‘We Knew This Day Was Going To Come’ For SJV
The Modesto Bee reports on falling home prices. ” After six years of defying gravity, home prices dipped in January throughout the Northern San Joaquin Valley. Homes sold for a median $386,750 in Stanislaus County, which was about $5,250 less than the record set in December.”
“The decline is part of a statewide trend that began elsewhere in California several months ago. January’s median California home price was $452,000, down $6,000 from December. Sales prices dropped $20,000 in San Joaquin County to a median of $430,000. In Merced County, they dropped $23,750 to a median of $357,000. In Tuolumne County, they dropped $36,250 to a median of $298,750.”
“The region has been overdue for a price drop, according to realty experts. Median prices have been breaking records virtually every month since 1999, when the typical Stanislaus County home cost $122,000. ‘We knew this day was going to come,’ said (agent) Mary Prieto. She said she has lowered the asking price of some of her listings.”
“One home, in Modesto’s coveted La Loma neighborhood, went on the market in the summer with a $595,000 asking price. Prieto took over the listing in November, lowering the price to $549,996. Now it’s been reduced to $474,996, which Prieto thinks will attract buyers. ‘The sellers were asking top dollar when they first listed it. They wanted to try for a high price, like all sellers do,’ Prieto said. ‘We’re going to go through this adjustment period, with sellers getting out of denial mode and into the reality of the market now.’”
“Is a price downturn bad for real estate? Many experts say no. ‘The market is absolutely softening. But for the long haul, that’s good for everybody,’ said (broker) Ken David Elving. ‘We’re just settling down.’”
“Elving said investors, who were buying strictly with the intent to ‘flip’ houses for a quick profit, have gone away. That means buyers looking for family homes have more from which to choose.”
“‘A year ago, the pressure was on the buyer to make an offer immediately,’ recalled John Walton, a 28-year veteran agent. ‘Now buyers have plenty of choices, so they have time to pick the right home.’ Sellers, by contrast, now must make sure their homes are priced right and look good, said Jeannie Mazzanti. ‘They’re competing with other sellers now,’ said Mazzanti, an agent for 20 years. Sales of homes priced $450,000 to $650,000 ‘are very sluggish.’”
Well it’s about time
Too good to pass up:
http://www.craigslist.org/eby/rfs/136250042.html
Priceless. He’ll have plenty of company in this same boat.
BayQT~
This really is funny.
Someone should tell him that his January appraisal is worthless given current market conditions.
Yeah, you pay me $15,000 and when you get this place appraised in March, the January equity will be gone. By May, you’ll be paying someone else $50,000 to take this albatros off your hands.
Yea, I thought was kind of funny too.
Sounds like a great deal — trade $15K in cash for $57,500 in equity. I am surprised that craigslisting survived long enough for you to be able to post it here!
Oh, yes we will. This is the SF Bay Area.
Home of the “financially self-delusional.”
his loan is not assumable anyhow, but who at this stage of the game would take on that kind of debt on a duplex that should be worth at the most $350K.
I laughed so hard when I read that listing on Craigs-list that the wine I was drinking came out my nose!
And Fremont/Union City is a crime-ridden cesspool! Selling a duplex there is no easy task.
that’s the saddest thing i’ve ever seen. i’m amazed that the person advertising is at wits’ end trying to figure out how to get out from under that debt load. what i find especially intersting is someone with “embedded equity” doesn’t take out a HELOC (snicker snicker)
As much as I think housing prices need to come down, I honestly don’t like these individual examples of suffering/hurt. Perhaps, all of us, known for our foresight and thoughtfulness (in not getting sucked into the real-estate craze), can also set an example, by not making fun of individual people.
I disagree. I think it is OK to make fun of him, because he is pulling a fast one on some poor sucker. If you think about it, he is trying to scam someone.
If he truly has $57K in equity, he can get a HELOC and use $15K to pay for his wedding, etc. A year later when the pre-payment penalty is not there, they can sell the “luxury condo(?)” and he can pocket the entire $57K. Why is he giving away $42K? The interest on $15K for one year will be, say $1K, and he still comes out with $41K. Who is he kidding? The truth is that he knows he is screwed and wants it to be someone else’s headache. Sure, accept the albatross and a negative cash flow of $750/month. What a deal! I feel bad for him, but he should not act like he is doing someone else a favor.
Excellent post! You should feel no mercy for any of the real estate speculators (gamblers) who will now be losing an equivalent amount of money that all the previous speculators made…I call it balancing out of the money pool. They got themselves into their own messes solely because of their greed without paying attention to any of the financial fundamentals of real estate.
How about this take: The guy’s loaded with debt, realized that he’s a greater fool, and looking for the final fool in the chain.
He’s gotten into a partnership with someone else, made a bad decision about what and when to buy, and is trying to find a way to dump this house. He knows he’s a fool, and is trying to get out. I have no sympathy.
As the years go on, this guy’s situation will be looked upon with envy. The sad stories to come are going to be real tear jerkers. But you’ll get no tears from me when the greedy get fleeced in the RE con game.
“… dump this house …”
Isn’t there a new TV show starting this fall called “Dump This House”?
Really?
Oh, and by the way, after the 1-year prepay penalty period ends, wanna bet the load adjusts?
Oh, and just who are you partnering with? What if he does not agree with your flipping plan?
This is a disaster waiting to happen, and this guy knows it. The saddest story will be told by the fool who falls for this, hook, line & sinker.
I think making fun and being amuzed is OK as long as he doesn’t know. It’s not like we are throwing it in his face or anything.
No, not the average person who just wants to buy a home to live in. That is what most of us want.
It is the “Flippers” and greedy people who deserve to be made fun of. Unfortunately, a lot of innocent people will be getting hurt. It’s sad.
I must say though, I don’t feel sorry for people who don’t use common sense judgement and go out and refi to the hilt just to buy stupid things like cars, furniture, etc…
Too early for April fools
Speaking of picking houses, when I buy I’m going to have a home custom built. I imagine the frenetic pace of homebuilding has resulted in a lot of cut corners. They’re just going up too fast for these to be quality homes. Does anybody know how much more a custom home costs?
That depends an awful lot on how much you plan on managing the project yourself and what kind of upgrades you go with. And how plentiful labor is. But $50-$100 a square foot is a good ball park. The problem is unless you are contractor yourself, its hard to find the right people for the job. My father is an electrician and my parents have custom built two homes (they only own one). When you are actively involved you can demand a higher quality and catch the hidden holidays.
Huh?
In LA, minimum 250 per SF.
I think $250/SF is high.
Life cycle cost optimized 50 year lifecycle overplanned and over designed commercial/institutional construction is $350-$450.
Stick framed/OSB residential cost to build isn’t $250/SF. Most production builders in CA can build for under $150/SF. They will go back to building for that cost as well.
???
$300-400 per sq ft in Fairfield, CT
Quality is way way down. I saw a new 1.5 million house where the final edging of the stucco around the windows was done by finger. Yes his finger prints are in the stucco. The excess stucco removed with the finger is sitting on the window sill, no need for a final walk through if the new owner buys sight unseen
Sounds like a job for “getstucco”.
Sorry, I couldn’t resist.
It depends a lot where you live and what quality of materials you want to use. $200 s/f is a good middle of the road number for a true custom house (i.e. not an off-the-shelf plan streched a few feet.)
I’m in the process of building my own house.
There are several things wrong with most new construction these days:
1. Home Owners associations! Even with single-family detached housing, most new homes are in some deed-restricted community with a HOA. You don’t want some old biddy on the “Reveiw Board” telling you what color to paint your trim! It’s better to find some land outside a development and build it yourself.
2. Slabs! I watch them build houses with all the plumbing going through the slab. When it fails 20 years down the road (or sooner), you’ll have to rip up all your floors and jackhammer out the slab, or run your pipes “up”. It’s not much more to put a crawlspace under the house. And the extra foot or so elevation gives you added flood protection. There’s nothing like being able to get under your house to fix things.
3. Corner cutting. Would you believe in florida KB and Centex build homes with NO LEADERS and GUTTERS! Almost every homeowner ends up having to add them. There are dozens of places where they cut corners.
I doubt if many of the houses built today will last 30 years. And that will be BIG trouble down the road. You’ll see neighborhoods in Arizona, Nevada, Florida, full of boarded up McMansions because they cost more to fix than they’re worth. Just wait about 20 years or so….
Thanks for adding to the long list of reasons to never buy a McMansion.
We certainly don’t build houses to last forever here. Wood just rots away. The houses are basically shacks out here in these Sacramento neighborhoods….$400,000 wooden shacks Someday, I want a nice house built of brick.
Custom-building is a big big pain in the ass. The municipal thugs will make sure they get the last drop from you. And load up on pens because you’ll be writing a lot of paper at home and in courts.
I realtor told me how he built a home way back in the days when it was supposedly cheap. He said he almost stuck a shotgun in his mouth.
“Is a price downturn bad for real estate? Many experts say no. ‘The market is absolutely softening. But for the long haul, that’s good for everybody,’ said (broker) Ken David Elving. ‘We’re just settling down.’”
Hey Ken Is anything bad for the realestate market ?
Sounds like “buy stocks for the long term”. Realtors and stockbrokers are close cousins.
At least stockbrokers have historical performance on their side. Residential real estate has historically been a mediocre investment at best. Try to get a Realtor to admit that.
‘We knew this day was going to come,’ said (agent) Mary Prieto. She said she has lowered the asking price of some of her listings.”
Be careful what you say Ms. Prieto before some of your clients from early 2005 seek legal representation.
“…prices never come down and you better hurry up or you’ll be priced out of the market forever.”
Mary Prieto, June 13, 2005
If Prieto was good enough for Scott Peterson, she must know what she’s talking about:
“KTVU and the Modesto Bee announce that the former home of Scott and Laci Peterson is on the market for $379,996. Mary Prieto describes the screening process being used to keep curiosity seekers from touring the home: filling out a long preapproval application, submitting to an interview and signing a confidentiality agreement. In a Modesto Bee account, Prieto says, “I don’t think any looky-loo is going to want to go through that process.”
I don’t think any bona fide purchaser for value is going to want to go through that process.
Hey, why don’t we all send Ms. Prieto an email asking her if she could share her buyer client list from summer 2005, that you are an attorney, kind of low on business, and looking for some clients yourselves??
He he he… While I have sympathy for all the sheeples who got sucked into the RE craze, I have NO sympathy for RE agents, who I honestly believe to be lower scums in life than used car salesmen(women).
Why are “all” RE Agents scum ?? Then I wonder what you do for a living maybe grocery checker who couldn’t pass the R.E.test. Some laid off techie who didn’t bother to upgrade his skills and can’t figure out why everybody wants to pay him 5 bucks a hr for his outdated skills cause even though he has a comp sci degree. Maybe a low rent lawyer who’s not real successfull at hanging his own shingle. I wonder. You made a broad statement wonder whats driving the bitterness behind it.
“DC Condo Watcher” didn’t specifically say “ALL” real estate agents in his post. I’m sure there are about 40% who are o.k. people that were in the business before the current bubble, that might have some ethics, but I feel the same as “DC Condo Watcher” about ALL the newbies who jumped into the business over the last few years, most are idiot scum. Usually there is some truth to a stereotype or it wouldn’t take hold. Most realtors would sell their souls for a sale and what makes them even worse than a used car saleman is that the realtor’s actions can seriously impact their customers lives. You sound like you are in the business,…what have you been telling your customers for the last 2 years? Have you assisted underqualified buyers to get in over their head by telling them that the real estate will only appreciate (are you still telling them that even though you read the bubble blogs?), that this is the best opporunity of their lives, that it is worth the gamble, etc. I bet you have. Most agents talk out of both sides of their mouths, i.e. “It’s a good time to sell”…”It’s a good time to buy”, etc. In regard to your other comment, don’t even go down the path of slamming “DC Condo Watcher” in regard to the education level of realtors (i.e. R.E. test)…this industry probably has one of the lowest barriers to entry of any job. I was a hairdresser, housewife, yoga instructor, etc. last week, took a one week real estate agent course of instruction (guaranteed to pass the exam or your money back!) and voila!, Now I am a professional R.E. agent, I think I’ll go have a glamour photo of myself taken (maybe with my dog, kids, whatever) and make a nice business card that proves I am a professional. What a joke! I think much more highly of a grocery clerk than I do of most realtors, there is more to life than chasing a commission and the grocery clerk probably sleeps better at night.
And what would be the basis of the suit??
I’m not saying that a judge wouldn’t throw out the case(s), but that doesn’t mean she wouldn’t have to hire a lawyer to defend her from 30 lawsuits. Most people in this country sue over much less.
No I wasn’t questioning the merit. And your right people sue for anything. But how could someone get it in their mind that it was a realtors fault for the bubble bursting and they got the ass end of the equilvant of the RE version of musical chairs. So they sue the realtor for speaking the truth about current market conditions. Oh wait I forgot no one is supposed to loose on real estate it’s the realtors fault of course it’s gotta be I couldn’t have been the moron could I??
Hang on, everyone else hawking investment ‘advice’, whether for fee or commission, has to be at least somewhat ‘accountable’. Why not realtwhores?
Based on the quotes listed above, if this particular Realtor is “speaking the truth about current market conditions” now, then they were lying last June.
That’s what (rightly or wrongly) the lawsuits might be about; professional misrepresentation when stating “…prices never come down and you better hurry up or you’ll be priced out of the market forever.”
Half a million bucks to live in MODESTO?????
Hey, where else can you get bad air quaility, bad water quaility, heavy traffic, heavy gang activity for that price!
I take it back then. Half a million bucks for a house is Modesto is a screaming bargain!!
I’ve been monitoring listings quite carefully in the Bay Area (East Bay), and have noticed several things:
1) Inventory ramping up quickly over the past couple of weeks. If this rate continues, Spring will have enormous inventory levels.
2) Price disparity is evident. There’s wide price variations in similar properties. Sometimes up to 20% difference.
3) Many more ‘price reduced’ listings coming online. Actual quotes:
“Sales of this plan in 2005 were at highs of $680,000. Great price at $630k!”
“Price reduced, over $50,000 below last sale of wescott model!”
One last thing to mention - about 50% of the listings seem to have Granite counter tops
Here in the South Bay (Santa Clara County) I’m seeing inventory go up as well. Fifty-four new listings since this morning.
Wish i could say the same for mid-peninsula. The lemmings are buying them faster than they list between burlingame and san carlos.
San Mateo County inventory does seem low to me. I wonder why the disparity between the two counties.
Remember Santa Clara County got crushed by tech layoffs ‘01, ‘02, etc. Still down what - 150,000 jobs since 2000? (saw more new empty buildings yesterday in Santa Clara and Sunnyvale).
I would guess San Mateo County employers are more diversified - airport, airlines (not saying much, really), Visa, Gap, biotechs. And people who live there also work in the more diversified SF City economy (big govt, finance, tourism and related).
I think the underpinnings of Santa Clara County house prices are much more fragile.
For years now the Central Valley has hit the chart tops in unaffordibility. Modesto is just one town of many here to be slammed by speculators and long-commuters looking for deals. The economic basics of the region do not support these price rises, and frankly most realtors know it. Inventories have recently spiked 3 to 5 times over last summer,and with affordibility indexs having consistently hit single digits, and without spec purchases, sellers are simply running out of buyers.
I simply can’t imagine living in the central valley, probably the worst place in California, and then driving a couple of hours through miserable traffic to work in the Bay Area every day. You’d never get a chance to see your house except on weekends. What’s the point?
Yep, probably better living in an apartment in the Bay Area.
I know I much prefer a short commute, even if that means renting. Many, many people who buy houses thinking that an hour or more commute every day, each way, is something they can live with find they regret it. They are too tired when they get home to engage with their families - all they want to do is slump on the couch and watch TV.
Plus, many of these people are (or were) commuting to the Bay Area, which shed jobs like crazy in the last recession. What if you buy a house, lose your job, find out that there are no local jobs to speak of that pay enough to meet your expenses - you are skroode.
many of the long commuters did their house shopping on the weekend when there is no traffic. they get to their destination in 25 minutes and think it’s a breeze. then they sit in a nicely furnished granite countered air-conditioned landscaped new home and out comes the checkbook.
come monday morning they don’t recognize the place. it takes 20 minutes just to make 3 left turns and get on to the freeway.
That’s a very good point. Whenever I’ve been buying a house - or moving to a new job - I’ve always made sure I’ve tried the commute a couple of times during the rush hour before committing myself.
What we need is $5 per gallon for gas for that 12 mpg SUV to finish the icing on the cake. hehehehehehe
Yep…Gas prices are going to really hurt places that are rural (away from the job markets).
Exactly! Learn how to live without a house full of Junk and rent an apartment near work. There are rentals here in Sunnyvale where you can live in a low crime area, walk to shopping/supermarkets, etc, and be across the street from a nice park. I think that would be much better quality of life than commuting 2+ hours a day….
i agree a 2 hour daily commute,makes for a long work day, most folks bought these homes because they could not afford to live near their jobs,now now that the homes are not increasing in value all those folks who deceided to make the 2hr daily commutes are in trouble,dropping home values will make them miserable, while they drive to their suburban tract.
I worked in Silicon Valley for over 10 years and used to wonder why don’t the companies move closer to the workers. For example, some Silicon Valley companies such as Oracle and Yahoo. But then the founders or top execs live in Atherton, Los Altos and such. So they certainly don’t want to commute. So the rank and file workers are going to do the commuting because they can’t afford to live in such high end areas. Engineers and programmers might commute from Fremont or San Jose. The non-white collar workers end up the Central Valley.
Merced was flipper central because they are putting a new U.C. there.
This is amazing stuff… could get really ugly soon. Hold on for the ride of your life!!!!
I like the title of the article, lofty prices “glide downward”. I bet it feels like a nice soft landing to everyone who bought six months ago.
They’re totally stealing stuff from this blog! A few days ago I wrote “Gosh, that almost sounds pleasant, like a swan ruturning home after a scenic glide with a friendly bald eagle.”
I wonder why they left out the friendly bald eagle
Maybe they didn’t like the mental image of large talons ripping into flesh.
This inland area and the IE in So Cal are going get hit the hardest in CA due to the high level of “investors”, long commute to work, and low affordability. When prices drop in the state, people will want to move toward the coast and work, not away from the coast. The area went up more than the SF bay area % wise and should do the same going down. These are similar to small cap stocks - more upside and downside with more risk and less liquidity.
To make money in the next up cycle in these areas, buy in these areas after the coastal areas have already started going up. They lag the coastal areas on the upside.
investors, who were buying strictly with the intent to ‘flip’ houses for a quick profit, have gone away.
Just gone away? Did they take their homes with them? Are these just sitting abandoned?
I think not……The last ones in are no longer buyers, they are sellers. They didn’t go away, they went to the other side and are going to be the cause of future RE problems.
As Ben and many others have repeatedly pointed out, flippers would ultimately be a double whammy to the market: not only are they no longer buying 5 houses at a time, now they’re trying to dump 5 houses at a time.
i agree. it’s really a 10 house swing.
Good call.
I get a laugh from all these realtor predictions of a ‘balanced market’. If prices aren’t appreciating 20% or more each year, none of these fools searching for greater fools are going to buy in. The market is dead…may look like a “buyers market” only briefly because supply is skyrocketing, but it will soon become evident that it’s neither a sellers’ nor buyers’ market.
As backstage suggests, these investors *were* the buyers when it was a sellers’ market. Now that they have become sellers, there is no new influx of buyers to replace them.
This market is toast.
In many markets in the Central Valley, those that bought after July simple can’t break even at this point. Their hole will keep getting deeper from hear on out.
Look at the inventory jump in Chicago Market
http://chicagobubble.blogspot.com/
I watch Northern Illinois MLS and keep track only of SFR, condo, and townhouses priced between 200K -500K. I have noticed the huge jump from 29,700 (jan 6) to 35455 (Feb 22) and haven’t previously posted on it because I think my surveying has a built in flaw. The flaw is that somebody who previously listed at 525K is more likely to reduce to 495K than a 225K lowering to 195K. It is good to see other corroboration of data. Thanks
“If you don’t have several million dollars’ worth of real estate working for you by the time you retire, you’re going to condemn yourself to a life of struggle,” Dryer said at a San Francisco seminar. - disgusting!!!
My comment is why people make an emotional decision instead of a logical one… this is awful!!!
Correction: If you have several hundred thousand dollars worth of debt when you want to retire, you will condemn yourself to a life of struggle.
Demand for ‘Walmart greeter’ jobs is going to be the next boomer bubble.
SAN FRANCISCO (MarketWatch) — H&R Block Inc., the company that helps millions of Americans complete tax returns, said late Thursday that it got its own taxes wrong in recent years.
_______________________________________________
LMFAO
Oh man that’s horrible.
Comment by OCDEVIL
2006-02-23 10:16:00
Rumor has it that Option laid off 600+ workers today. Can anyone confirm this?
___________________________________
You got this one right! You must have an inside source. Keep up the good work
Now here’s a real bargin in East Palo Alto
They need to drop the price about 600K
I didn’t know that homeless vagrants actually paid their rent. $650,000 - that picture with that price should be splashed across the front page of every newspaper in the country. If that doesn’t scream “There is something seriously wrong here!!!!” I don’t know what does.
Hey, I used to repo cars from East Palo Alto for five years. Not a single bank would do their own repos in that area; sub everything in that zip code to the private operators!
…but, the weather is so nice. Everybody wants to live in California. You could probably buy the place, put bars on the windows, a meth lab in the kitchen and flip it for a tidy profit.
as long as you put granite countertops in that meth lab
Over at:
http://marinrealestatebubble.blogspot.com/
We like to say “Yeah, it’s expensive, but we can wear shorts while golfing in January and drive four hours to skiing!”
Repo in E. PA? You have my respect! That’s gangbang central.
The two prior sales were 06/13/1994: $95,000
01/28/1994: $133,678
Look at that price drop in a few months!!!
WoW and I thought L.A. was ridiculous. I am amazed. Is that like a Beverly Hills adjacent like area or something. If not that’s gotta be a typo or something. I wonder if he’s flipping that. I wonder how much he paid for it. WoW I’m amazed.
I’m waiting for someone to say this is a joke… please?
BayQT~
“All the leaves are brown
And the sky is gray
…”
This crazy housing boom
Is going to fade away……
We still got crazy prices
All around the bay
Californians Dreaming
That greater fools will pay
It looks like something from a third world country. I wouldn’t let my dog live in that house!
I e-mailed the realor and asked him if this house had granite top in the kitchen to compliment the lovely exterior.
“One home, in Modesto’s coveted La Loma neighborhood, went on the market in the summer with a $595,000 asking price.”
There isn’t a single neighborhood in Modesto that one could reasonably call “coveted”. Unless of course you are from some sh-thole in Mexico, like most people who live in Modesto.
Wow. There always seems to be an unusual amount of hatred for the Central valley (and Modesto specifically) spewed forth by posters on this blog.
“Unless of course you are from some sh-thole in Mexico, like most people who live in Modesto”.
That’s a pretty ironic statement. Have you looked around at the demographic breakdown in California lately? How about L.A., San Jose, Sacramento, etc? And anyone who has ever lived ANYWHERE in CA knows that you don’t have to wander too far from your own backyard to find a “sh-thole”, gangs, or poor air quality. Some folks just choose not to pay $500-600 per sq foot to experience it.
Another friggen internet morality lecture…that is much more annoying than a bit of schadenfreude or a put down of an area.
Real estate slowdown leaves casualties
I couldn’t get to the story (need to register), but I was amused at the page that came up. You can join the real estate professions most prestigious networking organization and obtain the respected Inman Member designation….on sale for $149, a $4800 value. Boy, what kind of crap is this?
Many are unprepared for a downturn
Unless you’re not even 10 years old, you’re sure to remember the “dotcom bubble”! How short are people’s memories? Do they really think they can keep spending borrowed money on the hopes that the value of something will keep going up forever? This is the exact same thing we saw with people buying Cisco and Worldcom stock….
‘”Homeowners in markets where prices drop are in for a hairy ride,” says James Chung, president of Reach Advisors, the Belmont, Mass., market strategy and research firm that conducted the survey in September.
“Even if prices simply flatten, it is going to cause significant pain and have a large impact on the economy. Appreciation isn’t bonus money for a lot of families; it’s money that’s already been spent.” The long run of good fortune is all some people talk about, whether the venue is a formal cocktail party or a neighborhood block party.’
Hairy ride? OUCH!
In softening market, adopt a new attitude
You’ll like that home come April
Oh NO.
“But if you can wait to sell, wait. We’re just now coming into the buying season, when people’s thoughts lightly turn to thoughts of moving. This should soak up all that excess inventory in just a few months, and you’ll be in a much better position to sell your home.
On the other hand, it’s an excellent time to buy a house. If you have the resources, either from savings or by taking a line of credit against your current home, you’ll find some amazing bargains.
Think of it: You can buy your next home at a discount now and sell your current home for full price later. “
Where are the amazing bargains this bozo is talking about. Last time I checked, if prices are down, there down only a small percentage of what they got run up over the last couple of years. Then he suggests taking out the dreaded HELOC to buy the new home, while you hold onto your old home until April, “…when people’s thoughts lightly turn to thoughts of moving.” You bet - people’s thoughts used to do this, but I have a feeling this April things will be different. In fact, it’s different this time.
Yea I’m A Realtor and that made me cringe. How stupid is that statement.
“this should soak up all that excess inventory”
excuse me while i vomit
What a crock of sh$t.
Hey Auction Heaven:
Go rub this article in the OC Register’s and Lansner’s pretty boy face.
At least the LA times is doing somewhat responsible stories.
I’ll like it in April ‘07 or’08 better. I’m telling everyone about this site, and telling every one to low ball their offers. It’s NOT personal, it’s just business. WAIT two years at least.
How about FIVE?
The guy who wrote the story works for “Bloodhound Realty”. Boy, I really respect any advice he has to give. Can’t say I’ve heard of that R.E. broker…think it will be in business in 12 months?
Dreaming of dollars when what’s needed is more sense
Even though that was the West’s largest annual rent increase, a sign of weakness loomed in the Inland Empire. Average occupancy rates in the two-county region dropped to 91.6% last year from 95.3% in 2004, a downturn that could force local landlords to back off the steady rent increases that have been imposed for several years.
More than 25 million Americans turned to the nation’s largest network of food banks, soup kitchens and shelters for meals last year, up 9 percent from 2001, according to the report by America’s Second Harvest.
“The number of failed transactions usually climbs during a sizzling market.”
WHAT??????
Lies, lies, lies Yeaaaah!
It’s true especially in an overbid situation. The appraisal doesn’t come in seller has spent the money and refuses to sell for the appraised price. I have witnessed at lest 10 of those last year. Buyers overbid and come to their senses or get cold feet etc etc. Especially when your overstepping your financial bounds. I mean the stock boy may come to his senses and realize he can’t swing the 3k a month mortgage on his 1 and 1 condo with the graffitti on the wall after he visits the neighborhood after dark lots of things happen in a heated market
I was on a roll and I’m not even drinkin…. I’m link-locked
Well sit down and pour yourself a martini so we can all catch up girl
ns
Melody
I’ve noticed that you have stopped putting ‘read about’ in front of your links… This is going to sound crazy and I have absoulutly no idea why, but I kinda miss it! The ‘read about’ was like a cherry you eat first on a sundae. Not really all that important but set you up nicely for the delicious link to follow!
I will do that
Read about: Melody will do that
See there… I just can’t pull it off….
Thanks for making the world right again
maybe melody should start a blog
yer wearin me out, kiddo!
Wow Melody,
Thanks for all the articles but your giving me vertigo
I can only imagine when the articles really start pouring in!
It’s like the sky is falling…. this is actually worrying me. I was so excited at first… but damn!!!!
Just grab something solid and hold on… it could get interesting.
can anyone compare 2006 to 1989 or 1990?
it was before Gore invented the internet so it’s kinda tough.
Here is one oversimplified take for argument: In 1988 things were overheated by about 30% and later dropped by that much. Now things are seriously overheated by around 50% and toxic loans have been the medicine for all ills for several years. Affordability never went below 10% back in 1988 either, did it? That measure seems worse this time also.
Live in Irvine and was told by a RE person this week that so many Asian and Mid Eastern are flocking to this area that they will by any thing and think it is a great buy. He said that most of the $1,000,000 new homes by the new Tustin Garbage Truck storage area have been sold and mostly with cash! WOW! what a shame…. Does anyone remember the Japaneese purchases in the 80’s in L.A. commercial property,we ended up buying a lot of these properties back for 60 cents on the dollar. The sheople are still coming.
My husband commented recently that foreigners are buying lots of commercial property as well… site unseen. Buy, Buy, Buy!!!
If you consider the number of people in this country that don’t have a clue as to any impending danger in RE, even with increasing press coverage, and buy unwittingly even as we speak, it seems to me that foreigners with no knowledge of the market other than what the Realtor tells them would fare as bad or worse.
i’m seeing that sort of thing even in ann arbor michigan. the houses, especially the new houses which the new-immigrant populations here seem to bigtime prefer, are really some of the only properties that move at all quickly. there are a couple subs in areas with traditionally large asian populations where houses move waay quickly comparatively speaking (in weeks, instead of the months and months that things take now to move if at all). And the manipulation realtors clearly use has maybe special effects with these buyers. I was so proud of my husband some weeks ago when he caught the listing agent at an open house telling this young asian couple that they don’t really want to offer too much under asking price because otherwise they might offend the seller…hubby chimed in that this is ridiculous, and that houses are constantly being reduced in price and what silliness is this offending claim. I think that the idea that you would “offend” someone has a very loaded message to a recent immigrant, especially one from a culture where respect might be valued. The realtor just couldn’t believe that someone would say this. Hubby also stated for the edification of that couple that things are staying on the market for ages compared to two years ago, and the realtor was just amazed at being challenged, stuttering “uh, I don’t think so. I don’t agree at all”. what was especially funny was that the very same agent I happened to know has been the listing on a house in the same damned sub, a block away, that has sat for almost a year now. One measly little price change on that house he made in that time. I don’t know how some of these people sleep.
I assume you’re talkin the old Tustin base, right?
Man, don’t complain about overseas money. If we can’t export goods, at least we can export crappy investments. Remember Pebble Beach? I take this as a sign that the end is near!
Lets say you are from Japan / finance a million dollar home in the U.S. / real estate crashes and you are underwater by several hundred thousand $’s. You just walk away(or fly away) back to Japan. What do you have to lose? Its not like the mortgage cops will fly overseas to try to get you to pay. Your home free / no risk - right?
i bought my first piece of los angeles real estate (a duplex) in 1996. it was a property that had been foreclosed on. it sold for $385,000 four years prior. i bought it from the bank for $225,000. the owner that was foreclosed on was a middle eastern gentleman. nobody’s immune.
Everyone, please take a moment to consider this. Basically, we print counterfeit currency each and every day. We use it to purchase goods from abroad. We purchase MUCH more than sell (export). What else are people (foreigners) going to do with this funny money? of course use it to buy something (anything?) tangible. Does anyone else see the connection between our immoral, unconstitutional debt-based monetary system and the housing bubble?
I do :))
I think that it is somewhat intentional to lure foreign buyers into RE at the market top. It happened in 1989 and it is happening again. Sheeple come from every country and race.
U betcha…..they are 1st cousins that married. The outcome is unknown.
Ever wonder why the Portugese are so small. I asked a friend and said, ‘ do first cousins marry?’. He said ‘don’t tell anyone !!’. hehehehehehehe
Thats funny
I see the connection too.
I think there is a good chance that we are on the verge of some major inflation, to go along with some serious depression.
Just my two cents.
Los Angeles Friends in Deed
Here’s an ad I found on Reno’s RGJ.com homes for sale section:
FREE UTILITIES FOR ONE YEAR!Great home and Great deal!
2700 sf, 4bd, 2.5ba, 2car,
den + office, 1/2 acre lot,
SW Reno, $639,000. Nyla
720-9637 KW Group One
Yes, what a great deal when a year from now the equity drops by at least 25,000! No thanks, I think I’ll wait it out.
Probably drop $150,000. $150/ft
Melody -
The article about how financially unprepared people are for a flat or dropping RE market is a little scary.
Good Grief! sheeple, lemmings, etc…..the same names over and over again, kind of ironic….it’s like calling the kettle black, isn’t it? A question: is anybody making money out there or are you just jerking each other off on a ‘ presumed=superiority complex - reality=loser’ thread? how about some money making tips rather than “i feel for them” or “since these people are unscrupulous they’ll get what they deserve”. The ultimate question: how will YOU make money on this housing boom/bubble? Real players need only answer the last question.
Always a good sign when angry trolls post here!
Down we go!
I’m not aiming to make money; I’m aiming not to lose it.
I know I shouldn’t feed, BUT…
Many here have already made money on the upside of the housing bubble (sold and now rent). Many here are shorting/will short various stocks which should be affected by the downside of the bubble. Many here have quite a lot of money which they intend to use to buy RE and other assets when loans are scarce and “bankruptcy, bad credit, no money down? — no problem!” mortgage commercials are just a distant memory. Cash is king.
Sorry, Ben.
Agreed…I fit the your profile to a tee. I’m not greedy, I just knew that my house had appreciated way to much in too short of a period, so I sold and rented in the same neighboorhood. It’s nice to see the compounding interest, while watching R.E. prices start to slip. Waiting on the sidelines now, house money in CD’s, and a little other investment money in ProFunds Short Real Estate. I’ll probably only buy my personal residence when prices come down, not investment property.
I love these stories.
A bubblesitter extraordinaire.
I don’t believe this blog is dedicated to making money on the housing bubble, but simply observing (and occasionally laughing at) the phenomenon.
Still, this blog does provide plenty of money saving information. It probably saved me at least $100k on what would have been a poor home buying decision.
So, troll away, but try to come up with something more creative next time.
Acutally, a good “real player” knows when its time to ignore something and look elsewhere.
I think you’re misjudging the reason for all the conversation here. It’s not “sour grapes”–it’s people who are genuinely perplexed!
I, for example, own a home in Sunnyvale, CA, and some land in Florida, on which I plan to build a retirement home. Neither was bought to “get rich quick”. In fact, I have no plans to sell either property, ever! If tomorrow someone told me that my “value” had fallen 50%, I’d wouldn’t care at all! (Actually, I’d be happy because I may be able to get property taxes reduced.)
I also think that a lot of products I see advertised, from 40 year adjustable mortgages, to “interest-only / negative ammortization” loans are very foolish products. While I’d never want to prevent any fully-informed buyer from buying any legal product, I’d be just as happy if these types of mortgages didn’t exist. They just serve to drive up prices.
Ultimately, over the long term nationwide, house prices simply can’t rise any more than inflation and wages rise.
True investors who have real cash to back up their purchases and can wait things out, and are willing to take a loss are one thing. An entire economy based on borrowing on “value” that’s mostly imaginary is another.
Your primary residence shouldn’t be an investment. It’s a place to live. Anyone who counts it in their “net worth” is a fool. You’ve made no profit until you’ve sold it, moved to someplace cheaper, and have subracted all the “sunk costs” that went into it.
“The ultimate question: how will YOU make money on this housing boom/bubble? Real players need only answer the last question.”
The ultimate question: How soon will anyone who listens to YOU lose their shirt?
This might shock a few people. A Web site exclusively created for flipping condos (initially here in Florida). It just came on-line. Notice the line concerning bubbles.
http://www.condoflip.com/
Cut and paste the entire URL, since condoflip.com by itself doesn’t seem to work and produces a site under construction sign.
The “Distressed Sellers” option in the “Search For a Cond Flip” category will be the only business they have real soon.
Soon to be renamed “www.condodump.com”.
It has been on for a while, has always been under construction, and more than anything else gets a rise out of people. Sounds to me more like Social Engineering than Customer Service.
The ultimate question: how will YOU make money on this housing boom/bubble? Real players need only answer the last question.
Picture this: Hiding under bed with arms around a pile of Bennies peering out with very wide scared eyes.
You know there are plenty of signs here in Florida littering the roads, people even have bill boards and paid top dollar to make sure their message of “We Buy Houses” is heard…
Maybe these people trying to unload duplexes and other investment properties they can’t afford anymore should give the We Buy Houses people a call?
Walt Disney’s “Chicken Little” should be out on video/DVD soon. Just saw it in the dollar theatre. Great use of the “sky is falling” line. Maybe some benefactor could send every FB (or Joe McDebtor - homeowner) a copy as a consolation prize for being in a deep $hithole of debt.
The central valley is extremely hot, way overpriced, smoggy, people I worked with that commuted there were driving 2 hrs each way and looked like it. I am glad to be out of CA, and will look to cash in when you can buy a house there again for around $100K (like one could in 1999).
Ciao - there will be many sad stories about people all over the central valley and inland empire.
Condoflip = condodump is funny, but, oh, so true. Their site was a joke.
I read most of these blogs..What none of you mention is why this is happening..Could it be that as we approach 70% home ownership that there are not many qualified buyers left unless you give them free money..Interest rates only raising slightly has taken out a significant number of potential buyers at the entry level (Condo’s).
Along with this, the big builders (along with the wannabe builders) have broght on unpresedented inventory along with massive planned product in the pipeline..It gets real scary when you factor in job losses related to a housing slow down..It could get ungly my friends..I suggest you fasten your seat belts..