Home Sales Dropping

[FRED]

Home Sales Dropping
September 20, 2006 (The Onion)

For the third straight month, sales on preexisting homes dropped, leading realtors to call it a "buyer's market." Here are some strategies sellers are using to entice buyers:

• Dropping price by 50 bucks
• Carrying around wad of money; acting like owning this house got them that money
• Pointing out dishwasher several times
• Explaining to potential buyers how fulfilling it is to make mortgage payment on time
• Telling long, touching story about how grandmother needs $312,500 for kidney operation
• Letting third blouse button go
• Drowning out sound of noisy furnace with soulful vocals of Michael McDonald
• Reassuring buyers that people purchase things they can't afford all the time

AntiSpin: This is parody, but we hit up a couple of local open houses last weekend and saw some of these ploys actually used. As the housing bubble continues to deflate, what other helpful hints do iTulip readers have for home sellers?

[BK]

Re: Home Sales Dropping - NJ

The homes in the $700,000 seem to be sitting on market for 6 12 months. At the same time the Home Building companies are building like made.

Hovannian is shifting their strategy and focusing on tear downs in towns that are a close commuting distance to New York-NY. One street in Chatham-NJ - (a 40 minute train ride to the Big Apple) three homes have been torn down in the last ten months and are being replaced with $1.2-$1.8 Million dollar homes. Previously the highest price any home ever fetch on this street was $900,000. There are only 20-25 homes on this street. This is at a time when the high end market seems softer than lower priced homes.

It'll be interesting to see how this all works out. I'm glad to see the cracks in the Housing Bubble are becoming obvious - it has convinced my wife to stop investigating Insane Asylums for her husband (the silver lining) ;-)

[metalman]

Re: Home Sales Dropping

Fannie Mae could be hit hard by housing bust: Berg

Mortgage giant could lose $29 bln, long-term bear argues in investor letter

By Alistair Barr, MarketWatch
Last Update: 12:19 PM ET Sep 18, 2006

SAN FRANCISCO (MarketWatch) -- The worst of Fannie Mae's regulatory troubles may be behind it, but one longtime skeptic of the mortgage giant thinks it could face bigger problems from trouble in the U.S. housing market.
Gilchrist Berg, founder of $2 billion Jacksonville, Fla.-based hedge-fund firm Water Street Capital, said in a recent letter to investors that Fannie Mae could lose $22 billion to $29 billion if, as he expects, the housing bubble bursts and foreclosures increase.

"We are not sure the folks running the show fully embrace the risk of declining house prices," Berg wrote in the letter, a copy of which was obtained by MarketWatch. If the housing market continues to decline "a major portion of Fannie Mae's value could be wiped out." He declined to comment for this story.

http://tinyurl.com/hfmv2

not sure where he gets his $22B to $29B number, that's around 50% of FNM's $51B market cap.

[nikki]

Re: Home Sales Dropping

Here in Baltimore, I've got a $1 drop...no kidding. What a joke.

[SeanO]

Re: Home Sales Dropping

...As the housing bubble continues to deflate, what other helpful hints do iTulip readers have for home sellers?

Here is how I dumped >$5M worth of property in under 120 days:

1. Made sure each house showed better than the competition, by doing things like:

• Fresh paint w/accent walls or two-tone treatments
• New carpet
• Updated landscaping
• Granite countertops
• Professional staging

2. Even after 1 above, I still priced aggressively. Typically $5-10k below lowest priced similiar home, and never more than equal, no matter how much nicer mine was.

3. After 2 weeks on market, I dropped prices $5k to $10k per week until sold.

Although I'm a broker myself, I still use a top notch local Realtor that does a great job of getting feedback from other Realtors and buyers in case I miss something.

Every time I give someone this simple prescription for selling a home today they quickly say "I can't afford to do that". My simple reply is that if they need to sell, they can't afford not to.