Good info but unfortunately, not surprising. It seems like all big-dollar businesses, like banking, real estate, investments, etc. have an underlying corruption. The blatant greed is obscene.

Helluva find pal...things are just going from bad to worse arent they?
I always thought there was some kind of phoney pricing going on there in the realty market, but this is definatly proof that the skullduggery is real.
I wonder what else besides fuel food and housing is overpriced?
Insurance?Interest rates?goverment salaries?

This does not ONLY apply to the private end of it.

Where do the tax assessors get their information for pricing houses for property tax purposes? I would think they get them from the same locations, right?

Oh well, when you know you are screwed, at least you can see it coming.

Now, if I could only get selective Alzheimers. I would be just another one of the sheeple.

Or maybe madcow.

Wow. Now my property taxes make sense. I was putting off an appraisal but it might be worth the $300 to get the real value and stop being raped...

[edit on 2-9-2010 by AzoriaCorp]

so let me get this straight.

I bought my house for $206k and others on the street/neighborhood were going for up to $250k. If my next door neighbor puts his up for sale at $210, wind's up foreclosing and HUD dumps it for $170, then our entire street is now overvalued?

I think this comparison has less to do with over-inflating and more to do with protecting property values. Please correct me if I'm making the wrong assumption (I'm no financial expert or real estate guru)

Originally posted by TXRabbit
so let me get this straight.

I bought my house for $206k and others on the street/neighborhood were going for up to $250k. If my next door neighbor puts his up for sale at $210, wind's up foreclosing and HUD dumps it for $170, then our entire street is now overvalued?

No... in that case somebody just gets a deal on a 250k house for 170k.

...but you can bet you're not going to be able to market your home for 250 when TEN homes in your suburban neighborhood are foreclosed and on the market for 170, especially when ten other homes are falling into disrepair and the banks are more than willing to short-sale their foreclosures because their loss has already been subsidized.

When every home in a neighborhood is occupied, well kept, lawn mowed, and only a few are on the market the prices stay high. When the opposite is true, you can count on home values being low. It seems to me we are trending towards foreclosed, roof leaking, no money to fix it.

Sri Oracle

Well we are now heading into the great downward spiral of property prices. In the fear stage of the collapse. Finally, we are going to see properties set at a realistic benchmark for their true price, rather than a greed absorbed, over inflated false price. It's about time those on lower incomes who work hard can actually afford a decent home at a reasonable price. All else is, and has been, cloud cuckoo land.

The MLS is basing the home prices on appraisals or valuations that would be normally valid in a normal economy.

Most appraisers use the sales approach when valuing homes. They find several similar sales in the area, make adjustments based on amenities, condition, date of sale, blah blah blah. Usually the comparisons are similar but the price fluctuates with time. During the housing boom, people would bid up on homes and jacking up the appraisal sales approach.

The key to the price difference now is the fact appraisers try to shoot for a value based on a normal sale. A home that was overbid is usually considered a normal sale but a foreclosed and auctioned home is considered a distressed "non-arms length" sale. The appraiser will adjust upward on a subject house if the comparison homes were sold at auction. The reasoning behind this is that IF a home sold in the area was an actual non-distressed sale, it would sell at a higher price.

The MLS is just going by a real estate appraiser's reasoning when it lists a home at a higher price than the sold price. In a normal economy, a foreclosed and auctioned home would be more valuable than the actual sale price. Just because one guy defaults doesn't mean everyone else will and why should everyone's homes be devalued for one guy's failures. Auctions are much less frequent than regular sales and have a very small effect on general area prices.

But in this present time with this present economy, everything I said above is absolutely insane.

With so many people losing their homes and with so many bank auctions, the sold price IS the value. A normal sale is almost impossible in an environment where potentially cheaper houses are flooding the economy. A normal seller would have to slash prices just to compete. Why would I buy a home at a set price when there is a high chance that a home down the street would auction much cheaper.

What is going on with the MLS is not really a fraud. But it is careless, stupid, and lazy. The appraisers and the MLS guys aren't thinking, kind of like the non-thinking that helped churn the market in the housing bubble. These guys are using the same valuation methodology in an extreme and rare down market as they would in a normal market.

What the article points out without telling is that the real estate appraisers are the guardians of the real estate market. They were supposed to prevent the churning of home prices during the housing bubble but failed due to the non-spoken fact that brokers and bankers wouldn't give them business if they were seen as deal breakers.

Now they are failing again.

In fact the real fraud is that appraisers hardly consider the cost approach method and they totally skip the income approach method. With the income approach method, the value of a home would be based on what that home can earn as rental income. Without getting into too many details and justifications, the income method would basically say that homes at present are way overvalued in comparison to wages being earned.

I don't care what anybody says, not the government, not the people on ATS, and sure as hell not the banks or realtors say, their word is equivalent to a flying turd as far as I am concerned, any how my point the housing market is WAY overpriced, and by way far much more than 40%. Unless you think you can put a price on someone's life, well then to you pond scum, I say I hope that one day you will come down off your high horse!!!!
The only reason people pay these assinine prices is because of fluff in the market, a bunch of really ridiculous prices, numbers that mean basically "this is what you will pay, or you will die in a gutter and we don't give a damn!"

[edit on 2-9-2010 by ldyserenity]