Trulia Roger

You could always open a savings account and deposit yourself into it. - Thu Jun 5 2008, 16:08

It's only just that the original poster should get the 1000th answer. This is a record, by far! Congrats! - Thu May 22 2008, 10:06

Folks, please refrain from calling each other "stupid people" and "morons." It's a violation of our community guidelines, it's rude, it's pointless, and it doesn't make you look particularly good or professional. We had enough grief from one or two individuals trolling this thread for a while, so let's take the high road and refrain from posting if all one has to say is "moron", shall we?
Thanks! - Sun May 18 2008, 15:40

All: please use the "report" and "thumbs down" functionality when you see inappropriate content. It helps alert our moderation system of any shenanigans and we can take decisive action faster.

Thanks! - Thu May 8 2008, 15:04

JR: I'm sorry you feel we haven't removed enough. Our moderators and I have removed close to 100 posts, and I have already commented about our stance on moderating in moderation, so to speak (link below). Also I've seen a lot of attacks coming from real estate professionals, not just "members of the supposedly inquiring public". We'll keep watching this thread and remove the junk as we go.

Thanks for your participation. - Thu May 8 2008, 13:54

Paul: glad to be of service! This is actually the most-answered question on Trulia Voices to date, with 610 answers (and another 95 removed due to trolling). - Thu May 8 2008, 13:38

Paul: the original question's poster can select the best answer, and you can sort by "highest rated" if you want to see the best answers near the top. - Thu May 8 2008, 13:04

Richard: we're on the case and removing offending content and profiles. IP banning wouldn't be terribly effective, because it doesn't take much skill to find a way to get a bunch of new IP addresses, but we're on it. - Thu May 8 2008, 12:57

Slash: this is what happens when inconsiderate people keep posting inane and/or insulting answers, not when a thread has run its course. The burden is on you and others to stop being insulting and unprofessional and just walk away if you don't have anything useful to contribute. - Thu May 8 2008, 12:27

Folks, please remember to keep it civil and agree to stop insulting each other. It's irritating, rude, pointless, against our community guidelines, and not particularly flattering for the people engaging in that kind of behavior.

We haven't moderated those posts out to keep the integrity of the thread and because of our general stance about not moderating more than is necessary (see my blog post about this, written months ago), not because of cynical attempts to capture as much "content" as possible for SEO reasons (see message speculating about our intents a few pages ago), so please keep it civil and courteous. We can and will moderate content and profiles out of the thread if we need to, so please don't troll, flame or flamebait.

It might also help if any new participant would at least skim earlier posts before posting "all real estate is local", "now is a great time to buy", "now is a terrible time to buy", "interest rates are at an all-time low", "renting makes more sense", "the media is against realtors", "realtors are dishonest", or similar arguments, because each of these points (and more) has been debated, argued and (dis)proved many times over.

Let's keep on point and stop attacking each other.

Thank you. - Thu May 8 2008, 12:12

Rob, I appreciate the sentiment, but I'd like to ask you to remain on-topic and factual. That discussion on BHB is very interesting but has nothing to do with Ryan's question. In addition, several of us at Trulia have addressed all the points in that BHB discussion there as well as on our blog (link below).

If you'd like to revive the topic of SEO, why not start your own question? :)

Cheers,
Roger - Thu May 1 2008, 20:48

I second Ryan's request--let's focus on the issue and not post hostile or ad-hominem answers, please.

And remember: I am all powerful when it comes to the content that gets posted, and our moderators and myself will remove content that violates our terms of service. Please refer to our guidelines before posting if you have any doubts about whether posting something like "people with big mouths like aj and Richard that couldn't find their butts with both hands tied behind their backs" is against the rules (it is). Hint: ask yourself if you'd say those things to your mother, spouse, partner, children, boss, or close friends and relatives. If you wouldn't, then it probably doesn't belong here.

Thank you. - Mon Apr 28 2008, 21:49

Sandy and Jay: Interest rates are not at an all-time low, at least not fixed-rate mortgages. They were lower in 2005, when I refinanced from an ARM into a fixed-rate mortgage. - Sat Apr 26 2008, 18:08

Thanks, Patrick, for sharing the info. I do have to point out that...

Joliet home prices are in the black: up 7 percent over the past two years [...] Naperville home sales prices posted a solid 9.77 percent gain over the past two years, [...] Elgin - Elgin’s prices are hanging in there, with a 2.32 percent gain over the past two years [...] Aurora home sale price averages are all in the black over the two-year period but vary slightly by county. In Kane County, Aurora sales were up a scant .24 percent, from $182,506 to $182,951 [...] Sales prices in the Will/Kendall portion of the city are up almost 2 percent, [...] Prices in the DuPage portion are up nearly 3 percent, [...] Tinley Park home sale prices are up just more than 6 percent over the two-year period

means real prices are down, except perhaps in Naperville. Nominal prices are rising slower than inflation. - Thu Apr 24 2008, 12:30

Chandler: having talked with a few agents, from what I've heard the excessive "wishing prices" often stem from sellers stubbornly clinging to their idea of what their house is worth, ignoring their agent's pricing advice. - Thu Apr 24 2008, 11:09

JR: I see your point, but I think we might be talking about two slightly different scenarios. When will we as a nation, a collective of millions of people, see the bottom? Perhaps never, as you say, because there are still people who don't realize a peak was hit somewhere between late 2005 and mid 2007, depending on the region. But that doesn't mean realistic individual buyers, sellers and real estate professional who do their homework can't time a transaction near the bottom (if their market drops and does indeed see a bottom after a peak--not all markets have been affected to the same extent). - Thu Apr 24 2008, 08:49

Chandler: we did exactly what you seem to suggest. When we sold in early 2007, we didn't want to chase the market down, so we happily gave our buyers a price that was 15% below our agent's initial price, and about 9 to 12 months "early" (i.e. the price we would have had to drop to eventually if we had put the property on the market 9-12 months later). It worked :) - Thu Apr 24 2008, 08:45

A lot of folks I talk to say it's impossible to time the bottom of the market, and in the same breath claim prices are rising and the market is coming back. I interpret that as saying "the bottom of the market is ending". It's not as if house prices rise 15% in a week, so as long as you keep an eye on the market and buy around the time you start seeing some action and an uptick in prices over and above normal seasonality effects, then for all intents and purposes you've timed the bottom of the market.

Or am I missing something? - Wed Apr 23 2008, 21:57

Tom: there's really no need to be calling anyone a "fool," especially when the post I made is general about money management and holds true in any market. It's also a very bad idea to insult someone who has root access to the database :)

(no, it's not a threat, just a friendly reminder to keep it courteous and friendly around here, thank you very much) - Wed Apr 23 2008, 20:38

Janet: "In buying at this time, it's more important to be concerned over the mortgage rates than the actual cost of houses, since the rates are what dictates the actual money charges over the life of a loan.$ 5,000or 10,000 is a negligable amount if the rate charges one whole percent... the payments increase far more than the difference in price."

I would counter that's not a very sound way of managing your money in the long term. Over 30 years, you'll most likely have a chance to refinance into a lower-interest mortgage. The higher price you paid is there forever. I'd rather pay 7% interest on a $400,000 loan than 6% on a $500,000 loan.

If your home drops in value, as they are now almost across the board, you're losing actual money that you put down to buy the home with. If you wait, you can put that money into a savings accound and actually earn interest. And if illness, a job transfer, death or other life events force you to buy before prices have gone back up, you can be out a substantial amount of money. It's not an opportunity cost--it's actual money that you had yesterday but don't have anymore. - Wed Apr 23 2008, 18:49

One might want to take NAR predictions with the requisite boulder of salt, given these: - Tue Apr 22 2008, 08:54

Zack and Paul: good points all around. I have seen a lot homes in my small market that were sold between late 2004 and late 2006 that are back on the market with the break-even mentality. Those often have $50K-$100K worth of trendy HGTV-approved granite / stainless steel / bamboo floor / jetted tub HELOC-financed "upgrades" all over them, even when they're completely out of keeping with the size or style of the home, and those are usually listed at wishing prices of purchase + upgrade costs + 10% or more on top to at least break even, even though current comps aren't moving at 2005 prices.

Those homes are effectively taking themselves out of a potential pool of buyers out of stubbornness, lack of foresight (do you really need to spend $100K on a 1000-sqft pre-war bungalow that really should only sell for $250 / sqft tops, but that was purchased at an inflated 2006 price of $500 / sqft?) and the owners' inability to take a six-digit loss or major foreclosure hit on their credit score.

I for one, and it sounds as though a lot of people agree, am not interested in paying a huge premium over and above inflated prices to cover the cost of upgrades I wouldn't have put in myself. And there's the rub--how many homes are exactly in that situation? I can think of at least a dozen I saw in my tiny market off the top of my head, and there are dozens more listed in our local MLS. I worry about what will happen to those homes and their sellers, because I really don't see a good outcome in the offing. - Mon Apr 21 2008, 08:20

Interest rates are important to the buy-or-not-buy decision, but so is the purchase price. You can refinance out of a high interest rate. You can't refinance out of an inflated purchase price. Besides, because interest payments can be tax-deductible, assuming the same monthly payment in both cases, you're better off with a { higher rate + lower price } than a { lower rate + higher price }. - Sun Apr 20 2008, 17:28

Ryan: the Case-Shiller HPI should be available at Shiller's own site (link below). You may also want to check S&P's site at http://www2.standardandpoors.com/portal/site/sp/en/us/page.t…

New data gets released regularly. They make all the raw data available, too.

Trulia also updates sales and other stats weekly or monthly depending on the data. Check out our guide for Chicago at http://www.trulia.com/real_estate/Chicago-Illinois/ - Sun Apr 20 2008, 12:38

Zack said "... your post doesn't state that your 10% assumes a very short time horizon to ammortize the costs..."

Yes, sorry I didn't make that clearer. That's what I meant when I said "adjusting accordingly for different time horizons." I was also in reference to the notion that younger generations tend to have shorter periods between moves, job changes, etc. In my little town here, I'm seeing a ton of homes back on the market that have been sold since I moved here in late 2005, so one has to take into consideration the possibility.

Cheers
Roger - Sat Apr 19 2008, 18:44

[[ This is the heart of my thread question. If we know prices will fall, why should we buy? ]]

Here are a few suggestions. I'm a big housing bear and will rent until the cows come home, but please take this at face-value, and not as glib sarcasm.

Let's get the assumption out of the way and say you buy now in spite of likely price drops, perhaps because a $100K drop in equity is immaterial to your finances, or whatever. In other words, drops in the value of your asset do not bother you for whatever reason.

Good reasons to buy now: (i) you've found a house you absolutely love and you just have to have it. (ii) you have a job or a hobby that would be well-served by structural changes to the average dwelling (say, a recording studio or a ceramic kiln or what have you), and you can't do that with a rental. (iii) similar to (ii): you're tired of rental white and you want to paint every wall in your home a different shade of chartreuse. (iv) you have animals that make it difficult or prohibitively expensive to find a place to rent. (v) you've been evicted from an apartment during a condo conversion, and you don't want that to happen again. (vi) you can't stand the uncertainty or interpersonal relations involved in having a landlord. (vii) gardening is your life and the only places available for that are single-family homes, which are very hard to find as rentals. (viii) you want to run a business out of your home, with occasional client visits to your office, and most apartment buildings in your area prohibit that (I don't know if this scenario ever happens, though). (ix) you smoke and there's a city ordinance against smoking in rentals; owning your home is the only legal way to indulge your filthy habit.

That's 9 reasonable arguments for homeownership in a down market, and I'm sure the group here could come up with more. We loved owning our own place for some of the reasons I just listed: it was perfect, and we were (mostly) free to do whatever we wanted with it--there wasn't a single white wall in the house when we were done with it :)

Cheers! - Sat Apr 19 2008, 04:43

One thing to keep in mind is that a 1-2% y-o-y gain in (nominal) home prices is actually a 8% loss when you factor in inflation and the costs incurred during a sale. If your home's nominal price hasn't increased by 10%, for practical purposes it's dropped and you'll lose money if you sell (after 12 months; adjust accordingly for different time horizons). - Sat Apr 19 2008, 04:16

Here is a snapshot of what the market is doing around Silicon Valley, in California. It ain't pretty, sadly. - Sat Apr 19 2008, 04:01

I find all this talk about the media amusing :) First you're told the market is doing great, and the next paragraph you read the media is destroying the market. I remember the media reporting on the huge runup from 2000 to 2006, but I certainly don't remember the media being blamed (or praised) for causing the runup. And real estate advertisement (ads by brokerages + classifieds by individuals) is a major source of funds for the traditional media, so if they're all supposed to be corrupt and conspiratorial against the real estate industrial complex, it seems singularly short-sighted of them to bite the hand that feeds them, doesn't it?

And the irony of blaming the media for causing or perpetuating the housing crisis on a media Web site like trulia.com is delicious :)

This is my favorite thread of the week. Keep it up, everybody, it's great reading. And many thanks to the participants, pro and non-pros, for keeping it informative and courteous. - Sat Apr 19 2008, 03:43

One interesting theme in this thread is that "all real estate is local." That is by and large true, and you can't compare the housing bubble in Phoenix or Las Vegas to the non-bubbly markets of Atlanta and Houston, for example. But there's an important non-local factor at play, which one could describe as "what happens in Vegas doesn't stay in Vegas": credit and lending are national, and even international, not local. This means fewer people can get financing everywhere, and so the consequences of the housing bust in Vegas are affecting sales in normal markets as well. - Sat Apr 19 2008, 00:28

While we're discussing idées reçues in real estate, I'd like to point out the old chestnut "buy now because they're not making any more land" has been shown to be largely irrelevant to house prices. I'll refer interested readers to a 2002 paper by Harvard economists (link below) that showed that in most places, affordability is determined by zoning regulations rather than availability of land.

And land is man-made all over the place (SF Marina, Alameda, new islands in the Mideast, etc.) - Fri Apr 18 2008, 23:41

Ryan,

Interesting thread, and judging by the high number of answers, lots of people agree :) Here's my perspective as a housing bear. We bought a condo in So Cal in 2000, and watched the housing bubble inflate (we look at real estate as a hobby). When we moved to the Bay Area in mid-2005, we knew the bubble was just about to pop (in fact, one of the questions I asked of Trulia's founders when I interviewed for my job was "How is the company going to handle the impending housing crash?" and they gave me a most excellent answer...) and decided to rent, save money, and wait until prices came back in line with the fundamentals before we bought a house again. We're still waiting, because we're convinced there's a long way to go before a bottom, and every new week's worth of data confirms that outlook. While it may be a "buyer's market" in the sense that inventories are high, a lot of sellers are desperate, and mortgage rates are still relatively low, it's still not a sensible time to buy in my opinion, because prices here have barely dropped back to their 2005 levels, which is precisely the year when I figured the market was due to blow up because of grossly inflated prices. So no, I'm not interested in buying now, because I wasn't interested in buying then either :)

A lot of folks are saying that mortgages are at historic low rates, and that's just not the fact. ARMs might be, but those adjust, and with inflation and home prices the way they're going, by the time you might want to refinance into a fixed-rate mortgage to avoid your ARM going up too much, you may have lost too much equity to qualify, and fixed-rate mortgages may have gone up from where they are now.

And fixed-rate mortgages are still quite a bit higher than they were in 2005. Fixed-rate 30-year mortgages are not tied to the Fed's interest rate changes, so the Fed's drops don't have an effect on long-term rates. When we refinanced into a fixed-rate mortgage in 2005, we got a considerably cheaper rate than is available now. So don't buy the "mortgage rates are at historically low rates" gimmick--it just ain't so. Prices are also not "low" by any stretch of the imagination, they're just lower than they were at the peak of a massive runup in prices. That doesn't make them low.

That said, there are a lot of rewards to homeownership, and if you're going to stay in your home for a good long time, and can afford a drop in value, then buying now is undoubtedly better than it was between 2002 and 2005.

Note these are my personal opinions, and they're not necessarily endorsed, edited, approved, or otherwise sponsored by Trulia. I'm also only focused on a small market in the Bay Area, so your own area is likely to be different. - Fri Apr 18 2008, 21:15

Trulia is not the only company doing this. The web is a veritable widgetapalooza. None of what we do is underhanded, and it's all completely industry-standard.

Being angry with Trulia is entirely your right (although it saddens me, because we're really not out to get you), but I think the record should be accurate and balanced, and saying Trulia is the only one doing this plainly isn't true. It took me exactly 15 seconds to find a real estate widget with a do-follow link at the bottom showing attribution to the originating Web site. - Sat May 17 2008, 21:43

I realize I'm breaking my own moratorium here but I just had a thought: can any real estate pro please enlighten me about whether IDX rules prevent the display of aggregate information? Say, for instance, one wanted to aggregate DOM, sale price, list price, price reductions, etc. from an IDX feed and compute medians, averages and other statistics in a given location, and (bear with me here) display those stats in a widget, would that be permissible? If that's the case, then it could be a very cool tool for brokers or IDX customers to build.

Maybe they could be sneaky and have other site owners put it on their own Web sites, with a do-follow link pointing back to them (sorry, I couldn't help myself--this last part was a joke :)... ) - Thu May 15 2008, 16:20

Ronnie: if your visitors are interested in finding listings, and you display listings, then yes, it is probably in your interest to keep your visitors on your site. The easiest way to do this is by not linking to other sites that display listings. Any content you put on your site that directs visitors to another site is a potential distraction from your goal of keeping your users on your own site. If Trulia widgets conflict with your goal, don't display them. It's 100% your choice.

Painting Trulia as an underhanded traffic thief doesn't seem fair to me when the choice to have Trulia's (or anybody else's) widgets on your site is yours.

The bottom line is simple: if something (widget, partner, competitor, banner ad, IDX feed, flying cursor trails, Flash intros, what have you) helps your business or adds value for your visitors, by all means use it. If it conflicts with your business, don't use it.

Now if the crux is how well Trulia performs in search engine rankings compared to your site, then it's a different discussion. Yes, we're doing very well in search engine rankings. We've invested a lot of brain power to follow best practices in the industry. None of what we do is rocket science, black-hat or underhanded, so the playing field is somewhat level and anyone can do it if they put their mind to it.

This is going to be my last answer in this thread, because the topic has been discussed at length on various sites and I don't think I have much to add to the conversation.

Thanks for raising the issue here and encouraging an open discussion.

One last clarification: most of our listings don't come from the MLS. They mostly come from feeds and Web sites with whom we have a partnership. By and large, we don't really display "MLS listings"--we display listings, and most of them happen to be in the MLS as well, but we're not an MLS-affiliated Web site in general. - Thu May 15 2008, 15:34

Jim: If a visitor leaves your site to go to Trulia from a link in one of our widgets, you ask "Do they ever come back? Why would they?"

I'd like to put the question back to you: why wouldn't they? If your site is interesting and compelling enough that the visitor was there to begin with, what they do after they click on any link on your site should have no effect on their coming back or not, unless they decide your site wasn't interesting and they find another that fits their needs. By this logic, then, you'd have to remove every single outbound link on your site--not just links to Trulia.

But what makes the Web an interesting place is the interlinking between pages and sites. If a user finds a valuable link on your site, it reflects well on you as a site provider, because you've pointed someone to a site they may not have heard about. It's similar to recommending a restaurant to your friends. If you recommend a good restaurant, everybody wins: your friends, your standing in your circle of friends as a restaurant connoisseur (and, yes, the restaurant owner as well). That logic of implied recommendation is reflected in Google's and other search engines' ranking (relevance) algorithms, and it works pretty well, i.e. it fits the human intuition of relevance fairly accurately.

Note I'm not here to stir up the pot, revive an old argument or "defend" Trulia--just presenting another perspective. - Thu May 15 2008, 14:15

Ronnie: this is Roger from Trulia here. I'd like to point out that the Trulia widgets do not "steal" any traffic. If our widgets, say, redirected visitors from your site to Trulia automatically, that'd be stealing traffic, and our widgets do no such thing. All our widgets do is display information on your site.

Yes, there are links to Trulia in the widgets, but that's standard practice re. attribution.

I hope that clarifies things a bit.

Cheers,
Roger - Thu May 15 2008, 10:55

Newportfiji: thanks for posting that link to the historical median prices. It reflects my own experience buying in LA county in 2000 from someone who'd bought in the late 1980s and didn't make any money on my transaction (in real terms; in nominal terms we paid about 10% more than he had 12 years prior or so).

The idea of buying now is terrifying given this recent history. - Thu May 15 2008, 12:44

Jordan, thanks for posting this, I hadn't seen it. This should be a great kick in the pants and a good first step towards avoiding yet another moral hazard. It also means the housing market sure ain't going to get any better from this, but at least we housing bears are finally getting a little respect for our prudent approach to the market. - Thu Apr 17 2008, 18:21

Good suggestions, everyone. I do disagree with Sylvia a little, in that post-hoc editing of threads invariably breaks the flow. I'm a big fan of archiving everything as a snapshot.

About the thumbs: a lot of folks love 'em and try to get as many as possible as a sign of their expertise, by contributing thoughtful answers. taking them down seems unfair. And if we have TUs , it also seems fair and logical to have TDs.

We don't display TD counts on an individual basis, but we do use them (as well as TUs) in some of our algorithms, e.g. to determine rankings in member search. They only contribute a fraction of your ranking score, and we filter out anomalies (drive-by vendetta TDs, for example, and only one TD per user per answer counts, etc) so please don't be afraid of the thumbs.

We do value your feedback, though, and incorporate it into our product designs, so keep it coming! - Wed Apr 9 2008, 13:39

Hi everyone,

This thread has got to be a record--253 answers (254 after this one)!

About the Thumbs Up - Thumbs Down: there have been discussions about those, and we could most definitely show who's doing what, complete with date and time... It might encourage accountability, but it might also discourage folks from using it altogether.

But if you're one of those drive-by thumbs-down voters, we know who you are... - Tue Apr 8 2008, 15:29

Hi Sylvia,
I didn't mean to change to "pro"--I think I was messing around on my profile page and somehow forgot to set it back. Thanks! - Fri Mar 7 2008, 14:56

--- 2. People w/ homeownership experience assign a lot of value to various intangibles, e.g., their ability to make changes to the house. Someone used to renting probably assigns less value to that. Also, w/ time, the value of ownership grows ---

Actually, having owned a home for seven years and rented for the past two and a half, I can tell you the intangible feeling of homeownership and the ability to paint my home fuchsia are way down on my list of priorities. I've been there, done that, and enjoyed it a lot. But number one is not making a bad financial decision. As it is right now, I'd have to pay 2.5-4 times my rent to buy something I'd want to live in, and that's just not sound.

Also it's important to stop equating a rate drop by the Fed with lower mortgage interest rates. Fixed-rate mortgages track 10-year treasury bonds, not the Fed's short-term lending rate. Fixed rates have been going up just as the Fed has been cutting their target rates. There's more to mortgages than ARMs, and a drop by the Fed actually has very little to do with the kind of mortgages I and a lot of buyers would want right now. - Tue Mar 4 2008, 21:44

Ok folks, let's keep it civil, please: no name calling, and no flaming.

There hasn't really been any trolling on this thread, which is why it's still active and we haven't removed content, but if the name-calling persists we'll have to take action, and we wouldn't want that.

Thanks for your cooperation,
Roger - Sun Mar 2 2008, 20:53

Hi everyone, I hope this thread remains civil, because there's really no need for ad-hominem attacks.

Deborah: hi! I do have to disagree with you, though. Interest rates are low, but prices are hardly low. Low to me means at or below affordability levels, not just lower than the inflated prices we saw in the runup to 2005. E.g. if the usual price for, say, a car, is $15,000, then low is $14,000. Just because people may have paid $30,000 for that car doesn't make $25,000 a "low" price.

We won't know we've hit bottom until it's already behind us, but we have a long way to go before it's in the rearview mirror.

All I see on the market I track maniacally (checking listings 5x a day, 7 days a week) are price reductions, sales under asking (even when the asking price has been dropped a few times), underwater sellers trying to get out of loans without losing all of their shirts, and DOMs topping 6 months even on so-called moderately-priced homes. This market is primarily an affluent, upper-middle-class San Francisco satellite town, too, not a foreclosure hotbed.

Good luck to everyone trying to make a living in the RE industry. It's not going to get any easier. And I'm saying this honestly, with no sarcasm--these are tough times and I wish everyone the best. - Sat Mar 1 2008, 14:01

Brains... we sure could use more of those. - Thu Feb 28 2008, 11:38

This conversation is getting more interesting by the day. I'm glad I get email notifications :)

I can only speak as someone who used to own, and who can (and wants to) buy a house at some point. I'm fine in principle with the idea of owning a home that's worth a little less than I paid for it, as long as it's the perfect house that has everything I want and need. I'm not going to try to time the market all the way to the bottom if the perfect house comes along at a price I can live with. I also have no intention of walking away given all these conditions.

But I'm in a completely different situation from the majority of folks who took out home loans between 2004 and 2006 (I don't quite remember the figures, but they're indeed more than half in some states: no money down, no doc, neg-am, ARM, etc. NINJA loans). A lot of loans were given to people who shouldn't have had loans in those amounts in the first place, whether their homes kept appreciating or not. Their FICO scores weren't good enough, and/or their debt-to-income ratios were too high, etc. They have no skin in the game: no equity and low credit scores from the get-go. A foreclosure on their record doesn't really affect them negatively since they started off in poor shape anyway.

I think folks in this situation are what makes the bulk of the current wave of foreclosures, and there were so many of them we're nowhere near the end of the tunnel.

In the meantime I'll just keep renting and saving up for a solid home purchase when the time comes. Prices are dropping, and in my little Bay Area market I see price drops and properties listed for less than the purchase price 1-3 years ago ALL the time. It only validates the "don't buy yet" position I've held since 2005. - Thu Feb 28 2008, 08:19

All: interesting discussion, and kudos for keeping it civil.

One issue I see happening in the small market I track for my own purposes is that prices can't really go down unless something drastic happens, like new tax rules for short sales or new bankruptcy laws. This is because so many sellers bought at the top of the market between late 2004 and 2007, and they're already upside down by 5 or 6 digits. These are typically folks who really couldn't afford to buy in the first place, so they can't weather a $60,000 loss. Renting out their home doesn't begin to cover the mortgage,
so they cling to the price they need so they don't lose their shirt.

Right now, the only homes I see moving are priced well below what they would have fetched in 2005. Those are usually owned by sellers who bought in the 1990s or earlier.

I wonder if we're going to have a frozen market with record high inventories that simply will not move. - Sun Feb 3 2008, 12:13

Maureen: if by "take advantage" you meant "take advantage of more favorable conditions in a few months", then it's a wise move. If you meant "take advantage of sellers who need to sell" then I must disagree with the phrasing--would you say sellers were "taking advantage" of buyers between 2000 and 2005 when prices were going crazy? - Fri Jan 18 2008, 14:15

One more thing, to everyone: I have great respect for real estate professionals, and my comment about "whining" was not directed at anyone here. We liked our buyer's agent so much we used her services again when we sold last year, and for the past few years I've met and learned a lot from a bunch of great real estate professionals. - Thu Jan 17 2008, 16:30

Tiffany: You said "unless you actually go to sell your home when your equity is reduced to 15% per were the market is, then you haven't actually lost anything. You only lose money, equity or your down payment if you sell in a time when the prices are down from what your purchased it at." and I completely agree. But when the market was going crazy, that logic was turned on its head and people felt they had made a ton of money on their equity, borrowing against it like mad, even though, as you said it yourself, equity gains or losses are only paper money until you sell. Now they're overextended, they can't sell their homes to cover their neg-am + HELOC liabilities, and everybody is whining over what is essentially an abdication of personal responsibility and foolish financial decisions. The market as a whole needs a kick in the pants, and it's happening now. None too soon.

I think it's refreshing to see buyers hold off on buying now because of the almost certain equity drop--nobody knows for certain they won't need to sell in a year or two.

Another point I see bandied about a lot is media bashing for the price drops and the current state of the market. Nobody was blaming the media when prices were going up 20% yoy and the current crisis was building up. Newspapers and TV news were talking about record prices all the time, on the front page, just as they are talking about the market now, on the front page. It's a little too convenient to blame the media.

A lot of us could see the current mess coming from a mile away, and got out of the market before it imploded. It doesn't take a PhD in economics to know when something's fishy and unsustainable. Getting burned hurts, but I don't really see very many victims here.

(note: these are my opinions, I'm not talking on behalf of Trulia or anyone else). - Thu Jan 17 2008, 16:18

It's hardly a hot market if you look at affordability levels, for example. Prices have to come down by 20-40% to get back to a level that makes financial sense. It's happened before (1956-1958, 1990s, etc) and it's happening again. Not fast enough, if you ask me, but I'm saving up for a good down payment when the time comes, so it's all good. For me anyway :) - Thu Jan 17 2008, 16:04

Hi Diane, this is Roger from Trulia. I'm sorry you've experienced issues. In order for me to troubleshoot, I'd like to know what exact page on Trulia you tried logging in on, if you remember, and what operating system (Mac, Windows, other) and browser and version you used. It'd be wonderful if you could share even some of this information with me so I can look into the issue. You're welcome to contact me directly via my profile or in this thread. Many thanks! - Tue Apr 29 2008, 08:19