Seeing The “Handwriting On The Wall” In California
The Sacramento Bee from California. “It’s finally come to this in Sacramento’s weakened real estate market. Denial that the boom has ended isn’t moving houses. The upbeat talk of real estate agents hasn’t worked. Even price cutting isn’t working for many as thousands of houses languish on the market. Almost on cue amid the quiet desperation, auctioneers have begun elbowing their way into the sales scene.”
“‘I’m trying to get out quick,’ says Patrick Maloney, the Sacramento resident moving to San Luis Obispo. Last month Maloney put up a for-sale sign asking $293,000. But so far it’s attracted only lookers. Maloney aims today to distinguish his house from 15,000 others on the market an auctioneer.”
“In Elk Grove, John Chargin, too, is turning to today’s auction block for a house he’s listed at $549,950 and bought just last year. Chargin, a mortgage broker, moved to another office in California and wants to sell as fast as possible. ‘When you have a mortgage and don’t live in the house, you need to get rid of it,’ he says.”
“Anxious sellers say their arrival shows many people will now trade a lower price for a quick escape. ‘A lot of sellers have dropped their sales prices $10,000 and no one cares,’ says Keith McLane, principal of West Coast Home Auctions and former Sacramento land buyer for Texas-based Richmond American Homes.”
“It’s no secret that sellers are having troubles. There are also 10,000 more homes for sale than 1 1/2 years ago in El Dorado, Placer, Sacramento and Yolo counties. Many sellers report lowball offers from buyers who have again gained the upper hand in the market.”
“The minimum bid for Maloney’s $293,000 home is $169,000. Chargin’s $549,950 listing has a minimum bid of $299,000. In both cases the owners have set a private minimum amount they will accept for a sale, a process called a ‘reserve auction.’”
“Maloney says the equity he’s gained in nine years allows him to accept less at auction than he might get from a traditional sale. ‘I can see the handwriting on the wall,’ he says. ‘I don’t feel like sitting here six months or paying a house payment on top of rent in San Luis Obispo.’”
The Desert Sun. “Unlike what’s happening in places like San Diego, Coachella Valley prices year-over-year are not yet falling. But sales counts are down more than 40 percent from a year ago, according to DataQuick.”
“‘I have to tell sellers not to price their house up too high, but to price it at what they’re willing to accept and negotiate from there if they have to,’ said Rocio Flores, a real estate agent in Indio. ‘There’s a ton of inventory out there, especially with the new building still going on.’”
“Many of the homes constructed and purchased in response to the frenzied 2004 market, often by nonresident investors, are now sitting empty, frequently being offered up as rental units. And at some of the larger subdivisions, homes continue to be built.”
“‘It’s a much more competitive market out there right now, and builders are having to do things to entice buyers,’ said Fred Bell, executive director of the Southern California Building Industry Association’s Desert Chapter.”
“In response, some new-home builders are throwing in free pools, casitas and major price breaks to move their product. Some resale-home sellers are now having to drop prices by tens of thousands of dollars, as the sellers’ market of two years ago moves in favor of buyers.”
“‘I’m sure there were a lot of speculators who bought here in 2004 and 2005,’ said Chapman University economist Esmael Adibi. ‘But any of them who are still in the market, I imagine they are having problems selling those homes,’ Adibi said.”
“Some Coachella Valley owners and investors, struggling to sell their properties across many price categories, blame market psychology for the current slowdown.”
“As an investor, Alan Waters of Palm Desert typically does several remodel/upgrade projects on homes in the valley each year. He recently had a property for sale in Palm Springs for more than 18 months.”
“‘Even following a substantial price reduction of more than $200,000, bringing the price $100-per-square-foot below the neighborhood average, the property had not sold,’ said Waters, whose day job as CEO of Wilson Johnson involves commercial rather than residential real estate.”
“(Broker) Lorenzo Lombardelli contends that consumers are waiting for the market to stabilize. ‘There are plenty of buyers in the market,’ Lombardelli said. ‘But..they’re worried that if they buy now, the prices will go down even further later.’”
“‘This indicates to me that price is not the driving determination with buyers in this market,’ Waters said of his investment experience. ‘Uncertainty and ‘bubble talk’ are the issues.’”
Now that auction is being considered, CAR will not allow those sales in the MLS and median price calculation.
The more pertinient question: Do appraisers use auction results as comps?
They are still considered in the appraisal/comps though, correct?
Yes, as long as they are arms length transactions. Once those bombed prices get recorded, say goodbye to refis in that area.
An honest appraiser should but there was a Florida real estate association (Naples if I remember correctly) that ruled against including an auction of 45 condos in it’s MLS because it will ruin the comps. Anybody remember that posting?
Formerlahomeowner: An appraiser’s job is typically to estimate “market value”. The FIRREA standards for “market value” include the following items:
1. Buyer and seller are typically motivated;
3. A reasonable time is allowed for exposure in the open market;
A seller dumping 45 condos at an auction is not “typically motivated”. Most likely, such a seller is being forced to sell or is desperate to sell. That is not a typical motivation. Overall, i would say that FIRREA generally calls for the exclusion of (most) auction sales from appraisals.
If auctions become the primary way to sell a property in a given market, then this issue should be revisited. Until that happens, auction sales should not be included in appraisals.
Furthermore, I don’t think auction sales should be included on the MLS. They are not sales that were transacted with the assistance of the MLS.
That broker is a flipper in trouble:
Flippers In Trouble Turn To Auctions
Even a broker can’t get a break!
“Even a broker can’t get a break!”
Nowadays, they seem more likely than anything to “get broker.”
The appraisers ‘have to’ check the Fannie box that says it’s a decclining market. Betcha they don’t do it.
Furthermore, I don’t think auction sales should be included on the MLS. They are not sales that were transacted with the assistance of the MLS.
Another reason why NAR statistics derived from MLS data can be imperfect.
“Figures lie, and…” Well, you know the rest.
The appraisers ‘have to’ check the Fannie box that says it’s a decclining market. Betcha they don’t do it.
You got that one pegged.
That’s why the newbie schmucks over at Appraiser’sForum engage in debate as to whether or not there is a bubble.
They have to assuage and rationalize their cowadice in their moral failure to accurately report the market.
They are more interested in currying favor with a shrinking client base than doing the job for which they are getting paid.
The lies will continue as the desperation escalates.
The growling stomach often speaks louder than the whispering conscience.
Good perspective…can’t disagree.
Auction is next weekend. I can’t go, but hopefully someone can make it. Interestingly, most of the properties are older modest places in mature Naples neighborhoods, so they should attract interest.
of coarse not… no blind bidding.
This is great news. Real Buyers can put in real bids
without fear (real or not of fake bidders)
How ofter have we heard … there is a higher bid then you.
And you ask OK what is it ? and who is bidding more?
Realtos wont tell you. I suspect it was mostly phony bids anyway to get more out of the sale.
of coarse not… no blind bidding.
This is great news. Real Buyers can put in real bids
without fear (real or not of fake bidders)
How ofter have we heard … there is a higher bid then you.
And you ask OK what is it ? and who is bidding more?
Realtos wont tell you. I suspect it was mostly phony bids anyway to get more out of the sale.
Denial, anger, denial, anger. . . Wash, rinse, repeat, 3x each then again forever. . .
This is getting REAL ugly!!!!!!!!!!!!!
“In both cases the owners have set a private minimum amount they will accept for a sale, a process called a ‘reserve auction.’”
Sorry, this is not an auction….. I say, let them “twist in the wind”
2008 will start to bring “AUCTIONS”
“The minimum bid for Maloney’s $293,000 home is $169,000. Chargin’s $549,950 listing has a minimum bid of $299,000. In both cases the owners have set a private minimum amount they will accept for a sale, a process called a ‘reserve auction.’”
I did not see the “reserve amount.” Oh well, just another gimmick to get some activity. Waiting till end of 2007.
Exactly……….minimum bid=opening bid………just BS.
Reserve price will probably be BS as well at this stage.
- Chargin’s $549,950 listing has a minimum bid of $299,000.
STOP IT! It’s probably not worth 299k.
The Dog Whisperer calls it ‘Controlled Submission.’ Dude, roll over on your back like a Florida Gator and feel them rub your tummy.
Calm Submissive is the term.
Just an FYI to all Realtors out there, don’t expect me EVER to seriously enter a bid if there’s a reserve price. It’s not an auction, its just an offer to submit bids. By nature, this auction won’t work as an auction, it will simply work at best as a marketing device to the incredibly stupid (who apparently aren’t even buying now).
Yeah, these “auctions” with their ridiculous “minimum prices” don’t seem to work, just like sign spinners, staged houses, baked bread, and other incentives. Price is all that matters.
It seems to me that these auctions are just an expensive way for the seller to find out just how low the market value of their house is. Instead, save the costs of the “auction” and simply keep lowering your price. If you don’t like how low it is,then by all means, don’t sell.
Was in Livermore last week playing at Poppy Ridge. Read the local rag. They were advertising for spinners at $10 per hour, plus benefits. Big 100 unit condo projects sitting there. Check it out in 2007. Of course you’ll have to commute on the 580/680, insanity but plenty of good wine in the area.
Not baked bread. Cupcakes!
I got to admit, I do enjoy licking the frosting off of “offered up” cupcakes!
I don’t think you should all be too hard on these sellers for setting minimum bids at around 55% of the previous asking price. I think in general the commentators in this blog have agreed that, relative to rents, prices need to come down 40%-60%. If anyone actually wanted a house in the areas of these auctions, one could go to the auction, place a bid at the minimum, and refuse to budge if the secret(?) reserve price is higher. I am sure plenty of rentals are available if these sellers are too stupid to take a reasonable offer.
$10K reductions and nobody cares.
Gee, I wonder why. 10K on a house overpriced by 100K or more is chump change, and we’re fresh out of chumps.
How did Jack Nickelson say it?
“Go sell “chump” somewhere else, we’re all full up on “CHUMP” around here..”
And every home that is bought reduces the supply of chumps.
Jas Jain
Sometimes I wonder, there must be a factory out in Covina hidden somewhere, cause it’s seems to be about the only thing US still manufactures!
They won’t sell ’til they are true auctions at real bargain prices. Harry Howmuchamonth doesn’t care about 10K price cuts, he cares only about “how much a month.” And now he’s scared that prices have stopped going up. That’s all he cares about…
When prices get REALLY low, and it makes sense to buy homes to rent out, etc, then these may move at auctions, etc.
Pretty soon the handwriting would be on default notices and in lawyers’ offices.
““Some Coachella Valley owners and investors, struggling to sell their properties across many price categories, blame market psychology for the current slowdown.””
These mostly old folks never blamed anyone, or anything, when prices in some god-awful places, like 29 Palms, were going up 40-80% a year.
There is no shortage of land there. There will be more than 100,000 empty homes, year around, in Coachella Valley within 2 years. The desert is way overbuilt.
Jas Jain
I used to go out to Joshua Tree NP quite a bit back in the early 90’s, during the last Scal Re Meltdown, and there were 1 acre+ lots with doublewides going for $15,000-$30,000 in attractive desert locations right next to the NP entrance. The towns of Joshua Tree and 29 palms were riddled with vacated properties, junked trailers and weed-strewn lots, and were virtual tumbleweed ghost towns, complete with the howling desert wind. And there were lots of low-life drifters all about.
“The towns of Joshua Tree and 29 palms were riddled with vacated properties, junked trailers and weed-strewn lots, and were virtual tumbleweed ghost towns, complete with the howling desert wind. And there were lots of low-life drifters all about.”
Some low-life drifters, who are on welfare and were renting until a year ago, were able to qualify to buy 5+3 homes in similar areas. Then I knew that it wouldn’t be long. Also, in 1999, when Jessie Jackson and his son wrote a book for blacks to invest in Scams and the reverend was selling advice to black Churches, for a modest fee of $20Kk, I knew. When the bottom has been scratched…
Jas Jain
“This indicates to me that price is not the driving determination with buyers in this market,’ Waters said of his investment experience. ‘Uncertainty and ‘bubble talk’ are the issues.”
If prices made sense relative to rents, price wouldn’t be an issue for buyers. So price is the driving determination. His statement is typical self serving B.S., from someone trying to unload a white elephant on some dope.
SPIN is the biggest skill required of “professionals” in economics, investments and politics. Lies by any other name…
Jas Jain
Very revealing post. I never considered myself a financial professional, as I have never worked for a financial institution. These things all have a tendency of thinking inside the box, the exact opposite of what you have to do to be succesful. I am simply your typical mild-mannered guy next door type with lots of equity, no debt, and no RE sinkholes.
I am confused. Google search lead me to believe that you were a “professional” economist. Or are you an “Armchair” economist. Or just some rich guy talking?…. Forgive me if I misinterpreted what I found….
imploder “I am confused. Google search lead me to believe that you were a “professional” economist. Or are you an “Armchair” economist. Or just some rich guy talking?…. Forgive me if I misinterpreted what I found…. ”
Quite to the contrary. I have not taken a single course, or have sat in a single class, in the area of economics!
I do have a Ph.D. in EE (Digital Signal Processing, Information Theory), but most of my expertise is in statistics and correlation of variables, something very useful in economics and investments.
Jas Jain
Jas Jain posts “I do have a Ph.D. in EE (Digital Signal Processing, Information Theory”
I beg your pardon. I thought all this time you worked at 7/11.
“SPIN is the biggest skill required of “professionals” in economics, investments and politics. Lies by any other name…”
Remember G. Gordon Liddy’s testimony? I didn’t lie…I was simply less than accurate!
From today’s LA Times: “New mortgage applications are up sharply, the number of pending home sales is up, the national economy continues to expand moderately, and the rate of unemployment just declined again — to 4.6%.”
It’s amazing how people just ignore the obvious. Has the new lending guidelines taken a hold yet or were these FBs/GFs already in the pipeline? This is why I don’t think we will see any significant price correction until Fall 2007 or maybe beyond. Still too much funny money going around.
There’s no Chumps, like the VERY LAST CHUMPS…..
This type of temporary “happy news” will just ensure that the Fed will not lower rates… They will continue to throttle the patient (Housing) with BOTH HANDS.
Although lending was up in Sept, last week there was a “sharp” 5% drop. I think that we need to wait a few more weeks to find a trend. Also note that mortgage rates hit bottom two weeks ago and have taken a good bounce up.
There are lies, damn lies and statistics.
Pismobear posts “There are lies, damn lies and statistics.
Look out! JJ has pHd. in that stuff!
Mortgage applications doesn’t say anything about Mortgage fundings. It would be interesting to see the difference over time.
http://www.latimes.com/business/la-re-harney15oct15,1,6415615.story?coll=la-headlines-business
Here’s the link to that LA times article. Looks like a classic Shill article for the REIC.
quote fromDonald L. Kohn, the Federal Reserve’s vice chairman:
“Kohn sees no imminent bust or crash in housing. It is a “correction” that’s underway — a cyclical re-balancing of a marketplace that got too hot for too long in some parts of the country and is now heading back toward more “normal” conditions, where prices are more in line with what consumers can afford”
And so on blah,blah,blah. This is just one snippet from the article, which is basically a RE pep-rally booster prop-spin to counter the blossoming fountain of RE Bad news which has finally been picked up by the MSM.
I saw that article this morning and just chuckled thinking “Ok, you go ahead and believe what you want to believe”
“of the country and is now heading back toward more “normal” conditions, where prices are more in line with what consumers can afford”
Sounds like a crash scenario to me. To get back to what consumers can afford should shave about 1/2 off the current prices. More in California.
The real problem with the market is affordability…not the media, not interest rates, not a ‘bubble mentality.’ IT’S the PRICE, stupid.
They ran that exact same article in the Seattle Times yesterday. It seems the RE complex is launching a new nationwide spin campaign.
In one month you have mid-term congressional elections. We all know how trustworthy this government is? The Fed holds interest rates level, the stock market at an all time high and suddenly oil prices start dropping overnight and the job numbers go more robust. Go figure? After November we are back to the greatest fall in RE prices ever and also the stock market.
But gas prices will go back up!
Maybe not. Don’t forget the “Santa Clause” effect. BUt next year, you bet! Look out below!
I think everybody knows Gov stats are skewed (or at least suspect), the major news media are a bunch of cheerleaders!
The more they cheer the more I know we are getting close to something happening!
Agreed ‘07 will send the signal that this housing trend is here to stay awhile.
“Denial that the boom has ended hasn’t helped move houses”.
A quote for the ages, IMO.
Just like denial of “constipation” doesn’t help “move things” either.:-)
“When you have a mortgage and don’t live in the house, you’ve got to sell it”.
What’s this..!!??? Is that a note of REALISM I detect coming into the dialogue and national psyche?
Why bother, just wait and let the bank sell it for you!
The US households who currently own those 7 million second homes (above the 75 million owner-occupied) ought to take note…
“Second-home financing is now easier than ever
By Bob Tedeschi
NEW YORK TIMES NEWS SERVICE
October 15, 2006
The American dream used to include owning a house. Now, it’s owning two.
Vacation homes, once the sole province of the upper classes, are increasingly becoming standard fare for mainstream Americans.
According to a study earlier this year by the National Association of Realtors, there are nearly 7 million vacation homes in the United States, compared with roughly 75 million owner-occupied houses – a significant jump from decades past, the association said.”
http://www.signonsandiego.com/uniontrib/20061015/news_1h15vachome.html
You got two homes — BFD. It’s the third and/or fourth that make you a player. Read this from the NYTimes only 10 months ago (seems like a long time ago in a galaxy far, far away, doesn’t it?):
“The increasing ranks of third-home owners include many retired or semiretired couples, but also people in their working years who need only a computer and high-speed connection to make a living. Others have children at home or are tethered to a job that requires their daily presence, but manage to get to their second and third homes often, and typically plan to embrace the seasonal lifestyle fully at some point.
It is impossible to pinpoint the actual numbers of third-home buyers because lending institutions don’t distinguish between second and third homes. Every year, however, the National Association of Realtors uses courthouse deed records to solicit information from 100,000 people who buy and sell homes. The 2004 survey, spanning mid-2003 to mid-2004 transactions, added a new question about multiple homes.
‘This was the first time we asked about second, third and even fourth homes,’ said Walter Molony, a spokesman for the group. Of the 8,206 subjects who responded, 14 percent had two or more homes, 4.3 percent had three or more, and 1.2 percent had four or more.” [23DEC05]
Sure is gonna be interesting when we wake up next year and realize that we don’t make anything anymore, and selling homes to each other- or refinancing them- won’t pay the bills.
Ah, the growing pains of Globalization.
Get r’ done.
It costs lots of PITI money to hold on to one home in a flat or declining market. Just wait until all these self-styled real estate investment geniuses discover the ugly choice: Keep shelling out the ownership costs on your two or more investment homes — especially maintenance — or let your investments lose value due to real depreciation as they crumble into rubble. Or choice #3: Try to find a GF willing to catch your falling knives.
I think time shares are considered second homes as well. I know you won’t qualify for first time homebuyer programs if you ever bought a time share.
“(Broker) Lorenzo Lombardelli contends that consumers are waiting for the market to stabilize. ‘There are plenty of buyers in the market,’ Lombardelli said. ‘But..they’re worried that if they buy now, the prices will go down even further later.’”
At last……….here’s one realtor that knows where it’s at. I wonder if he’s telling his propective buyers this story
“(Broker) Lorenzo Lombardelli contends that consumers are waiting for the market to stabilize.”
No, Lorenzo. Consumers are waiting for the market to to SINK LIKE THE TITANIC, CRASH AND BURN LIKE THE HINDENBURG, AND REMAIN IN A HORRENDOUS SIEGE OF GUT WRENCHING ATTRITION LIKE STALINGRAD…..
i.e.”Levelialize”
I liked your analogy but Leningrad would have been more appropriate. The siege at Leningrad lasted 900 days, much longer than Stalingrad. Stalingrad was really a battle during one winter and then was over.
It would work better if you said the Flippers will wind up like the German 6th Army at Stalingrad. They realized the battle was lost, and life was unbearable. Much to Hitler’s chagrin they surrendered en masse. It was the largest German surrender of World War II. Another historic surrender seems about ready to take place. The battle is now being waged at the gates of the MGM Grand and the Bellagio.
I’m just trying to help out so some housing bull doesn’t question anybody’s credibility.
I like Stalingrad better, because after all their efforts, their horrible suffering and direct orders to hold, the inescapable reality of the situation eventually forced their capitulation. (the German 6th, under von Paulus).
Plus it’s a well know Battle… but thanks for addendum.
The high tide of the German Army reached it’s high water mark at the Caucasus mts in late 1942, then began a long withdrawl(just as the Re Market reached it’s peak in mid-2005). Then began the long bitterly-faught retreat against the surging masses of the Russian Army, which represents the surging counter RE market forces of falling sales, prices, and unwilling buyers battering against the FB’s. flippers and the REIC. Stalingrad was the culminating battle along the northern flank of the Caucasus bulge, which the 6th army, despite the pleads of G. Paulus and all the German generals ,was forced to hold because of Hitlers stupidity. When the Russian Army surrounded the 6th Army and trapped it inside Stalingrad it became a sealed death trap for the 6th army. This is about how a lot of the RE flippers and FB’s will end up.
Wow… better put that I.
thanks
Interestingly enough, the guy who puts out the “Daily Reckoning” website says his writings are linked to the continual study of both military and market histories.
Peter M.
Well posted you do know your history. I must add it was at Kursk that the German Army lost it’s last “war winning” striking power. By beating them selves on the redundent lines of defence of the Kursk Salient. When they were spent Zukoff unleashed his 6 fresh reserved tank Bragides on them.
Staingrad in 07′…… Kursk……08′ for housing.
Please commet, you are a smart guy!
Haven’t really done all that much study of the German- Russian Campaines but i understand that the Kurst battles saw the largest massed Tank battles of the entire WWII war. The Russians always had numerical superiority in tanks ,infantry, and artillery but the Germans had the qualitative superiority probably up to the kurst Battles. The Hard test of war also weeded out ineffective Russian Commanders and brought forth a newly emergent set of effective Russian Generals.
To go further on the comparison of the RE Bubble collapse to the Campaines of WWII, it will either be a slow grinding retreat for the RE Bubble, similar to the Axis stubborn withdrawl up the Italian Pennisula in 1943-1945, or it will be a swift collapse/retreat of the Axis/Re bubble such as the Allies achieved in the Breakout of the Normandy beachhead( an end-around spearheaded by the 3rd army under General Patten). This may not be exact in all particulars and i would have to refresh the details by consulting Basil H. Liddel Hart’s “History of the second World war”, a great 1- volume History written by a great Military Historian. Patriotic Bear may be able to help out here.
I have been to Stalingrad (now Volgograd). The battle lasted from the August 1942 to February 1943. Not just a winter fight. It was not the largest German surrender in World War 2. Axis forces of 225,000 (1943) were captured in Tunisia and 300,000 in the Ruhr pocket (1945). Approximately 92,000 6th Army troops surrendered at Stalingrad. Of this 15,000 were Romanian and Italian. Almost 60,000 “Hiwi” (additional Axis) troops were at Stalingrad. These troops were Russians that changed over to the German side. After the surrender they had a very short life expectancy. Only 5,000 Germans returned home years after the war ended.
Patriotic Bear post ” I have been to Stalingrad ”
Were you in the German Army?………Just a joke! I can help myself.
Now my real question. Did you get to see the big 300 foot? Statue of the lady with the sword? Before I die I want to see it.
Response to Patriotic bear:Another idiotic move by Hitler to stubbornly keep all those Axis troops in Tunisia instead of withdrawling them to Sicily where they would have really gave the Allies problems. I understand that something like a half-million or more combined Axis forces surrendered in north Italy toward the end of the war.
” I wonder if he’s telling his propective buyers this story”
Lorenzo tells his prospective buyers this:
……. rummmm (let me clear my throat)…mmm… (here goes)
“THERE’ HAS NEVER!, I REPEAT!, NEVER BEEN A BETTER TIME TO BUYYY!!!!”
‘There are plenty of buyers in the market,’
Name a few, azzhole!
Can buyers be buyers if they don’t buy?
I think not.
Yes, there are buyers on the sidelines just watching to see the train wreck happen. I have used a term called “insult pricing” and I believe it holds true here. The appropriate price for an item is just below the insult to the buyer.
I think I’ve been insulted now for the last few years and am waiting to turn the insults to the sellers.
Happy to be a renter rather than a knife catcher in the circus.
http://tinyurl.com/y8oqu7
‘There are plenty of buyers in the market,’ Lombardelli said.
Isn’t the definition of a “buyer”; someone who actually BUYS??
You are right. Well said.
In the Coachella Valley, they built a ton of Indian casinos. That will keep a lot of FBers employed. Of course, they will lose their wages trying to win back what they lost in the great housing dump. Go California, WE ARE NUMBER 1 in being house fools.
I thought they weren’t making any more land in Palm Springs, or Sacramento. The miles and miles of empty land is just a mirage. It is really a lot of overpriced McShitboxes waiting for the baby boomers to come and overpay with their gazillions of saved money from being responsible savers and not overconsuming with debt.
The coachella Valley has to compete for Retiring Boomers (with their supposed Gazillions of saved up or cashed out California Dollars) with the likes of Las vegas, Phoenix, and south Florida. I hear that these areas are having serous RE bubble pops due to all those Ex-Cal flippers(locusts) not doing their duty to bolster these over bubblicious markets.
Is it some inexorable rule that retiring boomers prefer Hot sunny desert or subtropical places to retire?
“Is it some inexorable rule that retiring boomers prefer Hot sunny desert or subtropical places to retire?”
Pretty much, with all the meds affecting blood clotting, inability to shovel snow and the tendency of (snow)birds to flock together, it’s pretty much a given. Of course that also means that most people don’t have much $$ either, contrary to the REIC mantra. Retirees are generally not all that well to do.
Anyone who even thinks of buying a house for less than 60% off peak price is a fool…..
I couldn’t agree more, Seattle Moose.
The deep price cuts of 30% off this early in the game portend a huge drop. When the last of these GF’s move over, watch out.
What is a GF?
greater fool
I couldn’t agree more, Seattle Moose.
The deep price cuts of 30% off this early in the game portend a huge drop. When the last of these GF’s move over, watch out.
You mean the GF’s will cut-n’-run? That’s un-American!
“Maloney says the equity he’s gained in nine years allows him to accept less at auction than he might get from a traditional sale. ‘I can see the handwriting on the wall,’ he says. ‘I don’t feel like sitting here six months or paying a house payment on top of rent in San Luis Obispo.’”
The writing on the wall (or sometimes ‘handwriting on the wall’) is an expression that suggests a portent of doom or misfortune. It originates in the Biblical book of Daniel - where supernatural writing fortells the demise of the Babylonian Empire, but it has come to have a wide usage in language and literature.
http://en.wikipedia.org/wiki/Handwriting_on_the_wall
Gs………..
Another place you find writing on walls is in public toilets…………..maybe that’s where real estate is at the moment
“Writing on the wall” (graffiti) was used to gage trouble brewing among the rabble by the Roman Elite. Often pictorial in nature, it let them on to what was brewing. “Foretelling” trouble…
Same thing LAPD does with gang units.
“… trouble brewing among the rabble …”
Probably what the Donkey, the Elephant, and the Federal Reserve think of blogs…
Execellent !!
Reminds me of the scene in Monty Python’s “Life of Brian” where the Roman Centurion is scolding the vandal who’s trying to scribble “Romans go home” on the wall, but he keeps screwing up his Latin grammar.
chilldogg-
Where do you think I got my info from?
now,now the new word is “rebalancing” no,the new lending guidelines have not yet had an effect.rates on subprime loans are up quite a bit,hard money is a lot higher as well…and although applications are up,a lot will not go through because the borrower is upside down.the new guidelines will really have an effect when it becomes difficult to sell mbs that do not comply.i expect there will be a slew of noncomplying loan pools that will have to be sold at deep discounts.these A$$HOLES are so used to selling their crappy loans that they are being a bit slow in figuring out that their market is changing.i shouldn’t call them A-holes,A-holes serve a useful purpose.maybe diseased slug molesters is more appropriate.
“The new (lending) guidelines will have an effect when it becomes difficult to sell MBS that do not comply”.
I’m thinking I missed something very important in the guidelines news. Was there a discussion about how non-compliance would make the loans harder to pass off?
Also, does it make it “just” harder? or impossible?
And re. this uptick in mortgage apps. lately: are realtors smart enough to even be aware of the new guidelines? If they are, do you think they’d advise clients to “hurry up and apply for a mortgage” before lending tightens?
If I was a realtor working within the new paradigm of “put yourself as far in debt as possible to buy that overvalued home” I would certainly advise clients to get in now before the lending party is over.
No time like the present to get one of those stated income loans.
i am a loan broker in a small shop.NO ONE else was even aware of the new guidelines until i brought it up.there are 15 loan officers,including the two owners and it is a clean operation…but out of 15,i was the only one awarw of the change…..
What the hell is the difference between an auction or a foreclosure sale???? About one month.
My understanding nobody is really bidding at foreclosure sales in Sacramento, so why would they bid at auctions?
Debt clock is ticking, tick, tick, tock. Another FB for the pot!!!!!!
People do stupid things at auctions, so maybe they think stupid people will do really irrational and idiotic things, like getting in bidding wars ….. you know, just like during the last 5 years.
How sad is this really ….. you’re the winner, when you were willing to pay more than anyone else for an item. Enjoy you lucky bastard !!
Ah yes, ye olde “winner’s curse.”
Yeah. E-bay is a perfect example of how people get caught up in the moment and overbid. I know from personal experience.
The foreclosure sale wipes out the Franchise Tax and IRS liens as well as the HELOC, 2nds and any other liens. IRS will negociate their down with a buyer at foreclosure but not the Franchise Tax Board (California). Be very careful.
“(Broker) Lorenzo Lombardelli contends that consumers are waiting for the market to stabilize. ‘There are plenty of buyers in the market,’ Lombardelli said. ‘But..they’re worried that if they buy now, the prices will go down even further later.’”
“‘This indicates to me that price is not the driving determination with buyers in this market,’ Waters said of his investment experience. ‘Uncertainty and ‘bubble talk’ are the issues.’”
No, there are NOT buyers waiting. There are people that watch the market and may BECOME buyers once prices go significantly down. There is NO pent up demand. Whomever wanted in, got in, at any price, in any loan. The cautious ones stayed out and remain out until it makes sense. Who else is left?
Lorenzo may be lurking here noting all of the pent up demand.
The REIC must be hovering around these blogs as I see/hear of no other demand for housing. Everyone we know of (who isn’t very aware of the bubble and waiting for a 40%+/- correction) is already in.
Some are in with more than a few homes. All I can see is pent up supply, waiting for the Superbowl/”Springhopemania”, 2007 season. I think next spring’s inventory increase will be even more dramatic than 2006’s.
‘Uncertainty and ‘bubble talk’ are the issues.’”
Sorry Lorenzo but IT the PRICE, Stupid.
Idiots.
“There is NO pent up demand.”
Catherine,
Let us start making a list of things (not people!) for which there is a “pent up demand.”
I just ran out of time.
Jas Jain
#1. http://www.megadox.com/documents.php/868
#2. http://www.uscourts.gov/bkforms/
#1. http://www.megadox.com/documents.php/868
#2.http://www.uscourts.gov/bkforms/
Yeah, what does that mean…”pent up demand”….?
Like all of the sudden, you just can’t stand the tension building, and you just say “f*ck it” and go buy a house.
I never understood that phrase the asshats claimed was driving and is still driving the housing market.
“Like all of the sudden, you just can’t stand the tension building, and you just say “f*ck it” and go buy a house.”
You are talking about people who will be caught with their pants down!
“I never understood that phrase the asshats claimed was driving and is still driving the housing market.”
It is definitely a creative use of language. “Asshats” heads are exposed!
Jas Jain
“Like all of the sudden, you just can’t stand the tension building, and you just say “f*ck it” and go buy a house.”
Yes, these are the people who will be caught with their pants down!
“I never understood that phrase the asshats claimed was driving and is still driving the housing market.”
“Asshats” leave their heads exposed!
Jas Jain
Jas posts ” you just can’t stand the tension building, Yes, these are the people who will be caught with their pants down!“Asshats” leave their heads exposed!”
Yes Jas, heads exposed. One dizzy from lack of blood, the other flush!
Pent up demand list:
#1. http://www.megadox.com/documents.php/868
#2. http://www.uscourts.gov/bkforms/
Is this a joke that I don’t get?
Jas Jain
well, not three posts of it …..
But, the idea was there will be a huge demand for these, which will result in a shortage, and then demand ….. and then ‘pent up demand’.
I said “for things;” I meant stuff.
I do agree that there will be lot of demand for bankruptcies related services. Another one is security services.
Jas Jain
You guys have this pent up demand thisn all wrong…..Pent up demand is when there is a short supply of something and everyone wants it.
Right now there is pane up demand for 2 things:
1. Buyers of real estate
2. Reasonably priced houses
It’s strange that the cure for #2 is also the cure for #1.
Don’t forget Beany Babies and Cabbage Patch Kids. Lots of pent up demand for those.
“(Broker) Lorenzo Lombardelli contends that consumers are waiting for the market to stabilize. ‘There are plenty of buyers in the market,’ Lombardelli said. ‘But..they’re worried that if they buy now, the prices will go down even further later.’”
Ok Lamebastardelli, there are not plenty of buyers out there, that would imply that they are buying, but they are not buying so they are not buyers.
What I want to know is who these people are that are buyers, do you see them often, are they real people or have you made them up. I think maybe you might have missed taking your medication. There are no buyers, so please for all our sakes begin taking your medication, go back to school and learn a new occupation. Being stupid, lazy, and selling real real estate is no way to go through life.
Ok Lamebastardelli, there are not plenty of buyers out there
In fact, the real problem is that there are plenty of sellers. He has it quite backward.
Whoops, misquoted above. SHould have written :
There are plenty of buyers in the market
In fact, the real problem is that there are plenty of sellers. He has it quite backward.
Pretty much everyone I know who was a potential buyer already bought (maybe a dozen finally gave in over the past two years). The only people I “know” who are waiting on the sidelines are on this blog. Can’t imagine there are too many of us since I don’t know (in a real sense) anyone else who frequents this blog.
But why ruin a nice spin nugget? It isn’t as though the REIC is going to create buyer from those who are sitting in their houses watching their equity spill into the gutter.
txchick57 is a wind (bag) blow (hard) know it all (nothing). Hopefully her (fat) head will explode from false egocentricity.
???
Is there some inside joke from a previous thread that I missed?
What are you, Mort? 12 years old?
Careful, Mort might be txchick, or ……?
I am sick of the beyatches sheot, that’s all.
Try another alias, Mort. How about “BorderlinePersonalityDisorder” ?
How about KMA toadie.
Mort, I find your attack on txchick57 out of line and rediculous in the extreme…………this blog is about housing not casting slurs on other people who contribute here………..now come on mate get with the program or get lost.
Mort posts “txchick57 is a wind (bag) blow (hard) know it all (nothing). Hopefully her (fat) head will explode from false egocentricity.”
This sounds like classic projecting, accusing another of your sins. I will not charge you my usuall fee of one dime, I doubt you can afford it.
You all admire her so much. She knows nothing. She lost money on the only real estate deal she evr did and yet you all admire her so much. You are all just a bunch of bitter renter losers. Go ahead, ask wind (bag) what her donut eatin’ blowhole thinks, you’ll go far. LOL.
“You are all just a bunch of bitter renter losers.” I’m afraid he just showed his true colors. I don’t always care for TxChick’s style, but I’m certainly not going to take some d**chebag housing bull (that would be you Mort) seriously.
You know nothing.
Ex-husband, or something?
I may be a “bitter renter”, but I am sleeping at night, unlike a lot of real estate “investors”.
Mort-If you know her and have a personal problem with her, keep it personal. Commenting on her posts is fine. Many of us do not agree with some of the posts on this board, however, personal attacks seem a bit out of place.
I wonder if Ben’s filter catches the phrase “skanky ho”?
I guess not.
I can filter you out completely if you want Mort. Enough wine tonight?
No wine tonight Ben, I’ll tone it down. Why do you allow txchick57 to disparage Oklahoma at every opportunity?
I grew up 40 miles from Oklahoma. The people in that state knock it plently.
Fellow Texan and all, huh?
We won’t mess with Texas, that’s for sure.
But you shouldn’t mess with the next President of the United States of America…
…Mr. Ben Jones.
We got a party name, too.
We call ourselves ‘The New Homeowners’.
Get along, doggie.
It’s true that a born Texan is always a Texan.
Ben, maybe that’s because you mother married her cousin.
er, your mother, that is.;-)
Look Mort, just because you married your sister … ummm, had to with the kid on the way and all … well anyway, don’t be so bitter.
Mort you married your sister, dang dude what is that all about? I mean that is nasty, Mort why did you marry your sister? Why Mort why? You just want to be on Jerry Springer don’t you? Well you have high ambitions, I must say wanting to be on TV and all. I just question the way you go about it, marrying your sister and all. THAT IS NASTY MORT!!
I guess it’s true what they say, societies are destroyed from within.
Mort, Mort, Mort..? And after all the love?
Ben, please get rid of this guy Mort.
“Oh my, this IS a Society……. What say Ye… thumbs up or thumbs down?….
Come on, he’s just being a temporary dufuss …
Now, I know THAT ain’t against the law in Texas… (probably in Oklahoma though, aren’t there counties you STILL can’t drink in?)
Course if it continues on “Give him a fair trial….. and then HANG HIM”
I don’t know.
I kinda feel smart around him.
You should never beat a baby with a sledgehammer, ya know.
It’s just bad manners.
Sweet - sounds like someone’s got a bad case of the “Losing his shirt in the housing bubble”.
Must be getting bad when the trolls are getting this venemous.
Posted to Ben “Ben, please get rid of this guy Mort. ”
No keep Mort, let him live with his words. He speaks for himself. let him stand or fall with them.
Be a big tent guy……. and pray Tx don’t rip him a new one!…….LOL……….LOL !!!!
Who this Mort fellow and what does he have aginst txchick? Mort open up to us, tell us your troubles, you are obviously a very disturbed person. Do you want to talk to us about it? Inquiring minds want to know?
But we must love everyone…
…even the one that Dribble.
If I understand Mort, txchick likes donuts, so her stock is rising in my book…..
Plus he appears to have first hand knowledge that she has some physical characteristic similar to a dolphin, porpoise or whale….. I ..I, mean from what I can gather. It’s all so confusing.
This may be an “interpersonal falling out” of some sort…
Stay tuned.
Did you know that cetaceans often attempt intercourse with humans in captivaty, and in the wild?
Apparently, the males have prehensile penises, which can grab stuff, and even carry stuff.
The females just might use your foot as a…well…you get the picture.
I had a particular cetacean grab my left Viper Fin in the ocean the other day. For real.
I didn’t happen to think much of the fact that foot long fish seemed to be jumping out of the water around me. Thought maybe they were happy or something. That’s what you get, being from the Midwest and all.
Apparently, I was the only large creature uninvited to the dolphin buffet. Must of been a way of telling me to go eat elsewhere, I guess.
Yeah, they had a good time, flipping out of the water after that, with me barrelling my scared butt to shore, looking like I’d just seen God.
If txchick looks anything like a cetacean, she must have a pretty good sense of humor.
I have no idea what that means, but heck, it made as much sense as anything Mort had to say.
Not that I’m knockin’ Mort.
Don’t wanna make enemies of anyone in possession of a prehensile penis, you know.
You just never know what might come of that.
Sorry about the speelling.
Ocean must be doin wired thangs to ma barain.
Could be Mort, too.
I live by the ocean (in Los angeles) as well. see dolphins jumping out of the water (if I get up early and bicycle)… Amazing.
Now that you told me this, don’t want them for a cell mate.
Mort, there are other ways to deal with the fact that you are a 35 year-old virgin who lives with his mother. Don’t lash out at txchick. She is, after all, an immigrant.
Oklahoma? Where’s that?
If Mort (received) his education (there), they don’t (teach) the proper (use) of parenthetical (expressions) in Oklaho(ma). That’s for (sure).
Why all the heat towards txchick?? She always has good info. Found a good green house developer because of one of her tips. She’s a little aggressive but she passes damn good info. In short…. layoff.
It may be the new troll program ….. reduce the housing discussion to a character assignation website. Not likely to work, but they’ve got to try something.
If we don’t feed em they will go elsewhere. Don’t feed the Trolls.
“‘This indicates to me that price is not the driving determination with buyers in this market,’ Waters said of his investment experience. ‘Uncertainty and ‘bubble talk’ are the issues.’”
This is an interesting point because people are really struggling to believe that houses are worth the price, from taxes to maintainence, etc… so, obviously, the home industry has a lot of work cut out to make people “believe again” that a rundown two bedroom is worth $300,000 or more…
I had the opportunity to visit my old neighborhood in Visalia this past weekend. I couldn’t believe what I saw: the Sport Chalet, Lowe’s, and other stores’ parking lots were two-thirds empty…something which would have never been seen on weekends a year ago when I lived there. Restaurants which had waiting lists on weekends were without such lists now. In fact, the whole town seemed to have lost half its population.
Even more interesting, helium filled blimps erected by McMillin, Centex, and other home builders trying to draw people to their houses. Did I mention the sign spinners hanging out on the major streets announcing “Incentives…New Homes for Sale!”
After having been gone for a year, it is a completely different world in the central valley. Everyone seems to feel depressed; no eating out, no shopping, no home ATM. And, lots of pickup trucks, RVs, boats, etc. for sale.
Now, we just need this attitude to spread up to the north coast!
Sounds good, I am looking for a nice BMW bike at 1/2 off low bluebook. Think those depressed floppers in the valley can help me out?
let those pilgrims eat dirt! over-extended trailer trash idiots!
As opposed to me… an under extended trailer trash idiot?
I say…..Long live trailer trash! Long live Billy Budd! And long live Billy Clinton!
….. Plus I like Kid Rock… just cause he was pooor!
imploder posts” just cause he was pooor! ”
Right on! Elvis was born in a “shotgun, shack” his daddy built for 200 bucks.
Yeah, same observation in OC. The local Wal-Mart was almost empty and the place is usually packed. Restaurants have a lot less traffic too. Zero waiting time at a couple of usually busy joints. And the same For Sale signs have been up for months. Unsold.
Not looking good in my neck of the woods.
As goes walmart, so goes the world.
I’ve noticed empty parking lots and empty stores in my area (Thousand Oaks) this fall as well, so I believe these anecdotes. However, wall street is still convinced that consumer spending is healthy and has risen lately. Can anybody point to some rational explanation or figures that either bear out what I see or what wall street sees?
It’s hard to judge where I am. California has built too much retail. Prop 13 means local governments favor retail development for stable tax income. Where I am, Northern/Central California Coast, more stores are fighting for the same customers. We’ve seen massive growth in retail and franchises in five years. YMMV.
JTZ - Are you in Mendocino or Humbolt County? If so, I’m curious about those markets. The prices there seem increadibly out of whack considering some of those towns are miles and miles from any kinds of jobs. I even hesitate thinking about them as possible places to live because they just seem SO isolated from what seems like some basic services (major hospitals in some areas for example).
I zip around LA/OC quite a bit and have noticed lighter than usual traffic on the fwys and city streets, even as gas prices have dropped. Of course the main commuter routes(405,5,605,ect) still get their usual jams during peak commute periods, but at all other times city traffic volume seems to have dropped off.
Another sinister note:it appears that there is a step up in ticketing for traffic violations. I have heard that when cities start to lose revenue during economic slowdown periods that their PD’s get marching orders to increase revenue thru ticketing drivers.
REmember driving thru along the 99 fwy on my way to SEquoia NP last year and was listening to the local Am Radio Station. They had a program segment where folks would call in to sell stuff such as old trucks, furniture, yard equipment,trailers,all assorted knick-knacks, ect. Sort of like Classified listings live on radio.
Visalia has grown out to become a large suburban-tract city no different than the hundreds of similar suburban cities of SCal except for the open Farmlands/Orchards/sierra oak foothill areas 30 min drive to the west, and the Magnificent Sequoia NP/Western Sierra Nevada mts 1 hr away. I can see how flippers/developers might have been attracted to Visalia. I have even thought of investing in property in nearby three rivers but my better sense prevailed. Nice area but subject to wild economic boom and bust cycles.
Just to add to this thread… We were in LA (Sherman Oaks) this weekend and went to The Cheesecake Factory on Saturday night. We got in with only a 10 minute wait. In the past, we’ve gone there on Sundays, Tuesdays, etc. and had to wait for over an hour. It was quite noticably less busy than before.
Don’t know if it was a fluke, as many of us in San Diego saw a possible slowdown last fall/winter (compared to previous years, same season), but things seemed to pick up again. Still watching and waiting.
” except for the open Farmlands/Orchards/sierra oak foothill areas 30 min drive to the west”
Error, should read “30 miles to the east”
peter m posts “Visalia has grown out to become a large suburban-tract city no different than the hundreds of similar suburban cities of SCal except for the open Farmlands/Orchards/sierra oak foothill areas ”
I have driven that route a zillion times, my son went to Reedly college. The only diffrence from LA is no money. No base to get started from unless you like picking almonds etc.
Or working at the local Wal-mart. Once stopped at a Visalia Wal-mart off the fwy 180(generals hwy) on way to Sequoia NP.
Apologies if this old news, but this graph blew me away: http://tinyurl.com/yzo858
From the MarinRealestateBubble.blogspot.com
Housing would need to fall by about 35% (from $20T to $13T) to get back in line with GDP. Of course that’s assuming that the economy doesn’t go in the toilet as a result of the wave of unemployment that will result from the collapse of the housing bubble…
This is definitely getting interesting!
Took another tour of the KB home developments in Sacramento and Woodland this weekend (only because they gave me $60 in gift certificates to do so
) Ive noticed that they actually sold a bunch of home sthis week and were pretty busy as opposed to the last few times I ventured in. Ive also noticed a lot of resale homes having their signs taken down though Ive never seen a “sold” sign on one. I think the inventory in Sacramento may be heading into the standard winter decline, prices should probably drop, but well see where things go.
Same thing in San Diego with sellers taking their homes off the market. Seen quite a few lately. I hear many are waiting for next spring. Should be a fun time for us bears!
ROTFL
Spring is when the bears come out of hibernation.
Neil
LOL! What RE deal did I lose money on? I made 33% in 18 months on a house in San Diego and haven’t bought since.
Thanks for the love, Mort. What can I say, 20 years plus in Oklahoma will do that to a person.
My only concern with you is that you keep that 4% body fat number.
txchick57, I for one am glad you are here. I find your comments insightful and you don’t mince your words when commenting on stupidity. That is refeshing and oft times very entertaining.
‘Uncertainty and ‘bubble talk’ are the issues.’”
haha bubble talk is ruining the RE market for all the investors out there in Cali.
How stupid can one get?