Sunday, October 15, 2006

Sacramento Bee: Denial, Upbeat Talk, and Price Cutting Not Working

From the Sacramento Bee:

Patrick Maloney aims today to distinguish his house from 15,000 others on the market with a tactic typically used to sell cattle and farm machinery. He's called in an auctioneer.

"I'm trying to get out quick," says the Sacramento resident moving to San Luis Obispo. Last month Maloney put up a for-sale sign asking $293,000. But so far it's attracted only lookers..."I can see the handwriting on the wall," he says. "I don't feel like sitting here six months or paying a house payment on top of rent in San Luis Obispo. I thought about renting it out, but I'm not the landlord kind of guy..."

It's finally come to this in Sacramento's weakened real estate market. Denial that the boom has ended isn't moving houses. The upbeat talk of real estate agents hasn't worked. Even price cutting isn't working for many as thousands of houses languish on the market. Almost on cue amid the quiet desperation, auctioneers have begun elbowing their way into the sales scene...

"A lot of sellers have dropped their sales prices $10,000 and no one cares," says Keith McLane, principal of West Coast Home Auctions and former Sacramento land buyer for Texas-based Richmond American Homes.
From News 10:
Thousands of homes are up for sale in the Sacramento area, but buyers aren't snapping them up like they used to. Now a group of frustrated and desperate sellers are auctioning their homes hoping to hear the words "sold to the highest bidder..."

Keith McLane of West Coast Home Auctions has been in the business for more than 10 years and says home sellers are getting frustrated with the real estate market slow-down. "A lot of people are finding very difficult to sell their houses now," McLane said. "We've had sellers that have been in the market for three, five, six months and they're saying, 'Get me out.'"
Sacramento's NPR station also had a piece on home auctions. Listen here.
Home auctions As the housing market cools, home owners are trying different ways of selling their homes. Are auctions a viable option?
Also: Flippers in Trouble Turn To Auctions

10 comments:

Anonymous said...

I hear the minimum bid for Maloney's house is $169,000, dose anybody know what it went for.

I hear CAR will not put auctioned houses into their statistics, that just proves they are a bunch of crooks, scam artist, and liars.

CAR stands for the Communist Association of Realtors. CAR just minipulates the numbers, however now it is getting harder.

According to David Lierah, the market will come back soon, so why does Maloney feel so motivated to sell by auction. Because David Lierah is full of crap. The NAR stands for the Nazi Association of Realtors.

Lets face it CAR, NAR, mortgage brokers, realtors, appraisers, subprime market, have caused this housing market to get way over inflated and the pain is just now beginning. There will be a 50% downward correction and a lot of people will be broke due to these greedy SOB's. They are destroying our economy by causing people to actually belief taking on this much debt is good for them, because real estate always goes up. Unfortunantely in the down times and this down time will be EXTREME their are a lot of people and I mean thousands upon thousands who will never be able to recover and I mean never.

Anybody who feels they need to get an INTERST ONLY ARM IS A FOOL. I feel sorry for them that have fell into this DEBT TRAP set up by CAR, NAR, the subprime market, and individual realtors. These people will say anything, tell any lie to just to get a commission and they are destroying people's lifes.

arizonadude said...

anonymous,
You got everything right. The data is so twisted how can anyone believe the crooked numbers.All you can do is study the market and make your own decisions.

Anonymous said...

I liked this line:

"A lot of sellers have dropped their sales prices $10,000 and no one cares," says Keith McLane, principal of West Coast Home Auctions and former Sacramento land buyer for Texas-based Richmond American Homes.

As if a reduction of $10K on an overpriced $400-500K house is supposed to generate a bidding war! The sellers are already listing their houses 20% ($80-100K) above 2005 prices.

I think these auctions are going to (rather rudely) let the sellers know the true value of their homes. And as soon as every neighborhood in Sac has one of these auction sales showing up in the comps, maybe other sellers will get real and either lower their prices or take their homes off the market.

Anonymous said...

How many of these "crooks" do you think are in the same boat? I'm curious as to how many of these brokers/appraisers got caught up in the frenzy and themselves will be "caught w/ their pants down" in this freefall.

JR said...

Anon 7:05, & 9:36

Your diatribes against the NAR, CAR & "crooks" is a bit overstated. Most of the people in the real industry are hard working honest people. There was and is no big plot to inflate housing prices and fleece America. It does not benefit anyone, including the Realtors to go thru this imbalanced market correction. Your rant is a little to "tin foil hattish".

That said, there are many contributors to this overblown housing market, including a Fed policy of lowering rates, combined with new extremely loose lending standards. The "lenders" are really just middle men these days, who pass on the loans as securities to pension funds, life companies and other buyers. So you see the "lender" does not care about fraud, credit, LTV or owner occupancy. The NAR and CAR had very little to do with that factor. The Reators did on occassion, as you point out, take undue advantage of the situation for the sake of making a nice commission.

However, this situation is the culmination of a Perfect Storm, with many factors, but primarily easy credit. The one factor you have not mentioned is the buyer's responsibility. At some point, we must all examine our own actions. The fact so many GF's never stopped to say "Does this make economic sense?" is very telling.

I sympathize with all the new FB's out there, 'cause I was one in 1994. I had to suck it up and feel the pain, so to speak. It was a tough lesson, but it kept me out of the mess this time.

Anonymous said...

honest?
hard working?

and you're descriping Realtors and Mortgage Brokers?

LOL...

Yeah, and John Saca really knows what he is doing, the Earth is Flat, and Noah really built an Ark and put a TRex aboard

Anonymous said...

NAR and CAR fund the propanganda just like Joseph Goebbels funded NAZI propganda. They are completely at fault. Their armies of scam realtors and crooked mortgage brokers were part of their message machine. Their participation is going to cause economic ruin for the FB's 10 times more harsh than what you felt in 1994. We all know the realtors used puffing tactics and told these people if they buy and get into trouble later they can always sell. Now they cannot sell and they are screwed. To harsh of lesson for a lot of people.

When people borrow from the Mafia it is a crime when people borrow from sub-prime it is legal. What is the difference?

These people are con artist and the people that fell for the con are fools.

Anonymous said...

JR

Now please explain how an imbalance in the market hurts realtors? They have made billions!!!!

Realtors are victims what the hell are you talking about.

The victims are the fools and their misery is their own.

Maybe it is time for our society to get rid of the oldest profession in history prostituion/realtors.

drwende said...

Anonymous 9:36 -- As far as brokers getting caught with their pants down, if they were stupid or optimistic enough to buy property that's now dropping in value and/or losing money on rent, yes, they will be dropping trou shortly.

I know of one who is on track for bankruptcy within a year. As for others -- look up the Official Public Records for whatever county the realtor does business in. In most counties, you'll be able to see online the volume of the realtor's trades, though not the addresses or values of the transactions.

drwende said...

Goodness, I write unclearly. That's the realtor's own personal property purchases, not what s/he represents for others, of course.