Moxie Posted August 18, 2011 Share Posted August 18, 2011 Interest rates are at record lows and houses aren't selling. What will it take to fix the market? Banks are lending; we just got approved for an amount WAY outside our price range. One realtor told us to hold on to our house because there might be another home-buyer tax credit someday. I'm not even sure that would do it. What is the solution? Quote Link to comment Share on other sites More sharing options...
Renee in NC Posted August 18, 2011 Share Posted August 18, 2011 Housing prices are going to have to come way down to be in line with the reduced wages that many are facing. Quote Link to comment Share on other sites More sharing options...
MariannNOVA Posted August 18, 2011 Share Posted August 18, 2011 Interest rates are at record lows and houses aren't selling. What will it take to fix the market? Banks are lending; we just got approved for an amount WAY outside our price range. One realtor told us to hold on to our house because there might be another home-buyer tax credit someday. I'm not even sure that would do it. What is the solution? Consumer Confidence would go a long way to jump starting the housing market. Job security would as well. At least that is what we are thinking here in a DC suburb. Quote Link to comment Share on other sites More sharing options...
Moxie Posted August 18, 2011 Author Share Posted August 18, 2011 Housing prices are going to have to come way down to be in line with the reduced wages that many are facing. But that is part of the problem. They are so low, people either aren't selling or they are taking a real bath when they do sell. Quote Link to comment Share on other sites More sharing options...
Happy Posted August 18, 2011 Share Posted August 18, 2011 Consumer Confidence would go a long way to jump starting the housing market. Job security would as well. At least that is what we are thinking here in a DC suburb. This. Too many people are worried that their jobs may go away. Too many businesses are holding their breath on expansions so not much hiring going on....although three people I know who were unemployed are now employed at good jobs...so maybe that's changing, too. And Sellers are worried about losing much of their perceived value. There are still too many foreclosures coming on and shooting market value for a neighborhood in the foot. Sigh. I have buyers right now who can't find what they want because too few homes are on the market--and they are super picky. It's an interesting market. Quote Link to comment Share on other sites More sharing options...
Carrie12345 Posted August 18, 2011 Share Posted August 18, 2011 My house value has dropped 40% in the past 3.5 years. I can afford a much nicer, much bigger house... if only I could afford to sell this one. :glare: Quote Link to comment Share on other sites More sharing options...
Renee in NC Posted August 18, 2011 Share Posted August 18, 2011 But that is part of the problem. They are so low, people either aren't selling or they are taking a real bath when they do sell. It's a catch-22! My landlord is renting our house out because he couldn't sell it. He wants $155K for something that is worth (now) about $100K, if that much. He won't ever sell it, because someone who can afford to spend $155K isn't going to go for the 1200 square foot doublewide, KWIM? He can't lower his price because he owes that much. Quote Link to comment Share on other sites More sharing options...
Mama Geek Posted August 18, 2011 Share Posted August 18, 2011 The banks will have to sell off their inventory for whatever they can get and take the losses. If and when that happens the housing market will take another significant drop, but that should be the bottom, IMO. Quote Link to comment Share on other sites More sharing options...
Sebastian (a lady) Posted August 18, 2011 Share Posted August 18, 2011 Housing prices are going to have to come way down to be in line with the reduced wages that many are facing. We really intended to buy a house with this move. Even had 100k in the bank for a down payment. But DC prices were so high that once we added in closing costs and taxes, we were well outside our comfort zone. There is no way that I am going to be willing to pay $1000 over our housing allowance for mortgage and taxes (before utilities and maintenance costs). Prices here would still need to come down a good deal more for us to be buying. I know there are a lot of sellers who cannot afford to reduce more. That sucks. But I am not going to add my family to the ranks of those who can't any longer afford their mortgage. So we rent and wait. And the recent proposal to change military retirement makes me even more reluctant to encumber ourselves financially. Quote Link to comment Share on other sites More sharing options...
justamouse Posted August 18, 2011 Share Posted August 18, 2011 Housing prices are going to have to come way down to be in line with the reduced wages that many are facing. :iagree: The economy is going to have to grow to be big enough to normalize the former housing bubble under which many people bought houses (which is why they are now under water). In the 80s, Denver had a regional (oil and gas) recession, and housing was in at least as big a pickle as it is now. In 1985, we looked at a house (dreamland at this point, not possible) that was $250,000. In 1987, that same house had been on the market for a year at $125,000 and had not sold. Now, that house is probably a million dollar house. We had to move and had 2 condos on our hands at the time. It took eight years for them to get back to "break even." During those 8 years, many people walked, and the government was auctioning off for $17,000 condos like ours which carried a loan of $45,000. You can't do anything in that situation. One guy I know let his get foreclosed, and then bought it back at auction, and recently sold it for $80,000, which is what other people are selling their condos for, but THEY are underwater. But the economy did recover, after the oil and gas recession was over, and both our condos sold in the same week...after 8 years...and in 6 months, one of the re-sold for DOUBLE what we had sold it for. We learned a lot of relatively cheap lessons at that point. :0/ The economy has to grow and stabilize. As long as we have unemployment that is really much higher than 9% (because people don't stay on unemployment, even though they still don't have jobs, so they don't get counted) it's not going to recover. Jobs and reduced doubt about tax policy are the keys. Unemployment has to be cut by at least 1/3 for that to be the case. Also, some areas of the country simply will not recover to their former position. People vote with their feet, and that is going to do great harm to some areas of the country. There was a news story today about wealthy people (who have businesses to run and to employ people) leaving Maryland because of the tax policy. That has already happened to NJ, NY, CA and some other states...Texas and the Southwest being winners in the shake-out. :iagree::iagree: NJ suffered an EXODUS of high wage earners because the taxes are so high. They took their families and businesses to other states. We would too, but our business is too location specified. Quote Link to comment Share on other sites More sharing options...
rlugbill Posted August 18, 2011 Share Posted August 18, 2011 My home's value has dropped a lot over the past 3 years. But in the past 2 months, it has rebounded. At least in my area, the economy is starting to recover, and there are jobs available and the housing market has started to recover. Maybe it's just around here, but home values are going back up here now. I go to zillow.com to check my home's value once in a while. Quote Link to comment Share on other sites More sharing options...
Barb_ Posted August 18, 2011 Share Posted August 18, 2011 The banks will have to sell off their inventory for whatever they can get and take the losses. If and when that happens the housing market will take another significant drop, but that should be the bottom, IMO. And that will take a long time. As long as the banks are unwilling to work with people like us who are deeply underwater (we owe more than twice what the house is worth because we moved out to AZ in 07) but continue to make our payments, they are going to wind up with years and years of returned inventory. My husband moved out of state 8 months ago and took a 30% pay cut when he lost his job. We are still here shackled by our house. We are still making the payments, but it's tight. We'd like to rent the house out, but we'd lose $1K a month off the top because our mortgage is that much higher than rents are going for here. We're hanging in there and hoping the economy turns around in the next year or two, but I'm not going to permanently sacrifice our family life for Wells Fargo. I have friends who are trying to short sell their house because the husband lost his job (with Wells Fargo, ironically), and he found another at a 50% loss in pay, but the bank is having none of it. The bank says they can pay. Well, yeah, if they stop feeding their kids. So they will be handing in the keys if they can't get the bank to agree to a short. There is a HUGE shadow market in some states. It's not going to improve any time soon, I'm afraid. Barb Quote Link to comment Share on other sites More sharing options...
jennynd Posted August 18, 2011 Share Posted August 18, 2011 the interests is low but bank are not lending money. When I get my house 1.5 years ago. the bank ask for 20% down. that is fine. but when the apprasals are 10% lower than the house price (apparently, 3 car garage doesn't matter, extra bath doesn't matter , the top line appliance and the size of the lot doesn't matter these days.) so 20% downpayment become 30%. We had good saving so it was fine but I imaging between the ban and appraisals scams. I heard lots of deals fall through. It is unfortunate that bank system really screw everybody over Quote Link to comment Share on other sites More sharing options...
Kim in Appalachia Posted August 18, 2011 Share Posted August 18, 2011 Prices to be closer to what people earn. Houses are still over priced in many areas. The only other thing that would help would be more secure jobs with higher incomes. Quote Link to comment Share on other sites More sharing options...
Joker Posted August 18, 2011 Share Posted August 18, 2011 We bought our home thinking it would be our "starter". A few months after we purchased it is when everything went crazy. Our home is now worth $50K less than we owe. We bought small and within our means, dh makes good money and we have great credit. We still can't sell. We've resigned ourselves to the fact that we're stuck. Quote Link to comment Share on other sites More sharing options...
unsinkable Posted August 18, 2011 Share Posted August 18, 2011 :iagree: :iagree::iagree: NJ suffered an EXODUS of high wage earners because the taxes are so high. They took their families and businesses to other states. We would too, but our business is too location specified. OMGOSH! You run the T-shirt shop on Jersey Shore!!!!!! :lol: :auto: driving away fast :D Quote Link to comment Share on other sites More sharing options...
bbkaren Posted August 18, 2011 Share Posted August 18, 2011 The banks will have to sell off their inventory for whatever they can get and take the losses. If and when that happens the housing market will take another significant drop, but that should be the bottom, IMO. I agree; and the banks don't want to do that because when they do, those assets will have to be revalued at a much lower value. And that looks bad for the bank's balance sheet to the stockholders. Suddenly an asset that's on their books for $400K, is now worth only $200K. Several thousand times over! They're putting it off as long as they can; and in turn, prolonging the recession. And that's not the only problem in the economy nowadays; the real problem is that nobody is going to be willing to suffer the consequences of living off their credit card/home equity loans for the last 10 years. So we keep printing more money instead of...well, "eating our peas". And guess what? Our kids and grandkids will be eating those peas a decade or two from now when it's unsustainable. That's the sin of it all. Quote Link to comment Share on other sites More sharing options...
justamouse Posted August 19, 2011 Share Posted August 19, 2011 OMGOSH! You run the T-shirt shop on Jersey Shore!!!!!! :lol: :auto: driving away fast :D :lol::lol::lol: Quote Link to comment Share on other sites More sharing options...
Stacy in NJ Posted August 19, 2011 Share Posted August 19, 2011 stablize. That's not going to be for several years - think a decade. Quote Link to comment Share on other sites More sharing options...
ChocolateReignRemix Posted August 19, 2011 Share Posted August 19, 2011 Job creation and economic growth. Quote Link to comment Share on other sites More sharing options...
ma23peas Posted August 19, 2011 Share Posted August 19, 2011 This would get way political, so I can't go where I would want to with this discussion...broadly, the instant the govt starts living within its means, things will perk up. Quote Link to comment Share on other sites More sharing options...
ChocolateReignRemix Posted August 19, 2011 Share Posted August 19, 2011 This would get way political, so I can't go where I would want to with this discussion...broadly, the instant the govt starts living within its means, things will perk up. And not to get political, it is significantly more complex than that simple statement. Quote Link to comment Share on other sites More sharing options...
JessieC Posted August 19, 2011 Share Posted August 19, 2011 So many families--including mine--are stuck where they are. We would love to buy another house, but we can't sell for what we owe, despite the fact that we have been faithfully making mortgage payments for six years. I know so many families who have outgrown their starter home and yet can't move because they owe more than the house is worth. Until someone (government? lenders?) helps these families, we are at a standstill. Quote Link to comment Share on other sites More sharing options...
Sharon H in IL Posted August 19, 2011 Share Posted August 19, 2011 Selling at a loss in a depressed market is normal and necessary in order for the market to adjust to a realistic level. Many, many homeowners have not processed the fact that housing prices will not go up forever by fiat of the universe. That the laws of demand and supply operate in housing as well as other markets. They would rather hold than sell at a significant loss. Therefore the market does not recover. And here we sit. Quote Link to comment Share on other sites More sharing options...
justamouse Posted August 19, 2011 Share Posted August 19, 2011 Selling at a loss in a depressed market is normal and necessary in order for the market to adjust to a realistic level. Many, many homeowners have not processed the fact that housing prices will not go up forever by fiat of the universe. That the laws of demand and supply operate in housing as well as other markets. They would rather hold than sell at a significant loss. Therefore the market does not recover. And here we sit. And where should people be getting the $ to purchase these houses? And when the market is glutted, why would anyone put their house on the market to compete with a catalog? It sounds like you're blaming the homeowners for being greedy? What responsibility do you hold the banks-like in Simka's situation where she had TWO offers but the bank refused them both? Quote Link to comment Share on other sites More sharing options...
Peela Posted August 19, 2011 Share Posted August 19, 2011 I think the governments and even the people have not really faced the enormity of the inter-related problems facing most countries today- huge environmental issues, catastrophes and more coming, treating the economy as if it is a real and separate thing rather than here to serve the people...I think the readjustments necessary to bring balance are so big no one wants to face them ....yet. So we will all lurch form one crisis to another for years, perhaps decades to come. I dont think you can look at housing prices separately from a huge number of other issues and try to fix that separately from the whole bundle of mess. Quote Link to comment Share on other sites More sharing options...
NoPlaceLikeHome Posted August 19, 2011 Share Posted August 19, 2011 Housing prices are going to have to come way down to be in line with the reduced wages that many are facing. :iagree: I think too many house prices our way too high for what people are earning IMHO. Even during the height of the market, dh and I wondered how all of these people could afford their very expensive homes. We felt it was smoke and mirrors. Quote Link to comment Share on other sites More sharing options...
JessieC Posted August 19, 2011 Share Posted August 19, 2011 Many, many homeowners have not processed the fact that housing prices will not go up forever by fiat of the universe. That the laws of demand and supply operate in housing as well as other markets. They would rather hold than sell at a significant loss. Therefore the market does not recover. And here we sit. As I posted above, I am in this situation, as are many families I know. How are we supposed to sell at a loss? Where does the difference come from? If you do a short sale, your credit suffers and you certainly can't buy another house. Most of us don't have 50k sitting around to make up the difference. Quote Link to comment Share on other sites More sharing options...
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