Here is an interesting example of how differently today’s real estate market is perceived. In evcery sale/purchase the cast includes the home buyers, home sellers, agents in the transaction and the neighbors.

1) Any agent worth his weight in salt knows that pricing is the key component to successfully market and sell a property in today’s real estate market. It is not easy to tell a person that their home is worth less today than when they bought it but unfortunately that comprises a lot of today’s market.

2) Most sellers refuse to believe the facts regarding home values. They are taken aback, if not downright offended, when you are honest enough to discuss the reality of today’s values/prices. Most would rather hear an unrealistic value and have deluded themselves enough to believe it. Here starts the failure of the sale - priced too high when it comes on the market, waits too long for the inevitable price reduction and starts “chasing the market” which always results in a lower sales price then had it been priced correctly in the beginning. Or, the sellers never reduce the price, the home remains on the market getting “stale” and the home never sells or does so at an extreme discount due to length of time of the market.

3)Today’s home buyers are the most sophisticated we’ve ever seen. They have access to massive amounts of real estate information. This group is fully aware of market conditions and unlike most sellers perception that today’s buyers are looking for a “steal”, buyers are actually looking for a fair deal in today’s market. When you offer them a fair deal they respond with more gusto then you would believe.

4) Then there are the neighbors of sellers who refuse to accept the fact that their homes are worth less today then than have been in the past 5 years. When an agent prices a home “fairly for this market” or when the ultimate selling price is announced the listing agent can expect lots of woe and grief from neighbors accusing the agent of “underpricing the home” and “destroying our values”. Unfortunately these people are either deluded or completely unaware of the facts, figures and reality of today’s market.

Those are the main players in this tragi-comedy called our real estate market. A cast that makes for some very interesting times indeed.

The article, The Rise and Fall of Artificial Wealth, is one of the most detailed, yet easy to understand explanations of where the U.S. economy is, how it got here and where it’s going. Check it out:

http://www.huffingtonpost.com/michael-d-intriligator-and-r-kyle-martin/the-rise-and-fall-of-arti_b_261392.html

http://www.dqnews.com/Articles/2009/News/California/Bay-Area/RRBay090716.aspx

Once again our banks are working against providing any assistance to homeowners whether it be in the form of loan modifcation or short sales. They simply refuse to comply. Check out this NY Times article: http://www.nytimes.com/2009/07/11/business/11nocera.html?_r=1&ref=todayspaper

It seems to me that a strongly monitored system of reward or penalty must be defined and implemented. The banks should be rewarded or penalized based on their perfomance with distressed homeowners/borrowers. It seems the only action they are committed to is foreclosure. 

http://www.bloomberg.com/apps/news?pid=20601213&sid=afOsHVj02UMc

The behavior of our banking system is appalling and, at this point, un-American. Uh-oh! Un-American is a mighty strong statement. Indeed it is. The banks are holding our economy hostage and the ransom they are demanding and receiving is crippling our economy with repercussions we will feel for many years to come.