Home Buying in Fairfield>Question Details

Disgruntled…, Home Buyer in Milford, CT

Be honest now realtors (I know that is a lot to ask) - According to Trulia, there is about 17.28 months worth

Asked by Disgruntled Renter, Milford, CT Tue Apr 7, 2009

of inventory in the Fairfield market. How low does inventory need to go to match historical levels, before we can see a true bottom in the market?

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Disgruntled Renter:

They say that a 6 month supply of homes in inventory is a "balanced" market. Anything less, and the market favors sellers, most likely with increasing prices. Anything more, and the market favors buyers, most likely with declining prices, as we've been seeing.

Is this a good time to buy? It is for many people. Prices are lower than they used to be. Interest rates are historically low. Some sellers are willing to negotiate so that they can move on. People who are selling a home and buying a larger home - they are "losing" money based on what their current home was previously worth, but the larger home most likely lost more value. So, that works for many move-up buyers. Many who are downsizing are working with the same understanding - it's time to downsize, and even though their current home has lost value, the home they will buy has lost some value, too.

Are we at the "bottom" of the market? We don't know. No one knows, but rather all we can do is make educated guesses based on the stats and what we see occurring in the market.

It does appear that the market may be picking up a bit. Will that last? We don't know and we can offer no guarantees. Is the current market pick-up we are seeing huge? Not really. It may be the start, or it may just be a blip in the overall market.

Are prices much lower than they used to be? Yes. If you're planning on buying a home to stay in for only a year or two, then perhaps this is not a good time for you to buy, in case the values do continue to decline a bit.

If you wait, will interest rates still be low enough? If the interest rates increase, then you will be able to afford less home than you can today.

These are all factors to consider, along with your own personal wants and needs.

All of us who own homes right now have lost some value. It's part of the real estate cycle. But, if we're planning on staying in our homes, at least for a few more years, then we should be fine in the end.

My personal recommendation? If you want to buy a home, and plan on staying in the home for at least 5 years, then this may very well be a good time for you to buy, based upon current values and available interest rates. If your future is uncertain, and you may need to move in the next 2-3 years, then it may not be a good time for you to buy.

No one can or will predict the actual "bottom" of the market. At least, not until it has already passed and values have already begun appreciating steadily again.
0 votes Thank Flag Link Tue Apr 7, 2009
Ah, The Fairfield County Real Estate Bubble. A topic near and dear to my heart.

Fairfield County has a long way to go to reach bottom. We’re late to the party, but friends, we have arrived. And we’ve arrived in a big, big way.

The Connecticut Housing Correction. It’s On.

The crutch that has helped Connecticut hobble along for as long as it did was Wall Street salaries and the trickle down that it afforded. That crutch was so unceremoniously kicked away this past year.

People still collecting their (shrinking) paychecks are not spending; the wise people with money on the sidelines are watching the carnage from a safe distance.

What’s in Storrs for Fairfield County? (Pardon my CT pun) Try another 30-50 haircut from today’s wishing prices. We’ll overshoot trend-line growth to the downside and probably get back to nominal 1999-2000 pricing.

Economists are usually quoted as saying that a healthy real estate market has a 4 to 6 month supply of homes for sale. Fairfield County is almost three times that? Look out below. You don’t need any other data points to conclude that this market is in a SEVERE state of disequilibrium.

Three things must exist to facilitate an increase in the demand for homes such that this excess supply can be taken up. Prospective buyers must feel comfortable in their jobs, i.e. employment growth on a macro level must be positive or at least steady. Secondly, there must be expectations of income/wage growth. Lastly, there needs to be a reasonable prospect of medium to long term equity appreciation. In Connecticut, like most places in this country, the needles are pointing in the wrong direction. All of them.

JR – most of the “bubble heads” are dyed in the wool capitalists that played by the rules and didn’t jump into the “feeding frenzy” of 2000-2006. We sat back, watched friends and family get in bidding wars and wondered what the long term consequences of too much money chasing too few assets would be. It took longer than any of us could have imagined, but we now have our answer. It’s a horror show out there.

The great majority of us have owned homes and want to buy a home in the future, but after analyzing the data we have come to the informed conclusion that affordability – even with rates as low as they are now – is still at an all time low. Short of massive price decreases there is nothing that’s going to fix it.
4 votes Thank Flag Link Sun Apr 12, 2009
Dear Disgruntled,
First of all, asking for information of a group by starting out with insulting that group, seems an odd way to go about things.
That being said, you refer to statements about the market bottoming and recovering, but don't give any details. The fact is that some towns are doing better than others (has always been the case, and always will be), and that some price points do better than others. For the lower and middle priced homes, sales are definitely picking up. We are starting to see multiple offers on properly priced homes in those ranges.
I am not from Fairfield County, but I can tell you that the higher priced homes are still NOT selling in my area. Since Fairfield does have a lot of high priced homes, I would expect it to be one of the last areas to see the rebound.
If you want good information about a specific area, then contact a good, local agent and get the real numbers for the neighborhood, or town, that you are interested in using comparably priced homes. If you look at generalities, then you will only get average trends.
And BTW, if/when you do talk to a professional, check your attitude and insults at the door. It will never produce any positive results.
Web Reference: http://www.danrossre.com
4 votes Thank Flag Link Tue Apr 7, 2009
Why would you ask a question of an entire group of people you believe are incapable of telling the truth? If we're all lying, you couldn't trust our answers. Seems an odd thing to do. You might get more satisfactory answers by doing your own homework.
4 votes Thank Flag Link Tue Apr 7, 2009
Ok, I'll try this again without personal attacks, since Nicole has inspired me to write something today.

As John so eloquently wrote, you can't argue with historical data for over 100 years and the Case/Shiller index is widely viewed as valuable data, even by the NAR. The great thing about bubbles is that someone is always willing to declare that the fundamentals of economics have changed, and that it is perfectly logical that house prices will increase exponentially for decades to come. Just as we saw happen during the tech stock bubble of the 90s, they are always wrong.

Why is Real Estate such a great investment for the average person to make? One word: L-E-V-E-R-A-G-E. There are very few other investments that average people can make that allow you to leverage yourself 5 to 1 (with 20% down), or even 10 to 1 or greater (with an FHA loan). This means that in ordinary times, your average 3% annual increase gets multiplied by 5 and you might get a 15% annual return. Subtract 3% for inflation and you're still up 12% year over year.

The bad thing about leverage is that it works just as bad for you in reverse. In a declining market like we're seeing right now, your losses get multipled by 5 and you can easily wipe out your entire down payment and all equity, and end up in the red.

So, let's imagine for a second the average homebuyer that decided "it's a great time to buy! (TM)" back in 2008. They put $50,000 down on a $500,000 house in Stamford, leveraging themselves 10 to 1 on this property. Now let's say the property went down the average 23.7% in the last 12 months, and is currently valued at $381,500.

The poor homebuyer that only bought 12 months ago leveraging themselves 10 to 1, has leveraged their losses into a 237% loss on their original investment. Their $50,000 investment has turned into a $118,500 loss!

Now you can see why nobody smart enough to do the numbers is buying right now. The phrase "catching falling knives" is very appropriate in this context. Far better to wait until the knife is stuck in the floor and pull it out safely, than to try and catch it on the way down.
3 votes Thank Flag Link Mon Apr 20, 2009
@Lori: That is exactly what I am saying. Historically, for the several hundred years that rent and home prices have been recorded, monthly rent has usually been 1/100th the sale price of a home. The price to purchase a home has always been 3x (actually more like 2.8x) median family income.

For hundreds of years this has been true, in normal markets not affected by real estate bubbles. We can also see how during real estate bubbles these numbers get out of whack. But they always, always return to historic levels. To say otherwise is to ignore hundreds of years of human history.

Yet, for some reason, the RE industry continues to tell home buyers that we should ignore hundreds of years of history and buy now. I have yet to hear a good reason why.

Your numbers on rent support that prices are almost double what they should be! The Case/Shiller index also shows that home prices are way higher than they should be.

For more information about this, I suggest you read this very detailed report on housing affordability world wide: http://www.demographia.com/dhi.pdf

I, like many other potential home buyers, just want to see some sanity return to the market and see the prices come down to the level they should. Unfortunately, our government and the RE industry seems determined to try to reinflate the bubble and keep that from happening.

The sooner home prices return to normal historical levels, the sooner we can start to recover and build a sustainable housing market with real valuations.

You know what I would like to hear from an RE agent? That now is not a good time to buy, that prices still have 35-40% left to go down in Fairfield county, and that you're better off renting and saving money for the inevitable bottom in a few years. Unfortunately, that type of honesty doesn't put commissions in RE agents pockets and doesn't put food on the table.
3 votes Thank Flag Link Tue Apr 7, 2009
Minna, save your breath.

She told you who she was in her opening salvo. You have nobody to blame but yourself for jumping in the water.
3 votes Thank Flag Link Tue Apr 7, 2009
Alan May, Real Estate Pro in Evanston, IL

Realtor.com is not a global MLS.
Rather, Realtor.com accepts feeds from most (not all) MLS's around the country.
Realtor.com is strictly an advertising medium. Not all listing information is found in Realtor.com.
As an agent, if your MLS provides a feed to Realtor.com, but you wish to add more info to your listings (such as additional photos or description), you must pay for that.

Many Realtors are not fond of Realtor.com. In fact, Realtor.com is not even run by NAR but rather by a separate, for-profit company. A Realtor can spend a fortune advertising on Realtor.com.

Each MLS (there are now 5 in Connecticut alone - there used to be more) is separate. Some are run as a conglomerate by the local brokers, whereas others are run by a non-profit organization. (I don't believe any are run by for-profit organizations, but I'm not positive about that). There are some standards from MLS to MLS, but each one does also get to make its own rules.

The MLS is set up to allow cooperation between brokers, so brokers have access to other brokers listings.
The MLS is not technically considered an advertising medium, but rather as an offer of cooperation between brokers.
In recent years, with the advent of the internet, MLS listings have been fed to various sites, including Realtor.com. These sites ARE advertising vehicles. They are NOT MLS's.

Access to the MLS is reserved for real estate professionals only, and we pay (separately from our dues to NAR) to belong and access the information.
Buyers and sellers are today able to obtain more information than ever about properties for sale. However, any buyer or seller is able to obtain any and all information they require through their agent, provided their agent is a member of the MLS.

(Not all agents are members of an MLS, and agents who are not members do not have access. I've heard from many, many "agents" over the years who use Realtor.com to find listings for their clients and then call the listing agent for information. In my opinion, these are not true "agents" and are not providing proper representation to their clients. Access to the proper MLS is vital in order to represent a client properly. Not being willing or able to pay the ongoing MLS membership/access fees, in my opinion, not a good enough reason to not provide a buyer or seller with the representation they deserve.)
2 votes Thank Flag Link Wed Apr 29, 2009
Just to clarify some things about our local MLS and also MLS # 98416242

Unfortunately, our local MLS does not yet include a cumulative days on market. But, they are supposedly working on adding that in.

For this particular listing, it is not re-listed at $599,000 each time.

Here is the complete history of this particular property:
The home was purchased in June, 2005, for $285,000 and then torn down and rebuilt.

4/21/2006 - listed for $799,000.
4/21/2006 - reduced to $769,900.
6/29/2006 - reduced to $749,900
8/13/2006 - reduced to $729,900
10/18/2006 - reduced to $699,000
1/18/2007 - listing was cancelled.

1/22/2007 - listed as new for $689,000
2/16/07 - withdrawn from the market.

3/15/2007 - listed as new for $664,000
8/2/2007 - reduced to $644,000
9/7/2007 - reduced to $619,000.
10/30/2007 - reduced to $599,000
3/16/2008 - listing expired unsold.

4/3/2009 - listed as new for $599,000
Currently active.

They did cancel this listing once to then enter it as a "new" listing. That is not a practice I would condone. Once our MLS utilizes cumulative days on market, this marketing trick will become obsolete. Another time the listing agreement actually expired.
But, all agents with access to the MLS can click on the History of the property and see all the details I outlined above.

Is the access to all this detailed history a joke? I don't think so. All this information is available to all agents. Any agent representing a buyer should access this information and share and discuss it with their clients, should their clients be interested in the home.

Is this home overpriced? Possibly. I have not performed an analysis of the home to determine its actual value in today's market. Was it overpriced in the past? Obviously, as it did not sell at any of the previous prices If they overbuilt for the area, then yes, the home's value will be drawn down by the neighboring property values.
2 votes Thank Flag Link Wed Apr 29, 2009
For those of you defending the MLS, here is how I know it is a joke. Check out MLS # 98416242. You would think this house has just been listed on April 3rd, 2009 for $599,000. It's new construction only 3 years old.

What you don't know about it is that the property was bought by a flipper in 2005 for $285,000. Then, they promptly bulldozed the house and built a 3,000 sq. foot McMansion on a teeny tiny .15 acre property. Mind you, this is in a neighborhood filled with 900 sq. foot ranches and capes with an average price of $250,000.

Every year the seller delists the property, then relists it for $599,000, hoping to strike it rich. It looks to a buyer as if it's a brand new property on the market, fresh and ready for them to move in to. What they don't realize is that the seller is desperate, has been trying to sell it for twice what they bought it for for the past 3 years with no success! Who in their right mind is willing to buy a $600K property in a $250K neighborhood?

How do I know all this? I live in the neighborhood and watch every year as they delist it and relist it, trying to mess with the MLS to make the listing more and more appealing. Sorry, but the property is not selling. It's a nice house I'll grant you that, but not worth $600K. More like 300-400K, and even that's a stretch considering the small lot and the neighborhood property values.

This is one small example of bubble stupidity that I see play out over and over again. Those of us that are smart and think a little bit just choose to laugh to ourselves and realize we will have our chance to buy a house for a fair price eventually.

Leading economists such as George Soros say that markets always overshoot prices on the upside, as well as the downside. Smart money is waiting for the overshoot on the downside, which has yet to happen.
2 votes Thank Flag Link Tue Apr 28, 2009
Lori, I can come down to Yorktown and overpay there as well, what a deal!

Bryan, I appreciate the sentiment you have, that you are trying to help buyers make a good decision, but your attitude of "buy now" does them no service.

This is the problem with RE agents, and I realize I'm making a generalization here. I have worked with very professional ones, who know their markets well and do good comps, but not a single one of them will tell a buyer the honest truth: That they should wait and see where the market goes because it's only going to get worse (lower home prices).

So, let's take your market of Atlanta, GA. I have a colleague that lives there and loves it. I see according to Trulia that there are 12,990 homes for sale and only 6,678 sold in the last year. It looks like you have 2 years of inventory in your market applying downward price pressure there as well. Can you point to one time in history when an excess of inventory has created upward price pressure? These are the basic laws of supply and demand and you do your clients a huge disservice by telling them to buy now, when it's clear that now is not a good time to buy.

But, I see commercials on the TV and hear them on the radio, paid for by your NAR dues, telling me every day that it is a good time to buy. I don't believe them for one second. If it was really a good time to buy, you wouldn't need to blanket the airwaves with advertising. You would have buyers lined up making offers on every property the day it was listed. The fact that you have 2 years of inventory sitting there leads me to believe that the fantasy is far from reality.

Look at another indicator: Average listing price in Atlanta is $480,065. Average sales price is $96,000, down a whopping 40% year over year. I would hazard a guess that median family income in Atlanta is far less than $160,021 a year. That is the median family income needed to support a $480,000 home.

So, please elaborate Bryan, on why now is a good time to buy.

Where I sit, patiently waiting for the bubble cheerleaders to stop cheering, it's a fantasy land where we all live in million dollar McMansions purchased on interest only option-ARMs that will only reset in the year 3000...
2 votes Thank Flag Link Tue Apr 28, 2009
Oh Nicole Borsey,

Yes, I'm filled with generalizations. I just intersperse my erudite market observations and wit with the horror of the data.

Shedding light on the data might be viewed as “putting fear into people,” but I’m putting forward hard data instead of anecdotes and f-e-e-l-i-n-g-s. Just because you feel that things are all lollipops-and-sunshine because you are not personally underwater doesn’t make it the same for everyone else.

Then again, data doesn’t make for good sales talk. But anecdotes sure do.

Nicole says, “you have no clue what prices I am selling these investments at”

You’re right. I don’t. But I do have an idea since Stamford median prices are DOWN 23.7 percent y-o-y. That’s not an anecdote. It’s data. Also, sales in Stamford are down 50 percent y-o-y. Good deals abound, I’m sure. Let me go and find my checkbook.

So, even if “the numbers work” right now, do you want to buy a rapidly depreciating asset in a market marketed by declining employment, negative wage growth and negative equity return? Of course you don’t. Because as educated people, we all know what’s coming given those indicators. If you don’t, well, maybe you should be selling cars instead of real estate.

2 votes Thank Flag Link Sat Apr 18, 2009
That's what I'm seeing in Fairfield to be honest. Sellers are putting 60 year old capes on the market, add $100,000 to the price they paid in 2005 or 2006, and seriously expect offers?!? Completely delusional. Those houses will be on the market 300+ days and will probably be marked down multiple times.

Guess what folks, even in the Fairfield county market, we have a bubble. Yes, that's right, especially in this market. Home prices are still 6-8 times income but falling fast.

The problem with our bubble is that it didn't start to deflate until the end of 2008 when Wall Street figured out the banks were all broke. Since we are so heavily dependent on incomes from Wall Street and the financial sector, we missed the housing crashes of 2005, 2006, and 2007 that were destroying markets in CA, NV, and AZ. Now we're in for a very long and slow ride to the bottom.

My prediction: bottom in 2011 or 2012, 35% lower than prices we have today.

Of course I could be reading the tea leaves wrong. Perhaps our government will continue printing money and spawn some 70s style hyperinflation to inflate all our indebted homeowners out of credit slavery. Helicopter Ben Bernanke has been warming up the printing presses and I hear they're chartering a couple flights out of Sikorsky as we speak.
2 votes Thank Flag Link Fri Apr 10, 2009
I'm glad I did the research and didn't let "Suzanne research this" for me. Otherwise I might have purchased in 2006 and ended up $200,000 or more underwater. Until we reach a bottom, I'll be sitting on the sidelines, waiting, while my taxpayer dollars get used to bail out underwater home owners that were foolish enough to believe that real estate market fundamentals don't apply.

Real estate market fundamentals ALWAYS apply. A 3500 sq. foot house is not going to sell for an average price, because let's face it, it's not an average house. An average house in Fairfield is most likely a 60 year old cape that's only 1400 sq. feet.

I'm sure all of you RE Pros know about these fundamentals, but just choose not to educate your clients on them, because it would mean fewer sales. This is a shame, because frankly, I would trust an RE agent that was honest rather than dishonest about the downside risks to investing right now.

"It is difficult to get a man to understand something when his job depends on not understanding it." - Upton Sinclair
2 votes Thank Flag Link Wed Apr 8, 2009
Lori, the plural of anecdote is not data. For a true analysis from Standard & Poors, see this article:


Their conclusion:

We find some evidence of overshooting in house prices in all of the regions we studied.
Either subsequent house prices, rents, or both support the overshooting hypothesis
depending on location. Our analysis also supports the view that house prices do most
subsequent correcting, relative to rents, in the re-establishment of long-run fundamental
equilibrium as measured by the rent-price index. Rent-price sensitivity coefficients are
higher, on average, in our house price regressions than in our rent regressions. Furthermore,
there is a consistency of response to over- and under-valuation among house prices across
the nation, namely that prices overshoot. But for rents we found regional differences in
behavior, with overshooting occurring in most, but not all, locations.

As Exhibit 3 shows, our rent-price index indicates that periods above or below long-term
fundamental trends can be quite prolonged. Overshooting is also not a one-way phenomenon
and occurs on the downside as well as the upside as all mean reverting processes do. With
respect to the current environment, though house prices have already corrected quite a bit, it
would not be surprising to see continued weakness in housing markets for some time to
2 votes Thank Flag Link Tue Apr 7, 2009
Watch this Century 21 commercial from 2006 and see some real honesty:

2 votes Thank Flag Link Tue Apr 7, 2009
See, this is what I mean by honesty. Until fundamentals are back in the market, we will not see the bottom.

By fundamentals I mean:

- Home prices no more than 3 times median family income.
- Home prices no more than 100 times rent for a comparable property.
- Inventory at an average level (I take it 4-6 months would be a good average).

Only 2 Realtors (Don and Lori) have acknolwedged that inventory is affecting the market. Out of all the Realtors that have responded, none of you have acknowledged the other 2 pricing factors that are still extremely far out of line.

Don't hate your potential customers. We DEMAND more honesty from our Realtors, or I'm afraid an entire generation of home buyers will soon realize that with the Internet and new forms of communication, we don't need the NAR any more.

Keep telling me it's a great time to buy, keep focusing on those low monthly mortgage payments despite negative equity and you can see why I don't believe in your honesty.
2 votes Thank Flag Link Tue Apr 7, 2009

Thanks for these thoughts, and especially the link. There is some really useful data there. I looked for this info a few weeks ago when the headlines about Deutsche Bank's prediction that the NYC Metro Area would drop another 40% first hit, but with no success.

I suspect we will stay in this area too for professional reasons, but it is so difficult to accept that buying into a market like this where home prices are so out of step with incomes, means that over the course of our lives we will be essentially throwing away money into excessive interest payments, and limiting our investment options by having to sink so much of our income into housing. It's a great place to live, but a difficult place to live well, or save.
1 vote Thank Flag Link Tue Jul 7, 2009
Bo Zho, you raise an interesting question. The Northeast seems to have been the last area to maintain the real estate bubble and prices don't seem to be going down very quickly. There has been an uptick on the low end, due to the 8,000 tax credit and the normal spring buying season. That is why you see houses in the $200-300K range selling right now. What I see also is that not much above $400-500K is selling. These properties have the most value to lose, and nobody with that kind of money wants to catch a falling knife. I'm still going to stay in CT, since my job is here and a lot of people I know are here, but for those that have the choice, there are other markets that are better right now. I don't expect things to really turn around until 2011-2012 at least, and it might take until 2013 or later for the high end to really come down to reasonable prices. I think reasonable prices are where we were in 1999 or 2000. Also, the market always overcorrects on both the upside and the downside, so 1997 prices are more likely than 2000 prices in the

If you want to see how far we have yet to go, I highly recommend this report from Deutsche Bank. It uses the latest numbers from June, 2009, and has some great analysis of all the major market areas, including Bridgeport/Stamford/Norwalk (Fairfield County) and New Haven/Milford:


They note that Fairfield county has currently declined 14% from peak and predict that at the trough, Fairfield county will have declined a total of 31.1% I think their numbers are as close to a good prediction as you can get.
1 vote Thank Flag Link Mon Jul 6, 2009
I too am a prospective buyer in Fairfield Co. (we are looking to buy in Norwalk chiefly because it has what would is the closest to affordable for us) who has been competely flummoxed by the disconnect between this town's median income and housing prices. Also, I am struggling to understand why average asking prices in Norwalk are over $800k when the average sale price for Q1 '09 was around $310k. I appreciate the thought you've put into these responses, and the hard data sources you provided (particularly the Demographia Housing Affordability Study). If the Demographia study is correct, however, the lack of affordable houses in Fairfield Co. has more to do with local policies and land use controls influencing development patterns than forces that can be influenced by market booms and busts. If you or I were to wait on the sidelines until affordability hits a reasonable ratio in Fairfield Co., I think we would be still renting when we are old and gray. Do you think the smart move is to get out of this area?
1 vote Thank Flag Link Mon Jul 6, 2009
Alan, thanks for the explanation. I didn't know the MLS was operated by different companies in different regions. I assumed the MLS was run by the NAR, based on the fact that realtor.com has a global MLS of the entire US.
1 vote Thank Flag Link Wed Apr 29, 2009
Well, I'm really not asking for your advice Bryan. Atlanta is a very different market than Fairfield County Connecticut. I just wanted to better understand how your brain can rationalize having two different realities at the same time.

Markets are cyclical. Either the market is in decline and it's not a good time to buy, or the market is in growth and it is a good time to buy. Another good time to buy might be in the trough before market growth.

To take my example from earlier of the condo I was about to purchase. How many years of normal market appreciation would it take me to wipe out 19% negative equity in just 9 months? I could probably live there for 20 years and not be able to sell it without losing money.

Or I could wait 2-3 years and buy it at $200,000 then enjoy normal market appreciation and not have to worry about a negative equity situation.

I grow tired of talking with you. I'd rather discuss the economics with someone intelligent like Don.
1 vote Thank Flag Link Wed Apr 29, 2009
Bryan Furse, did you create a sockpuppet account to speak in this thread so it won't show up on your comment history? That seems like an immature thing to do.

Here's a simple question for you that you failed to answer: How can you be telling people in Atlanta to smash the big button that says DEAL, which I take as saying "buy now while the market is hot", and at the same time say you're not telling your clients to buy now?

You just spent about 3 pages of text trying to explain why you don't want to answer John's simple question.

To briefly explain, when you said earlier that you wanted to give free advice to those in Atlanta, to buy now. The only assumption that was made was that if you're recommending buying now, you must think the prices will go up.

John asked a simple question: When in history have prices ever gone up when the market is in such decline as it is now? The answer, which you fail to give, is simply that it hasn't.

There are some good professional replies in this thread, but using sockpuppet accounts and spending 3 pages of text explaining why you don't want to answer his question doesn't add anything to the conversation.
1 vote Thank Flag Link Wed Apr 29, 2009
I guess where you and I differ, is that I see the constantly delisting and relisting in order to push the property to the top of the list and hide the price reductions as a deceptive practice, designed to fool an uneducated buyer into thinking there is no downward movement in price on the property.

I believe it is a deceptive trade practice, and you can see it play out in thousands of listings nationwide. It is also designed to allow the seller to extract the maximum amount of money from a property, not to allow the buyer to get the lowest possible price. After all, commissions are higher if the sales price is higher.

How long will we as consumers allow the NAR to get away with these deceptive trade practices? I think everyone should call the FTC and start reporting these deceptive trade practices. Sadly, congress gets too much money from the NAR for any action to ever be taken... If the FTC ever started real investigations into the deceptive trade practices of the real estate industry, congress would step in and tell them to leave the realtors alone.
1 vote Thank Flag Link Wed Apr 29, 2009
Don, excellent analysis on that property. You impress me as an agent that is very knowledgeable and honest. I admit I haven't checked the price fluctuations as closely, I've just seen the for sale sign on the property for the last 3 years.

It would be great if the public had access to that information, but I guess that is the hidden part of the MLS that RE agents pay their annual dues to the NAR to get access to.

I believe the database should be public and transparent, and not hidden. I also look forward to adding features like cumulative days on the market.
1 vote Thank Flag Link Wed Apr 29, 2009

your description of how the MLS is a joke, describes a seller and his Realtor listing and delisting a home. Supposedly, this is somehow "fooling" the public into thinking this is a new listing.

Yet, the property hasn't sold... clearly the public hasn't been "fooled". In most MLS, the house has to be offmarket for some reasonable period of time, to stop the "market time" clock. (in some cases 90 days, and in some 180 days).

Additionally, most MLS across the country have a feature called "cumulative days on market" or someway to view the history of the home based on the PIN number. So even though the listing may say "new", or only a few days, it doesn't hide the fact that the house has been relisted.

Yes, it's a marketing ploy, but nowhere near as sinister as you make it sound, as the MLS is marketing toward other Realtors, who know how to pull down cumulative days, and look up history.
1 vote Thank Flag Link Wed Apr 29, 2009
Alan May, Real Estate Pro in Evanston, IL
Let me add a personal story. Last August, 2008, I was about to purchase a 1600 sq. foot condo in Norwalk CT for $408,000. The condo was valued according to Zillow at $429,000, and I thought I was getting a deal. In the end, the sellers backed out and decided to take it off the market for personal reasons. I think they were getting a divorce and decided not to sell because they had only purchased in 2007 and didn't want to lose money.

That same condo today is valued at $331,000. In the last 9 months it has lost $77,000 worth of value. I would have wiped out my entire 20% downpayment and ended up with negative equity after only 9 months.

You know what the real estate agent, who was very professional and knew the market very well (20 years of experience) told me? You can't predict when the bottom will end, and that prices had already corrected themselves.

Looks like he was wrong. I am very glad the seller backed out, or I would be upside down on my mortgage already, after only 9 months.
1 vote Thank Flag Link Tue Apr 28, 2009
Bryan, you crack me up. REALTOR just means you paid the NAR their extortion fee so you could add a word to your business card. Good for you, would you like a cookie?

When you said:
Free advice: Anyone looking to buy in Atlanta, I would NOT wait. There are many reasons for this.

What are the many reasons? All I've heard you say are sales tactics designed to provoke an emotional response or urge to buy. While, I'm sure your sales skills are spectacular, what I am looking for as a buyer are HARD FACTS.
1 vote Thank Flag Link Tue Apr 28, 2009
To be fair, JR, when I say "middle class", my girlfriend and I both make 6 digit incomes. In lower Fairfield county, bringing in a quarter of million per year is pretty much "middle class". Even making that much income, I'm still not going to pay $500K for a tiny, 80 year old cape with a kitchen from the 70s.

On 250K a year, I _should_ be able to afford a 2,500 - 3,000 sq. foot home that was built sometime in the last 2 decades, in a decent neighborhood with good schools.

The fact that the market is so far out of whack that people are paying half a million for a rotting wooden box that hasn't seen a new piece of carpet or window treatment for the last quarter century should be a huge indicator that prices are inflated.

And, please, what does socialism have to do with this? I'm tired of having my tax dollars subsidize flippers. That sounds more like socialism than letting the market correct itself.
1 vote Thank Flag Link Tue Apr 28, 2009
Bryan... LOL... No concrete data, and your advice is to pretend like you're on a game show and mash a big button that says "DEAL!"

Here's free advice: Send $1000 to my Paypal account right now! I guarantee you'll lose a lot less money than if you follow Bryan's advice.
1 vote Thank Flag Link Tue Apr 28, 2009
My math is bad below... In a scenario where the home is appreciating by 3% a year but inflation is also 3%, inflation wipes out any gains you might make and property tax and repairs/upkeep puts you in the red.

I'm with John the Bruce on this one. We DO NOT WANT market intervention by the government. Bailing out failed banks is killing the market. Banks are keeping shadow inventory of foreclosures off the market to avoid causing prices to drop. Banks are also playing games by putting foreclosures on the market at too good to be true prices, getting multiple bids, and refusing all of the bids because it doesn't come close to what they really want for the property.

In a true fair market, banks would be unable to play these dirty tricks because they would need to sell their bad assets (foreclosures) to balance their books, or go into receivership/bankruptcy.

In our crony version of capitalism, the banks don't care if they sell any foreclosures because they'll keep getting cash injections from the taxpayers indefinitely. Obama already said that based on the "stress tests", they will prop up any banks that don't have enough money.

If I was a banker, why would I sell any foreclosures at a loss at all right now? I'll just sit on the bad assets and show them on my books at "bubble prices", thanks to the newly relaxed mark-to-market rules. It looks better to my shareholders to have a $1 million foreclosure asset on my books than to sell it for $500,000 and show a loss.

Until this insanity stops, the market can't return to normal. As tax paying Americans, we DEMAND that our government quit propping up failed banks and let the market decide what houses are worth.

This is why I'm a "Disgruntled Renter." My tax dollars subsidized the flippers, shady mortgage companies who inflated the bubble, and now they're subsidizing the banks who are trying desperately to keep re-inflating it.

Let the bubble pop already so that we can afford homes on our middle-class incomes.
1 vote Thank Flag Link Tue Apr 28, 2009
DR, that is an excellent (non-personal attack) explanation of why many people are standing on the sidelines. Thank you.
1 vote Thank Flag Link Mon Apr 20, 2009
Alan May, Real Estate Pro in Evanston, IL
We don't post enquiries on trulia in order to obtain the same ol' crap perspective from real estate 'pros'.
Gary, there will always be people who will only believe what they want to hear rather than the truth. When they are sellers, their houses expire time after time, when they are buyers the miss out on house after house.
1 vote Thank Flag Link Tue Apr 14, 2009
"Closet Socialist"?
Wow, where did that come from. As one who buys into the mantra, "Never buy more than 3X your annual income" I do believe it should be just a guide for affordability. If someone wants to go out and spend 5X THEIR annual income and can find a bank willing to give them THEIR money to do so then so be it...... that's CAPITALISM. But don't come running to me for my money when the "fit hits the shan" and a bailout when that endeavor goes south!!! That JR would be SOCIALISM!!!!!
1 vote Thank Flag Link Mon Apr 13, 2009
That was a rather snide remark to throw into your question! In my area we have over 22 months of inventory - honest.
Web Reference: http://topbrainerdagent.com
1 vote Thank Flag Link Wed Apr 8, 2009
Lori, I was able to get the information I needed. We obviously disagree on some things but I appreciate the constructive conversation.
1 vote Thank Flag Link Wed Apr 8, 2009
I know it was hard to ask...but now your posts are sounding more like something that is worth talking about. If you want agents to engage you in a respectable conversation, it helps to not start right off by an insult. The last few years of homebuidling and buyer demands has changed the landscape of home ownership. If we revert back to the average home price in my area to be $125k, you are going to have a lot of 3500 sq sf homes with multiples in them.

I already posted the data for my area earlier so I don't think that a few actual real life anecdotes hurts the overall picture.
1 vote Thank Flag Link Tue Apr 7, 2009
@Minna: I seem to have touched a nerve. I've been waiting on the sidelines to buy for the last several years and have seen first hand the damage to the RE market that easy liar loans and unethical RE agents can cause. Why bother to pay fair prices for a home when you're buying it with monopoly money and just plan to flip it? Most RE agents might not have been unethical, but if you're selling a house for way more than a sustainable price to a speculator with no money down and an interest only loan, you probably know you're hurting the other buyers like myself who diligently saved our 20% and followed all the rules. Actually, renting is a better financial decision in most cases, especially right now. See this article for more details: http://www.marketoracle.co.uk/Article9852.html

@Don: I appreciate your honest and candid response about inventory. You have a pretty optimistic view of the market, but I agree that interest rates are great right now.
1 vote Thank Flag Link Tue Apr 7, 2009
@Juanita: When I keep reading blogs and articles written by RE agents about how the bottom is here now, and spring is a great time to buy, and prices are going up, despite every fundamental indicator telling me the opposite, I wonder what alternate reality these RE "pros" are living in.

Here are the fundamentals:

- Houses in Fairfield are still much higher than 3x median family income. Even considering the salaries in Fairfield are much higher than the national average, this indicator still doesn't match historical levels.
- Houses in Fairfield are still much higher than 100x rent.
- Inventory in Fairfield is still much higher than historical levels.

So, with all economic indicators saying the exact opposite, I still see articles in the media and blogs written by RE "pros" every day that say "it's a great time to buy!"

I'm just asking for a little honesty from an industry where honesty seems to be in dreadfully short supply.

4-6 months might be a good level of inventory. I'd like to know what it was historically before, say, the year 2000 or so.
1 vote Thank Flag Link Tue Apr 7, 2009
DR, Bo:

My brothers, have faith in the economic certainties that you see all around you. Incomes and prices are so in a state of disequilibrium that even Senator Dodd can see it.

We had our 2004. We'll have our repeat of CT RE circa 1987. It's coming, be patient.

A house that we watch in Bethel has gone down over 25% from peak - and that 25% number is assuming they get their new "wishing price." The adjustments are happening right now, especially on the $500K+ properties.

My guess is that we will see some serious price capitulation come fall. You won’t have to wait much longer.

Keep your powder dry.

0 votes Thank Flag Link Mon Jul 13, 2009
JR said, “Why would you enjoy seeing a meltdown of the housing market? Many innocent people are going to be hurt in the process, including some of those waiting on the sidelines, maybe even yourself. Many industries may be affected. Did I say something about shadenfreude a few months ago? Looks like it’s back.”

JR, I’m enjoying the housing implosion for one simple reason. The meltdown is the path back to *real* wealth creation and accumulation. The faster we can get to the bottom the better. We can’t build any real wealth until the losers take their losses; then we can move on.

OK – maybe two reasons. It’s fun to see all the naked swimmers as the tide goes out.

The 2000-2006 mania might have resulted in higher real estate prices, but as sellers are now finding, those gains were mostly illusionary. The mania was the result of too many dollars chasing too few assets. The fallout of which was a building frenzy that resulted in an oversupply of housing units in the millions.

Although I appreciate your concern, it’s misplaced. Don’t worry about me. My “business” gets better the worse the economy gets.
0 votes Thank Flag Link Wed Apr 29, 2009
Much of the 'public access' part that is kept out of the public contains information such as the buyer's agent involved with the sale, clients telephone numbers and specific showing times, whether the house is vacant or occupied, pet in house, children in house, etc., information that does not need to be thrown out there to the public. All this NAR bashing and people don't really understand that they don't have a lot to do with the things you are bashing them about. It's wonderful to hear different opinions on the market from all the different posters but the incorrect 'knowledge' of contract specifics, ownership and daily running of the mls systems and other areas is as annoying to us as 'Top Gun' is to pilots, 'War Games' to scope dopes, etc., I'm sure that many of you that post pretty interesting things on the site are also in professions that we could not walk right in and correctly explain but we probably have enough knowledge of either by past experience or quick google copy and pasting to make ourselves just dangerous enough.
0 votes Thank Flag Link Wed Apr 29, 2009
No problem.

Realtor.com gets it's feeds from all the local MLS. Gawd, what I wouldn't give for a national MLS... that would rock. And oddly enough, I think it would actually be a cheaper membership... while there would be more work... it would be only 1 site, and so many more members to share the cost.

they have a national MLS in Canada, and they pay (on average) less per month, than we do.
0 votes Thank Flag Link Wed Apr 29, 2009
Alan May, Real Estate Pro in Evanston, IL
well, the MLS is an advertising media... so no surprise that it's not designed to allow the buyer to get the lowest price.

and I guess I have a higher opinion of the public, than you do, as I don't think this fools them at all.

also... again, it's NOT the NAR practicing deceptive trade practices. NAR does not own all the 700+ MLS around the country. Each MLS makes up it's own rules, as should be evident by the fact that Don's does not support cumulative days on market yeet.
0 votes Thank Flag Link Wed Apr 29, 2009
Alan May, Real Estate Pro in Evanston, IL
I guess, the missing link, here, disgruntled, is that the property history that Don pulled (Don the knowledgeable and honest agent) is available to each and every member of that MLS... and they would happily and willingly pull up that information on any house that you were interested in.

So if you showed some interest in that property, the first thing your buyer's agent would do is to pull the property history (let's see what they've paid, how long they've been on the market, and any price reductions they've taken). Then we'd pull any local comparables.

So I don't see any deception here. Their relisting in 09 as new, after being off market since 3/08 is legitimate (although their price is probably still high)... the relisting as new in January of 07 was merely a marketing ploy,... probably an attempt to get the property back on the "hotsheet" of the MLS. Not an attempt to deceive (as you can see, any agent can check the history)... but an attempt to put it in front of the agent's eyeballs again.

btw... our NAR dues does not pay for the MLS. There are over 700 MLS across the country and each and every one is run by a local board. We pay separate dues to those boards for MLS access.
0 votes Thank Flag Link Wed Apr 29, 2009
Alan May, Real Estate Pro in Evanston, IL
John: JR – when we discuss the median price of homes versus the median income, we’re talking about historical affordability rates. Just because that number is out of whack doesn’t mean that we’re saying it’s “unfair.” To illustrate it shows the manic nature of this market and it’s not meant to be a social commentary.

JR: I'm not sure who "we" is, John. Do you have a mouse in your pocket? :) I do see other posters with many of the same sentiments you have, say prices are “unfair”.

John: When I talk about these numbers, I’m just saying that both the denominator and the numerator of that affordability calculation are correcting; and they will continue to correct in spectacular fashion. Enjoy the show. I know I am.

JR: Why would you enjoy seeing a meltdown of the housing market? Many innocent people are going to be hurt in the process, including some of those waiting on the sidelines, maybe even yourself. Many industries may be affected. Did I say something about shadenfreude a few months ago? Looks like it’s back.
0 votes Thank Flag Link Wed Apr 29, 2009
Bryan Furse - I asked you a very pointed and simple question that you failed to address.

If you would have your clients truly fear that they'll miss the boat once this market recovers, could you please tell us the last time a real estate downturn was followed by a fast moving price recovery on the up-side? It's really simple. Please answer.


JR – when we discuss the median price of homes versus the median income, we’re talking about historical affordability rates. Just because that number is out of whack doesn’t mean that we’re saying it’s “unfair.” To illustrate it shows the manic nature of this market and it’s not meant to be a social commentary.

When I talk about these numbers, I’m just saying that both the denominator and the numerator of that affordability calculation are correcting; and they will continue to correct in spectacular fashion. Enjoy the show. I know I am.
0 votes Thank Flag Link Tue Apr 28, 2009
Bryan said:
Free advice: Anyone looking to buy in Atlanta, I would NOT wait. There are many reasons for this. If buying a house were compared to "Deal or No Deal," NOW is when you should be smashing that button and yelling "DEAL!"
Then a few hours later, Bryan said:
What I can't seem to get through to you is that I DON'T HAVE A BUY NOW attitude!

What exactly are you trying to say Bryan? Are you saying smash the button and buy now, or not?
0 votes Thank Flag Link Tue Apr 28, 2009
Don't look for a bottom! You will never find it! Use common sense! The cycle will not bottom until approximately 2013! Ask me how I know! Better yet, mark it on your calendar! There are always good buys because there are always motivated sellers!
0 votes Thank Flag Link Tue Apr 28, 2009
This is the problem with RE agents, and I realize I'm making a generalization here. I have worked with very professional ones, who know their markets well and do good comps, but not a single one of them will tell a buyer the honest truth: That they should wait and see where the market goes because it's only going to get worse (lower home prices).
You’re opinion of the public seems even lower than that of real estate agents. They don’t follow the same news we all follow? They aren’t aware of where prices seem to be heading? Sometimes people HAVE to buy or sell. Sometimes they WANT to own the place they live in. I would never rent. I have dogs, cats, I like to change my house whenever I want without asking persmission. I want a new kitchen. I want new appliances. My landlord is going to buy them for me? I don’t think so. YOu may not care where or how you live, but others do.
0 votes Thank Flag Link Tue Apr 28, 2009
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