Why Isn't Terrible Market Reflected in Media Reports?

shenandoahAugust 21, 2009

My husband and I find it so perplexing that large media outlets continue to churn out these stories about the r.e. market ticking upwards, when anyone can see this is due almost entirely to foreclosure sales and short sales, and not to sales of new and resale homes picking up appreciably. Where we are trying to sell our home in NC the market is stone cold dead. Our agent, whom we like and who we continue to have confidence in despite our lack of offers after ten weeks on the market, insists she's never experienced anything like it. We believe her because we have sold two homes previously, and we have also never known anything to compare. I have read this forum's posts with interest for a couple of weeks and have noted that almost everything suggested or tried by another weary seller is something we have also tried. Our location is supposedly 'great,' in a high-end development near a quiet lake, with good schools, plenty of shopping nearby, and a good commute to the city. Our house is close to amenities and has a private boat slip on the lake. But since my husband's job ended this spring when his company closed its doors, we've had no choice but to sell and downsize to a tiny place in a cheaper state. The point of the tiny place was to live mortgage-free, as well as debt-free once we sell the bigger place, so we put a big chunk of our savings into painting and professionally cleaning the house once it was empty. Then we listed the house at what our agent suggested was an aggressive price, but only one or two showings followed. We lowered the price over 10K a couple of weeks later. Zilch. Agent went to a seminar on staging and told us it could help if we staged and had better pictures on the net. We borrowed money for the stager, who assured us that such and such a house she staged sold 'in 3 days.' The staging isn't our style, but I think it did give the house better 'flow', and the response from the two agents who brought clients to see it was good. Two showings was all we got. Couple more weeks. Our agent tried an Open House. By now we're feeling sorry for her. A handful of people showed up, only one really interested. We tried a reverse offer on that buyer, but they bought a more expensive place up the road. My husband is so done with this thing that he pushed to reduce the price again. So we lowered it another big chunk -- now this property is listed at 40K less than the original 'aggressive' price. That was a week ago. Instead of dropping the price by $25,000 I probably should have edited the listing to announce that the house was a former meth kitchen -- that's how effective the price cut proved to be. It produced zero showings. Now the kids have gone back to school and there is nothing, nothing, nothing going on. Agents I've known in passing have been e-mailing me asking if I'll refer buyers to them. That's because there aren't any buyers. Not in this time zone anyway. I wish some producer on a national news show or editor of a daily would have the guts to do a story about that. And if anyone has suggestions to bring people in, we'll try anything. We've probably already tried it... (St. Joseph statue -- check. I found him dug up and mauled by a possum. Curb appeal -- spent endless days sweating buckets in the southern sun primping perennials and staging rustic lawn furniture. Check. But now we've started new p/t jobs -- thank God for that -- and I can't make the long drive back every weekend just for the sake of some sun-scorched rudbeckia)... but we'll listen to anything you've got. Thanks in advance, and I've enjoyed all the threads so far.

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xamsx

YMMV

My market has never been bad. It turned neutral for a few months, but is right back to a seller's market now.

    Bookmark   August 21, 2009 at 10:03PM
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cordovamom

In my market houses under 250K are selling, and they're not all foreclosures or short sales either. My hubby and I were out to dinner tonight and passed a home in our neighborhood that the For Sale sign went up two fridays ago. It now has a sold sign out front. It was priced to sell at 199K, although looking at the listing online it was very dated inside. Conversely, I have a friend in the area who has her home listed at 425K, reduced from originally 469K and has had very few showings in the 7 months she's been on the market. So in my area it appears as if first time home buyers are buying, but people aren't buying into a higher housing bracket yet.

    Bookmark   August 21, 2009 at 11:01PM
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biochem101

I'm not an expert but for a dose of reality I suggest reading Christopher Fountains Blog. He's both a realtor and a lawyer, albeit in CT so that housing market obsesses him somewhat. Just for a taste here's one of his recent posts:
___________________________________
August 21, 2009
Wall Street short term traders with no foresight

The marketÂs exploding today on news that sales of existing houses were up 5.2%. The end of the recession! Hooray! Okay, but these happy campers arenÂt looking at the figures. 30% of the sales were short sales  sales for less than the loans owed on them. 9.24% of all mortgages in this country are delinquent, with an additional 4.3 per cent already in foreclosure. That combination, 13.5%, is the highest rate of delinquency since record keeping of such matters began in 1972.

Foreclosures in Massachusetts were initiated in July at a rate 5X greater than in July 2008. Similarly, foreclosures in Rhode Island are "rampant". That huge jump in Southern California homes came about from the average price dropping 23% from last year, with foreclosure sales representing over 45% of all sales. Seeking Alpha looks at the huge default rate on prime loans: good credit, 20% down, etc. and fears the future because these are defaults caused by unemployment, not just the inevitability of poor folks who never could afford the home the government urged them to buy:

As you can see, everything is fine, no problems at all. The markets are sure to continue its steepest market rally ever rising 49% since march, outpacing the 1929-1933 44% rally. I guess the new normal of a high unemployment, revenue-less, earnings-less, and growth-less recovery means that the markets can have the greatest percentage gain ever, in only 5 months, and should continue forever. I am kidding of course, this thing looks ugly and makes me question what is really going on.

So take what you want from todayÂs euphoria. Personally, I have certain amount of respect for Wall Street players to make money, but almost none for their ability to see past the dayÂs trading horizon. I think someoneÂs going to be proved a chump here, and soon.
________________________________
August 21, 2009
Half-full or half-empty?

Nationally, the good real estate news is that sales of existing homes rose 7% this past July from July of last year. And even in Greenwich, we at least held our ground: 40 Contracts in July 2009, versus 39 in July 2008 and 40 July 2007. Before you pop that cork on the bottle of Cold Duck youÂve been holding in your otherwise-depleted wine cellar, though, consider whether weÂre seeing purchases merely delayed from the traditional springtime market or whether itÂs a true recovery. For the year through July, weÂve sold 175 houses, compared to 281 in 2008 and 419 in 2007. The true test, I believe, wonÂt come until September and October. If sales in those months come back to 2007 levels, we can breath easy. My guess is they wonÂt unless Greenwich home sellers do what sellers in the rest of the country have already done: cut their prices. What weÂre seeing nationally is foreclosed homes and short sales and in Greenwich, the houses that are selling are, for the most part, restricted to those that have slashed their prices. I donÂt see enough price cutting going on to give me confidence in the continued vitality of our market so either that will happen, or sales will stagnate again or, as is entirely possible, IÂm wrong again, and buyers will go back to paying 2007 prices for houses. I donÂt think thatÂs likely.

    Bookmark   August 22, 2009 at 8:29AM
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creek_side

I'm not an expert but for a dose of reality I suggest reading Christopher Fountains Blog.

That's the problem, reality depends upon your point of view. Some guy in CT who sees gloom and doom doesn't prove anything nationwide. Like politics, real estate is local. According to Zillow, our market has come off the bottom, but then again, it has never been down like some parts of the country, since it was never grossly overvalued.

Even local conditions, or more properly perspectives on conditions, vary locally. While one subcontractor told us he wanted our business because we may be the only people building a new house in the area, the county building inspector tells us there is plenty of new building going on county wide.

I don't doubt that the OP is in a terrible market, but the national media is focused on national issues, not pockets of real estate despair. Currently, the health care debate is getting most of the coverage. Real estate won't get much until there is some sort of definitive change in conditions. The news rarely reports static anything.

    Bookmark   August 22, 2009 at 9:40AM
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brickeyee

The mass media markets are based in large cities.
They have little to no idea of what happens outside their area.

Fairfax County, VA has an increase in prices and sales, despite one of the counties to the south, Prince William, being one of the highest foreclosure rates the whole US.

What is the Washington based papers going to publish more on?

ALL real estate is LOCAL.
The three most important things about a house remain location, location, and location.

It can even come down to the side of the street in sub-urban locations. The sales market in Falls Church City is not the same as the market in Fairfax County that is on the other side of the street (and may even have a Falls Church mailing address).

You can almost always sell quickly if the price is low enough.

    Bookmark   August 22, 2009 at 12:33PM
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jane__ny

"You can almost always sell quickly if the price is low enough. "
Question as: How low is 'enough.'

In my area, no houses have closed since May 1 and that was one house. There are approx. 300 houses listed and many went on almost a year ago. I can't believe how low many have reduced their prices and still aren't selling. People are not buying. Realtor states there is a large market for rentals. People are being asked if they would rent their houses. I live close to the City in an area where there are no foreclosures, as far as I can see.

So how low should sellers go? Should people give away their houses?

In this market, reducing price is not the answer. It's far more complicated than that.

    Bookmark   August 22, 2009 at 2:51PM
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chisue

A LOT of people have 'followed the market down', and their homes still are not selling. If I had to sell right now I would list at the rock-bottom lowest price I could possibly take (and wish I'd done it 18 months ago). I'd add up what it's costing me to hold onto the house. I'd consider renting.

Prices are not going up. Just some sales, of lower-cost housing, are going up. Sales of higher-priced houses are down over 30%. It's anybody's guess when the surplus housing will be absorbed -- and that won't happen until a lot more people get solid jobs. Some of the increase in sales in some parts of the market are also due to 'free money' for first time buyers -- again, to buy lower-cost, starter homes.

    Bookmark   August 22, 2009 at 3:20PM
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terriks

I work in a RE office and I can tell you that our business has picked up the last few months. It is not just foreclosures, but you have to understand that the foreclosures need to go away before the market in general can stabilize.

    Bookmark   August 22, 2009 at 9:49PM
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Zoe52

I live in Upstate NY. It seeems there are 3 homes on every block for sale here. The majority of those are NOT foreclosures. The only homes selling are in the 300K range and below. Those priced over 400K are not selling at all.

I was on the market last year for 6 months in the 500Ks. I had only five lookers and one that came back for a second showing. We pulled the house off the market last fall and relisted in late spring of this year. We are now down to the 420's. So far we have had only five showings since the end of May. I had a Realtor's open house this week and the majority of Realtor's say that my house is priced well for this market. (I say how do you know when not one home is selling in this price range?!) In 2008 at the Realtor's open they claimed that 489k was the correct price at the time (we had dropped from low 500's by then). Since then only 2 homes in our town sold in the low 400's last fall after my house went off listing.

We are thinking of trying to sell on our own after this Realtor's contract is up to save on the commission fee. That is the only way my husband will list under 400K.

The value of our homes in this area has not appreciated as much as those elsewhere

My sister bought her home in Springfield VA for less money than I originally paid for mine the same year 26 years ago. We added on 500 square feet and update 2/3rds of our home 10 years ago. All she has done is repainted and a kitchen remodel with no major additions. She is a Realtor and claims her home is worth about 150K more than mine according to her area.

Yes, you are correct that all Realty is local.

    Bookmark   August 23, 2009 at 12:24AM
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FatHen

Mainstream media is often owned by corporations, and is certainly controlled in large part by advertising money it needs from corporations. The real estate and lending industry have huge impact on what's reported. Because I was researching the housing industry extensively during the bubble for other reasons, I saw warning signs of mortgage fraud's increase within the industry, etc, that was barely if at all mentioned except in obscure places. Others I knew who were also into this topic noticed the same thing. Then, as now, the media isn't going to bite the hand that owns/feeds it. Much of this 'news' isn't even really news, it's press releases from the industries that want it printed. If you want real news you have to go looking for it from sources that present the other side, particularly those that get no money from any source that colors their writing.

    Bookmark   August 23, 2009 at 3:42PM
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mary_md7

Shenandoah, I'm curious about what general region of NC you are in? I have family in the Triangle, and they say homes are selling but prices are way down. So the home that would have sold for, say, $350K last year is selling about 10% less now.

    Bookmark   August 23, 2009 at 3:47PM
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Meghane

I agree; just having left the Triangle and sold at a $15k loss, the market is soft but not dead. You have to price to sell, not to make a profit. Sorry.

    Bookmark   August 23, 2009 at 5:57PM
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shenandoah

Mary, Our house is in the Charlotte area. That city has been hit hard by the banks' layoffs -- both Bank of America and Wachovia (now owned by Wells Fargo) were/are headquartered here, and their losses have affected many sectors of employment. In addition, we'd been touted as a boomtown just prior to the 2008 meltdown, so thousands of newcomers had relocated to the county, many buying homes before they had jobs, which only added to the glut of properties when the bottom fell out. Our house was appraised last year (factoring in the price of the lot but not the boat slip, which our neighbors are offering us $15,000 for) at $45,000 more than we are currently asking. In our neighborhood, no house has been listed that low since 2000. If we were to sell at our list price, after taking out commissions and closing costs, we will most certainly not make a profit. For that reason I agree with some of the posters that in this market the old adage "it will sell if it's priced right" is really not applicable, because no one knows the definition of 'right' anymore. At our ages we won't be able to recoup the losses we'll take on this house, and certainly not when the loss of the house is compounded by the loss of our livelihood due to the economy. Even so, we'd be glad to get it off our hands, just so we can pull back to a cash-only lifestyle and feel like we're out of this crazy crap game. It's definitely a whole New Reality.

    Bookmark   August 23, 2009 at 10:34PM
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fixizin

Posted by fathen:

Mainstream media is often owned by corporations, and is certainly controlled in large part by advertising money it needs from corporations. The real estate and lending industry have huge impact on what's reported... Then, as now, the media isn't going to bite the hand that owns/feeds it. Much of this 'news' isn't even really news, it's press releases from the industries that want it printed.

BINGO! Remember, the initial 'C' in C-NBC stands for Cheerleading! ;') Nothing but fooking bankster SHILLS on CNBC, Larry Kudlow being the most bombastic of the bunch.

    Bookmark   August 24, 2009 at 2:11AM
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Billl

"For that reason I agree with some of the posters that in this market the old adage "it will sell if it's priced right" is really not applicable, because no one knows the definition of 'right' anymore."

I'm not sure you understand the concept here. You could sell your house at a deep discount. There is no doubt about that. Your confusing "right price" for your pocket book and "right price" for the market. If you need to sell your home in a down market, you are going to take a hit. It isn't some giant conspiracy by "media", it is just basic supply and demand. Almost everyone is on edge about their jobs or income. We have some government programs propping up the low end of the market, but higher end homes are exposed to raw market forces. Fewer buyers = fewer sales and lower prices.

    Bookmark   August 24, 2009 at 9:14AM
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trianglejohn

If the mainstream media reported on the terrible housing market, how would that bring in buyers?

I think that there are a million reasons why things are the way they are right now. The whole system is being adjusted. Some people are going to be hurt very bad during this period of adjustment. Some people will never recover. At this time there is no way to determine who the winners and who the losers will be. There are no easy answers, there are no answers at all. You'll just have to do whatever you can do and hope for the best. If someone starts pointing out something you're not doing being the reason things aren't working - ignore them. No one has the answers right now.

    Bookmark   August 24, 2009 at 10:39AM
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ncrealestateguy

Shenandoah,
I sell RE on and around Lake Norman and Charlotte. What is your MLS #? I would like to take a look at the listing. Also, if you are located on Lake Norman, did your agent explain to you that there are 7 years worth of inventory of just waterfront homes?
Right from the start, you have a 50 / 50 chance of being a winner or a loser as far as geting the home sold. Like Chiuse said... you CAN NOT chase the market downwards. You have to price it a bit below market value to get serious interest. What Buyer in their right mind is going to pay market value for a home, knowing that in two months it is going to be worth less. They want a cushion. They will get it. From you, or from the guy down the street.
Do not sell the boat slip to your neighbor! If you do, you just decreased the Buyer pool even further.
Buyers are making their decision on one thing and one thing only right now, and that is perceived value. In other words, price. It is not true that you can not sell your home. you just need to price it right. A lot of agents do not know how to do this in a market like this. Your appraisal of 12 months ago means nothing to no one. Throw it away. Find what compareable homes are selling for, and then price it at least 15% under those. You need to sell. Interest rates are going up. Each time they do, your Buyer pool gets smaller. Do not get caught up with lowering your price little by little, and never being in front of the curve. You spent your savings and borrowed money for the stager. You need to sell tomorrow! Do not let yourself become one of those that gets foreclosed on or forced into a short sale. Speak with your agent today and come up with a good plan.
Good luck.

    Bookmark   August 24, 2009 at 6:00PM
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cmarlin20

If the mainstream media reported on the terrible housing market, how would that bring in buyers?

I think that there are a million reasons why things are the way they are right now. The whole system is being adjusted. Some people are going to be hurt very bad during this period of adjustment. Some people will never recover. At this time there is no way to determine who the winners and who the losers will be. There are no easy answers, there are no answers at all. You'll just have to do whatever you can do and hope for the best. If someone starts pointing out something you're not doing being the reason things aren't working - ignore them. No one has the answers right now.

Do you really think no one has more control of their future than you describe?
Do you really believe there are no answers at all?
Wow just wow
Life really is better than you describe, I hope you realize that out for yourself.

    Bookmark   August 24, 2009 at 8:53PM
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shenandoah

Many thanks -- there is much food for thought in your responses. I realize that I wasn't clear with my initial posting -- my exasperation with news organizations not covering the story of the market in depth is a separate issue from the problem of our own house attracting a limited pool of buyers, and I don't expect media coverage to bring a buyer to our door. I suppose the common theme there is frustration! It's quite true that there are no clear answers right now. What helps, day by day, is finding a way to feel less dependent on the eventual outcome.

    Bookmark   August 24, 2009 at 11:21PM
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trianglejohn

cmarlin20 - No, I mean that no one has complete control of their life. There are aspects of the posters situation that they can't do anything about.

Whenever people are going through a difficult time I see responses that imply that they are not doing enough, that they need to work harder or do something different. That is not always the case. Sometimes bad things happen to good people.

Don't feel sorry for me - I'm doing quite well during this economic downturn. My debts were paid off before things turned sour. I was able to buy when prices were low and interest rates were also. But all that "good" was just coincidence. I did very little to make it happen

    Bookmark   August 25, 2009 at 10:18AM
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shenandoah

NCREGuy -- a lot of what you say makes sense. Last time I looked, we were priced exactly 15% below the next lowest comp in this develop. and they don't have a boat slip, so it seems we're where we should be.

BTW, am I allowed to post my MLS# on this forum? It's #865928. Hope I don't get kicked off...

    Bookmark   August 25, 2009 at 11:09AM
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ncrealestateguy

Shenandoah
BTW...love the name, same as my dog, and my favorite fishing river.
Anyhow, thanks for posting the MLS #.
In the $250000 - $350,000 range and for communities with lake access, there is about 14 months worth of inventory... Actually not too bad. About .875 homes are being sold / month. Of the 7 solds in the last 8 months, 5 of them have been distressed sales, with the avg. $ / sq. ft of about $81. The other two sold for about $116 / sq. ft. These two had some brick, hardwoods and granite. I beleive your home does not. Your home is about 2400 sq. ft. plus the boat slip which is valued at $15,000.
I think your property would sell at about $250,000 - $265,000.
Also, remember that FHA loans only go up to $271000. This is a big deal because FHA only requires buyers to have 3.5% down payment. At $298,000, they need at least 10% DP. A huge difference for potential buyers.
I hope this helps. Good Luck.

    Bookmark   August 25, 2009 at 2:53PM
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