Despite Talk Like A Pirate Day and the Carnival of Real Estate Matrix readers actually thought about other things and said their piece.
Throwing caution to carny barkers walking the plank, here’s a few notable comments from the Matrix Zeppelin:
I find it interesting that people expect housing prices to “crash,” yet they are unwilling to see the value of their own home as dropping. Real estate prices are sticky-downward, because we price our homes based on our expectations and desires, not newspaper reports.
media coverage, if its not accurate, can help exagerate the highs and the lows of a market. I am not blaming the media at all, its just that I think there is a tremendous herd mentality out there right now.
the “herd” is finally waking up to the reality that housing prices must revert to the mean…the media is not distorting the issue; they are merely taking a hard look (for the first time in many years) at the fundamentals of real estate. and the fundamentals are overwhelmingly negative.
Sort of along the lines of what you are saying, I know my own perception has changed, over the past several years. Three years ago, when I bought my first condo, I wanted as much home as possible, so I got an adjustable rate 1st loan and interest only 2nd loan. This time around, in May, I was steadfast against getting an ARM, for either. The rates were just a bit higher for the 1st, and a lot higher for the second, but I didn’t want to take any chances. Bottom line? My acceptance of risk had been reduced, because of the uncertain housing market. Others, especially those who can’t afford to take out a fixed-rate mortgage loan at 8% instead of 5% (our 2nd loan rate) will have no choice but wait it out.
I find the best blogs at “carnivals” also tend to find carnies. Small hands. Smell like cabbage.
I am in Hoboken and it’s a sea of “For Sale” signs, whether on the street or attached to buildings. But I grew up in a town that banned them. I guess it is supposed to provide owners with a sense of security, but frankly, if you really want to sell, I think it’s pretty decent advertising.
Here’s another one from Coldwell Banker that claims it will help me “Find myself a city to live in.” (If you’ve also got Fear of Music and ‘77 in your collection, you’re all set as far as I’m concerned.)
I have come to a similar conclusion concerning refinancings, but do you think that it will really have an effect on homebuyer mentality? I think that even if rates drop a little, sales will still be down and inventory up, because at this point price is key, and until that comes down, nothing will move. After all, interest rates have been low and falling all summer and it hasn’t helped at all. But that was just my own thought.
I know this comment is a little late, but did you hear what Barbara Corcoran had to say today on Good Morning America? She is trying to demonstrate how to sell your home in 7 days and amongst some good ideas she stated: 1) Blanket your area with “For Sale” signs. Corcoran made 75 laminated signs at Kinko’s for a total cost of $324. Make your signs bright and clear. Bright yellow is the most memorable color. Use clear, big, black lettering so people can read it easily. 2) Corcoran also made up car magnets and a giant billboard in front of the house. 3) The Freunds’ [the sellers] friend owns a ski shop on the major interstate in town, so Corcoran hung a nine-foot banner across the front of the shop. Seventy-five signs, one billboard and a nine-foot banner. Yikes!!! No doubt that Town Board will have a very lively meeting the next time they get together.
Tags: Talk Like A Pirate Day, Barbara Corcoran, Corcoran
Concerning the issue about the media and the herd mentality – There is no question in my mind that the media helps create a mindset that pushes the trend to the extreme. I am a regular reader of Money.com. Last year, they ran a regular series of articles called “Mogul in the Making” that show cased how some average person (like a fireman or a housewife) was making big bucks in real estate. The articles mostly made you feel like you were missing out if you were not investing in real estate. During that time, never once did I see an article about someone’s home not selling. Now, they run an article about once a week called “Help – my home won’t sell” and showcase someone who had high hopes of a quick sell and it’s just not happening. The articles are written to show utter desperation on the part of the seller. In the “hot” market, I know of homes that sat on the market for months, and I now know of homes that have sold in a matter of days (I am in Atlanta). Once a trend starts, the media shows no balance at all, which in turn helps drive the “herd” to the extreme.
The funny thing about Herd Mentality (and something that Wall Street veterans know) is that going in other direction can be much more profitable.
I look at Money Magazine cover stories and I think of the Sports Illustrated Curse. If you’re younger than 25, you may also know this as the Madden Curse.
Anyway, I am envious of homebuyers in the market right now. Not only are mortgage rates the lowest that they’ve been in 6-8 months, but sellers are fearful of not being able to sell.
Low rates and low prices — an excellent buying situation.
I would hate to be in a fox hole with Ms. Corcoran. Her suggestions have panic written all over them. If I were interested in her clients home I would know beyond a shadow that they were in “collapse city” mode. Maybe some creativity and good old fashion overtime would help. Problem is these sellers have signed up for a closing as quick as possible evidently. Buyers lick your chops. It’s time to unleash the capital now that everyone is locking down.
I don’t see why anyone would be envious of buyers when affordability is at an all time low.
The fact that sales are way off in an environment of low interest rates and solid employment reveals just how far prices are from sustainable.
Barbara Corcoran’s suggestions not only sends the wrong message to potential buyers (“Buy my house before the market crashes!”) but also reveals her as the callous, contemptible harpy she truly is. Her cavalier attitude toward that community and the environment proves that there really ARE people to blame. She cares not one whit for the impact her tactics will have on the aesthetics of the town, especially when all those signs and other items become so much more landfill (or, worse, refuse – you know the seller isn’t ever going to actually dispose of these materials properly).