Archive for Monday, January 22, 2007

Housing market downsizes

Smaller increases in valuations shrink tax bases

January 22, 2007


Mayor Mike Amyx knew this news was coming.

As a follower of the local real estate market, Amyx has been hearing for months about Lawrence residents struggling to sell their homes.

"You hear the stories over and over again that people aren't getting anything close to their asking price," Amyx said.

Douglas County Appraiser Marion Johnson released projections this week that estimate existing homes in the county likely will grow in value by only 2.5 percent in 2007. That's far short of the historical Douglas County averages of 5 percent to 7 percent per year, and well below the double-digit increases that have been common in many neighborhoods.

Johnson also said some homeowners should be prepared to see their home values actually decline from where they were a year or two ago.

"We probably have had to adjust more values downward than we've ever had to since I've had the job," said Johnson, who has been the county's appraiser since 1991. "For values to go down, it has been rare in Douglas County, for sure."

It all adds up to good news for buyers, bad news for sellers and likely belt-tightening news for elected leaders who rely on property taxes to fund city, county and school district budgets.

"We're going to have to look at all these spending requests we get in a whole new light, or else we'll have to talk about a mill levy increase," Amyx said.

Caught in the middle

While local elected leaders are worrying about what their budgets may look like, Dale Roubison is worried about the here and now.

Roubison has been trying to sell his house at 1309 Stonecreek Drive for 13 months. His original asking price was $365,000, but now it's down to $338,000 for the four-bedroom, three-bath custom-built home. That's $18,000 below the market value the county has placed on the property.

"I had to drop it down because I wasn't getting anybody to offer anything on it," Roubison said. "I think it will bounce back, but I'm stuck in the middle of a bad time right now.

"I had no idea it would take this long to sell. I thought it would sell in a month or two for the price that I was asking."

Most years, Roubison probably would have been right. Historically, homes in Roubison's price range have sold in 30 to 60 days in Lawrence, with lower-priced homes many times taking less than a month to sell.

But in 2006, the average time an existing home stayed on the market was 102 days, with higher-priced homes often taking more than 200 days to sell, according to statistics compiled by the Lawrence Multi-List Service.

Lawrence real estate agents say the moderation is part of a nationwide slowdown in the real estate market. Gary Nuzum, president of Coldwell Banker McGrew Real Estate, said the slowdown was a natural reaction.

"We had five to six tremendous years, and there is just not a lot of pent-up demand," Nuzum said. "That time period really opened the door to home ownership for about anyone who had any aspirations to buy a home at all."

Nuzum also said a brief spike in interest rates caused some potential buyers to stay out of the market, and consumers haven't yet fully realized that interest rates have once again dropped to near historic lows.

Mark Buhler, vice president of Stephens Real Estate, said it also had taken builders a bit of time to adjust to the slower real estate market, plus he said he had seen several people move out of the community to be closer to their children who are working in Johnson County or elsewhere.

"The $200,000 to $400,000 market has taken some licks this year," Buhler said. "Oversupply is part of it. You are seeing a lot of homes in that price range that are being shown that are vacant."

Out of sync

This morning at a a joint meeting of the Lawrence City Commission, Douglas County Commission and Lawrence school board, Johnson, the county appraiser, will attempt to explain what the lower property values will mean to their budgets.

In addition to a moderation in home prices, the taxable value of personal property is expected to decline by 2 percent to 3 percent. That's in large part because of changes by the Kansas Legislature that exempt most pieces of business equipment and machinery. That decline is expected to continue in future years because the Legislature is phasing in the program.

In total, Johnson is estimating the total taxable value of real estate and personal property in the county will grow by 2.5 percent to 3.5 percent in 2007. That will mark new territory for the county.

"It never has increased by that little in the 14 years I've been here," Douglas County Administrator Craig Weinaug said.

In 2006, values increased by 5.6 percent, and the average increase since 2000 has been 7.2 percent.

The moderation comes at a time when the public's demand for government services has done anything but moderate. Local governments are staring at some large-ticket items - everything from new roads and bridges in the county to a new library and recreational facilities in the city.

Photo illustration by Thad Allender and Karl Gehring

Photo illustration by Thad Allender and Karl Gehring

"Usually it is the job of the administrators to give the elected officials the reality of what is on our want list as a community, and then show them what our list of resources are," Weinaug said. "Those two lists are less in sync than they have ever been in the 14 years I've been here."

Elected leaders, especially at the city and the county, can increase their list of resources by agreeing to raise property tax mill levies. But that's always a difficult decision, especially during a year that features what is expected to be a hotly contested City Commission election.

"It would not be my intention to raise the mill levy," said City Commissioner Boog Highberger, who has one of three seats up for re-election. "I think we're going to have to figure out how to make it work."

That was Amyx's view, too. He said the city might have to craft a budget that focuses more on simply keeping up with inflation rather than adding projects or programs.

"The increases we have had in the past have always given us a little bit of room to operate beyond inflation," Amyx said. "Now, we're really going to have to challenge ourselves."

Johnson, though, is cautioning officials that his estimates still are preliminary. He won't have a complete picture of what assessed valuations will total until March.

Other events could improve the budget position for the city. Sales tax revenues could increase at a higher than average rate to offset the slowdown in property taxes, or city commissioners could restart discussions about a new sales tax to help pay for large-ticket items.

Don't panic

Real estate agents also say there is good reason to think that the moderation in prices is only temporary. Both Nuzum and Buhler said they thought business would pick back up in the spring. They said the number of homes on the market has shrunk, helping to balance supply and demand.

Real estate leaders said they fully expected home values to once again start increasing by their traditional 5 percent to 7 percent per year.

"This is just a correction in the market," Nuzum said. "It is not the end of the world."

Buhler agreed.

"This ebbs and flows," he said. "And it helps if people remember that we buy houses in part because they appreciate in value, but we also buy houses because we need a place to live.

"Sometimes people forget everything but the investment side of it. They compare this to buying a stock or bond, but you can't live in a stock or bond."

Some government leaders also said the moderation in prices probably wasn't all bad, as long as it doesn't turn into actual widespread decline in prices.

"It has a negative impact on local governments," Weinaug said. "But I have teenage children and I sometimes wonder how they are going to be able to buy a house here."


lelly 11 years, 4 months ago

The Lawrence housing market has been way over-inflated for years. This is seen in not just high housing prices but in alarming jumps in valuation to pay for the new streets and sewers to empty houses out west and in the unscrupulous practices of some real estate agents in town.

Sigmund 11 years, 4 months ago

So when most peoples single largest investment goes down in value the LJW calls it "downsize." This headline should read "Lawrence Housing Market DECLINES" or "Lawrence Housing Market Becomes More Affordable."

But not to worry, the PLC/GRA Kommissioners (and fork lift drivers) are determined to pursue their "Smart Growth" policies which will restrict supplies and drive prices back up. Before you know it housing costs Lawrence and surrounding area will be as "unaffordable" as they always been!

BTW, while you "can't live in a stock or a bond" you know exactly what it is worth nearly every minute of every business day.

Kookamooka 11 years, 4 months ago

I wonder if people just don't see any reason to live here. The rumor on the street is, housing prices were inflated to begin with. Topeka is a bargain and....THEY have a new library.

budwhysir 11 years, 4 months ago

HMMM build a whole bunch of houses, with quote unquote inflatted prices, raise the taxes every year, and then run an article on people being stuck with not being able to sell.

Couple that with the fact that any bank around will finance anyone for any price at interest rates that are out of this world, and you have what? A PROBLEM FOR THE PEOPLE

ASBESTOS 11 years, 4 months ago

It starts. THe end of the speculation rollercoaster from developers and GC's that built these pieces of trash houses with cheap illegal immigrant labor using third world construction techniques and NOT reducing the prices.

Now we have WAY too many houses, not just here but across the country. The crawl to the bottom and the tax structure is going to get ugly!

""We probably have had to adjust more values downward than we've ever had to since I've had the job," said Johnson, who has been the county's appraiser since 1991. "For values to go down, it has been rare in Douglas County, for sure.""

Values are down, no one is selling, and no additional revenues are coming in as taxes, and taxes will have to be increased to reflect the retraction in value to keep the services equal to what they were.

The first step in a local recession. Don't feel bad though, in the Manhattan/JC area they built houses at an alarming rate, and those are all speculative on Ft. Riley, but there are a lot of empty houses there as well.

Put on your seatbelts it is gonna be a bumpy and uncomfortable ride, and your house and equity is going to have a retraction and correction. The mas stating that he had to "re value" houses, that is the major statment.

irishblues 11 years, 4 months ago

Yep, it's the average Joe once again, taking the hit. I can't sell for what I owe on my house because the market is flooded with those 200-300K pieces of cr@p. 21/2 years worth of inventory, what a realtor told me. At least I don't have to sell. I just want a smaller house.But It sure won't be in Lawrence. I LOVE Lawrence, I just can't afford to live there!

cowboy 11 years, 4 months ago

This will get uglier as time goes on for a few years. Record bankruptcies in the yuppie set who had to have a show home , borrowed to the hilt , and can't absorb the blows that normally come at you thru life. One medical episode , a lost job , rising costs , and suddenly you can't float the boat.

Make your life simpler you be happier and live longer.

Richard Heckler 11 years, 4 months ago

Downsize is a clever disguise for decline......

Downsize the new library design and keep it on site. Something is better than nothing. Add on at the east end.

Forget the superdome and build new soccer fields on existing park property. Build a new rec center or two for the neighborhoods.

Wonder if anyone has found themselves unable to sell for what is owed?

Ken Miller 11 years, 4 months ago

Speaking as someone currently carrying two mortgages, I am not happy - but I'm not surprised, either. Just from personal experience recently, I have seen a few more "contract pending" signs up at houses in the same price range as mine. What I don't know is how far these sellers had to slash their prices to get offers - and that scares the bajeezus out of me.

KsTwister 11 years, 4 months ago

Commissioners wanted the housing boom, but guess who will foot the bill for sewer projects,schools,streets and parks. Appears Horizon 2020 moves with not a lick of foresight. How many of those 20,000 homes north of Wakarusa are vacant?

Jamesaust 11 years, 4 months ago

Here I thought that perhaps the market would stabilize soon and then I read something like "Real estate leaders said they fully expected home values to once again start increasing by their traditional 5 percent to 7 percent per year." .....and I know that the bubble still has some goofyness in it.

To return to the mean, real estate prices would have to sit at zero (adjusted for inflation) for several years - or decline sharply perhaps in an economic crisis and bounce off of that bottom. In short, do you want your diseased tooth yanked out quickly or pull slowly?

As to a crisis: I guess this depends on whether you believe an inflationary environment with a sharply falling dollar and governmental and household debt almost beyond imagination and leading into a massive outflow of pension benefits lasting for decades would present the scenario for disruption. Anyone?

canyon_wren 11 years, 4 months ago

Hey, Cowboy--you said it all! No one plans or saves anymore for the crises that are bound to hit everyone. It is "spend/commit all you have today, for tomorrow may not come"--but tomorrow always does. Small IS better! I cannot comprehend the need--or desire--for these big "impressive" homes.

Richard Heckler 11 years, 4 months ago

It's difficult to read exactly what is happening however we were in a 1985-87 Tulsa market which found many homeowners,a few thousand, who could not sell homes to match the existing mortgages. So many of those homes were purchased in a hugely inflated market. A market that at one time was difficult to locate a vacant rental or a house to purchase.

Unbalanced growth at an accelerated pace may be catching up to Lawrence. Then again this may be election year politics because so many are sick and tired of inflated increases due to the fast paced unbalanced growth. Comm Amyx played a role in this as well. However if property tax increases drop for many years it will be good.

Christine Pennewell Davis 11 years, 4 months ago

well good news for my daughter looking to buy her first home but not so much for the homeowner trying to sell. Oh the tangled web...

Ken Miller 11 years, 4 months ago

momma: my house is priced at 155,900 - 3b/3ba about a mile west of KU - might your daughter be interested?

Christine Pennewell Davis 11 years, 4 months ago

canyon my daughter does not need impressive but 4 bedroom most like the best 4 kids one sey of twins and only one boy so he will need a room for himself but does not have to be big I would volenteer to let them build on to mine but I love my grandkids and really love sending them home. But yeah I get your meaning I lwould love a huge house with more rooms than I know what to do with but I am fine in my just right home that I can afford and can take care of besides the kids move out then what you going to do with that huge house?

Christine Pennewell Davis 11 years, 4 months ago

well she might be she has already looked at several homes and still looking an dealing with banks trying to get more $$ she really does not want run down and anything not run down takes $$ in this town as you know as a home owner.

Ken Miller 11 years, 4 months ago

thanks for the thought - but my house is not big enough for four kids and parents.

Christine Pennewell Davis 11 years, 4 months ago

I am full of envy over the 3 ba. only hae 1 and at one time had 4 kids and 2 adults in this house lol:)

Ken Miller 11 years, 4 months ago

house is in move-in condition...all three bedrooms upstairs... new roof, new carpeting on first floor, (soon-to-be new kitchen floor), all appliances stay. if still interested, contact me through LJW by clicking on my nickname.


Christine Pennewell Davis 11 years, 4 months ago

I will let her know thanks still wish I had 3 bathrooms still have two kids at home girls... says it all

salad 11 years, 4 months ago

Yes, the Lawrence market has been kooky for years. In 1997 our evil landlord (lived next door) put his house at 13th & NH on the market for $225,000(nice turn of the century two story). This was like $10,000 above what it was probably worth at the time, but it sold in 4 hours for $20,000 more than his asking price!!! We bought our house at 18th & Illinois in 97' for $95K and sold in 2003 for $155k. It sold in 8 days. Ahhh....the salad days of real estate.

Emily Hadley 11 years, 4 months ago

Weren't we just listening to developers' complaints that Lawrence was limiting their pre-fab development plans, based on a slowing market and vacant housing rates?

It sounds like we may keep our city in a better state by restricting new housing developments right now. I am glad we have such conscious governing bodies that want to "get the city's planning process ahead of development." 01-16-07/01-16-07h/resolution_long-range_planning.html

Richard Heckler 11 years, 4 months ago

The activities of Last Call and the Granada/Mass street shooting may be tarnishing the small town safe place to raise a family image of Lawrence.

KsTwister 11 years, 4 months ago

Has anyone, besides myself added the last 7 year increases together?

Sigmund 11 years, 4 months ago

The housing market is very unlikely to collapse and contrary to what some have said the value of a house has little to do with the legal status and ethnicity of those who built it. Further, modern materials and construction techniques are generally safer, fire resistant, and tighter (leak less heated or cooled air) reducing energy consumption and costs and many buyers consider that a positive thing! In any event I think this article referenced all housing declined in value not just new construction. The value of a residential property (or commercial property downtown) has as much more to do with what the DEMAND is for that property and the SUPPLY of competing housing alternatives.

Property everywhere else in the country is CYCLICAL and values go up and down. Lawrence has been immune from downturns in value in the past but THANKFULLY no more! How in the world is Lawrence supposed to gain AFFORDABLE housing if prices are not allowed to decline? Did you think some magic fairy or Kommissioner would wave a wand and Lawrence would get affordable without declining prices? Do you think Downtown Lawrence is ever going to get affordable if the Kommissioner's keep propping up values for downtown properties?

What I find interesting and important (but was completely missed by the article) is the houses are generally leveraged. The more leverage the more likely you are go get hurt. Buy a $250,000 home and put only $10,000 down and then have the market decline 5% and your entire equity is gone, all of it, and this doesn't even include the loss to commissions for the brokers and other closing costs! If you let the home to go into default it is the bank that lent you $240,000 that is going to eat the loss, but only if they have to sell when the market is down.

This decline is good if you want affordable housing in Lawrence, but bad if you counted on ever rising values like very aggressive lenders, highly leveraged buyers or City Governments and School Districts who have counted on ever increasing amounts of real estate taxes!

I wonder when the City Kommissioners are going to build a $30,000,000 library down the street from my house to prop up my land value like they want to do for the Downtown Landlords? Afterall if they constantly are wanting to bail them out, why not bail out the homeowners as well?

Bruce Rist 11 years, 4 months ago

According to the USA Today... (June 06) Larrytown is undervalued.

Look at FL and Caly... Way over valued.

budwhysir 11 years, 4 months ago

bigger is better, too big is baffeling

westernksgirl 11 years, 4 months ago

mommaeffortx2, I just send you a message.

formerlyKS 11 years, 4 months ago

Never believe the media when it comes to suggesting a locality's perceived degree of being "undervalued" or "overvalued."

Also, people always think their homes are worth more than they really are. In California, many people who remember that their neighbor's home sold for $900K in the summer of 2005 now can't get any interest when their home is on the market for $700K. In 1995, for instance, a modest home in Orange County, CA could be had for under $300K. In probably a few years, valuations will be back to nearly that level. The amount of speculation and "easy money" is incredible. The bagholders on the overpriced coasts are going to take it in the shorts. But, as usual, someone else's misfortune will be another's opportunity.

KsTwister 11 years, 4 months ago

Lawrence does not make California wages which are figured into values.For a fact one person here left a job in Lawrence that paid $10/hr and got the same job in California at $17/hr,so when housing was higher he was not surprised. He left here 5 years ago and now makes $21.50. Another left a job here to take the same job in Colorado,housing was astounding and he had to take a cut in pay to stay there. But Colorado is discouraging population increases and has since 1980. I believe it is the appraisers working with real estate people who are running this city up unnecessarily.

KsTwister 11 years, 4 months ago

And I might add with all the property tax going into City coffers should not our streets be paved in gold with all the extra?

Richard Heckler 11 years, 4 months ago

Overland Park rated as a top ten city to live and raise a family

Maybe some will want to move back. According to the quote the real estate dollar buys more. Hmmmmmmmm

Sigmund 11 years, 4 months ago

I love this quote: 6 Overland Park, Kans. POPULATION: 164,800 TYPICAL SINGLE-FAMILY HOME: $250,000 EST. PROPERTY TAXES: $3,500

  • PROS Abundant high-paying jobs and affordable housing
  • CON Feels like it was designed by the folks who invented cubicles.

I think this just about sums it up, both the good and the bad!

Jamesaust 11 years, 4 months ago

takeastand --

I would take such surveys with a grain of salt.

The fly in the ointment is the "proper" value. If you look carefully at how the research company came up with "proper" value you'll see that one significant (how significant they don't reveal) factor is a 'historic' factor. Basically for Lawrence, this means that since outrageous property prices have been the norm in town for some while any moderation in those prices will show up as "undervalued."

In fact, the average sales prices as quoted in this survey for Lawrence - $155k - is also the same sales price a year ago, and yet a year ago prices in Lawrence were "overvalued."

By comparison, you'll also note that Topeka, with an average sales price more than $50k less, is also "undervalued" even though the other factors supposedly measured such as cost of living, wages, etc. are not much different between the two.

And of course, the wage factor is wages reported by those living in Lawrence, not wages being paid in Lawrence. If the average middle class wage in town was comparable to what the average commuter to JoCo earned, Lawrence would indeed by a real estate bargain!

NorthLawrenceDude 11 years, 4 months ago

I have a friend who is a realtor and he had his best his best year ever in 2006. Why? Because he took listings in Mclouth, Tongie, Eudora and Perry. When he was out making sales, the "Lawrence only" agents were looking for second jobs so they could make ends meet! I think it is hilarious, there are more agents in this town than houses on the market! Buyers aren't stupid, they are tired of paying 200+ for a decent home in this town. THE MORAL OF THE STORY? Either move to North Lawrence where it is still affordable, or to a neighboring small town!

budwhysir 11 years, 4 months ago

Isnt lawrence a retirement friendly town????????????

I dont think a house increases in value because wood is worth more after it has aged for 10 years, it has something to do with um whats the word??

oh yeah the tax role...........

Lets get a clue/////

budwhysir 11 years, 4 months ago

Oh yeah, didnt the commisioners just get a 50% pay raise??>??

Arent we working on a smoking ban and new permit issues within the city???????

dont we have control problems in downtown lawrence???


budwhysir 11 years, 4 months ago

Reality, I dont think you are seeing the real picture here but thats ok.

Godot 11 years, 4 months ago

When I sold a house in 1993, it was on the market for only a couple of weeks. When we put our house up for sale in 2001, we had a contract in just 3 days. There is a house in our neighborhood now that has been on the market since last spring.

This market feels a little like the slump in the mid-to-late 80's; houses sat on the market for months, and sellers accepted offers way below asking; except that, back then, interest rates were up around 10%.

I tend to agree that the low interest rates have enabled many people to move from rentals to homeownership, and others to move up from "average" homes to the mansions in the west, with little change in house payment.

I guess, unless you just have to sell, the answer is, bide your time. And, if you have an adjustable rate mortgage, refinance to a fixed rate. The low rates are bound to trend upward again.

Sigmund 11 years, 4 months ago

"So, we have this 100% increase in value and three different realtors maintain this is the market price, yet she's been trying to sell it now for almost 1 1/2 yrs" Nope that is not the market price. She needs to lower the price till it sells then THAT will be the MARKET price on that day.

Making broad statements about "real estate nationwide" defies the three most important tenants of real estate prices, "Location, location, and location." Comparing the current state of real estate in Lawrence Kansas to AZ, CA, NY or the Dot Com bubble is an absurd over exaggeration.It's like comparing Clinton Lake to Hillary Clinton. They both have name but only the barest of similarities!

Sigmund 11 years, 4 months ago

ROELMAO! Best of luck to your Aunt. BTW, I have a cute little 900 sq/ft in East Lawerence I'll let her have $400...


Sigmund 11 years, 4 months ago

Marion I do not doubt it. I could never understand the prices in the older neighborhoods with lots of structural, electrical, plumbing, and sewer issues. I looked for over a year (yes, really a year) before I found a place that I felt was worth the money and that I could afford.

The newer homes in Lawrence were priced pretty close to Eudora, Baldwin, and Johnson County. It was the lower end of the market that was way overpriced in my experience. I think many of those properties were turned into rentals and were priced based upon rental rates of returns and not as homes for families.

christie 11 years, 4 months ago

Here's a piece of advice for everyone complaining that they can't afford a house. The bottom line is, you can't afford NOT to buy a house. It's the ONLY sure way to make money. Save up. Buy a house, struggle, and in 5 years sell it and walk away with 45 to 55k. Now use that 45 to 55k to get a bigger place. Struggle. Sell in 5 years and walk away with 75 to 95k. Do that one more time, and then pay cash for your final house.

Sigmund 11 years, 4 months ago

Buy property in a growing community and don't overpay and you will make money, especially with the tax breaks on mortgage interest. However, the days when you could overpay for property in a shrinking market, flip the house every 5 years and make money are over with. Significantly restrict growth (no growth, smart growth, planned growth, whatever) and you restrict potential future buyers of your property,. That is not a recipe for increasing values.

budwhysir 11 years, 4 months ago

Reality wrote on the law of averages, didnt we read an article on the raising of the local min. wage??

So, my point is, build a bunch of houses, price them at above 150 thousand in a town that people are saying the min. wage isnt high enough, raise the property taxes, raise the min wage to increase income taxes and the story begins

budwhysir 11 years, 4 months ago

RT, make sure you choose your posts wisely, we dont want to upset anyone

budwhysir 11 years, 4 months ago

I love how this article is in the same publication as the article talking about the meeting tonight to approve the building of a new apartment complex on 6th stree.

RT are you supposed to be using that phrase still? I mean in a politicaly speaking sense anyway

budwhysir 11 years, 4 months ago

Rt: politicaly speaking I think that you have made a good argument except for 20 years is a long forcast, Things can change from year to year so it is hard to get a good political forcast concerning the political things that are looked at.

budwhysir 11 years, 4 months ago

Rt you have it in sight, I think, just keep in mind that politics can be tricky and at times, others may have a different viewpoint than you or I might have. I am sure you have seen this in the past. We just have to march on and do our best.(politicaly speaking)

I will say that politics will stay in tact if we build the apartment complex on 6th street like I read about in another article. This will allow for even more living area to go unused

jafs 11 years, 4 months ago

Since the housing market decline seems to be nationwide and not confined to Lawrence, I would think the causes are not merely local.

However, locally, I would guess that demand is lowering due to a glut of overpriced houses, increases in crime and stress in town, and the lack of good full-time jobs with benefits.

Folks who thought you could easily speculate in the housing market and make a profit fairly easily may be thinking twice about that now, lowering demand.

As the infrastucture reflects the expanding population and crime increases, lowering the quality of life here, people may find it more attractive to live in Eudora, etc. than Lawrence.

If you are a working adult trying to buy a home, raise a family, etc. I would think Lawrence is not the easiest place to live - the combination of overpriced housing and lack of good full-time jobs is a poor one.

budwhysir 11 years, 4 months ago


Havent you heard? Lawrence is a good retirement city

formerlyKS 11 years, 4 months ago


You only think it has gone up 40% since 2002. The reality is that the value lies only in what some other fool will pay for it. People are waking up to that cold, hard reality here in California. A lot of desperate sellers are finally realizing that they've "lost" $100K in equity in the last year alone.

Most of the creditworthy borrowers are homeowners, and most marginal homeowners took the plunge in the last 5 years due to easy credit. Now, those marginal borrowers are one paycheck away (or less) from foreclosure. Remember when Orange county went bankrupt in the mid 1990s? Most people don't, especially given how much it has been hyped the last several years. Values are falling fast throughout the West and also Florida. Although there is no such thing as a national real estate market, the propensity of people to move makes it not far from that, and sharp housing declines felt on the coasts will trickle to the Plains in some form.

In 2002-05, Realtors (C) were saying "Buy now or be priced out forever!" In 2007, the saying goes "Sell now or be priced IN forever!"

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