The "distressing gap." The gap is due mostly to the flood of distressed sales, which have kept...


The "distressing gap." The gap is due mostly to the flood of distressed sales, which have kept existing home sales elevated, and depressed new home sales - since builders can't compete with the low prices of foreclosed properties.
Comments (16)
  • KJP712
    , contributor
    Comments (471) | Send Message
     
    Also,keeping the blinds drawn on the windows gives the illusion that the house is not really vacant.
    23 Apr 2011, 07:37 PM Reply Like
  • Derek A. Barrett
    , contributor
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    We've had some condo properties that will, in unsold units, intentionally keep the lights on and have large flat screen tv's facing out to the windows, trying to give the appearance that there are people living in them. These are large complexes with hundreds of units, but most of them unsold.

     

    One weekend the track loop that was feeding the tv's went out, and so the tv's were just showing that "snow" for the whole weekend, it was pretty hilarious.

     

    This has been going on for over 3 years in one particular complex.
    24 Apr 2011, 04:53 AM Reply Like
  • youngman442002
    , contributor
    Comments (5123) | Send Message
     
    They..the builders made thier money 5 years ago....get over it...
    23 Apr 2011, 07:43 PM Reply Like
  • cynic2011
    , contributor
    Comments (660) | Send Message
     
    They overbuilt back then and got paid early. Hopefully they invested wisely.
    23 Apr 2011, 07:59 PM Reply Like
  • Poor Texan
    , contributor
    Comments (3527) | Send Message
     
    The gap is bigger than they think. There are many homeowners who would like to sell their existing home or condo (downsizing due to age, retirement, need larger home for young family, relocation, etc.) but are not placing their homes on the market due to the lower prices . So they are standing pat, but are ready to put them on the market as (or if) prices improve. This will just continue the overhang of existing homes on the market.
    23 Apr 2011, 08:11 PM Reply Like
  • Leftfield
    , contributor
    Comments (4070) | Send Message
     
    This gap also includes people who are frozen in place who need to relocate to find jobs in this lousy job market.

     

    Since upside-down millions who cannot sell to relocate will need really to get jobs, any jobs, when extended unemployment benefits are no longer extended even further by politicians looking to cover their policy errors with taxpayer OPM, there figures to be another big wave of involuntary supply entering the housing market.
    23 Apr 2011, 08:29 PM Reply Like
  • 7footMoose
    , contributor
    Comments (2229) | Send Message
     
    Whose stupid term is "distressing gap"? This sounds like something dreamed up by the NAHB. There are about 7 million too many homes. Even accounting for the 500,000 being bulldozed in Detroit that is way too many. It will take some time before things reach equilibrium.
    23 Apr 2011, 08:41 PM Reply Like
  • phoneranger
    , contributor
    Comments (348) | Send Message
     
    The other problem is geographic. The model for the past 50 years has been to build new houses in suburbs and then exurbs further and further from city centers. Now with >$4/gallon gas that model is broken. So lots of inventory is located in places people really don't want to live in anymore. In Europe, where they have had higher fuel prices forever, it's the poor that live in the suburbs and the rich who live in the cities with the middle class in between. We will probably move in the same direction.
    24 Apr 2011, 09:28 AM Reply Like
  • Poor Texan
    , contributor
    Comments (3527) | Send Message
     
    Only partially correct. As people moved out to the suburbs, for the most part, they chose areas with mass transportation to the city core. The driving was limited to getting to the transit station. So the gas price increase isn't as sever as for those who must drive to work. The mass transit factor will slow your readjustment to city living.

     

    Another possibility is as prices in exurbs drop, a family with small children may prefer to have a home 'in the country' for the weekends but have an apartment or condo in the city. In a free country, the amount of individuality in decisions is huge.
    24 Apr 2011, 11:54 AM Reply Like
  • OptionManiac
    , contributor
    Comments (3503) | Send Message
     
    You're right. The suburbs were created by private mass transit owners who bought up property so they could radiate their lines outside the city. There is a move to return to urban living, many young people prefer it, and I think older retirees like to be closer to shops and restaurants.
    24 Apr 2011, 12:21 PM Reply Like
  • David Urban
    , contributor
    Comments (1031) | Send Message
     
    This may be bullish for the housing market overall. People throwing in the towel and giving up is the sign of a bottom.
    24 Apr 2011, 10:26 AM Reply Like
  • Ken Hasner
    , contributor
    Comments (425) | Send Message
     
    Around 2005 and 2006 I rented some office space which was right next door to a group of mortgage brokers....I could hear their phone touts every day thru the wall.....telling people their property would never decrease in value, how it was a no brainer, ect. etc.

     

    They were all driving $60,000 + cars and every day was a high five giving party....I don't feel for these scumbags one bit...they made their money and if they chose to squander it...then too bad for them and the others in the industry.
    24 Apr 2011, 10:59 AM Reply Like
  • OptionManiac
    , contributor
    Comments (3503) | Send Message
     
    NPR had a good program on that topic. They interviewed a guy who went from bartender to high flying mortgage broker. He lives back with his parents now.
    24 Apr 2011, 12:18 PM Reply Like
  • kwm3
    , contributor
    Comments (2454) | Send Message
     
    did anybody wonder why, if real estate always goes up, there is not an insurance industry product guaranteeing the price of your home--because that would be easy money if the premise were true. the fact there is no such product is because the premise is false, and that is or should be well known--but people have short-memories and delusional dreams about value. CA had a significant early mid 1980s bust with many builders filing bankruptcy, and there were alot of declines in the mid 1990s when i bought my home from a poor lady who lost about 20% over the course of 12 years of ownership.
    24 Apr 2011, 01:42 PM Reply Like
  • Duude
    , contributor
    Comments (3413) | Send Message
     
    The insurance industry likes sure things. They like to sell the sizzle but when you really break down the numbers as according probabilities and premiums paid it becomes clear the insurance company has a great racket going. It would be too hard to provide a low enough premium that would be marketable but still ensure the insurance company wins most of the time.
    24 Apr 2011, 05:34 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3503) | Send Message
     
    Not until WW2 did home prices outpace inflation, homes were never seen as an investment.
    24 Apr 2011, 05:44 PM Reply Like
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