Home selling and buying challenges today

[Conan The Librarian]

I've got two friends trying to sell their houses now. Here's some of the difficulties they face:
1) Very picky buyers. They want the place to be perfect.
2) Competing with short sales and foreclosures. This conflicts with 1 but it's reality. The foreclosures and short sales definitely won't be perfect, but they will cost less.
3) Short sales and foreclosures are influencing appraisal values such that the appraised values are lower than expected. This creates deal breakers where the buyer can't buy because the bank won't lend more than the appraised value.
4) Loans are available now, so people are in the market looking to buy. A couple of years ago it was difficult or impossible to get loans in some markets.
5) One of my friends took his house off the market because he couldn't get his price for it, so he'll wait a couple of years. My other friend is afraid they may need to do this also.
6) There is deep pessimism among home sellers now.
7) For people who own rental homes, renters can be really bad now and need to be diligently checked. A lot of them are people who had foreclosures because they could'nt afford a $1000 mortgage payment. Now they're trying to rent a house with a $1000 rent. They can't afford that either, but they're looking for a house to rent anyway.
 
Add more to the list if you are aware of anything.
 

[Conan The Librarian]

Home ownership as a practice in America is relatively new. Going back to say, the 1890s, middle class people preferred to rent because if there were bad neighbors or something they didn't like happened to the neighborhood, they could just leave. The people that benefitted from home ownership were the ones who could use the property for profit such as:
1) Raising livestock
2) Farming or commercial gardening
3) Taking in renters or boarders
 
Zoning laws eliminated a lot of the incentives to own property, but the rising values and tradition created a culture of people who considered home ownership as an investment.
 
As a home owner, I don't see it as an investment. I see it as a stable money pit that always needs work and an influx of money. Combine that with an actual property tax rate that is about 2.3 times nominal, and it's hard to justify owning my house for financial reasons.
 
(The acutal vs nominal property tax I refer to is how I interpret periodic assessments for upgrading my septic system, re-paving the road our house is on, etc. These are all in addition to property tax.)

[bulletstuffer]

Conan,


You are correct.  The things that will affect the market for a long time.


This is a simple supply and demand issue.  We have a break in the chain.


1 Foreclosures-These people were potential move up buyers knocking out a large segment of future buyers


2 Short sales-These people were potential move up buyers that won't qualify for a new purchase for years


3 The banks have tightened up credit requirements and regulations for home purchases knocking out a large segment of future buyers no matter how low the interest rates are!


4 The banks won't refinance homes that are under water which is understandable but will lead to more short sales and foreclosures


5  JOBS...people have lost them, got another that doesn't pay as much or are worried about keeping the one they have.  These are fence sitters worried about making the 30 year commitment


6 You have fence sitters thinking the market will continue to go down so why be in a hurry to purchase


7 The appraisers are concerned for their jobs and have become very conservative in valuations coming in with low appraisals more than in the past


8 Cash buyers have moved into the market but will not purchase unless it's a screaming deal.  Who could blame them.


9 Oh and the shadow inventory that will take years to sift through the market


10 There has been a dangerous paradigm shift in the view of owning a home as an investment and being part of the American dream


But besides these few things its all Rainbows and Sunshine in the real estate market


Keep your fingers crossed for our County!!!!!!!


Bulletstuffer

[blind ear]

It is far beyone a supply and demand issue. It is a bubble market that is far overvalued due to the banks takeing upsidedown loans on the front end. It won't correct until there is a major correction overall in all money property markets. The entire banking system is overvalued and will have to adjust to real values if the United States is to remain a capatalist country and not transition to a socialist state. An ecconomic crash is over 30 years past due. The average is every 50 years, it has been 80 years since the last crash. ear

[bulletstuffer]

Oh yea and what blind ear just said!  I was tired of writing    It is a very sad state of affairs    


Bulletstuffer

[Curtis]

All I know is I've been in my house for 23 years, the last five of which have been free and clear.  I don't plan on going anywhere and this was my first house.  I never understood the excitement of someone who tripled their money on a house, but then had to go pay the new market price for another one to move into.  They didn't gain anything as far as I see.  I bought my one and only house at age 29 and will probably die here, that's got to be worth lots of money right there.
 
Curtis

[hillbill]

lots of people buy houses and then whine they are underwater in them.i really have no sympathy for them. if yu want a house, pick up a damm hammer and build one.its not all that hard really.yu save up sum money and get your well and septic in place, most of that can be done yourself.pour a floor with plumbing in place and just git after it.1 guy can build a 1200 sq ft house in 3 months while holding down a full time job.

[Conan The Librarian]

Hillbill:


Sounds like you are describing a nice southern house. My house is a northern stick house and i am sick of it. Way too complex. Basement. High maintenance. Stupid eco BS septic system. I may take your advice and do a Real house thats easy to maintain.