Frederick County real estate - It's not what the media says! Is yours?

That's crazy.  I can rent for less than buying the same property.  Paying a mortgage would take a huge chunk of my paycheck. 

Housing in my neighborhood doubled in price in 6-8 years.  That's a major affordability issue.   Wages did not increase that much in that time, so how can the payment ratio be the same as it has for years?  A house that cost $150K 6 years ago will list now for almost $300K.  That's a huge difference. 

So I rent and save the difference until housing prices return to normal.  Lending is going to become stricter (as it should be).  I welcome the day banks require 20% down again .... prices will come down, because how many people have that much money in the bank?  We need to return to fundamentals ... 2 1/2 -3 x salary, with 20% down.  There's a reason that was a standard for so long ....

The media cheered the rising prices all the way up ... did they question affordability?  I didn't see anything about that.  So now they are reporting on the prices going down ... what's wrong with that?

We have a household income of just under $100K, and I wouldn't feel comfortable with a mortgage over $200K (2.5 x with 20% down) ... that's affordable and allows for savings, etc .... There aren't any houses in that price range near me - and I'm talking about 1700 square foot rowhomes.  When professionals with a 6 figure salary can't buy a home, there's a major affordability issue.  I realize you are in Frederick, and I don't know about that area, but come in closer to BAltimore and the prices are INSANE.

Why lie ?

even if we could the internet lets the truth out time and time again

main reason this nation is in for a long recession, depression

they say housing will not recover until 2022 

I found another career last year, I am not waiting around for 14 years to sell a home

Here's the real ethical question: If a house was going to go up in value as your client was looking at it, you would tell him that since it was in his best interest to make an informed decision, right? In fact, that seemed to be the main selling point up until mid-2006: Buy Now or Get Priced Out of the Market Forever! I doubt there is a single real estate agent that would NOT share that information.

Now if, as a real estate professional, you know prices are going DOWN in a particular neighborhood, would you not also be ethically bound to tell your client that as well and let them make a decision based on ALL of the information? Or, are you saying that you would be better off painting a rosey picture for him and let him find out on his own a year from know that you knew better and didn't tell him . . . even if it costs you a commission in the short run?

I know what the answer to that is and it is exactly the reason that "Realtors" will never be on the same level as other professions, much as you try to con us into thinking so. In a strong housing market you are nothing but order takers and in a weak market you will lie through your teach to make a sale. Without ethics, you are just slick salesment in bad suits with photoshopped pictures on your business cards.

You are lucky JR.

At least a REAL HOUSE still costs under 500K.  In my neck of the woods, you can't even get an apartment (AKA Condo) for less than 200K.  Real houses start at 600K for a new one (built before 1990).

Dear Larry,

I listened to what my realtor told me in the summer of 2004.  His message coincides with what HousingFacts.com is still saying this year.  Only today my situation is very different.  I lost my home and am living in a 3 bedroom apartment with my wife and 2 children.  My realtor told me back then "Don't worry, hey, you can always refinance".  Well, my rate adjusted in August 2007 and our finances fell apart.  I went from a $1982.00 home payment to a $3741.00 home payment. We foreclosed with the bank and the last 12 months have been hellish to say the least.   The only solace I can take is that I'm not alone in this nightmare. There are a lot of people, a lot of realtor clients, in the same boat rigtht now. Facing foreclosure and a financial ruin. 

I take responsibility for signing the mortgage and not realizing the impact of a higher adjusted rate, but my realtor in 2004, a NAR member, who I will not name, sold us down a river, Larry.    I'd take legal action against him for providing us misleading information and misrepresenting us, but I don't have the cash to pay a lawyer right now.  He got his sales commission. On to the next client. 

What did I get? I got a 3 bedroom rental apartment, a wife preparing to divorce me, and a destroyed credit rating for the next 7 years.   

The media is not the problem, Larry.  Realtors need to look in the mirror.  The NAR has been supplying the media with market trends and information too, as you rightly state above.   The issue is that the media (news agencies, internet news outlets, blogs) are finally fact checking the "inside information" the NAR has been feeding consumers.  And it doesn't add up, Larry.   Realtors should tell the truth, but you're advocating above that the "party line" be maintained.  The housing market is crashing down and realtors like you are saying "nothing to see here, move along, read our pamphlets. It provides the real truth".  This has to be a joke.  Is it too much to ask that the NAR and realtors like you take action to be forthright and not always say things to generate a sales commission now?

Good luck to you and your business endeavors.  But don't be surprised if some of your clients revisit you in the coming years, as I intend to do with my own realtor, and ask the question "So what the hell was that all about?". 

-Mark James, Riverside, CA

Those who bought six years ago have seen a 24.3% increase in value on the average even with the current down market.

You do realize that this is appreciation at about 3.65% or so when put on an annual basis? Actually, it is less than that, but the part of my brain the once could figure monthly or daily compounding has long ago atrophied.

So, you're trumpeting the fact that the best that the NAR can come up with is appreciation at roughly the rate of inflation?

Has nothing to do with real estate, everything to do with banking. Encouraging temporary home ownership was just the mechanism by which the middle class was relieved of its money... http://www.thetrumpet.com/index.php?q=5464.3798.0.0&ref=patrick.net

There is certainly some truth to keeping things positive.  Clearly that's what the Republican's are trying to do by telling us that there's no problem in the economy and that we're all just a bunch of whiners.  But artificially propping up housing prices that we can now see were obviously driven by speculation is not the right approach.  Housing prices have to come back into line with local incomes.  We can't continue living on the credit binge as we've been doing for the past 9 years. You can't really put a positive spin on that. Most people have actually seen their wages decrease because they have been eaten away by real inflation and stagnation - driving real wages well into negative territory.  Houses went up unrealistically.  Obviously there was no truth to the Realtor cheerleading chant "they aren't making anymore land" or "bubbles are for bathtubs" and my favorite "it's the law of supply and demand" - but as well as supply and demand worked on the way up - it also works on the way down.  There is now plenty of supply and no demand - and now prices have to come back to reality.  The speculators have left the market. It is your job as a REALTOR to help people see this very real truth - help them see that people were hoodwinked into taking on debt they could never hope to repay with creative financing unrealistically driving up prices.  When prices are affordable again, things will start moving. We can all be positive about the economy again. Cash will change hands and we can dig ourselves out of this rut and you can go back to making your 6%.

I am a broker/owner in an area where median prices are probably just a touch higher than in your county.  The twaddle you're promulgating is both deceptive and cynical.  Even at today's lower prices, the PITIs on virtually every house in my area (and I'll bet yours, too) don't square with actual family incomes and the fact that fog-a-mirror lending practices are long gone.

A family of four with annual income of $100,000, excellent credit and savings/reserves of 25K-30K (yeah, right) will qualify for a 300K mortgage- tops- in the current environment.  Add some revolving debt and a ding or two, and that mortgage comes down to about 250K.

Pair up the 300K mortgage with a 30K DP, and you've got a purchase price of 330K.  Too bad that in my area, 330K buys you a 1200 sf, 2 BR, 2.1 BA condoshack...with not even a garage.  Of course, the 3 BR, 2 BA ranch or split on less than 1/2 acre that would be minimally-appropriate for this family...well, that's asking 400K.  No wonder this is the type of inventory that's piling up all over the US.  NOBODY CAN AFFORD IT!

Don't even ask me what a 4 BR, 2.1 BA colonial- in merely passable condition- will set you back.  Even if the 450-500K price tag doesn't make the buying prospect retch in revulsion, the 10K property tax bill (have you guessed that I'm in NJ yet?) will send him to the phone book, looking to rent a Penske truck and get the hell out of the state.

Don't even bother to talk about market strength until the rent/ownership arbitrage turns back toward ownership as the better alternative.  And, regarding all those buyers you claim are now poised to take advantage of today's lower prices?  Well, there's a term for them, too: DUMB MONEY.  Any real estate investor who's over the age of 35 knows all too well that now is the time to keep the powder dry.  Why?  Because (at least in my area), even the prices being asked for REOs place investors in negative monthly net cash flow positions...should they be delusional enough to actually pony up the asking for these dumps.

Cheerleaders like you seem to be all over the US, trumpeting the same tired platitudes.  If there were any substance to what you shout to the world, why isn't anybody listening?  It's not because of the mainstream media...it's because when buyers sit down and do the math, THE NUMBERS DON'T WORK.

Perhaps you should spend more time doing some of this math and less time spewing the party line.