Have An ‘Outrageous’ Market Observation?
Some readers got a jump start on the market observations in the topics thread. “I’d like to see pictures of the most outrageous property for sale. I mentioned two the other day that were hilarious. I’ve since gone by to look at these dumps and they were the size of my living room selling for 1.3mm & 1.4mm.”
“I second the outrageous property listings. For example, this is in the Boston-area.” To which another replied, “Wow! That vinyl siding really holds up, doesn’t it? A hundred year old house, looks like new.”
Another reader missed a photo opportunity. “A particular condo for rent in Dublin would have made a great photo but the composition of the picture changed….the balcony that faces a busy street used to have not 1, not 2 but THREE For Rent signs! Honest! Now there is only 1 sign….I think the HOA got to them and had them take the extra signs down. Would have been a GREAT picture for the gallery.”
“Also…noticing a little more desperation on the part of the Bay Area RE agents. Listening to the radio, on the way to work this morning, an agent had a *spot* where she described 2 Open Houses this weekend….one in Livermore for **only** $619,000, and a **steal** in Danville for $1,049,000.”
Another added, “There is nothing in Danville to support $1M homes.”
A reply, “Now compare the Danville house to this. A tad overpriced in my opinion. (the overpriced comment was for the Danville listing, not the McKinney one, though in way, that one is also overpriced).”
A final observation. “How about examples of Realtor desperation? I just got a letter in the mail from a local realtor and I just couldn’t get over it. I’m in Sarasota/Bradenton and basically said a short window has opened for buyers due to the exploding inventory but will end soon with all the spring buyers that will rush in.”
“It was 1 & 1/2 pages long explaining how we’ll ‘miss out’ (said local median price will be $500k+ in 5 years) and a story of how she just helped someone buy a house for $19k off the asking price. She went on to say they now have an instant $19k in equity!! To top it off, the grammar was awful and the thing looks like it was done on a typewriter….. I actually want to email her but it may be a waste of time.”
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Oh my God you guys…All I can say is this. Do not ever e-mail a Real Estate agent about his listing suggesting that you think it is overpriced and that the house looks like a dump. Maybe I was out of line a little, but that guy was unreal. He e-mailed me back and used all kinds of profanity and told me to check the comps. I am still in shock! I wish I never sent him the e-mail now. I am still trying to recover emotionally from that e-mail. He destroyed his integrity with that profanity. He could had come out smelling like a rose if he responded with diplomacy.
You need to develop a thicker skin.
It is his near term livelihood that it at stake.
Don’t fret nancy…Its harder to get a driver’s license that a real estate license..There’s 1.2 million of them now the majority of which are moron’s…And get this…I am a realtor…
nope, I saw one guy take the written 5 times for DMV. Amazing, 100 questions he’d still score 15-18 (on mult choice). Yup, he got his. Kinda makes you wonder why bother. Just be honest & sell em at the counter.
I don’t know if these have been posted.
Living off $500 grand
Is it possible to live off the interest from $500,000? I’m single and 57 years old.
Cut Fannie’s Holdings, Critics Say
That Fannie needs liposuction.
Everyone in Danville CA thinks that their house is worth north of a million. I remember that we purchased a home on a golf course in Danville for $265K in 1997. That place has a long way to fall. For the bay area, it is one of the nicer and safer places to live. But not for $1M. Ciao to CA, and the sewer it has become.
I live near Danville in San Ramon. The houses do go for that much and for a million you don’t get a great house. Bet this is the same situation in LA and OC. Have decided to rent for a year or two at least till prices come down. Saw some open houses and the houses looked fine but $950K for 2350 sq ft is too much. It seems to taking longer to sell these houses as how many people can afford it. Price reductions on 15% of all listed houses.
That Danville home in the posting is a scandal for $1M. The kitchen looks like it was put together from Office Depot or IKEA. Maybe not even that nice. I’ve seen office kitchens that were a whole lot snazzier.
People are nuts out there paying $1M for a dump like that. Either rent or move. Don’t buy into the nonsense. Vote with your feet and get the h*ll out.
Those are some pretty sorry-ass million-dollar homes … You’d think that people who owned something “worth” a million bucks would own at least a few pieces of decent furniture, too…
HAHA! I’ve thought the same thing so many times! I can’t count the number of $800K open houses I’ve been to where you’re looking around at the furniture thinking “This is an $800K home?”
Sad that many are so overextended by the mortgage burden on a McMansion that they have no cash or credit left with which to properly furnish it.
Tim Wood-Housing: What Do the Charts Say?
Just looked at the Inland Empire’s (SoCal) Craigslist “rentals” section and “real estate for sale” section. There are close to 30 listings a day from desperate wannabe landlords and RE agents. Most of the pics are of brand new EMPTY homes with granite counter tops and DIRT LOTS. I guess about half of the investors are dumping their “investment” and the other half are hoping to ride out the crash with a renter. Good luck to them.
Here’s an incentive ad:
‘Save up to $75,000 off the price on select Shea homes. Whether you want to live in the Bay Area, Central Valley or West Sacramento..’
Spring is just around the corner in LA and SD. I’m waiting to see the determined developers enlist the services of movie stars to ladle the kool aid at the open house events while the attractive shills collect the signatures. The balloons, the music, the cleavage…oh my!
I remember in the 70’s, the developers of some housing in Frazier Park ,Ca(off I-5 near Tejon Pass) enlisted the services of Aldo Rey, who seemed to play military guys in the movies. Played a green Beret Sgt with the Duke in ‘The Green Berets’.It was during the recession Nov 73 to Mar 75. Housing was also in toilet.
It’s a bit off-track, I apologize, but theburstingbubble.com is certainly outrageous for pretending to be a bubble blog while playing host to realtors using it to drum up business. Several seem to live in Florida, and are determined to get bloggers to go to their real estate Web sites. The way they gush about Florida and its wonderful real estate deals is mind-boggling.
They’ve been posting pictures supposedly of views visible from inexpensive waterfront condos. Only one blogger is standing up to them. The realtors keep attacking him or her, but he (she) won’t back down. Here’s a link to the page involved.
http://theburstingbubble.com/forum/viewtopic.php?t=49&postdays=0&postorder=asc&start=105&sid=3ae52f4f92fe2059c03708a58b3ebc7a
Anton,
I posted on this blog. I hope it helps.
Hi King Cheese (love the name). I just went to the blog and saw your letter. I went back and found other ILiveHere posts, a lot of them blasting New Yorkers, that I enjoyed, especially since I too live in horrible Tampa (made worse daily by the influx), but I plan to get out of here at some point, either by going across the bay to downtown St. Petersburg (which is beautiful; the downtown, that is, not St. Petersburg), or somewhere. The New Yorkers can have if, though why they would want it, I can’t figure out. Just last weekend, I believe, there was a post here about how awful Tampa was. New York must be really terrible, if people want to leave there and move here.
I’m off to theburstingbubble to leave my own 2-cents worth.
Me too
Haha…blog warfare!
We’re still just a bunch of angry monkies, after all these years.
Looks like these realtors are pretty desperate to support the market, if their posting on blogs now. Six months ago they wouldn’t have bothered. This is a very telling development.
it just occurred to me that the housing situation is like the oil situation. years ago, it would have been unthinkable to have $3.00 per gallon gas price, but lately people seems to adjust to that price and it seems normal. the same thing can be said of the housing price; the longer the price stays up the more people will think it’s normal and they will look less and less at the fundamentals until sh*t hits the fan.
The big difference is that few people are risking their financial well-being by over-leveraging in oil.
Most people accept that oil is priced like a commodity: sometimes prices rise, and sometimes they fall. They do not accept that housing has become a commodity like oil.
The defference being you can choose an alternative to reduce your consumption of oil…Thats nothing compared to catching a falling knife of a mortgage you cannot afford…
I think the real paradigm shift over the last decade or 2 concerns the loan principal. While my parents’ generation would take out a higher mortgage to trade up, or a 2nd mortgage to fund an extension or remodelling, it would have been unthinkable to do a cash-out refi for consumption purposes. (Plus that type of loan wasn’t available then.)
Thinking of my parent’s group of friends (who are all retired), I can’t think of any who don’t to my personal knowledge own their home outright.
But a lot of my own friends and relatives have still got big mortgages going into their 50’s.
Wow. Danville postage stamp size lot with cookie cutter Fox & Jacobs looking house for over a million dollars?
I suppose that price includes the total kitchen and bathroom redo, including a Sub Zero, granite counter tops, custom cabinets, mood and practical lighting, chef quality stove, and in BR jacuzi, something better than mirrors and the Home Depot vanity and sink. And something besides beige would also be nice. For the money that is.
It’s like “Invasion Of The Body Snatchers” except its about RE.
I’d love to meet some of the folks that took on some million dollar debt for these properties. Apparently, our education system is completely failing us. It takes a special breed of person to be able to ask that kind of price with a straight face. Maybe instead of waiting tables while they audition for work, aspiring actors are now honing their craft as realtors.
Anton-
The site you referenced is disgusting. In the past I didn’t have feelings one way or another about RE agents, but I have developed some pretty negative impressions lately.
Thank you. I was afraid I was imagining it.
I too was completely disgusted by what I read. But everything ILiveHere said is true–I live on that Tampa trash-heap Harbour Island, and I have been getting literally 2 postcards a day for condos here, and the wording is pretty much identical to the crap the trolls are peddling on that blog. The truth is though, anyone out looking for a blog about a bubble is probably already convinced there is one, so that propagandist garbage will fall on deaf (and irritated) ears.
Hi tampaesq. Did you go back and read all ILiveHere’s earlier posts? They’re hilarious, and seem to have been upsetting the realtors from the beginning. His comments on Yankees cracked me up, and I loved the thing about realtors and carpetbaggers. I, too, have watched in horror as dumpy Tampa has turned into dumpy, crowded, expensive Tampa overrun by the repulsively pretentious.
I had friends who lived on Harbour Island, and said the grossest place they’ve ever lived, with lots of irresponsible Yuppies (Moms and Dads buying their places for them), poor construction, and dangerously high pollution. It used to be pretty, though. Now it looks like a Dore vision of Hell.
Our mayor is bending over backwards to accomodate every developer she can. There’s no end, evidently. I’m betting that Trump Tower never gets built, and hoping that the EPA stops the absurdity called New Port, but the EPA never actually protects the environment, does it?
Next election (city, county, state, federal, who cares?) I’m voting AGAINST EVERY incumbent, and I’m going to keep doing so till things straighten out, if ever.
the EPA are just the worst-rubber stamping everything-too bad
The whole real estate scene is insane, namely in Denver. Job relocation this year will move my family where the validity of many mortgages are probably thinner than the air!
For example, we recently put a deposit on a lot in two locations in the Denver area. One was a custom home community and the other was a new “urbanization” area ~ but a great location and school system.
Toll Brothers had a verbal ten day hold in the “urban sprawl” and within days corporate HQ sent a letter congratulating me on the purchase of my new Toll home. Hmmm, I am a bit vexed on that one. What kind of fuzzy math is Toll reporting for the numbers?
The custom home community still has the same 850K - 1.1M overpriced spec’ homes for sale with no other progress being made. Some of these homes have been for sale, with no mark down since August, hence why they are still sitting. Of course, a straight answer cannot be obtained due to the greed and ignorance of the realtors, developers, etc.
Toll as well has had inventory / open lots sitting for months; however, price hikes happen by the week. It must be the propaganda war to support “we had better jump on the bus while we still can” mentality.
Heck, you are even paying nearly $600K for a tract home in which I can jump roof to roof.
Very frustrating. I guess I need to start seeing which rentals will accept pets until this madness passes over!
Pikers!
Here’s how we do it in Silicon Valley: a 65-year old, 1000 SF house for $1.3M, in a Sunnyvale (nice place but it ain’t Palo Alto) neighborhood that is quite frankly below average — you are across the street from a trailer court and an apartment complex.
The flyer suggests that you tear down the house and build a 3-unit duplex — on that 9000 SF lot. Yah right. That’s a fancy way of saying “it’s overpriced and we know it”.
OH, my God! The nerve…..what did zillow say about this cracker box?
BayQT~
Although I don’t take ditech nor zillow as the Gospel, neither one of them give this property an e-appraisal close to $1.3M. The closest is ditech’s range of the $680’s to $800’s…and THAT range is outrageous. Even the highest comps (2005) were in the $700’s. Poor, misguided owner….and buyer, for that matter. If a deal is made anywhere close to the asking price, someone is just *asking* for a huge screw job…unless, of course, they have money to give away.
Question: 2005 prop taxes were $2,169. What will they be if this property sells for $1M?
BayQT~
Prop 13 - Taxes 1% of sales price plus bonds and special districts passed by voters. Unless Mello Roos. Taxes ave 1.15% in most areas. So, taxes will start at $11,500. Then increase 2% per year plus any improvements you put in. Pool, entertainment center ect.
What a joke! I have family in that town, and 2000 sf homes in nice areas approach that–but not some cottage in a below-median development! You can still buy a home in parts of Los Altos for that.
This was posted in a thread here a few days ago: $650k in a choice East Palo Alto location:
http://www.craigslist.org/pen/rfs/136179372.html
This meth lab must have granite countertops!
Prior sale prices (according to a commenter in that thread):
1/28/94: $133,678
6/13/94: $95,000
But remember, this is a CALIFORNIA location. Courtesy of There Is No Housing Bubble:
$650,000 for a boarded-up butt-ugly shack in East Palo Alto. I can’t get over that.
CL took that listing down today. What a shame! I liked the photos.
I looked it up on Google Maps. When I looked at the satellite photo I noticed that the house was next to a trailer park and close to a freeway.
Read about Media scare people out of buying house.
“Anyone who’s now waiting for a reduction in prices before buying is hurting themselves. Smart buyers to save money, are out buying now, before the annual spring and summer rush begins.”
Great opinion piece with no basis in reality. It’s the medias fault. Get out there and buy folks.
“Most homeowners have 30-year financing in place, which the lenders couldn’t demand be paid off even if they wanted too.”
This might true for those who have been there ten or twenty years, but the article didn’t mention that some 75% of all mortgage paper created during the last five years in California is ARM junk, and how about those HELOC loans. This piece is yellow journalism; Joseph Goebbels would be proud!
Virtually everything this guy says in his piece is absoulte BS and anyone who doesn’t read blogs like this and listens to ‘experts’ in the paper will eat it up as gospel. I would give just about anything to see him and his ilk eat these words in the future.
Notice on the bottom it says he’s a realtor.
That McKinney house is overpriced by at least 20-30K. You would think you were living in hell out there, and that that thing is a tract built shitbox.
Txchic,
The amazing thing about McKinney to me is the cows standing next to subdivisions. At least they have a Taco Bell.
I got an email today from a friend of a friend inviting everyone to her latest “fluff and flip” of a 1300 square foot place trying to make over 50% in just a few months. And this is in Dallas! This mindset is pervasive everywhere.
The house across the street from me went up for sale with an asking price of $330K in a neighborhood where the highest sale price I’ve ever seen was 306K (last summer). This place has been on the market now for about 5 weeks with two open houses and no offers. I don’t think there were more than 2-3 looky lous’s at the open houses. People are just nuts. The place should not sell for a penny over about 260-270K
If I see one more of those “seller entertaining offers between…” RE ad lines for an overpriced home I think I am going to puke.
Sellers in this market still think they are doing buyers a favor by offering their home for sale….
I nominate this San Diego pos.
http://tinyurl.com/pa4st
I remember stumbling across this place for sale a couple of years ago. The asking price was just over 400K. Looks like someone bought it for 415K in 2004 and now wants 500 for it. Looks every bit as good now as it did then!
Are the rats appurtenant?
You could certainly ask.
I’m not sure, but I believe that the roaches and termites convey.
Rats, roaches, and termites are the least of your worries. It’s the gangs that you need to worry about in that area. Trust me.
The SD Police crime maps for the area are definitely spottier than a kid with a bad case of chicken pox. But, I think that the local gangs and drug dealers would even be afraid of this house.
At least they didn’t say it was “cute as a kitten” or “dreamhouse” or some other absurd description.
I need to crank up the Californians Are Insane posts again. Thanks for the link!
This was in today’s Daily Breeze Real Estate section….written by a local real estate agent.
_____________________________
“Do the math, if the progression continues (remember Malthus on population growth from college days?)
we should arrive at the 400 millionth mark sometime around 2025. Okay so what’s this got to do with Real Estate? Plenty. In spite of the very occasional new development in our area- for example San Pedro’s proposed “Ponte Vista”, the housing demands of this undeniable population growth in our area, far exceeds the supply. Yes prices are sky high, but don’t expect them to flatten out any time soon. In studies done by the National Association of Realtors in spite of recessions, unemployment rates, and retail slumps, in worldwide large urban population centers, property values continue to rise. Granted there may be periods of “adjustment’ even of slower growth. But the fact remains that property values climb just as they do in the very desirable Southbay. And values will continue to rise- substantially. So for those of you well intentioned souls who will wait until the bubble bursts, good luck. We know you’ve been waiting for some years. For the rest - get in to property ownership anyway you can-make it this year if possible. ”
_________________________________________________
He goes on to give his contact information.
LOL. Malthusian limitations apply more appropriately to the exponentially increasing populations of realtors.
“In studies done by the National Association of Realtors…” No need to read any further or put any validity to these statements. They should be forced to place the tag “Advertisement” on any commentary written by NAR or a realtor. The SD Union Tribune always has the front page of the real estate section on Sunday with an economic analysis…it has been B.S. for the last several years and if you look it is always written by a NAR person or local realtor. They should be held accountable for their statements, but aren’t…they will just claim it was their opinion. Problem is most people think this is legitimate advice written by someone looking out for them.
I checked the records for that $1M home in Watertown mentioned above. It was purchased for $660K in june 2004. 60% in a year and a half–not bad. Looking at the photos posted on Ziprealty it’s got ALL the flipper specials–tons of travertine tile, granite counters everywhere, stainless steel appliances, raised-bowl sinks in the bathrooms. And yet, ugly, ugly vinyl on the outside (vinyl siding is a mortal sin on an older house–do not pass go, go directly to hell) and what’s up the addition on the front? Sort of makes you want to go over there and post warnings.
Is there a book or website or something where one can learn to spot a flipper-house? Or even one thrown up by corner-cutting builders? It’s hard to believe that the houses that are being built or worked on at the height of the boom are not going to become problems for somebody for a long long time.
Granite countertops, for example, look nice, and are nice, but I can’t believe that they aren’t going to make a house look really dated in the future. A few years ago you never heard about them. Now half the pages in the newspapers have the phrase “granite countertops” on it somewhere. I bet any house that has them is going to look so dated to the housing bubble that people will be ripping them out for decades.
Property sales are recorded by a city’s assessor’s office, and many cities now have online searchable databases (a primary source for Zillow’s data) that include sales data. A house being sold for a big increase over a recent purchase is likely a flip. Watch the flipper shows on HGTV, etc–patterns clearly emerge in the ways houses are “upgraded.” The houses are usually obviously upgraded for sale, and have not been lived in since renovation.
Yes, I agree that this “flipper look” will seem very dated soon–not that there’s necessarily anything wrong with the individual items, but the whole package comes together in a style that is going to mark them. I also find it weird that people would care more that appliances have stainless steel exteriors than that they have quality interiors. I don’t want to pay a premium to have someone do my appliance shopping for me.
Ok, check this out. With the overkill on granite countertop and raised-bowl sinks, guess what’s going on now? The granite countertop owners are discovering that there are certain stains that either are VERY difficult to remove or cannot be removed (I suppose, after a period of set-in time).
Also, the vessel sinks (above counter) are getting questionable results from users (online forums)….some say they are great, many say that there is a lot of splash and things that you set on the counter wind up out of the line of vision, under the bowl. There was also some concern with chipping of the bowl since it is now exposed. My conclusion from what I read is that it is dependent upon the size/shape of the bowl AND the positioning of the faucet in regards to the splash issue. From interior designers points of view, installation of both of these popular remodel elements are too wide-spread and will be dated very quickly.
But if you are keeping up with the Joneses, who cares, right? LOL! It’s just another thing they can spend their HELOC on. (Hmmm…lemme see…what can I buy now? I know! A parallelogram-shaped, granite vessel bathroom sink with a gold inlaid, gooseneck faucet. That’s the ticket!)
BayQT~
Another laughably priced house with a mean HOA in the deal.
http://tinyurl.com/jud6s
Ok, not as repulsive looking as the last one I linked. This one has a dinky yard (note the lack of pictures), new granite countertops and is very 80’s so-so inside. What you won’t realize until you move in is that the open space behind the development has loud Amtrak and Santa Fe trains that run through it day and night, fairly close to your million dollar house.
Choooo chooooo!!
Only a couple of the rooms in that place look usable; the others look like a bored wife’s playhouse, like playing barbie and ken at 100% scale with payments included.
That’s a very tacky house. It looks like something old people moving to Florida might settle in. Very much a tract house, with a Sun City quality. I would have guessed a hundred thousand, tops. The kitchen ceiling says it all.
I got one that is really great! A $1.5M Townhouse in Leesburg, VA. For those not from the area Leesburg is about 40 miles outside of DC and is about 1.5 hours by car during rush-hour. But this TH boasts 3BR and a 60+ gallon hot water tank. They might as well post in the description perfect house for anyone with more money than brains.
http://tinyurl.com/gcaus
Northern VA,
Did you click on the link that said, “Can I lower my payments?” Two of the scenarios (for a $8K+ payment) are with a 5/1 ARM and a 10/1 ARM. The other is a “Smart Pay” option that gives you a $7,700 payment.
Oooohhhh. What a deal that is. What a joke. And there is no real picture of the place. At least I didn’t see it. The one posted looks like a clip art standard.
BayQT~
This gem on ny craigslist:
BUBBLE BURST-PROTECT YOURSELF NOW
——————————————————————————–
Reply to: hous-136844315@craigslist.org
Date: 2006-02-25, 12:17AM EST
Protect yourself and do as all the rich people are doing! Get all of your equity out of real estate before the BUBBLE BURSTS and you lose it all!
Fast, Easy and No upfront costs. YOU are number ONE. Email for step by step guide to buying Investment Properties below market and make money!Pay plan is $300 on very 100k borrowed.
Payment plan is 1.25%………UNBEATABLE!!!!!!!!!!!!!……this is a no brainer.
no — it’s NOT ok to contact this poster with services or other commercial interests
Please feel free to email this scammer. Can you believe he’s pushing equity extraction BECAUSE of the bubble? Oy
Speaking of Realtor desperation, I had not heard from one of mine in Westchester, NY in months…this week, two new listings, two emails. And this is in one of the most expensive suburban towns out there. Gotta love it.
Need a good laugh. Look up MLS #25138534. 3 Bed/1.5 Bath/1180Ft2/1959 house. Asking $1.5M.
Zillow says $582K
10 Years ago house worth $240K
House is next to busy street and train tracks.
Unbelieveable!!!!
More Seattle madness. MLS #25122180
2 Bed/1.5 Bath/2080Ft2/1928/2.17 acres
Asking - $1.2M
Zillow - $379K
1997 - $282K
No view, no water,…….P.T. Barnum is rolling over…..
One last laugher. This is a perfect example of a crappy house in a good area. But still wayyyyyy overpriced!
MLS #26014895
4 bed/2.5 bath/2900Ft2/1958
Asking - $1M
Zillow - $717K
1997 - $310K
Hey, but “we’re different up here”…….LOL
MLS #26019781 (click on my name to get to RE URL)
6 bed/2 ba/2400Ft2/1918
Asking - $599K
Zillow - $396K
1997 - $150K
Given that this is “downtown” in a neighborhood where you wouldn’t want to walk at night, I would say 1997 prices would be pushing it.
Couldn’t resist this last one as this one QUADRUPLED in 10 years.
The Bubble here is as outrageous as California. We got the traffic and crowding without the sandy beaches, warm weather, and palm trees. Mountains are nice though and the air is better.
This is what I said this morning at housingpanic.blogspot.com/ concerning the real estate bubble and its relation to Ponzi schemes:
“I’ve been asserting for years that the insanely inflated real estate market here and abroad is simply another pyramid scheme, a grandiose version of Herbalife, which was huge in the early-to-mid 1980s (and a virtual bedrock of Yuppiedom). And I have no doubt that many of the scammers behind today’s real estate bubble are recycled multi-levelers resorting to their standard bag of tricks. There are always going to be people of no conscience trying to get rich by ripping off others, knowing full-well that at some point those coming into the scheme behind them are going to lose everything.
I think it highly significant that almost every community in America seems to have suspended its zoning and other building restrictions just in time to accomodate this bubble. We have giant, expensive, but poorly-built, houses going up in lower-class neighborhoods of tiny shacks, and flimsy million-dollar condos being build in slum districts and on waste lands, or on little shards of downtown property with no setbacks. And this is happening everywhere, not just in one or two communities, suggesting that the convergence of events is not spontaneous at all.
I suspect many politicians and government officials are somehow involved, and that calling this a Ponzi scheme is generous. We are talking about the biggest get-rich-quick flim-flam in history, with, potentially, the most devastating results.”
Other letters on this posting have pretty much followed the same path. I am wondering though if it is absurd of me to suspect a government hand in all of this. I always laugh at conspiracy buffs, but Ponzi schemes don’t just happen by themselves, especially when every detail (e.g., changes in loan requirements, zoning laws, sudden appearance of endless government cash, etc.) falls perfectly into place. If the bubble isn’t an orchestrated scheme, it certainly bears a remarkable resemblance to one.
If the bubble isn’t an orchestrated scheme, it certainly bears a remarkable resemblance to one.
The government needs younger people to work hard and pay taxes in the next 20 years to support the graying baby boom generation.
If they have a big fat mortgage they may be more willing to work harder. On the other hand, if they have a big fat mortgage, they won’t be able to compete with China and India where the cost of living is much cheaper.
People vote for leaders that tell them they can have everything. Spend money and borrow it from future generations. At some point this cycle will end. I wish I knew how.
I will guess how…Jobs & Interest rates…either of which can tank the entire market…Lose your job can’t pay your mortgage must sell..If to many people lose there job to many houses come on the market supressing the price sometimes below what is owed on the property..Lenders forclose and suppress the price even further in what we call a short sale (Sell the property for less than what is owed).
The interest scenario can wreak the same havoc..Interest rates rise enough that your payment increases beyond your ability to pay even IF you have a job and the same cycle can occur…
I have seen it before..It isn’t pretty…
It is 3:30 here in Mclean, VA. My apt complex just got papered with fliers for an open house “2-4″ today. It is for a renovated condo down the street. There is no price on the flier, nor an exact address, so I have no clue how the RE agent expects people to find it. Even worse is that this is the third week that they have done this, at the same time. This agent obviously has never had to work to sell a place before. From what I can tell, he has not started any sort of learning curve yet.
I suspect that it is the agent that owns this condo and is now stuck with it. Otherwise, he has big problems if this is the best property he has in his portfolio.
Todat the condo conversions next door have “Free Valet Parking”. I guess the drop from $420K to $380K hasn’t been enough.
Not particularly outrageous, but… I went to lunch with my wife’s cousin and her kids this afternoon in downtown Huntington Beach. I couldn’t believe the number of open house signs. We stopped by a place we’d seen last weekend; they’d dropped it another $10k since then (it’s now $939k). Also visited some other open houses, some brand new/not completed for 2.something mil (come to think of it, that IS pretty outrageous); some built in the ’40s for 1.8 mil. Cray-zee.
Anyway, the cousin and her husband purchased a very big 4/2.5 with pool in HB in 2001 for $400k; Zillow (which I just introduced to her) values it at $905k today. As we were driving around, she kept telling me that we *could* afford to purchase, that we should stretch beyond the standard guidelines (28% of monthly gross, 20% down, 30-yr fixed)—failing, perhaps, to realize that there are NO houses in HB under $600k, which is WAY beyond what we’re willing to pay. Sadly, if typically, she kept spouting the typical phrases: “Housing prices always trend upward,” and “Prices are only going to level off; they won’t come down.” It struck me as odd that even though we’re the same age and lived through the last housing downturn, she still refused to consider that the next few years are apt to see a major downturn. I said, “It defies logic. What happened in the last 10 years to make a $150k house suddenly ‘worth’ $650k? Nothing besides cheap money.” I mean, we were looking at the same bumper crop of open house signs, ferpetesake. And it’s not as if she’s going to lose money on her place.
I just don’t get it.
I am in downtown HB now.
I drove by Goldenwest and Yorktown in Seacliff. Literally the open house sign corner was out of land. No more signs could be posted on that poor corner.
The new slogan should be hurry up and buy your open house posting RE cause they aren’t making anymore of it.
Oh yeah and don’t forget they aren’t making anymore buyers!
I just remembered a golden nugget of…uh, “wisdom” that fell from the realtor’s mouth at that open house (850sf at $979k): “Sure it’s tiny, but you’d buy it for the land.”
What is out of whack is in Irvine they are building these small 550-600 square feet 1 bedroom places on Jamboree south of the 405 and want $400K+ for them. So you pay $3,000 with taxes and association to own when a similar place would rent for easily $1,400 and include a garage instead of parking in a cement structure
curtis, i can explain what is going on in your cousin mind…she lives in orange county,all her personal wealth and sense of well being is tied up in her homes price,she refuses to except the fact that she was lucky enough to own a piece of property in one of the most bubbily areas of the usa,if u take away their home valures these folks in orange county have nothing,but their horrible commutes on the 405 and the fact that they live near the ocean…most folks who own homes in orange county deny that the bubble exists,shes like bode miller,talking out of the side of her mouth…
I voted with my feet and left California. Hope others do the same. Emailed some of the realtors on the realtor.com - let’s impress them with their fame on Ben’s blog