2011 Orange County selling season an epic bust

Oct 7th, 2011  
by IrvineRenter  in Library News

Astute Observations

Astute Observation by FreedomCM
2011-10-07 11:10 AM

listing says REO now

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Astute Observation by lee in irvine
2011-10-07 03:54 PM

So I’m watching CNBC this morning before I go to the office, and a segment of none other than Alan Greenspan saying “in retrospect”, the best solution for housing inventory would have been for the “government to buy the houses, then burn them down”. <—-WTF!

I wish I could have 1 minute with Alan, Ben and the entire FOMC ... I’d scream our housing crisis has less to do with supply, and much more to do with passing homes to the next generation of buyers!  Either by lack of financing, prices too high, or non-cooperative banks!

There’s a buyer and price to close just about any house, the real question is ... are there willing/realistic sellers!

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Astute Observation by IndyLew
2011-10-07 08:53 PM

So if in 2007 for $100,000 of broker’s commissions on a group of homes sold, to pick an arbitrary benchmark, then in the summer of 2011 the same number of homes sold would produce a third less commission.  That means the same homes if sold at market price 2011, now produce only $67,000 of commissions.  But wait, there is also the fact that the sales volume is down, let’s say by 33% arbitrarily, resulting in $44,890 from expectations of a group of homes sold (or expected to be sold but not).  Is that about right, that total commissions to brokers/salesmen are down 55% from the summer of 2007 to the summer of 2011?  Aren’t there just about as many registered real estate sales representatives in Orange County now as then?  If so, why aren’t they competing harder with lower commission structures to attract more business?  Or have discount brokers actually made headway and brought down selling costs as a result (thus leading however to even lower total commissions compared to 2007).

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Astute Observation by Walter
2011-10-08 08:59 AM

There is a big difference between having a RE license and actively selling real estate.

I would say many have thrown in the towel and do not want to pay the expenses (MLS, Supra Key, document generation, etc) in this market.

For me, I am a part timer and since I have a day job, I will be fair with them and adjust my commissions to what seems to fit the effort I put in. It is extra money for me so I do not need to squeeze out every last dollar.

I have 2 in escrow now: short sale on a $200,000 condo, I will take my 2.5% on that one. A $500,000 SFR that the buyer picked out on their own, I agreed to 1.5%.

Once you sell a few properties and have been through the frustrations and delays of getting a deal closed, you will better understand why commissions will not go to some crazy low number.

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Astute Observation by newbie2008
2011-10-07 10:21 PM

Lee,
Govt. knocking down houses.  That plan was used for food during the Great Depression.  Burning grain, plowing under crops and let fruit rot were used to keep food prices high during the depression.  It worked.  Food was scare, people skinny, hungry and some starving.

Knocking down houses will cause the market prices to stability or rise due to limiting supply.  It will even stimulate the prices for housing fixtures.

FDR also encouraged trade association and regulation to set quality, production quotes/limits and prices.  People went to jail for selling services for too low of a price. 

A waste of resources for the benefit of the few.  Nothing new.

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