Posted on 08/17/2010 9:11:41 AM PDT by Notary Sojac
A survey of seven major housing markets found that less than half of all attempts to sell a home in 2009 had, as of last Wednesday, resulted in a sale.
The analysis, conducted by Redfin Corp., a Seattle-based brokerage that operates in nine states, shows just how tough the housing market has become–and just how many sellers are unwilling to lower their prices.
The survey looked at how the 500,000 homes that were listed for sale last year in seven of the nation’s biggest counties had fared. Around 47% of those listings had sold by last week, while just 4% of those listings were still active.
“There’s just such a standoff in the market between sellers and buyers, both with unrealistic expectations, and a lot of heartbreak and wasted effort,” said Glenn Kelman, Redfin’s chief executive.
Many sellers aren’t willing to reduce their prices because they don’t want to sell their homes for less than the amount they owe. Those “short sales” typically take much longer to complete because a bank must sign off on the deal, and they can be just as damaging to a borrower’s credit score as a foreclosure. Banks are less likely to approve short sales for borrowers who can’t demonstrate hardship or imminent default.
Others simply think that they shouldn’t have to reduce their prices, often because they’ve plunked down lots of money for renovations that they had hoped would boost the value of their home. The buyers may be happy to pull their homes off and wait for the market to come back.
Already, there are some signs that this year could be worse than 2009. Many markets have seen inventory levels shoot up since a tax credit for home buyers expired in April.
I’d like to explain to you the impact that:
reinstatement of prudential mortgage lending standards, and
an effective eighteen percent unemployment rate,
have on Mr. Realistic Buyer’s willingness and ability to pay your wishing price.
I’ve noticed lots of “banks” don’t want to cut the price either. They’re sitting there with foreclosed property wanting what’s owed on it when it won’t appraise. I guess they’re waiting for the “ultimate” bail out that’s coming from islamabama.
I don't see an "UNEXPECTED" anywhere!
(That was unexpected!)
In the area I am looking there are 181 homes for sale, most are bank owned.
Dear Mr Banker:
I would like to review with you the impact on prudential lending standards that might evolve from a mortgage market in which new loans are backed with private money rather than public money.
In addition, we will also discuss whether banks that claim to earn their money by putting their own capital at risk, understand the meaning of the following words:
"capital", "risk", and "own".
The last time this happened (S&L Crisis) the banks and the government got a lot of grief for letting go of homes at fire sale prices. Opponents claimed cronyism, depressing the market for existing homes, etc. So it's a damned-if-you-do damned-if-you-don't situation.
Re: your tagline.
Are you sure?
It’s not reinstatement of prudent lending standards. It’s lunacy. The new Government mandated guidelines and procedures (created and implemented by the very same people who created the situation to begin with) not only precludes risky borrowers, it precludes good borrowers.
I wonder what the percentage of purchases that fail to close is these days due to lending procedures? I’ll bet it’s around 70%.
I knew I should have sold years ago. I have too much to maintain as I grow older and prices are falling so that I could buy a smaller place at a bargain but I can’t sell what I own now.
in possession of a 20 percent down payment (not borrowed from a third party),
earning verified income of at least one-third the amount of the mortgage, and
buying a house for no more than 120 times the monthly rental of comparable properties.
Are borrowers like that being kicked out the door in your region?
how many were short sales rejected after months and months by the banks.
Two of the major factors used in approving a mortgage are credit scores (from very flawed credit scoring systems) and a satisfactory appraisal through a nutty, Andrew Cuomo designed system known as HVCC.
In addition, I would doubt that most borrowers have a 20% down payment in almost all areas of the Country.
The way I see it, these new procedures are accomplishing exactly what they're designed to do, precluding most mortgages from being approved. The reason? They know that the housing market is going to get even worse. Why make more loans now that could be the foreclosures of next year?
To your point I tried to buy a "short sale property" for what I though was a realistic price The bank asked more. because of some recent sales in the area I increased my price by 15% which I thought was exceptionally generous, but the bank said Just come up another $35,000. Since I had gone over what I though was prudent (though within a statistical value range) I told them no, you had your shot at my money. My offer DROPPED by 10% I got WHAT ARE YOU DOING??? from the seller's agent (who obviously took me for an easily taken rube) There was a no sale, and now both the county appraiser and zillow have the home valued at substantially LESS than my final offer. I'm glad I didn't buy, and they pulled it off the market, willing to continue to pay for the upkeep rather than sell for a realistic price. (btw I went on to buy another house in the same neighborhood which is now running slightly above what i paid.
PTFL
I'm in the market to purchase a nice 5,000 sq ft home with a few acres and hesitant unless the absolute perfect home shows up as the prices keep falling.
I read the local realtor's report and it stated that over 20% of all office space in the area is vacant. Commercial rental cost per sq. ft has dropped drastically, and vacancies are prevalent.
The problem is that we are about to turn to hyper inflation and I want to purchase before it hits.
Mine was in Palm Beach County. If you count grossly overpriced condos it's probably very similar there.
Location, location, location - my next-door-neighbor passed, and her house sold for $500k in one day. The new owner is knocking it down.
no more than 120 times the monthly rental
when considering if the "the housing market is going to get even worse".
And I would agree that if houses that rent for $1500 a month are on the market for $250K, yes, the market is going to get worse and I would not approve a loan for that amount.
The only answer in such a case is for buyers to lowball, lowball, lowball, until the pressure is too much to resist.
Prices are not coming back for a long, long time.
What are the conditions that must exist before a turn around in selling price of existing homes occurs?
We planned to sell almost five years ago, and decided not to because everyone claimed it was a terrible time to sell a house.
Obviously, conditions are significantly worse for sellers now, and selling prices much lower.
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