| Jeff Strickland 2005-06-17, 11:27 pm |
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"Steve Horrillo" <usenet@stephenhorrillo.com> wrote in message
news:3khpe.60077$6k7.14264@bignews4.bellsouth.net...
quote:
>
> On 7-Jun-2005, wisdomfinder88@yahoo.com wrote:
>
>
Sorry to butt into the middle, but I don't have the original post that Steve
replied to.
There is one other thing that Steve didn't cover that I think bears mention.
If the house sold new in 1990 for 150,000 and is on the market today for
450,000 and this is a discounted price to motivate buyers, then has the
price dropped OR has it effectively not risen so much?
Some of the pricing declines we are seeing are not declines in the sense
that anybody is losing money, they are only declines in as much as somebody
is not making as much money as they might have if they decided to sell 6
months ago. I am in my house for the long haul, and I have the largest floor
plan in the tract and I have added a pool and a room addition, so my house
should be worth more than the others. If the same floor plan is selling
without the room addition and the pool for 400,000, then my house is
reasonably worth about 425,000. Do I lose if I sell for 410, or do I just
not make as much? Has the price dropped, or has it not risen so much? If one
pays 425 and now it is worth 400, then the price has dropped, but when one
pays 375 and it is sold for 400, then the price has risen. Yes, it may have
risen more then retreated, but is the retreat a loss?
quote:
> Ever since I've been in the biz this has always been the case. Doesn't
> everyone like to think the sale of their home is going to solve all their
> financial problems. Not to mention the emotional attachment. A mother of
the
quote:
> most ugly baby thinks the child is beautiful as well. My experience has
> shown me that If you expose the home to enough buyers for a long enough
time
quote:
> you are always going to someone who is willing to pay above market value
and
quote:
> put enough money down to make up for the low appraisal. Especially when
the
quote:
> Press is feeding the frenzy. When a home sell over market value that
raises
quote:
> the bar for everyone else. The only difference I see in the past couple
> years is that people want to buy a home with little or no money down.
Banks
quote:
> are getting progressively generous/risky in their lending practices.
Second
quote:
> loans to cover the down payment is getting easier too. Once the Banks are
> told to tighten up and/or interest rates rise sellers will no longer be
able
quote:
> to get above market value. Which means selling the home will no longer pay
> off the credit cards, second and third mortgage. So of course foreclosures
> will increase and prices of homes will drop. Rental rates as a consequence
> will increase. But since it will be harder to get a loan once the banks
> tighten up the one's with good credit or cash will have a party. Yet I
don't
quote:
> feel there will be any real sharp changes because everything that happens
in
quote:
> Real Estate seems to happen in slow motion and varies from area to area.
> Also I suspect that the realty market is being used to keep the stock
market
quote:
> out of crisis as well. A hotter stock market will be an indicator of a
> heavier real estate decline as well.
>
> In a nutshell, tighten up on loans, raise interest rates, start cracking
> down on appraisers and home prices must fall.
>
> Anyway, that's my take on it. But I've only been in the biz for 5 years.
I'd
quote:
> like to hear what some of the investors and brokers who have been in it
for
quote:
> a couple of cycles.
>
> --
> Warmest regards,
>
> Steve Horrillo, Realtor | Trainer | Hypnotherapist
> http://brokeragenttraining.com (Advanced training for real estate
> professionals)
> http://over100percent.com (Realtors earn over 100 percent)
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