Great story. I sympathize with the Rossbachs. It's a terrible time to buy.

Most sellers are delusional about their home is currently worth, and living in 2005, when the real estate market was going full bore, and federal government looked the other way at crappy loans. My neighborhood has roughly 10 homes for sale, with half on the market for over 6 months. Until people realize that 2005 has nothing to do with present day costs, homes will continue to sit.

Good article today. I am in the same boat as this couple. I am also in the same ballpark as them budget wise and everything I've looked at is a dump or the sellers are so unrealistic it is barely worth the effort to even bid.

One part I find really funny is that the realtors are so dumbfounded by this change in attitude and market that they are many times making the problem worse buy telling buyers to hold on.

One house I bid on a year ago and totally rejected without a counter is still on the market and now listed below what I offered.

This is now the most overpriced housing market in the country and prices need to come down another 25%.

Don't believe me?

http://www.realestateconsulting.com/Intelligence.aspx?quicklaunch=true®ion=local

Check the housing barometer and you will see we have long way to go.

To the sellers out there, if you bought in 2005 and think your going to get your flipper DirectBuy renovation money back think again. This is interior decorating and you are going to need to swallow hard if you want to sell.

The woman with the rancher up in Monkton might as well take it off the market because she's not going to get an offer that is that high for a decade. They overpaid in 2005. Today's buyers are much smarter than the people who bought at the height of the bubble thinking prices were going to go up forever.

Today's buyer stayed out of the frenzy while the hordes took all the gold. Now that patience will be awarded as the hordes now find out they are not competent enough to hold on to it as they took out loans they cannot afford.
The government is getting in the way and slowing this down but they are not going to be able to stop it, a drop in nominal prices back to where they were in 2000.

This quote sums it up nicely: "The buyer's going to win this game of chicken," said Anirban Basu, a Baltimore economist and chief executive of Sage Policy Group.

Housing will continue to drop for the next several years simply due to the out of wack price to rent ratio and rising unemployment. Now add in what Natasha said above about the savings wipeout; many boomers who bought 20 years ago have plenty of room to drop the price and they will one house at a time in neighborhoods.

As for BRAC, 2/3's of the folks at APG have already relocated. The NSA folks coming from NOVA have decided to stay in NOVA and are making the drive 2x a week and are telecommuting the other 3 days. Why? 1. Encryption technology advances. 2. They cannot sell their homes!

While it's obvious many homes need to be reduced in price to become competitive, it seems a little absurd that they have looked at SEVENTY (70) homes and nothing works. It sounds like they have set a very conservative limit for themselves since you mentioned they were Both attorneys. If they're looking for the "perfect" home and want to stay within their budget and not overspend in this market, why not find one that needs some repairs, grab it for a great price and utilize an FHA 203K (rehab) mortgage to make it exactly like they want it. They'd gain instant equity and have their "dream" home. I would think once you've seen that many homes you gain "professional" looker, I mean buyer status.

Being that they are both attorneys does not mean they are millionaires. More than likely they both have huge law school loans to pay back. This is why we ran in to this issue in the first place. People overspent and looked the other way on the other bills that have to be paid every month.

As for looking at 70 homes, it comes down to them being smart buyers and likely looking to stay awhile.

Doing a rehab mortgage is fine if the house is listed below market, and your bringing it up to contemporary standards; but people want gold for dumps!

Baltimore is the last market that went up, and now it's the last that's going down. Check out http://mysite.verizon.net/vzeqrguz/housingbubble/

Scroll down for baltimore. If the appreciation has been normal, the nominal median price right now should be about 175K. Instead, we are still at 260K. The bottom won't be reached until 2010 at least.

"Rossbach checked loan records beforehand to make sure the owners could sell for less"

How do you do that?

Hi, Kevin R -- one way is to go to mdlandrec.net, where you can look up mortgage documents. You won't see how much a homeowner owes as of now, but you will see how much he or she borrowed to buy the home and whether he or she borrowed against the home later.

The site requires a sign-in, but it's free to sign up.

I am in the exact same boat as the Rossbachs. I'm also looking in Howard and Anne Arundel counties, but I will also accept nearby counties if something good appears. I've been looking for months now and nearly every place has either major problems or is tiny with a huge price tag. A few of the places I visited made me sick. I did not know people could live in some of the places I visited. I've been looking in the $200k to $250k range and all the same problems are there as what the Rossbachs are experiencing in their much higher price range.

I want to buy, but it's a terrible time to buy. Sellers are being unrealistic, there's an enormous glut of ghost inventory in the area, and most of the homes on the market are in complete disrepair. Maryland has the same density of risky mortgages as California, Nevada, and Florida, yet thus far the impacts of that have only barely kicked in. At some point the dam is going to break creating a flood of price drops and inventory. People, banks, and builders can't just keep putting off the inevitable.

I read this article in the newspaper yesterday. It was good, but I wish more time was spent on the BRAC. It's almost over. Those expectations of 30k people swarming into the area are highly unrealistic. Sellers don't realize that people in the BRAC are talking to each other and sharing knowledge. A lot of people moving are either electing to stay where they're at (in DISA's case) or have already moved. The others are renting with the exception of some impulse buyers. This influx of BRAC buyers to Howard and Anne Arundel is effectively over. Sellers, don't forget members of the intelligence field are the kind that do their homework and can see how overpriced everything is. People network with each other more than ever before facilitating the exchange of information.

Sellers can continue to try to wait things out and hope for the BRAC, Obama, or something else to bail them out. I can wait as long as it takes too. Maybe I'll just buy a mcmansion in PA instead. For 220k I can get 4 bdrs, 3 baths, 2 stories, and a 2 car garage. The same amount in Howard or Anne Arundel counties gets me a dinky 2 bdr 2 bath townhouse in need of major repairs. Maryland is getting set up for an over-correction in housing prices next year.

I think there is a 2 bedroom condo for sale in my building (Roland Park) for $89,000.I've seen others in this area for $150.000. Maybe these people are not looking in the right place for a bargain. Why spend $350,000 when you can get a 2 or 3 bedroom place for half that price, especially in this economy?

Patti: I think the family in question wants more than 2 bedrooms in case they want/have another child, plus they are probably intersted in a a nice yard so Jr can play outside and the are almost certainly concerned about school districts which rules out teh city unless you send your child to private school.

Most houses on the market that are sitting were bought in 2004-2007. In the city, almost everyone of these houses are asking for more than they paid. I think if you are a buyer, it's essential that you check out the sales history via land record site above.

I think it's understandable that people don't want to take a loss. But this is unrealistic now. I'm sure those CA sellers didn't want to take a loss either, all it did was to prolong the process so they took a bigger loss later.

Another interesting article would be to interview buyers and sellers of a recently sold property.

I'm interested in how people are deciding what to offer. Are they looking at comps? Is the appraisal coming in at the level of the offer? Is the real estate agent telling them what to bid? How are sellers deciding what price to take?

Sounds like these people want to name their price for the perfect house.

I am also in the same boat as the Rossbachs. My wife and I have been looking to buy for several years now but house prices are clearly overinflated. Sellers think that they can get 2005-2006 prices now and over 2X of what they paid in ~2002. I simply cannot afford to pay >1,600.00/month for mortgage payments. It would benefit everyone if the sellers lower their price by about 10% now (buyers can get affordable housing and sellers can sell their houses now rather than prolonging the pain for everyone).

Jamie, you should republish that graph of median prices:income again. Maybe break it down a bit more; like by county.

Some folks (eg: Chris) aren't seeing the disconnect.

WOW! Super negative. Nobody mentioned that they could buy a beautiful house in a great community in the City. Lauraville would be perfect! They could have an updated home, with more size and life they couldn't imagine with $100k left over.

These are beautiful bungalows, farmhouses next to a park with hiking trails, feilds a lake, 5-10 minutes from downtown, it also becoming a hip area with foodies. No cookie here, just charm, good community etc...

If this is suburban blog shouldn't it disclose that?

Dunn,

Living in the city has its advantages such as proximity to work and cultural venues but it also has disadvantages such as higher property taxes, higher auto insurance premium and higher rate of crime. To each their own.