradable assets into three "levels" according to how easy it is to get a market price for them.

This kind of full disclosure will reveal just how bad things really are \"/

long termer said...

Right On!

wc said...

This is one area where realtors really could be leading the way down letting people know their ridiculous prices aren't gonna fly anymore especially since mortgages aren't as easy to come by anymore

Anonymous said...

Frank: They do not get it because either their personal financial situation requires the asking price asserted and/or they are still psychologically locked into peak 05 prices.

Anonymous said...

But REALTORS like Greg Swann are saying that homes are worth what the homedebtor owes

Cow_tipping said...

Everything has its prices ... yes prices not price.
There is the "sell in 1 hour price", sell in 1 day price, sell in 1 week price, sell in 1 month price and sell in 1 year price, and of course the well known, sell and gimme 6% price.
There is several cases where the sell in 1 hour price can be higher than the sell in 1 year price. AKA falling knife.
Cool.
Cow_tipping.

Anonymous said...

soon 1 ounce of gold will buy a house

Anonymous said...

That's like trying to convince someone that they will be a slave for the next 50 years. Who wants to face that reality?

Anonymous said...

"Homes are only worth what someone is willing to pay for them, and right now, most homes on the market have no buyer in sight. Prices may have to fall much more to bring supply and demand back into balance."
===============================

IT TAKES 3 THINGS TO CLOSE A REAL-ESTATE TRANSACTION...

A WILLING SELLER,
A WILLING BUYER, and
A WILLING LENDER!

In the current credit-crunch, only the most well heeled buyers with the best credit scores with large down payments are going to find a WILLING LENDER. This is why housing prices are going to continue to fall for a long time (perhaps for years) in the face of a staggering inventory.

***WARNING: Investors who are waiting for prices to drop low enough to make positive cash flow on a property during the first year; may lose their shirts as properties continue to fall (forcing rents downward) in following years. Also, properties in areas away from major work/shopping centers may also drop in value due to rising gasoline costs in the years to come due to REAL PEAK OIL. For the uninformed, Washington D.C. just ran OIL CRISIS MANAGMENT SENERIOS, based on $5 to $6 gas prices. Why? Because there is a 40% chance of gas hitting $5 per gallon in 2008. If the world is really past the peak; we could see $7/gal in 2009; $12/gal in 2010; $15/gal in 2012... It will get to the point that the masses will have to live within walking or bike riding distance to work just to afford to live.

EVERYBODY, should be thinking right now about how they are going to live 10 years from now, if there is no gasoline at the pumps!

Veronica Lodge said...

RE: ***WARNING: Peak oil is coming to a gas pump near you, and sooner rather than later.

It looks like peak oil happened sometime in 2005 or 2006. The only factor holding back the oil crisis is the current recession, which is putting the damper on demand.

Now, the only thing that can pull us out of recession is bigger wars. The problem is that wars fought with borrowed money cause runaway inflation.

V.L.

LisaK said...

Even though the banks are being flooded with REO's, they are still letting them sit.

House A - vacant since March '07 -- great condition. Auctioned off on 10/6 for $270 -- bank DECLINED the bid. that was it's first offer. (the house was purchased 2 years ago for over $500k).

House B - never been lived in, original price is over $600k, it's been on the market for a year. it's current "markdown" is $424k (did I mention I can buy this house built to my specifications for $350? There are 3 YEARS worth of homes in the subdivision + more to be built - and half of those available are foreclosures!)

House C -- originally priced at $619k 2 years ago. Busy street, back yard is neighbor's front yard -- and the previous owners shredded it (tore out a freakin' fireplace, bleached carpets, ripped out lights, took off doorknobs, removed all of the shelves, and more). The bank won't take less than $400k for the home (and I can buy a bigger, NEW home down the street right now for $325k -- NOT on the busy street, with a waterview).

These are my 3 area low-balls. I've got time and money on my side, yet the banks still seem to be in denial (one is a Countrywide, one is Chase -- and another is Wells Fargo)

Anonymous said...

Last night I'm talking with this dude I know at a dinner party. He bought a house last month. I ask him aren't you worried about the housing crash happening. He says oh, no, you see he bought in an area that is up and coming and his house has already gone up in value...in 5 weeks. And the best part was he said a friend of his who is in real estate told him now is a great time to buy and he has nothing to worry about.

How do you respond to that except smile, nod, say congrats on your purchase and move on.

I'm still shocked by what I heard and that there are people that out to lunch.

Christiane said...

The most serious problem and risk to home prices is the years? of inventory. This has and will always be a supply/demand issue. With 10-12 months of inventory in many markets, credit and liquidity issues, and rising foreclosures how can anyone believe that things are going to get better any time soon? I am befuddled by the number of people who just don't get this.
A great question to ask those that believe the agents telling them it is a great time to buy...Who is going to buy the current inventory? Foreigners capitalizing on a falling dollar looking for vacation homes in CA, FL, AZ, or NV? Illegal aliens who might be granted US citizenship and thrown a foreclosure in for free? Guess what, our population is not rising at a fast enough rate to absorb all of this for a long time? What does that equal? Further price declines! Shame on the NAR for presenting a rosy picture in their new ad campaign. Hopefully, there are still some educated people left who will not fall for this! AGAIN!!

Anonymous said...

My panic - People said I was crazy but I sold my house. (banna dance)

ACT $362,500 07/11/07
ACT $349,900 07/17/07
ACT $329,900 07/19/07
SHOW $329,900 07/21/07
DEPOS $329,900 07/21/07
CLOSE $320,000 08/07/07 11 Days