Ed Dodson responding...


> I cannot add to Mr. Dodson's concise outline of the regulatory and disclosure 
>hurdles that are intrinsicly part of a real estate transaction.  To suggest that the 
>seller "anticipates" no gains to trade (with respect to contract terms) is only a 
>partial answer.  In reality, the seller KNOWS that there are no gains to trade. They 
>would choose to walk away from the transaction rather than face the regulatory impact 
>of "negotiation".  Only one party to that negotiation would win; consequently, there 
>is in fact no true negotiating scenario - there is no market for contract terms . . 
>.and there is no margin for contract terms.  There is instead a market for 
>boilerplate homogenized disclosure . . . but in my mind, that's hardly a market at 
> Ed Dodson here:

There is also this. This is very little speculative new construction anymore. Builders 
are showing homes using computer generated images. They purchase the land (often for 
cash because banks will not lend for site acquisition and preparation costs) and begin 
construction only when they have a buyer under contract and a mortgage commitment from 
a lender. So, the net impact of newly-constructed homes is not to add many new units 
to the supply of housing available for sale.

Existing housing units that are owner-occupied are easily pulled from the market when 
the owner anticipates not being able to get the desired price, except in a 
recessionary environment when unemployment or other financial duress is the reason the 
property is put on the market. Thus, unless business inventory for which a producers 
incurs storage costs and depreciation expense and may have to sell below the cost of 
construction, the owner of a house is generally not under such pressures. Any downward 
pressure on housing prices (again, unless there is a prolonged recession characterized 
by many defaults and foreclosures, in which case bank-owned real estate does take on 
the characteristics of goods inventories) is slowed by the withdrawal by
owners of their homes from the market who can and will wait until the next upturn in 
the housing market.
org:Fannie Mae;Housing and Community Development, Northeast Regional Office (NERO)
email;internet:[EMAIL PROTECTED]
title:Senior Affordable Housing Business Manager
note:If you need to reach me during non-business hours, send an email to: [EMAIL PROTECTED]
adr;quoted-printable:;;1900 Market Street=0D=0ASuite 800;Philadelphia;PA;19103;U.S.A.
fn:Edward J. Dodson

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