The domino effect!

elle481June 13, 2009

So here we sit, on the market for 10 weeks. Showing have been picking up but not like it used to be years ago when I have had homes on the market. I get two different kinds of feedback. One is "this house is not for us" as it is a ranch and way too many people in New England want the typical big New England colonial, and the other is "Wow, I just love it and it is my first choice". The problem with ALL of those people who love the house is they either have something on the market that is not selling or they will be putting their home on the market. So here we sit in limbo land. We have had a few "off the cuff" offers, none in writing, and they have been low. We had an offer from someone who has not put their home on the market yet and wanted to get a feel of what we might accept if they did put their home on the market (!!???). And we also had an offer from a couple who were looking way out their price range and were hoping we would just give the house to them.

So now we still are here, sitting patiently waiting for the homes below ours to start taking deposits so things can start moving at our range.

I check Listing Book daily and can actually see the homes in the $300K and $400K range taking deposits, and there have been many of them, but beyond that range, high $400's to over One Million, very, very little is happening. There are more homes in those price ranges that are coming on daily and interestingly enough, most initial asking prices are more realistic than what homes have been originally been listed for. The homes that had been listed higher have dropped their prices to adjust for the market, and a few have sold. Some of those were short sales or distressed properties that needed a lot of work.

Hopefully the market will start to work it's way up and things will start moving again. I need to stay positive!

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graywings123

A real estate agent told me the same thing - active at the lower end, but not seeing the move-up houses going. The new construction out there makes me want to scream.

    Bookmark   June 13, 2009 at 11:50AM
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triciae

It's not just the move-up buyer being stalled out because they've got a house to sell.

Other reasons more expensive homes aren't selling...

1.) There's is still virtually no secondary market for jumbo loans;
2.) PMI has dried up enough that I can almost say 'completely dried up' so the 80/20 jumbo loan is history;
3.) Banks to do not want to portfolio jumbos both because of credit risk & rate risk. Tighter underwriting only takes you so far in risk management. Anticipating that they may need to pay 7.5% on deposits in 3 years...they don't want to be stuck with a bunch of 6.5%, 30-year mortgages in-house (that's a sure fire way to go broke quickly);
4.) Buyers are lacking the necessary down stroke to qualify for the jumbos that are available (most want 25%);
5.) The largest amount of price fluff was/is in the upper-end homes. Most lenders feel that prices will potentially fall another 20%-25% in the >$550K range. So, in addition to credit & rate risk...collateral risk is still helping to drive lending decisions.
6.) Banks have lots of money. That's not the problem with getting jumbos...it's primary the lack of a secondary market. Until that changes, selling homes >550K will remain difficult.

/tricia

    Bookmark   June 13, 2009 at 2:12PM
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theroselvr

here we sit, on the market for 10 weeks.

Have you asked your agent what the usual days on market is for your area? It took us a year to sell from date listed to closing. Contract was 10 months.

So now we still are here, sitting patiently waiting for the homes below ours to start taking deposits so things can start moving at our range.
I check Listing Book daily and can actually see the homes in the $300K and $400K range taking deposits, and there have been many of them, but beyond that range, high $400's to over One Million, very, very little is happening

Curious what price range you are in? From what I quoted, you are higher then $400k?

    Bookmark   June 13, 2009 at 2:35PM
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jenswrens

tricia,

can you explain what a "secondary market" for jumbo loans is?

    Bookmark   June 14, 2009 at 10:54AM
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jojoco

the OP's house is a ranch, in a sea of colonials. DOM will not be as relevant for her.
Jo

    Bookmark   June 15, 2009 at 7:11AM
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