Trend of single family home prices dropping hard in "non-hot markets"

[CKN]

There is a law in California called Specific Performance. If they offer you full price you have to accept. It prevents discrimination. But if there are multiple offers-you don't have to accept the full price one if there are others OVER FULL PRICE. If you accept one less that full price-then yea a lawsuit is coming if there is on at "FULL PRICE".

There were multiple offers-all at the same time on the home I purchased in Utah nine years ago. It was a foreclosure. I made an "over full price" offer-as did somebody else-they offered the same price. The Realtors decided that who ever had the best credit rating would get the house. I won.

 

[RhondaHonda]

Those S Class Mercedes are going to be filthy driving on the gravel roads in Ramondville! I think that house was just overpriced for the area.

 

[PandaBear]

If I offer to sell something at a certain price, and someone shows up with a qualified offer, cash, etc. at that price, I think I'm legally obligated to sell it. Otherwise, I can expect a lawsuit. And if the prospective buyer is a member of a protected class, probably a civil rights violation. I'm just saying it's risky to list something too low thinking/expecting a bidding war.

Happens all the time, people offer asking but was declined due to minor things like contingency or other stuff. In the end people usually don't do this often of course, and those who do way low listing usually know for sure it is just a teaser and they will get multiple offers.

 

[CKN]

It’s called a bubble, not hard to understand

People paid two to three times more than they should have because of foreclosure bans binding up the market

Here's when the eviction ban, foreclosure moratorium and other Covid consumer protections expire

Financial protections keeping many households afloat throughout the coronavirus pandemic will end in the coming days and weeks.

www.google.com

https://www.washingtonpost.com/business/2021/08/01/tsunami-deferred-debt-is-about-hit-homeowners-no-longer-protected-by-foreclosure-moratorium/

Now we have business as usual opening up allowing for eviction and foreclosure.
My county alone right after July 4 had its first auction in a year with 30 tax foreclosures up for sealed bid, monthly home sales varied from a low of 8 to a high of 80 the last year and a half in this area so that’s a big hunk of real estate.

Add to this the wealthy coastal buyers that have messed up rural real estate are being forced back to the office or they have to get a job paying a tenth their current wage and they are facing foreign rental squatters

Redirect Notice

All in all a big mess, some areas will be driven even more expensive and others will loose big time.

Some areas are truly in demand and don't have the fundamentals of "a bubble". And those will become more expensive.

 

[Wolf359]

If I offer to sell something at a certain price, and someone shows up with a qualified offer, cash, etc. at that price, I think I'm legally obligated to sell it. Otherwise, I can expect a lawsuit. And if the prospective buyer is a member of a protected class, probably a civil rights violation. I'm just saying it's risky to list something too low thinking/expecting a bidding war.

You don't have to give a reason. They can sue you for whatever reason. You're not legally obligated to sell anything. You can always take your time thinking things over til the offer expires. You can always throw in additional terms/demands.

 

[Wolf359]

There is a law in California called Specific Performance. If they offer you full price you have to accept. It prevents discrimination. But if there are multiple offers-you don't have to accept the full price one if there are others OVER FULL PRICE. If you accept one less that full price-then yea a lawsuit is coming if there is on at "FULL PRICE".

There were multiple offers-all at the same time on the home I purchased in Utah nine years ago. It was a foreclosure. I made an "over full price" offer-as did somebody else-they offered the same price. The Realtors decided that who ever had the best credit rating would get the house. I won.

Can't seem to find it. Specific performance usually requires you to perform to the contract. A valid contract in real estate requires a signed contract and earnest money. No signed contract means you can't be sued for specific performance as there's no contract to enforce. Must be called something else or it's some other law. Even if the seller doesn't accept the agent could sue for the commission as the contract usually states that their job is procure a ready, willing and able buyer and if you reject the offer, they still did their job and should be paid.

 

[CKN]

Can't seem to find it. Specific performance usually requires you to perform to the contract. A valid contract in real estate requires a signed contract and earnest money. No signed contract means you can't be sued for specific performance as there's no contract to enforce. Must be called something else or it's some other law. Even if the seller doesn't accept the agent could sue for the commission as the contract usually states that their job is procure a ready, willing and able buyer and if you reject the offer, they still did their job and should be paid.

One can also be sued for interference with an existing contractual relationship. For this type of lawsuit to be successful you must prove the existing valid contract, knowledge, intentional acts to interfere with the contract, actual interference and damages.

Remedies for breach of contracts include damages, specific performance of the contract despite its breach or rescission of the contract. Real estate contracts often provide for liquidated damages, i.e. a specific amount of damages to be paid, in the event of a breach.

https://www.hg.org/legal-articles/real-estate-contracts-in-california-the-law-what-makes-them-legal-and-damages-in-the-event-of-their-breach-5563

I'm not a Lawyer-maybe it's another law. But here is the rub-all things being equal you don't have the right to sell your house to WHO YOU WANT TO. There are laws to prevent discrimination. And they are Federal Laws.

 

[Hall]

Not applicable in our little town. Neighbor across the street listed their house for $110,000 more than we paid for ours in late '19 and it was off the market within 3 days. Haven't spoken to them yet but based on other sales, odds are they rec'd offers for more than their asking price.

The irony is, about 2 weeks before they listed it, the wife posted in the local FB groups looking for a house or rental with 2+ bedrooms, pets allowed, and within the same school district. Feedback I saw was "nothing is available". Now after they have sold, she posted asking if anyone knows of land (X+ acres zoned residential and in the school district). Personally, I think they got greedy jumped the gun and now it might bite them. Obviously they had plans to buy land to build a house on but took advantage of the crazy selling prices of houses and a) may have nowhere to live and b) can't find land to build on.

 

[reemoeMO]

RE: Raymondville, per Wikipedia: The median income for a household in the town was $16,806, and the median income for a family was $21,667. Males had a median income of $22,500 versus $14,063 for females. The per capita income for the town was $10,500. About 30.0% of families and 30.2% of the population were below the poverty line, including 40.0% of those under age 18 and 27.3% of those age 65 or over.

 

[Hall]

The Realtors decided that who ever had the best credit rating would get the house.

How do realtors access credit ratings ?

 

[jimbrewer]

My feeling is that any forthcoming interest rate hikes will hit home prices pretty hard in a lot of markets. A $2000 month home tends to want to stay a $2000 a month home.

Yeah. The creditworthiness of the buyers is OK, but I don’t see incomes rising to allow for additional big price appreciation for a few years.

 

[CKN]

How do realtors access credit ratings ?

Through their friendly neighbor hood mortgage broker.

 

[Hall]

Through their friendly neighbor hood mortgage broker.

I understand that credit checks for mortgages don't show up as multiple, individual hits - the credit agencies allow them to be lumped as one (for a period of time). Anyone confirm that is accurate ? If so, someone can sneak in a credit check without it showing up ?

 

[CKN]

I understand that credit checks for mortgages don't show up as multiple, individual hits - the credit agencies allow them to be lumped as one (for a period of time). Anyone confirm that is accurate ? If so, someone can sneak in a credit check without it showing up ?

If you get certain credit card offers in the mail-I think they get them under the "sharing information" clause from credit card companies whom you already do business with. A simple google search provides a clearer answer to your question-

Can Someone Run a Credit Check Without My Permission?

The Federal Credit Reporting Act (FCRA) limits who can check your credit. Learn more on who can access your credit report and how to know if it was checked.

www.experian.com

 

[JHZR2]

My feeling is that any forthcoming interest rate hikes will hit home prices pretty hard in a lot of markets. A $2000 month home tends to want to stay a $2000 a month home.

That’s really it, IMO. Maybe all this inflation will in time “raise” wages, but unless that’s the case, people need to actively consider what portion of their income, and what sacrifices to quality of life, they’ll make to spend a greater percentage of their take home, or else many
of these markets will drop. Either there has to be endless population and opportunity (NE Corridor), population movement (TX, NC, CO, etc), the prospect of a quality of life and salaries (CA) or else what? A $500k house in the boonies is enabled by low taxes and being in the bookies with a concept of growth. When the folks move in from places with more
services and better schools, and expect that stuff, and drive taxes up, the incomes have to rise in a commensurate manner or else values will drop.

Interest and taxes decide buying power in most places.

 

[Fitter30]

raymondville Missouri is one of the most economically depressed areas of the state, my in law is there.

They price and advertise nationally hoping to get rich retirees, building their homes is the best job in the area.

Not for everyone's taste, lots of driving if you want city things.

Rod

im 40 miles from there less than 400 people in the top 5 of poorest counties in the state and very rural.

 

[javacontour]

Depending on where in Dallas County, the property may have some value. Bennett Springs State Park is partially in Dallas County. But unless the property is near the park or has a ton of land, it's hard to see it worth that much.

 

[PandaBear]

Starting to see the B/B- condition homes sit for > 14 days now. And this is in a very hot Bay Area market. These are homes that would have seen 5-10% above asking offers within 7 days in May/June.

Summer is the Real Estate season when people move to minimize impact to kids' school year. School is starting soon, so it make sense things are slowing down volume wise.

However I do see the stock market seems to stabilize and other than a few stocks they are not going to the moon again this summer. Since a lot of the RE money comes from stock sales and vesting, it make sense things are starting to cool off.

 

[Job]

Seems risky, because if nobody bids and a full price qualified offer comes, the seller is legally obligated to perform.

On the topic, I saw a big jump to the point of unreasonable prices in my area. But it seems to be softening a bit. I'm waiting for the real bubble to burst. A end to the moritoriums on evictions/foreclosures, the end of free money, people have to return to work and live within budgets, etc. Actually live near where they work, not where they collect unemployment and stimulus, etc. The soon end of near free loans and financing. I don't see the pricing of the last 12 months as sustainable whatsoever. I'm anticipating a 2009-2011 type correction in the near term, in 6-18 months.

You can be the only bidder and offer a hundred times the asking price and the seller doesn’t have to do anything. Not legally obligated in any way.
I never look at a house as money but a place to live or a place to rent to someone else to live. They can keep all the emphasis on money in this new age. It’s all people seem to think about and the more they have the more they think about it.

 

[Wolf359]

How do realtors access credit ratings ?

Depends on the Realtor. We also do rentals so we can do a credit check through the office. They've been going up in price, used to be about $15 for all 3 scores now last time I did one, about $22.10. I do them occasionally for landlords and just charge $35 just as a favor, hardly make any money doing them. I think you can get them for about $20-$25 for just one credit bureau. I think I did one once and the guy called me up a couple years later wondering why I did a credit check on them, but they were a co-signer and they had forgotten they signed the form authorizing us to run the report.