We still have a vibrant market here in the North Dallas area.  One of my listings had sparse showing about 3 weeks ago.  Over the last two weeks, it's averaged one showing a day.  We had an offer last week and sent out the Seller's Invitation To Buyer to Submit a New Offer (it's a Texas thing!) in anticipation of 2 more offers coming in.  On Monday, I expect to present 3 offers to the seller.

Explain the Sellers's Invitation To Buyer to Submit a New Offer.  Sounds interesting.

Gene and Rebekah,

That's good news that things are starting to move over there. Vegas is still struggling with a glut of homes on the market, yet there are some indications that buyers are slowly coming off the fence and making reasonable offers on listings. The bottom might be near.

I brought 3 sales to contract just this week............the buyers feel urgency and all seem to want to close in 2 - 3 weeks........

The Seller's Invitation to Buyer To Submit New Offer (Texas Association of Realtors Form #1926) is not a counter offer.  The property remains on the market and the seller can consider other offers.  It tells the buyer that their offer is not accepted by the seller and invites the buyer to submit another offer "which Seller may more favorably consider if" ....  with multiple blank lines following.

Instead of ignoring lowball offers, I encourage sellers to use this form.  If I think we might be going into a multiple offer situation and all interested parties haven't submitted offers yet, I suggest the use of this form.  I point out, however, that they run the risk of the buyer not coming back with a followup offer.

Real Estate business is quite predictable, Long period of Boom time, then followed by considerable period of Bust.

Home Prices are determined by the home Builders.  You see, Home builders buy lands, then build and sell home.  When they can sell home they just built, they don't have them money buy lands. It takes a while before land prices start to fall.  Once the Land prices fall low enough, then Home builders can make money building new home again.

To find out how real estate market is doing, just ask home builders.  When their business start to pick up, permits will pick up, then new home sales will pick up.

Home Prices will bottom about one year AFTER Permits bottom. Where are we in the cycle? here's a chart from U.S. Census for both Florida and Nationwide

As You can see, Permits are still in free fall.  Why?  Home builders' order are still decreasing, thus less permits.

The answer to your question on weather we have hit bottom.  Yes we are getting close on the Sales Volumes, they are down 50% from the peak, I don't expect to go any lower.  But Not the price, prices will fall for several years

Question:  Why would home prices fall?

Answer:     Competition,  As home prices moving up, Everyone from realtors to home builders, and from Land developers to mortgage brokers all benefit significant. But high profits attracted competition, as Profits will encourage more people becoming realtors, builders, land developer and mortgage brokers, etc. More competion will bring down prices. 

Even though the Tallahassee Real estate boom was over quite sometime ago, but most people in Real estate are still in Denial.  Please don't blame them, because most people can't let go the fun memories of the boom time.

With the speculative orgy in Real estate over, Prices will determine the level of competition, how many homes are being built, how many new agents coming to work in the real estate.

Price will fall back to the normal level of home price vs. average household income

Ratio of OFHEO house price index to personal consumption expenditures on rent

We have not seen any impact on home prices from home foreclosures yet. 2006 and 2007 Mortgages have seen very high default rates, and it takes 9 to 18 months from being delinquent to being auctioned off.  

It works like this, Joe sixpack late on mortgage for 1 month, lender issue a warning, after missing three months of payment, lenders call and demand payment or they will start forelcosre process.

In the 4th or 5th month of being delinquent, lender have lawyer to file foreclosure at he local courthouse. The court process will take 6 months in Tallahassee if borrowers agree with lenders. If borrowers want to delay the process like filng for Bankcrupcy or something, it can easily take a year or more.

Once the foreclosured home start to auction off, in about one to two years from now, prices will fall off a cliff.

With a bull market, the last stage usually brings the most increase in prices, and also with the bear market, the end will bring most dramatic price decline in the shortes period of time.

Looking at last boom in the Tallahassee real estate market from 1992 to 2006, the prices moved up very slowly from 1992 to 2002, barely kept in pace with inflation, then prices started to zoom to the up side as specualtion orgy in real esate devopled. in 2005, we see the largest increase in prices. price moving up in one year equal to all the prices move in the previous 14 years.

Now the inevitable ugly part, gloom cycle are firmly taking place in Tallahassee, inventory are piling up. the coming spring selling season will be ugly.  Psychology in real estate is still very exuberant or euphoric, most participants are still remember the good ol days, refuse to even ackowledge the possibility of home price decline.   

Prices will drop most in the last year of this deline period, (probably two years from now, psychology & attitude changed slowly) as banks will finally capitulate, they will sell homes on their book from foreclosures at any prices.

Minimum of 30% prices drop in Tallahassee is in the cards

Officials Falling Behind on Mortgage Fraud Cases

The number of mortgage fraud cases has grown so fast that government agencies that investigate and prosecute them cannot keep up, lenders and law enforcement officials have said.

Reports of suspected mortgage fraud have doubled since 2005 and increased eightfold since 2002. Banks filed 47,717 reports this year, up from 21,994 two years ago, according to statistics from the Federal Bureau of Investigation and the Financial Crimes Enforcement Network of the Treasury Department. In 2002, banks filed 5,623 reports.

"I don't think any law enforcement agency can keep up with mortgage fraud, because it's such a growth industry," said Chuck Cross, vice president of mortgage regulatory policy for the conference of state bank supervisors, an organization of regulators and bankers. "There's too many cases, not enough agents."

Mortgage fraud covers crimes like false statements on mortgage applications and elaborate "flipping" schemes that involve multiple properties and corrupt appraisers, title companies and straw buyers.

In one common flipping plot, someone buys a house, has it appraised for more than its true value and sells it to a straw buyer for the inflated price, pocketing the difference. The straw buyer lets the house fall into foreclosure, leaving the bank with the loss.

The cases coming into view reflect the recent boom in mortgages with limited borrower documentation and lax scrutiny.

Law enforcement agencies say they are overwhelmed, especially because investigating and prosecuting fraud can be complex and time consuming. The officials say career criminals and organized-crime rings have increasingly turned from other crimes to mortgage fraud because it offers lower risks and high profits.

"I could hire a dozen investigators and a dozen prosecutors and only scratch the surface," said David McLaughlin, a senior assistant attorney general in Georgia who coordinates prosecutions of mortgage fraud.

Losses involving federally insured banks totaled $813 million in the 2007 fiscal year, more than double the $293 million lost in the 2002 fiscal year.

These figures most likely represent "the tip of the iceberg," said the Mortgage Bankers Association, an industry group, because they do not cover mortgage brokers, who arrange more than half of new mortgages. The industry estimates the total loss this year at $4 billion

ANY realtor you guys know involved in Mortgage fraud here?

:-)

I am coming to the Tallahassee Board of REALTORS January 24th and 25th.  I hope you had a chance to sign up for the two great days of Mobile Technology training.  Here's a link about what I will be presenting.  www.DickBetts.com/tally.html

Dick

I am coming to the Tallahassee Board of REALTORS January 24th and 25th.  I hope you had a chance to sign up for the two great days of Mobile Technology training.  Here's a link about what I will be presenting.  www.DickBetts.com/tally.html

Dick