Housing Market Reality

Though I know more downbeat news is beginning to trickle in from Texas as well as other parts of the US now, I personally completed the sale of my own home here in Europe just yesterday and saw first hand a very similar dynamic in my market.

We took less than appraised value when just this spring a comparable house in my area was bid up to double it’s asking price! A price so rediculous I won't mention it here.
More on this in a later blog…
Vern

(CNNMoney.com) -- An Austin couple, Richard Morrisett and Regina Maldve, had a lot to learn about selling a home. That education is costing them big money.
They had put their three-bedroom, two-bath house on the market in April for $419,000, then dropped it to $399,000. In June, just as they were moving to their new home, they finished negotiating a verbal offer of $393,000.



"We said, 'Sure, that sounds great. We'll take it,'" says Maldve.
Eight hours later, they had another bid - at $399,000. That's where the trouble began. They failed to land either buyer and the couple is still trying to move the property.

"The buyers thought they had a verbal agreement and they were angry," says Maldve. They backed out and closed on another home just a week later.

Steady state market

During the past few years Texas had been one of the steadiest real estate markets for buyers; the economy was good, jobs were being created and homes were affordable and remaining that way. Prices had stayed low because of plenty of new home construction. The median home price in Austin is around $176,000.

When the couple finally changed brokers, they discovered they had overpriced the house, with comparables in the neighborhood about 25 percent lower.

They repriced it for $365,000 but still had no bites. They dropped it to $359,000 with the same results.

Meanwhile, they were now over-extended with two mortgages. They had counted on proceeds from the sale of the old house to pay for some upgrades on the new one.

They borrowed to make their payments - and worried a lot. "We can't carry two mortgages and other bills and credit cards," says Maldve.
Their salvation may be at hand. They have accepted an offer of $350,000 and took a down payment. But the new buyers have asked to delay closing until they can sell their own house.

"But we need to close before Oct. 31," says Maldve. "We've already tried to get our credit union (their mortgage lender) to delay our payment and roll it into the final payment when we sell."

They feel they must close before the end of the month. The brinksmanship is nerve wracking.

"I go to some of the local real estate blogs," says Maldve, "and read about how Austin keeps increasing in home sale prices. It's so frustrating to see these. I can't look at it without getting sick to my stomach.