Your million dollar McMansion was built with $150,000 worth of materials.

Your half acre plot of land is really only worth 10 to 30 grand.

Just because you paid to much for your home means anyone else will

Luckily the invisible hand can form a fist.

The buying public ALWAYS wants to pay close to free.

/But not too close.
//Because then something is wrong with it
///Completely free is right out. No, seriously.

Well, yes. When a house that's worth maybe $150-200k is being sold for $550k, it's out of sync.

Mismatched quotation marks are mismatched.

I blame decades of this false myth that your home is an investment that will always increase in value.

It will all be sorted out once people start doing some price discovery. And that will happen when people are desperate enough to sell that they accept some of the higher offers on the market.

fluffy2097: Your million dollar McMansion was built with $150,000 worth of materials.

Your half acre plot of land is really only worth 10 to 30 grand.

Just because you paid to much for your home means anyone else will

And will last maybe 20-30 years before serious repairs need to be done.

But...but..I replaced all the brass doorknobs! That's gotta be worth another 10K right there!

No, I'm pretty sure it's improper quotation mark usage.

/yep, I did.

The things you own end up owning you.

farquette: "Mismatched" quotation marks are mismatched".

indeed.

"Jack Donnelly put off selling his Capitol Hill rowhouse for three years until he thought he saw glimmers of life in the housing market this past spring. At $950,000, he said, the red brick Victorian is a "solid deal."

Hahahah. Solid deal of shiat. Oh, how I love sellers who still think they should always make money in real estate. It never goes down! Stop buying the NAR propaganda folks and stop believing the realtors themselves. I'm sure he can find someone to buy through a Fanny/Freddy/FHA loan...you know since they own the lending market now.

I don't expect prices to drop to zero but how about getting back to reality instead of supporting insane prices based off easy money from the last 10 years. 10%/year appreciation in many areas is unrealistic given basic economic facts.

farquette: Mismatched quotation marks are mismatched.

No, I think it is a very short, quoted pause.

grinderman: The things you own end up owning you.

No one ever owns a home. It is just rented from the school district.

MorphOSX: fluffy2097: Your million dollar McMansion was built with $150,000 worth of materials.

Your half acre plot of land is really only worth 10 to 30 grand.

Just because you paid to much for your home means anyone else will

And will last maybe 20-30 years months if you're really lucky before serious repairs need to be done, because them Mezkins didn't care too much about your house.

There's a radio station here that gives you the local housing stats every week. (Ok, it's the local real estate guy--it's part of his commercial). I always get a kick out of when he says "the average price of a home is $160,000, and the average selling price was $94,0000"--something like that. hello? The market is asking $60,000 more than the people are willing to pay? How does that work?

It's like that every week.

Satanic_Hamster: I blame decades of this false myth that your home is an investment that will always increase in value.

Yep, most of the people who lost their shirt in the housing market are the investment people who were trying to flip houses or wait for the price to increase without putting any money into the house. Screw them, I am not paying any more then 200,000 and that is for a HUGE house with everything I want.

That's a powerful cocktail working against the housing recovery,

The real problem is that people have entirely unrealistic ideas, like that their house should keep rising at a rate above inflation infinitely.

They're the same sort of mugs who sign up for Ponzi schemes.

cryinoutloud: There's a radio station here that gives you the local housing stats every week. (Ok, it's the local real estate guy--it's part of his commercial). I always get a kick out of when he says "the average price of a home is $160,000, and the average selling price was $94,0000"--something like that. hello? The market is asking $60,000 more than the people are willing to pay? How does that work?

It's like that every week.

It means the cheap houses are selling; the more expensive ones are not.

I think it's because people are trying to sell at high end bubble prices or they bought at the height of the bubble and think they can exist in that same world,which is no more.

A house is only worth what someone will buy it for. Simple. If the house isn't selling, you are asking too much.

/Sherlock

I've come down $75,000 on the price of my house and I'm still not getting any lookers, let alone offers.

Lots43: The buying public ALWAYS wants to pay close to free.

/But not too close.
//Because then something is wrong with it
///Completely free is right out. No, seriously.



Disagrees.

But it's got granite counters! That's at least $200k worth right there.

In my area I think it's about normalized. The wife and I are looking for a home, and due to my schedule, I can only go look every 3rd day or so for houses. By the time we look at a house, (4-5 days on the market) they usually have an offer or two, some accepted already.

So, it's basic free market economics at work? Who woulda thunk ...

/hot

cryinoutloud: The market is asking $60,000 more than the people are willing to pay? How does that work?

It's like that every week.

that is what is called low demand

MLS prices being cooked?

Link (new window)

"John McClain, senior fellow at the George Mason center"

fluffy2097: Your million dollar McMansion was built with $150,000 worth of materials.

This is the real limiting factor out there. Hell, technology has substantially reduced the man-hours necessary for building a house over a generation back (structural panels, factory trusses, engineered beams, PEX plumbing, etc).

The question is land value, then. And, your quarter-acre cul-de-sac twenty miles out isn't terribly special. The quarter-acre closer to the urban core, despite having a trailer park or old warehouse on it now, is really more valuable.

slimeydog: "John McClain, senior fellow at the George Mason center"

Welcome to the party, Pal

packingheat: farquette: "Mismatched" quotation marks are mismatched".

"indeed'.

ScottMpls: So, it's basic free market economics at work? Who woulda thunk ...

Would you kindly... buy my house?

killiemary: I think it's because people are trying to sell at high end bubble prices or they bought at the height of the bubble and think they can exist in that same world,which is no more.

This is exactly it.

People cannot accept the fact that they might lose money when they sell their house. But it's the nature of the market now that many people are under water on their mortgage, and will never be able to get as much as they paid themselves.

And the longer they hold out, the less money they'll get. Prices are still going down and it's a buyer's market.

Its mine so its worth more...

VW_Factor: A house is only worth what someone will buy it for. Simple. If the house isn't selling, you are asking too much.

/Sherlock

Yup. Makes me think of my old, unfortunately Alzheimer's-riddled neighbour, who insists up and down that Mr. Arigby and I paid too much for our house. (Did we tell him the price? No.) "You pay too much for that house! It not worth more than twenty thousand! You pay too much!"

Riiiight. A three-bedroom house near downtown is worth $20K.

Estimates really have to be rooted in your identified factor--what people will pay--and not in anyone's preconceptions.

Early 2000s:

So you mean to tell me that, for example, an undocumented immigrant can buy a Mcmansion with his Mcdees earnings and the way he gong to make payments is that he rents out rooms to his relatives and the other illegal immigrants he knows from church (not the other religion; they love the jebus.)?

2010:

We deserve to be in the mess we are!

Really. If they wanted to invest in property that the prices of never decreases should've invested in new cars. Has anyone EVER seen a year-over-year decrease in the price of a new car? Neither have I.

H31N0US:
It means the cheap houses are selling; the more expensive ones are not.

Well, I know that. You won't find me out there buying way out of my price range.

/bought a house here for $24,000.
//Yes, I do live in it.
///It is exactly as much as I could afford.

I just wanna pay off my mortgage and live there till I die. Of course, I'd sell it in a heartbeat if anyone would purchase it for the appraisal value used to tax it.

Something from the article -

"Back in 2004, when Donnelly and his new bride, Roxanne, bought the home, they'd paid $645,000.

The renovations totaled more than $150,000

(645,000 + 150,000 = 795,000)

He decided he wanted to sell it for $1 million. By then, however, the housing market had begun to sour, and he figured the home couldn't fetch what he thought it was worth.

And while Donnelly has trimmed his expectations, shaving $50,000 off the $1 million price he'd originally wanted, the reduction so far hasn't been enough to win over buyers."

So basically he was trying to make a $205,000 profit from only $150,000 worth of renovations he did to the house. And when that wasn't working he trimmed his profits to only $155,000.

The real problem with the housing market is that everyone is an idiot.

I just had my house appraised so I could get a HELOC. It's worth 25% more now than what I paid for it 4 years ago.

But I have no plans to sell it and move any time soon.

Gramma 2010-09-05 12:54:43 PM  
I've come down $75,000 on the price of my house and I'm still not getting any lookers, let alone offers.

Read that in hookers as in A House is Not A Home.