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comments on a recent globe article on bostonbubble

 
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unreal_estate
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PostPosted: Mon Oct 09, 2006 6:13 pm GMT    Post subject: comments on a recent globe article on bostonbubble Reply with quote

article posted on boston bubble website:

http://www.boston.com/realestate/news/articles/2006/10/08/fear_and_anxiety_in_the_housing_market/?page=full

To author:

While I can understand the anxiety of Seller's in a market like this, trying to sell, it strikes me as odd that there was never any news reported about the 'anxiety' of buyers trying to break into a grossly overpriced market where sellers expected buyer's to 'beg' them to sell to them at more than the asking price.

The folks in Haverhill you wrote about paid $99,000.00 for their unit in 1999. There investment has doubles in less than 7 years, and yet people/financial advisers feel 'bad' for them because they can't sell at a hefty profit. Please...people in the inner cities can hardly feed their children, never mind about the horrible living conditions. I think their 'devastated 5 year old' will be just fine with food in his belly and a warm bed in a room not riddled with rodents and mold. Haven’t you ever shared a room with a sibling?

What about the poor fool being told by the mortgage broker, the realtor and seller that 'houses never lose value' or 'just take out an option arm or interest only to get into the house. it'll be worth 20% more in a year and if you can't handle the payments when the note adjusts....just sell it at a hefty profit'.

Frankly I am disgusted with the selective media attention regarding housing. There are so many ridiculous articles about 'poor sellers' who can't find a 'greater fool' to pawn off their debt onto.

Your article talked about some folks who tried to auction their property. I quote: `I want to sell, but I'm not going to give the house away," said Stephen Greenstein, noting that another Nahant home, a three-bedroom, sold through AllynAuction in July for $1,050,000. ``I'd rather wait for the right offer." Well, why don't you also tell folks that these people paid $497,000.00 for this property in 1997. That's right 497K!

So it's ok for a buyer to just hand over $402,000.00 in profit to the seller....? Do you really think the Seller's have lost $326,000.00 cuz they couldn't find some fool to pay over 1Mil for it....?

When is that perspective ever offered for the benefit of a buyer being suckered into overpaying for a property? What about someone advising them not to just "hand over equity to someone else"…that values can’t and will not be sustained.

It seems buyers only want to recognize the rules of supply and demand when it benefits them. Supply is up…demand is down…well folks…that means prices come down. It works both ways.

The Greensteins may well have wished they took that 839K offer on their property as the bottom is a long way down. It’s just getting started. But hey, at least they saved someone the headache of overpaying in a declining market. Hang onto to it for another 10 years folks, by then it may be worth your million plus.
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Dorchester Grandma
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PostPosted: Tue Oct 10, 2006 8:12 am GMT    Post subject: "poor sellers" Reply with quote

Well said! I read about the anxiety and fear of sellers who want to upgrade to a bigger and better home with two bathroom but can't sell their smaller home.

How about those hardworking people who are priced out of the market completely? All that is available is some ramshackle place or shoebox size apartment in their price range. Are we supposed to feel sorry for those poor downtrodden professional couples making six figures and holding out for a home priced right for them? Just read about a couple in Charlestown who held out for a good deal and found the perfect condo costing only $400,000. Hey what is your problem? If I could spend that much on a home, then finding one would be easy. These rich yuppies are so spoiled. They are the ones who are responsible for the gentrification of Charlestown which used to be a blue collar affordable community!
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Another Guest
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PostPosted: Tue Oct 10, 2006 12:01 pm GMT    Post subject: Well said Grandma Reply with quote

Vey articulate and exposes the bias for profit.
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unreal_estate
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PostPosted: Tue Oct 10, 2006 1:34 pm GMT    Post subject: I did send my comment to author/reporter of article. Reply with quote

Should she respond I'll update this post. I have no clue as to how many of these reporters actually respond to comments, etc. I'd imagine probably not that many when a comment is not in accordance with reporter's perspective.

Maybe I'm wrong....hopefully.
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WaitingToBuy
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PostPosted: Tue Oct 10, 2006 8:58 pm GMT    Post subject: Buyers get no respect Reply with quote

I agree with the first post here. I've been looking for a home for months. Here are some of things I've seen:

1) I've been escorted out of a Coldwell Banker office for trying to offer a half a million all cash bid on a place listed at $700K. It's empty and has been for sale for a year. I offered my valuation analysis including an income analysis, a 20 year history of home sales and appreciation in my local market, a replacement cost analysis and yet the agents refused to even look at it let alone show it to the seller along with my bid.

2) Several houses that claim to have huge price reductions but in reality are down only 5% from original list. It's tough on those sellers to give back all of the easy paper gains.

3) Sales agents that claim they're selling houses at 95% of original list when in reality they exclude at least 20% of the market that has been relisted under different MLS numbers. They also refuse to comment on the 18 months of inventory that remains unsold.

Buyers are in a vulnurable position if they don't take the time to calculate the actual value of the house they're thinking of buying. It's like handing over your 401K to the seller and wiping out your financial future if you overpay by a $100k or more. It used to be that you would just buy as much house as you could afford but now that's financial suicide. Home prices are unlikely to appreciate off of this base. Buyer beware.
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admin
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Joined: 14 Jul 2005
Posts: 1821
Location: Greater Boston

PostPosted: Tue Oct 10, 2006 9:08 pm GMT    Post subject: Reply with quote

Quote:
I've been escorted out of a Coldwell Banker office for trying to offer a half a million all cash bid on a place listed at $700K. It's empty and has been for sale for a year. I offered my valuation analysis including an income analysis, a 20 year history of home sales and appreciation in my local market, a replacement cost analysis and yet the agents refused to even look at it let alone show it to the seller along with my bid.


It is my understanding that real estate agents are legally obligated to present all offers to the seller. I could be wrong, but I do remember reading this before and this RE/MAX website says the same thing: http://www.yourguidehome.com/seller_tools.html You might want to remind them of their obligation, if you are still interested in the property.

- admin
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AgentGrn



Joined: 28 Sep 2006
Posts: 82

PostPosted: Tue Oct 10, 2006 9:19 pm GMT    Post subject: Reply with quote

I think if I had $500k, I'd put it in an ING Direct account for awhile. At least it'll grow there.

The downturn is definitely here. I can't wait to see the adjusted YOY charts when they hit here at the end of the month.
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dmchattie
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PostPosted: Wed Oct 11, 2006 12:36 am GMT    Post subject: The Consumer Reply with quote

John F. Kennedy said "The consumer is the only person without anyone representing him in Washington. I would like to be that representative". Or something like that.

We all share the same type of bias expressed by the mainstream media - we only notice it when the bias adversely affects our interests. We renters recognize this bias in the perspective represented when dealing with the subject of the housing market.

Touch upon any economic issue and you will find that asking the question: 'what is best for the consumer?' is the best guide to your solution. I alienate a lot of friends when I use this to defend Wal-mart. Yes, Wal-mart. Sure, they drive a hard-bargain with their employees and their suppliers - but it is not without benefit. The consumer benefits from high-quality, low-cost goods. Your nurse, your school-teacher, your bus-driver, your waitress: all good, hard-working people whose standard of living is directly and positively impacted by the availability of inexpensive and relatively acceptable quality goods at Wal-mart. And there are many millions more consumers who benefit than the relatively few employees who suffer at Wal-mart.

Now, let's look at the housing market - what is best for the consumer? High quality, low-cost housing benefits the consumer. It is because the consumer is not typically the focus of our dialogue that we lose sight of how adversely he/she is affected by housing asset inflation.

We need to shift the dialogue, to shift our perspective in all economic issues - what is best for the consumer? We consumers need to speak up for ourselves against the banks, mortgage companies, developers, realtors, all of whom are well-represented in Washington, in the state house and in the mainstream media.

Please think about this, please give this some thought. For more information read "The Power of Productivity" by William Lewis, the founder of McKinsey's Global Institute.
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DDpricedout
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PostPosted: Wed Oct 11, 2006 11:20 am GMT    Post subject: So true... Reply with quote

Dead on - I had been waiting YEARS for there to be talk of the overpriced market, wondering why it was never talked about or highlighted, and feeling like I was a minority in worrying about never being able to afford a home of my own, now there's so many blogs I'm enjoying reading all of them! After many years, I have hope again of maybe being able to have my own place one day ... and I'm really not asking for that much!
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BillK
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PostPosted: Wed Oct 11, 2006 3:49 pm GMT    Post subject: Renting - in the best interest of the Consumer Reply with quote

Perhaps renting is in the Best interest of the consumer.

There are lots of psychological and cultural challenges to being a renter. But, I think it may be the best long term financial choice for the American consumer - perhaps there needs to be a shift in American society.

When you own you are at the mercy of the local school board and Town politicians who are primarily interested in spending other peoples money. Many towns are swamped with debt to pay for new schools and fancy playgrounds. Please consider that I am a parent and I love children. But, we do wrong by the children when we let our local politicians spend without regard to the long-term impact on the community. Real Estate taxes and increasing government fees is as detrimental to the qulaity of life as is out of control Real Estate Properties.

Whenyou own a property you routinely spend too much money on home renovations, fancy furniture, and lawn care. When you rent you spend No time or money on lawn care, the local Schools must provide an education to your children, some one else clears the snow from your driveway, no more haggling with dis-honest roofing contractors, out of pocket expenses for caring for a property go to ZERO$.
No need to call a Lawyer or Real Estate broker when you move - meanwhile your Nest Egg can grow without regard to how the Real Estate Market is doing.

A lot of wealthy folks chose to rent - its another myththe Middle Class teach children that the only way to get rich is to own your house.
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