There are still major problems happening in the US real estate market with foreclosures. According to CNNMoney.com, foreclosures have jumped 90% over last year. To blame is the slowing real estate market and the subprime lending nightmares.
According to RealtyTrac, the US foreclosure rate was one foreclosure filing for every 656 U.S. households during May.
These problems, and numerous others, are encouraging the Federal Reserve to tighten up regulations to slow things down. According to CNNMoney.com, there are four areas where the government and those highly affected by these problems are focusing right now:
1. Prepayment Penalties- Where borrowers are stuck with high interest rates or fees because they can’t afford to pay the penalties involved to refinance or sell to get lower rates and fees.
Insurance and Taxes Not in Escrow- When neither of these is being paid out of escrow and money gets tight, borrowers stop paying these. Taxes get behind and insurance lapses, and the lender is left with the consequences.
2. “Stated” or “No Doc” Loan Programs- These encourage borrowers to participate in what many call “liar loans” where income and assets are exaggerated.
3. Poor Judgement on the Borrower’s Payment Ability- Because most brokers do not have to worry about what happens after closing, deals are made that should not be happening in order to make a commission.
4. Lenders have already begun tightening things up and it’s gotten harder and harder for homeowners to get a good loan on a property, never mind your average investor.
Showing posts with label real estate. Show all posts
Showing posts with label real estate. Show all posts
Wednesday, June 27, 2007
Thursday, May 24, 2007
When You Are Ready To Sell
Realtors contend that well-priced homes sell in any market and any season but home sellers today have to assume a declining market when determining their asking price.
Since you have no control over the declining market, focus on the items you can have control over, the three P’s of home selling: pricing, promotion, positioning. Price it competitively, promote it everywhere it can be posted and position it well through home ‘staging’ principles made famous by Barb Schwarz. Free your home from clutter and claustrophobia before you put it on the market and clean it thoroughly. Staging will create an opportunity for buyers to focus on the home and the architecture instead of your life and hobbies.
The home seller who needs to sell with a certain period of time should structure his home sale with price reductions in mind on a scheduled basis. Some real estate agents push for price cuts after 14 days or 21 days. Most agents will tell you that the first 30 days of the listing is the critical period. After that the listing is ‘stale.’ You don’t want buyers wondering if something is wrong with your house when the only thing wrong is that you priced it too high.
Although many real estate brokers and agents are highly skilled in their knowledge of their local real estate market and can produce solid CMAs (comparative market analysis) and BPOs (broker price opinions), the trained professionals who conduct the most thorough reports are licensed appraisers such as members of American Society of Appraisers.Their web site offers the following tips for maximizing your home sale price:-
Update the paint and carpeting. The best thing you can do to update the look of your house is give the outside and the inside a fresh coat of paint and add new carpet. When in doubt, nothing works better than a fresh coat of white paint. -Give your house curb appeal. If you are going to spend any money on the yard or landscaping, work on the front yard. It is more important to buyers that a home looks good from the street. They can always fix up the backyard later.
-Clean house. Even if you have to put things in storage, clear your rooms and garage of clutter, knickknacks, etc. Sparse and simple are better than clutter and will make your rooms look bigger.
For homeowners who are thinking about selling in the long term, appraisers note that many people put time and money into areas that don’t increase value. For the best bang for your buck, think about the following:-Add square footage. When it comes to your house, nothing will offer a greater return on investment than putting an addition onto your home. -
Build out your garage. You may not think so at first, but your garage is of great interest to buyers. By adding a garage or expanding the garage you have, you will increase the value of your property. -Think before you build that pool. Even though you may love the idea of having a pool, don’t build one thinking of it is an investment. Many buyers don’t want a pool and don’t want the upkeep.
Location, location, location. The best thing you can do to make sure your home sells is to buy in a good location in the first place. When it comes to the value of your home, the location is still the most important factor.The bottom line advice is to sharpen the pencil and do the best you can on your own home pricing to compete with the other sellers. Yesterday’s prices are history so focus on the most recent sales of comparable properties.
Incentives or gimmicks can get you added attention but the value has to be there for the buyer to get excited about your offer to pay closing costs, etc. You might consider offering to pay the mortgage for 3-6 months for the home buyer. That incentive could calm relax the nervous buyer who is fearful of not selling his own home as part of his trade up or downsizing move. You can also offer agent bonus incentives but it can create a conflict for agents who work as buyer’s agents and must put the buyers’ interests first.
Since you have no control over the declining market, focus on the items you can have control over, the three P’s of home selling: pricing, promotion, positioning. Price it competitively, promote it everywhere it can be posted and position it well through home ‘staging’ principles made famous by Barb Schwarz. Free your home from clutter and claustrophobia before you put it on the market and clean it thoroughly. Staging will create an opportunity for buyers to focus on the home and the architecture instead of your life and hobbies.
The home seller who needs to sell with a certain period of time should structure his home sale with price reductions in mind on a scheduled basis. Some real estate agents push for price cuts after 14 days or 21 days. Most agents will tell you that the first 30 days of the listing is the critical period. After that the listing is ‘stale.’ You don’t want buyers wondering if something is wrong with your house when the only thing wrong is that you priced it too high.
Although many real estate brokers and agents are highly skilled in their knowledge of their local real estate market and can produce solid CMAs (comparative market analysis) and BPOs (broker price opinions), the trained professionals who conduct the most thorough reports are licensed appraisers such as members of American Society of Appraisers.Their web site offers the following tips for maximizing your home sale price:-
Update the paint and carpeting. The best thing you can do to update the look of your house is give the outside and the inside a fresh coat of paint and add new carpet. When in doubt, nothing works better than a fresh coat of white paint. -Give your house curb appeal. If you are going to spend any money on the yard or landscaping, work on the front yard. It is more important to buyers that a home looks good from the street. They can always fix up the backyard later.
-Clean house. Even if you have to put things in storage, clear your rooms and garage of clutter, knickknacks, etc. Sparse and simple are better than clutter and will make your rooms look bigger.
For homeowners who are thinking about selling in the long term, appraisers note that many people put time and money into areas that don’t increase value. For the best bang for your buck, think about the following:-Add square footage. When it comes to your house, nothing will offer a greater return on investment than putting an addition onto your home. -
Build out your garage. You may not think so at first, but your garage is of great interest to buyers. By adding a garage or expanding the garage you have, you will increase the value of your property. -Think before you build that pool. Even though you may love the idea of having a pool, don’t build one thinking of it is an investment. Many buyers don’t want a pool and don’t want the upkeep.
Location, location, location. The best thing you can do to make sure your home sells is to buy in a good location in the first place. When it comes to the value of your home, the location is still the most important factor.The bottom line advice is to sharpen the pencil and do the best you can on your own home pricing to compete with the other sellers. Yesterday’s prices are history so focus on the most recent sales of comparable properties.
Incentives or gimmicks can get you added attention but the value has to be there for the buyer to get excited about your offer to pay closing costs, etc. You might consider offering to pay the mortgage for 3-6 months for the home buyer. That incentive could calm relax the nervous buyer who is fearful of not selling his own home as part of his trade up or downsizing move. You can also offer agent bonus incentives but it can create a conflict for agents who work as buyer’s agents and must put the buyers’ interests first.
A Receipt for a Successful Sale
Seven Main Ingredients that Make up a Sell / Purchase
When all of the following ingredients are in agreement…
Location:
To coin the favorite phrase of appraisers: “Location, Location, Location.” The pricing of your property must reflect its location.
Condition:
The upkeep and presentation of your property is crucial to obtain the highest value for your home in any given market at any given time.
Price:
Price is the number one factor in the sale of a home. A property is really only worth what one person is willing to pay another to gain ownership of it. Price must be in direct relationship to the other 4 ingredients and it is the most important of all!
Terms:
The more terms available on your property the more potential purchasers you reach. The pricing of your property must reflect the kinds of terms available to purchase it.
The Market:
I.E. Interest rates, competition, and the economy all make up and influence the state of the Market when you sell your home. The pricing of your property must reflect the current status of the Market.
Creative Financing
Financing can be time consuming and stressful. When the buyer is pre-approved it makes the process run smoothly.
A Good Realtor:
An agent that cares about what your goals are and is willing to work towards that goal of getting the best deal in a timely manner is exactly what you will need.
Setting the best price to list your home is part science, part art. There are several aspects of the home's value we consider when making pricing recommendations.
1. Comparison. Where does your home fit in the marketplace? It should be priced to be competitive with comparable houses in the same area.
2. Negotiation. The price should allow some space to make concessions in order to close the deal.
3. Return. The listing price should be set so you net the most money possible from the sale.
4. Target. Ideally, the price is adjusted to the top of a multiple listing category, so the home's features compare favorably with lower-priced homes in the range. (If it is placed at the bottom of the next higher price grouping, the higher-priced houses will look better and sell more quickly.)
Unfortunately, what you paid for your home is not a factor in determining its market value. Neither is what you would like to get out of the home. Some home improvements you've made may add to the market value, however. Having the house in picture-perfect condition from the first day of the listing may also increase the value of your home. But mostly, these will help you sell faster, and that could mean a sale price close to your asking price.
Don't offer gimmicks; instead, correct defects -- cosmetic and structural -- and price the property right. The biggest incentive you can give a buyer is a well-prepared home that's listed for a realistic price. The listings that are selling in today's market are priced right for the market, they look good and there's no doubt in anyone's mind that the property is available.
Consultation with an accountant and/or attorney is recommended before entering into any financial transaction.
When all of the following ingredients are in agreement…
Location:
To coin the favorite phrase of appraisers: “Location, Location, Location.” The pricing of your property must reflect its location.
Condition:
The upkeep and presentation of your property is crucial to obtain the highest value for your home in any given market at any given time.
Price:
Price is the number one factor in the sale of a home. A property is really only worth what one person is willing to pay another to gain ownership of it. Price must be in direct relationship to the other 4 ingredients and it is the most important of all!
Terms:
The more terms available on your property the more potential purchasers you reach. The pricing of your property must reflect the kinds of terms available to purchase it.
The Market:
I.E. Interest rates, competition, and the economy all make up and influence the state of the Market when you sell your home. The pricing of your property must reflect the current status of the Market.
Creative Financing
Financing can be time consuming and stressful. When the buyer is pre-approved it makes the process run smoothly.
A Good Realtor:
An agent that cares about what your goals are and is willing to work towards that goal of getting the best deal in a timely manner is exactly what you will need.
Setting the best price to list your home is part science, part art. There are several aspects of the home's value we consider when making pricing recommendations.
1. Comparison. Where does your home fit in the marketplace? It should be priced to be competitive with comparable houses in the same area.
2. Negotiation. The price should allow some space to make concessions in order to close the deal.
3. Return. The listing price should be set so you net the most money possible from the sale.
4. Target. Ideally, the price is adjusted to the top of a multiple listing category, so the home's features compare favorably with lower-priced homes in the range. (If it is placed at the bottom of the next higher price grouping, the higher-priced houses will look better and sell more quickly.)
Unfortunately, what you paid for your home is not a factor in determining its market value. Neither is what you would like to get out of the home. Some home improvements you've made may add to the market value, however. Having the house in picture-perfect condition from the first day of the listing may also increase the value of your home. But mostly, these will help you sell faster, and that could mean a sale price close to your asking price.
Don't offer gimmicks; instead, correct defects -- cosmetic and structural -- and price the property right. The biggest incentive you can give a buyer is a well-prepared home that's listed for a realistic price. The listings that are selling in today's market are priced right for the market, they look good and there's no doubt in anyone's mind that the property is available.
Consultation with an accountant and/or attorney is recommended before entering into any financial transaction.
Buyer: Be Prepared To Buy
Buying a home is one of the most important personal and financial decisions you'll ever make. We want you to have this step-by-step guide to help you be prepared to buy your first home.
Knowledge Is Power ...
Accurate Information Is Essential Knowledge is power become an educated consumer because misinformation can get in your way. First, learn about the process and requirements for buying a home. Choosing Your Real Estate Professional Deciding to find and buy a home is one of the most important decisions of your life. It combines your personal hopes and dreams with wanting what's best for you and your family. It means making changes. That's why it's in your best interest to choose an experienced real estate agent who listens to and understands your needs, and works in the area where you want to live.
Reduce the Stress, Develop a Financial Plan
You can reduce the stress of home buying by thinking ahead. Before you find a home you want to purchase, develop a financial plan. This plan becomes your guide not only for saving money for the down payment, but also for covering other expenses such as your credit check, mortgage application and closing costs.
Establishing Credit
Having an established credit history plays an important role in the home buying process. It's never too soon to start building a good credit history. Start by diversifying how you pay for things; don't pay for everything with cash. Pay your bills on time, limit your debt, reduce the number of credit cards you have, and use them responsibly. Your goal is to show that you are financially responsible and a "good credit risk."
Closing and Other Additional Costs
After you find a home and receive mortgage approval, the closing is when ownership of your new home officially transfers from the seller to you. In some cases, sellers pay the closing costs. If not, you need to be prepared to pay this additional cost. This can add another two to five percent to the home purchase price. These costs also can vary from state to state.
Finding A Home …Your Search
Where do you start when you're ready to find a home? You'll want to have an idea of the features you "want" versus "need" in a home. Then the fun begins!
Making An Offer
When you find a home you want to buy, you'll make the seller an offer in writing. Your offer is typically the first step toward negotiating a sales contract. That's why determining how much to offer is more complex than simply determining a price. Because of the large amount of money involved, both the buyer and the seller need to protect their investments and limit their risk. This is why when you make an offer, you not only specify the price you are willing to pay, but also the other details of the purchase.
Contingencies
Contingencies generally allow you to anticipate potential problems so if something goes wrong, you can cancel the contract without penalty. If you cancel a contract without having agreed upon conditions and contingencies, you could find yourself forfeiting your good faith deposit and money spent to inspect the property, as well as other damages. For this reason, it's recommended you retain an attorney. Your attorney will advise you about what to include in your offer to protect yourself.
Your Good Faith Deposit
Along with your offer, you'll provide a "good faith" deposit that demonstrates to the seller your serious interest in buying. This is one of the additional costs mentioned earlier. This money is deposited only once the offer has been negotiated and accepted by both parties.
The Home Inspection
After you find a home and make an offer, a house inspection is often ordered. The seller should have the property available for inspection by a professional. In a typical inspection, experts examine the existing conditions of the property. Inspections may be required by law with the elements inspected varying by region, state, and/or your agreement. The most common type is the General Home Inspection. A home inspector can provide you with a complete service that covers from the basement to the attic, as well as the exterior of the home, walls, chimneys, and fixed appliances such as refrigerators and stoves. Other specific elements that can be included: (not a complete list)
· Termite · Plumbing · Water Quality · Lead
· Radon · Septic Tank · Asbestos · Electricity
The Final Walk
Though Before the closing and property ownership is transferred, you will want to visit your future house. This "walk-through" is an opportunity to ensure that the house has been left in the expected condition. You should make sure that all the items the owner agreed to leave are still there, such as kitchen appliances. This may also include furniture and accessories listed in the final sales contract. If there are problems, discuss them with your agent and attorney. In some cases, you can ask for a discount or credit at the closing to cover missing items or last-minute damages to the property.
The Closing
To be knowledgeable and prepared, ask your agents and attorney to go over the details of the closing with you beforehand. The closing process can vary by area of the country and even within the same state. Generally, the seller is required to provide clean title to the property at closing.
FUNDING
It's also important to review your credit report. This is a record of past and current debt that states when, how and if you paid. Make sure that the information contained in your credit report is accurate. By reviewing your credit report now, you'll have the opportunity to correct an errors. Ask your Agent to help you get a copy of your credit report to review. Don't wait until you've found a home to do this. Do it now. (see funding for more info)
Mortgage Pre-approval
A pre-approval is a simple calculation done by a mortgage lender that tells you (a) the amount you'll be able to finance through a loan and (b) what your monthly payment will be. When you find a home to buy, a pre-approval also reassures the seller that you have the financial means to purchase his or her home.
Once you know the amount the bank will lend you, the next step is to determine how much to save for your down payment. This will help you define the types of homes within your budget. Keep in mind the monthly costs associated with home ownership include not only your mortgage payment, but also real estate taxes, homeowner's insurance and utilities.
Your Down Payment
A down payment is the money you pay up front toward the purchase of your new home. Typically, the larger your down payment, the less you pay each month on the mortgage, and the lower the interest costs will be over the life of the mortgage.
How large should your down payment be? Many people make down payments of 5%, 10% or 20% of the sales prices of the homes they buy.
Your Mortgage
Your options for financing the home you find depend on your personal financial situation and your unique needs. Ask your agent for guidance about contacting mortgage lenders and getting a Mortgage Pre-approval. This will help you gauge how much you can afford to spend on a home and the financing options available to you. Here's an overview of typical financing
Knowledge Is Power ...
Accurate Information Is Essential Knowledge is power become an educated consumer because misinformation can get in your way. First, learn about the process and requirements for buying a home. Choosing Your Real Estate Professional Deciding to find and buy a home is one of the most important decisions of your life. It combines your personal hopes and dreams with wanting what's best for you and your family. It means making changes. That's why it's in your best interest to choose an experienced real estate agent who listens to and understands your needs, and works in the area where you want to live.
Reduce the Stress, Develop a Financial Plan
You can reduce the stress of home buying by thinking ahead. Before you find a home you want to purchase, develop a financial plan. This plan becomes your guide not only for saving money for the down payment, but also for covering other expenses such as your credit check, mortgage application and closing costs.
Establishing Credit
Having an established credit history plays an important role in the home buying process. It's never too soon to start building a good credit history. Start by diversifying how you pay for things; don't pay for everything with cash. Pay your bills on time, limit your debt, reduce the number of credit cards you have, and use them responsibly. Your goal is to show that you are financially responsible and a "good credit risk."
Closing and Other Additional Costs
After you find a home and receive mortgage approval, the closing is when ownership of your new home officially transfers from the seller to you. In some cases, sellers pay the closing costs. If not, you need to be prepared to pay this additional cost. This can add another two to five percent to the home purchase price. These costs also can vary from state to state.
Finding A Home …Your Search
Where do you start when you're ready to find a home? You'll want to have an idea of the features you "want" versus "need" in a home. Then the fun begins!
Making An Offer
When you find a home you want to buy, you'll make the seller an offer in writing. Your offer is typically the first step toward negotiating a sales contract. That's why determining how much to offer is more complex than simply determining a price. Because of the large amount of money involved, both the buyer and the seller need to protect their investments and limit their risk. This is why when you make an offer, you not only specify the price you are willing to pay, but also the other details of the purchase.
Contingencies
Contingencies generally allow you to anticipate potential problems so if something goes wrong, you can cancel the contract without penalty. If you cancel a contract without having agreed upon conditions and contingencies, you could find yourself forfeiting your good faith deposit and money spent to inspect the property, as well as other damages. For this reason, it's recommended you retain an attorney. Your attorney will advise you about what to include in your offer to protect yourself.
Your Good Faith Deposit
Along with your offer, you'll provide a "good faith" deposit that demonstrates to the seller your serious interest in buying. This is one of the additional costs mentioned earlier. This money is deposited only once the offer has been negotiated and accepted by both parties.
The Home Inspection
After you find a home and make an offer, a house inspection is often ordered. The seller should have the property available for inspection by a professional. In a typical inspection, experts examine the existing conditions of the property. Inspections may be required by law with the elements inspected varying by region, state, and/or your agreement. The most common type is the General Home Inspection. A home inspector can provide you with a complete service that covers from the basement to the attic, as well as the exterior of the home, walls, chimneys, and fixed appliances such as refrigerators and stoves. Other specific elements that can be included: (not a complete list)
· Termite · Plumbing · Water Quality · Lead
· Radon · Septic Tank · Asbestos · Electricity
The Final Walk
Though Before the closing and property ownership is transferred, you will want to visit your future house. This "walk-through" is an opportunity to ensure that the house has been left in the expected condition. You should make sure that all the items the owner agreed to leave are still there, such as kitchen appliances. This may also include furniture and accessories listed in the final sales contract. If there are problems, discuss them with your agent and attorney. In some cases, you can ask for a discount or credit at the closing to cover missing items or last-minute damages to the property.
The Closing
To be knowledgeable and prepared, ask your agents and attorney to go over the details of the closing with you beforehand. The closing process can vary by area of the country and even within the same state. Generally, the seller is required to provide clean title to the property at closing.
FUNDING
It's also important to review your credit report. This is a record of past and current debt that states when, how and if you paid. Make sure that the information contained in your credit report is accurate. By reviewing your credit report now, you'll have the opportunity to correct an errors. Ask your Agent to help you get a copy of your credit report to review. Don't wait until you've found a home to do this. Do it now. (see funding for more info)
Mortgage Pre-approval
A pre-approval is a simple calculation done by a mortgage lender that tells you (a) the amount you'll be able to finance through a loan and (b) what your monthly payment will be. When you find a home to buy, a pre-approval also reassures the seller that you have the financial means to purchase his or her home.
Once you know the amount the bank will lend you, the next step is to determine how much to save for your down payment. This will help you define the types of homes within your budget. Keep in mind the monthly costs associated with home ownership include not only your mortgage payment, but also real estate taxes, homeowner's insurance and utilities.
Your Down Payment
A down payment is the money you pay up front toward the purchase of your new home. Typically, the larger your down payment, the less you pay each month on the mortgage, and the lower the interest costs will be over the life of the mortgage.
How large should your down payment be? Many people make down payments of 5%, 10% or 20% of the sales prices of the homes they buy.
Your Mortgage
Your options for financing the home you find depend on your personal financial situation and your unique needs. Ask your agent for guidance about contacting mortgage lenders and getting a Mortgage Pre-approval. This will help you gauge how much you can afford to spend on a home and the financing options available to you. Here's an overview of typical financing
Saturday, May 12, 2007
10 TIPS FOR BUYING OR SELLING REAL ESTATE
In the market to buy or sell real estate? Follow these tips from the people behind the HGTV program "Bought & Sold" to make the process easier.
1. Arranging an open house to attract potential buyers doesn't necessarily work. Nosy neighbors and real estate agents will be attracted to the event but not serious buyers.
2. Despite conventional wisdom, the smell of baking cookies does not make a home more appealing to potential buyers. To enhance the chances of selling a home, ensure that the home always looks and smells good, and is well-lit inside and out.
3. Hire a home-stager to help maximize your furniture and accessories. An expert can help rearrange these items to make each room look more appealing.
4. Flipping real estate is great, but be sure to hire an agent with house-flipping experience. First-timers should start with a smaller project to get familiar with the process.
5. Reduce the asking price if there are no takers within the first month. If selling the home is a top priority, reduce the price substantially. It lets potential buyers know that you are serious about selling.
6. A good listing agent can usually point out property damage, such as termites or asbestos, that could become an inspection problem.
7. Roofs, air-conditioning units, wet basements with drainage problems, and major structural issues such as dry-rotted or cracked support beams, are usually the most costly issues uncovered during home inspections.
8. Many people interview agents to list their home for sale but never consider interviewing them to help them look for a new home. Both endeavors are equally important.
9. Interview several real estate agents before selecting the one for you. It is important to meet with at least three. Don't feel obligated to accept the one that an agency assigns to you.
10. Don't ask your agent for predictions. In a fluctuating real estate market, no one can predict what will happen during the buying and selling process.
1. Arranging an open house to attract potential buyers doesn't necessarily work. Nosy neighbors and real estate agents will be attracted to the event but not serious buyers.
2. Despite conventional wisdom, the smell of baking cookies does not make a home more appealing to potential buyers. To enhance the chances of selling a home, ensure that the home always looks and smells good, and is well-lit inside and out.
3. Hire a home-stager to help maximize your furniture and accessories. An expert can help rearrange these items to make each room look more appealing.
4. Flipping real estate is great, but be sure to hire an agent with house-flipping experience. First-timers should start with a smaller project to get familiar with the process.
5. Reduce the asking price if there are no takers within the first month. If selling the home is a top priority, reduce the price substantially. It lets potential buyers know that you are serious about selling.
6. A good listing agent can usually point out property damage, such as termites or asbestos, that could become an inspection problem.
7. Roofs, air-conditioning units, wet basements with drainage problems, and major structural issues such as dry-rotted or cracked support beams, are usually the most costly issues uncovered during home inspections.
8. Many people interview agents to list their home for sale but never consider interviewing them to help them look for a new home. Both endeavors are equally important.
9. Interview several real estate agents before selecting the one for you. It is important to meet with at least three. Don't feel obligated to accept the one that an agency assigns to you.
10. Don't ask your agent for predictions. In a fluctuating real estate market, no one can predict what will happen during the buying and selling process.
Sunday, May 6, 2007
Real Estate Agents vs Snake Oil Salesman
“‘We’re in a real estate recession,’ said David Lereah, chief economist for the National Association of Realtors, who surprised many this week when he announced he would leave the Chicago-based trade group on May 19. ‘I’m projecting the first [nationwide] price drop since the Great Depression,’ he said. ‘We’re going to have negative home prices in 2007.’”
“‘He promotes housing,’ said Washington economist Dean Baker. ‘Certainly, people who were making decisions to move, they either heard David directly or from someone who heard from David that home prices will never fall, don’t worry, the market will stay strong. So they paid too much for a house.’”
“Lereah, in an interview Wednesday, shrugged off the criticism. ‘I feel confident I did a very good job forecasting and reflected what was happening in the marketplace,’ he said.”
It’s hard for me to have a whole lot of contempt for Lereah.
After all, he was just doing his job — which was NOT to give a fair and unbiased assessment of the RE market. His job was to be the mouthpiece for a group of people who sell houses for a living, and to maximize these people’s profits by getting Americans to buy and sell as many houses as possible at the highest possible price.
And you know what? He did a pretty good job.
For someone whose paycheck was signed by a group of house-sellers, what else would you have expected him to do? What would have been a desirable outcome? So he says prices are too high back in 2003, then he gets fired and the NAR puts someone more accommodative in, so now what?
It just goes to show Beware of Snakeoil Salesmans. If it sounds too good to be true, it probably isn't. Do your OWN homework. Crosscheck even your real estate agent as they want to get paid as well, no matter how or who is doing the paying.
Sunday, April 29, 2007
No Housing Bubble HUH?
I wonder where is this author now? I also wonder how much money he made off of those who believed him, when he said, "there was no housing bubble." I wonder.
Kevin - If you look in today's online version of the WSJ you will also find an extensive article titled "What housing bubble?" You can read the article but the author's basic conclusion is pretty scary.
-Minyan JB
Thank you for the link MJB. The author's main thesis is: "There is no housing bubble." Among the evidence he uses to support this conclusion are the fact that he believes the strong housing market is a function of a variety of factors with "real" economic underpinnings: low interest rates, job growth, parental contributions, optimistic view of future earnings power. He goes on to cite three "myths" of housing: too much capacity, risky mortgage products fueling appreciation, and speculators driving prices higher.
All of this is basically a way of echoing the popular denial-based saying that, "What is, is." Blind acceptance. Sure, the economic underpinnings cited by the author may be "real" in the sense that they exist, but this ignores the reality of why those "real" economic underpinnings exist.
read more here http://www.minyanville.com/articles/index.php?a=8098
Kevin - If you look in today's online version of the WSJ you will also find an extensive article titled "What housing bubble?" You can read the article but the author's basic conclusion is pretty scary.
-Minyan JB
Thank you for the link MJB. The author's main thesis is: "There is no housing bubble." Among the evidence he uses to support this conclusion are the fact that he believes the strong housing market is a function of a variety of factors with "real" economic underpinnings: low interest rates, job growth, parental contributions, optimistic view of future earnings power. He goes on to cite three "myths" of housing: too much capacity, risky mortgage products fueling appreciation, and speculators driving prices higher.
All of this is basically a way of echoing the popular denial-based saying that, "What is, is." Blind acceptance. Sure, the economic underpinnings cited by the author may be "real" in the sense that they exist, but this ignores the reality of why those "real" economic underpinnings exist.
read more here http://www.minyanville.com/articles/index.php?a=8098
Subscribe to:
Posts (Atom)
