Monday, June 12, 2006

Farewell to the flippers: Home prices are falling

Guest blogger Richie is back for an encore. Grim is heading away on vacation again, so I'm filling in part time to keep the conversations going here.

I just came across this great piece from the Associated Press; the title says it all! What I like about this article, is that they FINALLY blamed the slowdown on the sky-high price of housing, although they did toss in the interest rate card again...

Farewell to the flippers: Home prices are falling

There you have it; it's in print Home prices are falling. If people follow the "news on the street" then we should see some more interesting articles coming out soon... Some notable quotable's in this article include:

Rising interest rates and sky-high home prices have cooled real-estate investment, “particularly in high-end markets in some juiced-up parts of the country where speculation was most rampant,” said Mark Zandi, chief economist at Moody’s Economy.com.
...
With land prices falling in some areas, Hovnanian has walked away from about $5.6 million of deposits on land parcels it had options to buy, lopping 5 cents a share off the company’s second-quarter earnings.
...
The national median existing home price was $223,000 in April, according to the National Association of Realtors. While that was a 4.2 percent increase from April 2005, the organization predicts that prices this year will rise only 0.8 percent.

Others aren’t so sure they’ll rise at all.

...
The Fed’s target short-term rate is currently 5 percent. If it passes 7 percent, “then things get very tricky,” Zandi said. “Many home owners will have trouble making payments. We’ll see significant mortgage credit problems develop.”

By the end of 2004, 35 percent of buyers had adjustable-rate loans, up from 18 percent the previous year, according to the Federal Housing Finance Board’s interest rate survey.


What gets me is the last quoted paragraph.. 35% of the buyers for ARM's in 2004. We all know the 2004 prices were out of hand, but what about 2005? It seems that as the prices rose, so did the number of people using ARM's to get their properties.


-Richie

34 Comments:

Anonymous Anonymous said...

Hi, Richie:
Great post. I was hoping somebody could start a thread about personal experiences they've heard about associates with unbelievable (to them) mortgage increases.

I mentioned elsewhere that on Saturday, someone I know decided to list their home this week because their mortgage increased in May well above what they can pay.

The pain was obvious. So was the surprise.

These were not rubes. Kluger mensch - typically people "in the know."

Pat

6/12/2006 09:53:00 PM  
Blogger Richie said...

I think most people are blind to the market and really are going to be in for a big surprise when they find out their home isn't worth what they paid for it 1-2 years ago...

-Richie

6/12/2006 10:15:00 PM  
Blogger new 200 Mbps BROADBAND over POWER LINES said...

Remember folks, it`s NOT yet a BUYER`s MARKET until we saw at least 30% price reduction in home prices...imho !!!

Don`t believe in the hype of the Realtors who want to make money... they don`t care who will be buying as long as they earn COMMISSION on every home sales !!!

6/12/2006 10:55:00 PM  
Anonymous Anonymous said...

Looking for guys to join my Fantasy League for football if interested contact Big Mike by posyting in the forum at

Offshorebettor2.com

6/12/2006 11:58:00 PM  
Anonymous UnRealtor said...

Where's "RE investor"?

RE investor, how many properties are you currently holding? Are they single family? Condis? Renovations? Tear downs?

6/13/2006 09:15:00 AM  
Anonymous Anonymous said...

an Ad ARTICLE AT
Asbury Park Press
Sunday May 28, 2006
p.G3 !!!

"Kara Homes advises active adults to purchase homes now" !!!

Why buy homes when you knew that New Jersey home prices is way overpriced according to the latest report and Housing prices is now cooling if not CRASHING !!!!

6/13/2006 09:57:00 AM  
Anonymous Anonymous said...

http://tinyurl.com/l26s8

HUD rules. A little late to matter, at this point, or a big help?

Pat

6/13/2006 09:53:00 PM  
Anonymous Anonymous said...

unrealtor-

maybe reinvestor101 is busy "UNINVESTING" his realty and reinvesting in gold!!

hehe
g'nite

6/13/2006 11:16:00 PM  
Anonymous Anonymous said...

. Pets Underfoot? Keep them out of the way ... preferably out of the house. Many people are acutely uncomfortable around animals. Nothing can stop a sale faster than man's best friend, wagging its friendly tail at a prospect with an allergy.
Go here for more ideas.

6/20/2006 10:55:00 PM  
Anonymous Anonymous said...

With the , you don't have strangers coming through your home, day after day, often week after week, at times which are not always convenient. Your home must look great ... truly great ... for one weekend only .

6/21/2006 08:38:00 AM  
Anonymous Anonymous said...

With the , you don't have strangers coming through your home, day after day, often week after week, at times which are not always convenient. Your home must look great ... truly great ... for one weekend only .

6/22/2006 07:50:00 AM  
Anonymous Anonymous said...

Potential buyers have to say "yes" many times to purchase your home ... but a single "no" over a seemingly minor item can kill the deal. You can do something about this.

6/22/2006 09:40:00 AM  
Anonymous Anonymous said...

Someone knows how to bring a lot of into your home, over a single weekend. Opportunity attracts them. Emotion captures them. Competition excites them. Their wallets open. Top dollar for your home pops out in an open bidding process that concludes on a single Sunday afternoon .

6/22/2006 11:00:00 AM  
Anonymous Anonymous said...

Cyber-wandering and looking for something that might help my own real estate business. Stumbled across your blog and enjoyed the visit. Thanks for the read. Visit my site if you have a chance.

6/22/2006 11:14:00 AM  
Anonymous Anonymous said...

If I spent as much time working on my own real estate sites as I do slogging thru blogging, I'd probably make more money. But I enjoy a good read. Thanks for the break. Stop by my site if you can.

6/23/2006 10:30:00 AM  
Anonymous Anonymous said...

Hint #13 for . Three is A Crowd: Avoid having too many people present during a showing. Potential buyers need to feel at home, not like intruders being hurried through the house.

6/23/2006 01:19:00 PM  
Anonymous Anonymous said...

Your blog was fun to visit. Not exactly what I was looking for. But fun. BTW, while the broad brushstrokes of successful marketing remain the same on the cyber battlefield of selling homes today, the rule book has changed. That's what we deal with on our websites. ... .

6/23/2006 03:06:00 PM  
Anonymous Anonymous said...

Blackstone, a public company, has a well-deserved reputation as a savvy real estate group. Will their investment blow up in their face?

6/24/2006 07:25:00 PM  
Anonymous Anonymous said...

. Never Stay In Your House With House Hunters: Let the agent handle it, and remove yourself if possible. Remember that the Realtor� has worked many hours with these people, and knows what they're looking for, and how to work with them. Let the Realtor� do the job without interference.You may feel that an agent isn't showing the important features of your home to the prospect, but the agent knows people aren't sold by details until they've become emotionally involved with the "big picture" of your home. The presence of any member of the seller's family can't help. It always unnerves possible buyers. It often prevents a sale.
Go here for more ideas.

6/25/2006 11:14:00 AM  
Anonymous Anonymous said...

You can do a lot to For example, curb appeal sells: do some landscaping. Plant some flowers. Remember that the front door greets buyers. Make sure it offers potential a bright, warm welcome.

6/26/2006 07:42:00 AM  
Anonymous Anonymous said...

With the , you don't have strangers coming through your home, day after day, often week after week, at times which are not always convenient. Your home must look great ... truly great ... for one weekend only .

6/26/2006 06:33:00 PM  
Anonymous Anonymous said...

The average home is currently on the for about 4 months before it goes to contract. Around 15% of initial real estate contracts never make it to a successful closing ... something goes wrong, and the frustrated seller puts the home back on the real estate market .

6/27/2006 12:49:00 AM  
Anonymous Anonymous said...

Blogging is not always a rewarding journey, but I ran across yours on this trip and it was a good break from my own real estate work. Thanks. Keep up the interesting work and visit my site if you have a chance.

6/27/2006 02:27:00 AM  
Anonymous Anonymous said...

Enjoyed visiting your site. Got to get back to my own, where we spotlight homes for sale on a website dedicated exclusively to the selling of a home. Not just any old website. But a website highly-ranked in the search engines , with thousands of back links already in place, directing traffic to a seller's exclusive listing.

6/27/2006 10:05:00 PM  
Anonymous Anonymous said...

If you're selling your home, consider . Faded walls and worn woodwork reduce a lot more than house appeal. They cut into your price. Invest in a few cans of paint. Brighten up the interior. .

6/28/2006 03:02:00 PM  
Anonymous Anonymous said...

Blog-hopping is a habit I am trying to break since my own real estate work requires a lot of attention to detail. Then I run into a blog like yours and I�m reminded about how the internet expands our views positively. Thanks for the read. Visit my site if you have a chance.

6/30/2006 06:50:00 PM  
Anonymous Anonymous said...

Hint #8 for . Clean Your Closets: Neat, well ordered closets look bigger, suggesting that storage space is ample. One of any home's biggest deal-killers remains: "Not enough closet space."

6/30/2006 07:04:00 PM  
Anonymous Anonymous said...

The No. 1 sellers' complaint on the is the "showing" process ... the line of people trudging through their home, inspecting their lives, in search of who knows what .

7/03/2006 08:38:00 AM  
Anonymous Anonymous said...

In this "cooling off" real estate market, suggest that the average residence is shown about 4 times a week during the first 3 weeks of a real estate listing. After that, an unsold home goes "stale" ... it gets shown less .

7/03/2006 12:43:00 PM  
Anonymous Anonymous said...

Pop goes the Housing Bubble? A Florida subdivision -- -- characterizes the area, the problem, and the answer.

7/05/2006 01:05:00 PM  
Anonymous Anonymous said...

If you're selling your home, consider . Faded walls and worn woodwork reduce a lot more than house appeal. They cut into your price. Invest in a few cans of paint. Brighten up the interior. .

7/05/2006 10:47:00 PM  
Anonymous Anonymous said...

Nice blog you have. Been looking for a good real estate blog to help me struggle through this difficult market. We've developed a unique approach to tough housing markets. Might interest you and your readers. Thanks again for an interesting site.

7/05/2006 11:00:00 PM  
Anonymous Anonymous said...

Hint #7 for . Safety First: Keep halls and stairways clear. Avoid cluttered appearances and possible injuries

7/08/2006 04:17:00 PM  
Anonymous Anonymous said...

I can never spend enough time blogging because I�m busy with my own real estate work, but I enjoyed your site. Too brief a visit, but thanks for the insight. Visit my site if you have a chance.

7/08/2006 05:20:00 PM  

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