The 10.5 percent drop in new home sales in February followed a 5.3 percent decline in January and was the biggest drop since a similar 10.5 percent fall in April 1997. Sales of new homes have fallen in four of the past five months with the sales rate of 1.08 million units the slowest pace since May 2003.
While sales of both new and existing homes climbed to new all-time highs in 2005, the fifth consecutive annual records, analysts believe sales will decline this year as the housing boom slows under the impact of RISING MORTGAGE RATES.
By sector of the country, sales fell by the largest amount last month in the West, a drop of 29.4 percent. Sales were also down in the South, dropping 6.4 percent. Sales rose in the Northeast by 12.7 percent while sales in the Midwest were up by 5.2 percent.
just to weigh in on Orange Co (Calif) and San Bernardino. Definately see prices getting soft and long, long time on the market for many properties. Some stuff is moving, but I know of one cases where a property that was overpriced when into escrow and then off the market. They owners had only been in 1-2 years and spent a ton of money on fancy upgrades. I’m almost certain it did not appraise so they pulled it off the market. I think this will become more common as people have poured a lot of $$$ into theri homes thnking it was an “investment”. A fancy $600 toilet to go with some strange (overpriced) tile from Expo is not an investment.
I’ve been selling out and moving money to the East. At least in Calif, this will not be a short-term ripple; this will play out over the next 3-5 yrs. (IMHO). Just look at the slow down in activity in this board over the last couple of month; being a “real estate investor” has become less fashionable I would say.
Sounds like the town I live in the OC. Last summer, almost everything was seven digits; now we’re seeing a lot of actions in the 9s again. That property last fall would have pull in 1050k.
The biggest reason housing sales have slowed is certainly not the small increase in mortgage rates, its the GIANT increase in housing prices. They have went up at astronomical rates. Nobody can afford them anymore. There are other factors of course, but the cost is the main reason.
Buy low Sell High But not as high as the one next door and you should win. Everyone keeps talking about sales price.although yo need to know that you make your money when you buy .Anybody out there tracking the buying prices of our homes.Are the huds and banks and all other REO’s selling at higher prices also or are they lowering their prices to accomidate the “BUBBLE”?
“The biggest reason housing sales have slowed is certainly not the small increase in mortgage rates, its the GIANT increase in housing prices.”
I see it as a combination of the two (rates & prices). People were buying @ these previously high prices, but rates tick up & affordability suddenly becomes the issue.
I predicted 40 yr. mortgage rates back in ‘99.’ Anybody wanna bet we start seeing MORE creative options coming from the lending community the next few years? I worked in Japan in ‘95’ as a consultant, and saw 100 year mortgages–transferrable to heirs @ that time. I don’t think it’ll be long before we see 50 & 60 year mortgages (will 100 year mortgages be the next generations future?).
“Everyone keeps talking about sales price.although yo need to know that you make your money when you buy.”
I read that A LOT here, but there ARE other ways to invest. I–for instance–DO NOT buy distressed properties. I don’t rehab & do very little (if any) physical work to the property.
I do a mountain of research & buy reasonably priced properties in good neighborhoods (though I’m always looking for underpriced properties…who isn’t). I buy in the path of future short term growth & ride the equity elevator. This kind of sideline investing accounts for 30-50% of our gross (nice little bonus).
the properties are not appraising for what they use to I feel so bad for those who over bid on houses. they must be mad at themself for doing that. I think the agents are to be blame as well for clients over bidding on houses and now alot of those homeowners are negative in equity their home have no value.
“I think the agents are to be blame as well for clients over bidding on houses.”
The good ole BLAME game’s alive-n-well!
In an industry where there’s no right or wrong sale price (just most probable price given a set of circumstances within a range)…in an industry where markets continuously cycle…in an industry where interest rates are impossible to predict (even for the experts)…in an industry with innumerable unpredictable variables…SOMEBODY’S JUST GOT TO BE TO BLAME!
Do you BLAME Agents when values go up? Do you give them a 15% tip when your home appreciates? No…cause that’s equally as ridiculous as BLAMING someone when the market goes down.
Ever wonder why commissions are so high in this ‘find someone to BLAME’ over litigious society? ??? ??? ???
when the value goes up tha has nothing to do with agents. Raelestate agents are suppost to help their client the are suppost to give them the best advice instead of giving them the best advice they are telling them to over bid why. Example: I had a client who doesnot make alot of money single mom with 2 kids the agent knows the lady doesnot make enough money she makes around 38,000 a year in maryland that is not a lot money so the lady told her client to over bid $20,000 dolars why i have no idea. she house basement had water problems she never discloure any of the home inspection report to her client now her client is in a lot of mess the how is now worht less then what she bought it for.
Example#2 I had a realestate agent helping to find a investment properties the first hting that came out of her mouth was to over bid on the property the house was in bad shape imean totally my husband is a home inspector so he inspected the home it was a piece of dump and this agent really wanted me to over bid so she can make more money. so thats what i mean by its the agents fault as well they need to be more open with their client and stop thinking about themself.
FOR EVERYONE HERE DONOT USE A REALESTATE AGENT HALF OF THEM ARE NOT EDUCATED AND FOR THE BUYERS OR SELLERS USE A RWAESTATE ATTORNEY THEY KNOW THE LAW AND REALESTATE BETTER THAN AN AGENT AND THEY ARE CHEAPER
FOR EVERYONE HERE DONOT USE A REALESTATE AGENT HALF OF THEM ARE NOT EDUCATED AND FOR THE BUYERS OR SELLERS USE A RWAESTATE ATTORNEY THEY KNOW THE LAW AND REALESTATE BETTER THAN AN AGENT AND THEY ARE CHEAPER
I agree with the above statment except for One thing…
Change the Half to 75%
I have about 4 Realtors accross the USA I use BUT there are all serious Investors with Multiple properties and I have about 3 top notch Attorney that are worth what I pay them.
I couldn’t get through your entire post. I’d recommend you use spell check, or get someone to proof read your contributions before calling others “uneducated.”
And frankly Wallace, I’m surprised you’d jump upon the Agent Basher Bandwagon.
It’s true that some Agents know nothing about investing the way it’s presented here. However, there’s many more ways to invest than those methods strictly tendered on this site. But, it’s difficult to offer alternative viewpoints thanks to a few routinely antagonistic individuals who repeatedly confront the occasional professional.
However, since it’s an open Forum & since Scalder offered his viewpoints…I’ll again offer mine;
Be careful where you get your advice. You can seek out the expertise of a real estate professional–who’ve proven themselves through licensing, extensive education, and years of experience, or you could take the advice of self-appointed Guru’s (who’s backgrounds & success maybe difficult, or impossible to prove), or yet others with a third grade writing level.
what expertise does an agent have all they do is go on teh interenet to www.realtor.com or what ever site go use. find the price range of the home for the client which anyone can do then then fill out he agreement which you can find on line any one can fill out the purchase agreement/offer on their own then they want for the seller to accept the offer now where is the education comes in. If agents are so educated than why how comes the averge joe can purchase a home or sell their home by themself. The only reason why anyone uses agent is for convenience not for their education you can go on line and view the same property you can fill out the sale contract yourself. so i guess everyone has the same education on realestate as an agent. now donot get upset this is just the truth. have you been paying attention that more and more people are not using agents as they use to because people are starting to realize that agents are only theri to collect money and nothing more now as for me see am am important now i am a broker with my own company well i onw 2 companies you need to have some form of education or good in math to do loans. a regular person cannot do their own loan doing loans is not as easy as seelling homes. OK sweet heart and i always referrence my client to a realestate attorney they are educated not agents they know the law not agents. they went to real school agents only go to classes for 1 month. DONOT GET UPSET IT IS ONLY THE TRUTH
I would highly recommend you stay away from signing contracts yourself (you can hardly spell).
I’m dually licensed (use to be tri-licensed). Each license carries with it the requirement that I attend continuing education classes every two years (I’ve been going to school my entire life…specifically real estate related classes for 15 years!). Attorney’s, my friend, have paid me extremely well for my opinion as an expert witness. Why? Because, I know more about certain industry related issues than they do.
Agents are like baseball players, or any other profession for that matter. Their experience, abilities, and education varying from individual to individual. However, the ones that make it (no small feat), have proven themselves, and their business IS real estate. They work at real estate everyday, and there’s no substitute for experience.
All states are different, but the state in which I live…MOST attorneys don’t have the hands-on experience…the day to day benefit of buying & selling real estate.
I’m not a big fan of agents, but good ones can be worth their fees. One of the best things about a good agent is they can keep a marginal deal “on-track” and bring it close. People (both buyers and sellers) can get a bit “crazy” during deals as egos, big-heads and other weird things come out in people; plus they push to keep people to meet deal lines. As an example, I am currently doing a FSBO with a 1st time homebuyer. Its like pulling teeth as these people are soooo slow about signing papers, getting the inspection done, etc. The deal will close and I’ll save $15k in commissions, but it made sense the Buyer is a tenant living in the house. If they had made offer while I had it listed, there is NO WAY I would taken their offer (they’re doing 100% financing…that’s a whole another post).
As for lawyers, they have a purpose, but its not the shepard the deal. A lot of what goes on during a real estate transaction is really project management and not related to the law. Project management is not about clubbing people over the head, but keeping them pointed in the right direction and focused on the end goal (this is what good RE agents do also).
So in conclusion, I would offer up as food for thought to consider RE agents as part project manager/part commission saleman. Good one worth their fees; bad ones are worth…(you complete the sentense).
Mike in Calif.
P.S. I’m not an agent and yes, I do loath the fact that some agents/loan brokers, etc make way more than me despite the fact that I have multiple college degrees, but I’m not interesting in doing their job and they would probably hate mine as well. Isn’t a free society great?
Please re-read my quick comment again… It may be my fault for a fast reply but I feel you may not have seen the point I was getting at. My Bad, I guess?
I am by no means “agent bashing” at all. I just voiced that 7 out of 10 agents I have worked with the last 3 years, (I have gone thru a lot) were only experienced in selling a home at retail and collecting commission. They did not own or understand investment property at all.
Again, with that being said about 3 out of 10 I have worked with are experienced investors and understand cash flow and the like. I merely seek out this type of person to work with. Sometimes it is like looking for a needle in a haystack.
As you know, I was and I am big on networking. My dad was a business man, who was very successful and he used to explain to me…“It is not what you know, but who you know”
One Realtor in NC (Kathy Furtner) I work with has found me 3 great income properties so far. This is why she has made good money off me and I refer people to her as well
I have one in Hawaii that has gotten me 2 great properties. Again I refer anyone in Kona to check with Wayne Ross “Kona Wayne” first. He has been great!
One in Florida I am currently working with that has gotten me 2 and has tracked down a hotel I am currently working on.
I just want to let people know who think all Realtors have the ability to locate you great investment properties, that on large it is not the case. If this is your reason for using a Realtor then great, I just suggest to all my colleagues to “Do your homework first” is all.
I wish you a great evening, and pray the wind dies down in the morning because I just bought a new bass rod and reel today and want to test it out! ;D
In my area, DOM is getting longer. There are a lot of inventory. Its like 2 homes are coming every morning in a particular subdivision and its taking good amount of time to get a contract.
Price depends on the location where the house is…I am seeing some areas here where the prices are somewhat same as last year and still sitting on market for 60-90 days.
Other areas, price did go up and market time is not that long but still not good as last year.
“Please re-read my quick comment again… It may be my fault for a fast reply but I feel you may not have seen the point I was getting at. My Bad, I guess?”
Gotcha…it’s Scalder’s (what an apropos handle) comment that half of all Real Estate Agents are uneducated that annoyed me. What a caustic comment to make regarding more than a million individuals from all walks of life.
To say that 70% of Agents (to use your example) are ‘inexperienced’ working with the typical investor who frequents these message boards…is much more accurate, and far less confrontational than Scalder’s antagonistic (and highly inaccurate) comments.
However, I can think of no other group (self appointed–unlicensed Guru’s included) that would be more likely to understand real estate investment than the professionals…Real Estate Agents.
I work in an office of some 55 Agents. If an investor were to walk in, or call the front desk, and explain that they’re an investor & would like to work with an Agent who’s experienced working with investors…18-19% of those who hang their license in our office are more than qualified to work with them.
It’s the snide comments of some–out to irritate–that starts these exchanges rolling. Rather than offering conjecture @ what percentage of real estate agents are ‘uneducated,’ it would be far less confrontational to say, ‘seek out an Agent specializing in the field of investment real estate.’
I mean…if someone really wants to be a real estate investor…they’d be well advised to leave a poor attitude at home (I must have advised that a hundred times here already). Among other things…Agents become adept over time @ sniffing out problamatic prospects, and disrespectful people won’t get the time of day. Furthermore, we talk to one another & someone with little respect for Agents WILL EARN THEMSELVES A REPUTATION…I can promise you.