Comments on: Who are Investors Going to Sell Homes to Now?

By: James Boyer Summit NJ

James Boyer Summit NJ — Thu, 14 Aug 2008 21:20:27 +0000

Part of the issue is also that many of the lenders out there just do not want to lend. At least not to the public.

By: jc in c'ville va

jc in c'ville va — Fri, 08 Aug 2008 20:13:27 +0000

20% DOWN !?!?!? You have to be joking. Just bear with me for a minute as this is something that is a repeated statement that has been really getting my goat recently.

December 2000:
I made $30k a year
Average house in my area about $80-100k.
20% down = $16-20k ~ 66% annual salary (few years of serious saving)

December 2007:
I make $60k a year (after some serious negotiations).
Average house $380K
20% down = $76k ~ 127% of my now DOUBLED annual salary.

PEOPLE NEED TO SAVE ? Save what? Some of the frivolous cash flying around.

Lets look at what cost more in the last 8 years:
———————————————————————————–
FOOD (rice alone since 2006, 217%)
———————————————————————————–
ENTERTAINMENT—my cable bill more than doubled 3 years ago before I got rid of TV in the house.
———————————————————————————–
UTILITIES—electricity 18% this year alone
———————————————————————————–
AUTO GAS—over 250% since 2000
———————————————————————————–
RE TAXES— 12-18% yr/yr, my house in assessed in 2000 @ $85k 2007 $200k
———————————————————————————–
FED TAXES—That raise put my family in a whole new tax bracket =)
———————————————————————————–
AVERAGE HOUSE PRICE – just look around
———————————————————————————–

Now I DOUBLED my salary in one year, how many Americans can say that they have managed to do that in the past DECADE.

The only thing that has NOT gone up significantly is the salary, = purchasing +saving power, of the average American citizen.

S0…
Without an appreciating house to sell, or a rich dead uncle, where does the average person plan to get their 20% down payment from.

If I have to save till I am 50 just to put the down payment on my house, how do I plan to pay the 30 year mortgage?

On my fixed income retirement?
How about using my 401k that has tanked over the last few years?
Oh I know, social security! That ought to be viable in 2030.

No, I’VE GOT IT. I’ll get a nice job at Wal-Mart like many sneior citizens making MINIMUM WAGE!

Even if you have the savings where are you gonna keep it?
In the 401ks that are taking a beating?
In the banks that are losing billions and being taken over by the Fed?
How about under your mattress, those depreciating greenbacks ought to be worth a lot in 30 years what with the rising price of toilet paper.

Truth is we have all become greedy, greed is what drives the US economy. When we hurt the whole world hurts.

Unfortunately, I am at a loss as to how we turn the clock back on this whole shell game. But while the average American is trying to feed and shelter themselves all while PAYING MORE for the privilege of going to work too actually make less. Where exactly are we supposed to save 20% down payments for $200k-400k houses?

By: Links for August 07 2009 | Real Central VA

Links for August 07 2009 | Real Central VA — Wed, 06 Aug 2008 17:01:43 +0000

[...] Who are investors going to sell homes to now? [...]

By: Colin - Florida Property

Colin - Florida Property — Mon, 04 Aug 2008 15:07:51 +0000

I’d echo rehad702′s comment. The few years up to 2006 were abnormally good and we’re now (possibly) getting back to more normal times. It’s a problem in an instant-gratification society, though – who wants to “work and save” when they’re used to getting what they want when they want it?

By: Albert

Albert — Mon, 04 Aug 2008 05:21:03 +0000

Thanks for the great articles. The same is happening in South Africa. The intertest rate in South Africa is sky high so the house rental industry is booming. People in South Africa can’t afford to buy right now. I guess it’s the current trend in the industry.

By: Chris Lengquist

Chris Lengquist — Sun, 03 Aug 2008 15:44:41 +0000

Of my last 5 closings 4 had 20% down payments and two of those were first time home buyers.

There are buyers out there with money. You just have to find them. Now is not the time to pull back on marketing whether you are an investor, realtor or seller.

By: Rehab702

Rehab702 — Sat, 02 Aug 2008 16:36:58 +0000

Does anyone remember the time when people actually had to work and save for a down payment? I think that the discipline required to do that also taught people financial responsibility. That isn’t such a bad thing.

By: azlandlord

azlandlord — Sat, 02 Aug 2008 16:07:19 +0000

As much as it has impact our business as agents and investors, I agree with rehab702. It will take time but people who desire homeownership will adjust to the fact they have to save a down payment and it will become the norm again.
Agents and investors will evolve and adjust too (once we stop complaining).

By: Nadine

Nadine — Sat, 02 Aug 2008 15:20:51 +0000

The property industry is getting really tough. Both seller and buyer are in difficult position.

By: Mike Taylor

Mike Taylor — Sat, 02 Aug 2008 10:02:39 +0000

The elimation of DPA is going to have a huge impact on the lower end market. This has effectively just taken a huge chunk of people out of the buying pool. Although this will hurt, I simply cannot find a reason not to eliminate it.