My Home Isn’t Selling—When Should I Give Up?

House for Sale (or rent) sign

It’s the end of the traditional summer buying and selling season, and Debbie Davis is facing a major dilemma.

The Allentown, PA, resident put her four-bedroom, three-bathroom house up for sale in March. She figured it would fly off the market—after all, the house is spacious, well-maintained, has a fully remodeled basement, and is in a fantastic neighborhood. What’s not to love?

“I did all the things that my Realtor® recommended: painted and decluttered,” Davis says. “A house down the street was on the market for about $30,000 more than what I was asking, and so I was optimistic.” Very optimistic.

But then reality reared its ugly head. Davis’ house lingered on the market, attracting no offers. Finally she decided to take the hit—and dropped the price from $239,000 to $229,000. The result: one lowball bid.

Now Davis, a professional musician who moved several states away while her home still sits on the market, is forced to pay a mortgage on her new house (which would have been otherwise paid for with cash from the sale proceeds). And so, the dilemma: Davis’ Realtor contract is up at the end of the month. Should she keep trying to sell the house, or take it off the market and rent it out?

Davis isn’t alone in her quandary. It’s a seller’s market across the nation right now, but that doesn’t mean every home is being scooped up in a nanosecond.

When your home for sale is languishing on the market, how do you know when to give up? Here are a few things you should consider before you call it quits.

Take a good, hard look at the numbers

The first thing to do is evaluate the way the house is priced, says Shannon Sharpe, a Realtor in New Orleans.

“I mean really evaluate,” Sharpe says. “Look at the active competition. What else would a buyer in that price range be getting for the same amount of money? Can your house be marketed better?”

When a home is stalling on the market, it’s often a price issue. Scrutinize the market before making a decision. If you’re comfortable lowering the price, try selling it for three more months.

Analyze how your home was marketed

“Before you take the next step, really check what happened over the last six months,” says Gary Malin, president of Citi Habitats in New York City. “Arm yourself with as much information as humanly possible.”

He suggests asking a few questions:

  • Were you provided with traffic reports and detailed information about the number of people who saw the house?
  • What client feedback did you get?
  • What advertising did you do in print as well as online?
  • Do you have details on what people who viewed your property ended up buying?

Both Sharpe and Malin agree that if you aren’t happy with the marketing approach, it may be time to seek another real estate professional. Approaches differ, and you might need to find someone who is better suited to your needs.

“Given that you haven’t gotten the result you want, it might just not have been the right fit,” Malin says.

Don’t limit your options

So you discovered your home was priced appropriately and you have no quibbles with your Realtor’s approach. It’s time to take a deep breath and accept the possibility that your market is in a slowdown.

Ask agents about the typical time on the market. And, Malin notes, the choice doesn’t have to be between renting and selling the house. You can hedge your bets and try both options until you find a buyer.

“You could put the house up for rent and for sale at the same time so that potential clientele have a trial rental period,” Malin says. “Maybe it’s just a slow time in your market, and the rental market is really strong. Maybe a year from now the market will be better.”

Enlisting a Drone to Sell Your House Just Won’t Fly

flying drone with camera

Once a novelty, high-def videos of homes with sweeping aerial shots like in a Hollywood movie have become a favored sales tool of real estate agents and homeowners.

Tempted to jump on the flying bandwagon to sell your house? You may want to put on the air brakes and educate yourself first.

Flying a drone isn’t like flying a hobby aircraft—not when it comes to selling your house. The rules were grayer when drone usage was in its infancy. But now that these flying gadgets have seemingly become as ubiquitous (and annoying) as mosquitos in some parts of the country, they’ve come under scrutiny by the Federal Aviation Administration. And the FAA has brought down the hammer.

Now, any time you want to use a drone for any commercial purpose (including selling a private residence), you’ll need to acquire a permit or petition the FAA for an exemption. It could take months, and there’s no guarantee the FAA will approve your request.

For individuals selling their own house, that’s a lot of hassle. Plus, drones can cost from a few hundred to many thousands of dollars, says Steve Metzman, president of the aerial photography business DroneLinx, which has offices in New York City andPhiladelphia.

Dangers of using drones

Why the governmental scrutiny? The FAA is concerned about the dangers of an untrained person piloting a drone, and also “personal injury, property damage, privacy and public nuisance” issues that can arise from your drone-flying escapades, saysDavid P. Cooke, director of Genova Burns’ aviation and aircraft law practice group inNewark, NJ.

Beware of breaking—or bending—the rules by renting a drone (and not getting the permit/exemption) instead of buying one, or shooting the drone footage and having an editing company produce the video. Either way, you’re at legal risk, experts say.

Best legal way to sell your house with a drone

If you really want that vertiginous aerial panorama of your home, your best option is to get an FAA-approved company to do the work for you.

Some Realtors® and real estate companies may include aerial video as part of their package, by either hiring a third party or doing it themselves if they have the proper permissions and equipment. To make sure the company is operating legally, Metzman says to ask for its FAA authorization number.

The good news: The FAA has been issuing more exemptions than ever before. To date, it has approved 1,500-plus exemptions (and that number’s growing!) throughout the country. At the very least, you’ll be able to shop around.

Selling Your Home? Better Make Sure It’s Clean Before Moving Out

house-cleaning

Let’s face it: Now that you’ve found a buyer and scheduled the closing, you’re ready to be done with your old home. A clean break! The last thing you want to do is spend the weekend deep cleaning the place for someone else to enjoy. Besides, would it even matter?

Actually, yes, it does matter.

We feel for you—the temptation to skip out on those last few cleaning chores is strong. But don’t give in. How dirty you leave your home isn’t just about etiquette—it could also cause problems with the sale of your home.

While buyers may forgive you if you forget to sweep under the stove, more serious offenses can have serious consequences. Check your contract: Some sellers may stipulate that the place be spotless by the time they move in. If you agree to this (verbally or in writing) and don’t live up to your end of the bargain, you could be at risk for a lawsuit.

So if you leave a pile of filth, the new owner could delay closing—or even bail on the sale altogether.

“In a rare case I had someone walk away from the sale because of the condition of the home at the final walk-through,” says Darbi McGlone, a Realtor® in Baton Rouge, LA.

Odds are your buyer will be incredibly stressed out by closing day, and you don’t want to make matters any worse.

“It could be the straw that breaks the camel’s back,” McGlone says.

So, what are you waiting for? Let’s bust out the yellow rubber gloves and get to work.

Work from the top down

When it comes to cleaning, starting early is easiest.

“I recommend doing a good scrubbing and decluttering before putting the house on the market—it can be very stressful to do at the last minute,” says Wendy Wrzos, certified interior redesign specialist and founder of The Blue Giraffe, a home staging and redesign company in New Jersey.

But if you didn’t start early, don’t panic. If you attack the job with a plan, it’ll get done faster. Try to clean room by room, working from the top down.

Dust the ceiling fans, wipe down the walls, and then sweep, vacuum, or mop. Clean the refrigerator (if it’s staying behind), and give a once-over to the oven and stove—including the drip pans. Check the air vents for filth or mold—and if you spot any, call in a professional. This won’t be a standard broom cleaning.

Once you’re done with one space, move on to the next. And don’t forget the details.

“Light fixtures are rarely cleaned,” McGlone says. “Wiping down cabinets and drawers inside and out would be nice also—not many sellers ever do it.​”

Take a deep breath

Cleanliness isn’t the only thing you have to worry about before the final walk-through.

“The first thing buyers always notice when they walk inside is if your home has any less-than-appealing smells, whether it is cat litter, a wet dog, garbage, or the fish you cooked two nights ago for dinner,” Wrzos says.

Reality check: Any strange odors—even if temporary—will make the buyers think the home is dirty. (And they may be right.)

Even if you’ve already moved out, go back into the home for a quick sniff before the walk-through. Bring a friend who might not be as nose-blind to your old home as you are, and ask for an honest opinion.

Air fresheners can minimize lingering odors, of course, but you can also try theseinnovative tips and tricks. When all else fails, call in a deodorization pro. Yes, they exist.

Take everything with you

Many sellers leave behind personal items, because either they think the new owner may get use out of them or they just don’t want to deal with them. But here’s the thing: “No one wants your old shower curtain and matching trash can,” McGlone says.

Unless the buyer specifically asked for something, take everything with you. Double-check attics, basements, storage closets, and the garage for anything you might have missed.

5 Things Your Home Appraiser Wishes You Knew

appraiser-magic-no

So you thought you were in the homestretch because you accepted a great bid on your home? Think again! The closing process has only just begun—and for most sellers, the appraisal can be one of the scariest parts.

For starters, lenders often require the use of their own, FHA-approved appraiser. That means you get zero say in who’s determining the financial value of the home you’ve lived in, loved, and sunk your savings into.

Here are some things sellers can do—straight from the appraisers’ mouths—to navigate the process.

Keep in mind that appraisers aren’t magicians

The appraiser won’t know what your home is worth the second he walks in the door.

“People think we know the value of the property as soon as we see it,” says Michael Coyle, the founder of The Coyle Group in Lafayette Hill, PA.

That’s simply not the case. A good understanding of the appraisal process will go a long way toward comprehending how your home’s value is determined.

First, an appraiser will pull comparable listings (called “comps”) from the nearby area. These are homes similar in style, location, and footage sold within the past few years. Then, he’ll come by your house to determine its condition and quality, as well as any other factors that would affect the cost of the home, and use that information—along with the comps—to make an accurate assessment.

This usually takes at least a few days—and definitely more than a few hours.

Prep your space—and its occupants

No, the appraiser isn’t coming by to judge the cleanliness of your homestead—but it’s still good form to declutter, dust, and mop beforehand to show your home in its best light, according to appraiser Adam Wiener, the founder of Aladdin Appraisal in Auburndale, MA.

A good appraiser won’t devalue your home because it’s messy—but a neat, organized home might help you.

“Even if they’re not consciously aware of it, the appraiser might value (a messy home) a little lower,” Wiener says.

Also, make sure the occupants of your home are prepared for the appraiser’s arrival, including teenagers who tend to stay holed up in their rooms.

“And make sure everyone’s clothed,” Coyle adds. “Sometimes, they forget to tell the teenager.”

Get your paperwork in order

Before the appraiser arrives, gather all the information you have about the house and send it over. Most appraisers will ask for this upfront, either directly or through the lender or broker.

Coyle recommends having on hand a list of major improvements as well as detailed info about the age and condition of the roof, HVAC systems, and major appliances. For any DIY projects, make sure you have the original permits.

“My favorite customers are the ones who have all the information ready for me,” he says.

There’s nothing worse than an appraiser pulling comps for a 1,200-square-foot 1920s Cape Cod–style house, only to realize on the day of appraisal that your master bedroom addition adds an additional 500 square feet.

When that happens “none of my comps are any good and my values are off,” Wiener says.

And that means more work—and more time before a final assessment can be reached.

So go the full-disclosure route.

“Hand it to them on a silver platter: Here’s my neat, gorgeous house, shown in its best light, and all the things that are awesome about it,” Wiener says.

Don’t put too much stock in home improvements

We’re sure your brand-new kitchen is stunning—but don’t be surprised if it doesn’t proportionally raise your home’s market value.

Appraisers stress moderation in assuming how much your shiny, brand-new kitchen will add directly to the worth of your house. If you spent $50,000, you’re likely to see only a fraction of that returned in value. That goes double for a new pool, which “does not bring as much value as people think,” Coyle says. (This might vary if you live in a hot climate where pools are near expected.)

As for your finished basement: Sorry, but that’s even less help. Most appraisers useANSI standards for measuring the square footage of a home, which excludes any rooms below grade. That doesn’t mean your basement has no value, but it doesn’t technically add space.

Don’t engage in listing ‘puffery’

Before listing, make sure you and your Realtor® take a realistic look at what your home actually offers. Are you including the basement square footage in the total? Are you hoping no one will notice your roof isn’t new? Preparing yourself ahead of time with a pragmatic estimate will ease the appraisal process.

And above all else, make sure not to fudge the numbers.

“There’s an epidemic of puffery,” Wiener says.

This is particularly rampant in areas where the assessor’s information isn’t accessible online. When you know potential buyers have to actually, gasp, go in person to look up the sketches, it might be a lot more tempting to pad some square footage here and there.

After all, who will notice?

Here’s who: Your appraiser—who’s happy to go to the office and pull 20 or 30 comps. And he won’t be fooled.

My House Is Literally ‘Making Me Sick’—What Can I Do?

sick-couple

At realtor.com®, we love to hear from our readers, take their thorniest questions about home buying, selling, and owning, and then tap into our deep pool of industry experts for definitive answers. It’s fun and informative!

One of you recently emailed us the following frequently asked question:

Q: I have been living in my townhouse less than one year and have recently found out that I have a high level of mold in the house. I had the property inspected by a professional building inspector before purchase and there was no indication of this problem on his report.

The house is literally “making me sick” and I have been advised (by doctors) to move out.  My questions are:

How can I put this home up for sale?

How much can I expect to pay to have the mold removed?

Should I pursue litigation with an attorney to recover my losses?

A: This is unquestionably an alarming situation to be in. But before you make any decisions regarding litigation, make sure to get a second opinion on the mold. Bring in a third home inspector—yes, a third—and make sure you know exactly how much mold you have and where it’s originating.

But keep this in mind: The fact that your initial home inspection didn’t indicate mold isn’t necessarily indicative of an unreliable home inspector. Inspectors are trained to look for conditions surrounding mold, but not mold itself, says Kevin Minto, president of Signet Home Inspections in Grass Valley, CA.

A routine inspection might indicate that a home has the proper conditions for mold growth such as waterlogged areas or spots with high cellulose content.

And, if mold was found, the inspector should have referred you to a qualified mold professional for assessment and remediation options. Bottom line: If the mold isn’t presenting visually, your inspector might miss it. But that also means it’s probably not a serious mold problem.

How to determine who—or what—is to blame

Unfortunately, there’s no good way to determine if the mold was present before purchasing your home—meaning litigation is unlikely to be a fruitful avenue. Plus, in the right conditions, mold takes just 48 hours to propagate.

“What is to say this mold infestation didn’t occur after the home inspection was completed?” Minto asks.

And another caveat to keep in mind: Even if the problem is as old as the house, it simply might not have affected the previous homeowners.

“All homes have mold to some degree,” Minto says. “Acceptable levels of mold are not the same for everyone as some people are far more sensitive than others.”

Unless you can uncover direct evidence the previous homeowners knowledgeably hid the mold problem, there’s not much you can do.

Since you live in a townhome, your neighbors may offer some clues. They may also be suffering—or even causing the mold.

Neighbors who cook with a lot of steam and don’t vent their kitchen properly can add significant moisture to the home, according to Larry Stamp, owner of Cameo Home Inspection Services in Olympia, WA.

Options are ‘limited’

We also recommend getting a second opinion from another doctor.

“You have to kind of be a little skeptical of the diagnosis as well,” says Stamp, who’s also a former nurse. “Mold illness is a very difficult thing to diagnose.”

But assuming you do have mold—and it is making you sick—your options are still, unfortunately, limited: Anything you do will require removing the mold, which can vary widely in cost depending on your location and the extremity of the infestation. You might be able to get away with simply cleaning the area, which can cost under $200.

But if it’s traced to a fundamental problem in your roof or foundation, removal costs can quickly climb into the thousands of dollars.

Even if you want to sell the house, you’ll be forced to remove the mold beforehand—or risk selling at a loss.

But there is some (sort of) good news.

“Keep in mind that everyone is not equally sensitive to mold and the problem may not be as bad as perceived,” Minto says.

Sin City sees high-rolling home prices again

Strong demand and tight supply has one of the nation’s hardest hit housing markets of the recession getting back on its feet again. Las Vegas home sales surged 14 percent in September from a year ago, according to the Greater Las Vegas Association of Realtors (GLVAR).

“At this point, we’re well ahead of last year’s sales pace, which is good news for local homeowners and the housing market,” said 2015 GLVAR President Keith Lynam, a Las Vegas real estate agent. “It remains a fairly balanced real estate market, which is solid news for both buyers and sellers.”

A time exposure of traffic along the Las Vegas Strip is viewed from Caesars Palace on May 19, 2015.

A time exposure of traffic along the Las Vegas Strip is viewed from Caesars Palace on May 19, 2015.

The median price of a home sold in September was $220,000, up 8.6 percent from one year ago, according to GLVAR. Condominium prices were up about 5 percent.

As with much of the nation, the inventory of homes for sale is down from a year ago, and the same is true in Las Vegas with September supply 3 percent lower than a year ago. Homebuilders are starting to ramp up again in the area, and with solid demand returning and distressed homes leaving the market, supply should increase in the coming months.

“Demand is still outpacing inventory in housing that’s listed for sale under $300,000, but when you get above that mark that’s where we’re seeing the softening in demand,” said Cynthia Silver, a real estate agent with Century 21 Martinez and Associates.

Pending sales were lower in August, but Silver says that is normal for the season. She is concerned some sellers are being unrealistic in their pricing. The Las Vegas housing market is improving, but it is still has a ways to go.

“As long as the seller lists for current market value, the days on market are still very reasonable,” added Silver.

Zombie foreclosures lurk locally but largely vanish

They were one of the worst blights of the housing crisis.
Zombie foreclosures –abandoned homes in some state of foreclosure but not yet repossessed by banks and put up for sale.

In some neighborhoods there were so many, they took up half a block. In others, they stood out, grass un-mowed, trash in the yard, glaring, often dangerous reminders of the worst housing crisis in history.

Now, thanks to rising home prices and streamlined foreclosure rules, they are half of what they were just a year ago.

Foreclosure house

Zombie foreclosures now account for just over one percent of the 1.5 million vacant homes in the United States, according to RealtyTrac.

States with the most vacant “zombie” foreclosures were New Jersey (3,997), Florida (3,512), New York (3,365), Illinois (1,187) and Ohio (1,028), and some markets, such as Boston, St. Louis and Philadelphia, have seen an increase in their zombie population.

That increase is likely due to an increase in default notices in states with a very slow foreclosure process that can drag on for years; with backlogs so big for so long, banks waited to file.

Now, as those backlogs ease, the banks are filing, but the new default notices are on homes that have been delinquent possibly for years, so they are more likely to be vacant when they finally get to foreclosure.

“The overall inventory of homes in the foreclosure process has dropped 36 percent over the past year so it’s not too surprising to see a similarly dramatic drop in vacant zombie foreclosures,” said Daren Blomquist, vice president at RealtyTrac.

“What is surprising is there are so many vacant homes where the homeowners do not appear to be in financial distress.”

The majority of vacant homes, 63 percent according to RealtyTrac, are owned outright with no mortgage.

“The fact that the homeowners are not selling, given the recovering real estate market in most areas, indicates that many of these properties are in poor condition and in neighborhoods that have been left behind by the housing recovery,” said Blomquist.

The problem is particularly prevalent in cities such as Chicago and Detroit, where distressed homes are highly concentrated in certain neighborhoods. 5.5 percent of Detroit homes are currently vacant, according to the report.

“Some single family homes stay vacant because they’re in the wrong place, in markets where population isn’t growing and demand is weak. But the big question is whether some owners are holding vacant houses in strong-demand areas off the market, hoping to sell higher if prices keep climbing,” said Jed Kolko, Senior Fellow, at the TernerCenter at UC-Berkeley.

Nationally, the supply of single-family homes for sale is extremely tight, and yet a lot of single-family homes remain vacant and off the market. The overall vacancy rate for single-family homes is still near its recession-level high, when you include homes held off the market, according to Kolko.

Mortgage applications surge 25% on regulation worry

Another roller-coaster interest rate ride, combined with anxiety over new mortgage regulations, caused borrowers to rush to their lenders last week.

Total mortgage application volume surged 25.5 percent on a seasonally adjusted basis for the week ending October 2nd compared to the previous week, according to the Mortgage Bankers Association (MBA).

An ad for mortgages at a Citibank branch in New York.

Both applications to refinance and to purchase a home were almost equally juiced. Refinance applications rose 24 percent, seasonally adjusted, and purchase applications were up by 27 percent. Purchase applications, which are usually less rate-sensitive week-to-week, are now 49 percent higher than one year ago, an astonishing jump given that the latest reads on home sales show the market appears to be weakening. They are now at the highest level in five years.

“The number of applications for purchase and refinance mortgages soared last week due both to renewed rate volatility and as many applications were filed prior to the TILA-RESPA regulatory change,” said Lynn Fisher, the MBA’s vice president of research and economics.

The change is part of a move by federal regulators to further protect borrowers by forcing lenders to disclose all details of a loan at least three days prior to closing; it went into effect October 3rd.

The average loan size of applications in the weekly survey increased by 6.9 percent, driven by a 12.1 percent increase in the average size of refinances.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.99 percent, the lowest level since May 2015, from 4.08 percent, with points increasing to 0.46 from 0.45 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. This average reading, however, does not show how low rates got on certain days last week, with some lenders quoting as low as 3.625 percent.

While the weekly jump is significant, mortgage application volume is still running historically low, especially on the purchase side, given population growth and pent-up demand from the recession. Purchase application volume is less than half of what it was during the housing boom from 2005-2007, and is now back to levels comparable to the late 1990s.

Chinese money flows into US housing

Asian couple and house

From sunny suburban developments in Irvine, California, to shiny new condominium towers overlooking Manhattan’s skyline, Chinese buyers are sinking cash into U.S. residential real estate. Chinese are now the top foreign buyers of domestic properties, according to the National Association of Realtors, and nearly half of them are paying cash, according to RealtyTrac, a real estate sales and analytics company.

Forty-six percent of Chinese buyers paid cash for their U.S. homes so far in 2015, up 229 percent from a decade ago. Compare that to a 33 percent cash share for buyers overall, up 65 percent from a decade ago.

“Cash buyers across the board are playing a much bigger role in the housing market now than they were 10 years ago, and that is particularly true for Chinese Mandarin-speaking cash buyers, who are more likely to be foreign nationals,” said Daren Blomquist, vice president at RealtyTrac. “Foreign cash buyers have helped to accelerate U.S. home price appreciation over the past few years given that these buyers are often not as constrained by income as local, traditionally financed buyers.”

Recent instability in China’s economy and stock market has driven even more buyers to the U.S. — so much so that Long & Foster, a Virginia-based real estate agency, recently began working with Juwai, a China-based real estate listing site.

“We’re seeing demand from Chinese buyers with children of all ages — some as young as 1 year old — and they’re relying on our team for insight into the local areas and their educational offerings, from elementary to university level,” said Pandra Richie, president of Long & Foster’s corporate real estate services. “Access to quality education is one of the top priorities for Chinese buyers, and from Philadelphia to Richmond, our market areas offer some of the best school districts and universities.”

Asian buyers accounted for 35 percent of all international purchases of U.S. real estate for the 12-month period ended in March 2015, spending more than $28 billion. They have been very active in high-end markets, especially in California and New York City.

Kathy Sloane, a real estate agent with Brown Harris Stevens in Manhattan, recently returned from a real estate conference in China.

“Many Chinese signed up to come. Many New York developers signed up to find out what these Chinese buyers wanted,” said Sloane. “The Chinese buyer that was there, often brought their children. They are affluent. They want to know how to get their children into school and how to get health care for their parents. It’s a package.”

Some want trophy apartments in New York, but certainly not all. There is an appetite for everything. They do tend to like new construction, as is evidenced in Irvine, California, where homebuilders are selling and even designing for Chinese buyers.

“These people are not about flight capital. They are about changing their lives and moving out of China for a variety of reasons,” added Sloane.

Education, health care and the promise of price appreciation are all enticing to Chinese buyers. While demand has been on the higher end until now, it is likely that more affordable markets like the mid-Atlantic will start to see increased demand. Cash is a distinct advantage in today’s tight housing market, and clearly Chinese buyers know that.

Housing today A ‘bubble larger than 2006’

Home prices are gaining steam again, fueled by tight supply amid growing demand.
Nationally, home prices were nearly 7 percent higher in August compared to a year ago, according to a new report from CoreLogic. That is a bigger annual gain than we saw during the spring market in May and June. Other monthly reports have shown the same phenomenon.

“It is clear that house price growth has picked up recently,” noted analysts at Capital Economics, comparing August’s annual gain to a 4.8 percent rise in February. “Indeed, with the months’ supply of homes close to a 10-year low, if anything, both CoreLogic and Case-Shiller are reporting slower growth than might be expected.”

Sold sign on house real estate

While home prices nationally have not yet returned to their peak of the last housing boom, some local markets have surpassed it. Now, some claim the housing market is in a bubble far worse than the devastating one in 2006. The argument: Housing is far less affordable today than it was back then, and the home price gains are driven not by healthy, end-user demand but by a lack of construction, artificially low interest rates, and institutional and foreign all-cash buyers.

“In the days of ‘anything goes,’ ninja financing caused housing prices to lurch higher, which forced people to rush in and buy, which in turn pushed prices higher, thus increasing volume more, and so on. But when it comes to the new-era, end-user buyer, that can’t happen any longer, as buyers actually have to fundamentally ‘qualify’ for the mortgage for which they apply,” wrote housing analyst Mark Hanson in a note to clients.

Hanson, often criticized for being a housing bear, points to the institutional and foreign buyers who have flooded the market since 2012, buying up distressed and lower-priced homes, as well as some new construction, all with cash. He calls it an exact replay of the last housing boom, “when unorthodox demand with unorthodox capital would pay any price it took to hit the bid.”

California-based real estate analyst John Burns, of John Burns Real Estate Consulting, called Hanson’s premise “ridiculous.” He said you cannot compare affordability today to the heady days of the housing boom when anyone could get a loan with no money down and artificial — now illegal — teaser rates.

“That was an awkward, unusual period that is not coming back,” said Burns, who claims 90 percent of the nation’s local markets are “affordable” when home prices are weighed against income.

He also pointed to low down payment FHA loans. “All you have to do is show up with that down payment and prove your income,” he said.

That said, rising mortgage rates are a concern, Burns said, admitting home prices have been inflated in part by artificially low rates.

“We will have a problem if rates go up,” he added.

First-time homebuyers, who are having a very hard time getting back into the housing market, say they are often outbid by all-cash buyers. In markets that were particularly hard-hit by the housing crash, like Phoenix, Las Vegas and Atlanta, they simply cannot compete with investors.

Investors put a floor on prices during the recession, but they also drove them far higher than expected. Institutional investors may make up a small percentage of overall homes purchased since 2012, but they make up a huge share of buyers of distressed, low-priced properties. Also, the impact of individual investors and foreign buyers is largely underplayed. They, too, come bearing cash.

“In short, end-users today are being handed a red-hot potato market already in a bubble larger than 2006,” noted Hanson.

The argument is founded in basic mortgage math. The majority of regular, owner-occupant homebuyers today need to get a mortgage to finance the purchase. Unlike during the last housing boom, when money was basically free, they have to have a down payment, good credit and enough income to qualify for the debt.

Even with interest rates today considerably lower than they were during the housing boom, housing today is far more expensive. Buyers can’t just pay interest on the loan, they have to pay principal as well. They have to put at least 3 percent down, and if they are using that low a down payment, they have to pay mortgage insurance. The income needed to qualify for a loan today is also far higher than it was then.

Wall Street appears to believe that housing is going gangbusters right now, because prices are jumping and demand is returning. Home construction, however, while improving from the depths of a pit, is still dramatically lower than it was not just during the housing boom but even during more normal housing cycles. That is the disconnect.

“Four years in, I would think the housing market would be further along. I think it means we’re going to have a longer, slower recovery,” said Doug Yearley, CEO of luxury homebuilder Toll Brothers,on CNBC’s “Squawk Box” last week.

In the same interview, Yearly claimed housing is more affordable today than it was during the last housing boom. That may be because prices have not returned to those peaks.

But as with everything in real estate, affordability often has to do with location. For young adults in big cities and hot real estate markets, homebuying can be a challenge.

A caller into C-SPAN’s “Washington Journal” on Tuesday morning identified herself as Rachael, a married, working millennial who pays $1,600 a month to rent her one-bedroom apartment in Northern Virginia, but, “would love to buy a condo.” She said she cannot afford the sky-high prices.

“It gets really expensive for a first-time homebuyer,” she said.