Did you know that “what happened to mr mortgage” is now a “Suggestion” on google suggest?! People are really missing you.

Welcome back.

Thanks mate, that sure was a typo however “of” would be applicable in parts of Florida and Michigan I guess.

Anyways, you are right… I just dont understand how prices are still so high even if the seller is desperate (Short Sale) situation etc. Being in the market , I notice situations where the seller wants to get out and take whatever he can but its the realtor who likes playing the waiting game for a better offer until the property goes into foreclosure. Couldn’t you atleast accept the low ball and begin negotiations with the lender rather than allowing it to go to the banks who would just sit on it anyways for like …….

Wonder if its only me who feels this way!!

Bb

I’m assuming it’s just a typo and you meant to type “OFF”, as in 10-20% OFF the listing price. I’m always keeping my eye out in some of the nicer parts of LA, primarily west LA, and 10-20% off the asking prices would be a massive ripoff, since the current asking prices are absurdly high. Just waiting and watching the NODs add up, watching the amounts owed add up into the 10’s and even 100’s of thousands, and waiting for the inevitable flood of foreclosures.

These sellers and their agents are nuts if they think their McMansions, “valued” at 1.5-2.5 mil at the peak, are a “steal” at discounts of only 20-30%. Nothing like walking into a dead open house, with a nervous, desperate and suicidal seller and agent, and giving them a verbal offer at 50% of their asking price. If they get angry, it’s even funner to follow that up with “well, you can take that now, or I can get it for 25% of your asking price in a few months when the bank takes it back…”

Heres my logic…if I like a home and know this is good, will throw a low ball of 10-20% of the listing price. If I get it, am happy about getting what I wanted at a good interest rate etc etc else I’m happy cos there are many more to arrive.No attachment to any property and an open mind that there is more hitting the market. However, critical to know that…at the lower end the cheaper it gets the more the competition. I threw a low ball of 300k for a 330k property and was beaten with a 300k ALL CASH offer. ROYAL FLUSH I’d say mate!!

So the golden question… ideal time + price+ interest rate. Mr.Mortgage would be nice to hear your thoughts.

Bb

Can you shed any insight to this predicament, Mr. Mortage? New home + low interest rates + 18k in Fed/State tax credit versus waiting another 1-2 years when things change (more money saved up for downpayment, higher interest rates, no tax credits, etc.).

-Randy

And just as the bubble was such an extreme fluctuation of historic trends, median home price to median income ratios etc., markets will overcorrect to the negative.

It’s that happy medium, that norm, that stability that we should all be hopeful for. But I doubt we will see it any time soon – it really does look like the Fed, government etc. are following the Japanese lost decade bubble/super recession playbook here – and if you look at that scenario, after the hyper run up until ‘89 and ‘90, R.E. values plummeted to 10-25% (depending on city/urban versus suburban/countryside) of what they were at the peak, over a 15+ year period. They only just started to bottom out from a multi-year flatline a couple of years ago, and once again the Japanese are in another recession.

Unemployment numbers keep climbing. The mid and upper end markets haven’t even really begun to pop yet. I can definitely see nothing but countless reasons to remain extremely pessimistic for the foreseeable future.

Look at the stock market, it’s not hard to find a stock that was $30+ not long ago and had crashed to $2. Then in recent weeks had gone from $2 back up to $10. One can make a reasonable argument that the stock has performed well recently. It would be outright stupid for anyone to say, “you might think $10 is good, but it is not anywhere near the $30 range that it once was…” Well, duhhhhhhhhh!!

I have a question: How will inflation affect home values? I am still a little unclear whether inflation will drive values up or down. I have read conflicting articles and analysis.

This is not neg spin as you propose but what is called “insight into the market”.

Perhaps – but negative spin is certainly a possibility with this guy. I remember last autumn when socal sales were up YOY but he insisted on using negative spin and calling these numbers “worse”. He eventually changed his post but not until we called him on this “NAR in reverse” tactic of using MOM numbers which dont take seasonality into effect. Then, once they were up MOM and YOY, he just quit posting them on his free site since there was no way to netatively spin them…

That was on his old blog, and so far he has been much less the hypster (and lets be honest here – his content is EXCELLENT)! Still, as we continue to progress toward recovery, we need to watch and see if he slips into his old ways.

Mr. Mortgage makes the comment yes but he points out where the “strength” in the market is coming from and produces a chart. In his chart he only includes 2006 and probably from the standpoint of showing the latter half of that year to show the event of the breakdown in financing and effect on sales for that period. Mr. Mortgage’s point has remained the same since I have been reading the blog. That point is that the biggest player in the RE market has historically been the “move up home buyer”. Because of neg equity conditions, the move up buyer is cut out of the market. This means that the market will be comprised of new home buyers and investment buyers, which are the weakest segments historically.

Because the move up buyer is out and reliance on sales is confined to weak sectors, home sales could have trouble making the number! This is not neg spin as you propose but what is called “insight into the market”. Mr. M puts forth the challange and places the chart in plain view to back up his projections. You can agree with the chart, disagree with the chart, whatever. His point is come May sales, 2009 is going to have a tough time generating a number that will be able to produce positive media spin.