Well the MBA announced today that mortgage applications are up, [Thanks L!] but just because folks are applying for a mortgage, doesn’t mean they are getting one. Take, for example, this listing sent to me by M. [MLS# 2792750] It’s a 3 bedroom 2 bath in Mesa, AZ- with an asking price of $198,500:
It seems to have received a lot of attention from buyers, in spite of the large tumbleweed in front of the fence. [Not an insurmountable problem to fix, I guess] But M sent it to me because of these comments in the property description:
**just fell out of escrow 4/3/07** **just fell out of escrow for the 5th time (6/25/07)! Make sure that your buyers are qualified!!!**
It looks like applying may be one thing, closing is another.
Thank you M!
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Really now, who couldn’t qualify for $198,500?
My guess is that the buyers are finding excuses to back out of the deal as they see the market continue to sink.
Who would want to pay that much? I can rent a nicer place for less…
Foreclosures are now 16% of all home transfers/sales in CA. Since they list at the full price of the mortgage owed, shouldn’t the median be lowered 16% to show the median minus the artificially inflated foreclosures?
If you take out the foreclosures, what’s the real median? Not aht it matters, I’m just trying to get something to normal. We can battle why the median is meaningless once we get near reality.
Also, how many times does the average house drop out of excrow? Shouldn’t we be taking that number out of the ‘sales’ column? I don’t think it’s fractional. I bet the average home falls out more than once before a sale….
Also, based on foreclosures being 16% of transfers, don’t we automatically know tha the salews numbers are 16% worse.
I don’t do numbers well, and we all know something is screwy, but what multiplier would you come up with to show the real sales and the ‘real’ median?
Sorry three posts, scattered and busy today.
Five escrows? Don’t sweat it.
Sit back, take a deep breath and relax for a few months … it’ll all be better next spring … just today the NAR said sales will rebound in ’08!
I wonder: Do the “economists” in the NAR have any idea that much their forecasts are ridiculed and discounted?
NVmike -
G just sent over a link to a story where the WSJ (author actually a Dow Jones type) dutifully repeats Yun without a trace of irony. This has got to be undermining the credibility of both news sources.
Funny thing 10 years ago that house was certainly selling in the 70 to 80k range. And to look at the picture it still is worth that. Even factoring in 3% apprecitation low 100″s at best. Still have a long way to go. I’d bet if they dropped it to 150 it would sell but still be overpriced.
Love the chain link fence surrounding the front yard. Nothing says ‘classy’ link chain link.
1165 palatial sq. ft for only $198k!
How much would that rent for? $900?
Richinaz-
You’ll love the sales history on this thing. The current owner purchased it for $127K in 9/06. Back in ’93, it sold for $53K.
Given that the median is DOWN YOY- you gotta wonder what this guy is thinking.
John, the Paper Money blog has a collection of NAR forecasts, dating back to December, 2006:
12/11/2006
Lereah “Most of the correction in home prices is behind us.”
1/10/2007
Lereah “The good news is that the steady improvement in sales will support price appreciation moving forward.”
2/7/2007
Lereah “After reaching what appears to be the bottom in the fourth quarter of 2006, we expect existing-home sales to gradually rise all this year and well into 2008.”
3/13/2007
Lereah “Although existing-home sales will be marginally reduced due to subprime lending restrictions, they should be gradually rising this year and next.”
4/11/2007
Lereah “Tighter lending standards will dampen home sales a bit, but by less than a couple of percentage points from initial projections.”
4/30/2007
Lereah Leaves NAR for Move.com
5/9/2007
Yun “Housing activity this year will be somewhat lower than in earlier forecasts.”
6/6/2007
Yun “Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year.”
7/11/2007
Yun “Home prices are expected to recover in 2008 with existing-home sales picking up late this year.”
I have noticed a decrease in overall applications but an increase in quality buyers…those with good credit and down payments. I think some people are starting to think the worst is over…we probably have at least two more years before it really turns around. Real Estate Finance
NVMike-
It sounds similar to a post I did at the end of 2006. The NAR can always be counted on to take mindless, senseless prognostications to extremes.
Dustdevil-
I found a home listed for rent on the MLS [#2798495] It’s slightly larger, built 1981 with a pool and a fireplace- the asking rent is $1,000.
re: twist (#14)
How can anyone look back at those optimistic, rosy forecasts and still respect the NAR’s forecasts?
And another thing … how is it that with every degenerating month and quarter, the experts are still claiming to be “surprised” by “unexpected” results.
To me, that seems a bit like astronomers waking up and being surprised that the sun rose in the sky that morning.
Guys -
This piece is a bit baffling, but the title + author is priceless
“NAR’s Yun, The House Whisperer”, by Blanche Evans, Realty Times, July 12, 2007.
John-
When Evans writes “how to” stuff, she can produce some really excellent material. However, she is, unfortunately, one of the worst NAR parrots out there. When she starts talking about a “buyer market,” you know she got into the Koolaid first.
Speaking of Koolaid, are you watching the Dow this morning?
RE: “The House Whisperer”
I knew I’d seen that very clever turn of a phrase before.
Active Rain:
How To Become “The House Whisperer”
in california this house would have been bought broken down remodeled and a hispanic family would be moved in for 350,000. you people are just being pessimist (?) didn’t the reports come out on the news that real estate was rebounding. i still say i wouldn’t buy a house until the houses that are for sale now have moved a little more quickly, it would be then i would agree the slump is over. until then no price is a good price as long as there is a 1099c lurking around. i went down one street as a short cut and the speculators have just distroyed an older (1940′s) neighboorhood. spec’s came in remodeled and now on one street every other house is either for sale, for rent, no info, yards full of trash, remodel doesn’t fit the neighboorhood and the the other houses look decrepit next to the fixed up ones and the folks that are still there have sofa’s on the front porch. would you pay 400,000 to live in a neighborhood like that. so that house someone somewhere will buy it. big tumbleweed, chain link fence and all.
Regina If that house was in California and it was broken down and remodeled you couldn’t sell it to some misinformed hispanic family because they couldn’t quailify for the loan. Zero down, no doc loans are part of the past now. When a person needs a 20% down payment and the income to be able to make the house payments alot less people are able to qualify for that amount of money. As Twist stated earlier in this post that house sold for 53k in 1993 it isn’t worth close to 200k now.
Regina…why do you say Hispanic?
because you have to live in california to see what they do to these run down houses. they start of with a money pit and then turn it around to be one of the best looking houses on the block. and i do admire their handywork. and i still say the house would have gone for 400,000 in california and you richcinaz are speaking of the after the crash market not the before and as i have said before i am the mail lady and i see what goes through the mail. don’t you think for one moment that people are still not buying houses.
Regina I do concede to you that houses are still selling and I do not understand the California market. I can only judge from what I see around me and from my past experience’s here in Arizona. I can draw some parallel’s between the bubble here and California and other bubble markets and fully believe what I’m seeing defies my logic. A quote from Albert Einstein “Insanity is trying the same things over and over again but expecting different results”. And this housing bubble is insane. In order to satisfy my sense of what is normal and logical prices will have to drop to the mean which is abpout 3% appreciation per year based on lets say a twenty year average. If prices do not come down I will continue to rent at a huge discount vs. buying. A recent thought is having a home built on property I purchase and see if that makes sense but I am willing to wait a few more years to do that.