My realtor-friend is a busy busy guy..

[SoCalDem]

People are "dumping" their houses in anticipation of them losing more value..

He had closings on FOUR houses last week..

One house had the price reduced $50K in a month..

The people had a "drive-by" offer last year for $650K (ridiculous in MY world)..they threw it in the trash.. Their house sold last week for $480K.

They were not in foreclosure, but just ready to bug out of California.. He said they were headed to Texas..

[nightrider767]

1. Send them to San ANtonio

Where a house can still be had for $90 a sq/ft.

Plus no state income tax.

[SoCalDem]

2. That may be why they are headed to Texas

the guy's a doctor, so I'm sure he could find a job :)

[gateley]

3. I've been watching the real estate in Seattle because I'm thinking of moving

back. I noticed one condo that was initially listed for $7,000,000 (talk about ridiculous) is "down" to 3,500,000.

There are still plenty of condos in downtown going for 10 million or so, and I doubt they'll get those asking prices, either.

Not too long ago, they would have.

Needless to say, these are not the properties I'm looking at for myself!

[Norrin Radd]

6. They are having to redub condos apartments here in Seattle,

as no one is buying them at those inflated prices. One friend of ours had to move out of her itty bitty apartment two years ago because the owners decided that they were "condos."

[gateley]

7. That happened in the 70's too. I heard someone say the other day that

not too far in the future, McMansions will become rooming houses. :scared:

[lapfog_1]

4. Greed...

same thing with the tech bubble.

Knew a guy that had been told by his tax accountant brother that he needed to hold onto his stock in Veritas for at least a year after he exercised his options (so he could pay long term capital gains).

His option price (strike price) was $16/share... at the time he optioned it, it was at $85/share (or a gain of about $70 per share, which if he optioned and sold on the same day, he would have had to pay about $26 per share in taxes at the regular income rate... he would have netted about $45/share on 20,000 shares... or $900,000 AFTER TAXES!).

But greed got to him. He didn't want to pay 36 percent cap gains, he wanted to pay 15 percent long term...
so he bought the shares and held on. Stock went to $75 and he sweated... but didn't sell, then it went to $60 and he didn't sell... then to $50, then $40, then $30... and it was at $15/share (under what he paid) when he finally sold... not only losing the $900,000 but having to PAY $20,000... but at least he didn't owe anything on the taxes!!!

I kept telling him to sell and pay the taxes... lock in his gain, but NOOOO... I was the dummy. He knew it would come back if just waited a little longer...

That's where we are at in the housing bubble now. Prices are starting to deflate so rapidly that like a deer in the headlights, the greedy homeowners who had ALL THAT paper equity wealth are now stuck. And too depressed to realize that they will be stuck WORSE if they don't do something.

Hence the turn down of the $640K offer last year and now the sale at what, like near the purchase price if they are lucky so they can skedaddle out of California.

Sigh.

[nightrider767]

5. Real Estate is no longer the " Investment" that it was

I think the new dynamic in buying will be people purchasing homes that they can afford and is a proper value as a living expense not as a retirement fund.

More of a traditional strategy. Find out what you can comfortably afford, and maybe pay a small amount above that, if you think your job is safe and your salary will go up.

WHich brings to mind the secret tragedy of this downturn. All those people who over-bought on the assumption that the market will continue rocketing up. Those people who are paying way too much money into their 1000sq/ft, 2 bdrm, one bath, $450,000 mansions, are now seeing their money go down the toilet on a monthly basis.

Many of them can still afford their mortgages, but they are so upside-down investment wise , that they are simply walking away from the property...