I recently sold my house to move to Little Rock. Because I didn't want a contingency sale, and end up with two mortgages, I decided to sell first then buy. All I can say is "WOW, the housing situation is depressing!" People either paid top dollar for their homes or overpaid, or people just think their heap of crap is actually worth more than it really is. Now, they are putting these homes on the market and asking more than they are worth.

I have found several houses that I wanted to make an offer on, but after having two appraisers pull comparable values, there is no way I could offer near what the sellers were asking. I made an offer on one and the seller's agent said the seller was insulted. People are still in the mindset that they can either make a few quick bucks by overpricing, or they are trapped in a home they overpaid for a years back. It is seriously depressing.

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"...it will take 20 years to recoup the $6 trillion of housing wealth that has been lost since 2005. After adjusting for inflation, values will never catch up."

Buying a house will still have its rewards, of course, such as getting equity and eventual ownership for yourself instead of your landlord and, as the writer notes, an inflation-protected asset. But, yes, the problem with "the wealth that has been lost" after any eco-manic bubble bursts is that the value never existed. It was imaginary.

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I agree, government cheese. It seems as if selling homeowners think that Arkansas (or their house particularly) is exempt from the financial woes everyone is facing. I see houses way overpriced in the city - and don't get me started about other cities in the nation, where homeowners think that because they paid WAY too much in the first place that the house is actually worth it. It's strange how people will hold on to a house that is taking them down financially instead of minimizing the loss and walking
away from a bad situation. As the article says, Nevada/Vegas will not recover anytime soon, but you don't see the housing prices dropping drastically either to encourage buyers. These same banks that got us in this problem in the first place are the same folks not doing anything to get these vacant houses off their books. It's a cycle that isn't going
to be broken anytime soon.

I just wish the government had put some rules on the banks - such as mandatory refinancing, etc. - before giving them our tax money. Who benefitted? The banks that got to shore up their reserves, not the people who are drowning in debt.

FYI, I rent. Thank goodness. I am not burdened with a debt I can't pay, a house I cannot sell, and a job in a location I can't leave because of the house and debt.

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Let's not forget the government's role in pumping up the bubble at the behest of the Real Estate industry. What if every industry succeeded in making the interest to buy their product tax-deductible? What if every industry had a government bank to buy up the loans that no commercial institution would touch?

To me, the entire thing is just another example of how lobbyists influence government and create corporate welfare. Essentially our tax dollars create commission checks for realtors.

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May I make a couple of observations?

Real estate values, as with anything else that is bought and sold, are determined partly by supply and demand.

"Fair market value" is determined by what a willing seller will accept from a willing buyer.

There is no arbitrary, intrinsic, absolute "value" in real estate.

You can say that houses that sold for high prices a few years ago were "over priced"; but they sold at "fair market value"--what willing sellers accepted from willing buyers.

Each piece of real estate still has its relative "fair market value": what a wiliing seller will accept from a willing buyer. It's not the value of the real estate that has changed; it is what constitutes "willing" that has changed. The MARKET has changed; the real estate is the same.

As for "the sellers being offended by your offer," that's an old trick used by UNSCRUPULOUS real estate agents in an effort to get you to raise your offer.

Any knowledgeable and ethical agent would have the seller COUNTER your offer in an effort to negotiate an agreement. When a seller is "offended" by your offer and REJECTS it, negotation stops and everybody loses. The buyer loses a house, the seller loses a sale, and the agent loses a commission.

My recommendation? Find another agent.

IMHO

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The agent works for the seller, by law. Even if you have your own agent, they work for the seller. Check it out. They have to disclose that and sign a buyer's agent contract to work for the buyer.

The market was rigged, crooked by Wall Street and the Congress. The bubble was created by creating a market for mortgages as an investment. This mortgage market drove the unscrupulous selling to people who could not afford homes to create mortgages and the skyrocketing values in the "bubble" market was essentially a pyramid scheme that had to end. The banks can bail out the home owners because they are holding what are essentially worthless mortgages. There are still plenty held off the market to keep the price from plunging. The banks were essentially looted by Wall Street.

The market can't 'recover' because we have too much housing stock for our population. We are a nation in decline. We have been since Reagan started this voodoo economic game. You may remember the first time this was played when they looted the Savings and Loans.

Next time you see another get rich quick bubble, get in early, get out early, and sell short at the end. Bleed the suckers baby! It's the American way, to decline that is.

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Let's not forget the government's role in pumping up the bubble at the behest of the Real Estate industry. - Roland

Let's not forget this is how every ponzi scheme is playing out - the rich own both parties. Until we throw out these bums and demand public campaign finance only as well as a restored and enhanced fairness doctrine - we will be played.

Slap a republican and kick a democrat - make them vote Green this year.

Otherwise give them John Brummet's phone number... he knows the best place to buy a centrist love seat or fainting couch.

I moved back to Arkansas because it's home and I love it... and because I could buy a nice four bedroom home in paradise on a seven year mortgage... purchase price less than ten percent of what i would have paid over 30 years for the same home in the lovely Pacific Northwest.

If you are buying a house you can't put on a 15 yr or less mortgage... you are paying way too much and giving up decades of your life/work to do so. Houses/property are like anything else in our lives... the government (or banksters or insurance company) can take it at any time... and you damn sure can't take it with you when you check out. Why dedicate 30 years to a ponzi scheme like that?

These people don't own a home... they barely possess the paper.

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@FullThrottle: "The agent works for the seller,"

There's no question about that. And it is the law. But that's not my point.

I mentioned "unscrupulous." I had one when I was the seller. She told me that her potential buyers had been insulted when I didn't accept their offer. And that's where she left the matter She acted as if I should offer to sell at a lower price. She did NOT bring a counter offer from her potential buyers. For all I know, she told the potential buyers that I was insulted by their offer.

I began to learn a LOT about real estate shortly after that. Later sold the house myself, with seller financing, etc., etc., etc. Then did that with a number of other properties. And many years later my wife became a real estate agent, so I'm pretty well aware of how the system works.

Legally, the listing agent represents the seller. But the agent has to work with BOTH seller and buyer to make a sale. Her/his primary responsibility is to the seller, but s/he does the seller no favor if s/he simply says, "Screw the buyer!"

The salesman at the car dealership represents the seller too. But s/he won't do much business for the seller if s/he operates with a "screw the buyer" attitude.

Remember, there is no seller until there is a buyer. The one with the money is the key to the sale. You can "represent" the seller all you want to, but until you arrive at a point that the one with the money is willing to part with it, NOTHING HAPPENS!

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I'm with Eureka Springs. Thirty year mortgage? A fool's game. Do the math. Yeah, we had a thirty year mortgage, but I made sure we had the option to pay early as we could. And we found we could big time, just by scrimping a LITTLE bit here and there. Been out from under it now longer than we were paying. The other way? Another 16 years or so. Of course the other part of the equation was that we built the new house we needed as we headed toward retirement. No McMansions around here. And I can't imagine keeping one up as one or the other of us recuperate from one thing or another.

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@Doigotta: "Thirty year mortgage? A fool's game."

In a sense, I agree. It is a fool's game for people who can afford higher monthly payments. But it was the only realistic way for people with marginal incomes to achieve home ownership.

The higher the monthly payment, the shorter the term of payment, the less interest paid. Anyone who knows anything about installment purchases understands that. But understanding it and being able to take advantage of it are two different things.

At one time in my life I leased a car and later bought that car; the most "expensive" car I ever bought. But at the time, I didn't have the capital for a down payment, let alone to pay cash, so I leased the car because I was a "traveling salesman" and earned my income on a monthly basis. The amount of the monthly payment was the key issue in the transaction, not the price of the car or the total amount I would ultimately expend.

Same thing for the thirty-year mortgage. If monthly income is the key issue, then the longest-term mortgage available is the biggest help possible. When you buy a house on credit, you have your choice among the four variables: principal, term, interest, payment; but you can't have ALL of them, unless you have adequate capital. If you can pay cash, you can junk the variables--all except the principal.

The thirty-year mortgage costs you way more in interest in the long run; YES! But if you can't make higher payments, the alternative is to rent. And at the end of thirty years you have a collection of rent receipts, not a house.

Granted, people need to go into these transactions knowing what they're doing; but even knowing the conditions, sometimes circumstances alter cases.

When I was a family money management consultant, I did all I could to educate people on these matters, as well as many related ones. But I was disappointed to find that many people were not interested in learning very much about family money management. The typical attitude was, "If I have money and want something, I'll buy it." They were more interested in instant gratification than long-range planning, and certainly more interested in satisfaction than security.

It may be cynical, but I'm inclined to conclude that America's religion is materialism and its god is money.

Upon our money we print, "In God We Trust," and by and large that's the god we trust in.

IMHO

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