‘It’s Clear A Price Correction Is Underway’
The LA Times. “Southern California’s housing market continued to cool last month as Los Angeles County’s home prices rose at their lowest rate in six years while San Diego County’s price declines worsened, data showed. ‘It’s clear that a price correction is underway, but it’s a matter of magnitude,’ said Andrew LePage, an analyst with DataQuick.”
“In Los Angeles County, 9,193 homes were sold last month, the fewest since August 1997 and a 21% drop from year-earlier volumes. August was the county’s ninth straight month of plunging year-over-year sales rates.”
“In San Diego County, the situation was worse for sales and prices. The region saw a 32% plunge in sales and a 2.2% decline in home prices compared with a year earlier. San Diego’s median price for all types of housing is now back to where it was in April 2005. It was the third straight month that San Diego prices depreciated and the 26th consecutive month that sales dropped from year-earlier levels.”
The Daily Bulletin. “Riverside County has the highest foreclosure rate in California. ‘There are a lot of people who are very nervous about the Riverside market,’ said Jack Kyser, chief economist with the L.A. County Economic Development Corp. ‘They have been checking on housing tracts to see if speculators were being kept out, and they were not. There is a big increase in unsold inventory in Riverside, and with the market slowing, that may be a problem.”
“Since the beginning of 2003, 83,275 new homes have been built in Riverside County. That’s almost as many as San Diego (48,225) and Los Angeles (36,075) combined.”
The USA Today. “‘It’s alarming. It really is,’ says Pam Canada, executive director of the NeighborWorks Homeownership Center in Sacramento. Her non-profit counseling center used to receive two or three calls a week from homeowners in financial quicksand; now, it’s 20 a week.”
“‘It’s remarkable,’ Canada says. ‘We used to take walk-in (clients), but we don’t do that anymore. We just can’t.’”
The Central Valley Business Times. “A softening home market is not by itself to blame for the jump in California home foreclosures says a San Diego attorney who specializes in helping those faced with losing their homes. ‘I’ve had a number of people in this last month, this is completely unbelievable and so foreign, their mortgage payments are more than their income,’ Mr. Brady says.”
“‘I think some of these lenders are so anxious to get their money loaned out that they do what they call ‘stated income,’ he says. ‘The lenders don’t care. You’ve got janitors that are out there with $450,000 loans,’ he says. ‘The lenders should know that janitors don’t make enough to support that kind of loan.’”
“‘I’ve had a number of clients that have..pulled all their equity out of it and they’ve used their house kind of like a credit card. Now there’s nothing left. Some of those are choosing just to let it get foreclosed on,’ Mr. Brady says.”
The Voice of San Diego. “As prices have declined, sales have slowed, and inventory levels have risen in recent months, the get-rich-quick, house-flipping days seem to be over for a while. The flippers are the type of investors that skewed the market during the red-hot days, said Peter Dennehy, vice president of Sullivan Group Real Estate Advisors. The flipping fever drove people to buy, buy, buy, regardless of location, and to bid each other up so that eventually, prices spun into a realm almost completely detached from the home’s ‘actual’ value.”
“‘They were very prevalent,’ he said, referring to flippers in the boom of a few years ago. ‘They’re the ones who are gone.’”
“‘You do not need to get on a bus and go to Phoenix with 40 people to buy condos,’ he said. ‘That skews markets. It’s not real demand. When everybody does it, it’s over,’ he added. ‘They had a good time until 2005 or so.’”
“Many homeowners tapped the soaring equity of their primary homes during the boom in order to finance their purchase of another property. The worry that comes now, in San Diego’s cooling market, is that some people may be caught with two or more mortgages due to reset.”
“Dennis Balagtas has used adjustable-rate mortgages on all of his properties. He said the payment options allow him some breathing room if another of his mortgages adjusts. ‘You have to ask, ‘Do you have enough cash reserve to make the payments?’ he said. ‘The reason I’m not as worried about it is because I have expanded to other markets.’”
“Dennehy said he thinks the dramatic boom left many people counting on the fact that they’d always be able to sell their homes for more than they paid, no matter how quickly they sold again. ‘There’s a gradual realization now that they can’t sell their home,’ he said. ‘That train has left the station.’”
“‘They were very prevalent,’ he said, referring to flippers in the boom of a few years ago. ‘They’re the ones who are gone.’”
Uh…not gone. Just stagnant within the inventory.
And within the future inventory, as many investors following Balagtas’ strategy will find out that Option ARMs and a buy-and-hold-forever strategy don’t mix.
So true.
And Balagts’ strategy is doubly going to fail once he realizes that it doesn’t matter that he has “expanded to other markets”, because he probably expanded into other bubble markets.
he will quickly discover that this is a NATIONAL housing bubble for the most part. all of his homes will drop in value at the same time. (or close enough anyway)
And worse, credit will tighten NATIONALLY as he tries to refinance one or several of them.
He’ll lose everything, including his San Diego home.
Or else some kind of unforeseen govt action to bail out the hapless real estate investor crowd will make us all wish we had read and taken to heart David Lereah’s book…
If these all-knowing, all-powerful government types you ruminate about existed, why would they have even allowed real estate to stop inflating?
Had to stop on the weight of it’s own fallacy.
The internal examination of the alternative though is a good thing….. expect the best, prepare for the worst.
Balagts didn’t even answer his own question - do you have enough cash reserves to make the payments? His response was only that he “expanded” to other markets. Hmmm, sounds like he’s got all of his money on the craps table, and he thinks he’s OK because he’s got it on lots of different bets. But he’s in trouble because he has no reserves, didn’t play the “no pass” line, and a seven is coming.
“Hmmm, sounds like he’s got all of his money on the craps table, and he thinks he’s OK because he’s got it on lots of different bets.”
Well, actually he borrowed his stake, but he is on the hook for the full amount won or lost, plus a large up-front fee to the house for the right to play the game.
“expanded to other markets”
Now there is a very wise flipper, he believes in diversification! It’s different in those other markets!
I bought Cisco AND Lucent.
The “flippers in the boom of a few years ago” are gone? Does this guy own a time-travel machine?
Something like 35% of the houses sold in the past two years, at least, were purchased by “investors” (cough). While the more astute or desperate among them are starting to bail, I’m guessing the great majority are clinging to the NAR-peddled delusion that this so-called “soft landing” will only last a few months before the party resumes. As the bubble implosion continues to play out, with rising interest rates, soaring inventories, and plunging sales, a huge overhang of “investor”-owned houses will be dumped into the market. That’ll happen around 2008-2009, I’m guessing. THEN the flippers (and FBs) will be totally flushed out of the market, but we are still in the very early, mild stages of the housing market crash.
Do you think that long? By next spring, when the signs are sproutin’ in the heather…
By next spring San Diego median prices should be down to 2004 levels! Median prices fell $4K last week alone in San Diego according to http://www.realestatedecline.com
….This is getting crazy!
surffroggy,
SD prices are at or below **early** 2004 prices in many areas. Don’t believe the median BS. Things are going down!!!
Down $4K a week? 2004 prices?
That’s great news. I hope that trend lasts for some time and comes to the Bay Area soon, though realistically we have a long way to go.
I remember about 18 months ago talking with a friend in the South Bay about how his house was “earning” around $10K a month.
“I remember about 18 months ago talking with a friend in the South Bay about how his house was “earning” around $10K a month.”
Wow, that house must have gone door to door pushing a lawnmower and mowed a lot of lawns to earn that $10k per month!
The rising cost of debt service is the key. The credit spigots are strangled by the lack of asset appreciation, while the debt drains grow ever larger.
Hang on tight, folks, this is going to be a heck of a ride, even if you’re out of the real estate market.
“Something like 35% of the houses sold in the past two years, at least, were purchased by “investors” (cough). While the more astute or desperate among them are starting to bail, I’m guessing the great majority are clinging to the NAR-peddled delusion that this so-called “soft landing” will only last a few months before the party resumes. As the bubble implosion continues to play out, with rising interest rates, soaring inventories, and plunging sales, a huge overhang of “investor”-owned houses will be dumped into the market. That’ll happen around 2008-2009, I’m guessing. THEN the flippers (and FBs) will be totally flushed out of the market, but we are still in the very early, mild stages of the housing market crash.”
It will not take even half that time. I agree we are only in the mildest stage’s of the vortex. I one year 3rd Q of 07 it will be a slaughter house. IMHO by 08-09 it could be less than 50-40 cents on the dollar.
I believe the decline is happening faster than most people realize, meaning the bottom is going to be reached sooner. My guess is not later than mid-2007. But then it will be a verrrry slow climb back up. The bottom, in my opinion, will be back to 2001-2002 prices, which means huge corrections in some markets, and more modest declines in other markets.
It’s unreasonable to assume that all areas will decline from their peaks by the same percentage amount.
Whoa Bill, you’re not a home builder are you? (kidding)
No hurry to enter the purchasing crowd though right? I would encourage every future buyer to examine their area and wait to see a STEADY appreciation for no less than 2 years before purchasing, and then note that this increase was fundamentally sound.
Always a last up-tick in the past declining housing markets that have precipitated a big slide in values. I would encourage the future buyers here to be weary of an increase, in that it might (should) be for the short run. Ever see a “false up-tick” last for 2 years?
No.
Ever see an appreciation cycle last for less than 5 years …… no?
Then why the hell not wait! Be a happy renter …….’bitter’ just swung to the other side of the dance floor.
Man, feeding a negative cash flow property, plus watching your rate reset, while your property value is sinking. Think about that. That’s really gotta suck.
Here are my two pennies:
We had a large number of people in 2004 and even larger number in 2005 get option arms (my guess is those who bought in 2002 and 2003 refinanced in these two years). Furthermore, those who bought in early 2004 with option arms were able to refinance this year (I know one personally who did this).
With that in mind, I’m thinking that those who bought in 2005 and have to refinance their option arms in 2007 won’t be able to. However, they will probably try and hold on for as long as possible before defaulting on their loans. My guess: 3 months. After that, default notices will go out and they will probably have another 3 months before they are booted from their residences. I’m guessing that this is going to be early 2008.
In the meantime, those who bought/refinanced the beginning of this year are going to start defaulting on their loans. Again, I’m going to give the 3 and 3 before things fall apart for them.
So now, we have a large number of defaults in the latter half of 2007 and beginning of 2008. Lenders are going to be bitten pretty hard here so their lending standards are going to become pretty stringent. Only those that can handle the expected highest payments for a house will only be able to qualify. Those who been forclosed on in the last two years probably won’t be in this pool.
My prediction: Prices are going to drop like a rock the end of 2007 and beginning of 2008. They will continue to drop, although at a much slower rate, until the end of 2009 and beginning of 2010. It will rise after that, but at the rate of inflation….until 2015 when the next wave a knuckleheads can overpay for a house.
I know that math isn’t exact, but do they realize that the 30% specuvestor correlates very closely to the drop in unit sales numbers that are being reported.
Let’s see now…take away 30% of the demand with flat or increased supply…this results in…,,{oops, wait, where is my slide-rule, do I have to carry the one?, or maybe I’ll just use my HP} :):)
Good point! Just wait until the other 70% finally grasp the problem with catching a falling knife…
I bet many of the other 70% are catching on by now, if not they soon will be…
I SEE BROKE PEOPLE!
Nice try, but the original catchphrase is “I see Debt People!“.
Pen posts “I SEE BROKE PEOPLE!”
Like Harm said most just wish for the day they are just “BROKE” not in the hole for ten’s of thousands or worse with the 1099’s and new BK laws’s in thier pockets.
“I see broke people” “I see debt people ” both made me laugh out loud.
Still very strong here in Wilmington, NC. Lots of denial. Very few good paying jobs. But it’s different here. We have the ocean and everyone wants to be here. Sarc button off.
‘I’ve had a number of people in this last month, this is completely unbelievable and so foreign, their mortgage payments are more than their income,’ Mr. Brady says.”
I guess the fook you’re goin’ to see BROKE people!!!!!!!!!!
I’ve noticed this too. My only conclusion is that since most of the specuvestors aren’t buying any more (I’m sure there are still a few who are really slow to get the news), that means that Joe Sixpack is basically still buying at their normal pace. I think it will still take another couple of months for most of the sheeple to figure out that the market is correcting (or will soon, depending on the particular market) and that they should wait. When the masses figure this out, sales will truly plummet.
“I think it will still take another couple of months for most of the sheeple to figure out that the market is correcting
Images of Wile Coyote form in my mind when he runs over a cliff and stays aloft until he realizes he’s in mid-air, then…long fall!
“‘I think some of these lenders are so anxious to get their money loaned out that they do what they call ‘stated income,’ he says. ‘The lenders don’t care. You’ve got janitors that are out there with $450,000 loans,’ he says. ‘The lenders should know that janitors don’t make enough to support that kind of loan.’”
The janitors, of course, are totally blameless. It’s not surprising that the mental giants who lied on their stated income are clustered in the fast food or sanitation industries.
Stated Income?…..hah! That’s a conservative loan these days. At least with Stated deals the lender will verify that the borrower actually has a job, though no income amount is verified. Usually Stated deals will verify source of funds to close the deal as well, unless of course the deal is what we call a Stated/Stated deal, that is, a stated income and stated asset loan. Now you’re thinkin’ “that’s crazy”. Nope. Enter the No-Doc loan. Ah….it’s a real beauty! No income verified, no job verified, no sourcing or seasoning of assets used to closed the deal. In fact, these items aren’t even “stated” because the sections of the application where this qualifying information can be found is required to be left blank. With the right credit you can go all the way to 95% LTV, and since the source of downpayment is not verified, the borrower can pull the 5% out of his ass (i.e. a credit card, signature loan, knock off the local liquor store) and the lender could care less. No, I don’t think Stated deals come close to being the scariest products out there.
Hey nnvmtgbrkr,
Any thoughts on the following loan product?
30 yr fixed at 6%…IO @ 6% for the first ten years and then converts to a 20yr amort schedule at 6%…no prepayment penalty.
I am not thinking of taking this, but read about it and thought “Hmmm”…
Your thoughts?
Others feel free to chime in….
Loaded question. This product is the least risky of all the I/O deals. Fixed rate for entire term. First 10 years are I/O, and at the end of the 10 years the loan fully amortizes for the next 20. The amortization is based upon the principle balance at the end of the 10 years, so if you started out with a 300K loan amount and paid it down to 225K during the I/O phase, the 20 yr amortizaion would be based upon the 225K. As far as it being good for you, I would ask why the need to pay no principle? I would also not recommend it to any high LTV buyers due to the upside-down potential from lack of principle reduction. I wouldn’t recommend it to anyone who needed the I/O payment just to qualify, banking on improved earning potential. It may be likely, but you’re placing a bet on a uncertain future. Without interviewing you it’s hard to say if it’s a fit. I do think this loan has it’s place, but what’s wrong with the good oldfashioned 30yr fixed?
Like I said, I am not thinking of using it (I am not even in the mkt to buy), so I don’t have a specific situation in mind. I read about it this morning and was just curious about it.
Thanks for your feedback.
This would be a good loan to get IF you have significant assets (non-RE) that you expect to sell over the next 10 years to pay the loan down a lot. Every time you make a pricinpal payment, on at least some IO, the IO payment resets down, unlike Fixed.
“Every time you make a pricinpal payment, on at least some IO, the IO payment resets down, unlike Fixed.”
Good call, I forgot to mention that. That is the case with most I/O’s.
this is the type of loan that will save a good fraction of these recent buyers, as long as they are able to pay the monthly. because at the rate we are going, 10 years from now a $3000 monthly PITI will probably be equivalent to a purchasing power of today’s $1000 or less. but, the collapse will still happen, albeit milder than we all assume here. you need less than 10% of all households to attempt to sell their house for the price to drop substantially.
Who care’s what kind of mortgage you come up with.
There’s a national housing value collapse under way.
Once the roof caves in, and all the 2-bit appraiser hacks who help feed the price run-up, are going to jail, have their licenses revoked or drop out of the profession.There will be a new underwriting paradigm.
All deals will be put under a regulator’s miscroscope.
As the pendulum swings back, appraisal reports will be ruthlessly thorough. Foreclosed properties because of their prevalence in the marketplace will be the NEW COMPS.
All those $450/500k fixer upper’s will crash back to the low-one hundreds which is where they belong.
I disagree with valuations reverting back to 2001/’02.
With demographic factors and the coming tax increases to pay for the all the legacy costs associated with the aging of of the Boomer’s, my guess it values will probably revert back to 1994 levels.
Income increases save for public employees are totally DEAD, contrary to government #’s. Health care costs are suckin’ the lifeblood out of everybody.
Doesn’t matter what mortgage you’re doing. To coin GetStucco’s adage, who wants to be stuck with catching a falling knive.
hd74man, your 1994 price level estimate does seem to square better than the 2001-2 level suggested earlier. For graduate school here in Chicago I have been researching tax records and assessed valuations and it does surely seem that at sometime around the mid-1990s is when things started to go beserk. In fact when I nervously and hesitantly bought my place in 2001 I thought that was the peak - the price growth since 2001 alone boggles my mind - and that’s Chicago housing prices - I cannot even begin to imagine the nonsense the rest of you have witnessed!
Being in sales this is the only loan type I would consider outside of a 30-F. I would makle the fully amortized payments always and only resort to the I/O payment if, in the next 10 years, I ran into a financial pinch. I look at the I/O as a safety precaution, nothing else.
Have Fabricated Income loans been introduced yet?
hahaha…….I thought that’s what ARMs were………silly me
Not only have they’ve been introduced, but packaged, bundled and sold as MBS on the open market to some lucky investor who’s probably taking care of your pension plan.
What about No Income loans?
remember Fantasylandmortgage.com
Alas, it seems that it is no more.
“Fabricated Income loans”
Heh heh heh! I *like* that! I fully expect the phrase “fabricated income loan” to appear in print in a major daily newspaper as a euphimism for stated income loans…
“Smitty Jegerwerbermanjensen’s troubles when he applied for a ’stated income’ ARM (also called a ‘fabricated income loan’) while working as a burger flipper at All American Burger…”
All American Burger = Fast Times at Ridgemont High…one of my favorite movies of all time.
“Fast Times at Ridgemont High”
Heh, I had been watching it the night before.
(Funny thing is I used to go to an *actual* All American Burger, somewhere in the Westwood/West LA area).
C’mon now, you know the only real burger in LA is Tommy’s. Remember going to the original one in LA on Beverly and Rampart from Pasadena late night during college in the mid-70’s.
and don’t forget to spice it with pepperoncini. i tell ya, that’s the one.
“only real burger in LA is Tommy’s”
Was there ever any doubt? Now there’s the Eagle Rock Tommy’s if your ever back in ‘dena…Cal Tech?
I used to OWN an All American Burger in SD..
Tommys is most likely a concept originated by Greek Immigrants, who are the originators of the Char-broiled Burger Concept. There is Tommys, Toms. Toms Farms, Toms #1-10, Astro burgers, Omega, Fantastic, boys, ect. I like Primos in Alhambra, Golden eagle and Pete’s in Long Beach, Tom’s on Orangethorpe off 57 fwy.among other’s.
The Secret is the Bun. Have you ever eaten a burger where the bun crumbles into a zillion pieces as you bite into it. The place is using old stale bread. Puritan Bakery is or was the choice Bread vendor for the Greek Burger operators.
Bubblefucius say:
Man use stated income to buy two story house; one story before and one after.
Too good!!!!!
Love it, Rainman!
Yet another “Bubblefucian Classic”!
There’s been a lot of talk about stated loans and I agree that No Doc loans are the worst BUT with a No Doc loan the broower has to have some skin in the game (usually at least 25-30% down).
There has been little/no discussion of No Ratio loans. For those that don’t know this type of documentation requires verified income and verified assets but completely ignores the borrower’s debt load.
Now take into consideration that a full credit report must be furnished so that the underwriter can see with his/her own eyes all the debts the borrower might be carrying but the underwriter just ignores their debt-to-income ratios and approves the loan if everything else is okay with the file.
This is the doc. type that will become popular next in my opinion as lenders have started to scrutinize overstating a borrower’s income a bit more.
No Ratio alleviates cooking up ridiculous salaries and, since most plenty of homeowners are up to their necks in debt, the file is approved much more easily.
Sad but true.
- “Riverside County has the highest foreclosure rate in California. ‘There are a lot of people who are very nervous about the Riverside market,’ said Jack Kyser,
- The Inland Empire is againg the ‘Center of the Universe’.
- ‘I’ve had a number of people in this last month, this is completely unbelievable and so foreign, their mortgage payments are more than their income,’ Mr. Brady says.”
Wake up ass*oles!
- “Riverside County has the highest foreclosure rate in California. ‘There are a lot of people who are very nervous about the Riverside market,’ said Jack Kyser,
This will soon spread thru out the IE. A Zillion Homes were built over the last 5-6 years. I think ground zero, as in your home is worth zero will be Chino. But all of the “newely build areas will suffer. The HB’s had a turnsyle Biz. you said I want, you signed, they flipped you to the house lender and Batta” Bing! You Got. Of course the earlier the better and many shmooez made money. But the last 2 years I doubt it. The houses cost a ton and the loans were late in the use OPM game.
- The Inland Empire is againg the ‘Center of the Universe’.
- ‘I’ve had a number of people in this last month, this is completely unbelievable and so foreign, their mortgage payments are more than their income,’ Mr. Brady says.”
Not suprising. The House cost, the loan fees have bit them in the butt. I must say if the lenders do any sober reflection, if the solitary House Payment exceeds a persons net take home pay for the month……..HOUSTON WE GOT A PROBLEM!!!
Wake up ass*oles!
On both sides Browers and The Lenders!
California RE never goes down……..
as I was told 6 months ago.
Well, they lied to you. California RE will go down as the bubble has burst. Buyers are shut out and there’s no place to go. The creative mortgage loans “w/o down payment” “w/o interest”….is all catching up with buyers that could not afford a house otherwise. The housing market is first filling up with foreclosures. People will simply walk away from their houses to save themselves.
But, but, but … they were just saying how great the economy is in the IE. It’s economy was so diversified and the job growth was great, so it wasn’t a bubble… it was different there!
but, but, but …. the IE has a lot of hospitals that need nurses that are paid good, I’ve been told. hahahahaha…..yeah right!!
“I’ve had a number of people in this last month, this is completely unbelievable and so foreign, their mortgage payments are more than their income,” Mr. Brady says.”
If this isn’t the very definiton of ‘being in debt up the wazoo,’ then I don’t know what is!
Oh, they may well have stated the correct income, and the GOP mortgage broker stated it a bit higher.
Better a bleeding heart than no heart at all.
Over 54,000 houses for sale in Phoenix Metro according to Ziprealty.com…WOW!!
Any of them any good?
And I still can’t find one I like………oh well I’ll just wait there’s more to pick from every day
“Over 54,000 houses for sale in Phoenix Metro according to Ziprealty.com…WOW!! ”
I was wondering when someone would post that. We’re go for 75,000 by July 2007?
I’ve seen something new around Boise- “reduced” signs. The house across from me was 199K in May, 194k in June, and now relisted with another realtor this week at 189k. House down the street was 200k in June and just relisted with another realtor for 189k. Reductions are here!
This afternoon, I went past a house that has a “New Price” sign on it. In fact, it’s had that sign for several weeks. Something tells me that it’s referring to a lower price than the original listing price.
‘There are a lot of people who are very nervous about the Riverside market,’ said Jack Kyser
______________________________________________________
No need to worry as I read recently that the IE was “different”. No bubble here move along…
No where else will I think you find 50K income families “owning” (at least for now) 450K homes than the Inland Empire.
Ha. Anyone who bought in Southern California last year is going to be as nervous as a six-year-old at the Neverland Ranch.
rotfl
Oh my… that’s the funniest thing I’ve read on this blog in a long time. I hope you don’t mind if I “borrow” it.
Soon we’ll be able to say “anyone who bought in the last 3 years.”
Neil
“No need to worry as I read recently that the IE was “different”. No bubble here move along… ”
Soon it will give Plamcaster a good name.
I dunno about that one. It’s going to be hard to make that cesspool look good.
yes, i must agree….anything other than coastal SCal is pretty much a cesspool
Brutal.
“‘I’ve had a number of clients that have..pulled all their equity out of it and they’ve used their house kind of like a credit card. Now there’s nothing left. Some of those are choosing just to let it get foreclosed on,’ Mr. Brady says.”
The Voice of San Diego. “As prices have declined, sales have slowed, and inventory levels have risen in recent months, the get-rich-quick, house-flipping days seem to be over for a while. The flippers are the type of investors that skewed the market during the red-hot days, said Peter Dennehy, vice president of Sullivan Group Real Estate Advisors. The flipping fever drove people to buy, buy, buy, regardless of location, and to bid each other up so that eventually, prices spun into a realm almost completely detached from the home’s ‘actual’ value.”
“Many homeowners tapped the soaring equity of their primary homes during the boom in order to finance their purchase of another property. The worry that comes now, in San Diego’s cooling market, is that some people may be caught with two or more mortgages due to reset.”
“Dennehy said he thinks the dramatic boom left many people counting on the fact that they’d always be able to sell their homes for more than they paid, no matter how quickly they sold again. ‘There’s a gradual realization now that they can’t sell their home,’ he said. ‘That train has left the station.’”
OK..I am not taking pleasure in the misery that these people are felling (well, not the ones that don’t have holier than thow smug know-it-all attitude) so much as I am just not feeling any sympathy of them.
Do we feel sorry for the guy who loses his life savings at the black-jack table? Although we don’t laugh in his face, we sure as heck wouldn’t put our arm around him and offer consolation.
Hey, that’s it! That explains it! It’s an addicition! Flipper’s addiction or some such name. Now we can feel sorry for them and perhaps start a clinic or something.
Great! Just what we need another “affliction”.
we need an ICD9 code for this.
Under psychoses groupings- let’s call it…
flippercosis
Bad business plan… Flippers won’t be able to afford your clinic
We just need to get it approved for insurance plans so the rest of us can pay for it.
I can imagine Flippers Anonymous and the 12 Steps. If you look at a “for sale” sign or log onto the MLS, that means you are on a slippery slope. One call to a mortgage broker or realtor means you are no longer sober!!
Glad someone came up with the name. The F’dB can now file for SDI.MediCal and other welfare stuff. Isn’t this just great?
Some of the best lessons learned - at least for the next boom - will be from the fools who bought into this one.
“Yeah sonny boy I remember back in 2005 when I bought 28 condos in Miami and I was worth $30 million, you know at that time they were not making any more land. Anyway, in 2006 the market fell on its pie hole and well lets just say, I have been a greeter here at Walmart ever since. Can I get you a cart?”
There will also be the parable of the foolish sharks that bought when the market was 1/4 of the way towards the bottom.
yeah, there’s a new breed of “smart” buyer now…the ones who saw a $1,000 price reduction and are thinking they beat everyone to it.
Exactly, or the smart guys running around buying foreclosures the real falling knife catchers. I met a few more over the weekend. I tried to help… really I did.
“guys running around buying foreclosures”
Wow, that’s kind of like people that go around picking up all of the beached fish far from the original shoreline just before the tsunami rolls in.
Mr Income Stream:
Your last write up on your run in with knife catchers was great!
I for one would appreciate continued updates.
If I remember correctly the esteemed Auction Heaven called it the single best post every on this blog.
Wow, that’s kind of like people that go around picking up all of the beached fish far from the original shoreline just before the tsunami rolls in.
LMAO with tears in my eyes!!!!!!!!!!!!
This blog’s easily better than an episode of The Office.
‘OK..I am not taking pleasure in the misery that these people are felling (well, not the ones that don’t have holier than thow smug know-it-all attitude) so much as I am just not feeling any sympathy of them.’
Why feel sorry for the self searving GREEDY?
Vander said much of that strategy she teaches focuses on weathering the market — in good times and bad. She attended some wealth-through-real-estate workshops in 1989, got fired up about investing, and then found herself struggling when the market dropped the next year.
“I was sitting there as a good student, upside-down,” she said. “That’s not how wealth is generated. It’s not to sell and get out.”
Gee, I wonder how many people she “counseled” with such pithy advice as, buy now or you will be priced out forever… This is nothing more than one of the enablers in this whole mess playing CYA now that the MSM is getting hip the massive ponzi scheme that has been playing out in So Cal for the past several years. No Mercy for the FB’s.
Read this sentence and get a good mental picture of this gal doing gymnastics in the classroom…
“I was sitting there as a good student, upside-down,” she said.
WTF??
“the homeowner’s payment was more than their income.” You know, this sounds EXACTLY like the Manufactured Home boom that happened here in Oregon (actually, in the nation) in the late 1990s. Teaser rates, stated income, dubious collateral and outright lies got people into homes they never should have been in. When the teaser expired, and the buyers realized they were under water, an unbelievable number simply walked away. It sure sounds to me like the same setup is coming. The resolution of that one wiped out a couple mortgage companies and resulted in major consolidation in the manufactured - home industry.
Side note… We placed one on our land in 2003 - 2000 SF for $90K, with foundation. And it’s a great place - we customized it within the limits of the engineering.
but as noted here before - numerous times - the chg in BK laws willnot make that an appealing alternative
Any thoughts on the following loan product that I read an article about this morning?
30 yr fixed at 6%…IO @ 6% for the first ten years and then converts to a 20yr amort schedule at 6%…no prepayment penalty.
I am not thinking of taking this, but read about it and thought “Hmmm”…
Nothing wrong with this loan except I do not believe this rate. It should be priced higher than a 30 year fixed because it has a higher effective term to the holder/investor of the loan. FNMA net yield on a 30 year is 6.299 for 60 day delivery. Add .125% to this rate for a good comparison on a rate with no points.
“Since the beginning of 2003, 83,275 new homes have been built in Riverside County. That’s almost as many as San Diego (48,225) and Los Angeles (36,075) combined.”
So SD built an extra 48K homes since 2003. Did we add 48K households since then as well, or are these mostly investor-owned, second homes and for-sale inventory?
48K households since then as well
___________________________________________
After we counting our friends from south of the border???
Only the ones who can afford to buy a new home in San Diego (permanent income > $600K).
All you need is a “Fabricated Loan”!!
“Fabricated Income Loan”
Yeah, I like that one as well…good job GS!
The amount of building in the IE is unbelievable. That 83K new homes is just in Riverside, which is only part of the IE (San Bernardino is the other part). Now, the IE is not a desirable location (to be polite), and the only allure it has going for it is that homes are cheaper there (and there’s a reason for that - no one really WANTS to live there).
The amount of new homes in Corona alone is enormous, and every home they’re building seems to be 5+ bedrooms. Costs a fortune to cool those homes in the summer, and you have to use A/C in the IE. There is going to be blood on the streets.
San Diego has been losing households since then.
Its basically like paying rent for a decade. If the market goes up, you win, if it goes down and you have to sell you’ll lose exactly the same as if you paid down the loan in a normal fashion.
I don’t think it is a good or a bad thing. It is simply a way to finance. I would say that the fact that it is fixed protects you from rising rates. If rates fall, you refinance (assuming your home value doesn’t, somehow, decrease). You won’t “own” anything until you begin paying down the mortgage (or benefit from rising values).
If you don’t pay points, I’d say its ok. You’ll always have the option to prepay.
However, with a standard 30yr fixed loan you will get some, not a lot but some, of your paid off principal back.
In either case, you still have to cover transaction costs of about 5-6%. So if the market is flat, you have to write a check for 5-6% of the principal on the IO loan.
The market is going down so better have a big checking account. It seems that most people today that have suicide/toxic loans don’t have a lot of money in the bank.
Actually transaction costs are closer to 10-12%. 5-6% is only the the RE broker/agent’s commission. The other costs include various lender fees/points, appraisal fee, home inspection fee (if you’re a smart buyer, you’ll get one), Title check fee, etc, etc.
So even if the market only stays flat, if you have to sell, you’ll have to cough up 10-12% of your house ’s price at closing.
Ouch!
Your over stating it a little bit. At most it’s 10% and thats if your being raped. 8-9% is the norm
You’re understating it a bit. Don’t forget the negative cash flow as rent only covers 2/3 the mortgage.
you forgot transfer and mortgage taxes…here in NY we also have the “mansion” tax on homes over $1mm.
What are you talking about? Your HOUSE is your bank.
‘You won’t “own” anything until you begin paying down the mortgage (or benefit from rising values).’
Actually you “own” the asset price risk the moment you close the purchase deal. Renters do not own asset price risk, though they may end up having to settle for less comfortable future living arrangements if home prices rise faster than their paychecks. Nonetheless, renters are generally not subject to price risk on a basis of 10X their annual incomes — and that is for those San Diegans who only own a single home of their own. The bozos quoted in that Voice of San Diego piece have no clue whatever about how fast they can get wiped out if prices go down just a little and interest rates go up just a little.
“The bozos quoted in that Voice of San Diego piece have no clue whatever about how fast they can get wiped out if prices go down just a little and interest rates go up just a little.”
Kind of reminds me of that stupid flipper Seattle Eric and his real estate investment blog. This genius is looking to pad another flippers pocket 20 g’s by purchasing an overpriced POS from him, putting in like 15K in cosmetic repair in the hopes he can make 15k or so himself. Talk about a fool. Working on those slim margins and in this market, the winds of change could blow in tomorrow and turn him upside down 50k in a second. That guy is gonna go broke I am certain.
The funny thing about Eric’s blog is how hostile he is towards anyone who suggests that RE is slowing down or heading for a fall. He calls them idiots, fanatics, and other colorful names. Unfortunately, he doesn’t seem the type to fess up when his “empire” blows up in his face.
LOL I noticed that on my one and only visit. He really lets ‘em have it huh? I might check back in the next six months when he’s lost everything. Of course by then he will be nowhere to be found.
Actually, the impossible has happened: Seattle Eric acknowledged last week that Seattle RE is softening.
He has a bit of disdain now for the “newbies” who are still jumping in. (Pretty funny since he himself got started at the peak last August ‘05).
Anyhoo…he’s considering investing in Buffalo, NY now. His wife went out last week to look at property. (This a true, not a joke).
He is one savy RE investor for sure.
Yeah, brilliant choice, Buffalo! A real flippers dream I am sure… Sounds like a great plan. Buy in late summer and at the market peak, only to get into more costly and time consuming repairs than one had hoped or anticipated, and wind up trying to sell in the dead of winter and blizzard conditions due to the relentless lake effect snow. I have not even heard a smidgen about Buffalo’s real estate market but I have heard the economy is less than spectacular, at least as far as high paying jobs go.
Realtor quote of the day (sfr in Los Angeles):
“Submit an offer on this home and receive a costco gift card.”
Any offer? Then give her my name - $1 offer. Email the card to http://bakersfieldbubble.blogspot.com
Quick, let me in too. I’ll bid $2.
I am pre-qualified for $10.
is there a link for this quote? I’ll outbid crispy&cole and offer $2.00
Here is the link:
http://www.ziprealty.com/buy_a_home/logged_in/search/home_detail.jsp?listing_num=06_117291&page=1&property_type=SFR&mls=mls_so_cal&cKey=msmq0wz7&source=CLAW
Now go and get your gift cards
I just offered $19,000 for this beautiful home and I think that is alot!! Maybe they will accept??
I want my gift card!!
LA is becoming a surreal joke. Just in the past month, I’ve seen easily twenty new listings in my area (Silver Lake, Los Feliz) listed in the $1.4-$1.499 range. Regardless of square footage, location, lot size, or condition of the house. It’s almost like the realtors got together and said, “Hey, let’s price everything just a hair under $1.5 million.”
In general, these are “normal” houses for the area. 1700-2400 square feet, 5000-10000 sq ft lots, 2-4 bedrooms, 1-3 bathrooms. Not trophy houses, not mansions, not even McMansions. Some of them are on really bad streets too.
I can only think of one reason for this: crack cocaine is being put in the water supply.
Are any selling??
LA has been a surreal joke for a long time, in many ways besides housing.
That’s probably the amount they need to sell it at to come out without a loss. Have to cover closing costs, the HELOCs, the dreams of early retirement, etc.
If you paid more than 300k in Silverlake for anything you’re a fool. If you paid more than 900k for anything in Los Feliz that’s less than 3500 sqft with a half an acre lot and a view of the city seek counseling.
yes - i just put down the pipe - i said 350! you are right 300 is more like it
i do not agree that lf is 900k - no way - not a regular 3/2.
no offense, but lf and sl are kinda rough. put some grills on your windows…. 1.4M is completely wacko for regular houses there - wacko. try 350k. now your talking
Los Feliz rough? I guess somebody could run your foot over with a shopping cart in the Gelson’s parking lot.
with their range rover, very heavy..ouch. try echo park where my friend’s shack with a back shack is zillowing at 850k. altho we do have gunshots occasionally….
“I’ve seen easily twenty new listings in my area (Silver Lake, Los Feliz) listed in the $1.4-$1.499 range.”
I live nearby, Atwater to be specific (I lived in Silverlake for years). Everything in my neighborhood is waaaay overpriced at 600-800K. Amazingly a couple of weeks ago a new house was listed two blocks away for 1.5 million. The combination of greed and the cloying language they use to describe these dumps — “lovely silverlake artist’s cottage”, “sweet atwater casa”, “cozy zen retreat” — makes me regret I ever learned to read.
Generally, I see a lot of houses sitting for months, then one day they’re listed as “inactive” on zip. Some must be selling, but I know that others are being “withdrawn” (how quaint), or put up for lease. My sense it that while sales have slowed considerably, prices are still extremely demented and that the crash is working its way in from places like the antelope valley, riverside, torrance, etc. Until it arrives (6 months?) I’m sure we’ll see more annoying LA idiots trying to shoot the moon.
I’d have to agree, manraygun. I’ve been watching inventories for the hills of West LA, from West Hollywood to Brentwood, for over a year. MLS inventories are up 30% or so yoy, but as far as I’ve noticed prices haven’t budged (yet).
Keep your fingers crossed we’re not the one place in the world that really is “different”.
Let’s see: devasting earthquakes at roughly fifteen year intervals, race riots approximately every twenty years, and secession movements whenever the wind changes direction. Yeah,sure… Investing in Los Angeles is just like investing in any American small town.
PS: Gotta love watching this barbaric meltdown from the cheapseats of my rent-controlled apartment. Crapitalism always undoes itself…
Silverlake is a baffling area of crooked, disjointed,twisted narrow streets : the entire community grid street pattern defys logic as it turns, twists and snakes up hills and down like some roller coaster. Old housing stock with narrow 80-100 yr old streets and old pavement but like another aging burg(Venice) Siverlake is being snapped up by The entertainment folks.
Los Feliz has some pricy homes up in the hills toward griffith obvervatory. LF Not a bad area at all but snarled traffic congestion problems due to ancient street and housing grid patterns.
One time i was driving thru Silverlake along sunset blvd during a thunderstorm: the traffic was inching along at 2-3 mph the entire evening.
No bubble because the REITs are still going up:
http://www.financialsense.com/editorials/droke/2006/0914.html
This guy agrees:
http://realtytimes.com/rtcpages/20060914_goodmarket.htm
I posted in another thread, but I just have to post this priceless quote again:
“If you want property, buy a condo that is lingering on the market and rent it until median prices return to their dizzying climb.”
Or maybe do this instead:
Watch it’s dizzying plunge and when it crashes to a thud or bounces lightly off the bottom there’s your time to buy.
You decide then whether you want to rent at a profit or live their yourself.
In the last week I have heard that 2 coworkers have bought houses in the Spring without selling the 1st house. It is starting hurt people.
Two days ago I saw the first house on Zip listed as an auction.
Today in the metro elevator someone had posted a picture their house with little tear off phone numbers like you do for a lost pet or daycare. It was a 700k house and said they would accept any “reasonable offer.”
This is NO.VA.
That was way stupid to buy another house before selling the first one last spring.
By spring it was already in the news that housing was losing it. Cripes, 20/20 did a story late last winter. That’s pretty mainstream.
These people were warned. They chose not to listen. No sympathy for people who bury their heads in the sand.
I feel like this past year has been all about warning people that the market was cracking. The national media gave a decent heads up even if the local did not.
Anyway, people have had their fair warning. It’s not like a switch was thrown in an instant.
In fact, you could say that the local media, by it’s cheerleading, granted people a “grace period” to get out., against the backdrop of the national media warning people that if they needed to get out, now was the time.
You can’t save everyone.
I have seen this “NOVA” used in this RE blog and I am not sure what it means or stands for. Do you mean northern Virginia?
The only business correlation that I know of “NOVA” is when GM tried marketing the Chevy NOVA in Mexico about 10 years ago. They could not get these sales to get going in Mexico, so they hired some outside help to research this thing and give GM a solution. What they found out is that “NO VA” in spanish means “it does not go!!!” (And GM paid outsiders to figure this out?) LOL
Cripes sake, that’s a stupid urban legend Happy_Renter. Not only that but everyone knows this was just a marketing 101 joke for a good 25-30 years. Go to wikipedia or even better, snopes.com:
http://www.snopes.com/business/misxlate/nova.asp
Man, I really hate urban legends. People constantly spout them off as facts.
It’s an urban legend that the Mexican Chevy Nova story is an urban legend.
Actually thats an urban legend.
NO.VA. = Northern Virginia a.k.a. Washington DC suburbs.
I heard that in spanish No. Va. means “Real estate market will not go any higher.”
Off topic, but I didn’t want it to get lost in the shuffle. The “unofficial” Greater West Palm Beach FL area home sales have just been posted at the real estate broker site I visit each month:
http://www.ipre.com/trendg/images/palsld.PNG
These numbers show a 66% year-over-year decline in sales and … drum roll please … a 4.8% YOY decline in median prices. The numbers tend to differ slightly from the official figures released by the Florida Association of Realtors, but the trend is clearly ugly.
What was the number of sales in August? it’s hard to read. Thanks
I got 607 vs. 1,765. The figures on the chart are indeed a bit hard to read, so I went to the individual price categories (sales under $100,000, etc.) and the numbers there are bigger. I added those totals up to confirm that I was reading the main chart correctly. And 607 is the result.
That one-month increase from 22,286 to 28,182, if it’s accurate, is mind-boggling. The increase is almost as much as the total for sale the same time in ‘05! And dividing the sales by for sale gets a 46+ months of inventory. Do you think it’s that bad?
I think that isn’t an “8″ but a “3″ instead. Still bad, but not that big a boost in inventory, near as I can tell.
YOY declines!!!! Let the bloodletting continue!
Are you a Chicken Little?
http://bakersfieldbubble.blogspot.com
end bold
I guess not everyone is aware things have changed here in San Diego. Neighbors across the street just put up a for sale sign. Jeez, they just bought the place a year ago for $740 K. Guess what their asking price is? Between $875 and $924K? I was flabbergasted. This is North Park for christ’s sake…………nothing special.
North Park … nothing special? That’s a kind description. Last good thing to come out of there was Ted Williams.
More like Southpark!! Where is Cartman when you need him??
Darn tootin’ not everyone is with the program in S.D.
I know a woman down there who just took equity out of her fully paid off home (last week!) that she bought 30 years ago and had intended to “use” for her retirement.
And yes, she was warned.
A lender called her a few weeks ago and suggested a loan. A cold call apparently. She had not intended to borrow against the house.
I told her lenders were getting desperate for business because the mortgage business was slowing down. Told her the inventory was surging in S.D. and prices dropping.
Told her to read this blog for a few days if she wanted more info.
She didn’t want more info. Sometimes living in a fantasy world is a lot more fun than dealingwith the real world.
I guess for her, last week was just one of those times.
Yep. Seen plenty of those myself. Numerous homes being put up for sale at a premium to last year’s prices. Guess they missed the memo.
People can always ask for pie in the sky price, but it only matters of what price will they actually accept.
there is a unit in my townhome here in Bellevue Wa was asking for 399K 2 months ago. Dropped their price down to 347K recently, and still no taker. Saw a For Rent sign, asking for $1500/month right next to the For Sale sign. I take it that the owner is trying to do anything to cover the dual mortgage. By the way, they bought this unit last year for 240K. Greedy a$$es.
‘There’s a gradual realization now that they can’t sell their home,’ he said. ‘That train has left the station.’”
And they’re locking up the ticket counter and tearing down the platform.
Notes from the field; San Fernando Valley, CA.
Have a Realtor friend who is very concerned:
She has many listing and many home sellers have lowered their prices and still nothing in escrow!
My personal observation:
It seems sellers are coming out of the woodwork to sell. Many new motivated sellers have bought a house in the last few years, fixed them up (kitchen, paint, floor rehabs etc.) and now want out. Most are living in their houses and I think are trying to lock in their “profits”.
Another observation: There is a new development in Simi Valley called Big Sky Ranch. Word on the street is there are many foreclosures in this new development. To many people bought the new house thinking they could sell the old house. Two mortgages killing them. Some more astute bloggers may be able to check this out. Zip code 93065.
a re agent customer of mine last week told me sales are off 80% in 1000 jokes westlake village area.the proverbial ship has hit the pan.
any of you read realty times for ventura county?
Tim star guy updates same market observation every day with out fail. there is a guy walter who has not found time to update his report from july.
what a set of jokers.
a new development in Simi Valley called Big Sky Ranch
“Big Sky Ranch”? I don’t believe it.
BWHAHAHAHAHAHAHA, ROTFLMAO, my ribs are aching.
Isn’t that the name Jim Puplava chose over at DailyReckoning for his fictional bubble development?
That should have been financialsense, not DailyReckoning.
Simiwatch posts “Another observation: There is a new development in Simi Valley called Big Sky Ranch. Word on the street is there are many foreclosures in this new development.”
Simi I know the area very well. The Big Sky Ranch development was misnamed. It should have been named “The Big Blue Sky Ranch” development with each house you got 500,000 dollors of free “Blue Sky”
The whole place is going to be a fancy debtors prison soon.
Alright.
It strikes me that it is well nigh time for one of the lovely and talented HBBers here to start production of the Sundance ‘09 hit indie doc of the year: “Flipped: The Bust of the Boom” or some such. I’m only half in jest. Its just ripe for treatment a la Fast Food Nation or Bowling for Columbine … A real estate armageddon, on film. I’d pay $9 for two hours of road kill. Takers?
A while back Ben had tipped his hand that there were negotiations around something similar.
Ben has stopped posting those interesting tidbits for a while.
Ben ought to develop a move/book about this. Considering all the work he’s putting into this (hello…one day off in how long?), he can’t possibly be doing it just to give us addicts our “fix”. I’d love to see Ben really profit from all this.
Its just a total mess. I think the party hasn’t even started yet. When the ARMs reset, more people then ever are going to be in trouble. I think that there are more and more people telling Congress and the Bush administration to raise taxes to bail out the housing industry. Anyone whats to donate to the housing bailout fund?
Hey TxChick57,
In the spirit of “kick ‘em while they’re down,” when are you going to pop in and spread a little more tough love over on the SDCIA forum?
I agree, now with Robert Cote degraded to lurking status, we need a regular with attitude to spice this up again.
Most blogs need a stalking horse personality to keep it interesting.
Cmon Tx Chick let’s see it!
I sure hope Robert Cote doesn’t stay down for long.
Robert…come on and join in again! We’ve all been flamed before (I’ve had some serious knock-down, drag-out “debates” before). Just have to dust yourself off and get back up on that horse.
BTW, I always back you up on the Prop 13 debates if I get there in time! More people will “get it” once they see how volatile prices are and how idiotic it would be to allow specuvestors set the prop taxes in CA.
I didn’t even read that Prop 13 thread, and flames invariably say more about the flamer than the flamee.
Cote, you’ve heard from a lot of people saying a lot of nice things in support of you and your contributions - you should listen to them instead of some jerk in a tangental thread.
“advice came to Balagtas from Lisa Vander, president of Pacific Blue Investments in Solana Beach. She said the slowdown in the housing market of late hasn’t dampened her estimated 3,000 clients’ enthusiasm for investing in real estate.”
—————————————————————-
she has 3,ooo investors at Pacific Blue? Nothing like a cheery consensus to buck ‘em up in this kind of market.
‘Its just a total mess. I think the party hasn’t even started yet. When the ARMs reset, more people then ever are going to be in trouble. I think that there are more and more people telling Congress and the Bush administration to raise taxes to bail out the housing industry. Anyone whats to donate to the housing bailout fund? ‘
I think this is a very astute comment. Let’s think about what we can do now to ensure that we don’t have to bail out the young and the senseless. This, of course, after the dems take back the House in Nov. Any ideas?
“Let’s think about what we can do now to ensure that we don’t have to bail out the young and the senseless. This, of course, after the dems take back the House in Nov.”
Give the Dems a majority in the house and senate, and elect a Repub president, or vice versa…Ah, the good ol’ days of legislative gridlock. Because when the federal government tries to do something *for* you, it usually ends up doing something *to* you.
html — bold off
I was just wondering how they are going to continue with those home shows on TV like House Hunters , Flip that House , Designed to Sell, Property Ladder ,etc. The producers are going to be hard pressed to find a positive situation . Sellers simply won’t be able to get their price by putting 2k of improvements like Designed to Sell suggests .Flip that house will be a horror story now .
I have noticed a change in the real estate commercials lately . It seems to be all about the real estate agents having good character as well as the Lenders .
Boy the market sure is changing and the real estate industry is trying so hard to make it seem like it’s just a minor normal correction ,no problem ,trust your realtor and lender .
Also notice difference here, even in local stuff.
Those shows just need a little tweeking, though. House Unders, Flame that House, Resigned no Sell, Property Laughter, etc. Then they can be used as a tool for true financial education.
tweaking?
WTF is needed in the real estate industry is an independant “counselor” who warns people of the sharks.
Of course Realtors (trademark) says that’s a function of a buyer’s broker-LMFAO…
I can’t remember the number of times I’d call a BB out of professional courtesy and say, uhmmm…I’m coming up real “light” in this appraisal. Since you’re acting in the fudiciary capacity of “advisor” for you clients in this purchase-what don’t you point me in the direction of the comparable sales you used to have these people make a $40k offer above anything I’m finding as indicators of value.
Pretty much all would tell me to f*ck-off. Then they’d call the L/O to give him hell and tell him their clients wanted a new appraiser.
Gotta luv Realtors, real professionals, LMAO…
I am in Southern California. Reminds me of a show I hear on the radio on weekend mornings. Some realtor show. They were getting a guy to buy his first house. He lived and worked in Santa Monica but to buy, the poor guy would have to be at least an hour away AND get a roommate to afford his new home. These were all bummers but the host said “keep you eye on the goal…home ownership”!!! I feel so bad for him…mislead by the others. I thought he would have caught a clue when there were no other bids on his house. But he still went thru with it. I was trying to send mental telepathy WAIT!!! Prices are going down! But I think it went thru.
It truly sickens me how the RE industry misleads people for their own benefit. This poor guy will probably lose a lot. And he’ll have to commute a lot and deal with a roommate for the privilage of doing so.
Fair point.