What does the sub prime crash mean to people selling their homes?

Question

Should I take my house out in
the market now and wait until the housing market improves ?

Answer 1

Without a sub prime market it simply means that only qualified borrowers with good credit, good income, and typically a good down payment (3%-5%) are going to be able to purchase homes. This takes a lot of people out of the game and makes the number of buyers out there looking to buy very low. With the number of homes for sale and the increasing number of foresclosures it means that you will most likely not be able to get a "high" dollar amount for your property. You would be better off waiting for the market to stablize and values to return or at least improve. And this may take 2-3 years. Some predict that 2008 will see more foreclosures and that it will not be until the end of 2008 or the beginning of 2009 that the market will end it's slide downward. Then it will take time to recover and values to more upward.

And everyone has their opinion... but I know for a fact that homes in Fresno CA are not selling, builders have many homes vacant and unable to sell, values have dropped approxiamtely 10%+ in the last year, and the subprime market had a greater impact on this area than the numbers given in previous answers above. Many people who have their homes listed on MLS cannot sell them and are doing price reductions on a regualr basis. So people can read all the magazines, quote reports.... I am a broker with 13 branches and I know actual numbers from what we have done over 10 years, watched many other offices around us closing, and I we do appraisals all the time. So maybe not for the rest of the United States, but I know what is happening in Central California.

(PLEASE NOTE: Every market is different. and while California is losing 1-2% value every month in some areas, states like Texas and Utah are supposed to be increasing in value).

Answer 2

The three previous answers don't have any idea what they are talking about.

Sub-prime lending is given to those who might not otherwise be able to obtain a loan. These would include people with FICO scores below 600 or my have just come out of a bankruptcy.

Sub-prime accounts for less than 5% of the total lending, and then only approximately 20% of those are in any kind of jeopardy. This means that only 1% of the TOTAL loans in extant are in trouble.

It DOES NOT mean that you shouldn't sell your house. The market in your area may, or may not be in transition from a seller's to a buyer's market.

The press, whose knowledge of this issue wouldn't fill the dimple on the outside of a thimble, has ramped up hysteria trying to induce a recession.

The truth of the matter is, that at any time, depending on your location, you may be in a bull or bear market. PERIOD.

Sup-prime loans may include ARMs (Adjustable Rate Mortgages), which is all that the local banks where I live HAVE EVER offered.

Go to a real estate agent and ask them how long it generally takes to sell a house on average.

The answer you get with come with exceptions, because some houses are problems, but the lenght of time can be a telling sign.

Around here, it can take 6 months to sell a house, but sometimes the seller actually prices the house too high, and scares off buyers.

The truth is, that since the Fed has raised rates some, motgage rates have increased and that has pushed out some potential buyers. That doesn't mean it is a bad time to sell.

Good Luck.

Answer 3

There are several theory's on the subject but the general consensus is that we will NOT have a crash, we will have a soft landing. Housing sales are flat now and most in the biz think prices will fall further after the holidays since there is a glut of inventory out there right now and we are seeing a buyers market. With buyers sitting on the sidelines in a wait and see mode, they may start to buy after the first part of the year after houses have been sitting in the marketplace not selling, the general thinking is that by then, sellers will be ready to deal.

Answer 4

It basically means that if someone is not really qualified to purchase a house then its likely that you might go to contract and they don't close. If you have a house on the market make sure it's rented or it is occupied please don't leave it vacant. Greenspan was saying earlier this year that we might be in a recession sometime late 2007. The fed has cut rates several times this year and that's not good for our economy. There are still some lucky people who are actually selling but it's far and few between, as a whole the market has declined substantially.

Answer 5

You can leave your house on the market, because you never know who might come around to buy it. Hopefully though, you're not in a terrible hurry to sell, say, because your mortgage is going to double in the next year. If you have a fair number of foreclosures in your neighborhood, the value of your home goes down, BTW, one percent for every house within an eighth of a mile from you. Also, your buyers are going to have to be better qualified than in the past, since no one, especially banks, want a repeat of this (even though they mainly caused it in the first place), so your buyer might not be a house-flipper who's got three other properties on the market. If you price your home fairly, you might do fine.

Answer 6

It means depending on where you live there are a lot more people selling houses and buying houses. That does not mean that you should not sale, but ask a realtor about the number of houses on the market campared to previous years. It depends on your individual situation.

Answer 7

It means there are allot more houses on the market, with allot less eligible buyers, supply and demand say prices (that have been artificially high) are dropping. So will no have the traffic you would of had 5 years ago, and will not get the price that you want.

Answer 8

I sure would unless for some reason you just HAVE to sell it.