As the recession becomes more severe and unemployment mounts, [would-be home sellers] fret each week their properties remain unsold, and fear losing equity. While buyers hunt for exceptional values [ed. isn't this GOOD?], sellers feel like hostages. [...]
James Bednar, a real estate agent representing buyers at DRI Real Estate Company in Ridgewood, N.J., said many sellers overvalue their homes.
“The industry has nailed into people’s minds that their houses are worth a certain amount,” said Mr. Bednar, who blogs about the New Jersey market at njrereport.com. “Sellers remember what neighbors sold their houses for two years ago and hold on to those unrealistic comparables. They need to accept the current reality of the market.”
Mr. President, you may want to take a line from Adam Sandler...
6 comments:
Well, they LIED to us about how homes were like the best investment ever, how they never lost value ever, how you would be a moron not to buy one, even for two years and then sell to someone else so you can upgrade just as people lease a new car every 3 years. So talking house prices down would prove they all lied.
The other way to think about it is do we actually want homeowners (and banks) to realise those losses? Right now they're just on paper much like our 401k and other investment losses, but it's not really a loss until you sell.
Who's 'they'? If it's the Bush admin., then Obama can simply reverse course. If it's real estate agents, who cares? Again Obama can just say the right thing.
So I only buy your story if 'they' is a whole lot of people, i.e., it's everyone who was making money during the housing boom. But those people weren't LYING, they actually were making money and the historical data bore them out. I'm pretty sure they believed it. But *that's the problem I'm talking about*. Again, the right policy for Obama would be to encourage those people to understand that they were wrong, that no sector of the economy can grow faster than all the other sectors forever. He's not doing it.
Re: your second paragraph, I assume you're joking :)
Adam Sandler: still not funny.
"They" referred to politicians, both demopublicans and republicrats, but yes, you could lump in real estate agents, mortgage brokers, lawyers, home inspectors, uncle Vinny, lots of people in there. And I don't think they ever put in the standard stocks/mutual fund disclaimer: past performance is not an indicator of the future. So I'm sticking with they lied. It ran like a ponzi scheme, as long as people bought, prices went up & everyone was OK.
I suppose the question to ask back would be what good would come out of talking house prices down? Cheap(er) housing for those without a house right now? They probably couldn't get a mortgage anyway. It would probably only benefit those with lotsa cash ready to scoop up deals, and they happen to be rich people (like Joe the plumber), who the democrats don't like anyway, that's why they tax them like crazy whenever they can.
Smiff - always putting things in context.
The point is to talk down *asking prices* to the point where deals are actually made. Right now there are a lot of people slapping unrealistic price tags on the houses and then sitting there waiting to sell. It's obviously going to be easier for would-be buyers to get mortgages if the size of the mortgages is lower.
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