‘The Paradigm Has Shifted’ In California
The Record Net reports from California. “Home prices in the Central Valley have started sagging year-to-year, just as they have in most San Joaquin County cities. Sales were down nearly 43 percent year-to-year as well.”
“Vince Malta, a San Francisco real estate broker who is president of (CAR), said the market is slowing as sellers often hold to unrealistic pricing expectations while buyers have more properties to choose from. ‘With inventory levels double that of a year ago,..some regions of the state prices are down from a year ago,’ he said.”
“Meanwhile, local homeowners say it’s a bleak housing market these days, even with some price slashing going by some motivated sellers. Jim Coan put his north Stockton home on the market in May. He has cut the price twice, from an initial $459,000 to $424,500. There have been only nine viewings and not a single offer, he said.”
“‘I think house prices shot up too fast the past few years, and we are going through a cooling off period that the Fed anticipated when they started raising interest rates,’ Coan said. ‘But compounding the situation here in Stockton is that more and more folks keep putting their houses on an already glutted market, thus impacting the old supply-and-demand scenario. We have an oversupply of houses and few buyers out there, for whatever reasons.’”
From the Reporter. “The real estate industry has seen rosier days. Last month, a real estate information service reported that Bay Area home sales hit their lowest level in 10 years, with Solano leading the slump. Sales were down more than 41 percent in the county compared to the previous year, DataQuick reported.”
“‘The experienced agents are telling me this is one of the worst markets they’ve seen,’ remarked Sue Kappel, who has operated since 1972.”
“And what of the thousands of people who only recently got into real estate or related industries to capitalize on the boom? ‘We’ve probably had 300-400 people quit in the last few months. We’ve had a lot of Realtors and loan officers quit,’ said Jim Porter, Solano Mortgage’s owner and senior loan officer.”
“‘It used to be get listings, get listings, get listings,’ Kappel said. ‘Now it’s find buyers, find buyers, find buyers. The paradigm has shifted.’”
The Press Enterprise. “A cooling housing market caused manufacturing growth in the Inland region to dip over the past two months to its lowest level in recent years, according to a report. The Institute of Applied Research and Policy Analysis at Cal State San Bernardino called the latest manufacturing levels ’somewhat worrisome.’”
“‘It’s rare in economics that you see dramatic shifts,’ Redlands-based economist John Husing said. ‘We’ve had one in housing.’ He said manufacturers that produce items for the housing market, like doors and hinges, have probably been the hardest hit.”
“Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said he thinks there’s anxiety in the business community with the slowdown in the economy and increased energy costs. ‘Anyone looking at what’s going on in the housing industry is probably getting a little nervous,’ he said.”
‘But compounding the situation here in Stockton is that more and more folks keep putting their houses on an already glutted market, thus impacting the old supply-and-demand scenario”
I wish we know what the motivation was for putting homes up for sale. Following the crowd and trying to cash out now ? Can’t afford what they bought and need to sell ? Moving closer to jobs ? When they sell where are they planning on living ?
‘I wish we know what the motivation was for putting homes up for sale.’
IMO it’s because these folks were really speculating. How many times did we hear, ‘I’m only going to live here for x years and then I’ll sell’? It was cheaper to rent in many areas, so these folks were gambling. Now they see the game is over, and they rush the exits. What else can explain record inventory in so many US metros?
Divorce, job loss, health problems, job transfer, flippers who are lame. There has to be more reasons to sell a house. Anybody want to add to the list?
how about panic!
I bought at $150 ,and yes it’s going down a bit ,but it will go up.Hosuing 2005=Tech stocks 2000
http://finance.yahoo.com/q/bc?s=JDSU&t=my
Loss aversion?
Too bad margin call isn’t one of those option for R.E.
The price/volume chart for JDSU is a good illustration of the difference between the stock market and the housing market. Compare the daily volume in JDSU as it ascended to $150 and then started back down. Trading volume was at least twice as much coming down as going up.
The housing market is the opposite. We’re already coming down the other side of the peak and transaction volume is half or less of what it was during the boom. We won’t see much price action until volume picks up.
Yes and no, madtiger. If we have a re-look at Japan’s endless ugly RE slide:
http://tinyurl.com/mormv
We see that, fast or slow, the decline is basically inexorable. “The paradigm has shifted.”
Yep. REALITY has shifted. And now, sales or no sales, prices they’re a comin’ down. Every passing day is a little tick to the right — and a little tick DOWN. Or hell — some days, a BIG tick.
And given that the latest reports are that ‘they aren’t making any more land’ on the TINY ISLAND OF JAPAN…well, the Great American Meltdown looks to be long and oh so very painful.
I say unto thee: Soon, no investment will be safe. It’s about Capital Preservation now…imho, anyhoo…
DannyHSDad,
‘Margin Call’ = ARM Reset.
ajh: ARM reset isn’t margin call at all.
I don’t know of any mortgage where the market value is, say, 80% of loan balance, the home gets foreclosed automatically. [Total loan/lien should be the criteria, if you ask me.]
All mortgages are based on the ability to pay, not the underlying asset [unlike stock where payment ability is minor compared to loan/asset ratio].
As far as I know, banks can’t foreclose because they are afraid of the upside down ratio of a home [unlike brokerage firms].
There is always a percentage that find themselves needing to put a home on the market for ordinary reasons. But less than 12 months ago, all we heard was shortage. Nobody says that anymore.
“.Hosuing 2005=Tech stocks 2000″
Indeed alot of haircuts comming-up!
“Anybody want to add to the list?”
Bay area buyers discovering just what a crappy place Stockton is?
“Anybody want to add to the list?”
Because if you don’t sell now it will be a long,long time before you see this kind of $$$$$ for your house again.
How about BROKE!
Its like the Fire Alarm just went off in your office. Your first thought is it’s just another false alarm…but then again you have just enough doubt to worry a little bit…and then you see your boss and his secretary heading toward the exit with his computer and rolodex…and you finally decide this might be the real thing. And finally somebody yells “Fire” and 1000’s of people head toward the two small exits. What follows a very weak summer buying season with MSM headlines reporting the truth is a Labor Day Massacre.
We also heard owners have additional 1-2 homes aside their primary home. So the demand is far smaller then we were told.
Besides the reasons others posted here, how about the two year period where they have to live in the houses before they are eligible for the capital gains tax break? I reckon many more houses will be newly on the market in the upcoming months just because they 2 year period is up. And they will price them unrealistically, of course.
Good point, if I owned more than one home I’d be tempted to sell upon two years, take the tax free gains and move into 2nd home for the next two years.
The irony is that waiting two years to avoid capital gains tax may wipe out those very gains.
The bad news is we’re totally upside down. The Good news is we avoided capital gains tax!! Too Funny!!
I recommended to a few people year or more ago to go ahead and sell and take the tax hit at 15% capitol gains. I told them the risk was greater to lose more than 15% in value, thus making the capitol gain hit a better option. In our area I really believe we’ve moved passed 15% down from the top, so anyone today who waited would have been better off selling and taking the tax hit. One friend took the advice, and is now a happy camper.
I did that too, having also advised people who pay me for the advice to sell their stocks in late 1999 or January of 2000 and pay the taxes. No go. I also really urged my Fla buddy to sell his house last summer when he was up 50% after only one year. Nope. Didn’t want to pay the taxes. Now he HAS to sell and can’t get anything in the ballpark of what was available last year if he can sell at all.
I think basically there is a lot more speculation in the RE market then we have been led to believe.
Right …..The excess inventory is so widespread and extreme and it came on so fast that I have never seen anything like it .
Was it that the speculators couldn’t unload because the prices just got to expensive ,combined with alot of 2002 and 2003 buyers wanting to cash out on the two year income tax exclusion tax break ? Have people for the last 3 years been that short term in their housing ownership plans or did the adjustable payment go up to high or both ? There is something a little weird here .I think the answer is that we had more speculators than we thought creating the demand for the last 3 or 4 years ,even if they moved into the property .
What would be interesting is to find out when the current sellers purchased the property and get a take on who the sellers are . Did a high % of them purchase in the last 2 or 4 years ,or is a high % of them long term owners just cashing out because interest rates were going up and they thought it was the peak .I feel like I’m talking about houses as if they were stock .
Don’t worry, the market always picks up after Labor Day.Or after Halloween,or after Thanksgiving, or after Xmas, or after New Years, or before Lent. Oh, I forgot, the Spring selling season is coming. hehehehehehehehe
Excellent question. That was never asked… or maybe was and the answer is to scary for the media to leak to the public
Ben please link the wiki entry on the housing bubble to your web site.
Its size of data is growing each day.
http://en.wikipedia.org/wiki/United_States_housing_bubble
Thanks
You guys need Gary Watts to tell 3 out of 4 sellers to take down their signs and delist their houses. Oh yes, I’m leaving mine on the market, I’ll go last!!! hehehehehehehe
We have an oversupply of houses and few buyers out there, for whatever reasons.’”
If this were a david letterman top 1 and not 10 how about Prices as #1 reason.
“Meanwhile, local homeowners say it’s a bleak housing market these days, even with some price slashing going by some motivated sellers. Jim Coan put his north Stockton home on the market in May. He has cut the price twice, from an initial $459,000 to $424,500. There have been only nine viewings and not a single offer, he said.”
aka, he bought it for high $200,000’s 2-3 years ago and after not getting an offer within a week he panics and cuts the price. Who has ever heard of a house taking months to sell?
I love the psychology of idiots
$454k lowered to $424.5k is not what I would define as a price cut. A real price cut would be $100k off the original price.
Why do these sellers act as though they’re doing buyers a favor by lowering the price in such small increments? Come on, sellers, get with the Program!
I am looking at homes in Colorado. My broker keeps emailing me listings with “Price cut by 20K”. I don’t EVEN go look!
Maybe they are afraid that a realistic low price, might actually induce more low balls, which was not the intention to start with. I call below median pricing the beginning of a sales cancer that will induce other house owners to lower expectations accordingly. Will it work this way with Zillow and now, Yahoo Real Estate, that is estimating the median of a ZIP code, something that is new?
We’ll see the hefty reductions in ‘07.
Sellers, on the other hand, may need to be willing to make some adjustments, Sue Kappel said. If a home isn’t selling, it may need a price correction; its condition may need improvement; an empty home may need to be staged with furniture and decor; its marketing may not be adequate; or the commission offered by the listing agent to the buyer’s cooperating broker may not be sufficient.
“Those listings at 3 percent or higher sell faster,” she said.
Can somebody please tell me why a house would sell faster with a higher commission for the Buyer’s Agent? Silly me, I thought homes sold nowadays if they were priced right and a buyer liked them. Maybe we should all buy homes without agents and see how they like that!!
Of course most of you say don’t buy at all. But I’m just talking about those that will be buying now for whatever reason.
higher commission to a buyer’s agent means more agents to bring more buyers and a higher chance of finding a sucker
“Those listings at 3 percent or higher sell faster,” she said.
Does she have roof of this? It sounds like more real estate agent “silly talk” to me…
You’re right Astro, she doesn’t have any data to support her claim.
when i sold my house in august ‘05…my stupid agent used that STUPID line on me. so, i said “if my house sells in two weeks or less at my asking price or higher, i’ll pay the full commission…if not…your commsission goes down proportionately” well, it didn’t sell right away…i reduced my price in 100k increments and it sold. i was happy with what it sold for (a record for the neighborhood) and my chump real estate agent’s theory was proven wrong. i have zero sympathy for the 3rd quarter 2006 seller reducing his/her price by 2% and scratching their heads and singing a sad song to the press. f*&k ‘em.
“Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said he thinks there’s anxiety in the business community with the slowdown in the economy and increased energy costs. ‘Anyone looking at what’s going on in the housing industry is probably getting a little nervous,’ he said.”
Just a little nervous Jack?
And “a little” means?
Oh I see……….the glass is half empty, not half full.
He said manufacturers that produce items for the housing market, like doors and hinges, have probably been the hardest hit.”
This is what will e real interesting. The people hurt that we don’t see at first. Good thing we have little manufacturing in the Us now.
Simmssays…Protect your private files
http://americaninventorspot.com/password_protect_files
But I thought John Husing said ” there’s no bubble here because we have jobs in the IE”.
Heard this from my aunt this morning, she said a vice president, i’m guessing home builders, said that there will be 300,00 people coming to the Inland Empire so its good to buy a house to rent out.She also said the homebuilders are still building houses so they “know” there are more people who can buy. I was just sitting there and thinking to myself, wow the damage a downturn will be on my aunt and a lot of other people thinking this way.
By the way this was the same aunt who wanted us to buy right away last year but i didn’t because of this blog.
A few weeks/months ago, Mr. Husing wasn’t able to connect the dots. The dots are now being connected for him. Gotta love the “experts” who opine for a living.
RE agents have and always be WHORES!! They could care less about the buyers if they are the agent of the of the seller but just barely. The only thing they care about is the commission which is way above what they are worth. Most agents would not disclose anything to the buyer as long at the sale closes. Even if they have to by law in some cases. The best agents should only get 2% to 3% of the selling price as these people are inept and do very little to reap the reward they get. If any body should be rewarded it should be the ESCROW agents that do all of the work as they make things happen and assure the sales close.
I think that current shakeout is going to lead to a huge decline in the number of real estate agents. While this is going on, look for the rise of the real estate equivalent of the online brokerage account. Or, put another way, think of what Expedia did to the travel agencies’ business. The same thing will happen in real estate.
Yep….they’re trying:
http://biz.yahoo.com/ap/060822/apfn_reply_com_relaunch.html?.v=1
BayQT~
Thanks. Sometimes we do feel that way.
Byron Alvarez, owner of Re/Max offices in Stockton, Tracy and Lathrop, said he’s sure the market is starting to turn up recently.
Boy where are these guys when you want to sell swamp property!
I hope statements like these rot the flesh off their bodies.
The whole valley is going to sink!!
Do not be fooled by “Its a buyers market” hoopla. Just sit tight, save up (or better yet, buy gold) and take your pick of the litter when it’s time. Spread the word.
I just zillowed two houses I sold (1996 and 2000) in California. The one in 1996 is still valued at its max. The one in 2000 has come down some in value. Both are hugely overvalued still. 1996: Ridgecrest, CA. 2000: Fresno, CA. I am astounded that houses built between 1950 and 1960 in Fresno are going for $224,000 or so. Those are drug areas. It has yet to be a buyer’s market in California. You are right. Don’t be fooled. It will be 6 years before the bottom is reached. These people are holding out to capture capital gains breaks, but will be forced to sell with very little profit at best (below what they could have achieved with California municipal bonds) and a big loss, factoring in commissions, maintenance on these old dinosaurs, and so on. I think I will consider getting into 28 day T-bills. 3 months are great but 28 day ones are nicer. Maybe 14 day! And yes, I’m buying metals too!
Ridgecrest? What a hole. I used to work on the base there and have a bunch of friends who still do. Housing prices there went through the roof the last year (because of BRAC speculation and other speculators coming up from LA and Ventura). Last I heard, there were 215 houses on the market? Probably half of all the houses in the Indian Wells Valley. If you don’t know where that s-hole is, it is half-way between LA and Mammoth, near Death Valley. Basically, it is on the other side of the mountains from Bakersfield.
Yeah I agree it’s a hole there in R/C. I too, worked on the base and still have friends there. Worked 11 years from 1985 to 1996. The last BRAC series were bad for NAWC, hence my house value there fell. When I bailed out I wish I did it sooner. I was timid about living in large cities, so that’s why I moved there in the first place. That was a big mistake, in retrospect. But I more than made up for it.
This owner is clueless that the paradigm has shifted:
http://www.prudentialcal.com/Consumer/Listing/ListingDetail.aspx?Search=145b7f6d-13fd-4e36-b32a-cb696d91fb53&Listing=14781100&IRPAgentID=&Image=1&First=1&Last=10&pagesize=10&SearchType=city&ListingDistrictTypeID=&FirstLetter=&Sort=1&Cookies=
Bwahahahaha, is he F**king kidding?!
Wow. That’s a new record for the worst Million $+ dumphovelPOS I have ever seen. How about that side yard? *can’t help but laugh out loud…
And what’s so –
*terrifying*
– is that LAST summer — maybe some wacked-out IO-ARM future debt slave woulda PAID that…
and he actual calls it a fixer. For $1,2M? Did I not see baby tile in the bathroom, French provencial cabinetry and dark wood paneling? Anyone familiar with that area?
Hilarious!
BayQT~
Check out the tax bill. Appx $1100. Would indicate a previous sale at about $100k
Laguna Beach is one of the most desirable locations in SoCal. Small, unique community on the beach. Lot’s of restaurants and galleries. Beautiful beaches and perfect weather. And LOTS of money. Warren Buffet had a place in Laguna.
$1.2 for this place is not as outrageous as it may seem. Zillow Laguna Beach and you’ll see what I mean.
Yes, it’s very desirable and expensive, that’s true. But there’s real, actual homes in great condition with an ocean view in Laguna Beach for $1.2 million. This one at this price is a disaster.
You’re right, of course. The place is a total scraper. How about that nice cracked foundation under the stairs?
I guess I meant that it is relatively less outrageous than say, a $425K home in Watts.
The value is all in the land. This is a teardown and the price reflects it. That’s the price of real estate in Laguna Beach for the past 2 years. It’s a little overpriced (maybe 20%, but nothing like the dumps ‘over the hill’ in Mission Viejo, or even in San Clemente)
It’s all relative, of course.
I heard a quote once…the closer people get to water, the stupider they get.
Even you are disconnected. Trickery….it is outrageous my friend, however it is a product of this rediculous time in R.E. history.
He has a great view of the power lines.
“It’s rare in economics that you see dramatic shifts…”
What economy is he talking about? Dramatic shifts are the norm:
…housing bubble….com bubble….Katrina….oil prices….gold and commodity prices…9/11…Russian currency/LTCM bailout….’87 crash…et al.
Wow. There’s a company left in California that actually manufactures things like hinges and doors? I am stunned!
Costs are so high in California that my company has had to send everything but IP offshore to remain competitive.
Same thing for my employer, based in Boston.
Yeah no shixx. I think he means chinese made hinges.
Built a condo tower, up to the sun,
brick and rivet and lime.
Built a condo tower, now it’s done –
Now it’s a new paradigm…
Nice.
OT, but I just got back from a nice weeklong vacation — a cruise out of Miami. A couple of observations:
1) Everything you’ve heard about how insane the condo building boom is in Miami is true. I literally counted 15 cranes visible off the north side of the ship before we sailed out of port, and probably 20-30 visible to the west and southwest. These aren’t little tiny buildings either — they’re 40 and 50 story behemoths. The last time my wife and I were down here was in February 2004 when we took a quick trip to South Beach. The city was already getting overbuilt with empty specu-palances (meaning, at night, only 20% or so of the units had lights on) back then. It is much, much worse now.
2) This housing bubble is not confined just to the United States. There are cranes all over San Juan in Puerto Rico too. And the bus driver on our shore excursion couldn’t stop talking about how much house prices were going up/had gone up there.
The world truly has gone mad! And incidentally, it looks like things got even more ugly this week while I was out — big crash in pending home sales and more trouble/downgrades in subprime lending land.
Anyway, good to be back in the saddle.
OT…..watching Flip That House. A guy bought a shell of a house in Sunland, CA for $495k to renovate and flip in 60 days with a $40k budget. And I mean a shell….it is a mishap from a previous flipper who ran out of money….unfinished rooms, mold, dryrot, no appliances…it goes on. I’m just 8 minutes into the show and it’s already a joke.
A&E
BayQT~
I watched one too. The house remodel ran 40k over the original budget of 10k. They sold it and still split 15k between the builder and partner. Ain’t life grand?
Oh, yeah! I remember that one…young, clueless guy, no job, with a family and he convinced the money guy that he could do it with a $10k budget. Yeah, that was ka-razy! Personally….dude needs to just get a job and stick with it. He’d been jumping from job to job.
BayQT~
” A guy bought a shell of a house in Sunland, CA for $495k ”
My wife is watching the show right now. We recon he bought last winter because of the price and the wet weather problems, he is incuring. Sunland is the Butthole of LA. A bulldozer could not fix that house, the lot is worth about 60K…….. Talk about the Greater Fool?
And he wound up taking about 4 months and $100,000 for the reno. The RE agent was BS’ing him with a $699k value. Of course, we never find out if he sold it or what he sold it for. Even he didn’t think it turned out as well as he expected it to, and HE’s worked in construction for 50 years! Boy, oh boy.
I want to see more shows like the one with the young guy who did almost all the work himself and screwed up a lot of it before he contracted each project out. There are a LOT of those stories out there…people who are full of themselves, think they know what they are doing but don’t have a clue.
BayQT~
I used to hate that show, now I love seeing the FB’s holding the bag.
That ass hat who tried to do it all himself and a few buddies hired some illegals to redo the roof, because he couldn’t afford compet contractors, the illegals had no idea what they were doing and even covered his garage door in tar. It cost him more to redo everything the illegal contractors screwed up then if he just paid for professionals.
How about the stolen sod he bought!
I saw that flip and apparently that guy made a good profit . I don’t know how old the program is but the flipper had enough money to complete the project . In the current market I don’t know if he would of been sucessful or not .This flipper didn’t make me as nervous as some of the flippers because the guy had enough money to get the job done .
I’m talking about the Sunland property flip . They don’t tell you if he made a profit or not.
What drives me crazy about the flipper show:
1. They show the flippers making major, major renovations, e.g., full bathroom and kitchen makeovers, new hardwood floors, full landscaping outside, a full team of painters to paint inside and out … Then at the end of the show they tell you the “improvements” totalled $25K or $40K!!! I mean, you have got to be kidding me!! Even here in Virginia, if I want to remodel my small second bathroom, the quotes come in at $25K for that alone!!
2. I hate when the climax of the show is some dumb-f*ck RE Agent coming in for a once-around, then proclaiming the “value” is $200K MORE than what the flipper put into it. No follow up on whether the property actually sold and, if so, what it actually sold for!! I would definitely watch the show if it was more realistic, and showed when flippers actually end up getting hosed.
A current market flipper would have to have the show renamed for “flip those keys to the bank”
Has everybody seen the new issue of Business Week magazine. The cover story is-”How Toxic is Your Mortgage”. I glanced through the article and it is filled with interviews with desperate home owners who bought with ARM’s and now are surprised thier loan payments have gone up, huh? One of them wanted sympathy and said he was mislead-hey next time read the loan docs before you sign away your life!
Oh thanx for saying something, I am reading it now!
Good article. I wasn’t expecting to see these articles start popping up until ‘07. Hold on to your —, we’re in for a bumpy ride.
New episodes just on.
The new episode of “Flip This House” had a house in Watts that was purchased for 265K and the guy is now listing it for 425K. PLEASE, I have been to Watts, and anyone who would pay 425K for a 3bd 2 ba home in South Central is on crac#.
That is a selling feature, the new owner won’t have to go far to get re-supplied.
- True.
- There is an article in todays Sunday LA Times that Opium production is up 60 % in Afganistan. It will soon be in LA.
“A cooling housing market caused manufacturing growth in the Inland region to dip over the past two months to its lowest level in recent years, according to a report. The Institute of Applied Research and Policy Analysis at Cal State San Bernardino called the latest manufacturing levels ’somewhat worrisome.’,/i>
That’s BS of the highest order. No place in the IE makes housing related manufactured goods.
and Voila! no more italics
Laptop temp iBook (mostly the kids’) while setting up the new office. Yes, I am building an office, in SoCal, in this economic environment. Pustule or no, life goes on. Oldest of my three girls turns 16 next week and at 16, 13, and 7 separate rooms are cheaper than therapy. My 300 sf of testoserone refuge still only cost $15k including the granite countertops. Could have been a lot cheaper except my inner engineer got the better of me on several issues. 2×6 R19 walls, e-glass, 80 amps, the usual.
“That’s BS of the highest order. No place in the IE makes housing related manufactured goods.”
I certainly do not know all the businesses in this area…
One that I do know of that is housing related is Milgard (windows and doors). They come to mind because I often pass a line of their trucks in the morning on I-15 (like most large trucks, they go slow up our relatively steep grades).
The Inland Empire covers a relatively large area.
I suspect there are more.
Certainteed makes custom windows and other housing products. It is located on the south east corner of the intersection of the I-15 and CA-91. Therefore it is in the IE. Counter example.
Is there anyone who is familiar with Glen Cove subdivision in Vallejo? (Solano County) How’s the crime rate, commute and other areas that I should know about?
Don’t worry I will not buy any property until the Perfect Storm - Housing Bust - is over. I’m just looking ahead.
Ben, thanks for you blog. I’ve been reading your blog everday - except when I’m on vacation - for almost a year now. Keep it up. I’m sure big donations will come when all the people here sitting on the side waiting for the perfect time to profit from falling home prices. Just a few percentage points of their profits will make you a zillionare. Who said you can lose in the housing market? Prices never always go up but you can always make money either on the downside or the upside. I wish I can short my next door neighbor’s house and put a stop about a year from now.
“Is there anyone who is familiar with Glen Cove subdivision in Vallejo? (Solano County) How’s the crime rate, commute and other areas that I should know about?”
Ray,
I don’t know much about that specific subdivision, but when I lived the Bay area back in 2003 to 2004 I once looked for houses out in Vallejo. Vallejo never really caught on big time during the housing boom… Yes prices went up, but Vallejo itself is still a dump, and generally has high crime rates. It’s too bad, because the downtown “historic” area actually has some nice older houses. The commute from Vallejo, if you work in San Francisco, would be BRUTAL as you must cross two bridges to get there, and the bridges often have major congestion. I-80 is the main artery from Vallejo to the East Bay, Berkeley, Oakland and the Bay Bridge, and it is one of the worst stretches of highway in the Bay Area and is basically a parking lot for miles every morning and evening. There is no good mass transit from Vallejo, unless you take the Ferry directly from Vallejo to down town S.F.
Thank you so much for the info. The view of the Carquinez Strait is not worth the commute and crime.
“‘It’s rare in economics that you see dramatic shifts,’ Redlands-based economist John Husing said. ‘We’ve had one in housing.’”
This is an example of evolution by jerks, such as Realtors (TM), flippers, and subprime lenders.
“He said manufacturers that produce items for the housing market, like doors and hinges, have probably been the hardest hit.”
These are the biggest economic casualty of the bubble implosion??? That must be tough on the Chinese economy.
$459,000 to $424,500
$424K is too much as is 324K… needs to down near 200K. After all it was only around $160K less then 10 years back. 5% YoY is normal appreciation.
The Vacaville Reporter article was hilarious.
Here is a “cached” link to the POS at 1015 Fielder Ct. in Dixon, CA. Just love the part about the “sewer dump.” Guess the owners have dropped the price already from $899K to $799K.
http://tinyurl.com/l25fg
Anything in the Bay area is way too high, and family unfriendly.
I sold my house in California in July 2005 (Just luck I sold at the right time) which I bought in 1997 and bought a nice 105 year old loft apartment in Buenos Aires, Argentina. It cost $65,000 for 1000 sq foot. In a nice area and no property taxes. As I lived in California I was forced to speak Spanish so moving south was no problem. I still maintain another home here but think our economy will implode. Argentina has been economically at the very bottom of the barrel. But now has the second fastest growing economy in the world. Construction is everywhere! I am not a seer but I do foresee huge economic problems in the next few years for the US. Too much debt will sink this huge debt ridden economy and it may be faster than I thought. My new apartment has gone up about 12% since last March. That makes me a little wary that they are also in a housing bubble, but the price was right. The winters can be cold there so I am now going to buy in Florianopolis, Brazil for the warmer weather. Cheaper apartments about $50,000. This is not for everyone but my job kept me traveling for many years so I can adapt very easily. But I feel something ill comes soon to the US economy and that is very obvious to anyone with an inkling of economic sense.
Argentina is a nice country, been through many crises, but overall pretty stable. Good luck!
OT - I’m convinced they make the best beef in Argentina.
Are’nt there a lot of ex-Nazi’s in Argentina?
Off of Well Fargo list of Home Buyers myths…
Myth #3
“It’s less expensive to rent, and now may not be the right time to buy.”
In fact, you may be surprised how much home you can afford for the same rent check you’re sending in now, especially when you consider the tax advantages of homeownership. And unlike rental costs, your monthly principal and interest payments will stay the same for the life of a fixed-rate mortgage. Because home prices almost always go up (and only occasionally decline), buying as soon as you’re able is typically a better strategy than trying to time the real estate market. Moreover, as a homeowner, you’ll be building wealth as your home equity grows.
https://www.wellsfargo.com/mortgage/buy/learn/myths
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Soon the myth RE nevers goes down will turn to fact ( not occasional ).
Similar to the Wall St. arguments that it’s always good time to go long on stocks, any stocks.
I think in more normal RE markets that it is probably better to own than rent. I think as a l-o-n-g t-e-r-m “investment” (roof over your head, tax treatment {not just the mtge int deduction}, sweat equity for handy folks, long term appreciation, etc.) it is a good purchase when the valuations make sense and the numbers (sensible numbers) work for the buyer.
I think to “write off” homeownership as a good thing would be a mistake. It is more than just location, location, location. It is more like: price, affordability, condition, timing, valuation and of course…location, location, location. I trite as location, location, location is, I still think it means a lot. I believe that poor locations…tough areas, busy streets, under power lines, abutting the local landfill, etc. are properties than will really take it on the chin, in all but the very biggest bubble markets.
Yes, I would be surprised - for my $2000 rent here in sf bay, I could buy something fabu!!! Yes, with a fixed rate, I could buy a shack in someone’s back yard. Or, with an option arm, I could buy something like a 750 sq ft 1 br TIC. Yeh, Id be surprised just how shitty these places are compared to where I live now. And with that option arm id be REALLY surprised, when I find out that in two years, the $600k loan i took out is now on a 500k house, and my payments just went up 50%. Yeh, Im feeling SO surprised.
Fricking idiots at wells…no, not idiots, scumbags.
LA Times, “Wages Barely Keep Up With Inflation”
http://tinyurl.com/mvfup
“The California Budget Project study tracked hourly wage increases, adjusted for inflation…”
“From 2003 to 2005, workers in the low and median ranges saw little or no wage growth, while those at the high end of the wage scale saw increases of barely 1%, according to the study to be released today.”
“Adjusted for inflation, wages for the state’s biggest earners rose 20.3% between 1979 and 2005, while the lowest-paid workers saw wages fall 3.7% during that period, the study said.”
OK, NOW I can see how people in California can be affording these sky-high housing prices. Or not.
You guys are going to love this..
Go to this web page:
http://www.homefair.com/homefair/servlet/ActionServlet?pid=48&previousPage=48&cid=homefair&mortgageRate=7.500&taxBracket=25.0&propertyTaxRate=2.0&appreciation=-10.0&rent=2000&housePrice=500000&condoFee=0&occupy=2
These numbers reflect reality here in PB county; all except the -10% per year price declines. I have no idea if that’s what we are going to see, but I think its reasonable for the next 2 years.
Beat anyone with a stick that wants to buy right now, especially in S. FL.
Honestly, I was shocked that I could put in a negative YOY. This is a reality site, after all.
Wow, I’m saving over $100K per year by renting. Awesome.
Renting is the new black!©
That 1.2 million house in Laguna Beach posted by CArefugee, wow! Could they not at least clean it, even if they are not going to paint it. Good grief. Yeah, that’s a fixer all right. Thanks for the laugh.