A Reversal In The ‘Cycle Of Appreciation’: California
Some housing bubble reports from California. “Bay Area home prices are slowing, an indication that the housing market has entered a post-boom era in which buying a home no longer guarantees a profit. ‘A few more people are hitting the affordability wall,’ said Ron Gable, (broker) in Half Moon Bay and San Mateo. ‘And more people are feeling they’ve seen the (price) peak for the near term.’”
“In several markets, prices dipped slightly. For instance, the median price for a detached home in Napa County dropped 1.6 percent in the past year, from $599,000 to $589,000, DataQuick found.”
The Contra Costa Times. “Home sales in the East Bay plunged in June compared with the year before, in the largest annual decline since sales began to droop 18 months ago.”
“‘The number of transactions continues to drop,’ said Christopher George, president of a San Ramon-based mortgage company. ‘And now they are dropping at a pretty significant rate. There also could be a stopping, or even a reversal, of the cycle of appreciation of home prices.’”
“Chuck Aydelotte, an agent in Pleasanton, remembers the days when an open house would almost always draw 20 to 25 house hunters. ‘Now if you can get six or seven people, that’s considered a good open house,’ Aydelotte said.”
“‘This could be a perfect storm,’ George said. ‘Interest rates are going up, payments are going up, more homes are on the market, and prices are flattening. With all of the homes that are on the market, those homes have to be sold at a cheaper price.’”
The St. Helena Star. “What is going on with the upvalley real estate market? The large amount of inventory (has) contributed to an overall market malaise. On any given day there are 8 to 15 new listings and 10 to 20 price reductions on single-family residential properties.”
“Of the 194 upvalley listings, about 160 are active and only 34, 21 percent, are in contract. Napa County listings are up 87 percent and sales are down 40 percent. Translation, like it or not: It’s a buyer’s market.”
“Recognizing the shift, sellers are starting to accept significant reductions from their asking price. A ranch house on St. Helena Highway recently sold for $975,000, $320,000 off of its asking price. Joel Toller, who represented the seller, says that his clients ‘understood the market shift, got a bona fide offer, took it and ran with it.’”
“Buyers have been inundated with media news about the market shift and are expecting to see prices plummet and to get a bargain. If a first offer is accepted, buyers are feeling they offered too much and want to go back for another bite of the apple.”
The Modesto Bee. “After six years of rapid appreciation, home prices in the Northern San Joaquin Valley have started to sputter. Houses are languishing on the market, often for months. Sales volume fell 36 percent in June in Stanislaus County compared with last year.”
“John Nelson, Modesto branch manager for a mortgage bank that funds home loans, advocates dropping all home prices by 10 percent to make them more affordable. Craig Lewis, president of the Modesto-based Prudential California Realty, agreed houses are too expensive. ‘What we have is an affordability crisis,’ Lewis said. ‘There’s a gap between the average sales price and the average income.’”
“Lewis said demand is still there for homes, but buyers won’t buy what they can’t afford. He said sales are off so much that times are getting tough for real estate agents. Last Friday, ReMax of Oakdale shut its doors. ‘We were given no notice,’ said Tom Van Ruiten, who was one of eight agents at the office.”
“Van Ruiten has been selling real estate for more than 25 years, so the current market slump doesn’t surprise him. ‘With home prices going up 20 percent a year and wages going up 3 percent a year, what did you think was going to happen?’ Van Ruiten asked. ‘Give me a break.’”
“The average for a one-bedroom apartment in the Bay Area climbed nearly 7 percent, to $1,218, according to a quarterly report by RealFacts. In Silicon Valley, where the fallout from the dot-com blowout drove rents down by about 30 percent, the average rent ticked up 9 percent to $1,259 amid a strengthening economy and improving corporate profits.”
What improving corporate profits? This must have been written before the latest earnings releases. Some did well, Google & Apple. Others did poor Intel, AMD, Yahoo. Did not mention recent layoff announcements from Sun, Intel, or Hp. Several are under the SEC eye for stock options back dating. Just today former Broadcom CEO and HR VP were arrested. There are a dozen more by latest numbers.
I live near Broadcom’s headquarters. I didnt hear about any former CEO being arrested. Which one and why?
Sorry that was Brocade not Broadcom….
SAN FRANCISCO (MarketWatch) — Former Brocade Communications executives Gregory Reyes and Stephanie Jensen were charged Thursday with securities fraud by the Justice Department and the Securities and Exchange Commission in one of the first cases involving stock-options backdating.
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“Hang ‘Em High!”
“Van Ruiten has been selling real estate for more than 25 years, so the current market slump doesn’t surprise him. ‘With home prices going up 20 percent a year and wages going up 3 percent a year, what did you think was going to happen?’ Van Ruiten asked. ‘Give me a break.’”
I’d love to hear what he was saying to his clients a year ago.
Possibly something very similar, which wasn’t newsworthy back then.
Now I’m scared…..RE agents are starting to sound like bears.
Could this be the bottom? NOT!
He calls himself ‘Tom Van the Real Estate Man’ on his website….
barf.
Hey, real estate agent with 25 years experience. If you know so much about real estate, HOW COME YOU ARE STILL WORKING?
You know all about cycles in real estate, well we just went thru 5 years of the greatest in the history or home prices, are you are still selling real estate! Wow, you must sure know alot about what you speak.
He is still working BECAUSE HE KNOWS SO MUCH ABOUT REAL ESTATE.
“Lewis said demand is still there for homes, but buyers won’t buy what they can’t afford.”
Correction…buyers won’t buy a depreciating asset for a monthly payment equal to 3x the cost of renting it. In LA, as sickening as it was to consider a mortgage of $5K+ a month for a crapbox, it seemed a nonissue when your equity was increasing by at least $50K a year.
But now, why would ANYONE in their right mind pay $5K a month for a crapbox, when they will be incredibly lucky just to break even by the end of the year with 0% appreciation (but we all know prices will likely drop as inventory swells).
When rents are somewhat in line with buying, value is somewhat irrelevant long-term but with prices as insane as they are, sellers are out of their mind thinking that there will be a soft landing.
that’s a brilliant statement eh? that’s like saying “people want to buy, they just don’t want to buy what they can’t afford”. see, i’m an economic genius too now.
“they just don’t want to buy what they can’t afford”
They do want to buy what they can’t afford, that is the problem.
“Lewis said demand is still there for homes, but buyers won’t buy what they can’t afford.”
I am personally enjoying all these so called economic genius’ who actually believed they MADE money when their homes appreciated. They were living like successful business people when all they did was to be in the right place at the right time. I wonder what they will do now when they actually have to find a way to EARN money?
We are renting for the first time in 23 years…it’s not too bad! And watching my money earn a return in the bank is kind of nice!
” He said sales are off so much that times are getting tough for real estate agents”
___________________________________
BAHAHHAHAH! GOOD! These greedy bastards are part of the cause of this bubble. The endless cheerleading, and slogans - “By now or be priced out forever”, etc..
“By now or be priced out forever”,
They did buy now and drow everyone to buy…. now there are no buyers, and he has no job.
I think the RE agents will be one our side soon: Sell now and price it IN!
Sell now or will never get this price again!
It’s been said before, but what kinda irks me is that all of these articles are so biased to the sellers. It’s the buyers that are sitting it out causing inventory to rise or buyers have more choices so get out there. Or ‘It looks like bad news for Real Estate as prices are not rising as sharply”…bad news for who? Certainly not buyers. You may get a mention for sellers to ‘price a tad more realistically’ but that still means a $300,000 profit instead of $280,000 for no fundamental reason.
Yep. Kinda like all us bears are in fantasyland because we expect large price drops. They tell us it just “ain’t gonna happen.” And they get this information from where????
Did we hear the “experts” claim sellers were in fantasyland when they expected 20%+ appreciation per year? Did the RE establishment tell them their prices were unrealistic and not based on fundamentals?
If sales drop by 70%, they just need to sell only to the builders offering 10% commissions, they the realtors break even. Nice to see that when the s**t hits the fan your realtor has his hand in your back pocket. We should start a realtor code of ethics.
Rule 1: When sales volume goes down, prices are soon to follow. So only sell to those builders offering 10% realtor commissions. If we stick together, all builders will be forced to match these commissions.
Depending on the town or city, lising in the Central Valley are up 4, 5, 600%. No lie. Unbelieveable numbers of homes for sale; and new developments by the dozen about halfway through the buildout cycle. Brand new homes sitting empty for 1 year plus. I know because in a perverse way I drive by them once a week to check. Too big a house on too small a lot for way too much money for this area. Very interesting times ahead for the Central Valley.
What area’s are you checking? Bakersfield listings are up 350% YOY ?!?!??! Lennar has a “cracker jack box” development near me and they have sold built hundreds of homes on SPEC! I drive through there once a week and they dont sell any homes (they use these signs that say “Congratulations -insert spanish surname- family”) AND they keep right on building! Our high end market is absolutely DEAD! I fear my comments of blood in the Streets of Bakersfield (sorry Buck) will be an understatement for this entire Central Valley!
Watching most everything from Sacto to Oildale. Seems that every 1st of the month, the listing pop again. The local talk is how RE is dead, as in check the fridge dead, something smells. Merced has 1300+ homes on the MLS, with 500+ ‘reduced’. Last year this time about 300. And this in a twn of 75-80K. Maybe 25,000 homes, probably less. That’s 1 in 20 homes for sale, and that doesn’t inclaude new stock. Like I said ,unbelieveable.
Oildale- LMFAO!
What’s the difference between Oildale and Bakersfield?
You don’t wear shoes in Oildale! Bare feet will do!
Ha ha. A college buddy of mine works for his family’s business in Oildale (i think)…Golden State Drilling…have you heard of them?
so what’s the median running in Merced? Given that the median household income is about $35 k (real #).
Sort of sad to see Bakersfield so built out. Im sure they have built houses in the fields that I used to drink beer with my friends in. But maybe it is better now I can drink beer in an empty house instead of an empty field. Now all have to do is figure out where to put the bond fire.
I remember those days also. Not sure how old you are but you might remember : “The Jump”, “the Couch”, “The Pits”, “the Place”, etc…I think most of these spots are now home to Homes and Walmarts and Targets
Interesting…we had a “The Pits” in southwestern Wyoming….which is much like the central valley except it’s violently cold 8 mos out of the year.
I look at my friends kids, on their cellphone leashes, and wonder how they have any fun. It would have been my worst nightmare to be out cruising the drag and have a phone ring in my car.
Oh yeahI remember all those places.
Who knows, maybe you can get paid to set fire to some upside down flippers house.
that’s OK, it’s time to thin the fukkin herd anyway.
“Lewis said demand is still there for homes, but buyers won’t buy what they can’t afford. He said sales are off so much that times are getting tough for real estate agents. Last Friday, ReMax of Oakdale shut its doors. ‘We were given no notice,’ said Tom Van Ruiten, who was one of eight agents at the office.”
…..
That’s not very nice of Re-Max. Aren’t realtors supposed to be caring and professional? What an unemployed RE agent to do now? Where is the money for the monthly payments of his/her RE investments? And the Mercedes too.
Looks like the lines for jobs at In-N-Out Burger and Deja-Vu will start to grow!!
Speaking of a Realtor losing his job:
Craig Lewis is the guy who fired one of his Realtors who bought the Scott and Laci Peterson house last July. The reason he was fired is that he found a knife in a cabinet in the back yard with a dried red liquid on it. He contacted the police and then the news media put him on camera wearing his Prudential polo shirt. Lewis apparently was not amused. Excerpts below.
http://tinyurl.com/qylvm
New owner of Peterson home loses job
Police say other people had seen knife he found
By GARTH STAPLEY
BEE STAFF WRITER
Last Updated: July 20, 2005, 05:30:48 AM PDT
The new owner of a Modesto home previously belonging to Scott and Laci Peterson was out of a job Monday, a week after announcing that a 10-inch knife had been found stashed behind the house.
Prudential’s name was splashed in national news reports when the home was listed in May. It was only coincidence, the listing Realtor later said, that the parents of Scott and Laci Peterson chose to sell the home to Roberts, who also worked with Prudential.
Roberts had worn a dark polo shirt emblazoned with Prudential’s logo when interviewed on camera last week. He said his association with the firm was terminated because of interviews he had granted to The Bee and two Sacramento television news stations.
Craig Lewis, majority owner of Prudential California Realty, declined to comment on the separation with Roberts.
Roberts, 54, paid $390,000, or $10,000 more than the asking price, for the three-bedroom, two-bath cottage-bungalow. He said he plans to live there with an adult daughter after renovating the home.
Roberts said Lewis and one of his managers had offered to coach Roberts on dealing with media before he bought the home. After the knife interviews, he agreed with their demands to avoid reporters and not to release photos of the knife, Roberts said.
“But all bets are off now,” he said Monday, three hours after learning of the end of his association with Prudential. “Right now, I’m just really hurt.”
Well, it’s for sale again. Roberts apparently has been having nothing but bad luck.
http://www.nbc11.com/news/9536182/detail.html
“MODESTO, Calif. — The Modesto home of Scott and Laci Peterson is for sale — again.
The current owner of the three-bedroom house says it has been nothing but bad luck for him since he bought it in 2005.
Gerry Roberts said he has been fired from three jobs since buying the 1949 home and can no longer afford the mortgage payments. He was asking $449,000 for it Monday.
Roberts was the first person to own the home after the Petersons.
Scott Peterson was convicted in 2004 of killing his eight-months pregnant wife, Laci Peterson, and the fetus she carried.”
BayQT~
Man, I see a horror flick in the making. Anyone who buys that house suddenly finds their lives start to unravel.
(memo to self: Call Wes Craven)
That reminds me. The other day I was working in LA up in Benidict Canyon near Cielo Drive, which is where the Sharon Tate/Manson murders took place. We got done early and walked up the road to the house and discovered that the original house was torn down (in 1996) and in it’s place a monsterous mediterainian house is being built. It’s going to be called “Bella Villa” and it aint gonna be cheap. Apparently Real Estate agents couldn’t sell the original house to save their lives and rented it out instead to shock rockers like Trent Reznor (Nine Inch Nails) and Marilyn Manson (Gee, I wonder why) to record albums there. When Reznor learned of the demolition, he bought the original front doors and they now are installed on his recording studio in New Orleans.
BTW I have to admit, it was a little creepy. Oh, and they even tried to change the address but they changed it from 10055 Cielo Dr. to 10066…(nice move dipsh*ts)
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I would have nightmares living in that house. No thanks at any price. Reminds me of the “Amityville Horror” or “Poltergeist” or “The Shining”.
Does the former Peterson home come complete with skeletons in the closet and bodies buried in the backyard?
So Roberts is tryng to make a cool 60K in one year on that house. His luck isn’t likely to get better any time soon IMO.
so what was the deal with the knife? did the police investigate it? i never heard this story before.
“‘A few more people are hitting the affordability wall,’ said Ron Gable, (broker) in Half Moon Bay and San Mateo.”
There are only a few left who haven’t already hit it.
I hit it about `96. Have had to settle for rented vintage house almost in newport beach with big yard and lots of citrus trees ever since. Rent has gone up 30% since i moved in 10 yrs ago.
Sounds like a cool setup.
I must be slow but paying $300k then to buy, or renting for $1k—renting seemed more fiscally responsible at the time. What a sap…
Well, you will be getting a chance to buy at a decent price in a few years.
my rent’s gone up 70% since 1996. nice suburb of L.A. same place. same paint. same carpet. quality of tenants in complex drastically declined.
So are you north or south of Tustin Ave.?
I think he means the stupidity wall.
[ If a first offer is accepted, buyers are feeling they offered too much and want to go back for another bite of the apple]
That’s something that needs to be communicated. No worse feeling than lowballing and then having the offer accepted no questions asked - leaving THOUSANDS on the table. It’s always possible to offer less and then work up to a peak price that you set in advance. People don’t remember that this was standard operating procedure during soft markets.
This guy might have gotten 300K off but the price was obviously still too high. If you are not embarrassed to present an off it’s too much. 50% off the asking is a max starting point.
That’s a good point. I believe this is the first time ‘buyers remorse’ has been mentioned in connection with lowball offers. I agree, why not go super-low and work your way up?
Agreed, but thats old school thinking based on sound risk management fundmentals.
Also need to check the seller’s equity position. A waste of paper and ink if the seller is HELOC’d over the top and broke. I don’t see a lot of sellers bringing cash to a closing. If they’re in that deep, by definition they’re broke.
Isn’t that what Realtors have been arguing with sellers not to do? Meaning set the price to sell and not some ridiculous high price to wittle down. Maybe it works both ways…I dunno, just a thought.
Realtors also argue with Buyers - “Your offer is too low! You’ll never get it and someone else will!” Of course, Realtor like high offers - the chance of the transaction going through is higher and also they get PAID MORE because of %! GO FIGURE!
Bad realtors might do this, but those that want to maximize sales and referrals would not. Using a buyer’s agent is a good way to help deal with this problem, as they specialize in getting a best fit transaction and explaining the reasoning behind a good lowball offer.
All this complaining about realtors is way off base. What ever happened to “buyer beware”? Do people buying cars find themselves shocked, shocked when a sales agent exaggerates something they really should confirm for themselves? No one put a gun to people’s heads to make them buy, and anyone who took and used bad advice as only themselves to blame.
why offer anything…just take it from the bank in 6 mo
From the LA Business Journal
High-Wage Jobs Leaving State
“It’s a double dose of bad news for California’s economy.”
“A recent study from a respected think tank has found that not only have the state’s major industries all suffered some net job loss from business relocations, but that this effect is most pronounced among industries that tend to pay higher wages.”
“The findings by the Public Policy Institute of California – which studied business relocations into and out of the state between 1992 and 2003 – runs contrary to conventional wisdom that lower-wage jobs are most susceptible to relocation. Most losses were found to have occurred in finance and insurance, manufacturing, and business and professional services.”
This will help.
Correct-amondo,
Lots of high skilled jobs like corporate accountants, legal consul, marketing, and engineering are being sent across the boarder and overseas.
Don’t forget all those Hollywood studio jobs being lost too…
I think this is the one thing that the RE idiots have completely ignored in their arguments. They like to hang their hat on the employment figures, but never address things like how does a company afford to pay an admin assisstant enough money to buy a $400K condo?? Answer, they don’t. The company moves to Nashville like Nissan did.
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Sorry if this was posted here already, but did anyone catch Ben Bernanke today in his testimony to Congress saying that 10% of all mortgages in the U.S. are ARMs that will be resetting in 2006???
And another 10-15% in 2007, and another 10-15% in 2008 (from what I’ve been reading).
‘With home prices going up 20 percent a year and wages going up 3 percent a year, what did you think was going to happen?’ Van Ruiten asked. ‘Give me a break.’”
A couple of points about this quote appearing in a newspaper:
1. It’s the opposite of the old line about “When a person’s livelihood depends upon believing something, they will.”
2. We’ve all taken cracks at how the media has mishandled reporting on this madness, but lines like the one above are appearing more frequently.
3. Last month my local paper reported on the latest release of DataQuick numbers by only quoting realtors. I wrote an e-mail to the reporter wondering if she would do the same for a stock market article. For example, the local county NAR rep said home prices would appreciate 7-10% this year. I asked if a long-only hedge fund manager said the stock market would rise 7-10% this year, would she run just that or would she balance it with another view? Lo and behold, this month that reporter quoted the views of an economist. Now, while the views he expressed weren’t the strong bearish takes you get from this blog, it was progress.
Others have made the point before on this blog, but I would encourage as many as possible to reply to reporters and apply some persuasive pressure. The tone is changing, but maybe we can help it along.
Who knows, maybe in 6 months it will be conventional wisdom that 20% home price appreciation given 3% (if that) wage increases was crazy.
“this month that reporter quoted the views of an economist”
investigative journalism has been missing BIG TIME…
on the other hand… June Fletcher from Wall Street Journal wrote an excellent book exposing lots of RE sham.
House Poor: Pumped Up Prices, Rising Rates, and Mortgages on Steroids: How to Survive the Coming Housing Crisis by June Fletcher (Hardcover - Nov 1, 2005)
20 years covering RE for WSJ… worth reading
I picked that up through Amazon; good read.
“Overall, the number of homes on the market in the Bay Area has more than doubled from a year earlier.”
This is a quote from the Wall Street Journal article from the previous thread. Thought it was very, very interesting — and definitely what I’m seeing on the ground. Also interesting that Kelly Zito in her article leading off this thread on Bay Area housing made no mention of this fact. Not that we should be surprised that the super-shilly SF Chronicle RE section doesn’t want to fully spell out this scenario: Sales sharply down, prices flat, and oh yes DOUBLE the inventory over last year. Here, in the most specialest of all places, the Bay Area!
There can be no other outcome but lower prices with such conditions. There will be sellers that have to sell.
Here, in the most specialest of all places, the Bay Area!
Yeah, the fudge-packing capitol of the world!!
Hmm. Sounds anti-gay and homophobic to me. If I make anti-black and anti-Jew remarks, will those be posted too?
Just wondering.
I wouldn’t call it anti-gay, per se. It was more anti-San Francisco.
Not that there’s anything wrong with that.
yeah. fudge packers outside Frisco shouldn’t be offended…
Sure, but lay off the black, gay jews, ok? And no hare-lip jokes!
So this guy with a wooden eye asks this chick with a hair lip out… She excitedly replies,”would I!” He shouts “hair lip!” and storms away.
LMAO!!!
Damon and CA Renter,
Joking about birth defects is as low as it gets.
Are you proud of yourselves?
OlBubba,
You are right. I wasn’t laughing about the birth defect part as much as the witty response to the other post. I am usually very, very opposed to making fun of peoples’ disabilities or physical characteristics (including those who are overweight, which is often the subject of cruel comments here).
I am sorry for any offense. You are right, I was not being sensitive, and apologize for being unkind.
There is perhaps some relevance in that gay areas are associated by some with price appreciation and some of the most bubbly places are also gay havens.
I’ve heard it’s part of a cycle. Artists move into an area because it’s affordable. The local atmosphere becomes more tolerant and liberal. Gays are then drawn to the area and bring more business, cultural events, etc. Lastly, wealthy people discover the area and run prices up. That’s overly simplistic, but I think it does hold some truth.
The homebuilders are feeling the ground shaking below the housing market. “Ritcher Scale” is used to refer Earthquakes!
Pls see below from Todays MSN:
Consumer companies, including home builder D.H. Horton (DHI, news, msgs) and Domino’s Pizza (DPZ, news, msgs) bluntly said they saw consumers’ changing their spending habits. Ford Motor Co. (F, news, msgs) showed an unexpected loss and said the market for autos is difficult.
Donald Tomnitz, D.H. Horton’s CEO of the home building company, said during a conference call today that sales “fell off the Richter scale,” and he didn’t see much improvement for the next three or four quarters. Domino’s said it was “operating in a much weaker consumer environment.”
When things fall off “Falling off Richters Scale” how softly do they land? BB was talking about a soft landing only yesterday.
I hope it IS something in between.
I think the point was that the Richter scale is logarithmic (sp?).
A 9 is 10 times more powerful than an 8.
Conversely, a 7 is 10 times less powerful than an 8.
Yes. I think the maximum magnitude is 10. The world has not seen any of that size.
We would rather be a renter than have any earthquake
Actually, a “9″ releases 100 times more energy than an “8″ on the Richter Scale
A co-worker (engineer…late 30s/early 40s) mentioned to me yesterday that he and his parents bought a “vacation home” in Half Moon Bay. He seemed so proud…it took all my strength to not say anything and keep a straight face. I’m thinking that whatever they bought is 4 X more then then should have spent.
BayQT~
The interesting thing about Half Moon Bay is that Highway 1 from San Francisco has been out since April due to a landslide. It’s not expected to be re-opened until September. The only access is from the south and Highway 92 which is a 2 lane road up over the coastal hills. Getting into town is a 10 mile crawl very day.
Good. Now the chump will need to battle traffic at 10mph to get to the dump he grossly overpaid for.
Fortunately because it is a vacation home he need never drive there.
They’re obviously too rich to care; I’m sure they’ll take the private heli over.
“Many Realtors say the media have overplayed weakness in the market. Richard A. Smith, vice chairman and president of Realogy Corp., the real-estate brokerage business due to be spun off from Cendant Corp. soon, says 2006 “will be the third best year in the history of the business” in terms of total home sales, despite the cooling trend. The National Association of Realtors projects that sales of previously owned homes will fall 6.7 percent from last year’s record.”
Sorry about bouncing back to the WSJ story but I couldn’t let this one slide. Just because volume is heavy doesn’t necessarily mean a market is good. The stock market had one of its heaviest volume years as far as shares traded in 2000 as the tech/dotcom sector was imploding. $20.4 trillion worth of stock was traded on the NASDAQ alone that year. High volumes are often an indication of sellers heading for the exits.
because volume is heavy doesn’t necessarily mean a market is good.
of course it is good - for the brokers (and as long as it lasts, and as long as the extra volume compensates for lower commissions).
Same story for the stock market …
Unless you’re the broker making the margin call- not a lot of fun especially if the account has gone negative.
I read Kelly Zito’s article in the SF Chron this morning. Yes, absolutely NO mention of huge uptick in inventory. But I thought the article’s lead sentence — “buying a home today no longer guarantees a profit” — spells death for this market. What’s the incentive then to pay these sky-high prices ?? Why take on hundreds of thousands of dollars of mortgage debt with no profit likely?
Flippers in Trouble Gallery is live:
sacrealstats.blogspot.com
100 Sacramento flippers losing money, live and in color. Enjoy!
good post, max! lmfao
A gallery of the walking dead…….ta Max
Nice site. I used to live in Elk Grove and I can’t believe what these people paid for some of those boxes. Incredible!!! Watch out for those knives.
classic
Where can I find past sale prices for Los Angeles homes? Is this a closely guarded secret? There is a house a couple of blocks from me that sold for $589k a year ago that had now been put on the market for $699k!! They have done NOTHING to the house! What is the deal???? GREED??? I hope these people BURN!!
This is the house: http://www.ziprealty.com/buy_a_home/logged_in/search/home_detail.jsp?listing_num=R2043229&page=1&property_type=SFR&mls=mls_so_cal&cKey=51m6t5b0&source=CRISNET
$699k what a joke! Their 1 year ARM probably adjusted and they can’t afford it! Tough! I hope they lose it!!
http://zillow.com
What are rents going for in your area these days?
I pay $2500/mo. for a 2100 sq. ft. home built in 2001 in a gated neighborhood. My rent went up this year from $2400/mo. Pretty good deal seeing how these houses are listing for close to $700k.
Hasn’t anyone told you yet??? You’re throwing your money away. LOL!
$2500 sounds like a lot of money to me. $700K requires an income over $150K. I am right there but still would refuse to pay that much (I HAVE OTHER THINGS I LIKE TO DO WITH $$$$$$$) unless it was a fire sale where surrounding homes were going for twice that.
Try zillow or the county recorder’s office.
In OC the county recorders office works for me.
Try the LA county Assessors site. All you need is the address. or try Zillow
Sold for $500K 2/27/04 and $630K 6/6/05.
Thanks!! Looks like these people are going to be losing $$ after closing costs. A house a few doors down has been on the market for months, same size and all! Guess what the price is on it? It is $649k. Was listed at $689k! http://www.ziprealty.com/buy_a_home/logged_in/search/home_detail.jsp?listing_num=R2023422&page=2&property_type=SFR&mls=mls_so_cal&cKey=q15fk7b8&source=CRISNET
Is debt just an accepted thing in LA?? Not for us! NEVER! It seems like we don’t have any friends just because we won’t “join the crowd”! It’s just like high school! And I HATED high school!
Whoops!! Sorry it was listed at $679k! But what’s $10k worth these days???
Hey LArenter, we don’t have any friends in LA, either. Let’s chill sometime over a coffee and we can lament the debt-culture together. B. brycemason (at) gmail (dot) com.
whoa- back to 04 pricing
2007 will = 2003
back to the future
NICE! There are a few here that look very painful!
3750 Gibbons Park Way
Carmichael, CA 95608 $584,950
Bedrooms:4 Baths: 2 Sq. feet:2334
Previous Sales:
Sold on 2005-04-04 for $512,500
Sold on 2006-02-16 for $585,000
MLS# 50113491
SAVE $50
haha
From the St. Helena Star article:
Contrary to dire predictions, there has been no bursting bubble in the Rutherford, Yountville, Oakville, St. Helena, Angwin, Deer Park and Calistoga (the “Upvalley”) market.
Yes, the large amount of inventory, general bad news — like war, floods and hurricanes, our long drawn-out rainy winter, rising gas prices, and interest rates — have contributed to an overall market malaise.
But, the Upvalley real estate market is anything but stagnant. Price reductions, withdrawn, expired and new listings cause a daily flurry of activity. On any given day there are 8 to 15 new listings and 10 to 20 price reductions on single-family residential properties.
Can these (cough) people really be that (wheeze) stupid as to say no housing bubble (gurgle) here and then go on to perfectly decribe a (shnozzle) dying market. Good grief, look at the symptoms. Uh doctor, the operation was a success but the patient died.
funny, they mention 4 reasons it’s not a stagnant market….but not one is that the properties are selling. hmm wonder why?
Yeah, it’s:
the large amount of inventory
an overall market malaise.
And “anything but stagnant” with:
Price reductions, withdrawn, expired, and new listings…
On any given day there are 8 to 15 new listings and 10 to 20 price reductions on single-family residential properties.
No bubble here, move along.
Sure, there’s “no bursting bubble” in Napa, although 39% of listings are reduced. (ziprealty 7-20-06)
OK, I think I got it.
We don’t have to feed the squirels anymore!
Thats only because the starving owners trapped them for meat.
Did anyone see the housing piece on the CBS Evening News? It should scare a few people!
Missed it - what did they say?
No I didn’t… so please… more detail?
http://www.cbsnews.com/sections/i_video/main500251.shtml?clip=/media/2006/07/20/video1823975&sid=3420&title=Housing@Market@Cools
She is just begging for a swift kick…’back in the game’ indeed.
this fat wench will soon realize that flipping condos is a “game” with serious consequenses for the loser.
Thanks for posting!!
OMG ! But the realtor told me prices naver have gone down. He told me it buy now or never will get another chance.
BAHAHAHAHAHAHAHAHA !
When even shoeshine boys………..
…and actors, taxi drivers, waiters, etc.
Yea, looking at that stack of cards in her hand the party is over and she doesn’t realize it. If that many realtors have walked through your house with clients and you haven’t sold it there is a problem. It’s time to reduce the price severely. It’s funny how she said she wanted to “get her equity” and move on like it was pre-determined she make money on a condo just because she bought it. If she doesn’t change her attitude she’s going to be in for a major-league a$$ pounding. It’s funny watching this unravel from the bleachers.
She needs to realize that when it comes down to fundamentals , the purchase of her “home” should have been with the intent to live in it for quite a while and be able to afford the payments. If she bought with the intent of speculating then she deserves to get screwed. Non-speculators who bought within their budget and actually wanted to live in their homes can ride out the drop in prices.
Up for 7mo & no sale or an offer? Hmmm, think it may be overpriced? This dumbshit will be chasing the market down until she says UNCLE to the lender.
Here’s a clip from that CBS Evening News piece. Final words from the FB: “I want to get out, secure my equity, and then get back in and play the game again. Makes me sick.
http://www.cbsnews.com/sections/i_video/main500251.shtml?clip=
Thanks Mort, I didn’t realize buying a home was a game
She thinks its a game. Me thinks this will be a game of Russian Roulette will bullets in ALL THE CHAMBERS!!!
*with ( I really need to proof read)
Thanks for posting!
Good one…I enjoyed watching the clip. ALL of these type idiots really need to get burned and learn a lesson in life.
“‘This could be a perfect storm,’ George said. ‘Interest rates are going up, payments are going up, more homes are on the market, and prices are flattening. With all of the homes that are on the market, those homes have to be sold at a cheaper price.’”
Gadzooks — an honest Realtor (TM)! George — you da man. I will look you up if I ever move to the Bay Area.
don’t worry this greedy b*tch will almost certainly lose her shirt on this one… she wants to get out before her “payment inflates” - yeah, good luck honey.
When July sales figures are officially released in the middle of August, the dot.com real estate crash will take all these “it can’t happen to me” down and out. This crash wiil be different, the speed of the internet will creat chaos, and I just can’t see many qualified buyers leaving the beach or the mountains to look at another overpriced turkey, witha slick real estate agent, and a stuck in the sand seller. BYE, BYE equity
funny thing is she’s delusion and still thinks she’s gonna make some cash on the place. i wish they’d follow up with these stories… it’d be priceless to see her 6 months from now.
And now on center stage let’s give it up for…
A couple I know got lucky here in LA on a couple of “flipped houses” and got greedy, going so far as to quit their jobs (retirement and all) as a teacher and a cop to become a loan officer and a real estate agent, respectively. They just bought a 750k home to live in, have a vacation home in Havasu, a Hummer H2, Mercedes E500, and a boat. I just got a letter from them caliming “now is the time to buy!” and asking me to please refer any friends or relatives who want to buy or sell. I feel sorry for them, but they are in for a huge life correction and they deserve it.
Be sure to keep us posted on them. It seems like there’s a huge potential for Schadenfreude here…
ouch that’s gonna hurt - giving up teacher’s and cop’s pensions?
I’m all over this, Michael!
hmm I could use a good boat. Haveta remember to call the bank in 6 months.
Read about Mission viejo Market Condition by Charles Mansur.
“Comments: Even though sales were down 29% from a year ago, sales for the most part were up for Orange County in June. I don’t research every city in Orange County, but one of the cities that I do, Dana Point, saw a dramatic drop in price. However, Dana Point saw a dramatic increase last month. Newport Beach, on the other hand saw an increase this month and a drop last month. That’s why I always advocate averaging a few months to see where the market is heading.
Mr. Gary Watts, a real estate economist is predicting that sales in the second part of this year will go up. This he bases on our strong economy and need for housing. I agree with him that the need for housing is greater than the supply. However, the psychology of the market that was fuelled by the negative press is causing buyers to be afraid to buy and therefore are creating the slow down. Note that prices are holding in spite of the slow down. This is just as Mr. Watts wrote and spoke about.
I read an article in the Orange County Register a few weeks ago about how rents are increasing. That is so true. If you are thinking of buying it still makes sense to buy right now. We have so many wonderful homes to choose from and the interest rates are still low. In fact, it makes sense to buy with a 5 year fixed rate at lower than the 30 years fixed.”
Usually this guy is more objective than the others but this sh*t makes me sick. Gary Watts fu*k up… don’t you get it? It’s not a great time to buy… don’t you get it? The media did not cause this crash… don’t you get it? One in four are late on their bills. Hello to America, we’re heloc’d to death, inflationed to death and we’re running out of money. Where is helicopter Ben?
There’s never been a better time to buy (the SFR I am trying desperately to flip).
Read about Mission viejo Market Condition by Charles Mansur.
“Comments: Even though sales were down 29% from a year ago, sales for the most part were up for Orange County in June. I don’t research every city in Orange County, but one of the cities that I do, Dana Point, saw a dramatic drop in price. However, Dana Point saw a dramatic increase last month. Newport Beach, on the other hand saw an increase this month and a drop last month. That’s why I always advocate averaging a few months to see where the market is heading.
Mr. Gary Watts, a real estate economist is predicting that sales in the second part of this year will go up. This he bases on our strong economy and need for housing. I agree with him that the need for housing is greater than the supply. However, the psychology of the market that was fuelled by the negative press is causing buyers to be afraid to buy and therefore are creating the slow down. Note that prices are holding in spite of the slow down. This is just as Mr. Watts wrote and spoke about.
I read an article in the Orange County Register a few weeks ago about how rents are increasing. That is so true. If you are thinking of buying it still makes sense to buy right now. We have so many wonderful homes to choose from and the interest rates are still low. In fact, it makes sense to buy with a 5 year fixed rate at lower than the 30 years fixed.”
Usually this guy is more objective than the others but this sh*t makes me sick. Gary Watts fu*k up… don’t you get it? It’s not a great time to buy… don’t you get it? The media did not cause this crash… don’t you get it? One in four are late on their bills. Hello to America, we’re heloc’d to death, inflationed to death and we’re running out of money. Where is helicopter Ben?
Why is my message stalling?
Read about California mortage defaults increase.
“”We’re not going to see a price crash like we did in the early 90’s,” says Foreclosures.com President Alexis McGee. “Back then, overbuilding by developers led to excess inventory and what we call competitive liquidation of unsold new homes. This time, the inventory just isn’t there.”
What the heck is he talking about. Inventory isn’t there? Kook-aid anyone?
Off topic, but I had to skick it in here, because geez louise the San Francisco Chronicle has hit an all time low. Go to http://www.sfgate.com. They have a poll. It asks “What kind of blogs are you most interested in reading?”
Supposedly, and I say supposedly because I can’t help but wonder if this whole poll is bogus, but supposedly 73% said “None– dumbest from of communication since paper cups and string.” And all of the others options got hardly any responses.
Well, that’s wrong, because two paper cups and string runs circles around the San Francisco Chronicle. And I can also tell you that is NOT the prevailing attitude toward blogs that you find around here.
I think this is the problem with how we all think. We (Ben’s bloggers) spend many hours, daily, researching bubble/economic topics. We assume that everybody else can/will do the same. However, when I mention this blog to other people, many don’t even know what a “blog” is. The internet is just something they use to e-mail their friends or occasionally look up some info (not spending the time/effort we do). That’s why I don’t necessarily believe this time will be much different WRT speed of the decline. IMHO, the market will really tank once the credit market gets hammered. It’s could literally “plateau” until then. It’s been doing that in SD for almost two years now.
correction: **It** could literally plateau…
yes, the credit spigot will be a major factor in how quick the bubble will burst; the internet will be irrelevant for how fast things unravel. The Dutch tulip mania in 1635 unraveled in about 1 week (90% drop from the top!); I’m sure the worldwide housing bubble can’t beat that.
Also, most people simply do not WANT to hear/read/remember the bad news when it comes to easy richess from housing. Maybe they will start paying attention when many close relatives go bankrupt, or the bank manager knocks on the door for an extra downpayment on the mortgage. Until then they will just hear the nice stories from the realtors, flippers etc.
Hey Ben, I have a post that did not come through… do you see it?
