posted on March 8, 2006 11:26:32 AM
Since Ebay redid the search, approx Feb 20 or so, it is true that the Ebay store sales have really improved for us.
However, man those auctions are tanking.
Just last night and so far today, here is another example.
Monday night (usually good night for us)- posted 100 auctions and sold 20!
Tuesday night- 30 auctions sold 2
and today Wed afternoon (usually good time for us) ran 30 auctions and sold 1.
Store sales continue to pick up.
Shame that most of our items we sell only do well on auction format and not store.
The collectibles we sell are moving pretty good in the store but our main money makers just sit in the store.
But since the new search, we are piling up inventory and it is not moving at all!
posted on March 8, 2006 11:40:01 AM
I don't think 3 days is enough of a time frame to really conclude that auction sales are tanking for everyone. Even if your category is tanking, someone else might be doing record business. That being said, I believe the future of ebay is more in fixed prices than auctions. I started to notice my sell through on auctions declining on a year to date period, but I have a lot of data (tomorrow is my 9 year ebay anniversary) - Where as the majority of my income even last year was in auctions, now it is a small part of my business plan. It's interesting that you say collectibles do well in the store, I personally think collectibles are probably better suited for auction, and different types of items might be better suited for store.
posted on March 8, 2006 11:52:21 AM
Auctions have been slowly tanking for the last couple of years. Items that used to get 80-140 hits on average a few years ago, now only get 10-20 hits for the exact same items.
posted on March 8, 2006 12:05:10 PM
for those who bot houses in the last 2 years with teaser rate,their rates have just been adjusted,so now they are paying 200 plus more a month for their house mortgage.
/ lets all stop whining !! /
posted on March 8, 2006 01:09:26 PM
NFL football is now more like WWF than football. Currently it just seems to be directional scripting. But don't wager on it.
posted on March 8, 2006 01:20:50 PM
The smart people who purchased 2 years ago with teaser rates probably already refinanced when prices went higher in most markets...I don't see how that affects auctions though, I think there are more sellers online, there are more buyers but not as many, and competition is alive and well. I think online auctions might just be a passing fad - Why would I want to bid on a package of razors? I think the future of ebay is fixed prices, but there will always be auctions. Ebay Express is a move in that direction, as are promoting the stores so much...They aren't setting the trend, just following it in my opinion.
posted on March 10, 2006 08:11:39 PM
This is what I am referring to,not every one is in position to refinance-
At the Doorstep
Millions Are Facing
Monthly Squeeze
On House Payments
Many Adjustable-Rate Loans,
Popular in Recent Years,
Will Soon Be Reset Higher
The Fadlallas Fight Foreclosure
By JAMES R. HAGERTY
March 11, 2006
Millions of Americans who stretched themselves financially to buy homes face a painful adjustment -- some could even lose their houses -- as monthly payments on adjustable-rate mortgages are reset higher.
In the hot housing market of recent years, many households took advantage of "affordability" mortgage loans -- heavily promoted by lenders -- that hold down payments for an initial period. Now the initial periods are coming to an end on many of these loans, leaving borrowers to face resets of their interest rates that can cause monthly payments to shoot up between 10% and 50%.
More than $2 trillion of U.S. mortgage debt, or about a quarter of all mortgage loans outstanding, comes up for interest-rate resets in 2006 and 2007, estimates Moody's Economy.com, a research firm in West Chester, Pa.
Most borrowers will be able to cope with the coming wave of resets, in some cases by refinancing with new loans, lenders and mortgage industry analysts say. But some borrowers will have trouble meeting the higher payments and may be forced to sell their homes or could lose their homes to foreclosures. A recent study by First American Real Estate Solutions, a unit of title insurer First American Corp., projects that about one in eight households with adjustable-rate mortgages that originated in 2004 and 2005 will default on those loans.
Resets will "eat into discretionary spending" for many Americans, says Joshua Shapiro, chief U.S. economist at MFR Inc., an economic consulting firm in New York. He expects consumer spending to slow in the months ahead but says the job market remains strong enough to keep most people out of serious trouble.
Still, a barrage of negative trends is making things tougher for already-strained borrowers. Interest rates are rising, which can increase the size of each mortgage reset and make refinancing more expensive. The housing market is cooling, making it harder to sell homes or build up a cushion of home equity.
Regulators are pressing lenders to tighten their lending standards, which probably will make it more difficult for some people to qualify for refinancing. And some credit-card companies have recently started requiring higher minimum payments. Energy costs are up sharply, too, as are property taxes.
One couple that faces a reset this summer is Ruth and Magdi Fadlalla, who two years ago bought a three-bedroom house for about $294,000 in the New York borough of Queens. Their loan carries an interest rate of 7.46% for the first two years. This summer, at the first reset, the rate will jump to 9.46%, they have been advised, and the rate could rise further in the future unless interest rates generally decline. Already, the Fadlallas have fallen behind on their monthly payments of about $1,950 and have been put on notice that their home could soon be lost to foreclosure.
'This Is Killing Me'
Mrs. Fadlalla, a special-education teacher, says her property taxes have risen sharply and other costs of home ownership proved higher than she expected. "This is killing me," Mrs. Fadlalla says, though she adds that "I'm going to work it out."
She is working with two local nonprofit groups, Neighborhood Housing Services of New York and Jamaica Housing Improvement, to try to avert foreclosure. "They never could afford this loan," says Peggy Morris, executive director of Jamaica Housing Improvement, who blames lenders for failing to take more care in warning borrowers of risks.
The Fadlallas got their loan through a branch of Southern Star Mortgage Corp., East Meadow, N.Y., acting as a broker. Like most mortgages, the loan later was sold to a financial firm that put it into a pool of loans that back mortgage securities owned by a variety of investors. Gary Shusterhoff, president of Southern Star, says the Fadlallas qualified for the loan when they applied.
A unit of Wells Fargo & Co., acting as a trustee for the investors that now own the loan, has initiated legal action to collect overdue payments. A Wells Fargo spokeswoman confirmed the action but had no further comment.
Debt counselors are bracing for many more such cases. "We have just begun to see what I fear is going to be quite a flood" of people seeking help in coping with resets, says Sarah Gerecke, chief executive of Neighborhood Housing Services.
Christopher L. Cagan, director of research and analytics at First American Real Estate Solutions, Santa Ana, Calif., plays down the threat to the economy as a whole from resets. He figures most borrowers who bought their homes or most recently refinanced before 2004 are in good shape. That's because the surge of home prices in most parts of the country lifted the values of their houses well above the amounts due on loans.
The bigger risk is with people who bought homes more recently and haven't yet benefited from lots of price appreciation -- and, in some cases, won't necessarily benefit at all because their local markets are cooling. For a study released in February, Dr. Cagan examined adjustable-rate first mortgage loans made in 2004 and 2005, including refinancings. He figures about 7.7 million of these loans are outstanding, representing $1.888 trillion of debt.
About 1.4 million of those households face a jump of 50% or more in their monthly payments once their initial low-payment periods run out, Dr. Cagan says, and an additional 1.6 million face smaller increases that are still likely to strain their finances.
Assuming that home prices stay around current levels and interest rates don't rise sharply, Dr. Cagan figures about one million households eventually will default and lose their homes to foreclosure. That would cause about $110 billion of losses for lenders, he says.
Lenders and the economy as a whole could easily cope with such losses, Dr. Cagan says, though it would be devastating for some families and painful for some investors who bought securities backed by the riskiest loans. "It won't happen all at once," Dr. Cagan says. "It will be spread out over several years."
Such wild cards as interest rates and home prices could throw off the projection. If interest rates shoot upward and home prices fall, the number of foreclosures could be much higher than Dr. Cagan's scenario foresees. If interest rates decline and home prices surge, the damage would be less.
Assuming economic growth remains healthy, foreclosures are likely to increase only "modestly" from the current pace, says Doug Duncan, chief economist at the Mortgage Bankers Association. He says job losses -- not resets -- are the biggest cause of foreclosures.
Subprime borrowers, those with weak credit records, are most at risk. In the past few years, many subprime borrowers held down their initial costs by using so-called 2/28 loans, whose rates are fixed at a relatively attractive rate for the first two years.
A typical subprime borrower who took out a 2/28 mortgage in 2004 has been paying interest of 7.1% for the first two years, says Grant Bailey, a director at Fitch Ratings in New York. Once that introductory period ends, the interest rate is reset every six months for the remaining 28 years of the loan at a margin over interbank rates, the rates banks charge one another for short-term money.
The 2/28 loans generally limit the size of the first jump in rates to around three percentage points. That would bring the monthly rate to 10.1%. Monthly payments for a borrower with a loan of about $150,000 would rise to about $1,315 from $1,000. Assuming interest rates stay around current levels, the rate would jump again to about 11% within six months to a year, bringing the monthly payment to $1,400, or 40% higher than the initial payment. Borrowers who chose loans that allow them to pay only the interest for an initial period, deferring principal payments, face even bigger increases -- more than 50% in some cases.
Choosing to Refinance
Rather than face those big jumps, many borrowers will refinance into new 2/28 loans, Mr. Bailey believes. Currently, they could get an initial rate of about 8% to 8.5% on a new loan.
But that won't be possible for some borrowers who have taken on lots more credit-card debt and whose homes haven't appreciated as much as expected. Because their debt costs would be so high in relation to their income and because they can't extract cash from their home equity, they may not qualify for refinancing. That means meeting the higher payments on the original loan or facing foreclosure.
"The ones who get stuck are probably going to be the ones who needed to refinance the most," Mr. Bailey says.
Even those who do refinance into a new 2/28 loan won't necessarily be in the clear because they still face an eventual reset, and refinancing typically costs thousands of dollars in fees, which often are rolled into the new loan.
A common sales pitch for 2/28 loans is that the borrower can use those first two years before the reset to improve his or her credit score and then qualify for a cheaper prime loan. "But that goal is rarely realized," says Daniel H. Jacobs, chief executive officer of 1st Metropolitan Mortgage, Charlotte, N.C. As the housing market cools, it probably will get harder for marginal borrowers to refinance on attractive terms, he notes, adding: "At some point, people are going to have to pay the piper."
posted on March 10, 2006 08:45:29 PM
While this is OT, I certainly agree that the problem written here is a real one. It's a sad case of people living beyond their means, and taking out these kinds of loans is a great example of this. I am a real estate investor, I own several properties - But I would never purchase a property without a conventional loan and at least 20% down payment. I've read that a decade ago, some of the types of loans were only offered to investors, and very few loans were made outside the traditional 30 year loan. Now, there are special teaser variable rates, 40 year loans, and loans that do not pay the principal - After a year, you could owe more than you paid. It's going to be an interesting few years ahead, but for now I don't think that is related to auctions tanking. We will have a LOT more things to worry about that bad auctions if the housing market goes really bad, recession or depression...
posted on March 11, 2006 08:41:28 AM
I live in a new subdivision outside Houston,houses are cheap and getting cheaper.
The national builders own finance company which would extend you a mortgage if your bank turns you down,it only asks for 10% down and rate is higher and they just sell the loan to some govt agencies,of course they expect you to apply for PMI.
HUD would give a buyer up to 15k (10% down and closing costs)if you income qualified and buy a house less than 2 years old.So , many took advantage of these offers and bot new houses with the idea they are building equity and enjoying a better lifestyle.
Then they move into their new home which is 3 bedrooms ,2 cars garage on a large lot and then they find out there are such things as drapes,lawnmower,weedwacker,garage door opener,backyard sodding,water bill,electric bill,gas bill,homeowner insurance,property tax and longer driving time to go places which means more car repair and there is also association fee for living in a subdivision.
Insecticide,fertiliser,weed be gone,fung away and spiders and fire ants!!
And their dream of house appreciation ??Well,not in Houston,may be in California or New York,but not here in Texas.
There are many for sale signs around here and many are foreclosures,all my neighbors sold their house for less and they bot their homes 3 years ago .
The builder has just broken ground on a new sub right next to us,and it will house 1000 houses,so how can any homeowner compete with the builder?
The prospective buyer walks into your home versus builder model home,which one would he choose?? And the only way a homeowner can compete is to lower his asking price .
/ lets all stop whining !! /
posted on March 11, 2006 08:52:13 AM
This may be off the topic but we have a hairstylist who sold his home in Orange County,CA for a good profit and use it to buy a house here(all cash deal) so he has no home mortgage to worry about.
He said he can live anywhere !!
But he is a young man with 2 kids and a working wife and he went to work in a nearby hair salon and business is terrible!
So he quitted his job and looking to do something else,dunno what that something else is,could be importing goods from his old country??
/ lets all stop whining !! /
posted on March 11, 2006 09:12:52 AM
On topic: my auctions are doing fine (knock wood).
OT: Some people live so far beyond their means that my accountant told me of having to do a budget for a married couple, no kids, making $400-$500k per year, so that they wouldn't be short when it came time to pay their credit card bills and groceries.
I know people in town (it's an affluent town) who are one Wall Street sized bonus from being homeless. They drive Bentleys and Mercedes, but have no equity in anything other than the (paper) equity in their homes, which can evaporate at any moment.
posted on March 11, 2006 10:45:40 AM
Car dealers,home builders,mortgage lenders,jewelers etc are so anxious to sell,they are too lax in their credit checking.
My car salesman said HE TRUSTS ME and let me drive away a new car .
One of my overseas supplier said he will ship me all I want and I can pay him back when the items are sold.
/ lets all stop whining !! /
posted on March 11, 2006 11:37:53 AM
I think I read the median house price in OC is around a million or more, that is just amazing. Growing up, Orange County was sort of the boondocks, not a prestigious place to live at all!
The other part of the housing market boom is that a lot of people refinanced their houses, used the money to pay off debt or buy things, and probably have run up debt again. If we see a major correction, there will be a LOT of people owing a lot more for their houses than the value of what it might be worth. This happened last time in 1990 or so when the market went bad, but the number of people using 2nd mortgages or equity lines were a lot fewer.
posted on March 11, 2006 12:01:42 PM
It is easy to picture a vicious cycle.
A slight reduction in housing values, or a few people's income problems, and they're under water (i.e., owe more than the house is worth). They then "turn the keys in to the bank." Their house is now priced for distress sale. That lowers the prices on surrounding houses. A few more people are then under water. And on it goes, until it finally settles down, with a battlefield of corpses to show for it.
We crossed the $1M teardown line a few years ago here, where builders would buy a house for $1M, tear it down, build a McMansion, and sell it for $3,4,5+M. I wouldn't want one myself; they're as classy as Donald Trump
posted on March 11, 2006 12:49:37 PM
Dont mean to sound petty,but living in a big mansion,one would equip each room with electronic gadgets like phones,TV,DVD player,appliances etc and even though they are turned off,they still draw electricity and add to your electric bill.
/ lets all stop whining !! /
posted on March 11, 2006 03:06:00 PM
We're closing on our refinance loan next Thursday. We have one of those lovely adjustable rates right now and our payments went up about $200.00 per month. We were in a panic. We have been wanting to buy a bigger house but haven't had any luck finding one that we want and we wanted to do it before out Adjustable went into effect. We are catching it in time with the refinancing so we got lucky. It starts with this months payment which isn't due yet and we will be closing on our other loan before then. Some people aren't so lucky and may have to pay it for a few months or longer.
Never again will we get an adjustable rate. We got screwed through the whole ordeal when we refinanced the first time. Very long story and we wish now we could do something about it legally. It's been over 2 years so I believe the Statute of Limitations is up.
Yes, my auctions have "tanked" real bad. I am only going to list a couple auctions a week now and let the rest sell from my Ebay store. I had about 13 auctions end so far today and only 1 sale. That's insane.
