Dan

As is typical the professionals here don't actually talk to the real issues concerning potential buyers. For instance, can you get a nice home in a decent school district for 3X your family income? Good prices? Compared to what? Last year? maybe so. But has the market adjusted enough to compensate for the run-up (I think about DOUBLE) that occurred between '01 and '05 due to sub-prime mortgages, easy money and sometime downright mortgage fraud that no longer exists? This is the proverbial "elephant in the room" that the professionals just will not address. Let's take a closer look at it. Maybe I'm being pessimistic and there truly was an economically sound reason prices shot up that fast. Did incomes in the area double along with the housing prices? Did energy and food prices plummet during that time in Hampton Roads while the rest of the country saw substantial rise in these costs? I have tried in vain to get the professionals on this site to actually discuss the true issues facing the market. I asked a very simple question a few weeks back asking about the tried and true "should you pay more than 3X your income on a home pruchase" and I got exactly one response. ONE!!! I thought it was a legitimate question. - Yesterday, 08:19

One has nothing to do with the other. You can "ride out a recession" while you're renting. I just relocated to this area and was out with a real estate agent looking last week. I make about 15% more than the median income in this area and the houses we were shown in my price range (260K-280K) was apalling. It's amazing what people expect for their run-down cracker jack boxes. You can get a decent home in this price range but you'll spend what you save on flak vests and brushing up on self-defenses course for your kids so they can go to school. When the average family can afford a decent home in an area where their kids don't have to walk through metal detectors to try and get an education THEN qualified buyers will start testing the waters again and think about buying. Until then, it looks like this qualified buyer will continue to be a renter. - Yesterday, 07:51

No offense to the actual agents that posted on this question ( I have actually seen more honest discussion on this one question than I've seen in a long while) but can you see just by these shocking responses between the "professionals" why there is so much distrust toward agents? Especially buyer's agents? You guys are talking about seller agent's bribing buyer agent's to have them get their clients to pay more? Agents steering their clients to homes that are overpriced just to get a bigger percentage on their commision check? Getting bonuses to get the client you are supposed to be representing to PAY more when you are supposed to ensuring they get the lowest price possible? Are you kidding me? - Fri Oct 31 2008, 11:54

Jon,
I don't think the posters you mentioned necessarily have anything against Real Estate agents overall. I too, have been accused of being "not so agent friendly" with some of my posts. But the issues I have is the fact that agents very seldom, if at all, talk directly to the economics of the current situaion. For instance, we all know there was an ABNORMAL run-up in prices of homes fueled by speculation, cheap, easy money and the sup-prime debacle. Of course, every agent on here will tell you "Yeah, but not in my back yard." But that just doesn't pass the smell test. Right now prices in the Hampton Roads area are WAY out of whack with incomes for the area. As Lori said, prices have DOUBLED since 2005 in this area. I'm sorry but that is the very definiton of a "bubble". I have read on here by some "professionals" that we just need to educate the buyer. It's not the buyer that needs educating, its the seller and the agents that REFUSE to admit we are not in the need of a major correction. Do I think agents are fully to blame for this? No, but I don't think they are blameless and there are things they can do about it. For instance, when a seller calls you to list their home for 320K they bought in 2006 for 220K, tell them "No, it won't sell in this market and I won't list it unless you agree to list it for 230K." And if EVERY agent did this, instead of having a bunch of listings sit for 10 months then we could all start moving this market again. To me, when I look at a house that's been sitting for 12 months I know right off the bat it is overpriced. And don't tell me "hey, it's got 45K worth of equity." I know that's BULL because if it did, you'd sell it for 45K more than the asking price you're not getting. C'mon people, it isn't rocket science!!!! - Fri Oct 31 2008, 08:54

Hi Jim,
I'll be relocating to the Hampton Roads area in a couple of weeks and have been researching the market in that area for several months now and I have yet to see that prices are down. If anything, I still see sellers who bought at the top of the "bubble" in 2006 trying to make 40% profit selling now. Could you please show me some evidence of prices dropping? - Thu Oct 30 2008, 13:30

Wow Carl,
I do believe that is the most honest, truthful comment I have ever read from a real estate agent on this site!!!! KUDOS to you for your honest input!!!! - Fri Oct 17 2008, 11:42

Thanks Nicholas,
That does make sense. I use a little sarcasm on this site just to show that it's never necessary to buy "right now". While there is a little bit of "ya' never know" and agents usually use the "we don't have a crystal ball" to deflect bad advice, the truth is you can predict things with some accuracy if you use a little economic common sense. For instance, it's a HORRIBLE time to buy. Why? AFFORDABILITY. You should never pay more than 3 times your annual income for a home. Right now in my Northern Utah area the median household income is 56K a year. This means that the median home should be approx 168K. Right now that median home is 245K (and this area is touted as the crowning jewel of the market these days). Now I'm not saying, like some others, that homes are going to fall 40% to get back to this equilibrium. But what I will say is that it will be a combination of lower prices AND time. Time for incomes to rise in order to meet this very fundamental part of real estate affordability. If the average inocme goes up 3% a year. We could very easily be in for a real estate stand-still of 5-10 years. I know this is not what those who make money buying and selling homes like to hear but it doesn't change the truth. If there is someone who would like to disagree I'd like to hear a good, well thought out explanation or scenario on how they think values could possibly be up within th next two years. - Wed Sep 10 2008, 12:42

BTW,
What in the world are interest rates doing going lower? Weren't the "experts" screaming about "historic-never to be seen again- bottom of the bottom- get 'em before they CLIMB" interest rates just 3 weeks ago? - Wed Sep 10 2008, 10:09

That's right people, Buy now or be locked out of homeownership FOREVER!!!! You can't time the bottom, people. It could hit bottom on Monday and Tuesday prices will skyrocket 30%. BUY BUY BUY NOW NOW NOW before it's too late!!!! - Mon Sep 8 2008, 18:26

Carl, The problem isn't because of deregulation. It's this idea that we "privatize" profits and "socialize" losses. That noone should be allowed to fail. What's funny to me is this argument on whether a taxpayer bailout helps the banks OR the homeowner. Excuse me? Homeowner? Last I ckecked, the only thing the so-called homeowner owns is a loan given to them by the big bad banks. They aren't homeowners at all. Bailout one and you bailout the other. They are in the same boat. The only people that get screwed or the ones (like me) who looked at this debacle forming five years ago and decided "thanks but no thanks" I'll wait until the "scum" who started this illegal pyramid scheme, the banks, home-flippers, shady appraisers, homebuilders, have the bottom pulled out from under them. Of course, I didn't realize that our great capitalist system would go "social" on our butts and use taxpayer money to prop this thing up. All in the name of "helping your brotha' out". PATHETIC!!! - Sun Sep 7 2008, 09:43

Ok JR, Real estate is such a great investment and it's such a great time to buy, which getting back to the original question, is the answer most RE's are giving on this blog. The banks should be BEGGING those buyers to mail in the keys so they can relist those great buys and make a killing right? Remember that there are two names on any given homebuying loan AND deed. The banks and the buyer. The agreement is that if the buyer defaults, the bank gets the asset. Of course, the bank did do there homework and insisted on the lendee fronting up 20%, demanding a proper appraisal of the value of the property, thus covering their a$$ in case a default did happen, right? Oh and real estate only goes Up, UP, UP!!!! The banks should be tickled pink with the foreclosure rate!!!! - Sat Sep 6 2008, 19:12

Wow,
Jeff just jumped on this thing all defensive. Sara spoke her position very eloquently, while Patrick made the perfect "salesman" move with his "car dealership" post. He claimed he was comparing apples and apples when he was really comparing apples and birdseed. You see the problem with comparing car dealerships and real estate agents is the fact that car dealerships OWN a portion of what's being sold or bought. Real estate agents, although they claim to, have no real "skin" in the game. They simply marry up those who want to sell a home to those who want to buy a home and take 6% of that transaction for their efforts. They are simply selling their time and can even decide how much of that they want to spend on a particular client. I'm not saying that real estate agents aren't worth their money. Some of them are. They are usually the ones who do not have to exort to sarcasm or comments like this
"You've made your choice, and I'm happy for you. I hope you get the best deal possible on this property, and because you're so confident that you will, I know that I won't have to spend any time worrying on your behalf." or
"Harry,
I don't think you need to pay anyone. You obviously know what you are doing. No one needs to tell you anything. Why don't you just write the offer yourself and save all the money?"
And this is from a forum geared towards agents!!!! And they wonder why they get the "rap" from the general public they do.
My 12 year old can better defend her position in debates!!!! - Wed Oct 1 2008, 19:50

Well Harry,
Sounds to me from all of the poor insulted souls on here that the real estate business is BOOMING. I love reading the responses on this site. One minute they're screaming how insulted they are if you try to bring them business. The next ninute they're screaming how the media is scaring their livelihood away!!! Comical!!! - Mon Sep 29 2008, 14:42