For sale, this price only

One of the reasons I believe sellers are being "stubborn" is because they have no choice! Their mortgage equals their asking price (plus a little for fees), whether they bought in the last 5 years or they borrowed heavily against their home. And often this asking price is not in line with the current market.

So the house sits. And sits.

If the seller REALLY needs to sell, they find a way to get the price lower. Short sale, raiding their savings (if they have any) or borrowing money, they find a way, and eventually the house drops to a point that it gets sold. It just takes longer.

What I don't understand is why the houses that have already been foreclosed on are remaining vacant? Banks are not good at selling real estate, they let the houses go to rot while vacant and still expect buyers to come in with high offers. In addition, as sad as it is to say, these foreclosures need to happen to correct the market. I feel for the people who, for circumstances beyond their control, have lost their homes to foreclosures, but I also believe that if the government steps in the stop foreclosure, they need to also step in to lower mortgage rates and increase options for first time homebuyers. It cannot be a one-way street to benefit only those in jeopardy, they need to help those who are trying keep the market going with purchasing power as well.

I have never been in a sellers' shoe, but don't they get an appraiser to evaluate the value of their home before listing their house on the market? Or do they just randomly pick a number (or suggested by RE Agent) off the air? Even with an appraiser's suggested value, sellers fail to grasp "a true value is what a potential buyer is willing to pay."

I have dealt with sellers who would have gained $100-200K from the sales, but refused to sell because of that extra $5000. Sometimes greed overshadows the other side.

I would have to assume that a seller is most likely also a buyer for another home - in the same market. So are these sellers trying to get their cake and eat it too (never understood that expression but you know what I'm talking about)? If they drop their price, they're most likely going to make it up on the purchase of their new home. No? Anyone with me? Against me? Let's hear it.

I am a prospective 1st time homebuyer and I am just waiting.... Waiting for prices to fall enough where I won't be over extending myself to buy a nice 3 bed 2 bath cape style house in a town with decent schools... My fiance and I are 26 and 27 make good money ($110k combined) and we rent for $1100/month that includes Heat... Why would we leave that to but a house for $370k that even with our pre-approved status of getting an FHA with 3% down and a 5.75% rate the monthly payment would be $2,715/month plus utilities... Remember we would have to pay PMI of $149.month taxes of $360/month and $60/month for insurance... $2,715/MONTH vs. $1,100/month with heat and total flexibility and oh by the way a lot more CASH!

We will wait till that house that is $370 gets down to $300k then the numbers work... better not ideal but they work better....

I find it baffling that homeowners seem to think that a 50-100% price appreciation in the last few years is reasonable, but a 10 or 20% depreciation in the value of their home in today's market is not. This is just delusional thinking. There's no fundamental economic reason why a house that was purchased for $250,000 in 2000 is worth $500,000 today. It's ridiculous and buyers know it. Buyers are rightfully afraid of investing in a home that is a depreciating asset.

Please no more subsidies for buyers, first time or otherwise. We already have far too many subsidies for the real estate industry, and all these subsidies do is feed into higher prices rather than helping with the alleged goal of making housing more affordable. The subsidies for homebuyers also discriminate against renters, and to what end?

Regarding appraisals, I think NI is right. It might be worthwhile to bring in an outside appraiser at the outset - someone who regularly does appraisals for banks - since it's going to happen at some point. We made an offer on a house that was well below asking mostly because a friend of ours, who was an appraiser, told us that the bank likely wouldn't give us a loan for their asking price - even if we were inclined to pay it. Banks are becoming a lot more conservative in how they are appraising houses - both in terms of verification as well as compensating for the falling market - and at some point their opinion becomes even more "real" than that of the owner, the agents, or even the buyer. (ps - the seller eventually reduced his price to our offer, but only after another 6 weeks and by that time our feeling was that the house's value had fallen even further!)

Ni (Post #3),
As an agent I know frequently the sellers are trying to push agents for a higher asking price. In a "strong" market the consumer would say "you just want to make your job as easy as possible." In this "bad" market those same consumers say "the real estate agent is way out of touch with reality and are telling the seller they can ask this crazy high price." No agent should ever "set" a price, because they are not the person with the property to sell. Sellers frequently attempt to push their agent higher and higher and in the end the agent gets blamed for the high prices. Secondly, the appraisal process is still significantly flawed as a result of guidelines that allow for too many variables in evaluating prices. Also, with the constantly changing pricing and the delays between offer and closing, it's very difficult for appraisals to come back as accurately as we would all hope.

Yep, seller prices are sticky no doubt. Eventually prices will come down, but I have to laugh at the people (like Yun) who call bottom constantly despite the obvious lack of a market clearing price.

The real estate market will stop dropping when sellers lower there price to a reasonable number. Which is around 3.5x their buyers income. That can happen slowly, or fast, but the result will end up the same.

I do think that a lot of sellers now think that the problem is a lack of buyers due to time of year, and the spring market will rescue them. We probably won't see big drops until the summer, when it is clear that is not the case.

Amazing how everyone has forgotten how it worked last time we went through this, in the late 80s/early 90s.

People sell for a variety of reasons, not just for financial distress. Another reason for sellers not dropping their price dramatically may be that some are simply not in a big rush to sell. Those who are approaching retirement age and anticipate geographic relocation or have become empty nesters feel no great pressure to sell quickly. They may have payed off the mortgage long ago or it may be trivially small. They have time to wait out the market. This group will continue to enlarge with time. Are there any surveys that document current sellers reasons for placing their homes on the market?

3 to 3.5x salary works if you have 20% down... I will tell you 1st timers like myself and poeople in my generation are graduating with $20-50k in college loans... this is a new issue because before the last run up in the late 90's 1st time buyers were buying properties for 185-250k and they had no student loans... People expect 20 year olds to buy houses for 350-400k with ZERO downpayment because we had to buy a car had to pay back our loans and save for retirement all at the same time.... Our salary $110k times 3.5 = $385k... at $370k with a 5.75% rate 30 yr fixed equals $2,715.... It has to come down more than that....

P.S. What happens when your wife is out of work for a few months or a year or 2 to raise an infant??? Or if you lose a job and are down to one income = Disaster.

To Matt-

If you don't have any $$ saved for a down payment, you will be out of luck even if you 379k house falls to 300k, as you will more than likely be denied a mortgage.

Banks want 10% down and credit score above 680.

LB,

We have already been Pre Approved with an FHA 30 yr fixed at 5.75% with 3% down (our scores are 785 and 740).... We are essentially the ideal 1st time homebuyer... We make $110k and have $55k in Roth IRA/401k plans but we have only $18k in cash... My point is that we are better off than 95% of the people our age and we can't swing $2,715 a month or really we don't want to... 300k we could more comfortably buy that house.

I just dont see how prices will stay at the current levels.

As another younger, first time home buyer, I agree that a greater market correction is in order. I talk to people in their late 30s/early 40s who bought starter homes in the late 1990s/early 2000s for under $200k. These same homes today are being listed for $350-400k+. Do people really believe the value of their homes has doubled in just over a decade?

I am amazed that when I look up what properties were purchased for on zillow.com and compare them to the current asking price in a "weak" or "struggling" housing market. One home in particular in the less well off section of a boston suburb that we are looking at was purchased by the current owner for $167k in 1999. Few improvements have been done to the property and yet it is being listed for $349k!

Most reading I have done on home buying and budgeting says you should not purchase a home that costs more than 2.5 times your annual income. For my husband and I, that amounts to a $305,000 budget- and we make over six figures between us! The median income in Massachusetts is listed at around $58k, and the average is around $72k- yet the average house costs $310k. How is that sustainable. Most people living in MA today would not be able to afford their homes in the current market.

If prices stick where tehy are or start rising again, how are young families expected to get a foothold?

Matt,

My wife and are almost in the same exact position as you with our income and ages. We to are looking at house and we limited our pre-approval to $350k. That $2,715 figure sounds just about right for what your monthly payment would be for your loan. PMI is the killer with the FHA loans and you usually have to pay about a point for PMI at closing with the FHA loan. I agree though, close to $3,000 a month for a house payment is ridiculous for a first time home buyer. $300,000 will bring your payment closer to $2,000 a month.

@ 5
Good luck with finding your pipe dream.
The only house you will find for 300 will need a lot of work.

Appraisers may help. That's because the new rules for "conforming Jumbo" loans requires that appraisers are randomly assigned to each transaction. No more relitters strong-arming appraisers to "hit the number that we need to make it work," or threatening to shut off referrals if they get an honest value instead. For these loans, relitters have lost control and are no longer able to corrupt the process. A good thing.

Oh, one other comment:

They have time to wait out the market.

Retirees certainly don't. Last down cycle lasted nine years until prices came back up.

George,

EXACTLY! 2k a month is doable. If people like you and your wife and myself and fiance start moving out Massachusetts is screwed...

Prices need to come down to keep people like ourselves here.

Tony,

There are plenty of nice houses that are listed for $370k now that I would love to own but only at the 300k range..

Great Quote from a Wall Street Journal article

- "Houses are easy to sell, at the right price."

Most of the recent homes coming on the market in Newburyport are going for 110k over assessed value.. It is crazy.

The value of any asset is what somebody else will pay for it. I dont care if its a pair of shoes, a lamp, shares of stock, or a house... the value if any asset is EASY price, not hard.

If you dont get your asking price, then you are asking too much. If you get multiple offers, then you arent asking enough. EASY.

Inventory is swelling because most home sellers still want more than assessment. I mean, are they nuts? We sold our home in a week, just this past month, because we asked for the appropriate price. Even Lambourghini's sell out in a week because demand supports their prices. It isnt about simply being expensive. Most home sellers simply want more than what the market will bear. Geeesh, how thick are the skulls of RE agents and home sellers? They should make battle armor of it.

The blogs herre are always so polluted by folks bitter that they can't get what they want. So they yell "correction, correction" all the time and can't imagine why sellers don't chop prices. The answer is: they lower if they have to, they don't if they can avoid it. Some sellers need to sell and have to take what they can get. Others have flexibility and time. And, if you have time you can wait for the buyer who "loves" your home and is not just a bargain hunter.

As for setting the price, the agent tells you what they think you should list for (a high price so they flatter you and get the listing) and then they start saying "lower, lower" and "take the lowball offer" and "the first offer is the best offer." All garbage. Brokers just want to do the deal and don't really care about your circumstances. Each seller needs to be responsible for their list price and their circumstances and do their own research. And you buyers need to recognize that not all sellers are desperate!

@11 (GB) - Hey, those retirees can wait til they die to sell. It is doubtful home prices will ever again reach 2005 levels, now that the USA is in a deflationary environment. The good news is that the old folks who want top dollar can in 20-40 years die owning their home, and take their dreams of selling a beat up home for huge profits to the grave with them and straight to the afterlife. They wont ever have to realize that a home is only worth what somebody else is willing to pay for it.

I don't know, I always get frustrated with first time buyers, and their expectations. I mean, I appreciate #5 wants a three bedroom house in a nice neighborhood with a good school system. I just think it is an unrealistic expectation for a first time buyer to get all of that. its about figuring out what your 2 or 3 non-negotiables are, and then compromising on the rest.

I mean, if you are looking for that in the immediate boston area, then you are talking about Newton, and you are kidding yourself. So, shoot for a condo, or a small two bedroom fixer upper, (MAYBE).

Or, head out west and get what you want, but with a 45 minute commute, first time buyers can't have everything, and they need to start being more realistic.

and, I don't understand why someone is confused about a house that was purchased in the early 90s, approximately 15 years ago, is now worth double. why does that surprise you??

Ugh, sorry to vent. Its just I bought my first place a few years ago, which was nowhere near as big as I wanted. But, I wanted to get in the real estate game so I made choices, meaning I chose location over size. Now, I just bought a small fixer upper in the same area, which is much closer to what I wanted originally, in the same area., and I've made money on my original property. I didn't whine about how expensive everything was, I set a goal for myself and I met it. Its not complicated.

Ugh,

The complaint is that housing is now a much greater percent of income than it was just a decade ago. People who bought homes in 1999 and paid $180k needed $36k for a down payment. Those same houses today are selling for $380k requiring a $74k down payment- and income has not kept pace with that. It certainly hasn't doubled- not even close. Another complaint is that people are trying to make hundreds of thousands of dollars on modest homes purchased within the last decade. Now I understand that they get what the market dictates, but it seems like the glut of homes on the market today may speak to the fact that home sellers are not willing to face the fact that this is not 2005.
First time buyer in Massachusetts today are facing a situation that their predecessors did not.

My husband and I have set a goal for ourselves too, but it is much harder to attain than the same goal was in our parents day. My parents and his are always commenting on how much tougher it is for their kids to "settle down" in a home than it was for them.

For some sellers its a matter of Cash Flow. They'd rather hold out for their price and keep making monthly mortgage payments while keeping their cash in the bank, rather than sell now at market value (a loss) and having to hand over the big chunk of change required to make up the difference in their mortgage payoff.

some sellers will try to wait for their price, but others will sell and move on. the ones who sell will set the new comps (lower) making the ones who wait look even more unrealistic. in a downward trending market, time is not on your side.

I don't like the demonization of 'sellers' in the above posts - the chances are, they are just like you - buyers of their next home and in a similar market - they want to buy their next house at a lower price while maximizing their current price - something I believe everyone would want to do.

The sad fact is that many of us own homes (second, third homes owned) that are out of the price range of first time buyers. Our recent buyer had to sell their home to afford ours, their buyer had to sell hers, and she had to sell her condo priced for first time buyers. There is a connection here that should not be ignored.

Why not keep renting if your can save over 1200 a month vs buying. Why is the law of our society that you must own your home before you can have kids or be happy with your life?

People didn't just all of the sudden start moving up from starter homes to larger ones. That process has been going on for ages. If this was truly the cause of the area's high prices, they would have been just as high (relative to incomes) for just as long. But they weren't. The doubling of prices occurred in the first five years of this decade - it wasn't a gradual rise that tracked incomes.

And what is this about sellers who can't afford to sell for less? Again, the doubling of prices occurred over the course of five years. Are we to believe that most people bought in the last five years? If not, they should have ample room for lowering their prices.

My wife and I (then we were not married) bought our home when we were 23 in 2000 for $150K by buying only what we could afford and avoiding PMI. We scrimped and saved to get the down payment and cash for improvements. We have since completely gutted the house and our incomes have more than doubled, but we still remain in this house.

Sure we would love a larger house with more land etc. but I refuse to buy another home East of Sturbridge MA, as someone correctly stated above, the value of an item is what someone is willing to pay for it. For me, I have zero interest in buying a 4 bed 2.5 bath home on half an acre for $450K+ in MA.

I feel for Matt trying to buy his frist home and wanting the ideal situation, and I hope it works out for him. However, I don't see the bulk of folks selling at $370K willing or able to drop to $300K, chances are if they purchased that house within 5-6 years, they paid more than $300K anyways.

There are plenty of houses on the market in the western suburbs for say $315K that were purchased by the sellers for $305K in the past few years, the house probably is worth closer to $275ish these days, but since their loan is probably around $290K they need to sell for above $300K to come out dead even.. So the house sits.

Steve

You don't need a 20% down payment to avoid paying PMI. You only have to finance 80% of the assessed value of the home. In other words, if you buy a home for much less than the assessed value you don't need to put 20% down to avoid PMI. An example is if you buy a home for $320,000 that is assessed at $360,000 you'd only have to put $32,000 down rather than $64,000 to avoid PMI. Banks never tell you this because they will want to paying PMI until you say something. It's up to you to tell them there is that much equity in the assessed value of the home.

Fluff... There is no justification for housing doubling. Money was cheap allowing banks to take on risky loans. Those people who bought high should be forced to take a loss or ride out the loan. If you want to speculate about housing costs as an investment then do so at your own risk. This is simple economics. Boston needs to be affordable to young famalies or they will go elsewhere.

A lot of sellers will sit on their house if they don't get their price. But many others are forced to sell.

Whether by death, divorce, job transfer, or foreclosure. Or they want to move and bought far enough back that they still aren't losing money at a real price.

And the price they have to sell will determine what the price is. Sure people can ask whatever they want - I could ask a million dollars for my car. But that doesn't mean anything about market prices for cars.

And I'm not bitter. I was a developer before the crash, and sold everything in 2005 to rent. And I will keep renting till prices correct, even though I have the money to buy (cash, no mortgage)

But frankly, if things go as they normally do, prices will not only correct, but overshoot. Look at 89-96 again.

Most of the houses that I have been looking at which happen to be in the 370k range were bought in the late 90's or 6 or 7 years ago. I am seeing that they were purchased between 180 and 250k. The thing is some of those folks have refinanced multiple times taking out almost all the equity available to them. The Mass Land Records website has an amazing amount of data. All you need is an address. You can find out the last purchase price and if they refinanced.

I see lots of price drops! Unfortunately it is those who were 50K over priced a year ago. Those sellers drop about 5k and now because of the declining market are 75k over priced.

For those that don't "need" to sell: Why have a house on the market in one of the worst downturns in the past few decades? There are better things to do with your time than keep an overpriced house in perfect condition hoping you'll win the lottery by selling to an uneducated buyer.

Charles - I couldnt have said it better myself. Nice.

People must learn, that the value of ANY asset is what somebody is willing to pay. Not what somebody would have paid.. in the past. And not what you *think* somebody will pay. It is what somebody would pay... today.

If you are selling your home, and you dont get any offers, there are only two possible explanations

1) You forgot to put up a "For Sale" sign.
2) You are asking too much. Meaning, you are asking more than it is worth, today.

Waiting for your home to "peak" in value again?
Consider gold. Some people waited to sell their gold in 1980 for the next peak. They had to wait over 25 years. Many of them died before it peaked again.

I don't know, I am a single income earner making approx what Matt and his fiance are making, and I am currently paying two mortgages equaling $320,000. So, again, I don't really know what to say to first time buyers who say they can't afford it other than rethink your lifestyle or your location, and also start saving. Home prices are not going to drop another 20%, and there is a good chance they will start going back up again (slightly) starting in 2009.

I stand by my earlier comments in that I think first time homebuyers are unrealistic in what they expect in a first time home. It's about getting in the game, not hitting a homerun the first time up at bat.

UGH, that makes no sense. Its like saying Bear Sterns stock was a steal at 30, because it was at 150 last summer. Of course it then went to 2....

If you google, you'll find that a LOT of people - not random commentators, but respected analysts, think that Home prices will drop another 20%.

It isn't too bright to buy into a losing game. Put another way, who thinks prices will go up this year? Answer, no one sane. In that case, there's no loss to staying out of the market. Worst case from the buyers side the market stays flat, best case the market goes down. Its a cheap option.

Charles, your comparison makes no sense, and explains why so many people are now losing their homes. Homebuying is not like buying stocks, and should never be treated in that same way. I think prices have dropped over the past year, and that makes it a great time to buy. (I will give you that I didn't point out this is obviously a longterm strategy - that is just the way that I think when buying property.)

I do think people waiting to buy just because it might drop another 20% is silly, I think a 20% drop is unlikely, and if you are buying for the long term, a small drop in shortterm prices should not be the deciding factor. think about it this way - what if I am right, that prices won't drop significantly over 2008, and may start to tick back upwards in 2009. People are passing up good opportunities right now, because they want to gamble

Ugh you contradict yourself at every turn. Housing historically ( long term ) has averaged 3 to 3.5x the means. The market is coming out of an unsustainable bubble. I have many friends in Real Estate. They all tell me the same thing. Once the first time buyers get priced out of the market then you are just shuffling properties and the market will go flat. Your theory that I should buy a cardboard box then trade up to a tent .... trailer.... run down raised ranch.... overpriced Colonial makes no sense. In order for me to afford a nice house for my family The market needs to keep returning double digit growth. Can I sell my cardboard box to a 20 something 10 years from now for $600K

Jay,

Not certain where I am contradicting myself. I have said since my first post that I think first time buyers are expecting too much, and that I think now, for long-term buyers, is a great time to buy. Prices are depressed from where they were a couple of years ago, I think there are a lot of great deals to be had, and I am sorry that you don't understand the concept of getting into the real estate game and then trading up (over the years).

For me, I bought my place seven years ago, and am getting ready to sell it. I won't make what I would have two years ago, and I don't care, I'll make a profit, I always thought prices two years ago were unrealistic and unsustainable. I've also already bought my new place, and was able to do so because I got it for significantly less than I would have two years ago. Prices have dropped, and waiting for the bottom could result in a losing game for a lot of people.

But, good luck with your particular real estate goals, whatever they may be.

Personally, rather than this silly squabble over personal theories, I'd simply be interested in eventually hearing how UGH's selling price compares to what his expectation was, and how long it takes for him to sell. Or to hear if he decides not to sell, and if so, what his reasons are.

That's all, folks.

Well, you should probably just skip over the silly squabble portion of my posts, and I'll try to answer your question (assuming I understood them correctly).:)

My expectation is that I will get 210k for my first time buyer condo, as one down the street that was 20% smaller sold a bit higher than that, after a slight bidding war in November. During the market hey day, I MIGHT have been able to get 235. I'll probably list it around 230 now, and take the first offer around 210. I have no idea how long it will be on the market - in checking other comps, 210 seems to be a more than reasonable expectation, but, who really knows?

If I can't get that, I'll probably just rent it out for a couple years. I bought it for significantly less than 210k seven years ago, so I can cover the mortgage pretty easily.

The question isn't what your expectation or plans are, but the reality of what really happens. Afterwards. Not now. And if you respond immediately, you're clearly not answering the question I'm really interested in.

Huh, well, as I said in my response, I may not be understanding your question correctly. However, I took a shot and made an effort. Not certain why you seem so angry that I took the time to consider and respond to what I thought you were asking, but to each his own.

Ugh everyone's experience is unique. I didn't buy a condo 7 years ago for probably $150K and selling it today for $210. My point was that same condo that you are going to sell 7 years from now will not be worth $336K 14 years from now 537K.
If you bought 2 years ago have negative equity you would be singing a different tune. I just don't understand how prices double in 5 years. Could you explain that too me?

Hi Jay,

I didn't say prices should double in five years - maybe that's where the confusion is. I said above that I don't think prices doubling in 15 years is that extreme. If I sold my condo for 210 today, would you be surprised if I sold it for 420k 15 years from now?

I agree everyone's experience is unique, and my posts haven't been about prices shooting through the roof in five years. My posts have been about prices being depressed in 2008, and it is a good time to buy for the long -term. You have to get in the game to play it.

My posts have also been about first time buyers wanting a solid three bedroom house with a yard and a good school system close to boston for 300k. I think those expectations are unrealistic.

Hi ugh, just a quick note- heck no I'm not angry, but I was just noting that you were jumping the gun on answering to my thought by stating what you thought would happen instead of waiting to post what happened at some future time. I mean, to me, the options for you are obvious. The unknown is what will really happen.

In a similar vein, it would be interesting to hear what happens to Matt et al.

Again, not what you think will happen, but what happens after the fact.

Cheers all.

First of all, I would like to address the comments regarding sellers who are asking too much for their homes. There seems to be an awful lot of envy in this blog. Sellers who have owned their homes for many years and are now at the end of their mortgage payments or have totally paid them off have much invested in their property. The sellers who are retired or who soon will be, want to get as much for their home as possible. It is none of the buyers business as to why these people are selling. YOU EITHER BUY IT OR YOU DON'T. I, for one, will wait it out. Sellers these days realize that the profit will not be as large as it would have been a few years ago. Have you ever heard of inflation??? Just as the price of everything goes up, houses will go up again too. The buyers these days remind me of the peoplke who wait at the dump to get something for nothing.
the second issue I would like to address is that "YES"--you can sell your home without an agent. Don't let anyone fool you. If you can take the stress---do it!!!

I am a seller and I won't be dropping my price any time soon. Keep waiting and paying your rent. I was a renter paying 1200 per month for a cramped apartment with shared parking, a heating bill that was too high, old appliances, no yard, etc. I wouldn't rent again for anything. And all you buyers that have waited for the past years - how much money have you spent in rent over the past two years $25K -30K? Looks like you could have used that towards a house. I think that the buyers out there are vultures and they actually are not interested in a good house only a good house that they can steal away. A lot of homeowners are waiting it out because the market is going to change again and you guys will be buying at full price except for the lucky few who might luck out on some poor guy who couldn't pay his mortgage. Keep waiting in your tiny apartments while we all sit in our comfortable homes and just wait. I think that prices are down about 50K in the last two to three years and that is just good enough.

I am 31 and my wife is 27. We have saved $140,000 in cash for a house downpayment. At this point, I think we will be waiting at least a few more years before purchasing a house. As a scientist I am accustomed to research and sifting through data and statistics. My conclusion is that house values have about 20% more to fall before they are in-line with historical trends and with the ratio of income:price. Granted, each location has its own supply/demand curve, but in general, I do not think 2008 is a good time to be buying homes. My best guess is 2009-2011 will be optimal. We have no problem paying our $1100 per month rent rather than $2700 per month mortgage. In fact, the extra money we save by renting goes towards investments, which will far outstrip home appreciation for the foreseeable future. I am predicting a shift in lifestyle in America as houses depreciate, U.S. dollar falls, and generation debt (i.e. Generation X and Y) begins to try to work its way out of student loans. I do believe we will see increased pricing of commodities and higher inflation than what we've seen over the past 20 years. But the inflation will be targeted inflation towards energy, food, and metals. Not housing. Historically over the past 100 years, houses have been very poor investments. Only in the past 15 years have Americans even thought of houses as investments. Regression to the mean is at hand.

Shoshanna, above, is an aspiring seller who calls buyers "vultures" and says she won't be dropping her price soon.

For future historians, I just wanted to point out she first posted on the boston.com forums complaining about her inability to sell her house in 2005.

A few excerpts from a sample comment from back in the day:

Just to let you know that the house prices are not going to go down too much farther than now - they have already adjusted and the only people dropping their prices like crazy are the people who already have a house and are carrying 2 mortgages!!! Stupid to do but it happens all the time!
....

Also, I have noticed that 1st time home buyers are among the pickiest and most ignorant of all the buyers. They think they can get a McMansion for nothing and most wont settle for a ranch or raised ranch they can afford and then trade up - they want luxury, luxury, luxury. And they want it now. They want the lexus and the master suite and the fancy cars and they don't want to save. They want it all and they want it now. And as for us homeowners, we are lucky to have our homes and we will not have a repeat of the 80's (totally different from now). So you people who are waiting and seem so happy about the price droppings, I hope that you realize that even if that does happen, you will get socked with the high interest rates!!

So sellers, don't panic sell! Everything is readjusting for the Fall and in the Spring it will go up again just like it has for the past 10 years....

http://boards.boston.com/n/pfx/forum.aspx?tsn=1&nav=messages&webtag=bc-re_mainboard&tid=48

Hi DT,

thanks for the follow up response.

I have an update on my condo. It was on the market for 3.5 weeks, and just went under for about 3% under my asking price, with a brief bidding war. Hopefully the close will go well. I am pretty happy.

I will say that I tried to price my condo appropriately for today's conditions. I never even considered listing it at a price that may have been applicable in 2005. I have also made a profit. I will also make about a 40% profit on my orignal purchare price, after paying all the fees. As I said previously, its about getting in the game with a longterm plan. Prices have dropped, and I think now, if you are buying for five years, you would be very smart to buy now.

My two cents.

So it looks like our good old friend Shoshanna has already waited through 50K decline of her house value over last 3 years. And she is eager for more. That’s the spirit!