Real Estate Blog - THERE IS NO PIE IN THE SKY. WHAT ARE YOU TELLING BUYERS WHO ASK IF IT'S A GOOD TIME TO BUY?

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THERE IS NO PIE IN THE SKY. WHAT ARE YOU TELLING BUYERS WHO ASK IF IT'S A GOOD TIME TO BUY?

IS THIS REALLY A GREAT TIME TO BUY A HOME?

OR, PERHAPS IT'S TIME FOR A REALITY CHECK.

* * WARNING - HARD CORE REAL ESTATE TALK * *

In some real estate markets, it may be a good time to buy real estate, perhaps. In Maryland and Northern Virginia, perhaps not. Simply proclaiming that "IT'S A GREAT TIME TO BUY A HOME" just isn't persuading many prospective home buyers. Consider some reasons why buyers just aren't buying.

WHAT HAPPENED WHEN HOME PRICES INCREASED 100%? The rapid escalation of prices between 2002 and 2005 moved housing out of reach for far too many prospective home buyers. Many believe that the downward price adjustment still has a way to go. True, mortgage rates are stable, but it is also true that, for non-conforming loans, qualifying has become more difficult.

Just because prices are slightly lower than they were in late 2005, 5-10% lower, doesn't mean that homes are attractively priced for the average home buyer. Bringing prices down 10% when they went up 100% doesn't bring many buyers out. Incomes didn't increase over the years to keep up with the housing price escalation. The rosy picture many are painting of the market completely ignores the qualifying ratios required for conforming conventional, FHA and VA loans. We hear claims that "Now is a great time to buy a home", but they never quite explain how.

Is real estate a good investment today? We hear that real estate is a great investment. Of course it is. But, is it a good investment now? Is real estate a good investment for the home that the average home buyer is qualified to buy? The forecast by all financial experts projects more foreclosures, more defaults as ARMs reset in 2008 and 2009. That will put more downward pressure on home prices. If we know that home prices are likely to be lower in the next year or two, how can real estate be a good investment now?

Fact. Because of the continued high prices of residential real estate, many consumers who would be buying cannot. If the job location is in a high priced real estate market, buying may not be possible.

Fact. Folks need a place to live. The question for many is, "do we buy now or in a year or two". Buying for a place to live makes sense. Buying now for investment purposes may not make any $en$e.

The high price of residential real estate has left many home buyers out of the market. If a family has a gross annual income of $100,000, they are qualified for a home of about $400,000 considering 30/40 ratios with 6.25% interest rate. The buyers can qualify for a mortgage payment of about $2,500 for housing and about $3,500 for all debt.

Reasonable??? Perhaps. Until you realize that the average detached single family home in the most popular locations for housing and commuting is over $700,000. This doesn't represent luxury housing in Maryland and Northern Virginia, just the average. However, a $700,000 price range usually moves the loan into Jumbo range and a higher interest rate. It's JUMBO financing, but not luxury housing. Tht is quite a departure from times past when only luxury home buyers were faces with JUMBO loan rates. The family will now need about $175,000 income to buy the average home within an hour of the primary employment location, Washington, D.C. This is what the 100% increase in home did to the market. It left families with incomes under $150,000 out of the market. In fact, for a family with a head of household at the top of the government pay scale, the income is only about $121,000. $120,000 sounds like a lot of money until you realize that it doesn't qualify a home buyer for the average priced home within an hour of the primary employment center location.

TOP PAY FOR GS EMPLOYEES Grade GS-10 through GS-15

GS 10 - $55,580
GS 11 - $61,068
GS 12 - $73,194
GS 13 - $87,039
GS 14 - $102,848
GS 15 - $120,981

$120,981 will qualify a home buyer for a loan amount of about $490,000 at 6.25%, if they can get 6.25%. This is jumbo range without a significant down payment which fewer and fewer home buyers have, particularly first time home buyers. First time home buyers rarely have much if any down payment. That's simply a trend with the high cost of living in this area. Rents, transportation, food, gasoline, insurance, and other costs have skyrocketed in the past 10 years. Rarely will a first time home buyer enter the real estate market with more than a 5% down payment. This is one of the driving forces behind the 80/20, 80/15/5, 80/10/10 loans and other no down payment instruments created to help buyers with good credit and little money. In the past 5 years, local taxes and home owners insurance have also escalated dramatically. Considering the cost of living in the area, it is surprising to find a buyer with a cash down payment unless they are realizing proceeds from the sale of an existing home. For high income home buyers, the Mortgage interest tax deduction is sometimes the only thing that motivates consumers to buy a home. The mortgage interest tax deduction is also the advantage over renting. That and the fact that high income families often find rentals difficult to fine in areas with popular school districts and good transportation alternatives. Vast areas are zoned for residential real estate but never permitted commercial rental units to be constructed.

HOME BUYERS MAY BE SMARTER THAN WE THINK. What are the choices for prospective home buyers? Use price as the only factor for their home search? The primary criteria for housing are, PRICE, LOCATION, PUBLIC SCHOOL RANKING, SAFETY. With gasoline prices high for the foreseeable future, there is a limit on commuting distances unless the job and other factors permit public transportation and that is not available in all markets in Maryland and Northern Virginia. So, even if we can find homes for a family earning $100,000, that location, public school and crime statistics may not appeal to buyers. Buyers begin their home buying adventure with a set of criteria that is almost always "good schools, easy commute, safe neighborhood, price". As experienced agents, we know that the search really begins with price and location. Most consumers buy homes in the upper limit of their qualifying income. We can't change their income. Buyers also must be within commuting distance of their job or they will not buy. Many families have special education needs that limit locations. When the price of homes in the eligible areas places homes out of the consumers reach, they will not buy. THAT, in my opinion, is the state of our housing market today. Prices will have to come down about 20-25% before there is a significant buying pool. Until real estate practitioners and home owner/sellers realize the state of our housing market, inventory will remain high and buyers will continue to wait.

How many prospective home buyers are willing to buy in a depreciating market? Unless consumers can buy a home for 10-20% below market for the area today, anyone who buys the average resale home on the market today can expect to see a reduction in value for the next two years. That's O.K. as long as buyers are prepared to occupy for several years. Buyers continue to negotiate the price of homes and if sellers is unwilling or unable to sell below market, buyers move to other listings or cease to look. More relocating buyers are renting. Local buyers are renewing leases or staying where they are.

THERE IS A BRIGHT SPOT. WHAT ABOUT NEW HOME BUILDERS? The exception to this scenario is new home sales. Builders have realized that, just to stay in business, they must keep selling and building homes. Now homes have decreased in price by 10-20% depending on the location and builder. In addition to price reductions, builder incentives have increased from the traditional $10,000 to as much as $100,000 or more for the average price new home. The buying pool for new homes is still quite small and most major builders will take reasonable offers that provides the builder with liquidity so they can continue to build and stay in business.

ARE THERE GOOD REASONS TO BUY RATHER THAN RENT? YES.
Fact. Buying a home is still preferable to renting because of the mortgage interest tax deduction.
Fact. Consumers who plan to stay in their homes for many years can benefit over the years by low interest rates and eventual growth in the value of their home.
Fact. Consumers have more choices for schools and transportation alternatives by buying rather than renting.

CONSUMERS NEED THE FACTS TO MAKE SMART HOME BUYING DECISIONS. There are over 2 million empty homes on the market. Studies do not support a quick turn-around in the housing market. Current actions in Congress to manipulate the mortgage market do nothing to help the future of the housing industry. If there is one good reason to buy now, it isn't because it's a great time to invest in real estate, but buy now before the government makes buying a home more difficult and more expensive to finance.

All my opinion, of course. Also, this appears to be against the tide of opinion. Are real estate professionals broadcasting that now is a good time to buy a home because they believe it? Or, is it wishful thinking.

One thing for sure, many prospective home buyers aren't buying it.

Posted by Lenn Harley, Real Estate Broker, Maryland & Virginia on 11/11/2007 09:45 PM

Comments (45)

lenn harley, active rain, real estate blog

45 Comments on THERE IS NO PIE IN THE SKY. WHAT ARE YOU TELLING BUYERS WHO ASK IF IT'S A GOOD TIME TO BUY?

NOV

2007

Lenn, I think you are right on the money. I would think that the people who are buying today are buying because they need a place to live. I would agree that today is not the best for buying an investment property. Excellent analysis of the situation.

Wow! That is a really good post! We don't have public transportation here, either. We see a lot of "moving closer to work" houses!

Jonathan. Thanks for commenting. My opinion reflects my experience in my market only. But, it's based on daily observations.

Lenn- as always - this is a straigt forward, honest post. I had someone contact me who read one of my blogs and he asked the same question. I told him there was no one size fits all answer -- and told him it depedns on a lot of factors -- many of which you have outlined above. He remarked, I was the most "honest" real estate agent he had interviewed. I think we must look at each situation and each market to answer this question.

Great post with alot of valid points. I think it is only a good time to buy if you are planning to be in your home for at least 10 years and you need to purchase for tax reasons. Each market is different of course as each situation. Thanks for sharing your thoughts.

Lenn,

We were spoiled by the boom years of the early years of this decade...Your comment,

"anyone who buys the average resale home on the market today can expect to see a reduction in value for the next two years. That's O.K. as long as buyers are prepared to occupy for several years."

provides us with a 'starter' group to ignite the next wave of buying...interest rates may rise from their very reasonable present level, possibly negating any lowering of property value...who knows how close we are to bottom...we will only realize this when values begin to rise...too late for those waiting for the bottom...just to end this, I personally feel that those able to puchase right now who will likely remain in that home for several years ought to be buying now...JMHO Thanks, Fran

When I'm asked if its a good time to buy I usually ask in return "what do you mean by good" There are to many questions to be asked ahead of answering that question. Many people are all going to have different "good timing"

Great post, Lenn. It is refreshing to hear from a realtor who doesn't just regurgitate the NAR line of "now is the very best time to buy or sell a home". I equate those realtors (and that organization) with the stock brokers who were screaming "buy buy buy" in 1999-2000. There's nothing worse you can do to your net worth than buy at the top of a bubble.

Lenn, what a great post. Though, in my area, I DO BELIEVE it is one of the best times in the last 5 years to buy (if they are buying their primary residence and planning to stay for a while), it sure gives me food for thought. Frankly, many buyers who are waiting have quoted some of the same reasons you've noted in your post. Very articulate as always, thanks for the provoking thought.

NOV

2007

Lenn- You are correct in all your advice in this post. I say it is a great time to buy here even as prices are dropping because we can buy property at a reduced rate, calculating in the depreciation over the next 14 months and basing our offers on such. Katerina

Prices are not dropping where I am and demand is still strong. Nevertheless, more and more, lower Westchester is becoming a playground for the wealthy and the middle class need not apply. For those whose heart is set on lower/middle Westchester I find out what their time line is. I tell them they need to stay put for about 5 years. They also have to be able to put down at least 10% and have some reserves beyond that. If they can do that, my best advice is to BUY what they can, be prepared NOT to be in love with it. I suggest they buy "potential" and fix it up. Part of this is driven by the fact that I am seeing double-digit increases in the rental market which can lead to even more pain if people wait too long. I also ask that they steer clear of THE most POPULAR areas. Go a tiny bit outside the "hottest" areas and also NEVER EVER buy the nicest house on the street. This will help shore them up against temporary drops in price should they occur and will help stabilize their outlay when rents are rising at a frightening pace.

Right now we are witnessing a tremendous TRANSFER OF WEALTH from the US to Europe, Asia, India and anyplace else you would care to name. In the NY metropolitan area -foreigners are snapping up property due to the favorable exchange. It is my sincere hope that this hemorrhage of wealth can be stemmed. But I look around me at what "globalism" has done to many lucrative fields of work and realize that we as a nation are no longer holding the best set of economic cards. That's why I don't see a drop in prices in places like NY.

I don't think I realized how out of whack home prices vs salaries were in your part of the country until I read this. It's surprising that there was any kind of a housing market "boom" at all Lenn.

As to your subject line "What are you telling buyers when they ask if it's a good time to buy?" Here in our area it is a great time to buy if they plan on staying in the home for the next 3-5 years. It's also a good time to buy for those people who do want a certain area or certain school district but couldn't afford said area 2-3 years ago. Those homes are now "affordable" for middle income purchasers.

Jayne. Moving closer to work is a continuing pattern in my market. Smart businesses are locating farther away
from center cities.

Joan. I get the question and I believe that other agents are getting it too. I don't have blinders on. I can however,
help our home buyers maximize their investment potential with market information. It's always the buyer's decision.

Christi. Thanks for dropping by. My information reflects the state of the market in my area.

Fran. Many folks will buy because it makes sense for their personal family, work situation. The point of this post
is to vent my frustration with so much coming from real estate "leaders" that claim that this is a great time to
invest in real estate. They don't appear to realize that, for some families, buying is no longer possible.

Jason. You are right. The answer has to be based on an individual consumer's needs.

John. Giving investment advice isn't my job. I find good homes for folks based on their needs. HOWEVER,
they do ask me. I give them the facts and they buy a home with their eyes wide open.

Catherine. Buyers are smarter about the market than we give them credit. They don't know much
about the mechanics of real estate, but they can deal with the facts of the market. Which, of course,
is why so many are OUT of the market.

Katerina. Sounds like you use some of the same numbers I use when computing offering prices.
Our buyers get a "jump" on future depreciation or they don't buy that house. We are looking
at 10-15% these days.

Ruthmarie. We have some areas like that. There are always folks with money who are not taking
the market into consideration. They buy what they wish to buy because, well, because they can.
I sold a $5M home last year and the cash buyer had no interes in negotiating. He just bought.

Kris. Good points. Prices in the Detroit market have come down a lot farther and faster than
MD and Northern VA. About 1/2 of our buyers are still priced out of the market.

Lenn: Tucson, pending contracts are up, year over year for September (haven't checked October MLS yet) by 32%. The average price for existing home sales closes in September is up for the same period by 7.8%. The median sale price for existing homes is up 3%. New home sales have gone south, though, and sales through MLS are down for the same period a whopping 36%

Mike in Tucson

Mike. I've been reading your posts for Tucson. As in our area, prices may be holding up, but the number of units sold is WAY down. That is the number that the NAR refuses to recognize.

New home sales are not always reflected in our MLS. I know builders who are selling faster than they can build. But, it's because they have reduced prices dramatically and offering good incentives to make buying easier. Home owners don't know how to market their homes. They look at price only. That's not going to work in this market.

I totally agree with you. As realtors, it is up to us to educate the consumers. With all the negative press that is out there, we need to be the ambassadors of real estate. Not only that, it's our life & for most of us our love.

Marc. Thanks. Good comment. I just don't know how we can go around blithely proclaiming that "it's a great time to invest in real estate". Buyer who hear that may be sorely disappointed a couple of years from now if they have to sell.

Lenn, maybe it's the lawyer in me, but I answer just about every question with "It depends."

Is it a good time to buy? It depends.

Is it a good time to invest? It depends.

How are home prices? It depends where you look.

Should I put my home on the market now? It depends.

How long will my house be on the market? It depends how you price it.

Answering these questions in any other manner just subjects the agent to criticism and possible hatred from the clients who take their unreasoned advice. You need to open up the discussion with the clients.

I never go around shouting "It's a great time to buy" -- that decision needs to be personalized to each individual's overall circumstances.

Brian. You get a Gold Star. I was prompted to write what I did by the current NAR advertisement, a post I read yesterday and John McArthur's post.

Of course "it depends". I keep hearing from local agents that "prices when up 1-2% in my area over the last year. Sure, but the number of sales that closed are down 1/3. That's the part they don't usually talk about.

I tried to get the message out about WHY many buyers aren't buying. It's not because they don't want to. It could be because they can't.

Thanks for a great post.

How up-set would you be if you saw your post re written with data from my area, Lee County Fl, different numbers, same conclusions and posted in the local section of activerain. I would offer full disclosure to the reader, crediting you for your work.

Lenn,

My point is that volume in most areas of the housing market has stayed strong. There are very few signs of this trend abating. It has been consistent throughout. Negotiations are tougher because sellers keep pricing in obscene gains - BUT.....the total number of sales is holding steady and the inventory for condos and coops is a little over 4 months. I think this is purely local...but I do see a shift of WEALTH away from Americans. So if I get an American national with a typical salary in my office - I'm telling them that they should buy - but to be careful what they buy. This is because I don't see the train stopping and interest rates are still favorable. Get in - while the getting is good because the rent increase trap is starting to get sprung - forcing people out of the area altogether.

Lenn, in my market it is still a good time to buy. We have seen a downward turn in housing prices but aren't seeing accelerated appreciation either. I know that isn't the case everywhere. Our biggest challenge is telling buyers here not to listen to what they are hearing from the national media.

Lenn,

You are a real estate genius that "TELLS IT LIKE IT IS". Sorry to all the agents who want to "BLAME EVERYBODY ELSE INCLUDING THE MEDIA". I don't think you'll get a star for this on most AR Groups. It's not part of their agenda.

Lenn this post speaks volumes about just what is going on and why buyers aren't buying. They smell something fishy and they should. I think some agents in some areas don't want to believe that their market is starting to downtrend and they think if they ignore it long enough it will just go away. That's not an agent I plan on referring any business to. San Diego "my market" in my opinion is deep into this cycle and will finally hit bottom in 2009 and start a slow gradual comeback in summer 2009. Of course - just my opinion.

I look at the bright side of my market being half way through the downturn - many areas of the country are just starting to see increased inventory and slower sales. For them it's just the start. I hope all AR members read this post. It's a great "WAKE UP CALL FOR THEM" - IF THEY CHOOSE TO WAKE UP! I think too many agents are writing posts about their favorite color or dogs and butterflies - I think buyers and sellers in their areas deserve better.

Mike Lewis

My answer is the same as Brian's.... it depends. When people ask "how's the market" I have to think in terms of where they are so that my answer matches more of their local expectation. And then I say that while that's true in your area, in this area what's happening is xxx. It's one of the reasons I try to spread myself only so far so that these answers can be more thoughtful and not just the ridiculous party line.

For folks in some areas it's a darn good time to buy. Is it the bottom? Who knows? But if it works out for their particular situation then it's a good time to buy. Not everyone is in this group or can be as you state. Financially our area straps too many people.

I feel like we are all circling the airport right now, waiting to land.

Ron. I see your profile but it doesn't tell me who you are or what you do. I suspect that if you used my post as a "template", you could write your own. Copying is tricky because we could get into duplicate content trouble.

Ruthmarie. I understand. One of the reasons our average prices stay so high here is because the luxury market keeps the numbers up. There are a lot of folks with a lot of money in MD, VA and your area.

Joddie. I'm not that familiar with your market, but our market has a long way to go down.

Mike. Thanks for the kind words. You're right. There aren't enough Gold Stars to go around. My post was prompted by what I was reading from so many sources that this is a good time to "invest" in real estate. It may be, if one has a LOT of patience. As for buying a home, that's different. We have to live somewhere and if one is careful, buying is still preferable to renting. I just don't want buyers to be misled. The consumer can take the facts, if they have them.

Josette. That's funny. Circling the airport waiting to land. That's funny because the next thought is "hope we don't crash".

Sure it is a good time to buy: prices are dropping and interest rates are still low. However, it is only a good time if it is good for them!

Lenn, no crashing! It's bad enough to fly as it is. My son is now a commercial pilot so it's scary enough to think that as bratty as he was as a teenager that now he carries all those lives in his hands!

A newsblurb just came across my mail about a real estate economist asking new construction builders to slow down because their concessions were hurting the industry as a whole and forcing all sellers to give concessions.... Hmmm... and making prices come down so that buyers can afford to buy more clearing more of the inventory and moving us toward a recovery, perhaps? Not sure what kind of economist he is.

Josette.

How can new home builders slow down? The have slowed in response to the market. They don't have to slow down to suit the resale market.

That's the same as asking them to go out of business. Builders MUST continue to sell and build or they cease to be in business.

That's nonsense.

NOV

2007

Way to tell it like it is Lenn!

Question: If the high average income in your area is $121k, qualifying buyers for about $490k, how the heck did prices go up to $700k? Huge down payments? Who was buying?

Laurie.

The average income isn't $121K. That is just the HIGH income for government employees. My point was the the HIGHEST earning governmnet employee, our primary industry, can't qualify for the average priced home in most counties within commuting distance of most of the gonernment office in Washington, D.C.

Prices need to come down.

Who was buying? Everyone who could get a mortgage which in 2003, 2004, early 2005 you could get a 5 year ARM for 3.75-4.5% and an interest only made the payments VERY affordable. This was at the low end of the Greenspan interest rate lowering exercizes. Once the rates began to go up, which he did 17 times, the rates began to disqualify folks. By the end of 2005 when the higher rates began to take their toll, it was all over. One would think that would be time for home prices to begin to come down, but they didn't. They kept going up. The inventory started to build and DOM got longer and longer. By the end of 2006, prices started to come down, but rates were still in the 6-7% range. Too many prices got in the Jumbo range, 7-7.5% depending on the credit scores. The buying frenzy was interest rate fed. It's over. There's a lot of difference between 4% and 7%.

It pretty much came to an end by the Summer of 2005

We also had a LOT of real estate folk buy for speculation. They used $0 down, interest only, short term ARMs thinking they would sell as soon as the home was completed. When buyers stopped buying, a lot of real estate folk are stuck with new homes that they can't sell.

Average price in Fairfax County, VA was $466K. In 2007, it's $752. That's just one county, but a very popular area with highly ranked schools, METRO and an easy, albeit congested, drive to DC.

So, where is the buying pool for Fairfax County??? The stable government employees no longer qualify to buy there.

These are just averages. There are a lot of anecdotal cases, but they don't make a market.

Hi Lenn,

I answered your question in the title.....It is always a good time to buy, then I read your article. My answer now is again "it depends" I guess the market dictates how impulsive we can be.....it depends

Dick Beals

Dick.

The thing about the NAR ad that's running is that it is trying to sell "wealth, investment, equity", etc.

Of course, I don't believe it will do much, but it makes us look rather silly when most of us know that we are in a declining market with a lot more shoes to fall.

Seems to me that this is the time to be selling HEARTH AND HOME.

Ahhhh. I feel a post coming one.

Lenn,

Great comments - I can't help but return and read these comments and your replies. I enjoy reading the advice and knowledge that you give to AR and the public. The real issues are what I enjoy most about AR and you take them on full force. Great job.

Mike Lewis

Thanks Mike.

I just posted a COUNTER POINT to the new NAR advertising campaign.

I'll be anxious to hear what you think.

Lenn,

Let me know what you think of my comment on your counter point post.

Mike Lewis

I don't mean to hijack the thread, but I didn't want to get as personal as an email. Mike, I DO know what I am doing and I resent the crack about the dogs. I'm assuming it was directed at me.
1. Real Estate is a LOCAL business. Are you 20 miles outside of Manhattan, with the luxury market going crazy? I'm actually not so happy about this because local governments are only seeing the $$$ and not looking (or caring) that they are squeezing out the middle and working classes. They approve complex after complex because they think it will bring in revenue and as the luxury buildings go up. It's sad, but its something buyers have to deal with and work with. Could it turn? Sure, but only temporarily. Meanwhile the average RENT for a 700 sq.ft. 1 BR unit is running upwards of $2300/month in a nice complex. $3000 is not uncommon for a luxury 1 BR. Renters are facing double-digit increases every year. If their time frame for living here is longer than 4 years, purchasing a cooperative makes tremendous sense as long as they have the funds to maintain it and the down payment. In many cases, monthly outlay is considerably LESS than renting and although common charges and taxes increase - its nothing like what rents are doing. Buyers often buy to stabilize their outlay.

2. If you own a pet around here and want anything other than a single-family home - it is wicked hard to find anything. The rules are Byzantine and many agents won't touch a client like that with a 10 foot pole. If you want to sell and you have a pet, making sure the pet is taken care of, the house/unit is CLEAN with no odors is an essential but difficult challenge. For staging purposes - it is also important to remove the pet "influence" - buyers want to imagine themselves in a home and many don't own pets. I take care of that for people. It may seem like a ridiculous niche unless you love animals, but there it is. When I get a pet-friendly listing - I work hard and use my contacts in the dog world to create publicity that gets to all the right eyeballs. I market to those with limited options and the units sell.

Lenn, when I saw the NAR ad, I thought, "RIDICULOUS". Your point re. # of homes being lower, but home pricing for closed homes remaining somewhat the same mimics this area. Additionally, the lis penden figures in Long Island in my county doubled from last year. Not having the "wealth" factor to the extent that other areas do, the foreclosures will force pricing down, regardless of how long the banks live in their own bubble of outdated appraisals. Short of that, the reason to tell people to buy now is for PERSONAL growth (i.e., personal choices at home, rather than a rental property with no write off or personalization) in the short term and financial growth in the long term- buy the smallest house in the "best" area that you can afford (with "best" being subjective). If a buyer asks if "now" is the time to buy, my opinion as a homeowner is YES; my opinion as the lady with the crystal ball is "who knows", and my opinion as a real estate agent is, "let's go look- if you fall in love with something and want to buy, now is the time." Those buyers agents that can get people to look are way ahead of the game.

Laurie. Right you are.

We're still selling homes. I've got a buyer 95% ready to write on new construction now in the $850K range. We can still sell homes.

However, when I read the NAR ad, I shuttered. There is no way I'm going to sell real estate as a good investment now when I know we are in a falling market.

Not only that, you don't have to do it. Selling HOMES is easy. We just need some lower prices so folks can qualify for HOMES.

NOV

2007

Good Lord, Lenn- i think we're related.

Brian. I sent this to you this morning after I read your article.

Yes, We're saying the very same thing.

Ignore my e-mail. I didn't see your comment here.

WHoa.... that was a curve ball.... You are pretty convincing!!! You have definitly made me think. I THOUGHT it was a good time to buy but obviously at the rate we are seeing and going to be seeing forclosures they are sure to drive selling prices further down in the future. HMMMM... I know in my market the average selling price is increasing at a rate a lot faster than income is increasing... It is just bad. If you don't have perfect credit and a TON of money to put down- NO HOUSE FOR YOU!! Great post to make people rethink what they think!!

Kim. Thank you very much. If I made someone think, my work is done here. Great comment.

I love this place.

NOV

2007

Lenn, nice post. You really work hard. The comprehensive level of your work is very rich and convincing. I get a bit encouraged because my thinking aligns with your writing. Very good work. Thank you. I will have to spend more time on my post. You inspire me.

Jeanean. This is hard work but it's necessary. I just keep working, working, working.

Thanks for commenting.

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