Post Local Housing Market Observations Here!
What do you see in your housing market this weekend? Auctions?
Builder incentives? “ILO Group of Houston, Texas, is pleased to announce the launch of the Punctual Payment Program. For the first time in Texas, ILO Group is offering any new buyer of a condominium at Towers at Clear Lake, no payments for 12 months, no HOA fees for 12 months and no closing costs.”
Realtor advice. “Being that we’re in the Hamptons celebrating the Film Festival, let’s start with the market out East: how did the market do this summer as compared to last, and is the ‘bubble’ bursting? [laughing] No, the bubble is not bursting.”
“But there are so many For Sale signs? ‘It has definitely changed from an overheated market where the seller rules to a much more balanced market. I think that sellers have to pretend they are buyers. I often ask sellers ‘Would you buy your house at this price?’”
Tax changes. “After leading the region with double-digit increases in property assessments, Loudoun County taxpayers should expect their home values to decline in each of the next two years, county budget officials said yesterday. A softening real estate market means tough times for government services.”
“County Administrator Kirby Bowers told board members that he has trimmed more than $40 million from departmental requests in such areas as public safety, parks, libraries, health and welfare. He said the shortfall could grow, depending on what the school system asks for. Schools account for nearly three-fourths of the current year’s $1.1 billion budget.”
A failed landbank? “One of Britain’s biggest landbankers has gone bust, leaving investors who paid a total of £7m for tiny slices of farmland, wondering where their money went.”
“‘I fully expected 20% annual returns over the next decade, multiplying my money up to eight times. I know that’s a lot but I did not go into this investment with my eyes closed,’ says one Kent investor who asked for anonymity. Now all he has is title to a plot of land in the middle of a field which is unlikely ever to gain planning permission.”
I fully expected 20% annual returns over the next decade, multiplying my money up to eight times. I know that’s a lot but I did not go into this investment with my eyes closed,’ says one Kent investor who asked for anonymity.
He went in with his greedy eyes wide open.
Now he has a better idea what is ment by the term ‘risk’.
“Now he has a better idea what is ment by the term ‘risk”
more like “sucker”
I need this guy’s phone number. My MIL owns some swampland in Florida she got suckered into decades ago and I would like to help her get rid of it.
A few years ago the swampland suckers were worked over via new scheme.
They were told that if they would only buy the adjacent plots, their land holdings would become large enough to be sold to a waiting buyer.
That just indicates that complete financial and mathematical ignorance (and greed) aren’t limited to the USA.
A mere three fold excess over the riskfree rate. He should have bought GOOG instead.
The Towers of Clear Lake is a 216 unit development of the banks of Clear Lake in Webster, Texas. Ammenities include: large expansive open air atrium, wireless Internet cafe, gourmet coffee bar, controlled access gates, pool, fully equipped fitness center, lighted tennis court, sand volleyball court, private boat slips, lighted pier and picnic and grilling area.
I went to high school at Clear Lake High School in that area. I could spend an hour telling you what a joke that development is but let’s start with the area is at or below sea level and a flood magnet.
Well then, the builder should upsell buyers on the value of owning on the flood free floors!
Love it………hahahahahahaha
not to mention “waterfront views”
Right at your doorstep.
Are you a turtle?
I fully expected 20% annual returns over the next decade, multiplying my money up to eight times. I know that’s a lot but I did not go into this investment with my eyes closed,’ says one Kent investor who asked for anonymity.
He was blinded by greed.
He couldn’t see clearly because of the dollar signs in his eyes.
Ka-ching!
Now all he has is title to a plot of land in the middle of a field which is unlikely ever to gain planning permission.”
The ultimate speculator Greedheads-purchasers of raw land with no deeded access.
Absolutely.
I have absolutely no sympathy for the investors here - whether or not the “landbanking company” still trades or not, they still own what they paid for, which is a small piece of a field, which will always be a field.
It is their own greed which is to blame.
Loafer
He just paid a bit much for a vegetable garden,
with “potential”. Just didn’t work out too well.
But, on the bright side, he has a nice plot for potatoes.
I agree that for a good percentage of speculators it was greed, but I’ve known a few people who “invested” in RE, and for some it was a peculiar kind of desperation. They couldn’t ever get ahead of the ball through the sweat from their brows, so they were looking for the sure thing that’d pay their medical in their old age and hope to leave something for their kids…
What happen to the old rule of thumb 2 1/2 times your income rules when it came to your mortgage? How about using one income in case someone loses your job, sickness or god forbid a divorce. We know mortgage brokers are not allowed to ask a young couple if they plan on having children or at least take the daycare expenses in a count when they are planning a budget. We also know that folks in expensive cities have always been renters, New York has had renters for ever…Who thought it was a good idea to be mortgaged to the hilt..As a social worker turned Realtor. Most of my business is done as a real estate counselor, advocate and provider of current education material. It works for me and my referrals keep coming. Our clients are asking for sound advice, we owe them that! Remember, you can run, but can not hide.
Quite simply, Glenda the good witch, it restricts LEVERAGE.
Those rules are for people BUYING houses and planning on staying in them for some time.
In a 20% pressure-cooker market, using housing as an INVESTMENT Opportunity, then you want minimum down and maximum price you can get a loan for.
Try 1000 down on a 500,000 house, making minimum payments of 833 a month for 12 months: 11,000 in cash and payments nets 100,000 for living in the house for a year. Net gain, is 89000 and you got to live in the house for FREE>
What a deal!!!
Live in a house for free… I represented a buyer a few months ago on a home that the seller had only lived in for one year. The day before closing we found out the seller had not made one house payment, so the bank was going to foreclose. My buyers were packed and had already given notice on their apartment. The apartment had already been rented out. So this was a short sale, with not enough money at the closing table. The sellers had no money. I ended up giving up my commission, since the bank could care less that it was going into foreclosure and would have just been put it back on the market. So, when everyone wants to rag on the Realtors, remember it isn’t everyone that is evil. I believed that my buyers’ lives were more important. It wasn’t their fault that these sellers thought it was ok not to pay on the mortgage and live rent free for one year. I understand leverage. What happens when it doesn’t work anymore? A lot of folks are going to get hurt on the way down. Remember not to step on someone on the way up because you are going to see them again on the way down. Still the good witch!
The trouble with your comment, Glenda, is that the vast majority of realtors don’t “represent” buyers or act in the buyer’s best interest. They think nothing of working in collusion with crooked appraisers and unethical mortage brokers to shoe-horn future FBs (naive and stupid buyers) into “deals” they can’t afford. The coming RE crash is going to flush out not only the speculative excesses, but also will force the realtors who want to stay in business to actually start earning their money for a change.
By giving up your commission, you personally paid for the seller’s year of rent-free living.
Your right!
What was I to do. Reward the seller or hurt the buyer. I was a buyers agent. So, I did what was right for the buyer. It was Pay it Forward! They knew what I did and in my business it is referrals that makes your business, especially in a slow market.
just like extending margin rules during the tech bubble! greed + stupidity + loose rules got people in trouble!
From the sales pitch for the ILO group marketing Houston condos:
We have carefully selected condominium developments located in trendy areas of Houston within walking distance of the finest shops, restaurants and entertainment.
LOL. We dont “walk” anywhere. First, you will die of heat stroke in the summer [which lasts about 8 months here]; second, you will get run over trying to cross the streets.
And for the Clear Lake development, Texchick said it all.
Dottie Herman represents everything that is wrong with real estate and brokers. She lies through her fake whitened teeth. The fact that she is in a photograph beaming with Donald Trump makes me want to run for the hills. How many people are really going to finance one of those mega million Hampton homes?
It’s stupid cult like dressing. You see the same thing with used car sales-men. They all try to dress for sucess to the point where it becomes a stereo type.
The photo with the Donald is priceless. Look at her freshly whitend teeth, fake blond hair, and slightly tightened facial skin.
Does anyone recognise the other people in the photo’s?
The last few years our tax assessments on our homes have gone up sky high, I wonder if they will be as quick to lower the assessment as home prices drop. When we bought our last home in 2001 they were already sending us a tax assessment that was for more than we had bought it for the month before.
assessments go up, assessments go down.. but the tax bill will always just go up… just adjust the tax rate….
I often ask sellers ‘Would you buy your house at this price?’
Good one.
Better yet, could they qualify to buy your house at this price?
You will propbably attract buyers just like yourself, how are they going to afford this? DAH!
These are the two most effective arguments when discussing the real estate bubble with those who are sitting on a pile of equity and refuse to believe prices will ever go down. Whenever I introduce this argument, I can see the revelation on their faces as their confidence turn to trepidation and doubt.
In the Verde Valley, AZ, the number of for sale ads has seen a big decrease. But the inventory on the MLS is at a record, suggesting FSBOs are waiting for the spring. Here are some bits from realtor ads:
‘$598,000 Sellin Below Replacement Cost. This custom home in La Privida at Verde Santa Fe (Cornville) is a must see! Top-of-the-line upgrade too numerous to mention.’
‘$1,100,000 Drastically Reduced! Brand New SW/Pueblo style home on 1 acre of treed land with red rock views. Home has never been lived in!’
‘Lake Montezuma $244,000 Priced under appraisal!! Landscaped home sits on the top of the mesa on two combined lots.’
‘Reduced by motivated owner! Move in ready in Village of Oak Creek. A great buy at $379,000.’
I drove through Miami Az this weekend. I bet its cheaper there?
Nice view of giant Slag mountains and blackened smoke stacks. I couldn’t tell if anyone lived there? Has the mining has made it un-inhabitable?
‘Wal-Mart Stores Inc. predicted a rare decline in monthly sales on Saturday, even as U.S. bargain-hunters jammed stores in search of gifts at the start of the crucial holiday shopping season. The retailer will provide a final monthly sales report on Thursday, when most other major chain stores report their November figures. This would mark Wal-Mart’s first monthly same-store sales decline since April 1996.’
OT rant, but I was at a Walmart a few days ago, in the sporting goods section. I wanted to ask a question to the attendant of the department.
Instead, I had to wait in line behind two “Latino” guys, both dressed in gray hooded sweatshirts, as they had decided to complete their purchase at the sporting goods. Their hoods were pulled up, looking like they were trying to hide their faces, and the only apparent reason to buy at the sporting goods desk was they wanted to add to their anonymity (there were fewer people there than in other parts of the store). Time was around 10pm.
Their purchases? Five cans of spray paint each. In colors ranging from purple to gray to black. It was so obvious these “homeys” weren’t planning on painting their barbecue. They were vandals, probably taggers, probably gang members.
It warmed my heart that the Walmart clerk never said anything. I felt the thanks giving of the season, being thankful that Walmart was happy to sell $40 in spray paint that was obviously going to end up as thousands of dollars in vandalism damage to the local cities.
Not that I think the clerk was supposed to say or do something about it. But just the plain fact of the obviousness of their intentions, and Walmarts duty primarily to its profits and shareholders, and lack of regard for costing the city a lot of money is amazing. Of course, they probably would have been labeled racist and civil rights violators had they said anything to these two guys.
FWIW, this was in Orange County, CA. Ah, it’s so nice to be a Latino in southern Cal. A weird kind of privileged class.
I always wonder by cities with huge graffiti problems just don’t ban the sale of spray paint?
So you would take away the my right to buy spray paint because of some criminals? That would make you a criminal as well. These hoodlums should be shot on sight, but we can’t do that because the government protects these crooks, after feeding and housing them from birth with food stamps and Section 8 vouchers, etc.
http://www.corpun.com/awfay9405.htm
For problems like “tagging” and vandalism, Singapore has shown us the way. In the 1990s a punk American teenager, Michael Fay, found out the hard way that capering with a spray can just doesn’t pay in SIngapore. He got four months in jail, a $2200 dollar fine, and (best of all) got six lashes with a bamboo cane (wielded by a Karate black belt) to his sorry ass. Talk about a concept whose time has come!
That’s nothing. A couple weeks ago I was taking out a couple large items to the dimpsty dumpster behind my building and when I came around the corner busted two teenagers spray painting the side of my building. It took me a few seconds to figure out what they were up to and for them to figure out if I gave a damn.
I gave chase and caught one of the idiots by his flopping “hooded” jacket. Yeah the punks in Russia are sporting the homeboy look also. His buddy got away but not for long. I hauled this kid into the concierge’s office who called the local militsia (police). The cops who came down were so happy and beat him pretty good right there in the concierge office. He gave up his friend’s name and cell number and the cops called him up on his phone. Told perp no. 2 they had his buddy and if he didn’t bring his sorry azz down there right now it will be worse for him when they find him. About five minutes later the second dude showed up at the entrance.
I gave a brief deposition but they said they didn’t need it since the the two cans of spray paint in their backpack and the paint on their fingers matched the paint on the side of the building. The cops slapped the two kids around some more when they took them out to review the artwork on the side of the building probably for my benefit to show they are serious.
Anyways to make a long story short about a week later the concierge told me the cops had busted about ten guys aged 14 to 22 who were spray painting around in the area.
Personally, I think that’s the way to deal with dirtbags like this. Instead of wasting taxpayer money hauling them through the court system, just give them a severe enough beating on the spot that they name their accomplices and maybe think twice or even three times before they vandalize anything else. Then make them clean up not only their own graffetti, but a bunch of other taggers’ work too.
waterboard them!
Thats called Turkish justice and its sick. Temporarily satisfying, but sick. Kudos to P’cola Popper for catching the kid, but glorifying that sort of vigilantism is just sadistic and juvenile.
Josh
No, sadistic and juvenile is being the idiot that slaps them on the wrist so they don’t learn their lesson.
I don’t understand the mentality of people who think it is cool to dirty their own neighborhood. When the society is full of dumb people such as that, what does it mean for the future of our society? Does that make you want to buy gold or would you be so impressed and inspired to buy an S & P 500 ETF?
My father was living in Singapore at that time. One item that is often overlooked in the reporting of that incident is that the car that was spray painted belonged to the Minister of Justice (or whatever) for Singapore.
Hobokenite — I was in a neighboring country and followed the news daily and in detail. That kid spray painted many cars, not just one. He was a big-time smart-ass, even after his arrest.
Thats called Turkish justice and its sick. Temporarily satisfying, but sick. Kudos to P’cola Popper for catching the kid, but glorifying that sort of vigilantism is just sadistic and juvenile.
Josh
Vigilantism? Oh please, Nancy. P’cola Popper caught the punk and turned him over to the proper authorities, the militia. If they dispensed a bit of rough justice, that’s too damned bad.
A few days ago some shitbirds spraypainted all kinds of obscene drawings and profanities all over the playground equipment at the local park, close to where my kids line up to catch the bus. Believe me, if I could get immunity from prosecution, I’d happily take a baseball bat and give whoever did it the kind of beating that makes cops say, “What kind of animal could do this to another human being?” Then I’d go to whatever sorry excuse for a father who spawned such trash and beat him senseless too, on general principle.
Society is in such a sorry state because it has failed to send a clear, unequivical message to the scum that actions have consequences, in the only language that the scum can understand.
Amen! I feel exactly the same way. I came home from LV on the 60 west and as I am approaching the 57 where DELAYED construction has been going, tagging is all over the the freeking bridge that I thought it was a waste of $ to decorate the walls of the bridge. I think we ought to pass a reward for any citizens to shoot a tagger on the spot. Call it year round duck shooting season if you’d like.
it’s illegal in LA to sell spray paint to minors
http://www.iir.com/nygc/Municipal%20Codes/municipal%20codes–graffiti%20tools.htm
And that’s worked so well in preventing grafetti.
Home a loan,
You’re a racist ass. I agree that they were probably punks up to no good. However, you did not need to identify their ethnicity. Therefore your use of the term “latino” was gratuitous.
I live in a white neighborhood and the teenage punks around here are white. They spray signs, walls, trees and vandalize our property.
Yes, I used an ethnic identifier. The difference is that mine was useful; in order to highlight how gratuitous your use was.
Agreed.
Know some friends that went to look at a rental house in a nicer part of LA (North Hills SFV). The “owners” of the rental said “just move in and pay us so we can keep it out of foreclosure.”
I think a lot of rental will soon be foreclosures!
Get the address and keep track of it. Let us know how it pans out.
Here is the address:
10006 Arstead (Knowlwood Est.) Granada Hills CA.
the house next to my folks in n hills in san fernando valley has been on the market 2 months.first listed at 559k then reduced to 549k then 539k.now he says he wont go any lower,he bought it 5 years ago 185k.this house has no air cond.and is only 1200 sq ft.if he lowers now to 509k or 499 it will sell quick.he will chase the market all the way to the mid 400s by next summer.
“just move in and pay us so we can keep it out of foreclosure.”
Personally, I wouldn’t want to rent such a place. The owner seems to be a buck or two away from losing the house, after which I’d be out on the street.
MORTGAGE FRUAD. MORTGAGE FRAUD. MORTGAGE FRAUD.
It just keeps screaming at me. I have started perusing for it in the closed sales and the pending MLS listings in Sacramento. I have found SIX in the last few weeks in Placer County, without even trying. Total fraud: $980,000. I am establishing a personal relationship with the FBI, DRE, and the county DA’s. I am making it my mission to bring these crimes to the authorities and push for prosecutions. Based on my initial responses from the authorities, I must educate a few of them in the ways of these criminals. My tenacity is relentless and I have had enough. When all is said and done, I will make txchick57 look like she is dating Casey Serin.. Enough is enough. I will keep you informed under a new “handle”, like Sgt. Friday, or Palladin….or any suggestions? Have gun, will travel, reads the card of a man….knight without armor in a savage land….
keep up the good work and please keep us posted
A new handle? How about Don Quixote? Nothing wrong with tilting at windmills, just don’t expect things to change. The corrupt system is too entrenched to be changed; big money likes it that way.
Diceman, I understand your reservations. All of my workout buddies said the same thing when my credit cards were stolen at 24 Hour Fitness and used in Reno. They said to forget reporting it. I worked with three law enforcement agencies. We identified him, tracked him to Palm Springs and the police killed him during the arrest when he tried to unholster one of the officer’s weapons.
It took a lot of time and trouble, but the sense of satisfaction is going to be worth it. My first salvo with the FBI has been somewhat frustrating, but I have an appointment. The Bubble Community shall not be denied.
Right on JR. These crooked sub prime lenders are killing this Country. They are the scum of the earth.
Go for it, JR — hope you’re successful.
Start your own blog with threads on every new case. Nothing speeds justice like shining light on dark doings.
Regardless, more power to you!
My hat off to you Jr. Keep up the good work .
Check this out:
http://www.rockbottomdrhorton.com/
Local housing mkt observations. Took a drive around Wildwood NJ with a couple of friends yesterday. These shore towns are not even toast, they are cinders. ForSaleForSaleForSaleForSale etc, and of course Luxury Condos Under Construction anyway. Cape May didn’t look so bad, but my friend, who has been involved in development there for 30+ years, pointed out a whole bunch of small beachfront motels that are scheduled to be replaced by condo-tels. I.e., collections of 2BR or 3BR apartments labeled “hotels” despite the absence of lobby, dining room, or any of the other usual common facilities of a hotel. Seems to me on this blog I have seen rumblings of complaints from individual condo-tel owners about the teeny weeny revenue they receive. A racket like time-shares.
Hey AZ. You were in my neighborhood.
The crooks are paying themselves and their brothers 6 figures salary for management fees.
Thanks for the suckers.
You’re so dead on. I rented a cheap place in North Wildwood this summer and I couldn’t believe all the motel-to-condo conversions PLUS the new condo construction. What’s really sad is that most of Wildwood attracts working class people — many of whom have been suckered into buying this crap over the last year. These people cannot afford to see their equity go negative. Greed kills.
Sacramento still has tons of for sale signs all over the place. I see tons of for sale by owner signs. I bet at least 10% of the homes are for sale by owner, which are not reported on MLS. People are just more savy about doing things themselves than they were during the last crash. The internet makes this easier.
Are you starting to see more sale signs converted to rent/lease signs as well? It’s happening on my commute (more on the Antelope end than in Roseville, so possibly more of a tactic for the low-end than the Roseville McMansion crowd).
For the past 1-2 months, I have been seeing a lot of “executive” rentals listed for the Central Coast, especially in North and South SLO county. When a street address is given so I can do a Zillow search, these places have pretty much all been purchased in the past 1-2 years. Some are simultaneously for sale and for rent (although not always advertised as such).
There are more lease option signs out there that is for sure. I think the flippers who are in jam and cannot sell are opting for the lease option. For them it it like another marketing technique or something. They can get their flip house rented and in the end sell at negoitated price from two years ago or they pay them 20K or something like that. I bet there are people out there who go for it. More fools who lose. I wonder if some poor bastard signs a rental agreement with a lease option clause and year or so later they are going what the hell did I just do.
This whole housing market is so full of fraud and snake oil salesman it makes me sick. I know people who are stuck in their home with an ARM and cannot refinance for a two years, maybe even more without the prepayment penalty. In the mean time their house is losing value and by the time the two years is up they will be lucky to refinance.
PEOPLE PLEASE LISTEN YOU ARE LOSING YOUR ASS IN THIS MARKET. DO NOT BUY AT THIS INFLATED PRICES. YOU NEED TO LOW BALL YOUR OFFERS. THIS IS A COMPETITIVE MARKET NOT A MONOPOLY.
I’m thinking of getting a nicer rental from which to watch the collapse. I currently rent a 900 sq foot condo in Westlake Village, CA but would rather rent a 1500 sq foot house with a yard. I’m thinking of approaching one of the many sellers who have been dropping their price and who don’t take their property off the market during the holidays, assuming they are fairly desperate. I would offer them below market rent but agree to pay six months in advance if I can pay directly to their lender, thus keeping the place out of foreclosure for the time I rent it. I have a lot of cash at this time as I’ve pretty much exited the stock market and have been putting lots into laddered CDs. Currently there are lots of SFRs with for sale/lease signs in front and a few with homemade “for rent” signs. Most are vacant and I can’t believe the owners will let them sit month after month. Anybody spot problems with this strategy?
I’ve got $$$ in staggered CD’s as well and the only thing that can hurt that position (and possibly save the housing market from a complete breakdown) is hyper-inflation or a major USD retreat…..If one is getting 5.25% in a CD but inflation runs 15-20% then parking the $$$ would not have been a great bet. In that scenario housing price #’s stabilize even though value is lost…..this helps folks who are in over their head and keeps all the properties in the USA from being dumped on the Wamus and Fargos of the world….Even makes our trade deficit and other debt less expensive……a position against the USD and/or long precious metals would be a way to hedge your positioning. The risk of extra liquidity to cushion domestic housing market is a real likely course of action and this means that we may not see the huge price declines in terms of dollar #’s that the housing bears are forecasting. That $500K house that you are waiting to become $250K might just wind up being $600K in 2008 even though $600K in 2008 might be only worth $400K in 2006 dollars.
awaiting bubble rubble — I think your strategy is good relative to renting from an FB. But I’m not sure I agree with seeking out the most desperate of those. Presumably, you want to be able to remain in your rental home at least as long as the term of the lease, if not longer at your option. Almost by definition, if you agreed to a rental payment that equaled the FB’s mortgage payment, you’d be paying way too much or never would have found Ben’s blog. So we have to assume that you agree to only a rational amount for the lease payment. Making a lease payment to the mortgage holder does not give you security, then, because you do not know if the owner/bag-holder will make the balance of the payment(s) due each month.
I am leasing, having cashed out in 2005. I chose my landlord carefully — that would seem to be a switch from days past, but it was a very prudent one, I believe.
Thanks, Chip, for your comments. It makes sense to check out the landlord. I don’t think I would offer enough in rent to cover the entire cost for someone who bought in the past two years with sane terms and/or has seen a reset, but I think if I tied the stipulation that I pay the lender directly, then it might bring P&I payments current or close to being current and avoid foreclosure during my tenure. Of course, I don’t know if I would trust a distressed owner to fix a leaky roof, pay his taxes, or play fair with a tenent. You’re right, I’ll check out the landlord’s situation carefully. Any ideas on where I can buy such reports? What has the world come to when prospective tenents have to run a credit check on their prospective landlords?!
Regarding hedging against the dollar, the only property I own is in Europe so about 1/4 of my net worth is in Euros. I also have small positions in FDPIX, RRPIX, QID, and even BEARX as well as some foreign telecom stocks, which I think will do well if the dollar truly tanks. However, I would like to buy some CDs in Swiss Francs (not from Everbank, thanks). If anybody has ideas on how to do that, please let me know.
You might want to buy Swiss government bonds, which pay competitive rates and are more liquid than CDs (as well as being as safe as any Swiss franc investment could be). A good European broker should be able to buy them for you, although you may have to hunt around a bit if you are trying to use a broker in the US (as I gather you are).
Awaiting — this is a day late, but in case you’re reading it…
I would deal with a reputable rental agency, often an office of one of the large national real estate agencies. Ask the person point-blank what they know about the owner, or are willing to find out and disclose. It is BS that they cannot tell you anything; the restriction would be “without permission.”
I recently inquired of such an office about a house that got my attention. It is out of state, in an area where I might want to build a house. I told them I do not want to rent from a 20-something flipper who is trying to feed an alligator. It’s up to them to find me a good landlord. Also keep in mind that these agents hope against hope that you will buy something through them later on, so it is not in their interest to screw over you. Generally.
I’ll re=-post this later on if I don’t see that you read it.
Thanks, Chip!
Hey Ren,
I noticed there is a sign on the I-80 near Dixon that say homes in Roseville and Rocklin low 200’s with a 300’s crossed out. Any truth to that?
None that I’ve seen, though that could be because I go straight from the fields and powerlines part of Baseline straight into McMansion-ville. I can, however, confirm that there are some new construction condos near Galleria Mall starting at 160. She says they’re pretty nice, but she was looking at fully-loaded models. I’m sure the base pricing doesn’t get as tricked out a place. (Yes, our house is now Rabid Bubblehead vs. Bridezilla Who Must Own. The third roommate thinks we’re both crazy.)
I will see if I can find out where these paragons of near-affordibility are, however. Those prices are only 4X income, as I think the Roseville household median income is something like $57K a year.
I’m a seller in SoCal. I, and another seller in my neighborhood received an “offer” from the same buyer, a RE agent. The catch? No purchase price, it’s a reverse auction. We are supposed to fill in our “best price” and then he will decide who the “winner” is. Wish me luck!
I’d be interested to know if, in the end, the agent buys either one, or was instead just fishing for bargains.
The agent wants you to know who the other bidder is so you can negotiate eachother down. He is using your familiarity with your competition against you. It’s an old tactic. Don’t fall for it.
Instead. Get the agent to sign a conditional purchase agreement that locks in his commitment to buy whichever property is cheaper and forces him to put down a non-refundable deposit.
Then use your familiarity with your competition against the agent. I will not tell you to collude against the agent as that is illegal. I would never recommend that you agree with your neighbor on a higher price that the buyer is locked into so you can share the profit. That would be wrong.
Good luck.
seen in Irvine on this a.m.’s drive–Hovnanian’s Avenue One development–Jamboree & Dupont. New sign out front now says “From the High $300’s”. 3-4 months ago, it showed “From the low to mid $400’s”. These are “luxe” condos– starting at 600sq for a 1/1 HAH!. Add on $300+hoa. Khov.com website shows the 1/1 now start from $369k, so a good $50k+ haircut–or 12%. ‘taint so different on the pricey side of the tracks.
http://www.irvinehousingblog.com has more.
Ma is off 12%+ since may 05
5% my A_S
Today’s FB anecdote of the day…
A friend of mine recently sold his house in our neighborhood and moved to a posh Golf Resost community in far-South Gilbert. He purchased his house for well over $800K and financed over $650K on an ARM. I’ve calculated his P&I alone at over $4000 per month. His interest rate doesn’t reset for another four and a half years, so his situation won’t worsen anytime soon, but he’s only planning on staying in the house for a couple of years until he can sell it for a profit! :0
Talk about bad timing.
If I hadn’t discovered Prevacid many years ago, that story would give me heartburn, instantly.
Went to a couple of open houses in the neighborhood. A few people attended these. A couple of new under contracts…but most just sitting still. Realtor told me that a good number of deals fell through from people moving to Atlanta (in town area) from out of town as they could not sell their existing houses during the summer. Most of these people are still trying to sell and now are in corporate housing here.
“the Hamptons are a place where people want to be. It’s like Manhattan. We published our market report and it was better than any of the destination places in the U.S. That’s primarily because it isn’t investor driven—and neither is the Hamptons—people really want to be here.”
The idea that the Hamptons is not investor driven is off the mark. The place is teeming with people who have plowed fortunes into weekend homes because they think the appreciation will outperform stocks. This is particularly true in the last five years since 9/11.
If there ever was an area ripe for an implosion in prices it’s the Hamptons. Although the average guy is still trying to figure out a way to buy in, the smart money is already quietly leaving. The crash there should be a spectacle.
Beehive,
agreed, and a lot of foreign money was pouring in…Brits, Germans and French buyers…should be something to watch.
Beehive — thanks for a well-written and concise report.
Just got back from a weekend in Palm Springs.
There were For Sale and Open House signs all over the Desert communities.
Every other billboard on the way back to San Diego, along the I-10, I-60, and I-215 was for new home developments.
This week new home sales report release will show an annualized sales rate of about 1.0M, while homebuilders are still building at a rate around 1.6M.
Do the math. The price declines are going to be ugly.
“This week new home sales report release will show an annualized sales rate of about 1.0M, while homebuilders are still building at a rate around 1.6M.”
Prof — that will be well worth an on-the-ground follow-up. Too bad you can’t write off the gasoline as a “blog participation expense.”
Hey Prof,
We just returned across the Mojave Desert to SD from a family trip. We saw a rather striking number of new tract home developments out in the middle of the desert along the way. I simply don’t believe there are enough good jobs out there in the desert to support new homes priced in the $400K+ range. In other words, I believe more price declines are needed to balance supply with fundamental demand for homes as affordable places to live.
(Albuquerque NM)
I’ve been watching the house across the street from me sit on sale for almost all year. I’m not sure where it started, but it was listed at 515k this summer, dropped to 499,500 around labor day. I just checked today, and it’s listed at 459,500. Still no visible traffic at all.
Mine is an older, middle-class neighborhood, with everything from small 3- or 4-unit multi-families, a variety of SFHs mostly from the 50s, some still around 1000sf, others remodelled over the years to as much as 3000+sf. The house on sale across from me is an “older” McMansion, about 3500sf, built in 1981 with another large house and some townhouses on what was a small empty space.
Not a lot of for-sale signs in this neighborhood, but more than usual over the past 25-30 years — about one per block now, with (guess-timate) 10-20% selling.
The main thing my neighborhood has going for it for many people is that it’s a nice short drive to the AF base/the airport/the university/etc. Presonally, I like it because it’s an established neighborhood with mature landscaping, a nice variety of houses — and no HOAs or other modern nonsense! But it’s not a yuppie or gentrified neighborhood like some in town.
The median income here is about 40k (I’ve seen some sources say 38k and others say 42k; that may be different time periods or neighborhoods included.) I earn about 3x the median, and *I* couldn’t afford to buy the house across the street at any “normal” mortgage load.
And this is just one house *not* in any of the many, many, many new McMansion developments going up like weeds everywhere I drive (and we have
*lots* of still-empty land!)
Condo controversy heats up
Plan for second tower irks El Cortez owners
By Dani Dodge
STAFF WRITER
November 26, 2006
El Cortez condo owners feel cheated. They bought homes in the historic hotel with luxury in mind, but their sinks back up, their homeowners association is broke and there’s no doorman to welcome them at the end of the day.
NANCEE E. LEWIS / Union-Tribune
Barry Bruins, president of the condo owners association at the El Cortez, is leading the fight to stop construction of a neighboring condo tower.
The fact that developer Peter Janopaul – who along with business partner Anthony Block renovated the 1927 hotel – is now planning to build a new condominium tower where their pool and parking is, well, that’s just one more slap in the face.
Disputes have generated a flurry of legal actions, including at least a half-dozen lawsuits and a request for a restraining order.
“They made a lot of money off of all of us and then they turn around and do this?” El Cortez resident Rob Mills said incredulously. “They just say, ‘We’ll put another building in front and ruin all your investments?’ ”
http://www.signonsandiego.com/uniontrib/20061126/news_1m26elcortez.html
As you know i keep professing that if you have the money for a home then give a offer and see what happens. But i must say for the sellers who are in a different world as to price point of their property and what the true market value is at the present time is worlds apart.
Example:
Went to a open house, the new home is priced by the flipper at 1.2 million has been on the market 4 months. I then looked up the actual closing price that the investor paid it was 807K. I always like a good fight so i went back and told the owner agent how serious he was about selling of course he smiled and said in this market dead serious.
I told him the exact truth, i looked up what you paid and after looking around i would say you have 50k in upgrades. He doesn’t answer me, if i was to offer you 925k how would that sit with you he says i rather burn the place. I told him you said you were dead serious and you have been on the market 4 months, he says at your offer i make 55k that is not enough. So why argue i walk out and lets see what happens. I don’t know about anyone else but i rather have 55k in my hands then go broke because of some stupid notion that i deserve a 400k profit?