Home Buying in Madison>Question Details

Gary Probst,  in Madison, WI

Have others noticed the market heating up for starter-level homes? In Madison, WI, I've seen several offers

Asked by Gary Probst, Madison, WI Sun Jun 15, 2008

at one time, shortly after the listing. Is this a good sign?

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"Wanting to see a vibrant housing market is not an indicator of realtor or developer greed."

What Realtors and developers refer to as "vibrant" translates to "unaffordable" for those looking for a home. How is wanting housing unaffordable to boost their commissions and profit not a sign of greed? It is the definition of greed.
3 votes Thank Flag Link Sat Jun 21, 2008
Thank you for your candid response Karen. I disagree what you say about Realtors as a whole, however. NAR has advertising campaigns to convince ppl to buy because its a great, safe investment, and Realtors have pushed the "this place is different" montra usually coupled with "buy now or be priced out forever." The interesting thing is that every Realtors says their area is safe and immune. How can this logically be? We all know that this is not true. I dont agree that Realtors should be allowed to make such statements, and they are not aimed at boosting values. The exact opposite is true. Moreover Realtors help set prices. I know for a fact that Realtors colluded during the boom in raising prices so that they could get a bigger commission (e.g., for each new house why dont we all agree to list at 10k higher than last sale). In addition, I know Realtors that have told ppl that had problems qualifying why dont you call a lender I know. Turns out the lender is a subprime snake pushing them into a teaser rate to qualify, knowing that they cant afford the resets. If the buyer hesistates, the Realtor and/or broker said you can always refi or sell. We all know the games that Realtors played. If you claim to be different, I understand, but dont defend a profession that has caused so much harm and turned the American Dream into a nightmare for so many unfortunate families that got involved in the bubble. Prices need to fall about 30% in most cities to get back to historical norms. There is no doubt we will return to them as that is how economics works. I just wish more Realtors were looking out for the buyers they claim to be representing. I wish Realtors could recognize that having prices fall back to normal means they can have a stable job. Keeping the prices propped up above affordable limits would require layoffs of about half, as the sales rate will need to be artifically low to compensate.
3 votes Thank Flag Link Sat Jun 21, 2008
Karen Wenzel wrote "hopefully the trend will continue." I assume you are referring to your hope for more bidding wars pushing prices up beyond affordable levels, threatening our entire banking system and placing families at risk of economic suicide so you can buy more things for yourself. We can all hope this crash pulls down you greedy monsters. How many potential buyers have you warned that prices historically are at no more than 120 times rent, the average is no more than 3.5 avg income in the area, and that the mean for appreciation is inflation v. one percent. Thus, prices significantly beyond these levels indicates that a decline in imminent. If the answer is none, you really have a lot of soul searching to do.
3 votes Thank Flag Link Sat Jun 21, 2008
Foreclosures are picking up as prices are slashed. This wave of knife catchers will further drag down comps and prices. I'll wait for the real bottom in two years, and buy from the massive bank liquidations.
3 votes Thank Flag Link Sat Jun 21, 2008
Possibly. I see in The Showcase USA (a local industry news/ad sheet), that WI appears to be less badly affected by the general malaise in the RE markets associated with the sub-prime fiasco. The same article shows the NAHB forecasting a turnaround beginning next year. I'm a little more reserved. Between the war and tax refunds, and their inflationary consequences for the value of the dollar (deficit spending), and the cost of energy (more inflationary pressures) and the Fed's shift toward tightening credit, I expect a more generalized slowdown in the RE market to affect the nation as a whole. Nor am I optimistic that it will be short lived.
3 votes Thank Flag Link Sun Jun 15, 2008
Tsk, Tsk. Wanting to see a vibrant housing market is not an indicator of realtor or developer greed. There have been two long-standing engines of our economy, transportation and housing. Well, with General Motors having massive layoffs, Ford teetering and jobs flowing to Mexico and Asia, daily, one thing that can't be "outsourced" is land. If the transportation market is faltering, we'd all better darn well hope the housing market revives. Demand increases prices, not realtors. We don't have that kind of power. Sorry to disappoint. Demand is still high but financing is crimping activity. Because somebody has the contrived and mysterious 600 credit score means financials try and take advantage of a perceived weakness with higher rates, thus, predatory lending, which happened just a few years ago.

Don't blame real estate people for the current housing crunch. Its a situation of lower net wages, higher energy costs and less than honorable tactics by large lending organizations, as they "sucker-punched" consumers. Remember the loan offers of 1% (for six months) and "pay what you want" offers, as recent as 2006??? So, how are realtors responsible for that?
2 votes Thank Flag Link Sat Jun 21, 2008
Doug,
I am quite realistic that we (the nations home owners) are in for several years of "rough weather". I have personally purchased a home with interest rates in the high teens ( 17% in 1984) and inflation through the roof. But working 2 jobs, and doing whatever it took to make sure that we made every payment in order to keep the house.
I try to educate my Buyers about "getting back to basics". Buy within your comfort level, don't buy the McMansion if a smaller home will fit your needs. Plus, people got used to using their rising home values as a "bank" and continued to pull out equity, sometimes to finance fancy cars, vacations etc. People need to understand that the goal is to eventually pay off the mortgage and own your home (not the bank)
We, "the Realtors" do not create the home values. The Buyers in the market determine what they are willing to pay. I don't "sell" homes. I can't put a pen in someone's hand and force them to "BUY" anything.

Maybe we have to get back to learning how to save for a downpayment, not expecting that we deserve to have "what the Joneses" have. Live within our means, and not using the mighty credit card , maybe our economy "house of cards" might stabilize.
Just a thought.
2 votes Thank Flag Link Sat Jun 21, 2008
Jim, I thank you for your honest and candid answer. It is nice for a change that someone is analyzing the situation from more than a minute by minute, day by day basis. If only some would stand back and look at the economic forecast from the 20000' view they would quickly realize that is laughable to believe there is any near term end in sight to this debacle. If there were a larger proportion of used home salesmen/saleswomen like yourself I believe there would be a large probability that the country wouldn't be in the mess it is in right now (i.e. I'm sick of all the shills blaming the fiasco on the sub-prime fallout). I for one see it as it is; a ponzi scheme house of cards that had no other outcome than to come crashing down. And so the escalating descent continues back to historic norms...
2 votes Thank Flag Link Sat Jun 21, 2008
Hi Gary,
Yes, I am definitely seeing more activity in homes priced under $225,000 in the Madison area. Showings have increased significantly since April, I've had 2 offers in the past 10 days and am experiencing the same scenario as Karen described with entry-level buyers on smartly priced homes. I think it is signaling the bottoming out of the housing market . Its a great sign and I'm thrilled!!
Web Reference: http://www.sophiashomes.net
1 vote Thank Flag Link Mon Jun 16, 2008
Gary,
Yes, I too am seeing a slight increase in activity here in the Milwaukee area. Lower priced homes (under $200,000 are starting to get more showings and I had 2 recent situations with Buyers, where I sent them listings to see, and by the time we set up showings (within 24 hrs) they both had accepted offers.
Hopefully the trend will continue, and "trickle up"...
Web Reference: http://www.GoPackerUp.com
1 vote Thank Flag Link Sun Jun 15, 2008
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