Comments on: Pride Will Prevent Housing Price Drops

By: Matt

Matt — Mon, 11 Sep 2006 11:50:39 +0000

The theory might work in a market where buyers are still plentiful. But if the bubble truly collapses, that’s not going to be the market you’re in. What’s more likely is that you take the best offer you can find as soon as you can find it.

People selling houses are almost always either speculators (who are about to take a bath) or owner-occupants who find themselves needing to move. The latter group often have comparatively little notice, and if they can’t find a buyer before they have to leave town, they’re stuck making a mortgage payment on a house that’s sitting vacant, while also paying rent on whatever place they moved into while waiting for their equity to liquefy…assuming the bubble didn’t make all their equity disappear when it burst. There are very, very, VERY few people so wealthy that paying rent and mortgage (or two mortgages) at the same time on non-income-generating property isn’t going to be a powerful motivator to sell at any halfway reasonable price that’s offered.

By: Kevin

Kevin — Fri, 08 Sep 2006 22:46:20 +0000

Sorry, I’m not buying the theory. If someone is selling a home, usually it’s because they plan on moving or need the money. Either way, they aren’t going to wait forever. If after a period of time they get no takers, they’ll start to sweeten the deal with incentives or cut the price. Especially if they’ve owned longer than 2 years, since they’ll still make a heft profit anyway.

I would think the only people who wouldn’t sell are people who aren’t really serious about selling, or who bought in too high and cannot flip their home without losing money.

By: Khyron

Khyron — Fri, 08 Sep 2006 07:26:35 +0000

Let the alligator keep chewing your leg off. I’ll buy when you offer to pay me to take it off your hands. Or it gets foreclosed on, whichever comes first. (Maybe, if the bank isn’t acting stupid. Because if you won’t negotiate, the homebuilders will.)

By: CK

CK — Thu, 07 Sep 2006 21:15:05 +0000

I concur with Hawkmoon. No offense but only an idiot is going to leave the 5K on the table. Sure lots and lots of people are making these sorts of deals, but not to save face.

By: Hawkmoon Nine

Hawkmoon Nine — Thu, 07 Sep 2006 20:37:34 +0000

I don’t think many people will care what the neighbors think. They won’t be your neighbors anymore once you sell.

By: jim

jim — Thu, 07 Sep 2006 20:14:19 +0000

I wouldn’t but then again why do people buy all sorts of things entirely on credit just to keep up with their neighbors?

By: King Asa

King Asa — Thu, 07 Sep 2006 19:28:40 +0000

Doesn’t make sense to me. Are you telling my you would give up the extra $5,000 just so you could “save face”. Who cares what your home officially sold for?

I do understand the theory that current listing prices may be overinflated because the extra perks thrown in with the house aren’t subtracted from the end selling price…
but if the selling are throwing in perks that make the overall price more expensive than what they could sell for without the perks, then that is just stupid. Why do that… just so you can tell your friends your house sold for $500K instead of $480K, seems like a poor decision to me.

By: FMF

FMF — Thu, 07 Sep 2006 16:40:51 +0000

You’re off your rocker! (But I’m used to that).

To add realism to your situation, assume you’ve waited for 16 months at $500,000 to sell your home. Think you’d be a bit more willing to accept $480k, $470k, or even lower regardless what your neighbor sold his place for? I think so.

This is what I think will happen. Pride will keep prices up for awhile, but when homes stop selling at those prices, the prices will start to fall.

By: prlinkbiz

prlinkbiz — Thu, 07 Sep 2006 15:25:25 +0000

Pride might keep you from making money too. Who cares what your neighbor sold for? If you need to sell, you can make some money, and move on with you life, why would you care?
I only look for motivated sellers. I also base my pricing on square footage- thats the real story and where the money is. I know average price per square foot in the areas I look for houses in. I can see in two seconds if something is well priced, over priced or under market. Then I look at comps, and then I look at the house.

By: Brian

Brian — Thu, 07 Sep 2006 15:15:58 +0000

All makes sense to me. My father had great pride in the look of his house, inside and outside. His efforts were rewarded big time when he sold his house. He was very proud that he generated a huge profit. Why wouldn’t you want to protect the most personal valuable possession and asset that you own? You bet you would.

By: tiredbuthappy

tiredbuthappy — Thu, 07 Sep 2006 15:06:35 +0000

Good point, I wish there were more stats besides just sale price readily available.