Housing Market Slows as Buyers Get Picky

Buyers are walking away when sellers refuse last-minute demands, making a drop in sales worse than expected.

Comments: 125

  1. In a related matter, there is pending legislation in the Senate to once again bring back the home buyer credit. I wouldn't be surprised if the parties lobbying for this legislation are the impetus behind this story. The plural of anecdotes is legislation, as the old saying goes.

    What really amazes me is how a measly $8,000 credit will not only get buyers off the fence, but also engage in bidding wars, as occurred in desirable close-in DC suburbs as the credit expired in April. In markets where the median home price is $500K, the tax credit should have minimal affect on buyer behavior. Not so.

  2. This market has been kept artificially high by the policies of Obama and the Democrats. Let the markets decide. Get the government out. Housing prices would -- and should -- fall, to more affordable levels

  3. But wait, sellers are people with "special" status coddled and protected by the Fed. government, Fed. Reserve and the Congress. These entities stand to protect "sellers" from the downside effect of supply-demand curve of an otherwise normal market.

    Buyers are inflicting too much hardship on these unfortunate sellers, who used house money for cruises, granite counter-tops, the new shiny BMW, and I would implore the government to pay "hardship allowance" to these hapless sellers. Maybe extend the $8K credit, maybe tax renters and savers, or maybe give just $10K to every homeowners.

    After all at this point, we are printing or borrowing money. Its not as if the Chinese are getting any of their money back....Its just pieces of green paper!

  4. Bizarre, all this hand-wringing about mortgage applications now dropping to 1997 levels.... Did anyone happen to take a good look at the classic "bubble" from 1997 to mid-2005? It was unsustainable!

    Good Lord, let capitalism and the market do what it's supposed to do: bring prices down to be in line with historical affordability levels. Stop propping it up with MY (and YOUR) tax money in $8000 credits!

    Enough already!

  5. Such tactics at the closing table or just before it doesn't say very much for those buyers ethics. Yes, I know, this is not personal, it's business. But saying so doesn't make it right. As compared to those who took advantage of lax lending rules to buy too much house and then cash in equity in loans that they really couldn't pay back, those seeking last minute concessions, often for unreasonable or even irrational issues, are no better than the aforementioned irresponsible borrower; trying to get something for nothing.

  6. The headline "Demanding Buyers Hinder the Housing Market", which appeared in the right column, is a bit outrageous. Perhaps if buyers had always been picky and conscious of how much they were spending, the bubble may not have grown as fast as it did. To suggest that people who are carefully evaluating properties and assertively negotiating deals are dampening the market is ridiculous. When so much money is at stake, of course buyers should be careful and assertive! The subtext is that buyers should consider paying more than necessary in order to help restore the market, as some kind of public service....

  7. Buyers and sellers need to refrain from crazy demands or offers, no matter what the market may be doing. It's the nut cases, like the family that offered $50k over asking on a house we bid on during the boom, paying way more than the house was worth, that skew the market. A fair price is a fair price.

  8. Sold signs have become more common in this suburb of Houston, after a short period of stagnation, but houses have always been reasonably priced here. For example, three bedroom houses with all the bells and whistles selling for $100,000 can be found all over the metropolitan area. The price of real estate in many areas of the country, New York for example, has been out of all proportion to income, and the market needs to be further corrected. It is painful for homeowners, but people should not have to pay huge sums to live in a closet or force to live hours away from their jobs.

    If buyers continue to demand more for their money and sellers are forced to lower asking prices, owning and renting can become more affordable for more people. It is not going to be a pleasant process for many, but the real estate bubble should not be allowed to return. Housing in Miami is selling because prices fell to the ground.

  9. I won't comment on those owners who are under water, mortgage-wise. For those, I am truly sorry that they have to get a certain price just to break even and keep the mortgage holder from suing them for the difference between the mortgage balance and the selling price.

    I believe there are many homeowners out there who are selling now that are sitting on a bonanza, house appreciation-wise. I realize this is way out there, but recently I heard of a home in Malibu, CA on sale for $6 Million. The owner was offered $4 Million and the buyer wanted her to install central air, about $20,000. What did she pay for it four years ago? $2.5 Million. She was in financial trouble and had to sell. What did she do? Refused the offer! I guess a $1.5 Million profit wasn't enough. Unrealistic expectations.

    As far as being nickle-and-dimed to death, we are in a buyers' market. That's something very few, if any, of us can conceive. Get used to it. It's not going to change for years. Why shouldn't a buyer get the most for the least? It's called Economics 101.

  10. For over a year, we here in the real estate market of South Carolina's capital city watched as the housing market shattered all around us, but never touched us. We registered amazement as our home's value remained stable on Zillow as we read about the plummeting prices of houses in other cities around the nation. When we finally decided to upgrade to a larger house upon the birth of another child a few months ago, we thought that we would escape the housing disaster that the rest of the nation has suffered through. We put our house on the market a month ago and learned quickly how wrong we were. The real estate market here has tanked. In the midlands of South Carolina, real estate is dead, or at best dying. Oh, there are sales here and there of "jumbo loan" mini-mansions, but in our price range of more modest homes, not a single home was sold in our zip code last week, despite living near one of the largest military bases in the nation. I'm beginning the question the wisdom of the home tax credits, or at the very least the wisdom of failing to extend the credits. Something has caused the bottom to fall out of this market. Now e-mails from Zillow bring cringes in the place of last year's schadenfreude. Does anyone in Columbia want to buy a beautifully-maintained cottage-style home with three bedrooms, three baths, and a newly-refinished upstairs? Mention my post on the NY Times and get $5000 off!

  11. One might look at the brokers who have a strong hand in determining what sells in this market. The higher the price the higher their profit. However, there are so many properties on the market that brokers can make up for a low sale by selling in quantity. They want the sale, they talk the seller into a lower price and then, at the last moment, the buyer's broker suggests that they will have to renovate (and by the way, I know a great renovator). The renovator inspects the house, finds more items that he can fix, the buyer is tempted and asks to lower the offer. Meanwhile the seller who is strapped for cash, will not get a tax break in buying because it will not be his first home purchase, cannot afford to lower the price -- if he does, given the closing costs and taxes -- he will not be able to buy anything else without a mortgage which is hard to get. The only thing wrong with my story is that many times the he is a she or has lost an income and needs the money. Case rests.

  12. The idea of the government is to not have the prices crash and send confidence and the economy down in an uncontrollable tailspin. Those who are watching carefully will note that while the landing has not been "soft" the adjustment is proceeding at a controlled pace. Eventually the market will adjust to levels commensurate with the ability of people to pay based on their income. We did not get out of control overnight, and there is nothing wrong with getting the situation under control in a responsible manner even if takes a little longer than it otherwsie might.

  13. Dear #10.Eric who wrote

    For over a year.... our home's value remained stable on Zillow as we read about the plummeting prices of houses in other cities around the nation. When we finally decided to upgrade to a larger house upon the birth of another child a few months ago, we thought that we would escape the housing disaster that the rest of the nation has suffered through. We put our house on the market a month ago and learned quickly how wrong we were. The real estate market here has tanked. In the midlands of South Carolina, real estate is dead, or at best dying. Oh, there are sales here and there of "jumbo loan" mini-mansions, but in our price range of more modest homes, not a single home was sold in our zip code last week, despite living near one of the largest military bases in the nation. I'm beginning the question the wisdom of the home tax credits, or at the very least the wisdom of failing to extend the credits. Something has caused the bottom to fall out of this market. Now e-mails from Zillow bring cringes in the place of last year's schadenfreude. Does anyone in Columbia want to buy a beautifully-maintained cottage-style home with three bedrooms, three baths, and a newly-refinished upstairs? Mention my post on the NY Times and get $5000 off!

    Let's take this in order

    (1) Zillow 'estimates" = 'you get what you pay for' and that applies to appraisals as well. Free Zillow' estimate = garbage

    (2) You can't figure out what the "Something" is that "has caused the bottom to fall out of this market."??? LOL!

    (a) Prices were INFLATED by insane and stupid lending practices handing out money people couldn't pay back

    (b) Prices had no relationship to income which means they had no relationship to the ability of purchasers to pay the price. (And that situation is 'non-starter' from the get go.)

    (c) People can only buy what they can afford. Without loose credit and 'fog a mirror, get a mortgage' lending, people have to live on what they can earn.

    And earnings have NEVER supported the prices of the past 10 -13 years.

    (d) There is not as much money out there as the delusional cheerleaders (typically relators) led you to believe in pricing your house.

    (3) You have no problem - zip zero nada - on selling your house promptly. There is nothing wrong with the real estate market that "price won't fix."

    LOWER YOUR BLOODY PRICE AND KEEP LOWERING IT UNTIL YOU GET A BUYER!

    See, isn't that easy?

    And if you can't figure out how much your neighborhood can really pay for those houses, look up the median household income for your neighborhood on the US Census website. Take the median income, divide it by 12, multiply by .28 and get the amount they can afford for taxes, insurance, and a mortgage. (Hint: I can virtually guarantee you that what households in your neighborhood can really pay will be a LOT lower than your price.)

    How dare you expect me, as a taxpayer, to ante up $8000 as a giveaway so you can sell your house!! LOWER YOUR PRICE!!

  14. It is still a much better deal to rent in this housing market if you don't already own. My best case scenario for where housing prices will bottom out is at November 12, 1999 levels, i.e., the day the Glass-Steagall Act was repealed. My worst case scenario is too scary to contemplate, but it goes back to a time in which lending standards were rigorous and better reflected the median income in communities.

    Over the long haul, median housing prices have to bear a reasonable relationship to median income. Incomes are likely to continue to drop in my community as public sector wages and jobs continue to go down. Even though a portion of our market is propped up by wealthy folks buying second homes to be close to the beach, and our relatively large proportion of trust fund babies who also want to leave in paradise, the 800 square foot 2 BR/1 BA homes far from the beach aren't likely to continue to fetch $550,000 when wages are being cut for working stiffs and the median income is less than $60,000.

    The tax credits just prolonged the time to get to the inevitably greater price drops. But the biggest delay comes from the public perception that the drops which have already occurred are temporary. Folks are in denial. I call it the local fallacy. Our housing market is special because of..., therefore prices will never go down too much. People are saying that in all kinds of communities, just as they used the local fallacy to explain why prices were going up so much. It didn't occur to them to ask why this phenomenon was happening all over the country.

    I did. And I saw the crazy mortgages and predicted that we were in for a fall.

  15. I'm fine with people burning out on buying houses. I'd like to buy one myself but all the "investors" using FHA loans and the people trying to claim the housing credit the demand drove up the market. Now, the FHA says any bank that sells it a mortgage that turns out not to be owner occupied, will have to buy it back. And the housing credit has ended. So, the market is slowing down. Hmmmm. Good, maybe I can buy something other than a slum to house my over educated and underpaid self.

  16. We just completed a home purchase in Central Pennsylvania. The condo had been on the market for 10 months when we made an offer, and the price had already been lowered 3 times. We bid an additional 9% less and finally got the property at 6.5% below the final listed price (about 15% off the original listing). After closing costs, the sellers did not make a penny on what they had paid for it (in 2005).

    Meantime my parents are trying to get out of their nearby 1974 home owing to their health. They, like many other Americans, used their house as a cash machine to finance spending that was both justified (upgrading to double-glazed windows; roof repairs) and unjustified (taking a cruise; paying off credit cards that had been run up on QVC and its ilk). Based on my recent experience as well as the market for homes like theirs, I've determined that they will be unable to net what they owe. Classic story of underwater homeowners who are on track to lose their home -- or send the keys back to the criminally negligent bank that lent them all that money in the first place. And guess who's going to pay for their folly? Every taxpayer in America. And me. The condo we just purchased was for them. Thanks, Mom and Dad.

  17. Bravo for the buyers! The guy that bought my house paid the asking price but asked for my lawnmower and all the garden equipment. Sure, take it. I bought my new home at the same time after looking at more than 50 homes. Why buy anything with an extensive "honey do" list or over priced? Keep looking and beat down the sellers.

  18. Many real estate agents benefited and even caused the downturn in housing by encouraging unqualified buyers to lie on applications. All got their sales commissions up front and none are required to return any of them to compensate for investor losses or other losses. The tax credit is solely for the selfish benefit of the selfish real estate industry. It must not be reinstated. Let the free market do the job.
    It will take many years for the market supply and demand to come into equilibrium. Places like California and New York have had inflated prices for decades and have benefited from the low interest rates. They use up a disproportionate amount of the capital for loans. Those areas should have to pay premium interest rates due to their inflated prices.
    If you are a seller and the buyer pushes too hard, tell them to shove it. If enough people do this, the buyers will get the message. On the other hand, agents are constantly putting pressure on sellers to lower prices. After all they get commissions up front. If you as a seller lower your price, tell the agent to lower their commission too. And if you the seller finance, tell the agent to finance his or her commission too. Agents want all their money up front with no risk but expect the seller to take all the risk, but they tell the public they sold all those homes. Anyone can sell homes if all they do is lower prices. Agents never disclose how many homes remained unsold for even years and were not sold even by lowering prices. The real estate industry has very cleverly avoided disclosure laws and ethics laws. They constantly fool and mislead the public about their activities. Most of them won't even list certain "undesirable" homes in undesirable neighborhoods or manufactured homes. They routinely violate the federal fair housing law with impunity. And they have even got laws written in their favor where they don't have to disclose the basic size of a house and rely on "esperts" for that. Even a good 6th grader knows how to measure with ruler don't they, but real estate agents now go into a house like the three fools; no hear, no speak, no see. They want that underserved commission up front with no risk, while all the risk is shifted to the seller and buyer. Tell them to shove it too. Owners must regain control of the situation and be prepared to sit it out until the market returns. Do not give your hard earned property away in fire sales. Of course the greedy owners in California and New YOrk are a different story altogether. Remember what economics is all about: Supply and demand, nothing else.

  19. But hey, I'm in the top 5% or better in income! So, it's not me, it's the market and the people who wanted to speculate.

    I just saw a chart for interest rates for the U.S. from 1960-2010. This country is being wracked by bankers, and all the money wrung out of it.

  20. Something is wrong with this system when you have to work thirty years to afford a permanent home for your family.
    Let home prices fall.

  21. It's clearly the entitled attitude of today's generation of home buyers that are to blame for this disgusting new trend. As I've heard in nightmare stories too often, these people feel that the seller must satisfy ALL their demands or they'll walk. They've grown up behaving this way and they must be stopped.

  22. Just was looking for a rental in Venice Beach, California...and was shocked by the number of FOR SALE signs. It looks like a lot of people are rushing to get out before things really tank. The last real estate downturn lasted a decade in Los Angeles ...from 1989 to 1999. My guess is that this one will last as long or longer and we haven't seen the bottom yet people still think their tiny houses should sell for $1.2 million.

  23. Oh, boo-hoo, it's called a buyer's market for a reason. When supply is high and demand low, basic Econ 101 tells us that the buyer is in the better negotiating position. If you want a crazy seller's market, try Toronto, where supply is low and demand high. Buyer's brokers sit in their cars in front of houses on the market and engage in bidding wars. By the time their finished, that tiny two bedroom/1.5 bath bungalow you thought you get for $350,000 has been bid up to $400,000 and you've either paid far too much for a house that could easily fit into the living room of one of those McMansions, or you've walked away from the madness. Sellers reaped the benefits of a hot housing market for too long; this market belongs to buyers with the guts to flex their new found muscles. This is what Republicans like to refer to as the free market.

  24. Jobs. Nothing gets better unless and until more of us are employed.

  25. This is just more evidence that the money people keep trying to put lipstick on the pig that remains the economy. Republicans are pretending it is their control and opposition to government spending, the Democrats are hailing Chairman Obama (I'm left leaning, but the cult of personality is getting old without something new to support it)and their stimulus, and the only money being made is by those who bet on the daily churn in the market. As Europe is discovering, and we should, let's pay mind to the man behind the curtain and focus on the Oz the Great, the Market Prediction.

  26. At the prices these HELOC abusing homedebtors are still asking, I want their daughters thrown in with the deal.

  27. I like this better than where we were only five years ago, when buyers were literally having to write love letters to potential sellers in order to stand out as the potential acceptable client (...but don't ask questions, and we accept blindly your inspection, and know the roof will be ours to fix after purchase, and yes please do take all your large appliances with you, etc!).

  28. Many of these deadbeats aren't even paying their mortgage.

    So who's being unreasonable?

  29. Unfortunately for sellers, the market has a way to go before median home prices are in line with median income. Why should I make the same mistakes these "owners" made by purchasing an overvalued property? Until then I am happy to rent a luxe condo at a fraction of the cost, live well, and put money in the bank.
    Demanding buyers know that there is a difference between truly owning a home and simply having a mortgage. They are not hindering the market, they are correcting it.

  30. In the high end markets where the $8,000 tax credit had little affect and income limits made buyers ineligible, buyers are still demanding but deals fall through more due to financial shocks than denied bottom feeding. The crisis in Greece and fears for other European fiscal instability, the plummeting stock market, new taxes, 9+% unemployment, general job insecurity, and fears of a double dip all have buyers very emotional and hesitant. The fallout from lower transaction volume in these markets (many around NY,NJ,CT,CA etc) is that towns and states are losing huge transfer taxes levied based on sales price further hurting already devastated state budgets. But tax credits do no good in these markets, the economy simply has to recover, unemployment needs to go down and people just need to feel more secure generally.

  31. Sellers (and NYT writers) don't appreciate that we buyers are shopping with our own diminished assets. Here in New York City, a market that some say is still waiting the big fall, I am liquidating mutual funds worth 20% less than a few years ago to pay for an apartment. The sellers will be getting about 5% less than they paid for the apartment a few years ago. Consider too the advantages they enjoyed in the meantime: tremendous tax write offs for their financing, tax-deductible loans to pay for their children's educations. I, the renter trying to save while paying a high rent and putting children through college, can only suggest they get over it.

  32. The automobile market soared when cash-for-clunkers ended in the U.S. last year, after a brief down-tick. The same will happen for homes now that the new-buyer credit is over. However, the inflation-adjusted housing price level still remains well above its long-run average. Unfortunately, housing prices probably must decline further before equilibrium is restored.

  33. As a real estate attorney who has been through boom and bust markets since 1980 (and yes, this is the "bustiest") I'll say 2 things:
    1. Price fairly. Your house will sell.Will you get that dream price? No. Get over it.
    2. Things will loosen up in 2 more years. Why? Because people all have to live somewhere, and there is demand slowly building in the pipeline (the buyer credit released a bit of that steam prematurely, and very amateurishly, making this look like a re-crash afterwards).

  34. Housing prices remain inflated and need to correct. Renting in many markets is still a better option than purchasing a starter home and incomes continue to decline. Sellers continue to compete with bank sales and the $8,000.00 credit was just smoke and mirrors. Too many educated buyers are waiting it out or expecting to purchase property for real value.

  35. We looking at NJ and the listing prices are hilariously too high for the house and land you get. And still the houses are selling -- not fast but they are selling at around list price if there is nothing structurally wrong. That would be fine but all you have to do is look at southern CT where the prices for similar houses are easily 20% less and you'll get better taxes and more land on top of it. What the heck is up with NJ prices?

    The housing market really depends on region of the country.

  36. Deal is a deal if you feel so bad do not sell to the people. The artificial housing market has to end eventually. If Fannie, Freddie and FHA were not buying all the mortgages with tax dollars we probably would not have any buyers either. Only in America- Free market in the good times, government subsidized stupidity in the bad. Nothing like the taxpayer backing an FHA mortgage on a 1/2 million dollar McMansion just so we could get Nancy Pelosi's California crowd to be saved from their own ridiculous costs.

  37. My real estate agent told my wife and I several times, in response to our angst about getting "a good deal":

    The right price is the one that can be agreed on.

    It merely feels a little odd in a culture that seems to increasingly buy everything on whim that there is a resurgence of hard-nosed bargaining.

  38. One of my businesses involves servicing computer equipment that monitors and controls many aspects of a building's "life," as it were: heating, cooling, security, ingress and egress monitoring, etc.

    I have clients whose buildings have been empty and on the market for years, because the owners continue to believe that the building is "worth" some arbitrary amount, usually derived from their own determination of how much profit they deserve to make from their investment. Most of these asking prices are way out of line with current market values; yet the sellers stubbornly refuse to consider anything less. Consequently, the buildings languish, empty, for years on end, with their owners continuing to pay for taxes, maintenance, utilities, my services, and so forth, rather than accepting an offer that they consider insulting.

    The really strange thing about this is that quite a few of these clients have already paid far more in taxes and maintenance costs on their empty buildings than they would have "lost" had they lowered their prices a bit. And we're not talking chump change here: One of the buildings is a commercial warehouse whose annual property taxes alone exceed a quarter-million dollars, not to mention the costs of maintaining the building, landscaping, and so forth to keep it salable.

    In my opinion, this really boils down to is a crybaby attitude born of a self-centered sense of entitlement on the parts of some sellers. They harbor unrealistic expectations based upon equally unrealistic assumptions that they are entitled to a certain return on their investments, regardless of what the market has to say. Their sense of entitlement blinds them to the most fundamental law of commerce, namely, that whatever you're selling is only worth what someone else is willing to pay for it.

    That the government is supporting the artificiality of real estate prices is unfortunate, but not unexpected considering that few people in government these days have any experience at all running businesses. They prefer spending taxpayers' money to artificially prop up unrealistic prices, rather than just letting the markets determine prices, as they should.

    -LL

  39. Many of our friends have sold their homes at a small loss in the village of Barrington in order to purchase a larger home in Barrington Hills which would have been unaffordable 5 years ago. We are presently doing the same. In addition to sellers who find it difficult to deal with the "new" housing market add buyers agents; with all his heart, our agent resists our demands for prices lower than the annual list to sales ration would produce. He takes the sellers loss as personally as if it were his own and he's supposed to be our agent. Real Eastate agents as well as sellers are made hesitant by denial and buyers are transfixed or emboldened by falling prices. This market may not last forever but it may last long enough for my spouse and I..

  40. The drop in the housing market is inevitable. Baby boomers pushed housing prices higher for the past 3 decades. They could do this because there are so many of them, because their median real family incomes were higher than those of previous generations, and because buying a house at almost any price was seen to be a good investment.

    Now, baby boomers are starting to retire and put their houses on the market. Who will they be selling to? The next generation is smaller, their median real family incomes have fallen for a decade, and buying a house is no longer considered to be a sure-thing investment.

    Until demography changes, and until wealth stops getting concentrated in the hands of fewer and fewer people. housing prices will continue to fall.

  41. Why are we surprised by this? We are currently in a buyer's market regarding housing. The buyer can ask for the moon and feels they have every right to get it. When I bought my home in 1999, it was a seller's market and you would not believe the conditions of the homes we looked at. The sellers would not fix anything, and if you didn't like it, they'd say that there are 10 other families that would buy it, no questions asked. Today, the buyers have the advantage and until the housing market is balanced again, the sellers better get used to offering the world to any buyer that comes along that makes a reasonable offer or forget selling and if you can wait it out.

  42. Whenever I scour the real estate listings in the Hudson Valley I am amazed at how high the prices are. Many of the same buildings listed have been assessed at far less. Somehow there is a disconnect. The only conclusion that I can draw is that people are still living in the boom days. Both parties--buyers and sellers should get real.

  43. And Fannie Mae just announced a second credit report will be pulled right before closing to make sure buyers haven't done anything stupid, so even more settlements will fall through, and let's not forget the lurking "shadow inventory" of 2.8 million homes still on banks' balance sheets as REOs but not yet released onto the market. Nothing will improve until employment improves. Prepare for a long slow economic slog, and that's on the bright side.

  44. The real estate market in nyc is over the top. One wonders how young people can afford to live here.
    Brokers help to inflate that market. The expectation of sellers is to make a killing. Value is not even a factor. Somehow, we have to get back to a real world of necessities where everything is not speculation
    and hype.

    There wasa time when Williamsburg, Brooklyn was a working class ethnic neighborhood. Now every block is new luxury buildings, one cannot even think of a coop less than $400,000 for a studio that is or more than $2500 for basic apartment and much more. The Bloomberg administration has played to developers and realtors. They think tax base not affordable housing.

  45. Homebuying is an emotional decision as much as a practical one.

    Optimism is required, and in short supply just now.

  46. It's a weird time to be selling a house. I'm not talking about something you bought as an "investment", just a plain jane I live here kinda place. There was a noticeable drop off in lookers when the credit ended. Folks who looked before were skittish, so far folks after have been daft. The ones we have seem to be doing recreational viewing. Very weird feedback, like "I have too much going on in my life right now" or "the house is too nice". I'm certainly willing to work with someone, but if they don't know what they want, how am I supposed to negotiate?

    It's definitely a buyers market, and in some ways I wish I was looking for a new place now. Sadly, I remember how tough the NY real estate market was back in the early 90s when we had to sell my parents place. Looks like it's time to batten down the hatches and hope for the best as a seller.

  47. Maybe what's really going on here is that home buyers are waking up to the reality that the only ones who consistently make-out in the housing market are the mortgage houses and they're saying "no thanks."

  48. Buyers should get the most house for the least money possible. I was forced to sell due to health problems and know all to well how bad this process feels. Buyers should make their requirements known early in the process to avoid hard feelings. A good real estate professional will or should help both parties get a fair deal. Overall, the housing market is still WAY over priced and many people will have to loose illegitimate equity they gained in the bubble. Those who paid inflated prices will lose money so the little people get screwed again. What else is new?

  49. Bloomberg is reporting "U.S. home foreclosures reached a record for the second consecutive month in May, with increases in every state, as lenders stepped up property seizures, according to RealtyTrac.Inc.

    “Bank repossessions climbed 44 per cent from May 2009 to 93,777, the Irvine, California-based data company said today in a statement. Foreclosure filings, including default and auction notices, rose about 1 per cent to 322,920. One out of every 400 U.S. households received a filing."

    The Wall Street Journal -
    "How much should we worry about a new leg down in the housing market? If the number of foreclosed homes piling up at banks is any indication, there’s ample reason for concern. As of March, banks had an inventory of about 1.1 million foreclosed homes, up 20 per cent from a year earlier....That “shadow inventory” was up 30 per cent from a year earlier. Based on the rate at which banks have been selling those foreclosed homes over the past few months, all that inventory, real and shadow, would take 103 months to unload."

    From the New York Times we get "buyers are getting picky." What nonsense. Banks have been holding back inventory to stall the housing crisis while they receive federal funds. Now that that's done, expect recession round two as banks finally begin to unload these properties on the market. Thank god we have the NYT to give us the cover story - admittedly based on nothing more than anecdotes, that sales are going due to consumers.

    Didn't you all used to do real reporting?

  50. Why the rush to get your $8000 tax credit? All this is, is a prop to keep the real estate prices artificially higher.
    Ok great, you get your home. Get your tax credit, and guess what? You house is worth less now then when you bought it. Buying a house is about what you can afford. Nothing more.
    How people got so insanely lost in that concept is beyond me.
    You want that $8000 dollar credit? Negotiate. As far as sellers go....... the dream is over.

  51. Please-- someone should blame the real estate "industry". Remember that the National Association of Realtors barely made a peep about the declining sales numbers, market shifts, foreclosures in the months running up to the implosion and insisted that the market was just fine.

    Real Estate sales in every state are a monopoly. A land or home deal is incredibly difficult to do without "professional" help. Yet most often the help or advice is often just a broker inputting information into the Multiple listing service-- a closed document that only brokers can access and use for a fee.

    The "market" is inefficient and slow to adapt because fundamentally a piece of property is only worth the number for which someone will write a check. Sales pricing and the offering price often takes months to truly align because the brokers make educated guesses as to a market value of a home and the buyers probe for the true floor.

    Were there real time price reporting this mess the "market" is in would have righted itself some time ago. Like a commentator says in a earlier post about Miami-- sales are happening there because the bottom was found.

    The broker/buyer status in the US continues an "extend and pretend" market. A broker always takes his cut-- if this "tax" wasn't borne by every real estate deal and a true and open market place existed;
    prices would align faster and more immediately. Owners would reap more value-- value that they earned, not a real estate broker.

  52. Why were these people in trouble to start with? Because they bought a home that they could not afford. Just because there is a tax credit, you don't run right out and buy a home because not everyone will qualify for the credit, (notice how many people never made the deadline) and those people that could not afford a home before all had a sudden windfall?

    They won't be able to keep up their payments and they will lose their homes.

    On the other hand, if people are willing to be the next batch to lose their homes, have a ball.

    This will blow up in peoples faces. After all, the Government is involved and we all know how that goes.

  53. Home sellers are still living in the 2005's. One seller that I am familiar with paid $350,000 for a home in 1994, watched his neighbors sell for a $million in 2005 and now complain they would have a loss of $hundreds of thousands in today's market if they accepted an offer of $600,000. Unrealized and unrecognizable gains have become the nemesis of today's housing market. Buyers are only taking advantage of the situation as it exists now and are indeed subjecting themselves to future uncertainties in the housing market.

  54. Everyone is watching Property Virgin...great show, but they seem to think that searching for flaws and demanding concessions is a de rigeur part of the game. When we bought our first house, the chimney lining was cracked so the fireplace could not be used. As I had no interest in a fireplace, I didn't care at all. I could have demanded a credit, but it was a seller's market (there were already six back-up bids the first day) and honestly, what is $600 over the course of the mortgage, or the length of time I would have owned the house? Something like new windows is far more expensive, of course, but that's something that is most likely reflected in the price of the house. Had it new windows, the price would have been higher. At some point, EVERYTHING needs to be replaced, so why didn't that buyer just demand the cost of a new furnace, appliances, etc.?

  55. To the moralists who complain that the government is bailing out sellers: The recent real estate tax credits - and the current ridiculously low (taxpayer subsidized) interest rates - have almost nothing to do with bailing out sellers or builders per se, although the politicians are certainly happy curry their favor. The real reason has everything to do with bailing out banks and saving the ailing financial system. That's because, as median home prices decline, the value of those ubiquitous mortgage-backed securities decline as well, further eroding the financial position of the many banks and related financial institutions that hold them. The government economists hope that, if we can somehow keep (the insanely inflated) real estate prices relatively stable for a few years, the nation can ward off a double-dip financial crisis until the banks restructure their asset base and natural inflation catches up. The alternative - letting prices fall until everyone with a mortgage is completely 'under water' - would be great for all-cash buyers, but nobody else. That's because there would be almost no solvent banks left to make loans. Is that really the outcome we want?

  56. In my area sellers were laughing all the way to the bank, as buyers went into bidding wars, and ended up paying outrageous prices, then had to spend another fortune 'renovating' their new home. No one felt sorry for the buyers back then, everyone just raked in the profits. The tables have turned. Now buyers are much more level headed and want more for their money. Who can blame them?

  57. During the boom I heard many stories of sellers screwing buyers, accepting a higher bid after the "closing
    time", changing the terms of the sale, etc.

    Over the years we've bought and sold 3 homes, it was always unpleasant, real estate agents pushing for a
    sale instead of representing their clients, last minute demands, extra expenses, etc. It's an argument to
    stay put or rent.

  58. "We believed that they had come to protect us. But instead, they came to kill us."

  59. There's an ethical difference between honestly negotiating a lower price with the seller during the offer/counter-offer process, and tactics like asking for expensive last-minute concessions for items which are not actual problems or repairs. It's the buyer version of bait and switch, and even if the seller refuses it has cost the seller time, money and stress, as well as taking their property off the market for weeks or months.

    Buyers who engage in such tactics, and the agents who represent them, should feel ashamed. But they won't.

  60. This is nothing new. The only difference is that because of the housing collapse, the buyers has many choices and expects sellers to offer more concessions. It is always a game of expectations on both sides. Sellers need to lower their sights and the buyers needs to become more realistic. Will that ever happen? Nah!

  61. I have been a Realtor for 24 years. Our Georgia market never had the bubble found in other places but we are off probably 20 percent in prices from 2007, which I consider the benchmark. Most of our foreclosures are in either properties bought to be "flipped", half completed and abandoned, those who bought at, say, $200,000 and refinanced for $250,000 etc, and in lower economic areas where those not used to owning a home and with minimal investment abandoned homes they could no longer afford or felt were not worth what they owed. Builders who overbuilt top-tier priced homes at a far greater rate than the market could absorb have also turned their inventory back to the bank. We have forgotten that we buy a home primarily as a place to live, and that OVER TIME we expect it to appreciate. I have no sympathy for the investor who bought into an unfinished condo complex in Florida on the promise that he could sell it for twice that amount the minute it was finished. That was a bad investment and we all bear the brunt of our bad financial decisions. I have no sympathy for the "flipper" who bought properties for nickles on the dollar and now wants to unload them because they are worth pennies on the dollar. I have no sympathy either for those who raped their homes and are now moaning after walking away with $50,000 unearned dollars in their pockets, no investment in their home and little sanction except impaired credit. Those who I feel not only the least sympathy for but the most anger towards are those who are perfectly capable of paying off their monthly mortgage, living in their home and waiting out the downturn, but who choose to walk because it is "under water". These are the people who have made it so difficult for the homeowner who has lost his job or is forced to relocate and cannot sell his home at market value.
    Large-scale fluctuations are normal in stocks but we are not used to observing the same cycles in real estate unless we are directly in the market. Those who do retain their homes and contimue to meet the mortgage obligation they took on will reap the benefits when the market spikes up, which it will. People are still having children, getting married, getting divorced etc., all motivators for selling and buying real estate. There is a pent-up demand and when the dam breaks we are going to be back in the buying frenzy of a few years ago. Without speculators, hopefully the prices will recover to a logical level, i.e. where they reflect the cost pf construction or replacement with locations, schools, and amenities factored in for every market.
    We will all be better off if residential real estate returns to being a function of hpusing people not of fattening their bloated portfolios.

  62. Jeeeze.

    What is wrong with these buyers?

    Don't they know that it's their patriotic duty as Americans to make the sellers RICH RICH RICH?

    How dare you deny the sellers their well deserved BMW's and plastic surgery that they'll need for their next Caribbean vacation.

    You buyers had better act fast and pay full price because before you know it, you'll even be priced out of the cardboard box you'll be sleeping in on skid row.

  63. It's important for all parties to keep problems in perspective when buying and selling. Getting hung up on minor issues can be costly for both the buyer and seller. The law of diminishing returns kicks in very quickly when dickering over a minor issue.

    Last year, at the bottom of the market, my partner and I tried to buy a house that needed radon abatement. It would have cost only $1200, but we foolishly insisted on having the owner abate the radon before closing. She dithered, and we walked away in a huff. We ended up buying a 2nd choice house at a similar price that seemed in good condition when we bought it. Long story short, the house we ended up purchasing needs about $150,000 in gutting and repair for major structural problems that weren't picked up during the inspection. The seller of the original house with the radon problem ended up getting $20,000 less for her house from another buyer. On top of these losses, we ended up paying a few extra months rent, and the original seller ended up making 2 more months of mortgage and tax payments. In this situation, everyone lost....and someone else has the house I would have preferred.

  64. When I was a young buyer I was completely naive about home buying. The realtor did an OK job of educating me about the process when I made stupid demands over minor issues. But it was not until I had to SELL a home that I really learned what to do as a BUYER in the future. Don't ask too much. Buy the bones, pipes, wires, roof, foundation, walls, heating and cooling system of a house (and it is OK to ask a seller that that part of a home is in good shape - but even some of those things may not be perfect). You are not buying the wall paper or bushes or crappy carpet! Be reasonable as a buyer and it is a better experience for all. When you sell one day, you'll be glad you were.

  65. Guess What folks, the music has stopped and now we have to pay the Piper. We used our houses like Credit Cards and now we have to take a hit. If that means we have to accept and underwater price and arrange a short sell with the bank. So be it, folks who abused their HELOCS deserve the hit to their credit. Meanwhile, those of us who saved and rented within our means to save up for a house are reaping the rewards of our years of Austerity. The Housing Bubble has burst and now everyone who took part is crying that they have some gum on their face...

  66. Over 50% of new college graduates haven't found jobs. Over 450k people are applying for unemployment benefits every week. Interest rate has been kept artificially low for an extended time and sooner or later needs to go up drastically affecting home prices. Property and school taxes are rising without control. Unless prepared to go underwater almost immediately why should some one buy a home now?

  67. Is the NYT seriously oblivious to the detrimental effects of the policies of Fannie and Freddie in creating this artificial bubble??? Or is it taboo to criticize such "progressive" institutions?

  68. I am confused by one of the first comments: how is Obama culpable for the housing price woes? Do you really think that an $8,000 tax credit kept prices artificially high? Personally, I think fault may be on the banks and homeowners more than not (since they are the ones who actually have the contract); goodness knows I have family members who did their share. You can put some of the blame on congress and presidents of years past who encouraged home ownership, but - really? - Obama?

    Hmmm, now that I think about it such comments are a shining example of how lack of personal responsibility is endemic to our society. Kind of sad.

  69. Welcome to another land of make believe created by taxes instead of reality.

  70. As a Realtor, I can say that most of us do not like crazy markets that favor either sellers or buyers. The crazy sellers' market led to bad buyer decisions but most agents advised them against making those moves. Now we are struggling to make a living as total sales are down. A realistic market where people can afford homes that cost 3x their income is best for all of us. I do not believe the credits had an overall positive effect any more than they did with cash for clunkers, and I believe a fair tax system would eliminate the mortgage interest deduction also. A home provides you a place to live and I love being a homeowner for that reason- not as a tax shelter.

  71. Buyers are attmpting to build in some price protection against having to add in more capital for those new windows and as a hedge that prices might fall once again. another thing that goes uncsociouslt throught minds is what if I had to resell in a year or two.

    There is a good amount of backlog of buyers who normally become active buyers every year as they decide to move from renter to buyer but even with a 20 to 30% reduction in house values these still have to have the family income to get the loan and most of these are still trying to get as much buying power as always. When they do this, they naturally try to build in as many safety heges as is possible. A good agent will help his or her customer stratgegize the deal based on the house, its condition, the neighborhood and what the bank islikely to appraise the hosue out at.

    This story neglected to mention the fiancing nightmare that exists because of a banking system that is still dysfunctional and without adequate staff that now has a faulty appraier appointment system wherein contract appaisers cover much wider areas and end up not knowing the local housing idiom. Added to this are a lot of apples and oranges comps from short sales and bank owned property sales which unfortutnately taint both nearby as well as otherin the town sales.

    The underwriting process has gone paranoid.

    The extraordianry aspect of all of this is where did all of thethe troubled asset relief money go.

    Homeowners became the pawns while the Bush administration used the inflation of home prices, its short term wealth creation, and all of the jobs from over construction to keep our economy and that administration afloat. Now our Republican leadership is trying to sandbag every change and still insists that their influences come first and that politics is a better doctor than expertise and expert problem solving.

    We are not going to survive without wrenching consumption change and invention, and degassing McConnell, Boehner, and Steele who are incompetent statesmen.

  72. Interesting reaction in MidCoast Maine.

    Two classes of sellers having very different impact on the marketing of used houses.

    One is doing major, not minor renovations so that the house is looking at its best. Painters, plasterers, landscapers, carpenters and others are renovating old houses so they sparkle, and retain their asking price---until the haggling sets in, since it's very much a buyer's market.

    At the other end are old houses, which are either empty and 'off the market'...we have a half dozen in the neighborhood. Several are occupied by renter/renovators who are slowly 'fixing up' the house in their spare time; in hopes that the market will pick up to allow these second tier players to compete.

    Government regulators and environmental activists keep ratcheting up the criteria by which buyers evaluate a used house, faster than renovators can meet them.....'is it LEED compliant? Are all compliances ENERGY STAR certified'...so the target of opportunity keeps moving and older houses, are, well, just getting older....'fixer upper' now has a new meaning of being regulatory compliant and for old houses, often of historic significance, this can be a financially daunting impossibility!

  73. Mr Kelmen is as arrogant as one should expect. His team and profession shook buyers down for years based on the mortgage ponzi scheme and the "we'll put everyone in a house" mantra , getting a lot more than they deserved.

    The rhythm of life requires just the adjustment he/we see now. Sort of like "Spinning Wheel"...

  74. This should be titled, "Housing market slows due to sellers who fail to acknowledge reality" - I don't think anyone but those with a vested interest actually believe housing is going to 'rebound' anytime soon. And for some reason the believers think that "returning to normal" means returning to the once in a millennia 20% year-over-year increases.

    Sellers need to accept that what they get now will be better than what they get a year from now, and would be lucky to get the same amount 5 years from now. More broadly, we, as a nation, have to divorce ourselves from our abusive relationship with housing and the stock market. Once upon a time they followed the economy, now they are the economy. Bad News.

  75. Please, people stop and think a little bit, and stop being so selfish. We need to stop saying things like:
    "People cashed in on their houses to get money to go on vacation, for a new roof, to send the kids to college,” said Roberta Baldwin, an agent in Montclair, N.J. “They thought it was always going to be worth more."

    Without making it clear that this is an unquantified statement and I have not seen any studies that show #1) what percentage of underwater homes are due to refinancing and #2) what percentage of refinacing monies went to expenses other than home improvement.

    Of course this happened, and people like people will be, were greedy. The same greed that is infecting the minds of some buyers right now who refuse to understand that just because there are a few REO and short sales below market price out there, that the houses at market price are NOT overpriced. This needed "correction" is an illusion. The corrections in the real estate market happen quickly and the current prices *are* the current market values. I'd like them to be higher, you'd like them to be lower, but the bottom line is that they are determined in large part by availability of credit and not by greedy speculators. If I sold my house now I could just barely afford to purchase one for the same price even though my income is almost 2X now than it was in 2005 simply because credit was very easily available in 05.

    By insisting that everything was caused by individual greed and trying to wish the market to a level where many good people will lose any financial cushion just so you can get something that you covet but didnt have the income to support before, how is this not self-centered and greedy? With prices and interest at the current levels, if you can't afford a house in an area that you want to be in now, you better move to someplace more affordable or improve your career because you'll never afford it.

    The biggest problem is the way the banks have control over the market and how they give preferential treatment to speculators over people. This has been and always will be the case without regulation because speculators always pay cash (even if it's someone else's) The normal person will never buy at those illusory short-sale prices. (up to 50% below market in my neighborhood!)

    Bottom line there are a lot of reasons that people are underwater and people need to stop making stupid broad statements about causes and how we should use money. Capitalism is boom and bust. If you want Capitalism you need to spend when you have it, cause you ain't gonna keep it forever. Go ahead and save to pay all cash, then you'll find that your saving have effected the trade balance and your currency is now worthless. This is what is happening to Germany right now who foolishly thought that they could export without importing - make a ton of money buy selling luxury items to the world and then chastise everyone else for buying what they sold! Now they're paying for it because they are not alone, but part of a trading region. Even if they had their own currency they would be suffering because they'd have to lower export prices to let the poor Europeans afford it.

    To re-iterate. stop the whining! Anything can and will happen in a capitalist market so take you lumps and get over it. that includes walking away from a negative equity situation (american corporations are notorious for walking away from contracts btw so don't hold people to a different standard), keeping up payments even though you will never get your money back, and/or NOT affording a house because the market price is too high for your ability to pay.

  76. Bogus trend alert. 1) Blaming a change in behavior on the part of buyers for crashing housing prices is bogus. There is an inventory glut, and demand is down because fewer people have jobs. The Federal Government just ended a huge incentive for new-home buyers, as well, which has predictably widened the gulf between demand and supply. 3) It's an obvious buyers' market. It's perfectly ordinary for buyers to seek advantage from their strengthened position, and for sellers to complain about it. But this phenomenon is a consequence, not a cause.

    The right-wing narrative about the housing bubble and its collapse is that consumers were to blame. A loan industry running amok doesn't exist in that narrative, but it surely exists in the real world. This article extends that narrative and blames consumers for monthly trend blips, ignoring fundamental causes entirely.

    It doesn't fly, and it isn't good journalism.

  77. "How dare you expect me, as a taxpayer, to ante up $8000 as a giveaway so you can sell your house!! LOWER YOUR PRICE!!". Thank you AnneS for posting this so succinctly.

  78. #2: "This market has been kept artificially high by the policies of Obama and the Democrats."

    Jerk the other knee - it's got bells on it! The bubble began to blow, reached its peak, and burst under Dubya.

  79. To AnnS 13 addressing
    To Eric 10 ... lovely, perfect response.

  80. While letting the market decide, and letting prices fall to where they "belong" sounds good, it is most often the banks that prevent that. Today, even prime mortgages are underwater, and banks (whose actions created the subprime collapse) refuse to allow the sales. By the time they are willing to negotiate, the seller is in bankruptcy.

    The best news yet in the housing market is that hundreds of thousands of underwater homeowners are saying, "Fine. Foreclose on me. It will take you two or three years, and in the meantime, I'm staying here and making no payments at all."

    If more homeowners did that, the banks would be forced to recognize their part in the collapse and short sales would be pushed through in days, not months. There is no shame in forcing the banks to take part of the loss.

  81. The Government should stay out of the home purchase business. No person should pay for another's mistake in this business. At one time a home buyer had to put 20% down to buy a house. The ability to buy a house was a goal. Builders, banks, and buyers changed all that. Builders priced houses high. Banks made it easy to get a loan. Buyers bought without reading and understanding what they were signing, and without the money to buy the house. The Government should stay out, and buyer beware.

  82. The price of houses varies greatly from region to region. We are going to be putting our house on the market next year - and homes around us have been selling for good prices. It may take some time for them to sell but they do sell.

    What do you get for those higher prices? A great community, tree-lined streets, involved residents, a terrific school system and walk-to transportation into Chicago.

    There are two acclaimed hospitals, easy shopping, a well known music event: Ravinia Festival nearby, Chicago Botanic Garden, Northwestern University, theaters, classes and so much more. Established communities that are embrace everyone regardless of race, ethnicity, sexual orientation or income are hard to come by. Evanston meets all these criteria and more.

    So I think sales really depend on where you are and the community surrounding you. Keep the faith sellers - and buyers - good homes are out there waiting for you to buy or sell.

  83. Seriously, are we going to blame this mess on the careful people who have been biding their time and saving their money until now, where they can finally actually afford to pay for a home of their own? As opposed to the people who've indebted themselves up to their eyeballs for instant gratification and expect us to bail them out? I've been renting all my life and kept wondering how people I knew for a fact make less than I do were able to afford houses I could only dream of. Now I know. THEY COULDN'T. And my tax money pays to bail these people out? When I have spent years to save up a 20% down payment? You bet I'm going to be picky and choosy. In my area 500K used to buy you a hovel. That hovel might now cost you 420K. Prices are still way too high in certain areas of the country. I'm planning to move to a more affordable area soon and I'm taking my pile of money with me and spending it on a non-hovel that is priced properly.

  84. We have a potential buyer who wants to spend a night in our house before deciding about it. Aside from the security, privacy and liability issues, there's just an "ick" factor to this. Apparently it's being done on a TLC or HGTV show. People try out houses and entertain their friends, youth groups, whomever. We're not desperate so we're not doing it.

  85. PT Barnum suggested a "fool" was born every minute. Apparently, there were millions of them who paid outragous prices for an investment product called a house or condo. Then they bought into the notion that these homes were overflowing piggy banks. Now they are in hock beyond their eyeballs and cannot see that buyers will not pay for your "design" work. Others ignored code required upgrades, insulation, new roof, energy saving windows and doors, etc in favour of stainless steel appliances and granite countertops.

    It is not my fault you made a bad investment decisions and do not expect me to pay for them. It is also time to stop the mortgage interest write-offs and the buyer credits. These only prolong the pain.

  86. We tried to buy a home in Santa Cruz, California for over three years. The sellers were all selling the houses "as is" with now inspections. We wrote many letter and saw biding wars that drove the prices $100K over asking price for small houses that needed major updating and repairs. We are happy to rent a house now for $2,000 a month that would have sold for $750,000 in the boom years.With property taxes, I just don't know how any of the current prices in coastal California makes any sense. The rentals go for much, much less.

  87. It's very strange to hear that sellers feel like they are entitled to a certain price. My wife and I live in Boston, one of more over-priced markets in the country. We will probably never buy real estate here. It is much cheaper to rent and renting allows us to stimulate the economy by spending our money on things other than mortgage interest, broker fees, and home improvement products. I fail to understand why the government wants us all to have our money tied up in real estate. If real estate were cheaper, consumer spending could be much stronger. We have friends who don't go out to dinner and don't take trips because they are locked into mortgage payments that are much higher than what our rent is.

  88. There were several contributors to the economic collapse.

    1. Deregulation: And you thought people would
    protect their own interest and refrain from
    greed which brings about: lying, cheating and
    stealing what belongs to others. Contrary to
    the opinion of the wicked, rules are not made
    to be broken. Rules are made to protect the
    rights of individuals and establish social
    norms.

    2. The greedy Sellers who demanded an
    unreasonable profit for their investment.

    3. The Buyer who was willing to do whatever
    it took to purchase a house even if it meant
    lying about their income and paying an inflated
    price price which was outside what they could
    afford.

    4. The evil Realtor who demanded an inflated
    market value on the property so that he could
    get the sale and then refused to call the honest
    analysts who would not lie.

    5. The evil analyst that was all to willing
    to put down a false estimate to insure that
    he would get the next call.

    6. The evil lender who was not willing to pay
    the fee of an honest analyst and obtain a proper
    market value of the property.

    7. The evil libertarians who all to often demand
    less Government regulations which history has
    proven time and time again, does more harm
    than good.

    8. The evil politicians whom, having been
    elected to represent the best interests of
    the people and the nation, all to often, sell
    themselves to the highest paying lobbyists.

    9. The evil Pastors, evangelists and alleged
    Christians who like prostitutes, sell
    themselves to the lies of prosperity preaching
    and wealth for all and running around like
    chicken's without heads declaring their hate
    for God's laws and judgments saying:
    "we are not under the law".

    10. Evil corporations and CEO's who lie to the
    Government saying: "there are no qualified
    applicants" and demanding more H1 visas.

    11. Evil immigrants who demand that illegal
    immigrants be given immunity and not doing
    so is bigotry.

    12. Evil corporations and politicians who put
    forth the stupid notion that Open trading with
    protected markets produces quality jobs.

    13. Evil stockholders who demand unreasonable
    returns on their investments requiring
    corporations to transfer jobs to lower wage
    nations putting Americans out of work.

    14. The Evil economist that puts forth the
    fools notion of a jobless recovery, and
    of a consumption driven economy as opposed
    to a recovery the creates jobs of the unemployed
    and an economy that is driven by a balanced
    of consumerism and production.

    And then finally, the not so obvious:
    Look in the mirror. That person contributed
    to the economic collapse as well.

    We all had our part, even if we like to think
    we did not.

    The solutions are fairly simple.
    1. Reinstatement of the banking and finance
    regulations that protected the market and
    whose .
    2. Stop being so greedy and dishonest with
    yourself and others.
    3. Demand that Washington set up a program
    to invest in a manufacturing base in the
    US. Specifically in green energy producing
    technologies. And that such monies may not
    be used by international corporations but only
    by those who will create manufacturing Jobs
    within the member States of America.

    I for one am pretty tired of hearing foreigners
    demand US tax dollars every time there is an
    economic investment in the US.

    The United States Government is a government of
    the people of the United States. It is not a
    government of the world, for the world and by
    the world.

    Nationalism is a double edged sword.
    It can work for good or evil. Nazi
    Germany showed how it works for Evil.
    America needs to show how it can work for good.

    We are not citizens of the world, we are the
    People of the United States of America.
    Let us not face our problems and difficulties
    as other nations would face theirs. Let us
    face our problems and difficulties as the
    Americans of history has taught us to do.
    They taought us that we are to face all of
    our trials as one Nation united under God.
    With the courage to face both the realities
    of our imperfections and the complexities of
    our trials. To work with imagination, ingenuity
    and a resilience that does not quite until the
    job is done to it's final completion.

    If we will face our current dilemmas the way
    previous generations of Americans faced theirs.
    We cannot only seal the leak in the gulf, and
    clean up that pollution, but we can also produce
    the technology that is needed to provide the
    energy needs of the future as well as return
    the many unemployed to work.

    We need to step up and be American. Those who
    have resources to do so need to help those who
    have not been able to find work until they can
    do so.

    Stop with the lunicy that a person would be
    working if they really wanted a job.

    Just as it is a buyers market in real estate,
    it is an employer's market when it comes to
    jobs. Without help, no one get's out of this
    alive.

    It wicked for non-profits to not help a person
    without a job. Hunger and the lack of food does not lead to work. It leads to disability and
    death.

  89. Real Estate Axioms:

    Buyers are liars

    How do you tell a real estate agent is lying? Their lips are moving...

    Get your own inspection if you are selling. Buyer's inspectors can't be trusted. They work for the buyer.

    Just more real estate baloney.

  90. To AnnS, #13:

    Wow, too much coffee this morning? I didn't even finish your post -- it made me nervous just thinking about someone getting so worked up about an online comment. But re-read my post: I said I was questioning the wisdom of the tax credit. However, I question even more the wisdom of cutting of the tax credit suddenly once one is in place. It affects the psychology of buyers out of proportion to its size (see earlier someone's earlier message about the credit-induced bubble of homes in the DC area). So no one is asking you to pay $8000 to help me sell my home (but if you want to buy it, I'll give you $5000 off since you read about it on the NY Times).

    More seriously, we're fortunate to be in a position where we don't have to sell our house. Many buyers are making the mistake of thinking that everyone who is selling is in some kind of financial trouble. We would *like* to move to a larger house, but if it doesn't work out, we're fine where we are. So, no...we're not going to lower our price to a ridiculously low amount just to sell. It's a bargain now, but if it doesn't sell, it doesn't sell.

    By the way, of course I never thought that my house was worth what Zillow priced it at. I thought our house was worth what it appraised at when we re-financed two years ago (which was about 10,000 less than Zillow's estimate). However, even if Zillow inflates prices, it's still a good indicator of trends in the market. And that's what I've been watching it for.

    So to sum up to AnnS, who seems to like bullet points:

    *I'm not convinced the tax credit was a good idea;
    *No one is expecting you to pay $8000 for me to sell my house;
    *Not all sellers are in a position where they have to sell their house
    *That includes me;
    *Zillow is poor at absolute estimates, but good at detecting trends;
    *Yelling at fellow taxpayers will get you nowhere -- if you tea party people want to convince others of your ideas, then try to approach matters in a calm and rational manner. People will be more receptive to your point of view. Who knows? You may even change someone's mind (or find out that they agree with you more than you think). On the other hand, if you just want to vent because you had a bad day, carry on!

  91. It's all relative to income because that's reality. The false market values created in the bubble by exotic financial instruments, lax credit standards, and all the hype and deception has finally come home to roost. The sad thing is, as a result, we got duped and let the treasury be looted by a bunch of crooked Wall Street Bankers and their bought off political allies. New housing is in the toilet because there's yrs. of backlog thanks to the millions of foreclosures yet to come; new housing starts are at a twenty yr low; banks holding foreclosures to try to control asset values; HUD walking hand in hand with the crooks who caused this by funneling foreclosures to dummy corps, who in turn sell for a huge profit considering they're the same people who foreclosed on these homes in the first place In other words people, you seen nothing yet. With all those millions of jobs outsourced and current employees being hammered by their current employers, what do people expect. The market is manipulated by Wall Street, which urinates all over the free market theory , and this is all being allowed by political representatives who are supposed to represent their constituents (the millions of voters, not the rich and greedy corporations.), but unfortunately, to big - to - fail owns the whole enchilada at the preset time. Buying a house at the current time is a gamble considering the state of the Nation - good luck with that!

  92. Housing is still over-priced by at least 25%. Let's hope the morons in DC stop tinkering with the market's decline to reasonable prices.

  93. I agree completely with Craig #12 that action was needed to prevent a self-reinforcing downward crash in home prices. Yes, home prices needed to come down to a realistic price. And they are. But we were in danger of markets freezing such that *nobody* would buy, as the few buyers with resources after an economy-wide crash would be anticipating ever-lower prices in the near future. I also suspect, that the slide is being stemmed to help stabilize the toxic financial assets underlying the whole crisis, to allow them to be priced and eventually unwound by banks and financial firms. We may hate that, but I don't think a lot of people have really grasped mentally what the alternative would have been.

    If the depression generation were still around, informing their grandchildren and great-grandchildren what happens when markets were allowed to do their thing unimpeded, I think we'd be seeing fewer comments about how the gub'mint should stay out of things and just let the housing market "fall to more affordable levels".

  94. I remember when it was like that in the 80s. Selling real estate was a really hard job back then; not for the casual player.

    Maybe the pickiness will get more people to fix up their houses. Too many people focus on PITI and forget that you have to pay about 1.5% of the home value in repairs each year. Our housing stock will fall apart if everyone is stretching themselves to the limit just paying the mortgage.

  95. Part of the problem for what little anecdotals I have seen is that sellers are trying to sell property that they can no longer afford to maintain and buyers don't want to take on those costs. I just saw one where the seller couldn't afford to replace a small, non load-bearing wall damaged by termites. She sold to a couple whose inspector didn't see it but the new owners took possession and found it that same day. The seller ended up coughing up the money she didn't have to prevent the sale from being rescinded

  96. I had dreams of 'moving up' one more time before retirement, and am happy that I didn't. I am sitting on a reasonable mortage that we can afford on one paycheck if need be; a stable neighborhood with good schools and low interest rates. I made a substantial downpayment when I purchased the house; but have put $70K into it to turn it into something that is both more competitive when I go to sell and more liveable while I'm here. If I sold tomorrow, I wouldn't lose money- but wouldn't recoup what I've invested.. then again, it's only been 5 years. I put it on the market briefly about two years ago when I re-married, just as the market was tanking. I probably could have sold without losing money- but I wouldn't have recovered my investment. I simply took it off the market and will wait out current conditions. I have real estate agents calling me constantly (don't they have enough unsold inventory??), asking me if I'd like to re-list, as they have a lot of demand in my neighborhood. I am happy to be able to sit out the market until I can get a reasonable price.

  97. I was looking to buy this past summer in the DC metro area. 2BR 1B condos were going for $400-450K range in gentrifying neighborhoods in DC and $500K+ in more established and desirable neighborhoods. These places were 1100sf at best. In addition to the cost of the mortgage was property tax and condo fees (up to $500/month in some places). It just wasn't worth it to me.

    I decided to rent in a desirable neighborhood for a fraction of the ownership experience. Sure I am not getting the tax deduction but I am saving so much a month and I don't have the anchor of selling when I am ready to move in 2yrs.

  98. As a practitioner in real estate closing as buyer's attorney, seller's attorney and sometimes bank attorney, I beseech the powers that be to get the heck out of the housing market. Stop the bogus social engineering that got us here in the first place. Stop the threats to banks to lend to people who don't 10 cents to their name. Stop with the ridiculous governmental incentives. Stop with the insane HUD rules. Let the "buyers beware" (caveat emptor), let the free market reign supreme. Once government pulls out of the real estate business (it's my little fantasy...indulge me), things will get much much better.

  99. I live in Scottsdale, Arizona, ground zero for the housing crunch. I have had many of my friends hurt emotionally and financially by it. But the market was crazy back in 2005 through 2007. Everybody wanted to be a builder, real estate agent, or a mortgage broker (some all three). The guy who cleaned my pool for years somehow managed to get a contractor license, a construction loan, and built a luxury spec. (Now an empty foreclosure, with, of course, a huge pool) People were buying 3 million dollar homes with a $50,000 down payment. I had people knocking on my door wanting to buy my home. Mortgage brokers were calling at all hours of the night begging me to take money out of my home. Why would you take money out of your home, unless it was an emergency? I'm bucking the trend and building a new home. It is 7,100 square feet under roof, of which 5,100 square feet is livable. I am getting that much square footage framed for $52,000. The plumbing (all cooper) for the entire house minus the fixtures is $17,000. I tore down an existing structure, removed a tennis court and swimming pool, bought in 120 tons of dirt, and leveled it for $19,000. I'm pouring the pad for $12,500. I went out to Mesa, Arizona and bought 3,300 square feet of beautiful stone flooring for $5,200, enough to do three quarters of the house. I bought 6,000 square feet of pavers for just under $4,000. I have put my master carpenter on salary, and he is very appreciative for the work. I refuse to listen to the talking heads. Back in the day, they were telling you to buy baby buy. Now, they all sing a different tune. What goes up must come down. What goes down will eventually go up. The market never stops moving one way or another. Of course, as Mark Twain once wrote: "all generalizations are false, including this one."

  100. Sellers are permitted to be crafty if buyers are. The correct strategy if this last-minute crunching has become standard is to price the home higher than it merits and when the buyer exacts his or her toll, to reduce the price to what the seller expected in the first place. And delay repairs and upgrades until those last-minute requirements are on the table, then "capitulate" and do the repairs and upgrades as earlier anticipated.

    It's a stupid cat and mouse game. But so long as mostly middle-class (read working class) individuals want to pretend they're commodity day traders and Wall Street sharks, rather than the poor schnucks they are -- at the mercy of much larger financial forces that the Administration and Congress have yet to tame -- this is the game we all must play. I'm ready. I'll enjoy seeing my potential buyers come on as John Rockefeller. I, of course, will play Eli Broad. May the best imposter win.

  101. This is a thing of beauty as real estate agent can't steer buyer into bad deals forcing every one else to jump through hoops as the did during the boom.

    The dirty secret is agent who were suppose to be dual agents were really spies for the seller, and not really negotiating the best deal for the buyers and demand that lenders make the deal happen whether or not it was good for the buyers. Real estate agents would advises sellers to put a not accepting government finance option in order to submit an offer to buy, because the government loan was a hard process but a safer loan for the buyers.

    Now buyer have power to shop and get the best deal, as the current over 35% of the market share of new home loans are FHA mortgage loans, compared to the low of 3.1% during the housing boom.

    Messaged to President I graduated from Harvard law school, there is a reason FHA is producing now over 1,000% better in production since the days that push the country to the brink, and that is MINORIY who receive subprime loans where always qualified for FHA loans, but they were steered to subprime loans because it made these people more money seller, builder, real estate companies and mortgage companies.

    As with most crimes follow the money and it will lead you to the crooks.

  102. The real villains in all this? Agents (or "realtors" - members of the Nat'l Association of Realtors). Who do you think is advising buyers to make these last-minute demands?

    I bought my first house with the "help" of a "realtor." It was such an unnerving experience that I vowed never to do it again. I bought my last house on my own, directly from a seller, and it was a great experience - trust and good-will on both sides. So leave the "realtors" out - you'll have a much better experience buying directly from an owner.

  103. Nevertheless, If you try to buy a house in Las Vegas, reputted as one of the best "buyers" markets, it is really IMPOSSIBLE. All houses for sale are "short sales"; the banks allow owners who got money out of their "equity" during the bubble to stay in. It takes more than 6 months to get a house and the occupants refuse to show the houses and live for free without paying mortgages, estate taxes or association dues. One had the nerve to tell me that he could not show the house because he was in a golf tournament. Not all who are losing their houses are the honest working men who lost their jobs. Many are greedy, lazy, scumbags that wanted to make a fast back and lost in the gamble.

  104. What's wrong with "We'll sell it to you for x"..."we won't buy it for more than y"..."nice meeting you"..."you too"
    It's really no more complicated than that.
    I feel NO sympathy for anyone in these transactions because frankly, the buyers/now sellers, the mortgage companies, and most importantly the realtors, made this mess. Now they whine?
    No sympathy..none. If you house isn't selling for what you are asking, it's priced too high for the current market. Although if you knew that in the first place, you wouldn't be in the position you are now.
    Those of us who sold our houses during the boom, because you could smell this coming 2 miles away, and are now renting, are entitled to a certain degree of self-righteous smugness.

  105. Just happened to us. We received an offer on our home, which started at $449K last year, three weeks ago at $323K. We reached agreement at $346K which would have left us, after 20 years of home ownership, with roughly $20K in total equity. But then the buyers made an outrageous offer that we set aside $30K for "repairs", basically to make our 30 year old house new. We told them to take a hike and our now going to try to rent it. In September, I suspect I will simply hand the keys off to Chase which bought Washington Mutual, one of the major figures in this fiasco. It's a gorgeous home by the way - with 18 foot vaulted ceilings, 1/3rd of an acre lot, wood floors, new carpeting, refinished bathrooms and kitchen in lovely Spokane, WA. http://hotpads.com...

  106. Its sad but markets sets price as does buyer. Maybe sell low buy low on next home so not as big a loss, if selling now without buying another home your going to take a big hit.

  107. Many here have commented that housing prices are still outrageous and should go down. Does that mean they would favor a rebate of all of the taxes I paid on the supposedly inflated value of my dwelling?

    My spouse and I sold a home in 2010. After an early contingent offer that we could not accept, because it would have tied up our equity, we reduced the price of our home several times before getting an unencumbered offer. The buyer then tried to negotiate a lower price than the rock-bottom listing price, which was much better than what we had seen for comparable properties, an impression that was reinforced by a couple of current appraisals. We refused to lower the price further, and the buyer purchased the home anyway.

    So what if the sellers took out a loan to improve the house? Shouldn't updates, tastefully done, factor into the home price? Having been both a buyer and a seller, I would rather pay more for a home that is finished and updated, than less for one that needs a lot of work.

  108. Everyone who is expecting or waiting for housing prices to come down to the historical 3X median income numbers are living in a fantasyland. Those numbers mean nothing now that most households are two income households, and women are just as likely to be working full-time "career" jobs as opposed to part-time "extra-spending money" jobs. The new paradigm should be 6X median income.

  109. Hola Amigos:

    This isn't going to stop until employment moves up. Working people will want to buy a house. Working people won't have to sell because they can't pay the mortgage.

    When will our "leaders" do the heavy lifting and: cut minimum wage, cut union influence, reduce EPA,EEOC,IRS, eliminate class action law suites, and 100 other little "protections".

    Cut cost of living and everyone gets a raise!

  110. Maxi @ #16

    I hate to burst your bubble, but it sounds as if you "negotiated" your house down to *peak* bubble price. 2005 pricing is probably double (or maybe triple) what it's really worth.

  111. Maybe Obama needs to make some speeches telling us how things will get better if buyers will get more realistic with their offers and open their wallets more when they want to purchase a home. Mortgage rates are very low and qualified buyers have no problems getting loans. Higher home prices will certainly stimulate the economy and help the tax situation of many States and municipalities. I also hope to see Obama on TV soon telling us how the unemployment situation is doing under his economic recovery plan. I notice that he always comments when the unemployment rate drops and the number of jobs increases so it seems fair to get his wisdom when the opposite happens.

  112. To #16:

    Banks made stupid loans.

    "Criminally negligent"?

    You mean, if I borrow more than I can ever possibly, including lying about my income, that is a bank's fault?

    I am not sure I want to live in your country.

    People over-levered. They screwed themselves. Now they have to be adults, give back the keys to the home they can't afford, pay back what they borrowed, and learn never to do it, again.

    Period.

  113. The issue is not demanding buyers negotiating lower prices, the issue is waiting until just before the closing to make additional demands, because the buyer believes the seller will be in too weak of a position to refuse this late in the game. The only alternative is to start over and put the house back on the market. The solution is a contract with teeth, but in my experience with private residential real estate contracts in NJ, the contract is pretty much a useless piece of paper, offering buyers so many outs that a seller in a down market is pretty much at their mercy. When the market was over heated, I sold a property for much less than I could have gotten, just because yes meant yes, contract or not. In many people's eyes that would make me a sucker; I think it makes me human. You want to rip off the cable company - go ahead, but when you rip off your (potential) friends and neighbors, then you are just a jerk.

  114. Fortunately the housing market: sales of preexisiting homes, new home starts, foreclosures, apartment rentals, condos, all realestate sales, etc., are not indicators on the quality of the recession recovery.

  115. Around here, if homes are priced correctly, they sell. Several in my neighborhood. Not in two weeks; more like two to six months, but they sell. And they have enough prospective buyers come around to enable sellers to turn away the more manipulative of these buyers. Yes, even at closing. There are a couple cases in my neighborhood. Both homeowners put the houses back on the market, and did an "as-is" sale. They found other buyers.

    Certain buyers are over-estimating their power in a buyer's market. Not every seller is quite that desperate - some homeowners have hoped to sell for some time for ordinary reasons of planning to move closer to family or to retire, and are using the current relative stabilization to make their sales. And they are wary of these aggressive buyers (another story in my neighborhood) who not only push hard deals and make things difficult, but also search for any reason to sue for non-disclosure later.

    So the key is:

    1. Price the house with the market. (Possibly some of these aggressive buyers are that way because they're dealing with unrealistic sellers.)

    2. Arrange to have the time (in months) to make a good sale. Not every buyer is as pushy as described in this article.

  116. Isn't this how markets are supposed to work? So why are the capitalist economists upset?

  117. In the summer of 2007, after over 50 years in the business, I voluntarily retired as a builder of >$1 million mostly for-sale houses. I was very lucky to have escaped the collapse of the housing market. If I had one of my new homes still for sale, here's what I would be facing: I estimate its annual carrying cost would be about 10% of the original asking price (e.g. $150,000 per year on a $1.5 million house). To make matters worse, holding for so long (with no appreciation to fall back upon!) usually leads to lowering the asking price. All said and done, after about 18 months the entire gross margin has been erased. To make matters worse, even in the best of times, buyers typically expect to negotiate - so it's not surprising, but gut-wrenching, to have a buyer arrive at the closing table with a list of demands beyond the signed agreement. Many builders, their capital wiped out, have been forced to turn the keys over to their construction lender and hope that it would not come after them for unpaid interest and principal deficiencies.

    If I were still in the business I would be redesigning my houses to get the cost down, which means making them smaller and simpler. This is opposite from what I did for all those years as I responded to the direction of the new house market. It would not be much fun!

  118. The New York Times continues to ignore the fact that Congress is sitting on yet another bit of legislation--reauthorizing flood insurance which expired on May 31st. This is the second time this year that Congress has allowed this to happen and is a contributing factor to why home sales have dropped.

    Congress holds up unemployment benefits and home flood insurance yet we're supposed to believe them when they say they want to help the American people and get the economy moving again?

  119. Middle class incomes have been falling since 1975 when inflation is accounted for, yet home prices rose far faster than income and inflation. In the 1960s the average family had 40% of debt as compared to annual income. In 2006 the average family had 130% of debt as compared to annual income. Much of the debt is related to mortgages but in 2006 it was also personal debt in the form of unsecured loans and credit card debt.

    The way I see it, home prices, at least in NYC, are about 50% too high for the average middle class family to own and not be burdened with unaffordable debt.

    Robert Shiller and other economists have said that home prices need to decrease and will decrease further going forward so that homes prices will be in align with income.

    Let's face it Americans, we are a nation that is growing ever poorer for the most part and the wealthy, the Top 10% (especially the top 1%), are increasing their share of the wealth as the rest of us get a smaller part of the economic pie. The wealthy have as much to lose as the rest of us in the bottom 90%, but this fact is being ignored.

  120. Reading some of the comments - it sure is easy to be flip when you aren't personally affected. As a military family, we have had to move five times in the last ten years. Each time, we have had to pay double for a comparable house. Now hoping to move one last time (home), we are stuck. Since the end of the homebuyer credit, there has been a noticeable slowdown in activity. It may not seem necessary or important for those of you LUCKY enough to have bought at the right time and don't have to relocate. For the rest of us, every penny counts.

  121. Real Estate is a moving target risk like all other investments. The value of your home is based upon how well you know how to navigate the risk and often the risk is not alway valued by the arrrogance of what the buyer or seller thinks the house is worth.

  122. The market is not dead---THE PRICES ARE TOO HIGH! After location,location,location;it's price,price,price. A "live" market will happen when supply and demand come together. It is truly sad but that is the reality. People will continue to be stuck with overpriced goods when there is no market. There will be no recovery in housing until prices come down or employment goes up.

  123. If you go online and look at some homes built in the 1950s throught the 1970s in California. Many are nicely upgraded, kitchens, bathrooms etc. However, many are not, fixtures that were current 30 or more years ago..as Daryl Hall said "no can do".
    New windows, new roof, new HVAC, new bathrooms and kitchens, or no sale

  124. The housing market has been down in our area for some time now...about two years!

  125. O.K., here is my story: I built a custom home myself with the aid of a couple of sub-contractors. It took 6 months of hard work. I prepped the 120' x 160' lot. Paid all fees (sub division, building permit, septic), put in new utilities and paid those impact fees. The house is 1800 s.f. with an attached 2 car garage with 19' by 16' bonus room above. Vaulted ceilings in the living room and the master bedroom. Woodburning fireplace, hardwood floors, Pella doors and windows. The master bath has a 6' shower, 50 gallon soaking tub, dual lavatories, all Kohler and Delta fixtures. The other side of the house has 2- 11' x 12' bedrooms, and another bathroom. Custom kitchen cabinets, including Kenmore high -end appliances. The lot is completely landscaped, has mature oaks and pecan trees. Built it with loving care in 2006. So I know how much it cost to build. I am undervaluing the lot at 25,000 dollars. I am undervaluing my 60 hour work weeks at another $10,000 (that's a $20,000 yearly salary). There is a beautiful K thru 6 elementary school 7 blocks away. A childrens park, general store,churchs, all within 8 blocks. The town has no crime. It is 15 minutes to Mobile Bay and 35 minutes to Gulf of Mexico. 45 minutes to Mobile or Pensacola, Fl. 4 major malls (if you enjoy those )within half an hours drive. Been for sale 1 year, asking $198,000. Best I've been offered--$150,000. Hardly any serious lookers (never mind buyers). So--when all you "buyers" are making an offer, what exactly are you thinking about? Or are you thinking at all? Oh I know---only YOUR time and money are valuable, and you want a "mercedes" at "ford focus" prices. Unh -Huh... Well...keep on dreaming...