New Trend Maybe Starting

"Increasing numbers of sellers are simply surrendering"

Thank you for sharing the article bill. We appreciate all the information you share with us:)

We have definitely been behind the national trend downward, and yes, we are seeing it now. Local "experts" seem to think we have hit the bottom, or nearly. I'm noticing an increase in solds, but that could be seasonal.
I appreciate you sharing the article, Bill.
Gena

remember that local "experts" try to talk the market up because their livelihood depends upon it. Be careful on where you get your advice at all times if the person has a vested interest in a certain bias.

I've been watching something similar. Seeing where the appraiser are cutting hard, so flipping isn't such a good ball game. Carol is digging for new ideas too. With the appraisers in certain areas cutting up to 20% on FMV what what do you see happening and a direction for us?

Bill, I agree this is what I'be been saying for a while now. We have been looking and working on short sales. That's where the market is heading. The banks don't want to work with anyone on loan mods so people are walking. I have heard some horror stories from homeowners lately.

“We would love to have a house,” said Dan Cunningham, a 41-year-old renter. “I have more than enough for a down payment. I’m preapproved for a loan. But I have to have confidence it’s not going to lose another 20 percent.” He plans to wait until he sees prices rising before making any offers.

if you're living in the house

if the value of your house goes down if even for a short period of time, it is ok because you live in it and aren't looking to sell.

These situations only matter when you are looking to sell or if you're looking to purchase a property.

The winners and partial cause of this are the cash buyers who can dictate their purchase prices and with purchasing at a such a distressed price, brings the curve down and will keep it there until the market stabilizes.

We have not hit rockbottom yet but we're close and thats a good thing. And when that happens, say goodbye to short sales and other home saving plans;

Its back to strictly foreclosures by 2015. I'm sure of it

Thanks for the warning and of course you are correct. I was referring to comments from other more seasoned investors from my REI club, but nonetheless, CAUTION is the password.

I agree with your 2015 comment but that means people on this website need to be smart to last 4 more years.

With Fannie and Freddie becoming more and more obsolete with the government wanting to become less and less involved in home ownership, its going to go back to the days of homes being bought by people who could afford them.

Which is the way it should be.

For the next few years its going to be iether you have the cash, spotless credit and heavy downpayment and cash reserves in the bank. Don't be surprised if and when the FHA goes into retirement as well.

If your Flipping houses and the market prices are dropping 20% then so are your Buy Prices. Everything is on a pendulum. If more investors are finding deals on Foreclosure then all that means is less deals are being found from Sellers who are not in Foreclosure.

If market Prices are dropping 20% for example on a $100K home and only selling for $80K than all you need to do is buy the property for an amount lower to reflect the new sale price.

You can do this by doing short sales and making JS Jurek style REO offers!

The Hard truth to many of these falling home prices are the ones in white collar areas. Stop assuming that ALL home prices will drop a large %. White Collar jobs have been hit the hardest during this recession and so have many Blue Collar jobs. The Difference is where the Collars buy their homes and how much they pay.

Traditionally Low Income areas have Buy Prices that are 30%-60% off of FMV, Middle Income is 25%-40% off of FMV, and Luxury homes are 5%-15%. This information came from Wealth INtelligence Academy (Rich Dad) at a 3 day Wholesale class. The information from that class on FMV % is reflected on buying a house NOT in Foreclosure in a sellers market. In other words not todays market! But its a good example of how to look at percentages and the difference in the Cash Amount.

A $1M luxury home you buy for $900K is only 10% off. But thats $100K! So lets sell it at $930K and make $30K, or 3% profit of FMV. On a Low Income Home with a FMV of $50K that you buy for $25K is 50% of FMV, so thats $25K, lets sell it for $45K and make $20K on the deal, or 40% profit of FMV.

I know there are many more details that play into each of those deals, but the point is not to get so caught up in those details.