‘It’s Not A Bad Market, Just Overpriced Homes’
Kenneth Harney has this report on appraisals. “In cooling real estate markets, it’s one of the hottest questions: How do you value a specific piece of property when local home sales are down 20 percent to 40 percent from last year, inventories of unsold homes have ballooned by 200 percent or more, and all the trend lines are pointing negative?”
“‘It’s getting pretty dicey out there,’ said John D. Bredemeyer, a residential appraiser and spokesman for the Chicago-based Appraisal Institute. ‘Just looking at historical data can be perilous. You’ve got to open up the window and see what’s really happening now. You’ve got to answer the question: ‘Where are we in this cycle?’ And you’ve got to factor that into your valuation.’”
“For example, Gary Crabtree, based in Bakersfield, Calif. said, some agents increasingly are playing what he calls ‘the re-list game.’ Take the property off the market for a short period of time — and then list it again with a different price and MLS code.”
“‘Now the house no longer looks like it’s been sitting dead in the water for months on end,’ Crabtree said. ‘It looks like a new listing,’ and it’s reported in that misleading way.”
“Crabtree said one house he tracked was first listed in October at $299,900. It sat unsold for 122 days. Then the listing agent pulled it out of the system briefly and brought it back as a new listing, but this time at $269,000. When it didn’t sell in 30 days, the agent again yanked the listing and reported it as a new one with an asking price of $259,000. The house is now on the market for $229,000, ‘but it’s still not selling.’”
“Crabtree also is constantly on the prowl for concessions that may have puffed up the price of houses. ‘There’s just a tremendous number of them out there right now,’ some of them under the table and tough to detect, ‘but they’ve got to come off the valuation.’”
From the Santa Clarita Signal. “Selling your house is no longer a piece of cake. The word on the street is don’t sell unless you absolutely have to. Sellers throughout the Santa Clarita Valley are going to extremes to attract buyers.”
“Home sellers now can wait months for an offer and it is usually below their already reduced asking price. Savvy homebuyers are now playing a waiting game while scanning the multiples to find the best house for the lowest price. Overall, the situation is desperate enough to compel developers and sellers to offer incentives and perks unheard of nine months ago.”
“Just ask Cindy Schwanke, who quit her job as a pastry chef to devote herself to selling her home. She bakes cupcakes for people who come to her open houses. She and her husband listed their three bedroom, two and a half bath home built in 1990 in a quiet neighborhood in Castaic for $629,000.”
“In spite of her cupcakes, Schwanke said she had no one show up during a recent Saturday open house. She wonders where all the buyers have gone. Her current listing agent, Paul Morad, said he expects interest to pick up now that the home’s price has been reduced to $525,000.”
“Schwanke is a very motivated seller. Last year, she and her husband closed escrow on a 5-acre property in Acton. Now they are stuck with two mortgages and property taxes with no end in sight. She is ready to call in the Feng Shui master.”
“‘The buyers are definitely out there,’ said Miguel Soler, a real estate agent in Valencia. ‘It’s not a bad market, just overpriced homes,’ he said. ‘The bottom line is, selling houses is very competitive on price. People don’t care about cookies, donuts or flowers, they just want the best value and they are doing comparison shopping.’”
“He said many sellers are unrealistic about the true value of their home. ‘Buyers are now coming to us already educated about what is on the market, know what they want and know what they want to spend,’ Soler said.”
“‘It’s all a numbers game, the buyer wants to get the best bang for the buck,’ he said. ‘The toughest part of my job now is to tell people what their home is worth and dispel their false expectations. We can market till you are blue in the face, but if it is priced too high, nothing is going to work.’”
“Soler said motivated sellers are those who have relocated or have already bought a new home and are willing to drop the prices below the competition, or short sell, just to get out. In other words, he said, this is no time to sell a house with the intention of making money.”
“Tracy Hauser, a real estate agent in Valencia said the real problem is speculation inventory, people who are thinking of retiring in the next five years and just want to see what their house will bring. She advises those speculators to pull their houses off the market, because it only confuses buyers and clogs the market.”
“She said ironically buyers were afraid not to jump into the market as they saw prices going up $10,000 to $20,000 each month. Now, buyers are waiting for prices to bottom out. ‘Fear of loss drives the market up and fear of loss drives the market down,’ she said.”
“In spite of the market downturn, Castaic home seller Schwanke remains optimistic. ‘After six months, we would like to sell it, just so we have peace of mind, but I am not giving away my beautiful home I raised my children in. Maybe we will rent it, but I am not going to throw it away.’”
Personally I don’t think its the housing bubble that’s affecting Cindy’s home, it’s her crappy cupcakes. LOL.
One might ask why you would need to quit your job to sell a house ? Isn’t that why you hire an agent ?
No. Cindy is one of those supercontrolfreaks following and questioning the agents every move, taking credit herself for anything positive, admonishing the agent for anything negative.
Sounds like Cindy is hanging out at her open houses, passing out cupcakes and talking up the virtues of her “beautiful home, where I raised my children.” That’s enough to turn off the most interested buyer - the constant bragging about how great the house is (while there’s probably still crayon marks on the walls) and cupcake bribes. I’d be a little turned off by the “perfect hostess” routine.
The best open houses are when the sellers are far and away from the premises.
Posted ““Tracy Hauser, a real estate agent in Valencia said the real problem is speculation inventory, people who are thinking of retiring in the next five years and just want to see what their house will bring. She advises those speculators to pull their houses off the market, because it only confuses buyers and clogs the market.”
What a moron. Of course Tracy would have sold and made ton’s off these people in the past few years. I bet if I said I was a flipper, or just a pure speculator she would not “advise” me not to buy one of her “ripe” listings.
Agreed. Once again these “stories” reek of inconsistencies.
Posted “Agreed. Once again these “stories” reek of inconsistencies.”
They do “reek” of rotten cheese because these people talk out of thier butts!
Why sell cupcakes when you can make a 100k overnight?
Maybe we will rent it, but I am not going to throw it away.’”
___________________________________________
No don’t throw it away. Let it eat away every $ of financial security you have and let it ruin your family. Then you will learn that GREED is not good!
Posted “Maybe we will rent it, but I am not going to throw it away.’”
“Hell no!” you could turn it into a shrine, like Graceland! You could sell tickets people would come from all around to see the place you cooked cupcakes and raised your kids “Larry, Moe and Curly”
I thought that alternating bouts of rentings and listings will chase her listing price all the way down to well below zero equity, but I like the shrine idea even better.
I know a couple of sellers that are saying this same kind of thing. Because their house isn’t selling, they say they are going to rent it out. It just makes me wonder how many will actually be able to rent them out and what kind of rent will they be able to get. These people are living in a dream world and have no idea what it’s like to actually be a landlord.
BTW: that was a very short-lived rising-rent syndrome. It lasted what, about 6 months? Now it’s going back to falling rents as the true scale of this over-production is exposed.
“Maybe we will rent it…”
After a typical renter gets “works over” a house for a year or two, it’s going to be worth more?
Many rental homes turn into pits…
“Many rental homes turn into pits… ”
Mostly because the landlord doesn’t see the need to maintain THEIR property.
I welcome this sort of competition.
Would you rather have a 3 hour commute or a 30 minute commute?
Landlords in these distant exurbs are tilting against windmills. When it comes down to paying rent on temporary quarters, smart tenants will choose convenience if they can get clean safe neighborhoods with great schools. What is your time worth?
If there were a market for rentals in the exurbs, you would have seen apartment construction. There is none of that at all. These SFH “landlords” in the exurbs are going to get their a$$es handed to them in a most unpleasant manner.
Maybe if she throws in some ice cream with the cupcakes, it might close the deal.
Who gives a sh@t about cupcakes or cookies at an open house. It is all about price.I’m certianly not going to be swayed into buying a house because of the food at an open house, give me a break.
Shhhhhhhh!! Don’t stop the weekend food court. This is easier than listening to some idiot sell timeshares for a free round of golf.
I went to a investment pitch this week at the new country club in Valencia, the dinner was awesome.
At an open house here in Arlington, VA (just outside DC) last weekend, the seller had apple cider stewing on the stove to create an aroma. What a joke! Lower the price already!
HAHAHAHAHAHAHA! I can hardly catch my breath after that one! The thought of apple cider cooking over the stove in the summer heat just slayed me. I mean these people have lost their minds. Oh man that was a good one… Thanks John and keep ‘em coming. BAHAHAHAHAHAHA!
She forgot about St. Joe! I’d be pi$$ed at my agent if he didn’t suggest St. Joseph.
“The bottom line is, selling houses is very competitive on price. People don’t care about cookies, donuts or flowers, they just want the best value and they are doing comparison shopping.”
All together now, class: “DUH!”
“Schwanke is a very motivated seller. Last year, she and her husband closed escrow on a 5-acre property in Acton. Now they are stuck with two mortgages and property taxes with no end in sight. She is ready to call in the Feng Shui master.”
“Feng Shui master” ?????
Give me a break!!!!!!!………..the comedy continues
Just courious about The Schwanke’s purchase of five acres out in Acton. I know they needed a large spread for the horse corral and for their trucks/RV’s? . Acton and that entire area in Saugus Canyon does have large multi-acre ranch spreads. Acton is about half-way between Santa Clarita and Palmdale. See lots of large homesteaded ranchettes out in that area.
They didn’t move too far from Castaic, which last i know back in 2005 was just sprouting new tracts, near the Lake. Distance from LA would be about the same for both places.
Maybe the land burned up in the fire?
“Feng Shui master” to homeseller:
After a thorough investigation of your property I have a diagnosis. The prosperity chi is pointing into the toilet. The love flow is stopped up like the upstairs drain full of kung pao chicken grease. The root cause? Your head chakra is misaligned with your colon chakra. In china we call it, (phonetically) “bal gon be cook”. Confucius might have translated it as “Another F@cked borrower.”
Please pay me cash only no take check
Coming soon to a town near you!
“bal gon be cook”
FB in Chinese!
Any other translations out there for FB?
For dyslexic people, there’s BF.
Dyslexics of the World, Untie!
DrChaos - Are you any good with rental property? I know some people who could use your analysis
Forget about all those pathetic comedians on TV, we have got it coming in here! Dr. Chaos for president, ooops, maybe we do not want that job now. It might be easier to control the Iraqi insurgency than to sell a house in the present market conditions. And things will get a lot “Better” in the euphemistic sense.
The market is gonna have fun chewing her equity
Feng Shui master looked at house and had the following to say:
Upon looking at the house and the surrounding, I recommend the following to sell the house:
LOWER THE PRICE!!!
Yeah, we always wondered who would profit off the downturn, and now we have our answer!
“Tracy Hauser, a real estate agent in Valencia said the real problem is speculation inventory, people who are thinking of retiring in the next five years and just want to see what their house will bring. She advises those speculators to pull their houses off the market, because it only confuses buyers and clogs the market.”
Apparently Tracy doesn’t understand the definition of mechniacs of speculation.
- Agreed.
‘Fear of loss drives the market up and fear of loss drives the market down,’ she said.”
- Tracy Hauser will soon discover that prices can and will fall ten times faster than they go up. Even stocks will spike and inch up - but when panic sets in program selling sets in …get out of the way.
Translation: Stop running for the exits! It hurts my commissions.
Another translation: Hey! You think I care about you getting top dollar for your home while the getting is good? Well, I’ll tell ya. DROP DEAD!
“Ready to call in the Feng Shui master”
Last I heard, for Feng Shui to work, the people have to be within its sphere of influence. Obviously, the price + location + house != interested sellers.
From my perspective, bringing in the Feng Shui ranks right up there with buying the St. Joseph statues.* Those sorts of exercises aren’t much more than mumbo jumbo along the lines of not breaking the chain in a chain letter or wearing your lucky hat when your team is playing.
*As a Catholic, you can have great fun with the patron saints. There’s a patron saint for everything. The patron saint of parking is Mother Cabrini (incidentally, the Cabrini shrine outside of Denver has a very large parking lot.) “Mother Cabrini, don’t be a meanie; find me a place to park my machiny.”
Can anyone come up with a similar prayer for strapped sellers? One should be to St. Joseph— and one should be to St. Jude, patron saint of lost causes.
Not really. A lot of Fung Shuei relies on common sense. As an example, you don’t want to have a house at the end of a “T”, where every car coming down the block shines its headlights into your windows. That would be bad Fung Shuei.
It’s also bad Fung Shuei to live next to one or more taller houses. (Because the neighbors can literally look down on you out their windows.)
Not too familiar w/ feng shuei, but the fact that somethings in feng shuei are rational doesn’t mean that other parts are not magical. It seems that the whole framework is magical in nature. For instance does the principle that one should not have a house next to taller houses derive its authority from its rational soundness or from an appeal to some vague “energy” or other non-causal mechanism?
I think those design shows on HGTV are follow many of the concepts of Feng Shuei. Some common Feng Shuei rules are:
* When sitting at a desk or lying in bed, the entrance door should be in a clear line of sight, and you should have a view of as much of the room as possible ( also known as the Wild Bill Hickok Rule )
* Straight lines and sharp corners are to be avoided, and especially should not point where people tend to sit, stand, or sleep.
* Avoid clutter.
*Some objects are believed to have the power of redirecting, reflecting, or shifting energy in a space. These include mirrors, crystals, windchimes, and pools of flowing or standing water.
Feng Shui - literal Chinese translation: wind and water. Well, all homes for sale have Feng Shui these days. Shui coming out of the faucet, and Feng that is puffing hot.
Cabrini is the patron saint of parking? Is that why they called it Cabrini Green in Chicago? I would not want to park anywhere near the place. If you left your car there overnight, in the morning, there would be a parking space…for someone else.
Man, that’s the all-time ironic indictment of that particular saint, isn’t it? Cabrini Green is the poster child for failed urban planning and political pandering, and just because (and even though) they demoed it out, it will never be forgotten as an example of “what not to ever do again”.
A truely immortal mistake for the history books to record.
I thought they tore Cabrini down? I must be mistaken…
Cabrini founded around 60 orphanages and refuges for the poor across the United States, and later into South America. This helped nurture the downtrodden and diseased. All this before the days of government welfare. During her work she later contracted malaria and died.
Some stand in genuine awe of people whose dedication is way beyond things such as chatting in internet forums; I certainly do the former, while I certainly waste time on the latter.
“Maybe we will rent it, but I am not going to throw it away.”
I’m hearing more and more of this from defiant owners. I’ve also noticed lots of “For Sale” signs changing to “For Rent” signs here in N. VA - and they’re not moving either.
It looks to me that we will soon have a glut of SFH properties for rent. Good luck trying to cover the carrying costs.
They are using the Donner party logic. “We’ll just wait this storm out, then cross the range when it passes. What’s that about food? Nah, we’ve got plenty, like I said, this things gonna blow over in no time!”
If you’re in the Denver area,how about Al Packer. Four miners spent the winter together. In the spring, ‘lucky’ Al was left and he had, in fact gained weight. hehehehehehehehe
LOL
The less prudent folks buy, the more attractive it becomes to do so.
At present, the most prudent is not to buy at all, even if you’re rich. After all, who wants to lose money more than the rich?
It’s not the rich who throw money around foolishly, but the poor.
“I’ve also noticed lots of “For Sale” signs changing to “For Rent” signs here in N. VA ”
Yep. And lots of ads on CL saying “Last week before we pull our house off the market.” Yeah, that kind of threat makes me want to rush right out and write a check to the seller.
MESSAGE TO SELLERS>>>>>>>>>>
The down side of a real estate market is like quick sand.
Slowly but surely it gets you.
This is another benchmark in the now-famous run-up of the 00’s: Cupcakes no longer sell houses!
Speaking of overpriced houses…
I wrote a few months ago about a townhouse open house I went to. The place, built in the 60’s, and with no sale history, had been on the market for months. It was listed at 370K. The realtor offered that it was “negotiable” for example, around 340k. Price had already been reduced several times. Shortly after that, it disappeared from the listings, but never appeared as a sale.
I thought maybe the seller had been smart, listened to the agent and looker’s feedback about pricing, etc. and sold it low. Today, I just found it on FSBO.com. Apparently, seller just ditched the realtor and went back to the original price. “Price firm” at around 415k! He’s going the wrong way!
FISBO has always meant: TOO EXPENSIVE! Even in down markets!
You are much better off skimming the bottom of the MLS. The problem is that you have to get an agent who will show you ALL of the listings, NOT just the ones you “qualify” for, or she thinks you should see. NEVER promise loyalty to a SELLER’S AGENT, NOR tell them your income, assets, or anything else. (Make up a lower income, so as not to be manipulated into a higher price!) (They did it to you on the way up, so it is fair game to do it to them on the way down) (Plus: it is perfectly ethical to lie to inquisitors, especially if they are liars themselves. Don’t EVEN feel a tinge of guilt in doing so.)
Oh sure they SEEM nice.
LESS is MORE!
Ms. Schwanke and her husband are real crybabies. According to Zillow, their house was valued at $168,000 in 1997 (they bought it in 1990 — the data doesn’t go that far back):
Click here
Here’s the listing at the realtor’s website:
Click here
Seems they bought it for $240K in 1990.
Nope, don’t “give it away,” Cindy. Wouldn’t want to lose money or anything. Fools…
“I am not giving away my beautiful home I raised my children in. Maybe we will rent it, but I am not going to throw it away.”
I hear this kind of comment from desperate sellers all the time. People are way too attached to their homes and still in denial about values. In reality, she may not have a choice, unless the mortgage is paid off (which I highly doubt).
Of course by “give it away”, I’m sure she means sell it at a reasonable price that will still net a profit. albeit not the 300% gain she was hoping for.
A mere profit would never do. We must have at least a 300% gain. After all, we deserve it! We’re entitled.
Yeah, if she had bought in Santa Clarita valley during 97, it would have been priced well under 200K.
maybe she did so many cash-out refinancings that half a million will be a short sale
I am renting in Valencia after selling LA area house in 2004. What I’ve noticed is that people who bought houses in Valencia in 2005 are now selling those house for $80K to $100K more than the price they bought it for. They want an $80K profit after 8-12 months in a depreciating market. So much for greed and stupidity.
Off topic, I’ve noticed that a lot of households in the Valencia/Santa Clarita Valley are single income, stay-at-home mom types. I don’t have any opinion which is best (stay-at-home or career mother) but how can people afford $600K houses. They don’t all work in the movie industry. Median household income for Santa Clarita is: “Median income for a Household in the city was $66,717, and the median income for a family was $73,588.”
Isn’t it obvious how they can afford it? They sell houses to each other.
Agree. Either that or HELOCs and credit cards. Funny because whenever there is a school activity that requires contribution - only a few would actually donate money. Budgets are getting stretched to the max.
I know one of those moms who bought a 550K house. She now takes care of an infant for 50 hours a week presumably to help pay the mortgage. This is the second one. The first one was a real heartbreaker. I won’t go into the details.
Please do. We love details.
BayQT~
Panned on zip and noticed that The entire SCValley region lists +2500 homes for sale-that just on the MLS. There are 97 ample-sized SFH’s listed under $500,000, mostly in Saugus, Canyon Country and ,yes, Castaic. 57 of these are reduced price. It appears that there is a surge in reduced price listings and a noticeable downward pull in overall list prices in entire SCV. Very soon folks will start talking about $500,000 average median prices for large SFH’s as being the norm for the entire SCV. looks like too much newly-built sfh inventory, similar to the IE. Also , SCV is competing with the $5000+ listings in the Palmcaster area, which is not all that much farther to commute from(30 min more).
peter m,
There are several homes listed in SCV for $1 million plus. $1 million for a Santa Clarita Valley house!! This is not Beverly Hills, Palos Verdes or the Westside people!
My last post didn’t go through. But just in case anyone doesn’t know what I really think about this, paying more than the cost of construction for a house in SCV is financial suicide. It’s a remote isolated desert with no jobs, no prospects, no industry, no decent schools, nasty gangs, and lots of tumbleweeds. A perfect place for money to die, and not happily.
I’d have to disagree… the Santa Clarita Valley is becoming a very well-established area, with many new residential neighborhoods that are master planned. On the other hand, I live in Lancaster. smlandlord’s description would apply there. Side note, my coworker still has his condo for sale in Canyon Country (850 sq. ft., 2nd lowest price among 50 others in the complex at 269K) with no phone calls.
sm landlord,
You must be confusing SCV with some other place: “Gangs and no decent schools?!!” We moved to SCV (Valencia) because it is rated as one of the safest big cities in California per FBI stats (okay, it’s a gov’t study) and one of the best schools around. It’s master-planned with decent businesses around the area.
As far as remote - it is just 30 miles north of downtown LA, Glendale, Burbank - it’s far but not remote.
No offense dude, but 30 miles in a lot of places in the US is ok. 30 miles in stop and go is hell. Leave at 4:30 am and you are ok, I suppose.
I used to wonder why ppl moved to Loma Linda, San Bernadino, etc. The life there sucked and 70 miles East of LA does not seem like a lot, but the ppl I know who lived there NEVER went into LA. Why live there then? If you are not going to take advantage of living near a city with cultural and all the rest, then get the hell out of the whole vicinity and go to some place where there is NO premium for being close to a major city.
You can be just as boing in Waco as Loma Linda and have twice as much….
boring, not boing
What I’ve noticed is that people who bought houses in Valencia in 2005 are now selling those house for $80K to $100K more than the price they bought it for.
Um, I think you mean trying to sell, not selling.
Why is the Post dicsussing the Bakerfield market? Isn’t that the local newspapers repsonsibilty? My local paper is so far up the REIC a$$.
Bakersfield, like Lancaster, where I live, was/is a speculator’s delight. The crash will be equally nasty in both places. People in the AV are still on the happy train. I helped a customer the other day with his permit for his new pool/backyard water park - valued at 300K, financed by a HELOC. Yes, it’s just for the pool.
Here is a great line from a local Realtor’s News and Views:
(Location: East Ventura County, CA)
“The market has definitely changed. Sellers who really want to sell have to look closely at the comps and decide if they can afford to sell. Remember, you can’t make your house worth what you need to get out of it. Buyers are only willing to pay what they think it is worth.”
These word really say it like it is. How many will find this out!
Posted “The market has definitely changed. Sellers who really want to sell have to look closely at the comps and decide if they can afford to sell. Remember, you can’t make your house worth what you need to get out of it. Buyers are only willing to pay what they think it is worth.”
That is true. What if your ARM loan popped is bustin’ your stones? Or your HELOC has you eyeballs floating?
“Schwanke is a very motivated seller.”
New definition of “motivated seller”: One who buys a second property before selling first. Also often an ardent believer in the power of cupcakes and fung shui to shape markets.
“Schwanke is a very motivated seller.”
I thought Schwanke means…. well as the English would say “John Thomas” in Yiddish….Bill Handle says it all the time.
oy vey
I’m more interested in the article’s comments from appraisers. Have the lenders changed their tune and started to actually demand conservative estimates, or is this new, tough talk just more lipstick on the pig?
In spite of her cupcakes, Schwanke said she had no one show up during a recent Saturday open house.
Maybe she should offer buyers her cookies?
Ridiculous but what can I say that hasn’t been said already. Go ahead and try to rent it out, sweetie. I’m sure you won’t get anywhere near what you “deserve” doing that either. And please PLEASE someone have these people stop referring to it as “my beautiful home”. It’s a HOUSE, okay? I have noticed it’s never a “home” unless it’ s an overpriced POS being peddled to a gullible public.
A house is just a place you live in, but a home is a happy place.
tra la la la la la
It’s a HOUSE, okay? I have noticed it’s never a “home” unless it’ s an overpriced POS being peddled to a gullible public.Sort of like a FSBO where the owners are too cheap to pay a professional. Or it would cut into their flipper profits too much. FSBO’s suck, no matter how you look at them.
Open Houses, too. Open house= price too high. Always.
This seller honestly believes that her $h#t don’t stink.
Posted “In spite of her cupcakes, Schwanke said she had no one show up during a recent Saturday open house.”
I am pretty close. Maybe I will come by the next Open House and stuff myself, then ask to use the toliet. That will teach her about fung shoo and rolling green death.
With this greedy idiot, I’d be tempted to try an “upper-tanker”. If you’re not familiar with that term, re-read AE Newman’s post and try to visualize that.
http://www.urbandictionary.com/define.php?term=upper+decker
That’s harsh.
“feng shui master” what a idiot.
Maybe she should call the Keymaster.
$5 to the first person who knows what I’m referring to
Alright. This bitch is toast!
Keymaster character from the “Matrix Reloaded”?
Why is it that every guy who’s into THE MATRIX, would sleep alone in a women’s prison? Just wondering.
that is not true!!!!!
Who ya gonna call????
Are you the keymaster? Funny how stuff sticks with you.
Matrix
the Keymaster of Ghozer?
Sigourney Weaver in Ghostbusters looking for the Keymaster? Was she the gate keeper?
$5 to the first person who knows what I’m referring to
“Don’t worry Ray, everyone has three mortgages these days.”
(maybe slightly off; that’s from memory)
I think it was “two second mortgages”, but still that’s a good call from the film.
KeyMaster as in “GhostBusters”?? Wasn’t Sigourney Weaver the “Gatekeeper”, wink, wink
Much better idea to call these guys.
“‘Now the house no longer looks like it’s been sitting dead in the water for months on end,’ Crabtree said. ‘It looks like a new listing,’ and it’s reported in that misleading way.”This is a USUAL practice on Long Island, not the exception. DOM is a fantasy number. And inventory is twice what it was in the heyday, but not much more. It will be a “Giant sucking sound” that will attract all first time buyers to the crash areas such as Florida, Las Vegas, etc, that will finally DRAIN the equity out of this market. Hell, why pay $400k for a house here when you can have a much nicer one for $200K, or much less, in Florida or Alabama? Especially if you’re retired. Or a service job worker.
Ross Perot, call your office.
Isn’t it interesting how deceptive the real estate industry is regarding listings and relistings .
When you think about it the real estate industry is pushing the idea of a 2-4 month correction and than a up market in 2007 .That message would stop the market cold right now .if a seller hears the predictions a seller would say ,”OK , I better hold out on my price because its going to be a up market soon.” You see the current NAR message is just for the buyers . “Buy now in this buyers market and get good deals because the market will go on the uptick in 2007.”
In other words DL/NAR is saying prices will only be down short term and than up up and away, beating inflation etc. That would cause the sellers to hold to their price if the correction is going to come that soon .
Any industry that has to give a different message to the buyer than the seller is a con job .
Regarding the appraiser checking property closely ,it’s a good thing. The underwriter is suppose to check the sales contract for incentives and kickbacks also and the Escrow officers knows that the lender is entitled to full documents .
If I was a seller I wouldn’t trust these clowns and if I was a buyer I wouldn’t trust these self-serving real estate clowns .
This is way to big of a transaction ,(buying a house ), for buyers and for sellers for salespeople to be screwing with their lives .
I have had enough of this sh-t.
“Schwanke is a very motivated seller. Last year, she and her husband closed escrow on a 5-acre property in Acton.”
I imagine that that downpayment on the Acton propert came from a HELOC on the house she wants to sell; but like she said ’she’s not going to give it away. TeeHee. And it’s such a beautiful home that she raised her kids in, but she’ll rent it out.
Gotta love it. She rents it out and in five years looses her chance to get tax free monies out of it. In five years it should be selling for a lot less and with some bad renters in there she’ll be paying repair bills and evictions and mortgage payments. I just love this new breed of investor.
“Maybe we will rent it, but I am not going to throw it away.’”
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It’s the buyers who will be throwing money away if they pay her price.
Cindy’s comments demonstrate the #1 mistake a seller makes…..does not detact themselves emotionally from the equation. In business terms she is trying to sell what’s called “blue sky” and it doesn’t work in real estate. The only thing blue is going to be HER as she hangs on to “emotional equity”.
When you buy, or when you sell, you have to look at the house as bricks, nails, and glass; nothing more. Sellers COUNT on buyers getting emotionally attacked to the house and pay too much. Those that dont’, buy right.
What I am having a serious disconnect over is the prices being thrown around like chicken legs in a KFC bucket. Listing a house at 629k and then dropping it a few thousand here and there (I’m sure it didn’t get a 100k haircut on day 60) seems ludicrous to me. Another article I read had a condo dropped from 1.77 mil to 1.67 mil.
It still can not be carried on a 30 year fixed mortgage without severe finacial grit, or very high income. A 20% downpayment for it is outside of the reach of most of the population. Drop it from 630k to 525k, and it is still unaffordable, period.
525K means 100k down, 425k loan! Call it 65 bucks per 10k, and you still get a monthly mortgage of about $2800 a month! Throw in Association, prop tax, home insurance, 1 yr warranty etc… etc…. and you are looking at a $3400+ month loan.
Am I missing something here? 3400+ per month is not chump change. unless you are over 100k/yr that $40,800 in loan payments will kinda suck badly. It will leave not much for vehicle insurance, registration, utilities, food, little johnies birthday etc….
Most likely a buyer would buy with zero down (all the rage these days!!!), so 525k gives you 3400/month before all those little goodies (HOA, prop tax, insurance etc…).
Who has been buying these houses on these terms and not adding 10 number on a piece of paper (or use excel) to come to the conclusion that it is not affordable?
This is utter madness.
Am I missing something here? 3400+ per month is not chump change. unless you are over 100k/yr that $40,800 in loan payments will kinda suck badly.
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IMHO, even with a $100K+ income, that payment would suck badly. If we’re to use the old 20% DTI ratio, you’re looking at $2,333/mo MAX for PITI. Personally, I think a monthly payment (PITI) of $2,000/mo is tops for $100K income. Best to keep it under $1,700, IMO.
That’s 28% DTI ratio…sorry!
CA renter - no disrepsect here, but only INSANE people in those circumstances would do 3400/mo payments. Period.
I avg 130-150k/yr and I would NOT go over 1500/mo. You need a hell of a lot more than 100k to do 3800 - try 250-300k+ (IMHO) I must be cheapo!
“Schwanke is a very motivated seller. Last year, she and her husband closed escrow on a 5-acre property in Acton. Now they are stuck with two mortgages and property taxes with no end in sight.”
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Yep. Schwanke is a move up buyer, bought the 5 acre place at the top of the bubble, chasing the market down with the old house of which’s proceeds were supposed to make the new place affordable. New place no longer has any where close to affordability. Big mortgage, big taxes, small retirement.
“Crabtree also is constantly on the prowl for concessions that may have puffed up the price of houses. ‘There’s just a tremendous number of them out there right now,’ some of them under the table and tough to detect, ‘but they’ve got to come off the valuation.’”
Could someone please notify the homebuilders’ accountants that concessions really ought to “come off the valuation” when they value their inventories of unsold new homes — the ones for which the comparable sales only happened after giveaways like Help’U'Sell services on the old homestead (including six months of mortgage payments until a F-B is successfully stuck with it) and new cars.
Even more good reasons not to buy now.
“Selling your house is no longer a piece of cake. The word on the street is don’t sell unless you absolutely have to. Sellers throughout the Santa Clarita Valley are going to extremes to attract buyers.”
That’s great advice — when home prices are at the start of a four-year+ downturn, be sure to hold on until your negative cash flow has forced you into a position where your back is against the wall and you are really, really desperate to sell. Don’t bother cutting your losses, as it would screw up your neighbors’ comps.
Cruel, but true.
Evidently, selling your house is no longer cup cakes either.
doesn’t help to tell the fb’s the truth — they listen to d. lereugh
“In spite of her cupcakes, Schwanke said she had no one show up during a recent Saturday open house.”
$525,000 isn’t so bad. I’d look at a $525,000 house for free cupcakes.
Beware, you don’t know what she’s putting in the cupcakes to make the house look better
“‘It’s all a numbers game, the buyer wants to get the best bang for the buck,’ he said. ‘The toughest part of my job now is to tell people what their home is worth and dispel their false expectations. We can market till you are blue in the face, but if it is priced too high, nothing is going to work.’”
I’ll never turn blue in the face, so they better keep marketing..
Maybe she should offer something else, the other kind of cupcakes? Umm, that “something else” might be illegal. LOL
Maybe all those buyers wishing to steal poor Cindy’s beautiful house that she raised her wonderful children in just don’t f**ing feel like paying for her cupcake-eating brats’ college, just because she was kind enough to live in the house for a while. I just don’t get why people can be in such denial about markets. Did she pay anywhere close to what she’s asking for it? I don’t understand some emotion-related belief that she’d be “giving it away” if she got just some smaller amount of profit over what she paid for it. Otherwise, the only articulation should be “damn, I’m going to be seriously screwed if I don’t get XK for this place, because I’ve already bought something for YK and I can’t afford to take less”. Why her cupcakes and kids add anything but wear and tear is absolutely beyond me. How long does it take for people to get the message that house prices have been ridiculous and getting offended by buyers’ realization of this fact is just silly?
Cindy is gonna need some K.Y.
bahahaha
“In spite of her cupcakes, Schwanke said she had no one show up during a recent Saturday open house.”
Quote of the week.
I guess no one likes her “cupcakes” ;=)
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delusional. maybe she should offer other oral favors.
I don’t get it.
Noone came for her cupcakes because at the open house next door, they were serving pizza, and at the one across the street, they had ribs, and at the one two doors down, they had a feng shui master serving sushi.
See, no need to stop in for cupcakes.
“Based on a current population of about 250,000 residents, that would mean there are 100 properties on the market for every person in the SCV.”
Uhhh … so there’s 25,000,000 properties on the market - WOW!
(no one ever said that realtors were good at math)
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my offer will be 1997 price + 3.5% annual compounded. take it or leave it.
That might be too high?
Does anyone know if squirrels will eat cupcakes?
I’m planning visiting a friend in valencia next week. would love to go and have the cup cake with HBlogger here. that would be fun, any one interested?
HOLY MOLY. Many apologies if this has already been posted but WTF?????
http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=1382618
Great post. BTW, you feign astonishment pretty well, Tx — I know none of this really suprises you!
Thanks Txchick; I knew some of these SOBs were unscrupulous, stealing money from the elderly. OMG and that couple w/50k+ in credit cards and multiple mortgages. Ouch!
Let me tell you about just one borrower from today:
* Husband and wife
* Husband on fixed income military retirement $1800/mo
* Wife makes $9500/mo as a registered nurse
* 5 properties with $3,400,000 in mortgages
* All mortgages currently have prepays
* 8 interest-only mortgages
* 1 option ARM deferring $3500/mo
* 3 in Chula Vista and 2 in Escondido
* No more than $75,000 equity in any of the homes (verified by comp checks with 3 appraisers)
* All properties with front end LTV over 90%
* $65,000 credit card debt $672 Mercedes payment
* One property had 3 mortgages, one of them hard money
* 621 mid FICO
* 2×30 in the past 12 months
* Not a dime in the bank
They have been making mortgage payments with their credit cards and refinancing to pay off the credit cards. They are at the end of their rope, but refuse to throw in the towel.
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Damn.
$9,500 as a RN? $115,000 a year? Is that right?
Yes, nurses make a lot of money these days. Government/insurance subsidized health care is whey.
“why” not “whey”.
No, it has nothing to do with govt subsidized healthcare. They can’t get anyone to sign up for nursing positions! Hospitals are going overseas to get nurses from the Philippines because people in the US don’t want those jobs. Supply and demand.
Yikes!!!! if that’s where it’s at ……..the chit is really going to hit the pan
81/100 had credit card debt above $10,000
54/100 had credit card debt above $20,000
18/100 had credit card debt above $50,000
out of 100 ppl, that TELLS you how this economy has been chugging along even though it shouldn’t have been - if avg Joe MAKES 50k/yr, these amounts are huge….and very unlikely to be paid off
For those of you familiar with Venice Beach, some guy who apparently owns half of Rose Avenue down here is cashing out. A good portion of the street is now for sale, each property has the same black and white realtor sign. Looks like someone smart is figuring it’s time to cash out. No bargains though.
“No bargains though.”
Yet.
I kinda sorta like Venice’s ‘edgy’ appeal, but am I the only one that thinks, taken as a whole, Venice blows?
It’s not perfect, but most of L.A. is even worse. Overall, I like it here.
i like those sidewalks/tiny alleyways which serve as streets in Venice. Electric ave is chick, with old decaying commercial structures next to 3 story art-deco lofts/studios. There have been past problems with gangs, drugs and shootings in the oakwood/california ave part of venice:has it has quieted down there? Outdated 70-80 yr old street and grid patterns make venice a highly dense,compacted(squeezed)area of multi-units,old tiny sfh’s on mini-lots. Venice is turning into a beachfront version of West holywood or Melrose district.
It’s not perfect, but most of L.A. is even worse. Overall, I like it here.
I has a certain atmosphere and I almost lived there. But it has issues - but, Hey, what part of LA doesn’t? Specifically I’m talking bad graffiti and gang activity. The regular folks there are ok people!
That board has changed it’s tone dramatically over the last 6 months, has it not.
There’s no bubble denying now. I sense more of a “hunker down” and “how can I still get mine” mentality.
I talked to a good friend who is a bit of a perma-bull today; it was a good conversation. I wish more bulls would post here as it forces me to make sure my assumptions and reasoning aren’t getting sloppy, and to make sure I haven’t missed anything.
Now the house no longer looks like it’s been sitting dead in the water for months on end,’ Crabtree said. ‘It looks like a new listing,’ and it’s reported in that misleading way..
That happens alot here in MASS. What about fake P&S agreements. Fake leases on rentals and so on. The industry views the appraiser as being part of the problem in free falling markets which is going on here in Boston. It’s gonna be a long cruel winter no that the buyers are gone…
i don’t see the ‘irony’ in the buyers’ willingness to jump in when prices were rising, or their newfound reticence
Instead of cupcakes Cindy should try Pot Brownies. Cuz you gotta be at least stoned to pay her price in this market especially in Castaic…long commute unless you work at Magic Mountain
In the end, after all the sturm und drang, the house is worth what somebody is willing to pay for it. Who cares what list prices are? Who cares what the appraisel is? It either sells or it doesn’t. Its just business.
I actually go to open houses for the pastries…I am not buying, but you can get some really good eats and usually some fruit juice
So…lets see…
cupcakes or a 10% reduction….
….hmmmm….cupcakes…
….erm….10%….
…oh god, I’m so conflicted….
(not)