You began the ad hominem. And if you're going to describe yourself as "smart" and "professional" you probably actually should do a better job spelling. I didn't bring up all your errors - just made sure I cited you properly. Feel more than free to point out all of my spelling errors. It won't take you long.
I'm not sure why you are taking this so personally. I got on my soap box after reading a bunch of industry b.s. from people trying to make a buck while pretending to have an interest in the well-being of the home buyer. Here's a prime (and concise) example from Carlos:
Read this: http://www.northfulton.com/Articles-i-2008-04-10-171546.1121 stop hesitating, and pull
As to the rest of your post, here are some other points:
"If the agent is professional and has ethics they qualify the buyer. Qualifying the buyer doesn't only mean qualifying whether they "can" purchase a home but whether they should be purchasing a home at this point in their life."
Notice the "If" - does that have anything to do with the current housing mess or the point I am trying to make?
"both the buyer/seller and I benefit."
I was asking who benefits, you or I, if a buyer buys in a declining market. The answer is that you benefit. It won't really affect me much. But the buyer may very well NOT benefit if the market tanks and something happens and the buyer can no longer make the payments or must sell for some reason. Do we have to go into that?
"Something else I'd like to point out is that you seem bothered by the fact that I get paid for my hard work. Of course I benefit when my client buys/sells a house...it's called earning a living."
I'm not bothered at all by your earning a living. I do think your commission level is excessive, however. I would venture to say I'm in the majority there. I will say that in the current market, sellers' agents may very well deserve what they earn. But now that agents no longer have a monopoly on info, commission levels are beginning to come under attack, no?
"For some reason people like you have this crazy notion that my hard work shouldn't be compensated....When was the last time you felt someone should give a portion of their "paycheck" to you for bad service or a bad product?"
When did I say that your hard work shouldn't be compensated? I really have no idea what your fourth paragraph even means.
"I'm sick of people like you bad mouthing an industry when it affects many good people. Yes, there are bad agents...but there are great agents too."
Why do you think so many people are critical of your profession? Why do you think real estate agents are generally held in such low regard? Why are they so frequently viewed as dishonest, greedy and opportunistic? Why not spend some of your time being the voice of reason and objectivity on boards like this instead of attacking people who dare to stand up to the NAR company line constantly spewed out?
"Also, even in a terrible market where we don't know when the bottom will happen, it is still a great time for some buyers/sellers to move. It depends on their individual circumstances."
Finally a realtor who admits that the market is terrible. Exactly what should happen here. And I don't particularly disagree with that statement.
"So, why don't you relax and live and let live for a change?"
I'm relaxed. Just fighting the monopoly. But I do think it's funny you chose to end your rant with those words.
I am a Realtor, and I will be the 1st to tell you that there is much uncertainty in the market right now.
However , I believe, Alpharetta is one of the best communites to purchase in the nation.
Fact is that mortgage interest rates are still at historical lows. As to home prices, it is impossible to say if they will go up or down. For Alpharetta, I believe, some neighborhoods will increase and some will decrease. Too many factors, and Alpharetta is too large an area, to make a blanket statement.
Also everyone's situation is different, and must be considered individually. I had a client recently that purchased in John's Creek. Originally they were looking in the $350,000 price range. They were planning to pay cash. Their situation changed quickly with their financial investments, so we changed their criteria. The home they purchased (bank owned) was for $192,000 cash. They are very happy, since they got a lovely home, and walked in the door with equity of about $25,000.
In fact I have found rentals for a few of my clients recently. This is because, in my opinion, they were not prepared to buy a home at this time. Perhaps I could have convinced them to purchase, but how could I sleep at night. When I accept a client, then I look out for their best interests.
My previous, tounge in cheek, post: "My Crystal Ball says that thing will be changing after the Presidential Election. It says definitely that the economy will be improving or getting worse."
Why do you say that prices are low, Carlos? Although not a bubble zone, plenty of places in Alpharetta experienced a runup that far outstripped inflation. You know that. You also should know that no one is predicting a runup now. Unless I''m very much mistaken, t's not going to hurt to wait 6 months to see how things shake out.
From my research all the experts say homes will again become a home, not runaway investment vehicles. If you do not have kids and can rent, give it at least 6 months. It will be a buyers market for another year or two and big pops in prices will not happen. The top of the market was 2006 and agents are still using old data to price homes, so if you do buy make sure you are looking at comps from the last few months.
The only way this is true is if the rent vs purchase calculations show renting is much more expensive than history or any financial sanity would sustain, which if true, certaintly won't last very long. In nearly all metro markets, the opposite is actually true. Rents did not follow the insane runup in prices of 2002-2006, so renting, in general, is MUCH cheaper when compared to buying in most metro markets.
Linked below is a paper explaining it from the Center for Economic Policy and Research.
How come you got interested in Alpharetta discussion.
I have to tell you, I have been to this area and looked at some homes. They are a steal compared to the junk in Edison area that we have to pony up 400K to get a starter home. Also the neighborhood is great and edison feels like a slum compared to this. The rents in the region are not too low compared to Edison and the property taxes are a fraction of what we pay in Edison. So, in terms of value, homes in the region are great compared Edison.
But a big negative is that there are too many foreclosures and too much new construction lined up. So, the prices will drift lower or stagnate until the foreclosures and new constructions get absorbed by real buyers and not investors trying to flip
One thing I never understood is that every real estate broker tells that now is a good time to buy interest rates are low. If the interest rates go up, don't home prices come down because of more buyers being priced out? If you are paying interest on a lower amount, you overall monthly payment could actually be lower and get a better tax deduction as a larger portion of your monthly payment is interest
I personally would like to buy when interest rates are over 10% as I know I will get a lower price and the rates will go lower later on, bringing more buyers into the market and push the prices higher.
I think it is insane to say now is a good time to buy because rates are lower.
However, in the Roswell/Alpharetta market there are areas that have great deals that investors are spotting and picking up. Also, unlike many markets, people are continuing to relocate here so our demand is not flat and thus buoys the prices somewhat.
Honestly, this is the "best answer" you can come up with?
Now is a great time to purchase. Maybe the market will go down however maybe it will go up. To be honest our market has not suffered as much as some other parts of the nation. In fact in some neighborhoods, homes are selling for as much as 95% or more of list price. More and more sellers are pricing their homes correctly for the market."
"Maybe the market will go down however maybe it will go up", so you better buy now? That's your answer? Your "BEST ANSWER"? And you are real estate experts? Are you kidding? There is no one with any sense who has looked at any trends or statistics who thinks the market is going up. So why are you saying people should buy? Could it be out of greed and lack of scruples? Even when the market bottoms, it's going to stay there for a while. Why not advise the OP to wait a while? You base your assertion that now is a great time to buy on the fact that we aren't the Inland Empire or Vegas or Florida or Phoenix? You think that because sellers can get 95% of asking price in the Spring peak selling season that the OP ought to buy now? You make no sense. You haven't answered the OP's question honestly. But you have shown your greed and self-interest.
It's just disgraceful and disgusting. Period.
The only thing I'd like to add is that you see a lot of people claiming things like "the only way to know the bottom is when its passed".
The comment is true in absolute terms, but in real terms, its not. Home moves are very gradual and very correlated to the previous months moves. Using C-S data the correlation is .94 between previous month and this month. Also, historically housing has grown basically at the rate of inflation, so when prices are climbing at inflation again, you're at the bottom.
Graph below of C-S index vs inflation.
I have no idea what you mean by REAL value or ACTUAL value.
If I am paying more interest, it is going to the bank and will be passed along to the investors who are buying CDs and other fixed income instruments. But I get to take higher deductions and pay lower property taxes
If I buy a home with higher base price and lower interest, I am paying more to the seller and real estate agent and permanently on the hook for higher property taxes. As long as I am paying the same or lower amount out of my pocket, I can't care less about REAL or UNREAL value
I agree that it is all about demand and supply. As interest rates go up, fewer people will qualify/afford the payment pushing the demand lower. More existing home owners can afford to refinance and will be foreclosed on, pushing the supply higher.
If I remember correctly, it is the jump in rates from 4.5% to 6.5% that set this whole crash in motion, which we are now unable to stop even after taking the rates back to 5%
Lets assume home price is 400K and 30 year mortgage rate is 5%. 20% down payment will be 80K and loan amount will be 320K. The monthly payment will be around 1,700/month and 20,600/year. assuming 2% property tax, 8000/year brings a total of 28K/year. Assuming a standard deduction of 11,400 it gives them additional deduction of around 11,000/year and assuming a tax rate of approximately 25% gives them additional tax benefit of 3000/year. So their net cost if 25K/year
Now lets assume interest rates jump to 10% and home price falls to 300K. You still have your 80K down payment, so, your loan amount will be 220K and monthly payment around 1900/month and 23,000/year. assuming 2% property tax, 6000/year brings a total of 29,000/year. But since they are paying more in interest, their additional tax deduction will be around 4000/year, bringing their net cost to 25K/year
So, the difference in the amount I am paying out every year is a big ZERO
And some things to consider if we ever live in a world with 10% interest rates on a 30year mortgage
1. 10 year treasury yield will be around 8% and there won't be any reason to invest in stocks or corporate bonds unless both crash to provide potential very safe rewards around 15%
2. Inflation will be through the roof causing govt entitlement costs to explode causing higher taxes
3. There won't be much money left after paying for taxes, food and gas to think about home ownership. So, people will double and triple up. Basically kids, parents and grand parents living in the same home causing housing demand to collapse
There are many, many other very bad outcomes of 10% mortgage rates and none of them are good for housing market.
So, when I assumed home prices will correct by 25% from 400K to 300K, I am being very, very, very optimistic
home prices corrected by 25% on average with mortgage rates being essentially flat.
Obviously this math and my thought process cannot be correct because every single real estate agent says that the biggest reason to buy now is because rates are low. And I mean it.. I really am wrong some where, please correct me.
"If you are an investor, the best time to buy is NOW. Maybe the market is falling, but it always goes back up. If the market is falling, then bid accordingly. Bid low. Very low. I'm betting that there will be more millionaires made in the next year or so because of this foreclosure cycle. So, if you care to step into the fray, please do so. You can't make money in this market if you are afraid to invest. Good luck"
Well Jim you were dead wrong.
Ramping unemployment and mortgage rates will reduce the price of homes going forward.
Did I mention that Fulton Co. has exorbitant tax rates?
Prices will stop going down when personal incomes justify the prices paid.
Having said this, I'll let you determine whether the money you'll save by waiting on the purchase will justify the rent you'll pay in the meantime.
Now is a great time to purchase. Maybe the market will go down however maybe it will go up. To be honest our market has not suffered as much as some other parts of the nation. In fact in some neighborhoods, homes are selling for as much as 95% or more of list price. More and more sellers are pricing their homes correctly for the market.
"Is there any doubt that now is a great time to buy?" Uhhh...yes.
Oh, and if I want to get wealthy, I have to buy a house right now??? Dan harps on that.
And of course, it's all the media's fault.
Yet at the end of the presentation we hear, even from a self-interested head of a realty company, that prices are not going to increase until 2010.
Tori, both you and Dan should be ashamed of yourselves.
I'm calling into question the honesty of the Harry Norman big shot and others who knowingly give misleading information. I am not referring to you. I just wish we could get some candid assessments from agents. My whole point to begin with is that agents always say it's time to buy, buy, buy! I'm not saying that there aren't good reasons to buy right now or even that there aren't values to be had. But how about more candor?
Answer this question for me, Stephen: do you honestly believe that from this point forward things are only going to get better in the housing market not only in the Atlanta area, but nationwide, as the Harry Norman guy claimed?
The housing marking is being hurt by many different factors, fuel being just one of them, as you know.
It's one thing to say that there are various opinions. True. It's another completely to ignore all the data coming out and to call bottom. That is misleading at best.
Last, It would be appropriate to be honest.
Regards, and good luck.
"Robert Toll, the colorful chief executive, summed it up this week: "We don't believe this will last forever, although I can give you no indication that the end is in sight, or that the light at the end of the tunnel is not the train coming toward you." ?
Sorry, wouldn't let me put it in the Web References section.
I'm glad we are speaking of opinions.
I am under the impression that by mentioning the Wall Street Journal you feel more weight may be given to your opinion. Did you notice that the word "opinion" appears at the top of the article you cite? Do you know who wrote that opinion? An REIT manager. Objective? Hardly. I will admit that it is nice to see someone backing up his opinions with some statistics and facts. There are, however, in my opinion, some serious problems with his arguments, specifically his glossing over the impact of foreclosures and tightening lending standards. Then there is this brilliant nugget:
"The next question is: Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do."
Hmmm...hardly inspiring of confidence to someone hoping to not purchase a home which will then depreciate.
There are some places in the nation where prices may be nearing the bottom - places where the bust began first and that have seen significant price drops already. That does not mean that that is the case for all areas or Alpharetta in particular. No one says that Alpharetta is going to see a bust. A slow decline for another year or two? Possibly. Stagnant prices? Likely. A slow rise? Maybe. But nothing to warrant the "you've got to buy now, don't delay, you'll be priced out in Alpharetta!!!" cries. Nothing even to warrant the "no one knows when we've reached the bottom until its too late" nonsense. Consider this excerpt from the opinion in the link you provided:
"For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won't happen for another 15 years."
Much of what I've read suggests that there will be continued declines in prices in many places, even in Alpharetta. Calling bottom now is in my opinion, very, very premature.
We should see an upturn in Alpharetta & nationally with higher loan limits for both FHA and conventional that will increase consumer choice and provide greater access to lower interest rate mortgages in high cost areas. Therefore a noticeable rise in home sales can be anticipated in the second half of the year. This means you will be paying more for the same house in 2009.
I would be more than happy to discuss the market here in Alpharetta & compare it to Santa Monica for you. Moreover, I can setup you up with your very own website that will email you houses that meet your criteria. It will keep you abreast of any pricing changes as well as the local market here.
John J. Reinhardt
RE/MAX Greater Atlanta
Market in inventory will see prices beginning to rise the third and fourth quarter of 2011. There are many
Excellent homes now to choose from and other options you have including lease purchase options. That way you have a chance to see more properties and make sure you like the home you are leaseing along with the
We can lock-in a sales price based on the current or future market with an
option to complete purchase with in a
12 to 24 month time period. If you want to wait to lock in you offer just incase the market has not reached bottom in this market area. This may be the perfect answer for you.
I would e delighted to help you and
have exceptional experience in the
Alpharetta area as I have lived in the market area for over 20 years.
You can reach me at 770-616-2214 anytime to discuss further the choices. You have to insure a win!
I can help you make that happen!
Rebecca S.Damiani, CPM
Key Management & Consulting, Inc.
I still think it was a problem with over construction but I am an outsider and haven't visited the region in more than a year. How do you all see it now? Are we there yet?
I personally think we are almost there, may be 6 more months of down side risk.
I've been following this thread for a while and saw that you might be moving to the Alpharetta area in the future. Coincidentally I'm taking out a prospective buyer this afternoon who is in town on interviews from NJ (I believe Clifton). My husband grew up in Manalapan, NJ and I grew up in Port Washington, NY and we have been living in Alpharetta for over 10 years, so I'm familiar with both your area and the Alpharetta area. I completely agree with you that you can't compare Edison to Alpharetta...the cost of living and life style you can have in Alpharetta really makes it a great place to live and bring up a family (if that is in the cards for you).
You mentioned you have relatives that live here, do you know the neighborhood/subdivision that they live in? I'd be curious to see if we know each other.
If you're interested in learning more about Alpharetta I'd love to help you.
Please let me know if I can be of assistance,
Obviously I offended, you, didn't intend to do that. I was just casually asking what brought you here, thought you do deal real estate here too.
I have family in Alpharetta, visited several times, and would really like to move there some time in future. As you know, I have been living in Edison area for several years. I did exaggerate a bit and shouldn't have used 'slum' word, so, I apologize, but Edison is no comparison to Alpharetta in my opinion.
I was here because another hater/spammer/mis-information spreader was littering the trulia forums over the weekend and my replies to his stupid posts somehow led me here. I don't know why I attract these losers but they follow my posts similar to what you are doing now but to a much more negative degree trying to make me and other realtors look bad and insult people looking to delve into home ownership.
Incidentally his profile was deleted for abuse.
These types of people and others with never a good word to say but to defame the idea of home ownership and all realtors.
Making comments like Edison is a slum, you obviously never been there!
"If I remember correctly, it is the jump in rates from 4.5% to 6.5% that set this whole crash in motion, which we are now unable to stop even after taking the rates back to 5%"
You may not remember so good because mortgage rates haven't been in the 4% range um... EVER!!! or at least as far back as I can remember, rates went down because the Feds initiative to stimulate home buyers sitting on the fence to make a move and buy.
Also that the reason for the real estate problems stems from the community reinvestment act and so called "affordable housing" loan mandates made by democrats to force banks to make risky loans to people that otherwise would never qualify for a loan. This is something that would have happened sooner or later but nobody knew it would be to this degree.
I love your reasoning. Prices don't necessarily come down because of interest rates, it's just simple supply and demand. I'd suggest a little research project - my guess is that mortgage companies wrote more apps in the last 2 weeks than in previous weeks, despite having rates 1 whole point higher than in previous weeks.
Homes will remain flat, and the interest rate will help or hurt the sales, but prices long term (Key Word: Long Term) are not effected by the rate.
It's also a interesting take: You'd rather pay what amounts to $50K more for a home (through the interest rate) than get "ACTUAL" value with a lower interest rate.
One thing that happens with low interest rates, is that you are financing REAL value. If you knew the rates were going to vary wildly in the next few years, then you could get the lowest price in exchange for the highest rate, knowing that the market could correct and bring the rate down so you win both sides. Unfortunately, it won't happen like that. The rates will go up from here, prices could come down as a result, but remember 1 interest rate point is like a $10K change. Most homes (media) will not go up and down more than $10K from now on.
Goat read my entire post I wasn't calling bottom in 2007, for the people asking I told them that prices have come down and the interest rates did as well, since the rates have fallen tremendously although starting to rise now are still excellent.
As your gold values go up, they may with our Governments careless spending and borrowing but how much house will you be able to get when inflation raises interest rates for buyers down the road to double digits?
You keep referring to real estate as a monetary investment, most people don't buy real estate for that being the primary reason. Most buy to build and grow a family in, take advantage of tax deductions and as they pay off their homes (over 90% of Americans are paying their mortgages) they will only need to pay taxes, no rent and can pass on the home to family when they die or when alive (down the road) borrow against it via home equity loans, you do know many people do have equity in their homes. Only people purchasing since around 2004 are in trouble or experiencing little to no equity but not even all of them.
Most people, unlike you feel that family is an investment as well and growing up in a home they can call their own is a beautiful thing you would not know anything about (being a renter).
By the way, why does your profile say buyer, isn''t that deceptive, shouldn't it say other?
For all I care you can be buried with your gold and silver, I hope your happy together, just stop pushing on people here, this is not a gold and silver ad site.
Have a good day, I'm done with your stupid arrogance and clear hatred toward a profession of people helping people achieve their goal of home ownership. I've never pushed a home on someone that didn't want to buy or shouldn't because of personal finances or for any other reason for that matter. Real estate isn't exactly a "Quick Sell" and gives buyers many opportunities to back out and plenty of time to think it over.
" I don't want to buy now because I feel that prices will continue to go down."
I love this. You can try to guess the market if you like but you have a 1 in 3 chance of getting it right. What do I mean, well, there are three things that can happen while you wait.
1. Interest Rates go up - a 1% increase is a $10 Price increase.
2. Many neighborhoods have already flatlined and turned around (some do continue to decline) - there are several with 1% increases in the last 60 days! You don't know the bottom until it's already hit! So you could pay more for waiting. Also, if you are a 1st time buyer, then if you wait past october, you'll miss the tax credit.
3. You could guess perfectly.