"...and I'd say its a pretty safe bet this builder is going to go under."

I believe that I said the exact same thing here about two months ago. It's only a matter of time.

Shorting Beazer six months ago was a good play...same as Thornburg two months ago.

I suspect Beazer is a buy-out candidate. At the end of '06, they were highly leveraged with debt in excess of 50% of capital. Also, 40% of Beazer's houses are sold to first-time or first move-up buyers so their buyers are also taking it on the chin in the credit markets. I guess the question is what builder left standing is strong enough to buy them out? Maybe, it's too late & their remaining assets are so eroded nobody wants them? They've been selling off land and walking from options like crazy.

/tricia

I haven't seen the press really address why people aren't buying.
They imply its tightened credit.
So.....the only people left in the market are people without good credti? I don't buy that. Because I've got good credit and I think its foolish to buy now.
Because of up-run prices? No. The future of the economy.
No one has agreed with me on this but I wonder.
Beazer has developments around here along with others of course. This area may have seen a tiny run up but generally wasn't a run up in appreciation area (ohio). New construction is quite reasonable I would imagine. So why?
Its either
-Prices are far too high - this only really impacts some specific markets (where all the main news feeds come from apparently)
so lets leave out D.C. Miami, California
-poor credit scores can't get loans - can't suddenly be almost everybody
-supply has suddenly outstripped population numbers
-People are uncertain about the future and hunkering down economically
?

Mary - I see your points -- if my husband's transfer would have gone through, I don't think we would have bought in this market immediately either. Without knowing when the bottom is going to hit it's risky to buy a home that 3 months down the road will be worth a lot less. I think there are a lot of transferees with the same philosophy (I personally know of 3 people that have been transferred and are sitting and waiting for the market to bottom out before they purchase).

Mary...Interesting question.

I think the MSM tends to latch onto the simplistic and finds explanations that sound good in a 30 second sound bite - hence "buyer paralysis", "stubborn sellers", "bargain hunting buyers", "greedy sellers", "frozen credit markets" etc

Human behavior tends to so much more complicated. So where are the buyers? Hiding in foxholes? Maybe. I think all the reasons you listed above are reasonable. Price inflation, local economic conditions (I'm thinking Ohio and Michigan), negative herd mentality, buyer fatigue, a historically high rate of home ownership, tightened credit, higher interest rates - all factors which contribute to a dearth of buyers out there. Every sidelined buyer has their own story. I have mine. You have yours. Our personal equations are composed of many factors. My primary reasons for not buying are price, an inability to commit to owning more than 5 years, and an emotion aka stubborness. I'll be darned if I'm going to fund someone else's retirement by handing them a 500% profit on their home.

But, I also think we underestimate how much of this housing boom was fueled by buyers believing that housing was a "can't miss" investing opportunity. The NAR estimates that by 2005, 40% of all home sales were purchased as second/vacation/investment properties. That's huge and it spells mania. Many "specuvestors" bought mulitple properties using exotic financing. Now, many of them are sellers. In 2006, 36% of all home sales fell into this category. I'm not sure that there are many people left who still believe that now is the time to invest in real estate.

This country has just been through a housing mania of historic proportions. A lot of people made money and a lot of people are going to lose their shirts. The WSJ article that try99 links to in the "More on Foreclosures" thread is fascinating.

Maybe, the only buyers left are the ones with great credit, healthy downpayments, and skeptical outlooks.

YIKES, waiting to buy a home until the bottom is in?? Don't be certain you'll know when it happens...And what of if a bell goes off, "The bottom is here,!!!" and interest rates are now 10%?? you missed a great opportunity to buy, so you saved 10% on your dream house, put your life on "hold" for who knows how long until the bell goes off letting you know the bottom has been reached, and now you don't qualify for the 10% fixed rate loan...If you need to buy, do so..It really amazes me that this forum has become SO negative, i was SO negative about 18 months ago, and my mortgage broker friends thought i was out of my mind, i was ridiculed for not buying a 2nd home, etc...Now with all the naysayers, how you'll never get back your $$ if you buy now, the contrarian in me says the bottom is much much closer then people believe...But the days of 10-20% annual appreciation are LONG gone,be happy your home is worth what you pay for it when you sell it, and if it is worth more, thats even better

I personally know of 3 people that have been transferred and are sitting and waiting for the market to bottom out before they purchase.

I'm assuming that with the transfer comes a corporate buy-out of your existing home? Because doesn't trying to time the market bottom only work for those without homes to sell (transfers and first-time buyers...)? For me, waiting for a lower price on what I'm buying means only ending up with a lower price on what I'm selling, so it's kind of a wash. And, as qdognj said, I'm not really willing to put my life on hold for that.

I, for one, am not looking for bottom. I wouldn't know it if it jumped up and slapped me in the face. I'm looking for price and value to reconnect in a climate in which sane lending practices prevail. So far, it ain't happening here. And yeah, I have real misgivings about liquidating $700-800K and plowing it into housing right now. Shoot, if that makes me a fool so be it.

Tauphidelt...I don't know about cordovamom but corporate purchases of homes for transferees seems to be a thing of the past. We received some assistance from our Fortune 500 employer on our last two transfers but nothing approaching a buyout and, certainly, no assurances that we would not lose money...which we did.

Maybe, if housing worsens, corporations will rethink their relo packages and once again offer more assurances.

All three of the transferees I know did receive corporate buy outs. So they're not sitting with homes on the market right now. Although I do know that some companies are tightening up on relo packages, a few are still doing buy outs. Real estate is risky and if these transferees are unsure of the market that they're buying into, I can't blame them for waiting it out. They may miss out on some bargains in the market place right now, but if they watch the market carefully they may be able to time their new purchase so that they hit it at the right time.

There's a small new development in an enclave just outside our subdivision - maybe about 20-25 homes - being built by Ducati.

I was at an HOA meeting the other night and one of the board members works for the company. About 8 months ago, most of the lots were sold. Today? Every single buyer backed out opting to lose their deposit. Since prices went down so much over this time, the builder wouldn't reduce their prices and so they lost all the deals.

Now, there are 20ish brand new homes sitting there, no potential buyers for them. Perhaps if Ducati and other builders cooperated, they may have been able to salvage the deals.

I relocated and did not get any kind of financial help. FWIW

Seems like a could get a good deal in development these days. To bad I don't like new developments. Heck I don't really like any kind of development but I do like mature trees and hopefully larger lots.

I'm not really trying to time the market either. On the one had I should be considering how much money I've lost on home/residence. I need to be careful.
On the other finding what I'm looking for is impossible anyway so if I were to find it - I wouldn't be able to afford to wait.
But it sure would be nice if prices would correct some.

Mostly what I've noticed just recently is it seems like there's less inventory in my searches. I'm wondering if people who don't have to sell have started to pull their homes off the market.