I’ve been noticing two very odd words appearing more and more often lately. What words you ask? I’m sure you can guess.
Just today I received an email from a reader with a link to this NY Times piece:
The Balance of Power Shifts to Buyers
And a quick search of the newswires finds these:
Slow boil for a buyer’s market
“For Sale” signs have been popping up all over our area.
Real estate agent Desni Crock says that’s because it’s a buyers’ market.
“It’s great for buyers, not so great for sellers. Sellers are tending to hear in the media there’s this huge increase in the value of their homes, which is true. However, it’s not in this area so much. We’ve seemed to level out.”
Home Building Slows, Still Buyer’s Market
Wait a minute.. Just wait. Less than 5 months ago we were at the peak of the hottest sellers market in history. You expect us to believe that in 5 short months the entire balance of power has shifted to the buyers? No, sorry, I don’t buy it.
Oh no, we are not in a buyers market, but yes, the market has indeed changed. How? The greater fools have evaporated from the marketplace, but it is not a buyers market. The realtors are counting on the buyers market battle cry to reignite the speculative mania again. It won’t happen. Not this spring, not this summer. There is no buyers market. Don’t fall for it.
Caveat Emptor,
Grim
Grim, I’m wit ya!
I have seen a few places around me go up for sale, but it really is just annoying me. There is a house behind me that sold for $100,000 in 2000. It’s an ugly house, I looked at then and thought it was too much. Also I know that it has the added feature of having numerous cars hit the house on one corner that has been covered up with siding. Anyhow, $100,000 in late 2000 and now they are asking $400,000. I saw another house that didn’t sell at $550,000 last summer is now up for sale for $600-something. I guess since it is a year older, they think it is worth more???
I keep looking at the tax records online to see what people paid, and I really cannot get over being really surprised at what people are asking for their crazy little houses.
Found out the price of the FSBO a few houses down from me.
It’s on a 25×100 lot. One family, small, and not very attractive. No driveway/garage, street parking only. Nearly fell off the chair when I found out he wanted $400,000.
grim
what are you saying? always good time to buy.
it is always a good time to buy. lets see Iran is looking for a fight, they sell most of their oil to China, long term interest rates are low because of the buying by China in Govt notes. But wait, Iran gets missile tech from North Korea that gets it from China. I fail to see the connection!
( the reason why interest rates are low now is because China has all that Walmart money )
well as long as we keep buying things will be fine. then the folks can live off the money.
one hiccup on interest rates and we will see things go bad. IF the Iranian situation gets worse then China may not buy our bonds, Iran may try to cut off oil to the West. Basically, think what this will do for the home sales market?
about 3 months ago i thought Grim was a little bit too Grim, 30% decreases, well now I believe he is on the money.
1. Look at all the possible problems with loans.
2. Increase in energy costs, the Mac Mansions need more heating
3. If China and other oveaseas buyers of Govt notes stop or reduce buying then interest rates could start to shoot up.
CDF
i was out today looking around in madison. it still just baffles me to no end the prices people are asking for these pieces of s*it. 1950’s track houses falling apart and they want $500k+. i can’t be the only potential buyer seeing the lack of value and saying screw it. i want to own a house, but i’m not willing to mortgage my life away to get something i’m not even proud of!
CDF,
This one is for you..
Nightmare on Main Street
grim
Grim ,
You find the greatest things.
I know now why I enjoy your blog.
CDF
You can’t be more right. What buyers are they talking about?
I am renting and have no intention of buying in the near future. When I do buy, I have the potential of buying 1 home. There are sellers out there with multiple properties to unload, even one idiot that owns 19!
Add to that lot those who don’t want to sell but have to because they can no longer afford the mortgage payment due to the ‘exotic’ loans they took. Relative to the potential size of the inventory, there is no market.
It’s a Renters Market – Thanks to the Housing Bubble
What about “It’s a forclosure Market!”
Grim and others,
Here is the link to the article I mentioned yesterday on the exodus of NNJ people to Florida. Interesting to note they are using tax records to see migration patterns. Big brother is watching.
NJ exodus to florida
Thanks for the heads up, I was looking for it this morning but got sidetracked by the dog and coffee.
grim
Let’s now forget how just a couple of months ago, our favorite NJ cheerleader (Dominick Prevete) was telling people it’s a great time to buy (while prices were at their highest)
What’s even funnier is that if you Google “Dominick Prevete” the #1 hit is this blog. Not Weichert.
HAH!
-Richie
Grim:
BUYER’S MARKET – good point.
I liken it to the old “30% off” clothing store sale that starts on Friday. Thursday night after that close the proprietore ran all over the store raising all the price tags by 40%. Same general idea at play :-P
I agree – it’s not a buyer’s market.
I’ve noticed that new listings seem to be priced about 5% higher than equivalent listings from last Fall.
Based on how long the older listings have been sitting, I expect price reductions. But these would essentially be reductions to 2005 price levels.
So far, no one has really blinked and lowered prices to pre-2005 levels.
Hence, I conclude that we’re in a neutral market.
these phrases are stupid. it’s always a buyers’ market. houses don’t get sold without buyers. the only time it’s not a buyers’ market is when it costs more to rent than own (i.e., almost never). that’s the only situation where sellers have real leverage. otherwise, you just don’t have to buy.
I can’t wait until the internet puts realtors out of business like it did to the travel agents
The fallout of the bubble will all but destroy the traditional real estate business. I agree, it will go the way of the travel agent.
As the market declines, sellers will do everything they can to protect whatever equity they have. While the seller alone has no control over pricing, they do control how much they wish to pay to a broker.
I have a feeling we’re going to see a new crop of flat-fee based transaction facilitators to help out the FSBO market.
grim