‘Buyers Want A Good Deal, Who Can Blame Them?’
Carol Lloyd writes for the San Francisco Gate. “To hear the off-the-cuff remarks of real estate agents is enough to inspire a new horror genre. ‘It’s cratering underneath my feet,’ muttered one agent after his pristinely marketed, cautiously priced listing engendered only a single, below-asking offer.”
“Another agent, whose characteristic optimism had evaporated like the sheen on a new floor after an open house, bluntly described the market as ‘flat-lined.’”
“During the boom, buyers just wanted a roof over their heads. Now it seems they want every little thing on their ‘under heaven’ wish list. But short of that, agents say, they’ll settle for that lovin’ feelin’ that only a buyers’ market can bring.”
“‘Buyers want a good deal,’ says (realtor) Carren Shagley. ‘They want to feel as if they’ve gotten something for their money.’ Who can blame them? ”
The Santa Rosa Press Democrat. “A home building company considering two big projects in Petaluma has backed out of one land purchase and negotiated a $2.35 million discount on the other. The discount stems from a slowing housing market and an estimated $1.85 million in fees.”
“On the other Centex project near the downtown Turning Basin, the company backed out of buying the property, between Copeland and Weller streets, after holding an option for 18 months. ‘It wasn’t a total surprise, but it was a shock,’ said Gina Pittler, one of the property’s owners.”
“Centex was willing to revise its plans in July but canceled those plans this month in the face of a slowing housing market and the risk involved in starting over in the approval process.”
The Sacramento Bee. “Neither Ron Rael of Novato or Kirk McKinney of Pacifica nor any of their Bay Area investor colleagues much care now for Sacramento’s languid market. ‘You got more bang for your buck a couple of years ago than you do today,’ said Poppy Stercl, a mortgage broker who lives in Rocklin. ‘It’s dropped off a lot,’ said Stercl.”
“Collectively, these sentiments have become key factors in Sacramento’s flat or falling prices and its record pileup of more than 15,000 homes for sale as summer’s big buying season comes to an end. The wave of investors and Bay Area arrivals who helped drive the region’s real estate market to what many believe were unreasonable heights has primed it now for an aftermath that no one can yet measure.”
“Some believe Sacramento is particularly vulnerable because outside forces that propelled it skyward have dissipated. In the first quarter of 2004, more than one in four houses sold in Sacramento County were to investors and second-home buyers. But at last count this summer it was closer to one in six, according to DataQuick.”
“‘A few years back you could buy a three-bedroom, two-bath for $150,000 to $170,000, rent it out for $1,200 a month and get positive cash flow,’ Rael said.”
“Altogether, investors bought more than 73,000 homes in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties between 2000 and June 2006, DataQuick reported. More than 22,000 of them were from buyers with Bay Area addresses. But those numbers are now falling greatly.”
“By early this summer, ‘flipping’ represented only 2.4 percent of sales in the capital region, while 28 percent of investor-sellers reported losing money on their deals, Ela reported. Adding to the uncertainty is the continuing inability of many locals to afford even today’s weakened prices as the market slowdown enters its second year.”
“Bay Area residents aren’t the only ones who can’t afford to take the homebuying plunge. Though prices here are still less than in the Bay Area, the median price of new homes can top $562,000. ‘The prices aren’t competitive anymore. They’re just lousy California high,’ said Stephen Levy, of the Center for the Continuing Study of the California Economy. ‘For eight, nine or 10 years, the Sacramento median price was near the national average and now it’s more than double the national average.’”
‘About 1,800 children have trickled into Hayward schools since the first day of class Aug. 29. But as of this week, the district was still at least 750 students smaller than it was last fall . The school district, which had 24,200 students at its peak in 2000-01, has shrunk by more than 10 percent in the past three years. With fewer than 21,500 students, it is the size it was 10 years ago.’
‘ In response to the enrollment decline and new size guidelines for elementary, middle and high schools, the Hayward school board voted last spring to close six elementary schools in 2007. Some say the closure of that many campuses will alienate families, causing more to leave the system. Vigil disagreed. ‘I don’t think the closing of schools will drive people away,’ he said. ‘I think the price of housing will drive people away.’
The Santa Cruz Sentinel. “This week, the county dried up the deluge of ‘for sale’ signs. Starting Oct. 1, signs that are staked in county road rights of way can be confiscated. ‘It was beyond time,’ Steve Wasylko said. Just steps from his driveway at the top of Vista Del Mar Drive, the signs are hard to miss, and more so on the weekends, he said, when he sees as many as eight signs pop up.”
“Realtor Erica Stefani, whose signs are throughout Rio del Mar, said they’re a central part of the job. ‘Our sales are mainly based off of directional signs,’ she said. ‘Having our signs available for the public to see is a huge part of the way we sell our properties.’”
“Realtor Erica Stefani, whose signs are throughout Rio del Mar, said they’re a central part of the job. ‘Our sales are mainly based off of directional signs,’ she said. ‘Having our signs available for the public to see is a huge part of the way we sell our properties.’”
If you’re too stupid to use online MLS and Yahoo Maps to find open houses then maybe you ought to stay home.
lots of open houses are last minute decisions of the sellers. Anyone who’s ever opened their house up to any idiot off the street knows it’s the last thing you really want to do, and only do if you’re not in escrow by Saturday.
Nevertheless, if the city ordinance says they can’t put signs on common property (probably without a permit or something), then they need to find a legal way to let people know about open houses.
Some realtors list open houses in the paper for Sat and Sun .
Is it me or something in the CA water out here. Enforce the sign laws, but let anyone come off the street for a Drivers Lic.?
This is the darling strategy known as “linkage” which has made the Middle East such an oasis of peace.
Whether a community is a dump or not is only loosely related to the manner in which people are allowed to drive through it. California didn’t get much value out of the immigrants going undocumented strategy, so giving them licenses allows some control of the situation. California does require insurance of all drivers so that driving without can get you arrested and your vehicle towed such that you might not get it back.
But you are saying that because California has immigrants and has not been able to totally settle that it makes no sense to let anyone talk about signs. Given the history here, you should run for governor.
“California does require insurance of all drivers”
WTF? California also requires all drivers to drive at or below the speed limit. Giving drivers licenses to people who aren’t in the country legally won’t slove the fact that a good majority of them can’t afford insurance. Straw man, red herring…take your pick.
“Given the history here, you should run for governor.”
And you, president.
You are right. Real estate sign postings should be closely linked with the immigration issue, specifically the process of issuing drivers licenses to illegal immigrants.
Gosh…signage is THAT important to the business? Sales are mainly based off of directional signs? Huge??
Whatever happened to that Gary Watts dude who advised agents to collude to limit signage?
Just curious ..I missed his name recently.
Trash begets trash. Here in Washington County, Oregon, we have the same ordinance - have for years. The wooden parts (stake) make great kindling or garden stakes, but it’s a shame about the plastic - what a waste.
Carol Loyd does not have the mental fortitude required to write about the RE market in California. I wish the editor would just pull the plug on her.
She admitted she bought in June or July 2005. Right at the top.
That just proves my point.
Yeah, I NEVER though I’d see the day Carol Lloyd was quoted on the HBB.
I love to bash Ms. Lloyd when she’s doing her usual RE shilling, but this article didn’t seem too bad to me — in fact, kind of a stunning about-face. (I agree with her points that staging can be a major turn-off to buyers — it is to me personally, since it’s not like the buyer gets to keep any of that stuff — and that not every buyer is lured by tasteless new stainless steel-encrusted kitchens, nor are willing to pay the sellers’ wishful premium on such features). Perhaps she trolls here? Maybe this fine blog is “educating” her away from the Dark Side…
OT here, but just wondering what others though about this and its eventual effect on house prices, if any. This quote was from an article on Bloomberg: “government spending will grow to 20.6 percent of gross domestic product in 2006 from 18.5 percent when President George W. Bush took office in 2001.”
Floridians are seeing astronomical increases for insurance premiums, and it’s busting many household budgets. Referencing the above quote, combined with all the local and state coffers that are in a mess (i.e. San Diego), should people not be prepared for an eventual hike in taxes of all variations? With so many FBs out there paying a huge % of their income on housing, what would tax increases do to them? To me, this is just another reason for prices to crash hard. A paycheck can only go so far.
The insurance companies should have adjustable rate homeowners insurance . You start out at a teaser rate ,it goes down if there isn’t any hurricanes ,floods etc. nationwide ,than it goes up until the insurance companies recoups their losses ,than back down again etc. But you have a prepayment penalty if you change insurance companies .
” Comment by CA Guy
2006-09-15 10:06:45
OT here, but just wondering what others though about this and its eventual effect on house prices, if any. This quote was from an article on Bloomberg: “government spending will grow to 20.6 percent of gross domestic product in 2006 from 18.5 percent when President George W. Bush took office in 2001.”
It use to be a clear choice Big (Dem) Gov or Small (Rep) Gov now there is no choice both are BIG.
“By early this summer, ‘flipping’ represented only 2.4 percent of sales in the capital region, while 28 percent of investor-sellers reported losing money on their deals, Ela reported. Adding to the uncertainty is the continuing inability of many locals to afford even today’s weakened prices as the market slowdown enters its second year.”
Finally, the flippers are getting smarter but for some it will be too late as they upside down on their properties and negative cash flow every month. Not a a recipe for making money that is for sure.
NorCal Ray,
Ray, I’m just a little suspect of flippers as a group to trust their “I took a bath in red ink” numbers. I’d doubt 5% of these guys worked with a bona fide CPA and I also suspect that a LARGE percentage “made” their profits by re-fi’ng post flip and took the cash out with the aid of an “understanding” appraiser? To be truthful not a lot of these guys are really sure if they ARE or are NOT making money. They just know they don’t have to answer to anybody, make really cool decisions and they get to drive around in big brand new pick-up!
I could not agree more. Just like the day traders of 2000. (before they all/most got hung out to dry!)
I have a question that has perplexed me for some time…maybe someone here could suggest an answer. Okay so, as we all know, money from California’s major cities (SF, LA, OC) most definitely spills out and “ruins” surrounding cities and even STATES’ real estate prices. Anyone living in Nevada, Oregon or Washington can tell you this is a fact. So here’s what I don’t understand! Why doesn’t Manhattan/NYC money spill out and do the same?? Upstate New York is one of the CHEAPEST places in the country to live! I look at the properties for sale in that area on craigslist and am absolutely amazed at what your money can buy out there. We’re talking $100/square foot.
Now someone might say, “Upstate New York is crappy, that’s why.” But that doesn’t hold water…COMPTON is crappy and home prices there are in the $300k’s! All thanks to the massive spread of irrational CA money.
So yea–what allows big city CA money to ruin the entire state of CA (including crappy areas of CA) and the surrounding states while NYC money stays contained within NYC?? Throw me a bone here!
Maybe because New Yorkers have culture and a life there. Here in the OC there’s little culture so we are all just a bunch of money grubbing house flipping fools.
the average person in Manhattan is smarter than the average person in Hollywood or the OC, maybe?
dwr replies to BB “the average person in Manhattan is smarter than the average person in Hollywood or the OC, maybe? ”
Maybe, maybe not. Both share two common factors Greed and now Fear. First for the buyers/flippers of the last few years now as they reverse roles and get into the others “shoes”
Long, long walk ahead, I think. One more thought, in the future I will be a buyer. When I do buy, I will press the attack with out mercy cash deal 10 escrow, no if’s and’s or but’s…. Take it or leave it period.
Is that Greed? Perhaps, or are “they” just being paid in “their” own coin?
You kidding? Half the people out here in Hollywood/West LA hail from NYC anyway….
Define Upstate NY. I lived in Dutchess County and saw homes rise from 140K to 220K within 7 years and then 9/11 happened and they really took off as city dwellers bought second homes or just moved to within train commute distance from the city. Orange county took off too, Newburg of all places got a huge boost.
CORRECTION: I just looked on craigslist for houses for sale in Compton, and they’re now in the $400ks! If that ain’t a bubble, I don’t know what is.
I remember a guy was buying duplexes in Compton in 1997ish for about $90-100K. I (correctly) thought he was an idiot, but (at least on paper) he’s a well-off idiot.
I lived in Syracuse from 1988-2003. I will shed some light on your thinking..
1. Syracuse is 4 hours from NYC. Rochester and Buffalo are 6 hrs. Albany is closer and re prices have risen nicely there wherease for Syr, Roch, and Buff they have not.
2. The economy of Upstate NY, west of Albany, was totally manufacturing driven. It collapsed like nothing see since the great depression starting in 1991. As a result, there are few jobs left, few high-paying jobs, no upward mobility.
3. With the job losses, people moved out. Upstate NY excluding the Hudson valley had a net LOSS of population during the decade of the 1990s. Not a net deficit of people migration, but an out-right net loss of people. All the young people left. The demand for houseing litterally dropped since there were increasingly more houses than people.
4. The weather is worse than you can imagine. My house just north of Syr received an average of 20 FEET of snow each year. In addition, the temp rarely got abouve 70deg after labor day. there is no Spring, only Winter part 2. I can remember trying to paint the outside of my house in early June and waiting for the sun to warm the temp up to 50 degrees so I could paint!
Also related to the weather - it takes a big toll on the maintenance of the house. You must spend a great amount of time maintaining the place. If you let something go, you will lose the house very quickly. And you only have 4 months of the year to do all this extra mainentnance. I had to remove the gutters on my house each fall or the snow/ice would do it for me.
5. The taxes are high. A $150k house carries a $6k/yr property taxes (property taxes pay for some of the most expensive public schools in the country, and also for some of the most expensive local government in the country).
7. Utility rates are very high. The minimum charge to have electricty to my house was $46/month PLUS usage. Gas rates also had very high delivery rates. Basically the electrical grid was constantly being rebuilt from the snow and ice storms.
In Upstate NY, they basically give you the house for free, but charge you an arm and a leg each year (taxes, utilities, upkeep) to stay there.
That is why NYC people go to Conn, and NJ. Also, NYC people tend to be very cosmopolitan, and upstate NY, as lovely as it is, just can’t provide that spark that the city people are used too.
Forgot #6… the place is financially very conservative, especially the local governments. There is virtually no venture capital money available. No new start-up companies. A guy I worked with tried to start a company and no one would lend him a dime. It was a pretty good idea, and he finally got part of it launched, but he said he never had seen so much resistance from lenders and government to new businesses in his life. (he was not originally from there)
There are a few exceptions–e.g., Paychex, headquartered in Rochester, made its founder Rochester’s only billionaire.
Rochester’s main employers have all suffered major problems and shed lots of jobs–Kodak, Xerox, Bausch & Lomb, Frontier/Global Crossing.
NY-the economy is undergrouand- w hilery and shumer the tax king and queen
they have an NON incorporated contracotrs tax of 11 or 14%
so most work is for cash
chuck and hillary have little to do with tax rates in NY.
flatffplan - could you rewrite so it makes some sense?
“NYC people tend to be very cosmopolitan, and upstate NY, as lovely as it is, just can’t provide that spark that the city people are used too.”
I agree, but you always read about people who visit upstate on the weekends or move up here. if you live in Albany, you’re still close to NYC. there are cultural attractions sort of close, they just take some finding. the adirondacks are nearby. saratoga is near. golfing is less expensive. the traffic is lighter. that’s not to say there won’t be culture shock. it just takes a different mindset to live there.
I lived in NYC for a few years and live in San Francisco now. Manhattan money goes to Long Island, Jersey, CT, or Florida; an old cliche but very true - have 2 friends in NYC who bought “investment properties” in FL just last year, ironically at what in retrospect was the peak. As for Compton, despite being a bad neighborhood, it has an ideal location. It’s central between downtown LA and Orange County, and commutable to both while being within distance of many nice beaches. Look at local money going into Compton the same way Manhattan money has gentrified Brooklyn and Queens over the past few years.
I agree with much of CincyDad’s comments, but I believe NYC area money has spread to some areas upstate. The Thousand Islands Region (St. Lawrence River area on the Canadian border) and other resort regions in upstate NY like Lake Placid, Saratoga and the Finger Lakes have seen prices surge … Many waterfront homes on prime stretches of the St. Lawrence River are in the $600k-$1.5 million range. Believe me, locals are not buying those homes! I grew up in Watertown, NY, just 30 miles south of the Canadian border and own a duplex that I rent out there for good positive cash flow. Despite the generally miserable economy, Jefferson County, where my duplex is, has a large Army base (Ft. Drum) and consequently has a strong rental market. My property manager there (who is a realtor) tells me “investors” from the NYC/NJ area were buying duplexes and other rental properties in Watertown, sight unseen, sometimes several at a time, throughout 2003-05. Granted, we’re talking $100K to $150K a piece, but still! But CincyDad is correct that, although the purchase price seems low, there are many other big expenses associated with owning property up there … High property taxes, very high utilities due to long cold winters, and high maintenance.
As much as anything, the concentration of home loan mills (Countrywide included) that seem to exist in that brain-dead place call LA.
Excuse me but while Countrywide may indeed be a toxic loan cesspool it is -our- toxic loan cesspool; Ventura County.
That said, Orange County still has lots more of this nonsense covering a wider range of malfeasence. Countrywide is “dead lender walking” but their one huge explosion will pale in comparison to OC’s death of a thousand cuts.
Robert Cote posts “Excuse me but while Countrywide may indeed be a toxic loan cesspool it is -our- toxic loan cesspool; Ventura County.”
Spot on! I would recon Simi Valley to be ground zero. I have lived in Ventura County for 30 years and the lending standards have gone straight down the drain.
What the Heck are they doing in Oxnard? I went thru the flats ouside (east) of old town and they are building for miles around in some giant planned community. They have few pads poured and less frames-up, one would think they would stop?
That nails it. This bubble is primarily driven by easy money, and Southern California is the focus of the mortgage-lending Gold Rush. Stands to reason the local pirates feed on the local inhabitants first before spreading out across the country.
I’m guessing the difference, in part, is access to a much bigger job market within reasonable commuting distance in those California towns (of course Californians drink the kool-aid and start thinking that 2 hrs is a reasonable commute).
Yea…but they also ruin neighboring STATES! Nobody commutes from Vegas to LA, yet Vegas’s bubble has been fed HUGELY by CA money. I saw it first-hand; I lived in Vegas from 2002-2005. Same goes for Oregon and Washington and probably Arizona. NYC money, on the other hand, doesn’t seem to infiltrate neighboring states.
Not just neighboring states either-as we know in Cali-rado.
Quite a bit of our Arizona bubble was due to the Californicators, er, investors.
It’s the climate. It’s possible to have that Mediterranean climate over thousands of square miles. The NYC money spreads out, all right… all over California.
It’s the center of the investment world. They invest their extra cash in things other than housing.
Actually, the same effect exists for NYers. The Calif. phenomenon is basically retirement/second homes in Vegas, Ore., Wash., Ariz., etc. Well, NYers don’t retire in Albany, Hartford, or Philipsburg, NJ. They retire in Florida. Is that a bubble state?
I don’t know about your conclusion. There is still spillover. Go to some of the crappy neighborhoods in Newark, Jersey City, the Bronx, Brooklyn, Queens, Staten Island etc. and see what they are going for. The spillover might be a little more concentrated but in the past 5 years it has gotten ridiculous.
“Now someone might say, “Upstate New York is crappy, that’s why.” But that doesn’t hold water…COMPTON is crappy and home prices there are in the $300k’s! All thanks to the massive spread of irrational CA money….
So yea–what allows big city CA money to ruin the entire state of CA (including crappy areas of CA) and the surrounding states while NYC money stays contained within NYC?? Throw me a bone here!”
I have noticed that there has been 15-20% yoy’s (july Data quick) in some of the “crappiest LA cities such as Compton, South gate, Bell Gardens,Huntington park, ect). And prices around $400,000 for 50-yr old 2bd/1 bt 700-900 sq ft on .12 acre lots. These areas are very heavily immigrant communities, which is somwhat puzzling, unless there is heavy selling of overpriced WWII built starter shoeboxs to recent Hispanic immigrants.
Compton has a well-deserved bad rap, and Gang activity/shootings have been a recurring feature there.
There are actually some quiet peaceful streets and areas in Compton, relatively speaking as compared to other parts which are indeed slummy and dangerous. Compton/willowbrook/watts have some very densely-crowded areas with 2 bd/1 bt 700-800 sq fts on .12 acre lots sited on small cramped streets(Pre-WWll built hoods). These are packed with Hispanic Immigrants. The Larger SFH’s will often have additional converted rooms/garages, as well as duplexes.
What is driving Compton sfh prices to average $400,000 median. Probably selling of overappraised properties using “fishy” loan products to first-time immigrant Hispanic buyers. 90% of listing agents for Compton-area home sales are Hispanic.
Listen up: don’t be fooled by all the “buyer’s market” talk. prices are still about 50% overprice. until it can get to that level, everyone should stay put or be burnt. this is still very early in the game. remember the 7 years rule.
“Another agent, whose characteristic optimism had evaporated like the sheen on a new floor after an open house, bluntly described the market as ‘flat-lined.’”
I would have worded that anology differently: “like the sheen on a new corpse after an open coffin”
analogy (must use spell-check!)
““like the sheen on a new corpse after an open coffin”
Yuck. I want a closed coffin.
wow - went to a HVAC contractors show
DOA folks
I wonder what the granite countertop trade shows look like?
Now we’re going to get granite-faced appliances and stainless-steel cabinets and coutners.
What about the granite toilet?
…granite showers?
Is granite still used for tombstones? Would come in handy this Halloween to decorate the front lawn - and can double as a for-sale sign.
Don’t forget the ubiquitous travertine tile!!
The Sacramento Bee. “Neither Ron Rael of Novato or Kirk McKinney of Pacifica nor any of their Bay Area investor colleagues much care now for Sacramento’s languid market.
LOL I know who Kirk McKinney is. He is a contractor that ready to go bust b/c of all the flipping diasters he and his partner have done over the past few years. He has converted most of the money out of his business to build a $2M plus home in Pacifica, and people are on to him. Many homeowners and subs are after him with law suits. Next, the DA will get him for conversion and diversion of the homeowners money.
And that is the rest of the story !!
I don’t even have to read the posts cause I can tell buy the 75% drop off of works plus we are going into the winter months!!! In Mass the winter has been brutal (except for last year) and people hunker down and hibernate like Yogi.. I just remembered I have to send $$$ for taxes today… http://www.ghjellystone.com/yogi.gif
Sellers and builders are still lucky in that there are buyers looking for good deals. In another year, or two, there wouldn’t be many buyers to do deal with. At that time many sellers will send the keys to their homes to the bankers and many builders would declare bankruptcy. Most of the sales, then, would be of homes possessed by crooked lenders.
90%+ Realtors would leave the business because there wouldn’t be enough business to go around.
Jas Jain
90%+ Realtors would leave the business because there wouldn’t be enough business to go around.
Amen…..
(So here’s what I don’t understand! Why doesn’t Manhattan/NYC money spill out and do the same?? Upstate New York is one of the CHEAPEST places in the country to live!)
Manhattan/NYC money spills out all around the region, but it only goes so far away. Northeasterners have a different attitude toward distance than people out west.
The second home/telecommute boom reached the Catskills, the Hudson Valley, and the Adirondaks, along with southern Vermont, western Mass, and the Hamptons. These are established areas. For the working stiffs, there is a boom in super-commuters from the Poconos.
Syracuse, Rochester, Buffalo and Binghamton are just too far away. The get NYC’s money, but not its people (and probably like it that way).
Larry is right on. In a previous life (2001-2004), I made the drive from Westchester County to Binghamton (about 3 hours NW of NYC) on numerous Friday evenings. The weekender traffic is dense, but once you get north of the Catskills, the highway is w-i-d-e open. There are no towns at ALL for about 30 miles along Rt 17, then you finally hit Hancock. Which, by the way, pretty much got wiped off the face of the math by the floods earlier this year (most of the town sits directly on the Delaware).
I still visit Binghamton (my hometown) annually, and there IS anecdotal evidence of NYC folks buying up country properties to act as 2nd homes. Its just not very prevalent.
And, to agree/add with the previous posters:
1. High taxes but GREAT schools.
2. Horrible, cold, gloomy winters - I remember as a kid, we once experienced a whole month without sunshine. However, the summers are gorgeous. Mild with LONG daylight hours.
3. The economy up there is DOA. Elliot Spitzer even made the comment that Upstate NY is turning into “the Next Appalachia”. Ouch.
I joined the Navy when I was 17 (back in 1981) and never moved back. I have some very close friends who still live there, and everyone of them works for some form of the gov’t or quasi-gov’t(state transportation dept, NYSEG, BCC, UE school district) entity. There are lots of well-educated people up there, but they have been very slow to adapt from the “company town” mentality (Binghamton with IBM, Rochester with Kodak, etc….).
It’s the San Francisco Chronicle; SFGate.com is the address of their website.
Don’t bother… I used to think of it as news but now I haven’t clicked that site in over a month. Movie reviews are okay but that’s about it. Otherwise, not good for anything except finding where a movie is playing.
Grew up in Buffalo, agree the collapse of heavy industry has hobbled the town. Place is a mix of old money and solid, ethnic working class.
I love the summers, low eighties and no humidity. Lake effect dumps plenty of snow, but keeps the temp. much warmer than say, Toronto,
which is truly frigid. That said, the housing stock is truly amazing–plenty of 19th century robber baron manses, a couple of Frank lloyd wright masterpieces, tons of well-crafted, huge houses from the 1900s to the 1920s. 400k-would buy you a gorgeous house with mature trees and landscaping, and at least a half-acre in the city. That said, upkeep is high. COL is cheap though and folks friendly–might retire there someday.
“Grew up in Buffalo, agree the collapse of heavy industry has hobbled the town. Place is a mix of old money and solid, ethnic working class.”
In 20 years, raplace “Buffalo” with any Bay Area city. Replace “heavy” with “tech”.
Doubt NorCal will be hobbled like the rust belt cities were. Will always attract folks for the weather, beaches, wine country, etc. Plus the non-tech economy is strong. Outside of Manhattan, the largest concentration of Fortune 500 firms is headquartered in the bay area. But a lot of California companies have been relocating to cheaper cities in the recent past…
> In 20 years, raplace “Buffalo” with any Bay Area city. Replace “heavy” with “tech”.
As soon as the Bay Area gets 20 feet of snow in a year…
“Adding to the uncertainty is the continuing inability of many locals to afford even today’s weakened prices as the market slowdown enters its second year.”
In my opinion, when considering how far prices will drop in any given market, one only needs to look at median income as it pertains to the median home prices. They are so detached right now it is laughable. When you have median home prices in the 300k-400k range and median income in the mid 40’s you’ve got serious problems. Someone earning 45k should not even consider purchasing anything over 150k in my opinion, and that is with at least 10% down. Well, needless to say, there is NOTHING available for that amount period. Buyers need to turn up their noses as well as their middle fingers to sellers and their insulting asking/wishing prices and go home. Let this thing crash hard and then we can start over with a market based on fundamentals, and not greed.
I agree. Our income (after years of work) was about $100K, with no kids at home and almost no other debt ($2K on a car). We borrowed $285K - almost three times our income - and I had a hard time doing THAT. 7-8 times annual income? That’s ludicrous.
I echo your sentiments as well. This bullsh*t has gone on long enough and I’m looking to start bursting people’s bubbles every chance that I get (pun intended). I moved to SD from Chicago in late ‘04 with my wife (she is in the Navy and we had to move here). It wasn’t until spring ‘05 (when I found this blog and Piggington’s site) that I understood how all these people making less money than my wife and I were buying such expensive houses. It was baffling at first. That bafflement has turned into contempt for all the losers running SD in their Heloc bought Mercedes/Hummers/BMWs… and especially for the realtors here.
No Mercy for the FB’s.
Well said BanteringBear!
Yes, we just need to return to reality.
News flash…a $200k-$300k mortgage is a gutbuster for most middle class folks!
“Bay Area residents aren’t the only ones who can’t afford to take the homebuying plunge. Though prices here are still less than in the Bay Area, the median price of new homes can top $562,000. ‘The prices aren’t competitive anymore. They’re just lousy California high,’ said Stephen Levy, of the Center for the Continuing Study of the California Economy. ‘For eight, nine or 10 years, the Sacramento median price was near the national average and now it’s more than double the national average.’”
Finally catching on in the local media. This has been going on for 5 years now… BA prices has been so out of wack pre-9/11.
We have so many 50-80 yr 800sq ft cottages going for $600-700K… and to think so many purchased these at the peak is mind boggling.
Dont matter if its in Palo Alto off university or 2nd St in San Jose. They look like a real POS… Lots of DOGS out there…
Its sure is going to put a fat smile on my face as I watch these fools loose their homes. Just watch as prices go down 50% and more in the Bay Area.
I went to see an old craftsman style home in Willow Glen with my sister last weekend. These homes are TINY and I can’t see spending that kind of money ($800K) for anything that small without a garage a big yard. Many Many for sale signs in Willow Glen right now.
CNN/Money just reported their “Most Affordable Homes” top 25 list. Funny - 21 of these towns are east of the Mississippi, but not suprisingly, the Midwest dominates.
25 Most Affordable Housing Towns
you look like Captain Morgan in that picture on your blog.
First Downtown Real Estate office shutdown. . .
Sterling Real Estate has closed it’s Little Italy San Diego office. . .the first of likely many to close downtown. . .with only 60 sales of condos last month, and at least 20 downtown real estate offices (Keller Williams had 200 agents) things can only get worse!
20 offices?!? No employment bubble there…
Oh, I assume that was 60 sales of condos amoung 20 offices, not just the one. 60*$400,000*3%=$900k of commisions, enough for one office. But after expenses, that’s less than $1k/realtor!
Note: less than $1k/realtor for 20 offices…
Good Riddance…fewer parasites wandering around the Condo Canyons that are Downtown San Diego.
We were in Rochester, NY in July “05. We have friends there. We drove from Vancouver, BC and really enjoyed ourselves. I DO remember our friend saying that there had been no runup in prices like other places…(especially Vancouver) She was a little “disappointed” by this. Oh well.
Her sister, on the other hand, was visiting from Florida. She was, shall we say, “gushing” with enthusiam at the time.
“Altogether, investors bought more than 73,000 homes in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties between 2000 and June 2006, DataQuick reported. More than 22,000 of them were from buyers with Bay Area addresses.”
Let’s see, 73,000 * 50K loss each, and the investors loss will be
3,650,000,000 or 3.6 billions, just in Sacramento area.