Jennetic@gmail.com

Hi Laurie,

I am not a Real Estate Pro, I am just an interested observer. That said, I think you did the right thing by not countering and deciding to wait, watch, and continue to look elsewhere.

You based your offer on recent comps, and that seems to be reasonable, yet the general response that you've received here seems to be that you are lowballing? The article that Tameka links to specifically says that the Philly area/suburbs are still 10% overpriced, that there is nearly a $40k difference between what people list for and sell for, and that especially the suburbs have a lot of overpriced listings. I think that article supports your decision to base your offer on comps. Also, an Inquirer article did recently state that Philly foreclosures are way down year over year- and then says that Philly put a temporary mortitorium on foreclosures and initiated a program that lengthens the time it takes to foreclose! Well, duh! Mark Zandi of Moody had this to say about Philly's decision to put a temporary mortorium on foreclosures: "Foreclosure moratoriums are delaying, and not forestalling, foreclosures." I put in the link to the article below.

Lastly, I find it really interesting to watch the back and forth between Realtors and buyers and Realtors and sellers on Trulia Voices. I think it is a great resource! When talking to sellers, Realtors tend to say that the seller probably has to lower the price; when talking to buyers, Realtors tend to discourgage low balling and encourage bidding higher. (This is just a generality; there are many Realtors who go against this trend, especially for buyers, you can see it in this thread).

I think this probably reflects that sellers tend to have unrealistically high ideas of what will sell, and buyers have (maybe?) unrealistic expecations of the price at which the house will sell. For what it's worth, I think the buyers definitely have the upper hand, and no one wants to catch a falling knife. I suspect that you have a lot more to gain by waiting. I am not in KOP, but in my little 'burb between Philly and Allentown, I see a whole of For Sale signs, quite a few Price Reduced signs, but very few Sold signs. This suggests that prices still have further fall or something else has to happen to reduce the inventory until some sort of equilibrium is reached.

I just wanted to be at least one person here to say, Good Job! You made a fair offer based on sold comps, and walked away when the seller wouldn't play ball. There are many houses for sale, if this one doesn't work I am sure you'll find another one you like just as much or even more. You've already seen other great homes with more space for less money, so you know that you won't be stuck if you don't overpay for this specific house. You kept the golden rule of investing (Don't get emotionally involved!) Well done!! - Wed Jun 25 2008, 08:44

Let me preface this by saying that I am not "Today's Buyer"; I am "Tomorrow's Buyer", and since you asked the question I'll tell you why.

I will almost certainly buy in 1-2 years. I am not waiting because the media tells me that things are bad; I am waiting for several reasons, one of which is that I have every reason to believe that prices will decrease in the next year. I have the internet and I can, and do, research my areas of interest on my own. I have to do a little digging, but between Zillow, Trulia, and my county's property site, I can generally see what is for sale & what has sold- and most importantly, the price at which a given property sold.

In other words, please don't assume that buyers are sitting this time out only because of media "gloom and doomers". It is very easy (although a little time consuming) to be a well-educated buyer. I can see a trend line in my area indicating that sale prices are decreasing.

Also, I know from reading up that in most real estate cycles, prices bottom then stay flat for a while. So I am not at all worried about "missing" the bottom. I also know that an increase in interest rates is quite likely, but that chances are good that prices will adjust accordingly (e.g., prices decrease when interest rates increase, providing that overall housing prices are in line with affordability ratios- and this entire correction seems to be settling near the prices lines of affordability).

Right now, I am content to rent and continue to save up money for a downpayment. I am not concerned about throwing my money away on rent *at this time* because my observation is that prices are going down and my savings are going up. (Also, prices are only one reason I am renting- I am also starting a new job/career path, and I think it's wise to see how this goes before making major financial purchases).

So, this is a long response merely to say that for some future buyers, in some areas, now really just isn't the best time to buy. Also, to indicate that with the internet and so much information, it's pretty easy for buyers to do their own research. I don't mean this to be offensive, but I believe that it is always Buyer Beware, so I am much more comfortable doing my own research, rather than relying strictly on someone who only makes some $ when I make a purchase. I don't mean to denigrate Realtors- there some excellent Realtors, in fact I have one in my family. But in any big event in life- medical, financial, anything! just by my personality, I feel better doing my own research and getting multiple opinions.

Lastly, I am not an "anti-Housing" person. I believe that buying one's house is almost always in one's best interest, financially and maybe even emotionally, if one is ready to put down roots. I just think that we are in a rare period of time when one can come out ahead financially by waiting another 365-750 days to make this huge purchase. At the very least, I don't think I'd lose much financially by waiting, especially as I have a pretty nice and quite inexpensive rental that allows me to save. Since I also have an emotional component that indicates that it is better to wait (e.g. I will feel more comfortable having the flexibility to easily leave the area if my job doesn't work out), it is clearly better for me to rent. For others, especially for people with kids, I can see how the emotional aspect my outweight the financial aspect, especially if the plan is to stay in the same house for 7+ years. - Mon Apr 28 2008, 09:42