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Home prices drop 0.5 pct. from February to March
"When you loot at recent trends, there are signs of renewed weakening in home prices," he said in a statement.
This is discouraging for American homeowners who have seen the value of their largest asset deteriorate significantly over the last three years. If the home prices dip again, consumers may curb their spending and threaten the nascent economic recovery.
Looting can indeed be discouraging for American homeowners. No doubt about that.
Forehead. Desk. Whack. Whack. Whack.
Real Estate Newsletter Articles this Week: Existing-Home Sales Increased to
4.15 million SAAR in November
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At the Calculated Risk Real Estate Newsletter this week:
[image: Existing Home Sales]*Click on graph for larger image.*
• NAR: Existing-Home Sales Increase...
16 hours ago
9 comments:
I'm not sure what that means, "when you loot at recent trends." How do you loot in a market with falling prices, other than by selling now before prices fall further? I wouldn't call that looting, I'd call it strategic selling.
To me, looting would be buying a house with falsified documentation (liar's loans), then stripping and gutting it without making a single payment and disappearing before foreclosure.
We got this listing on a repo a couple of months ago. It's a dump. No garage or carport, cheap construction, no ceiling fans or light fixtures (bulbs only). Our fair market estimate of value, based on location, condition and comparable sales with adjustments, was around $40,000. The seller listed it at $70,000. If a buyer could be induced to pay that price, I suppose that would be looting. But no offers were made.
So the seller lowered the price, then lowered the price, then finally put the house up for sale on an online auction. To date, the highest bid has been $22,000.
I seriously doubt the seller will accept that offer. And I fully expect the house will be re-assigned to another realtor when it doesn't sell. That means all the work, gas, money and time--I had to spend 10 hours at an open house for this property over the weekend that only three people showed up to--I've had to invest in finding, researching, pricing, marketing, and advertising this house has been wasted.
Oh, well, that's life in the wonderful world of real estate.
All these government interventions trying to prop up house prices is pissing in the wind. Deflation is the new normal, and prices will continue to decline. Because there are more sellers than buyers, credit is hard to come by, and sales are slowing. When prices fall to within a reasonable level of incomes, then they will be at the bottom. But with stagnant or declining wages and credit contraction, there's no telling where that will be.
That said, I think most people are missing the salient point here. Prices fluctuate, up and down. You only lose money in real estate if you are forced to sell. (Or if you're forced to work in this business, like I am. Ha!)
The supposed value of your home at this particular time only matters if you're trying to sell. If you're living in your home and don't intend to sell, all of this is much ado about nothing.
Just live in and maintain your home, pay off the note, and wait for the market to recover, which it will eventually will.
A house is not an asset, because it doesn't generate income. It's a capital savings account with expenses. When viewed at in this way, it's value (read equity) is determined by when it's sold, not by its estimated value when it's not for sale.
All these government interventions trying to prop up house prices is pissing in the wind.
Truer words were never written.
However, I do have one quibble. In some markets, a lot of prices will never come back.
MOM, you have no idea.
Yeah, in some markets, prices will never return to what they were. Because the jobs have been exported and the remaining wages depressed. Thank you, globalization.
I spend several hours witing ads, uploading pictures, for the Source magazine, of which we own the back page and centerfold. As soon as I enter these ads, I find out that some properties are pending contract, others had price reductions, and still more listings came in. So I have to go back, hide pendings, make the price changes and add new listings. It's insane.
What is the point of paying to advertise a property that is already under contract? What is the point of paying to advertise a house at a certain price, if that price is lowered the next day?
We have to pay for print ads weeks in advance. By the time the magazine comes out, some houses are already under contract, others have had price reductions, and still others need to be advertised but can't be. It's an exercise in redundancy.
GawainsGhost,
This is what I would call the recent "looting" trend.
Nobel prize-winning economist described the root of the financial crisis in 1993
In the paper, they argued that several financial crises in the 1980s, like the Texas real estate bust, had been the result of private investors taking advantage of the government. The investors had borrowed huge amounts of money, made big profits when times were good and then left the government holding the bag for their eventual (and predictable) losses.
In a word, the investors looted. Someone trying to make an honest profit, Professors Akerlof and Romer [co-author of the paper, and himself a leading expert on economic growth] said, would have operated in a completely different manner. The investors displayed a “total disregard for even the most basic principles of lending,” failing to verify standard information about their borrowers or, in some cases, even to ask for that information.
The investors “acted as if future losses were somebody else’s problem,” the economists wrote. “They were right.”
MOM,
"In some markets, a lot of prices will never come back."
I am reminded of Detroit's Silverdome selling for roughly the price of my Seattle area home. Mine only sits on 1/3rd acre though. It's no Friedman compound!
Yeah, and at least the Silverdome hosted a Wrestlemania!!!
GYSC,
I could host a nap-a-thon right now. Would that count?
I stayed up late last night expecting to see some serious stock market volatility. I managed to see the down half but I dozed off before seeing the up half, lol.
That's ok, no one awake and alive bought the ramp up anyway, just a bunch of algos.
My link no longer points to a "loot at recent trends" article.
Have no fear, I went "looting" for it and it has popped up in other places, lol.
NPR: Home Prices Down In Major Cities
"When you loot at recent trends, there are signs of renewed weakening in home prices," he said in a statement.
Can't let the "loot" get away! Look and loot are so interchangeable.
Look quotes
I don't mind making jokes, but I don't want to loot like one.
A man should loot for what is, and not for what he thinks should be.
It is always wise to loot ahead, but difficult to loot further than you can see.
And lastly...
When you loot into an abyss, the abyss also loots into you.
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