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Can someone Stop these Listing agents?

I eat crow and willingly..I am officially eating back a big chunk of my pride and also my knowledge has been thrown into a twisted mangled knot.My last blog said that prices had stabilised but it looks like the market is totally at the hands of unscrupulous agents who keep dropping prices everytime their listing hits the market!

No one cares..Sellers on Short sales have moved out and don't care what the bank gets for their house. The listing agents give arguments till they turn blue in the face, but in my opinion it is all about their bottomline.They are destroying the values of the neighborhood and what is it going to take to stop them from dropping values?? Till the value becomes Zero?? Oh and BTW- 98% of the listing agents don't even live in the area, so why would they care?

Banks are run by morons...or super intelligent people. I am surprised how:
The banks are even accepting the listing agents pricing their portfolio at ridiculous prices
The banks are approving these sales!
Why don't these banks care what they get in lieu of their note?

An Appeal.. is anyone listening to me? I am a resident of Windemere and a Real Estate Professional. This is my plea to agents who DO NOT live in this area and who are listing homes here- please explain to me the logic of your pricing, stop dropping prices for no valid reason and stop destroying our neighborhood.
This seems like a downward spiral price war between the few listing agents, as to who races this area into the ground first !! Don't give me the reason that higher prices don't sell because honestly, you don't care. If you stopped pricing your next listing 50K below the last sold, then prices would stay calm.You are taking this to a whole new level of insanity and I am just surprised people still hire you to sell their homes when it is very clear that it does not bother you one bit where the prices go.

Great news for buyers...I am sure buyers will get great deals and I wish them well and maybe even some of my buyers will write up offers. Trust me, my heart sinks everytime I write the low offers because my house price sinks with it too and yet I have to do my due diligence to my clients.

We are in the price undercutting war and someone has to think about people living in the community who are not selling now but with every listing that comes on the market, their property value sinks to a new low.

Posted by Rama Mehra Certified Pre Foreclosure Specialist on 03/25/2009 06:32 PM

Comments (47)

Pricing Wars in the Real Estate Market Channel

pricing your home to sell, short sales in windemere, san ramon real estate prices, prices of homes in windemere, listing agents

Originally posted at: Windemere,San Ramon Blog: Can someone Stop these Listing agents?

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47 Comments on Can someone Stop these Listing agents?

MAR

Sorry Rama, I like you very much but do not agree. I am a listing agent, you can move here and be treated right by me. We have the opposite problem. The banks send out agents to do BPOs on our short sales that do not live in our area and we have comps to prove the last solds in the same neighborhood and they turn in a BPO that is too High and then you have a seller we are trying to save from foreclosure who does not want the foreclosure. We even have sellers who are putting cash into the deal in order to save the deals. There are 2 sides to a coin.

Rama - I understand how you feel because it is killing me to see the prices tank in an area that I farm alot and really love. Fortunately I don't live there so I don't have that vested interest. I doubt the listing agents don't care about where prices are going. They are probably just trying to do their job which is to sell houses. This is a really tough market but I really think that the buyers in my home market, the DC metro area, just don't seem willing to write until they feel that the lowest price is on the table. They are the ones driving our market, not the agents.

A house is only worth what a buyer, ready willing and able is willing to pay for it. In this market sellers who have to sell need to find a price that will generate offers. Why keep a house on the market month after month with no activity???

We'll save the overpriced, unsellable listings for you.

Thanks to all for your comments but trust me, I am talking about an area where people want to move to because of an excellent school district. I know these agents well enough to make the comments, because otherwise I would watch my words. For these agents, it is all about their bottomline. What frustrates me is the fact that there in NO reason to drop prices 50- 100K lower than the last sale right at the onset !! Buyers will pay what they feel is right but agents are also perpetrators of these perceptions- when our prices keep coming down, buyers come in and make lower offers because they know that by the time that short sale closes, there will be more lower priced homes! It is a vicious cycle. The funny part- there is a line of people to buy up the REO's and they are selling for more than asking price !!

MAR

Rama,

You need to understand it is the market forces which are pricing the housing prices down and not the agents . They will get more commision and if they sell it more . However I can understand your pain being a homeowner. You know Windermere is high tax area and tax remains the same even if Home price goes down so many people don't like to buy there even so it is wonderfull community.

Hi Rama,

Relax. do not let this downturn affect our lives. The same market forces that are bringing down the prices will also bring up the prices in the future. Do not think that few home sales are defining the windemere markets.

The stock market is stabilizing now and with so much govt. intervention and interest rates in 4s, the good days are not far away and the same homeowner who is trying to bid low will pay a much higher price few months down the line.

The market has already forced prices down, it is now the agents who are driving them down further. Please hear my argument carefully- I am not having fun with talking about my own industry.. I know exactly the game being played.I don't want to talk in detail or someone will drag me into court and I am too broke to pay for it !!!!!!! I sold nearly 15 million dollars worth of homes just last year and the taxes come up but it has not been a deterrent in buying in Windemere.
Buyers too don't think of how they are hurting themselves. In the old days when people overbid on homes, existing home owners were happy that their "equity" was getting higher. Now forget sellers, even buyers should think that after they have bought their home at a low price, some other buyer is going to come in and get something cheaper in the next 30 days !! So you just lost a big part of down payment with the next sale...... because till 30 days ago when you were a home buyer you wanted the lowest price but after you became a home owner some other buyer wants their house cheaper than yours !!
I hate to say this, but agents(alongwith other circumstances)do determine whether the market is heading North or South.

Rama,

I got your point but the market or the agent forces will work only when there are less buyers and too many foreclosures (Like Brentwood or Tracy).

Windemere has more buyers than the number of houses that come on the market and since the market (stock market and economy) is seeing lot of good things recently. These whole forces (both market and agent) will completely reverse. These forces are completely driven by ecomony, sellers(agents in this case) and buyers.

Couple of low priced home sales do not bring down the property down because it is just that few prople got lucky. Other people who are sitting on the fence thinking that the home prices are going down just by looking at one or two home sales do not understand that when all the home buyers like them come to buy when economy gets better and there are not enough homes to sell, they will be paying 50k more every month they wait buy the house.

Rama,

I think it is a free market and prices should fall to the extent where people are comfortable. Moreover, San Ramon is not like Peninsula, with less space to grow or the hub between downtown SFO and Silicon valley. San Ramon is very much a suburb and the prices should fall to a level of suburban living, where people can live but also be able to pay for gas to commute. And it a few agents are willing to let the prices fall, as a Realtor, you should feel happy that your clients will get a good deal. I think you are mixing personal and professional thoughts here and most people visit your blog for your honest professional opinion. Please do not put your reputation at stake by writing this blog as "Rama the homeowner" vs "Rama the friendly realtor". I have personally loved all your previous entries except this one!

I think San Ramon is very discounted already compared to Peninsula.

You get a bigger and newer house for a lot less than peninsula and San Ramon is no different then lot of peninsula cities. San Ramon/Pleasanton/Walnut creek have lot of jobs. It all depends upon the location in which people you are working. If you work in San Francisco, San Ramon is better than San Jose. If you work in San Mateo then there is no difference between living in San Jose or San Ramon.

also, the schools are at comparable level compared to mission or cupertino. what do you get for 800k in those areas. a 40 year, 1300 sq.ft house. In San Ramon you get a 3000+ sq. ft newer house.

I do not conside most of the peninsula as city. Most of them are suburbs of San Francisco and San Jose.

Who says Bay area does not have cheaper home.

"Is it just me?" should look for a home in East Palo alto, richmond or oakland. you will find a home that you can afford.

DO you know how much it costs for private school education for 2 kids. It is same as a mortgage for 600k house. It means you are living for free. does that make it cheaper than east palo alto ? maybe?

My point is only this : Most of us that live in the bay area make an annual income of about 100K-150K. If we are talking about a couple, lets say 200K. A safe mortgage is 3X that amount, which is about 600K. Now, I think, a "decent" (and the definition of decent differs from person to person) single family home, in a good school district should cost that much. I agree that private schools are expensive and my thoughts are that if these realtors are pricing aggressivesly around 600K to make it more affordable (as per my definition in the first 2 lines), then I don't think anyone should argue it is wrong. Just because someone thought that they can afford mortgage 4 to 5 times their annual income and made a bad investment during boom, you can't keep prices artificially high. I am not saying single family homes in San Ramon should fall to 300K. All I am saying is, considering it is a suburb, and most people would commute to downtown ot San Jose, the pricing between 500-650 is optimum. And anyways, these are my thoughts. I am sure, a lot of people who bought their homes at 800k-1M during boom will not agree.

Do you know San Ramon has higher median income compared to lot of peninsula cities (more than 80%) like foster city etc?

The 3x income does not make sense for places like bay area or international places like bombay, delhi, shanghai etc.

the 3x income makes sense for remote areas that nobody wants to live.

also, who said San Ramon do not have have affordable single family home in the 550-600k range? but expecting to buy a 4000 sq.ft brand new for 600k is foolish because it costs a lot more than that to build that house in a bay area city.

another thing, most of the peninsula is suburb as well. do not think of sunnyvale or foster city to be san francisco.

PS: I am not a 800k-1M home buyer

sk?

I don't think 6-7X of annual income home prices will be sustainable in the long run , Ultimately income level will determine the Home prices . We shouldn't forget San Ramon is second choice for most of the Bay area professional if the prices are coming down in Cupertino than they will crash in San Ramon.

San Ramon is heading towards $200 per Sq Feet rate in next few months the way things are going. It is Surprising to see Rama worried about the falling prices which is good for economy and her Clients . If people have less Mortgage they will have more to spend elsewhere which will revive the economy.

your reply just made me laugh by your statement "if cupertino crashes people will move to San Ramon".

one thing for sure these recession has given rise to several economists who can predict how things will be in future.

and I guess all these analysts/economists like "PotentialBuyer" will be jobless after the economy and house prices improve.

I had to go out of town, will get back and respond to all comments. There seem some with Rama bashing, but i can take the punches because i speak truly from the heart and my everyday experiences.

@maybe its just me : The houses I am talking about, are homes that Rama has blogged about and they are all within 3000 sq ft. These are new listings around 2400 - 2700 sq ft at 600K. And that price is right is what I think. People bought them at 800K in 2007 and that is what I mean by keeping it artificially high!

MAR

the prices are driven by bank here and not the home owners. 600k is not the right price for this home.the acutula price should be higher. try building one yourself.

it is just a matter of few months when things will reverse and all these analyst/economist predictions and home affordability arguments will come to rest.

so economist "potential buyer", you want to buy a 2000 sq ft home in san ramon in next few months for 400k (as per your 200 sq. ft calculation) right? I can't stop laughing. You made my day

I think there were 2 good points that PB made. One is that if prices in Cupertino comes down, San Ramon will crash. And yes! absolutely so! Is "wannabuy" saying that San Ramon is immune to these crashes!

Secondly, there are 2200 sq ft townhomes that are going to 450-500k. People bought these for 700-750K during boom. How much longer do you think it will take for SFH to come down to that range? Well, I am not an economist, but the way jobs are vanishing here, you don't need to be an economist to know this. Let common sense prevail! And yes. homeowners would want to keep the prices high but when banks see few/no offers, they will bring it down. If your neighbor's house is sold by a bank for 600K, do you think you can sell your home for 800K? Well, now that is the Joke! You can laugh as much as you want! But we all know, in this economy, who will have the last laugh : the renters :-)

MAR

Glad my post made few folks Laugh which is good for them. Folks do your own homework ,don't just dream of overnight housing market turnaround . Find out How many folks are underwater in Windermere and how long they will keep paying such high Mortgage before they realize the truth.

With regards to per Sq Feet price in Sam Ramon , Lennar and Centex are selling 3000-3200 Sq feet houses for 800K with lot of upgrade , do the math to find out per sq feet price. Also findout how much they were selling them six months ago. These builders are not Stupid to discount these houses if there are lot of buyers for them at $400 sq ft price.

Folks, I am back. Thanks for all your comments. Here are my clarifications:
1. It seems some buyers are upset with me for complaining about the lowering prices.I am a professional and totally understand that the market will determine the price BUT at the same time the whole point of the blod was the handful of agents who are deliberately reducing prices. There is NO need for lowering the next home's price by 50-100K when the next home can be prices 10-15 lower than the last sale, depending on the circumstances. Let the buyers decide what they want to pay for the house.
2. I sell a lot of homes and find great deals for my clients. I am happy for them whe they get the lower prices but please do not forget that I am a human being too.I cringe about my home's value but I have never expressed this before up to now!! Do I not have a right to do so?
3.I do not want to get into the discussion about Cupertino, because I do not know the area and will not make comments.
4. Prices were "artifically" high- do you know why? Because inventory was low and buyers wanted to jump onto the bandwagon to increase their wealth and portfolio. In today's market, with all the doom and gloom around us, people are over analysing about the minutest of details. In the boom market, even a crapper would sell of a million, no questions asked.In today's market buyers want every possible upgrade, not pay an extra dime for it and will take another house for free with it, if possible !! It is the mood of the buyers and the market. If the market wants blood , it will take it. When buyers want to buy, they will buy the worst house on the block without batting an eyelid.
5. As for the builders, if you go back to my blogs, I did bash them up for higher prices( myself). In fact some of the builders eventually did heed my advice( I know they have been following me on activerain) and dropped prices- guess what? They are almost sold out.

I am still holding fast to my allegations in the blog and will not change my stance.I am sorry if I offended some of my readers( especially buyers) for taking things personally, but would hope that you would understand that behind all the hard work I put in for my clients in finding the"cheapest" home, I am a human too who bleeds when cut- just like you.

MAR

I too do not agree that san ramon pricing is dependent on cupertino. Every Asian (including indians and chinese) want to buy in good school districts. The Asian population in bay area is enormous and areas like cupertino, mission and palo alto cannot accomodate all of them and this is the reason the prices in those areas are so high. just imagine if there would have been no pleasanton or san ramon the prices of cupertino would have been much higher. Now, I am talking about people who work in san jose but for all other areas San Ramon is a better choice because of newer home at great price.

There are several buyers (I know at least 5 of them) who are waiting on the fence to buy in san ramon. some people have already started to take advantage of low builder prices. I am sure once all the builders are gone (conside lennar and centex almost gone) it will be difficult to get the same discounts. Currently 60% of the buyers in san ramon are buying through builder because of builder pricing being so low and that is the reason resale homes are loosing some value but once the buillders are gone, the same buyers who couldn't buy will turn to resale homes driving the prices high because there won't be any extra inventory from the builder.

life is too short to worry about money. enjoy each and every day as it was your last. take it easy both buyers and homeowners under water.

The same economics that brough the prices down (because the homes became too unaffordable) will also bring the prices up (The homes are too affordable now and market has over corrected) and create a equlibrium making both sellers and buyers happy.

Actually the resale homes are way cheaper than builder inventory right now.It looks like builders have changed gears and are looking to get out of Windemere by the end of this year.That will help stabilise prices somewhat.
And yes, life is too short and life is not all about the money !! Thanks for the infusion of positivity!

Rama, you are a true ROCK STAR!!! Why? Because your blog was so popular that you attracted so many outside comments! That never happens to me.... wish it did! This is a great topic and I am happy to see it is being debated so vigorously with various points of view (although I will bet that some of the guest comments above are from anonymous agents, not actual buyers).

In our area, I don't see enough price dropping on the short sales and the banks, in my opinion, aren't dropping the values enough to get the houses sold in a timely manner. Then the sellers just walk away instead of a short sale -- they let it go to foreclosure, and then the value drops another $50k.

This market adjustment is a tough time for everyone. Except for first-time buyers, they are making out very well in this market!!! It is great to see an agent like yourself who is so passionate about her community!

Join my new AR group and post your blog at http://activerain.com/groups/virtualoffice

Regina P. Brown

MAR

Hey Regina, thanks for your comments !! I have been debating this with other agents I know and they too have been feeling the same way.But I guess no one had the guts to address the issue in a public forum.I wanted to engage people in a dialogue and I totally agree that many responses were from agents who wanted to remain anonymous!! I say- gather the nerve to argue!
The biggest problem in our area is that prices are being slashed for no reason whatsoever. SHort sales can be priced competitively but not to the extent of destroying the neighborhood. The funny bit is that the bank owned homes are selling for more than asking price because people perceive them as good deals and there are 10-15 offers on each ! That is the nature of business here.Buyers are confused and I don't blame them!

Builders have slashed the prices so much that the same buyer who inflated their bank balance for the last 8 years is in trouble.

I guess it is all about money. the same builder who built windemere is bringing the price down by building at such a rapid pace.

where has all the ethics gone? doesn't the builder have a heart to feel the pain of buyers who supported them in the last 8 years.

Can they not build slowly and absorb some losses to keep the families in windemere happy. don't they have a social responsiility to help who trusted and bought from them in the past.

The banks and the builders are making so many families bleed everyday.

Buyers,

you must be feeling very excited when you see the prices drop. right? does that makes you very happy?

don't forget the same foreclosed/short sale home you might end up buying has very bitter and painful memories of families who lived their before. That energy will always remain in that home forever . I guess you get what you pay for.

I've been following this thread and have been feeling some sympathy for owners that are concerned about dropping value of their property. But the the last few posts that talk about ethics, social responsibility etc, prompted me to post some of my thoughts.

For those of you that are complaining about dropping prices, ethics, social responsibility, etc - did you ever feel the pain experienced hard working and silly folks ( like myself ) who couldn't afford to buy their dream homes or who wouldnt pay the unreasonable premium while you guys were driving the prices up thru the roof and some ways inviting trouble for yourselves ?

When are people going to own their mistakes ? The banks that lent irrationally get rewarded by getting TARP, buyers that bought homes at exhorbitant price cry foul when the realize their mistake and start talking ethics, -ve energies, social responsibility, etc. Where was the ethic, social responsibility when people drove up the prices ? Why did people pay such unreasonable premium to the builders and never complained about it at the time ?

In my opinion, the most common mistake people did was that they bought homes at a high price because they thought they could afford it and not because it was worth the price. In majority of the cases, it was a reckless show of wealth

The same market force that pushed the price up will also bring it back to a more reasonable level. The "reasonable level" is relative and will always remain debatable.

I can understand the pain of existing home owners but I would like to know how they were feeling when Home prices are going up every few months with no fundamental reason other than exotic mortgage plans. Did they ever thought about the folks who stayed within their means and didn't jumped on the Bandwagon.

It is funny to blame builders for lowering prices , they are only reacting to market conditions and Rama's earlier Blog about Bulders.If they can find buyers now for the same prices they sold few years ago they will love to make the deal and may through few more upgrades.

I am sensing a great deal of anger on both sides.Understandable.The debacle that has occurred in the RE industry was an avalanche caused by many disturbing factors and no one person can be blamed. When credit was flowing, everyone one of us bought things we could not afford and if anyone comes back to me on this point and say they did not- I will call them liars.We all bought cars, clothes, jewelry, homes because credit was easily available.Prices drove up because people wanted to buy homes at any cost, agents killed it by driving up prices( because no one complained) and sellers got the money they wanted, banks got more sheep for the slaughter.The scene was set perfectly for laying out the killing fields!
So, lets not talk with a holier than thou attitude because all of us did it and ALL of us have to take responsibility for our actions.BTW- I am not exempt from it either.
Also to the comment above about builders- they are in the business to make money and they don't give a damn about how they hurt anyone. Its all about their bottomline.Social responsibility does not exist in their business practises.And that brings me back to the main point of my blog- its all about dollar bottomline, no one cares!

Hmm...so you don't want to see prices fall in windemere because you own a house in that community. Well, wake up and smell the coffee. Look around and get an assessment of the situation and you may add to your so called "expertise". It seems you would like the listing agents to start rigging and fixing prices, instead of the market correcting them. Check out case-shiller index and other indicators (if you didn't know they existed!!). What in the world you think prices in windemere would not keep falling...If I were a buyer, I would avid realtors like you who have vested interest in having me pay a higher price.

APR

I think you are just looking to slam and not listen to the argument.I am NOT asking anyone to overpay but at the same time there has to be a balance of prices.It is very easy to attack an agent like myself who is atleast having the guts to be honest, but wait till you become a homeowner from a potential home buyer and then will ask you how it feels to see your home prices crash through the bottom, right after you buy.It is very simple to make judgements on people, sail the boat with other homeowners, only then you will understand the pain. And just so you know, I am not DUMB- not knowing the case-shiller or other indicators of the market.Under no circumstances will I let negative attacking people like yourself stop me from expressing myself. Good luck with your home search, or should I say "deal"search...and BTW you might find me rude but I deal with insulting people like yourself all day, everyday and don't really want to engage myself in a dialogue with judgemental people.I can very easily delete your comment but will not, just to prove my point.

I don't know why this issue is being raised.

Prices have stabilized in windemere and the homes that you see listed that low is an undesirable home. You have to see the home first to decide this. Good homes that everybody like are selling at a premium. The affordability is at 96-97 level due to low interest rates. the interest rate was around 8% and now it in the 4's.

case-shiller and all the anaylst that you named have been saying the same thing for the last 15 years and they will continue to say the same thing regardless of how the market is and believe me every dog has it day and now it is their day.

I feel pity and sympathy for the buyers in these forum dancing because they will miss the opportunity to buy a affordable home

Thank you and should I say Amen...If you scroll up to the top, I said, lower prices should be based on circumstances and not without justification.It just seems to me lately there is a seething anger with buyers who are just looking to attack because either they think they are very very very knowledgeable or just enjoy a royal Realtor "behind" kicking

I think, who is attacking who would be clear if you check the first post that started this debate. It was an attack by the home owner (who also happens to be a realtor) calling the bankers moron for selling property at lesser prices, the out of city RE agents listing homes for lower price, so on and so forth. Later on followed by sellers blaming the builders for reducing the price.

All said and done, people from both the sides made some valid points.

Relax people...The economy will be back on track soon, the buyers will have more buying power, the sellers will get more $$ and all of us will be happy again.

Whats the whole point of trying to get an argument out when people just want to get behind you with a whip..I was not attacking but making an argument and if you perceive it so, then so be it.

Rama,

Like they say "Every cloud has a silver lining", with all the arguments, bashing, discussion going on here, you cannot deny all the attention your blog is getting! You may lose some buyers in this debate, but you have a lot more to earn - a darn awesome reputation!

Good luck!

I admire Rama for speaking his mind but based on this post and her past few posts looks like Rama as a home owner is dominating Rama's as a realtor . Here is a intresting article for those who are thinking of overnight turnaround in San Ramon real Estate market .

http://online.wsj.com/article/SB123853857749575441.html

The article does not mean anything to San Ramon because San Ramon is in very high demand. The article might be applicable to other areas which are not popular.

I don't know why people don't understand that all these generic news do not mean anything to the local market. You should look at the local stats on what is going in your area to get the true picture

The above comment just shows the typical Owner Denial Syndrome :-)

People, your local market is not more immune than your reginal or national market! If people are losing jobs everywhere, dont expect your local market to hold up. It basically boils downs to income vs spending ratio and if the income is falling, dont expect people to pay millions for your home, just because its in San Ramon! Well if the bay area falls over 70% in its value, San Ramon may fall 50%, but don't expect it to be at 10%! Run! Run! The sky is falling!

Rama the homeowner dies a slow death everyday, but Rama the Real Estate professional has NEVER given advice to buyers to pay more just to keep the values of her home or tell her clients to list really low !! If any of my buyers or sellers are reading, I would encourage them to write their comments.I respect my clients, as they are the ones who put the food on my table.
Trust me on this one, I feel bad for the sellers and for buyers because I have had buyers who get a great deal for that particular home and 2 weeks later the same one is selling for a lot less.. it hurts me to see people lose money, thats why I want to stop what is happening around here.

Ok , That WSJ article didn't make sense to you . Please query how many homes are underwater in San Ramon and how many are Sold at loss in last twelve months in any local newspaper ,you will get the answer.

http://www.mercurynews.com/ci_10965922

APR

Do you think you should trust that data? sfgate.com shows that in san ramon the underwater homes is 29% and san jose mercury news shows that it is 51%.

Funny thing is the source of data for both newspaper is zillow.com nd zillow.com does not understand the difference between dublin and san ramon when it comes to valuing the property.The data from zillow.com is highly unreliable.

San Ramon has lot of old areas in which people have their mortagages completely paid of.

APR

Rama,

Love the data you post and your opinions (even if I don't always agree with you). This blog sets you apart from the hundereds of agents in your market, please keep it up !

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