Are you a real buyer in Baltimore City? See this Craigslist ad
I'm guessing that this is a realtor that cannot get any offers for his customers.
Here's the ad link:
Lots of people seem to be looking but are afraid to make a decision to buy. They won't even make an offer for fear that it will get accepted. And then what would you do?! After all, the market could still drop and you might be able to get it for less.
Sellers NEED to sell.
I have several sellers that I'm working with that just want offers. If it's reasonable, chances are they will take it. Or at least counter.
This doesn't mean you're going to get a property for 25% of it's value. But it does mean you can probably negotiate a great price.
I have properties all over the city. Most need a lot of rehab. Some are rent ready.
E mail me if you are a REAL buyer! Tell me what you want.
How about you drop the prices of your listings 30%. You'll get offers then. Since when was housing a used car markup? You guys hate being compared to used car salesmen. Stop acting like one.
Baltimore had the 3rd highest run-up after Miami and Los Angeles. It rose more than DC proper % wise. Everyone knows there was a lot of funny business going on with the appraisals.
People lied about income. The average was like 50% over there real salary. Pretty much says it all. Wake up and understand that the perception of real estate has changed and it's no longer an investment but consumption.
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21 comments:
"How about you drop the prices of your listings 30%. You'll get offers then. Since when was housing a used car markup? You guys hate being compared to used car salesmen. Stop acting like one."
Adam, this is a GREAT comment. You are being generous though. From my experience, used car salesmen would be greatly offended by the comparison.
I guess it's the old "gotta protect the comps" game. I say, let them sit on their listings...
until 2013.
Yep, great comment!!
SEND IT TO HIM ADAM!!!
Yep, great comment!!
SEND IT TO HIM ADAM!!!
I love it... I just want to know when the waiting will be over, when can I buy?
The media frenzy has worked...and the bottom has occured. Prices dropped 11.4%, but home sales have now begun to increase. This is the chance all of you sideliners have been waiting for. Don't blow it.
-Fresh
Fresh I would suggest you google the term bear trap.
Fundamentals have not changed, housing still has another 20-30 percent to go to bring us in line with early 90's lending and income standards.
The drop in baltimore will be more this year than last. Making 100k for having a house 3-5 years is not going to happen for you sellers today.
I cannot wait till next year when the rehabbers have new inventory that is 30% less with better quality as labor and materials deflate in cost. They will under price their previous projects putting more folks underwater.
The bleeding stops when incomes start to jump up again like they did in the late 90's during the tech boom.
With a war to pay for, Hillary-care coming (people forget your income taxes are going to go up 3-5% in 2009 when the tax cuts expire) and food/energy inflation from demand from china and india, I just do not see a quick recovery unless oil drops back to 30 bucks a barrel and 1.50 gas returns.
I'll buy a house as soon as I get that $600 check from the gov. 25 cents for the house payment, 10 cents for gas, 15 cents for the electric bill, 2 bucks for gas....$hit, I'm home free.
I've heard of the "bear trap" phenomenon referred to by a different name. Dead cat bounce. You might think it's coming up but it's just it's lifeless shattered carcass bouncing off of the pavement to only come back down again.
Totally agree with the original point. When I see an asking price that looks like the seller is still living in 2005, I certainly am not willing to waste my time arranging an appointment, etc. But I really don't think that realtors are to blame for the hold-outs refusing to lower asking prices. More likely that it is the underwater home owner trying to recoup an investment in anticipation of looming adjustments in financing terms.
If you look up these properties on MDAT, they've usually changed hands 3 times since 2001, each time for an average 25% increase in price. Now the home owner has the balls to ask for 5% over what he payed in '06. I'm sure that realtors would rather take 6% commission on a haircut sale price than 6% of nothing.
If it really is realtors setting these prices then they should go back to their previous day jobs as they have no idea how to sell a house. No one wants to negotiate with someone who, after seeing the asking price, they think is out of their freaking mind.
What Adam talks about in his first posting here has a lot of truth to it. I work with a lot of these crazy owners who think their shell they bought for whatever price a year ago and now cannot rehab is worth at least 25% more than they paid for it. I have investors who would buy at a price that reflects market conditions. But the sellers are just stupid. And for whatever reason, the buyers won't make a lowball offer - I guess they have been laughed at too much and are tired of wasting their time. But how else do you get the price you want as a buyer when the sellers are still living in fantasyland? I lived thru this in the early 90's in CA. There was a huge inventory and eventually sellers just rolled over but not before they hung on hoping to get their price for a long time.
The sellers that put houses up last year and did not sell are coming back on the market at a lower price. They do not want to go another year and will be more aggressive. This is one of those things that takes time.
You have to remember the buyers are the one in ultimate control. Sellers forget that. There is no one beating down the door to buy a depreciating asset that will cost them more to buy then rent.
Some people have compared the current housing market to a ponzi scheme. In a way it's true, basicially you run out of supply of new buyers(suckers) and the people who bought last are the ones holding the bag.
A lot of people who have these shells to rehab had a vested interest in the market going up forever. For many it has been for close to a decade. To them this seemed to last forever. They drank there own kool-aid.
However when you need financial "innovation" to make the deal work it should be a sign that there are limits.
And thus the classic signal we were in a bubble.
My feeling is that 2003 prices are about where the Canton and Federal Hill homes will bottom.
Your 2/1.5 rehab will be around 200k.
The nice suburbs will level out around early 2004 prices.
You marginal ones may go back to 2002 prices.
The folks that will go down the most are the houses on large lots way out. The land will be most of the loss as the only land going up right now is farm land. You build a house on it, you in a way decrease its value as it does not generate income.
At that price the market will start to level out. Even then the levels of inventory will stay pretty high in the city because there are still a boat load of homes in canton and federal hill that were bought over 20-30 years ago that will be sold and rehabbed as the owners die off.
The statement above from Urban Flight about it not all the realtors fault has some truth to it.
I have talked to realtors that are now taking the strategy of turning down listings that are losers. Why put money and energy in marketing a home that they know will not get the price the seller wants?
A lot of sellers have there hands tied. They are going to have to bring money to the table if they want to sell in the next couple years.
More than likely though they will either rent it(for a loss) or walk away. Walking away screws the pooch of moving up however so they have to make a choice.
Take a loss, or be imprisoned to the stainless cell they overpaid for until the market starts to recover.
Another thing to remember is that many of the houses downtown are sold because of new family creation.
This is going to sound kinda sexist but when Harry "hold on to the rowhome" has Sally "wants a yard and nice school for little Jimmy" twisting his arm to move who do you think will win?
all logical as the big picture, but the details make all the difference:
location location location
Harford Harford Harford
BRAC BRAC BRAC
By now Buy now Buy now
Last chance Last chance Last chance
-Fresh
The way that Craigslist ad is written, it sounds like Christian Dunn, that was bashing Jamie Hopkin Smith on the Baltimore Sun. I think you should email him and confirm.
Great stuff Adam
there is a great article in the NY Times discussing how hard it is for a seller to admit he made a mistake.
Average income in Baltimore is only 62k. Housing needs to get back to 180,000 on average if you look at things from a historical standpoint.
It might take another year or so but eventually everyone will run to the exits at once and prices will drop rapidly like very other bubble that pops.
Hey, Freshie: Prices are inching down in Harford still. Give it 8 more months. Too many THs built out there since 2003 in anticipation of the big payday. Harford will drop another 10 percent, at least. Canton will tank--especially the Highlandtown portions of Brewers Hill. That's all gonna be drug city as the dealers continue to move south, north and east of the Hopkins mess. The Canton area was also fraud city during the runup, with shoddy construction the rule, and laughably inflated appraisals. Canton core will survive with a 40 percent haircut off peak. The edges will go to seed--look for 90-95 percent losses when the corner boys come back. Location, location indeed.
fresh prince,
I hope you're joking about sales increasing. The numbers you're referring to were month-to-month comparing February sales to January sales, so based on history an increase in sales is expected. The 2.9% increase was less than half of what typically occurs between January and February in the average year. Using a year-to-year comparison, which is the real comparison that should be made, sales were down over 23%! I wouldn't exactly call a freefall a great buying opportunity.
I'm sure that "Will Smith" dug up some year-over-year February numbers that he is referencing. There's an extra day in the month this year and compared to the previous year you have one more day of revenue or whatever data you want. It's a common practice in the securities industry used during a leap year to fool investors or anyone else stupid enough to fall for it.
....assuming that February '08 saw no actual change in sales volume from '07 on a day-to-day basis, adding a day for leap day would skew the year-over-year comparison by 3.6%.
February 08 was down 20+% in sales from Feburary 07, which is horrible. It was up from January, but who cares - more houses ALWAYS sell in January - it would be like claiming warmer temperatures in August vs. May = global warming or something.
Salaries are not going up - not now, not ever. The dollar will continue to drop and inflation will run wild. Jobs will be lost, and the last thing on anyone's mind will be buying some grossly overpriced McMansion. Prices have a LONG way to fall around here, believe me!
It's sad. I remember my mother and father bought a house (well taken care of) near the edge of the city for around $55,000 17 yrs ago. I was looking at houses in Baltimore and people wanted $80,000 for a shell in an area, that when you drive by, looks like all the houses should go for under $20,000. Then it says the house is going to cost an additional $100,000+ to fix up. Call me crazy but something seems out of whack.
I don't mind buying property in Baltimore and ACTUALLY living in it (not flipping), as long as the prices to buy and fix are reasonable and remotely accurate. Baltimore can be a decent place to live again as soon as we get rid of the snakes.
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