An “Avalanche” Is Coming: California
The Valley Voice reports from California. “Tulare County Association of Realtors numbers show that the inventory of existing homes for sale has been coming down for the past three months for the first time since late 2004. The numbers had ballooned from just 400 residential listings on the Visalia/Tulare MLS to over 1000 in October 2005 to over 2300 in September this year, even as miles of new home subdivisions remain under construction.”
“Since September existing homes on the market has fallen to 1709, a number that remains high compared to past years. MLS numbers show real estate activity has averaged about 200 sales a month.”
“Local realtor Brad Maaske says he believes many of the excesses of market have been squeezed out by the price correction mechanism that includes the new home sale market. ‘Before people would pay anything for homes, and they did’ compared to today as builders have adjusted prices and offered incentives that have allowed sales to continue at a far lower price point.”
“Maaske says the adjustment in inventory in the local MLS came for a combination of factors including fewer homes coming on the market, continued steady sales and expired listings of home sellers who have taken their listing off the MLS.”
“Title company owner Scott Collins says his figures show real estate refinancing activity in the last quarter down 41% when compared to the same quarter in 2005 and most worrisome a big increase in the number of defaults—up 42% over the same period in 2005.”
“Collins says the number of defaults came in part when a new homebuyer just barely qualified to buy a new home and does so by paying a minimum payment. Then the value of the home heads down and the buyer needs to sell because of a job change and the home is worth less than what he can sell it for.”
The Daily Press. “The financing honeymoon that swept thousands of home buyers into the High Desert is quickly becoming a foreclosure nightmare for growing numbers of homeowners, recent market data reveals.”
“Statistics compiled by DataQuick showed San Bernardino County had 2,548 foreclosures in last year’s third quarter — up 100.8 percent from the 1,269 reported in the same period of 2005. (A) foreclosure web site showed there were 426 foreclosures and 5,617 pending foreclosures throughout the county in December.”
“Paula Hurst, a foreclosure specialist, isn’t optimistic. The 13 pre-foreclosure evaluations she’s done in the past two weeks have left her ’scrambling.’”
“Hurst handled five foreclosures in 2004 and about 72 in 2006. That tells her an ‘avalanche’ is coming. She suspects the flow of new buyers may also decrease, as prices in bigger urban markets continue to soften.”
“‘If they’re frozen,’ she said of the bigger markets, ’so are we.’”
“Hurst advises homeowners to sell soon if they want to get anything near the latest price points, because prices will plummet as more foreclosures are filed. ‘Homes will land in a more affordable price range again,’ Hurst said.”
“As the number of financially distressed homes rises in the High Desert, one of the biggest risks faced by homeowners will come from people looking to steal from them.”
“Victorville Realtor Joe Brady warns that cases of squatting, where people illegally take possession of vacant houses waiting to be sold, may rise along with the foreclosure rate.”
“He believes the problem will occur most frequently in outlying areas, such as Newberry Springs, where the owner of one of Brady’s listed houses recently discovered a couple living in what was supposed to be her vacant investment.”
“Property manager Carol Randall said homeowners can avoid the possibility of squatters by keeping a vigilant eye on their vacant houses, either by themselves or through others. Homeowners might also want to buy insurance coverage for their houses while they’re waiting to be sold, since standard home insurance policies don’t cover periods when a house is vacant.”
“(Realtor) Craig Kudrly said another scam aimed at homeowners goes like this: A criminal approaches an owner desperate to sell his or her home. The criminal offers to ‘buy’ the house for a certain amount, no questions asked.”
“The criminal fails to change the title on the house, but ‘rents’ the house to unsuspecting renters for up-front fees. Then the criminal disappears, leaving the actual homeowner with illegal tenants and the tenants facing possible eviction.”
“‘I could write a book about all the times I saw it happen,’ said Kudrly, who began handling house foreclosures during the market bust in the early 1990s.”
The Union Tribune. “Robert and Marie Leboda would like nothing more than to make life simpler for 2007. The San Diego couple admit that they have been a little overzealous with real estate investments over the past few years. They’re now feeling buried by all of the financial obligations that owning property entails and don’t know how to come up from underneath it all.”
“The couple is now responsible for maintaining four properties, not to mention mortgage payments that total about $6,500 a month. They’ve each taken up additional jobs, but their extra efforts haven’t quite afforded them the quick and easy solution they were hoping for.”
“‘I wouldn’t say investing in real estate is a completely bad idea, but we just really overdid it,’ Marie said. ‘We jumped on the real estate bandwagon when we thought it would be great for us financially. But it’s turned out otherwise and now we’re so overwhelmed by it all, we don’t even know where to start.’”
dropping inventory w no increase in sales= sign yanking
Hey, I live here in the Visalia/Porterville area, and trust me…The only reason Listings are going down is because people are finally giving up on selling their houses…And they’re pulling them off the Market. New home builders are still going full steam though…Gonna get really UGLY!
I don’t know about that, I have a cousin who works design trusses for homes. He said that his business cut a whole shift (about 75 people) because they don’t have enough work. I ask them what people do there to be able to support such huge growth and they all say “I don’t know.”
I drove past gang-nail Truss builders in Visalia last friday and their parking lot was full of employee cars. seems like they are in full production to me.
In Visalia, builders like McMillin, Centex, and Ennis no nothing other than continuing to build. In 2002, all three were offering new starters from the $120s…by late 2005, that number had risen to the low $300s and has since fallen about $100K over the last year. The builders there will continue to build full-steam ahead because it is still profitable…and, if they didn’t build, what would they do? They know nothing else.
On a related note, it was interesting visiting Visalia a few months back. The Lowe’s at Packwood was almost empty–on a Saturday. Sign spinners advertising for Centex and McMillin were on the streets, and large inflatable blimps were all over the skies. 18 months ago, you couldn’t even find a parking spot at places like Home Depot and Lowe’s…so this is definitely an encouraging sign.
I keep hearing that builders will keep on building because there’s nothing else to do. This is simply wrong. You see building continue for two reasons:
1. It’s profitable (it has not become unprofitable, but a lot of these places will be fighting to reach breakeven in ‘07/’08)
2. The have to keep on building because of external forces.
Mostly what we are seeing now are the external forces.
It takes several years from inception of a project to completion. During that time there are lots of people involved and lots of contracts signed. It can take 15 to 24 months to complete a phase of residential construction in a large development. Once it gets started, it’s very difficult to stop. Land owners ehat their payments. Streets & lots need to be graded. The bank expects you will spend their money to build. If you don’t build, you need to give that money back. If you build halfway, you still need to give the money back that you don’t spend and repay the rest.
Your subcontractors and suppliers (and their lawyers) will expect you to honor the contracts you made with them.
These guys work on razor thin margins until the homes can be sold, and they have to be built to be sold.
Right now they are like flippers who bought in late ‘05 or early ‘06, it’s just that their part of the RE equation takes a long time. They do not know how much pain they will go through until they try to sell. They will keep building until they reach a stopping point.
All building will stop during the later half of ‘07. That’s when properties started in ‘06 will be completed. That’s what the suppliers at the beginning of the supply chain (i.e., truss makers, lumber mills) are telling us. They are laying off whole shifts of workers. When the end of the supply chain (painters, cabinet makers, carpet layers, landscapers) get the axe, it’s all over.
This is way to long a post, but it is very complicated. Builders simply cannot just stop building. It’s not that building is profitable, it’s just less unprofitable than stopping.
Anthony I haver heard this song so many times. I live in Visalia and I always hear Costco is empty! Applebees is empty! Lowes is empty! I don’t know if you go by there at 2:00am or what but these resturants/building stores/costco are very much packed with people any given weekend. Believe you me I want nothing more than the greedy builders/developers and especially the exsiting home sellers get hit very hard. But business is as usual.
Same in the Bay Area. Last i read on Ben site. We are full steam ahead with more new development.
I grew up in Porterville. Used to be a friendly, but rough town with ncredible mountains to the east. Dust bowl oakies and Mexicans, equally poor and uneducated, but we got along. Mexicans liked our dirt track racing and we liked their food. A lot of nice folks there. Visalia had the retail shopping. When I left 20+ years ago to go to college, I thought I might move back one day. The economy and pollution and crime have just gotten worse. I will not be moving back anytime soon.
I can assure you the area is not wealthy, and will no doubt be even poorer when this is all over.
I’m in Visalia for shopping about once every 2 weeks and it’s not a bad town, but will be one of the new Hoovervilles (squatters living in what’s left of those extremely average houses built on speculation, that barely got sold, or not at all, or existing houses, in many neighborhoods, as well) that will be plentiful, in just a year or so, all across the land, that is, unless meth thieves tear apart the shoddily constructed houses, in order to sell what they can scavange for 2 Cents on the Dollar, to complete the ruin.
And when temps get warmer this spring, the number of properties for sale will increase. In the interim… potential buyers are getting wise… learning of the potenital and very likely doom on the horizon. In the end, the only people buying are those 1) intending to own a home for a long period of time and not concerned about the risk, and 2) financially capable people that have not educated themselves about current conditions.
But remember, the NAR says the worst is behind us and prices will go up again in the spring.
- “Victorville Realtor Joe Brady warns that cases of squatting, where people illegally take possession of vacant houses waiting to be sold, may rise along with the foreclosure rate.”
- During the early 1990’s Palmdale and Lancaster Ca had thousands of empty and forclosed on homes….folks would simply change the locks and have the utilities turned on and ‘Homestead’ the property.
It went on for a number of years. The Inland Empire is toast.
Not a bad idea, actually, for those of us who really want to save some money. What’s the downside for the squatter, anyone know?
My guess about the downside would be jail time.
I am not sure what the downside is, but I do know that, in a lot of states, unless there are signs posted which say “Private property keep out” or something to that effect, squatters can take legal ownership after living there like 7 years or something. It is very important for those who have vacant properties to check on them from time to time, and kick these people out should they be living there.
Bantering, as I recall, we have a law like that here in Florida, something about a “hostile taking”. That’s why I’m thinking there isn’t much downside, other than being kicked out. I have a feeling that, for many squatters, arrest doesn’t even take place. Interesting.
I think the term is “Adverse Possession”. It can also arise if there is an survey error and it is not caught after a certain time period.
I think you also have to be paying the property taxes. It is a state by state thing though…
That’s true. In CA, one of the elements to fulfill a claim through adverse possession is to pay property taxes. However, I do believe that if squatters cross raw land that you own for a certain number of years, they can obtain something called a prescriptive easement (which isn’t good if you’re the owner).
Skip is right, but adverse possession is a tough nut to crack. Basically, if the legal owner shows up one day and says “this is my property — you don’t belong here”, that just about kills the claim. I think. Law school was a long time ago.
It’s not quite that easy…but you should always keep an eye on your vacant properties…developed or not. We have a piece here in the Visalia/Porterville area that has become a “Tent-City” for the area’s Homeless…Not once, but twice!
That’s too confrontational. Far easier to simply order the fumigation/ tenting service for the wee hours of the morning.
Oops, no one was supposed to be living there…oh well
“That’s too confrontational. Far easier to simply order the fumigation/ tenting service for the wee hours of the morning.
Oops, no one was supposed to be living there…oh well
“
LOL
I live in Lancaster aka the “New Compton”. I had squatters living next door to me in the 1990’s. I called the cops on numerous occasions they finally were forced to move. They had a boat in the driveway and were selling dope. It was terrible. It will be much much worse this time. We are already having to deal with the Section 8 here. That too I had living across the street from me in the 1990’s. What a nightmare!!
Yep. I was a property insurance adjuster back in the early 90s out here in So Cal. Squatters were all too common in San Bernadino and Riverside counties. Typically upon entering a once squatter occupied home you would find drug paraphernalia, secret hiding places in the dry wall, and lots of tin foil. Oh and the smell was putrid from animal feces.
Unfortunately for my members (I worked for USAA) removing squatters was almost as difficult as removing a bad tenant. I agree it’s going to be a lot worse this time.
Did they at least sell good dope?
I don’t know cause they forgot to leave their business card.
Gee, They usually just carve their cell phone number into the hardwood floor.
BlondieGirl,
I feel for you. I lived in Lancaster / Palmdale for 17 years. I just couldn’t watch what used to be a nice town go down the toilet. I left California and the Antelope Valley for good this time. The only great thing about the A.V. is that its a great place to be leaving! We lost the East side to Section 8 in the 90’s and the West is sinking slowly. I give it 5-10 years and the West side will be ghetto-ized.
I grew up in CA, but I’ve come to realize, my CA is gone for my children. The state for the most part is living off a 30 year old reputation. Yes, there are still nice areas, but unless you’ve lived there 20 years ago, forget it (uless you make $200,00 a year). I knew there where places I was priced out of (i.e. La Jolla, Santa Barbara), but to be priced out of the Antelope Valley, WOW! I still can’t wrap my head around that one. I make low six figures and had $200K for a down payment, but could not commit to buying a stucco shitbox in Lancaster for $450,000.
The Antelope Valley is toast! I don’t miss it one bit and truly sad to know so many of my friends live in the “new Compton”. If you stay, you better invest in some sun glasses and don’t look directly into the blast that’s coming. Let’em Burn!
Let ‘em burn,
I hear you. See my post above about Porterville. I think California has some of the most amazing places in the U.S., but actually living there is much more dicey. Most cities are unmitigated hellholes, or grotesquely overpriced. The landscape is dry, the air is wretched, crime is rampant. It is far too diverse to paint with a single brush, but overall it is overrated and overpriced. The prices we have seen in places like Lancaster, Fresno, and Compton blow my mind. I can think of literally hundreds of places nicer at 1/3 the price.
I predict the California real estate market will soon be a big, smoldering crater.
Obviously, “someone” thinks owning vacant homes is a smart strategy, as 51% of December 2006 homes sold in SD were reportedly vacant (according to a credible source — Russ Winter).
http://wallstreetexaminer.com/blogs/winter/?p=263
I am really clueless about the advantage of owning a home which sits indefinitely vacant. Isn’t it cheaper for the owner to sell a home, if even at a loss, than to have squatters take possession and quickly “depreciate” its value? Can anyone offer their insights on this subject?
GS, I am constantly perplexed by this as I can find no uspide to owning an SFR and letting it sit vacant. It is, undoubtedly, one of the most foolish wastes of money I can think of. My best guess is that a large portion of those vacant sales were by owners who had moved up into another property already. The “accidental speculators” if you will. But the rest? Newbie wannabe investors with either stupid or borrowed money, maybe? A kooky country for sure.
GS, Bbear, the problem stems from the fact that these people caught this mysterious ailment called “I-can-sell-my-property-at-a-premium-because-it’s-never-been-lived-in”-itis. If you recall, there were and are sh%tloads of property proudly listed as “never been lived in”. This was their prime selling point, and they had no plans on keeping the property long enough to even *need* a tenant or house-sitter. The plan was to sell at the uber-inflated price and whistle all the way to the bank. Now, they are all stuck with these *presents* to themselves (and their HUGE ass box of stupid) and they can’t even re-gift the damn things.
The additional killer that is being discussed here (below)is the fact that standard home insurance doesn’t cover periods of vacancy. That’s beyond scary, and I’d bet money that MOST of the people buying multiple properties didn’t do their due diligence on this either. What a HUGE mess this is.
BayQT~
If you are correct, and barring unprecedented future home price inflation in the wake of a record level of home price inflation which pushed affordability to all-time lows, a lot of SD and PHX flippers and their lenders are setting themselves up for huge losses going forward. I find it hard to believe there is an unlimited supply of greater fools out there, but the facts on the ground lead me to wonder.
Yep, it seems so, as well as the practice of the lenders allowing a greater percentage of spec purchases (non-owner occupied) than they have in the past (way back before this boom). This is what has turned many of these developments and condo towers into ghost towns (which I’ve mentioned here before). When all of these sordid puzzle pieces come together and see the light of day, and if rules and regs are not re-examined and rewritten, I don’t see how history won’t repeat itself.
Instead of learning from the mistakes that have been made and things overlooked, all I see are officials and “experts” covering their asses.
Sorry….I know I’m preaching to the choir. Rant off.
BayQT~
“The additional killer that is being discussed here (below)is the fact that standard home insurance doesn’t cover periods of vacancy. That’s beyond scary, and I’d bet money that MOST of the people buying multiple properties didn’t do their due diligence on this either.”
You got that right, Bayqt, and when the insurance company discovers that the home is vacant, the rate typically goes up 3x or 4x, sometimes more depending on the insurance company. The theory is that the risk of loss (fire, theft or vandalism) is much greater when the owner isn’t there to ward off trouble. I’ve had a lot of experience with this issue, in the context of estate homes.
Sometimes, the executor wants to keep things “hush-hush”, and doesn’t tell the insurance company. Then, the dolt will pay the next bill with an estate check. Duh! If the insurance companies are on the ball, they’d be looking at the checks for payment that show addresses different than the property being insured, and then follow up with letters.
Friend of mine has had his old house in Atlanta vacant for over a year now. He moved jobs and never could get his asking (dreaming) price, and even though some buyers came close, he refused to take any offer less than whatever his current asking rpice was, nor would he accept most contingencies.
He took it off the market last spring, saying he’s just going to “keep it” as a retirement investment! So he pays the mortgage, taxes, repairs (yep!) for that empty place. nice investment, huh? (He won’t do the math. I can’t blame him — it would be too depressing.)
He thought of renting it but then decided they’d tear it up, and since he and his wife have an emotional attachment to it, they couldn’t deal with that happening. So they just pay that nearly $2k every month for nothing.
He actually got an offer for it recently, even though it’s been off the market. Probably from someone who saw it last year, and offered him within about $2k of his last asking price. Yet… He says no! :-O He now says they have to match the highest listing price (er, wishing price) currently in his neighborhood, which is $25k more! The fool!
Question: He says he doesn’t need to tell his insurance company that he vacated the place, since he has an alarm. Yikes! Now what would happen if it burns and they find out it’s vacant? (He actually thinks his insurance might would go DOWN if he called to tell them it’s vacant — I tell him no chance.)
Yep. It happened. Wanna house? Just bring a hammer to pry the boards off the windows.
Now with Meth Manufacture it could REALLY get ugly.
The meth manufacture loves boarded up windows. Less work for them LOL.
To successfully squat a house means that the squatter needs to give notice to the property owner. One can’t just move in secretly… be there for 7 years… and presto own the home.
I took some RE law and depending on the state laws, I don’t think there is any requirement of notification. (Perhaps someone with less rusty background could correct me?) I believe it is the owner that has the duty to see that the property is being used as they intend.
I remember reading about someone who owned a house out of state, and never visited. Some people moved in, and after a while began to maintain it and pay the property taxes. A few years went by and they got the title.
I think that’s how squatting works in Florida, but I’m a little rusty on the law myself. Interesting. I guess, if you can find a vacant home that is behind on property taxes, move in and pay the taxes, you could conceivably end up with title. As I recall, the whole process hinges on the owner of record failing to assert his property rights over time.
But isn’t it the case that properties behind on tax payments for a few months are sold at some kind of auction by the county (owners’ negligence means they dont know about the auction) and there are many lawyers and investors who gobble them up only to kind of ‘blackmail’ the owners to pay a fairly hefty fee to get the property back. I saw it happen to a commercial condo owner who forgot to pay taxes for quite a bit of time.
At least locally (DC area) TedK’s right. ISTR an article on the practice a few years ago. These people would be bidding HUGE amounts for property to get the chance to put the screws to the owners.
I think it takes 5 years to go to tax lein sale in Ca. at least . Most lenders are notified when a borrower is late on taxes and they will make sure you pay the tax lein because they take second position to a tax lein . So , as long as you have a mortgage the lender will be on your ass if you don’t make the insurance or tax payment and I believe they can impound you if you don’t ,(as least most loan contracts have those clauses in them ).
Yes, all true. That is why you paid the Tax Service Fee the last time you got a home loan. The service notifies the lender if you do not pay your taxes. If the lender then has to pay them, they will send you a bill and put you on impounds for future taxes.
Our neighbors growing up had a strip of land next to their house that they used as a driveway. They used it for 20 years or more. Somebody tried to use that driveway to cut through to their house that was located behind our neighbors’ house. Not so fast! The neighbors were granted ownership of that land since they had done the upkeep for more than 7 years. That was about a 15 foot wide strip by 150 feet long. Not a bad addition to the homestead.
“Adverse Easement”
Right, you just need to visible (e.g. you can’t occupy a house secretly,) and hostile (the owner didn’t give permission,) and then wait for enough time to pass. You often don’t even need to pay property taxes .
BINGO, gorobei. That’s what I was trying to recall. As far as the property taxes go, though, it would depend whether the owner was paying them or not. If the owner wasn’t and the squatter wanted to be successful in taking the title, paying the property taxes would be a good idea.
In certain states, only six months needs to pass. Typically, if a homeowner intends upon leaving a property vacant for more than six months, they need to execute a declaration of non-abandonment. This protects the property from squatters. But the squatters, contrary to what bmfarley suggests, are under no obligation to contact the owners prior to moving in to the abandoned property.
In California it’s called “Adverse Possession”, and there are alot of critereon that need to be met. There’s also a method called a “Quiet Title”, which is much the same.
Here’s some of the conditions:
1.) Claimant must be in possession of and pay property taxes on…or, if no taxes are due, maintain the property…or, simply use the property…uninterupted for a minimum of 5 years.
2.) The claimants use must be of an “Open and Notorious” manner.
3.) If owner is aware of claimants use, and gives claimant permission to do so…claimant cannot request “Adverse Possession”.
4.) However, if owner is aware of claimants use…doesn’t approve of claimant’s use…but does nothing to stop claimant’s use of property for 5 uninterupted years…Claimant has a right to claim an “easement of necessity”.
5.) Railroads and other Public Utilities are exempt from “Adverse Possession” because of the logistics involved in policing the vast areas of property under their control.
6.) There’s more requirements…but the point is, it’s not that easy to just move onto someone’s land and claim it as your own.
Just curious, what is the reason that these laws are on the book? It seems like outright theft to me, regardless of whether the owner has ever set foot on the land or maintained the property.
It is mostly meant to deal with situations where the last property owner is Dead, with no heirs…or can’t be located.
Or, in the case where there’s a small piece of land that everyone has been using as a road, necessary for access to their property…and the new property owner gets pissed off at his neighbors, and wants to mess with them by blocking off the road.
Used correctly, it’s not a bad mechanism…Used incorrectly, it’s a great way to screw people.
Central-Cal posted:
“There’s more requirements…but the point is, it’s not that easy to just move onto someone’s land and claim it as your own.”
I don’t think anyone ever posted that it was easy to do. The point being, it IS possible. These unwitting specuvestors have not even a clue that this stuff exists. To just let a property sit, vacant (and potentially uninsured), is an invitation to costly problems which could, quite feasibly, result in the complete loss of ones so-called investment.
It might stem from a part of British law (which a lot of laws do). Back in 1066, when the Norman’s (basically the French) invaded England, local inhabitants fled their homes as the Norman invaders advanced. When the dust settled, a “squatters law” came into effect which allowed those who had fled to come back without fear and, if they found an empty house, take possession. In many cases the property was totally abandoned because the owners had either been killed or didn’t want to move back into the area for some reason. Of course, these were the days when a shack didn’t cost $1.5 million!
Some of these laws have been modified over the years and most property owners do not totally abandoned their property. There is usually somerone around to make claims of ownership. Even until recently, the Brits had strong rent control. If you rented and UNFURNISHED property, it was almost impossible to get evicted or for the landlord to raise the rent. In fact, even in the mid-70’s, there were renters paying $10 a month for houses worth $60,000 (now worth $1.5 million) but Maggie Thatcher changed a lot of those rules and the EU courts have modified them even more and NOT in favor of renters. It’s still fairly hard to evict a renter from an un-furnished property but the EU laws allow the lanlord to increase the rents annually to the point where most of the older renters cannot afford to stay anymore. Once they move, the rents skyrocket. If the old renters have a family, the government usually steps in to help.
“5.) Railroads and other Public Utilities are exempt from “Adverse Possession” because of the logistics involved in policing the vast areas of property under their control.”
Gubment Land exempt too, (aah course, they prefur to do the takin, not givin)
What Central-Cal said. And to keep somebody from doing that Intentionally. Letting somebody use a road to get access to their land, then turning around and trying to charge an exhorbitant amount AFTER they’ve built a a house.
Mike, and then there is the back and forth over leasehold laws. Apparently, sometimes 99 years IS forever as far as the law is concerned.
No notification requirement for Adverse Possession (”homesteading”).
~Misstrial
Misstrial, I don’t believe “Adverse Possession”, and “Homesteading” are the same. “Homesteading” is a way you can guarantee you won’t get kicked out of your house for “unitentional indebtedness”, such as medical bills. My understanding is that “Homesteading” however, doesn’t protect your Home from intentional debts, such as credit cards and personal loans.
Adverse possession has to be “open and notorious.” You have to be openly in possession (living in, conducting business on, grazing animals on, mining, cultivating, etc.) the land you’re squatting on, and I believe you bear the burden of proving your possession was open and notorious.
Ooo yeah! The article talks about squatters coming to the abandoned (”walked away from”) houses in the California high desert. I’ve been posting about this before. And others see it. They don’t mention the increase in meth labs that will also come with the squatters. The California high desert is full of people living on the cheap and taking advantage of the seclusion to create meth. That’s depressing, but you cannot hide from facts. One more indication of America’s decline.
Meth labs don’t “Homestead” the property, they “Home-Dead” the property. (toxic nightmare)
And I didn’t know this:
“standard home insurance policies don’t cover periods when a house is vacant.”
I do remember hearing about banks letting people live for like 18 months in foreclosure before forcing them out. Probably figured the original owners still felt a vested interest in maintaining the property and were cheaper than “security service” to patrol.
I’m not a real estate expert but I am guessing that the occasional meth lab explosion doesn’t add a lot of value to a neighborhood.
Meth labs are horrendous. This was one of the final straws that locked me out of vacation home markets. All of the places I looked seriously turned out to be Crank Country with many recent examples of labs on poorly defended land. Cleanup costs could be as low as a few thousand, but tended to average well into five figures sometimes going into six figures. Because toxic dumps need to be handled the owners that discover the mess have little choice but to ante up, and paperwork makes it hard to just hide the contamination.
This time the swing in property values will be different as negatives like this start to sink in and accumulate.
OHHH yes, I can attest to that. Inherited a prop in Phx couple of years ago. When I talked to the family Allstate agent (who handled it for like 30 yrs) to drop car coverage he let me know that they would drop the house off in very short order. Told me that to get insurance for vacant (which they DON’T write) there were only 1 or two in the valley. NOT cheap, either.
I pity the naive people who could afford a house but are living among abandoned ones with squatters and meth freaks that will occuppy them. it’s a hard lesson. But it’s too bad you cannot depend on this heavily pumped (David Liar-eah) ownership romance when it’s easy to end up in a HUD/Section 8 / drug lab neighborhood. Your American dream becomes a nightmare.
Better to have been in savings bonds the last 5 years and at most have a timeshare where you really want to go 1 week out of the year. Better to rent where you can vote with your feet away from the drug culture and welfare culture.
I agree with you, Bill. It is getting ugly for those folks who try to live modestly within their means. A “modest” neighborhood can turn into a slum at the drop of a hat these days. I’m watching it happen here in Southshore Tampa Bay.
Well I know from my case: I had a house that was losing value fast in the California high desert in the early to mid 1990s. An apartment complex was across the street. One day the local rag ran an article that the cops uncovered a meth lab on the second floor of that complex in one of the buildings. I’m serious! My tirade about druggies in the desert is for real. The meth lab was not the deal that dropped the value of my house as much as the military base realignment and closures in the 1990s (BRAC).
I will rent at least until the prices of homes in my favorite areas drop to 1998 levels + a 3.5% annualized inflation rate (or below!).
“builders have adjusted prices and offered incentives that have allowed sales to continue at a far lower price point.”
Nice of the builders to “allow” these tumbling prices… Oh, I mean “lower price points”…
Typical Realor Fkn Bullsh#t
“‘I wouldn’t say investing in real estate is a completely bad idea, but we just really overdid it,’ Marie said. ‘We jumped on the real estate bandwagon when we thought it would be great for us financially. But it’s turned out otherwise and now we’re so overwhelmed by it all, we don’t even know where to start.’”
I wouldn’t say it’s a completely bad idea either. So, I suggest that you hang on to these 4 properties, maybe get another couple jobs, and pick up a few more properties.
hahaha
Actually, these are the stories that I have been waiting to see a lot more of. It marks the turn of the RE investment corner from smugness all the way past panic — to despair.
Pretty soon it’ll be: It’s never been a worse time to buy!
“The financing honeymoon that swept thousands of home buyers into the High Desert is quickly becoming a foreclosure nightmare for growing numbers of homeowners, recent market data reveals.”
The financing honeymoon also seems to be quickly turning into a nightmare for a growing number of subprime lenders:
http://br.endernet.org/~akrowne/ml-implode.html
Everyone’s 6 pack goggles are wearing off….
What have we here… ohhhh gawd!
Maybe they can gnaw off body parts to escape…
They can just stretch their adjustable ARM’s. Sorry, i couldn’t resist.
No apologies necessary, puns may be lowbrow humor, but we take what we can get.
“Hurst handled five foreclosures in 2004 and about 72 in 2006. That tells her an ‘avalanche’ is coming.”
“Hurst advises homeowners to sell soon if they want to get anything near the latest price points, because prices will plummet as more foreclosures are filed. ‘Homes will land in a more affordable price range again,’ Hurst said.”
‘The avalanche is coming! The avalanche is coming! Hurry up and sell, so you can get off the inventory mountain up near the top instead of getting buried at the bottom.’
This reminds me of the scene in Caddyshack where Rodney Dnagerfield is talking on the phone and making deals: “Buy, buy!!! … then sell, sell!! This market is changing so fast, that if you bought in 2005 or 2006, that is the message: you, of all people, get out now before all equity is gone. Of course, once that point is past, you might as well enjoy the ride before they yank the keys away.
Ok, which of you is Hurst. This advice is too sensible for the normal RE industrial complex.
I agree, people are going to enjoy the ride once the equity roller coaster passes them (on the way down).
I just toured homes with my fiancee (schadenfreude). It was funny. Sadly, the Realtors ™ are starting to recognize us. So we just politely asked, how, what did that home on such and such sell for?
The universal answer: that home just reduced its price, you need to bid now if you want them to consider your offer.” (answer: polite smile. Well… an attempt not to smirk.)
Neil
You’re fianceé is Sammy Shadenfrude?
Wow , at least intelligent people got together .
rotfl
Not Sammy!
She and I are just enjoying the missery of others.
But you gave me a good laugh!
I cannot believe how many open houses went on this weekend. I have a 1/4″ of new fliers. Somehow, stress goes away knowing other people are in that much trouble. Our favorite? A $1.200M (purchase price) flip currently on the market for… $1.125M. Another couple there was just ragging on all of the under floor water damage (yes, you could feel it).
Neil
“This reminds me of the scene in Caddyshack where Rodney Dnagerfield is talking on the phone and making deals: “Buy, buy!!! … then sell, sell!!”
With the inventory piling up, it is starting to remind me of the scene in Caddyshack where a Baby Ruth ended up in the swimming pool, someone yelled “Doody!” and everyone ran screaming out of the pool.
“‘I wouldn’t say investing in real estate is a completely bad idea, but we just really overdid it,’ Marie said.”
Ya really think so?
$6,500 a month divided by four is a very affordable-sounding $1,625 a month per property they own. If San Diego property weren’t so affordable, I would almost be inclined to wonder whether they used subprime loans to finance their mini-real-estate empire…
Yeah… but what if the market rate for renting those were significanlty less… say around $1,200 per month. Or less?
And what if the reset rate is significantly more than $1,250 per month?
And what if they got caught in a price downdraft? Forgot to look that far ahead? Oops…
$1,250$1625“look that far ahead” -
Yesterday you or someone else on this board pointed out that an IO loan turns into a 20-year amortizing loan after year 10. Egad, I didn’t know that (I don’t write IO’s anyway). Doesn’t it seem likely that there will be a foreclosure avalanche aftershock around 2014 when a bunch of IO’s who managed to go on making their payments suddenly are faced with a 60% or 80% increase in the monthly payment amount?
“avalanche aftershock around 2014….”
Joining them will, I think, be the ‘Cash Back- Fraud Deal’ buyers of today. 2014 will be about the time they’ve burnt through the ill gotten monies, and now have to pay the actual 6k payment out of …. dare I say….income.
az_lender and lefantome,
Do you folks really think that a noticable portion of the I/O loans and cash-back fraudsters are going to still be in those loans around 2014? I’m betting that for the properties that don’t get foreclosed or abandoned, they will somehow be “refried” or otherwise reprocessed. Most of these homeowers are not they type to stay put that long anyway, methinks.
sm_landlord –
IMO, there will be a noticeable portion of these cash back fraudsters still able to stay in the loan, if the cash back was substantial. This fraud money could easily ASSIST in servicing that debt for many years. Their impact on the market will be small because there just aren’t that many. Good fodder for bashing though. This group just needs to get caught and prosecuted.
I actually looked at how I could work this scam myself. There is a house in Chico that I am….. slightly interested in, listed at 1.1mil. I have about 300k-400k I would be willing to put down on a house, but I couldn’t afford a 700k-800k mortgage. So…… if someone would just be willing to lend me 1.2mil (8.5k/mo, PITI), and the seller would give me 200k back at closing (1mil sale), how long could I service that debt with 600k cash, if what I can really afford is only 3k/mo? With the investment income from the 600k, and the tax advantages from this 1.2mil loan, I’d say …. Just about FOREVER! I’ll be 100 years old before I’ve burnt through that money. This is the plan of many of these fraudsters, and I don’t think we would have to see them “in trouble” for a very long time.
Incidentally, saw this job ad in the SF Chronicle today: INSURANCE BZ indep. investigative/ adjusting firm seeks a motivated exp’d., multi-line ins. FIELD INVESTIGATOR/ ADJUSTER AND EXP. MORTGAGE FRAUD INVESTIGATOR for No. Calif. w/bnfts. Fax res. To……
Humm ….. NorCal, you don’t say?
(On a side note, saw this under the ‘recommendations’ for the Leboda’s in the article: “Purchase a 20-year term life insurance policy for coverage of $1 million per person for better financial protection….” LMAO!!! Why bother with suicide, just draw straws and see who falls on the kitchen knife……).
“Yesterday you or someone else on this board pointed out that an IO loan turns into a 20-year amortizing loan after year 10.”
Actually, AZ, IO loans come in a variety of different flavors — 3, 5, 7 year fixed periods are (were) the most common, but apparently the 10 year product is just now becoming more popular (we’ll see how long THAT lasts). The big majority of IO resets will come long before 2014.
lefantome,
OK, so you get $200K cash back on a fraud at closing. Where does the other $400K come from to compose the $600K that you propose to invest to make the PITI payments?
Maybe I’m dense, but you lost me there.
I think he was going to use $400k of his own cash in addition.
The San Diego couple’s article was a “free financial makeover:
What the “Financial Planner” would have charged: $3500.
The “Financial Planner’s” big advice:
”
Seid told the couple the first thing to do to help lighten the load is to start selling off a few of their properties.”
WOW!!!! BRILLIANT!!! DO YA THINK? Now that’s worth $3500!!!
The rest of her advice is “Start Saving Money”……
Imploder, these people have me steamed right now. Did you read that list of assets and liabilities? This guy now has $1,200 in 401k at 42 years old and he is proud. Their net worth is listed at $426,000. What a bunch of bull$hit. They have no net worth. They will be declaring bankruptcy. These two morons should be a constant source of ridicule. They thought it would be so easy. They deserve to be homeless for being so greedy and stupid.
“What can we do? What can we do?” Sell the damn houses as quickly as possible, you in-bred doorknobs.
Did you see their income? $46,000–from his two jobs and her part-time job. Tell me how a couple with that income buys more than a million dollars of real estate.
I don’t see how they can afford even a condo in Compton at current prices.
*I* can’t afford a condo in Compton, and I make well over $100k per year.
F-R-A-U-D
I’m a Darwinist in all ways. For this context, I’m a financial Darwinist. It takes two parties to agree to a fraudulant loan: the loaner and the recipient. When all the smoke clears, these people - who, in other decades, would not qualify for a million dollar chunk of real estate - will be on street corners selling newspapers in the morning and begging at night before going home to their cardboard boxes. I shed no tears for them. You did not hear much about people signing things they did not understand 30 years ago, 20 years ago, even ten years ago. Perhaps reading comprehension by the products of American taxpayer-financed public education has sunk so low.
Now did the financial planner try to get an actual, real appraisel of what these properties were worth, or did accept whatever fiction was on the loan paperwork? ISTM that their planner is suggesting for them to commit fraud by having them save money by eating off of their business’ dime. Now If they’re living in their business location, are they paying personal income taxes on the value of the housing that they receive from their business. He’s no longer in the service, housing is now taxable renumeration.
The best part is his quote saying he wished he had started a 401(k) 20 years ago when he joined the Navy, then he would have been set. Uhh, the TSP, which they cashed out to start their investing, is the 401k equivalent for the government (and is an excellent deal.) So he DID have one, just did not hold onto it. Idiot.
I’m a little curious, did he cash it out and pay the taxes or take a loan agains the ballance? I did that to get my downpayment in ‘99, then repaid it when I refinanced in ‘03.
Is it me, or does it seem like “The switch got turned on” after the first of the year”? The stories are becoming gloomier and gloomier for CA and elsewhere. Some seem to be bordering on hysteria.
Seems like acknowledgment of the imminent collapse is becoming more and more acepted in MSM.
Amazing so far how the scenario is playing out like many here conjectured.
Good thing that “someone” is confident enough to be “snapping up” vacant homes in SD (reportedly 51% of Dec 06 sales were vacant homes)…
You keep harping on this GS. All this statistic says is that the houses were vacant at time of sale. Not that the new owners planned on keeping it vacant. I suspect this has to do with “investors” dumping properties rather than with people buying for the purpose of keeping them empty.
Nobody has offered any kind of convincing answer to my question, but I am still hopeful. 50%+ purchased vacant is, frankly, a stunning figure, given that flippers supposedly all left town. If you trouble yourself to click on this link and have a look at Russ’s graph, you will see that the percent of SD homes purchased vacant has more than doubled since June 04 (23% then, 51% now). This trend raises the question “Who is dumb enough to catch all these falling knives?” I am hoping that someone can offer insights, your suggestion to “ignore the man behind the curtain” notwithstanding.
http://wallstreetexaminer.com/blogs/winter/?p=263
“…the percent of SD homes purchased vacant has more than doubled since June 04 (23% then, 51% now). This trend raises the question “Who is dumb enough to catch all these falling knives?”"
I think that is answered quite easily. They are the same types of people who have been purchasing throughout the last few years. We have, in no way, purged the market of these greatest fools. I am repeatedly blown away by the number of transactions still taking place at these insane prices. I am convinced that the current buyers are individuals with the rosiest of glasses. They hear only what they want to believe. Now is a good time to buy a home because it is a “buyers market” is all they need to justify their actions. The people buying right now ARE the greatest fools as they completely and totally ignore the trend. You can excuse someone who bought at the peak as they could not know it at the time. But someone buying right now, in the face of these declines, is the most inept.
It is an interesting number GS. But the consensus scenario that I’ve read here is that long term investors with “second homes”, “vacation homes”, “rental property”, etc. would be the first to bail. The increase in homes sold vacant is thus an expected sign-post along the path of the correction. The people who can get out are doing it while the FBs bleed. Next up, foreclosure wave and REOs.
As to who is buying them? We’re not out of GFs yet. Their not making any more land you know! Better buy now before prices go up again!
their = they’re
“As to who is buying them? We’re not out of GFs yet. Their not making any more land you know! Better buy now before prices go up again!”
Are they still making subprime loans to GF investers? Even after this weekend?
I don’t know if all the ‘investors/flippers’ have bailed first. A guy I work with was a mortgage broker on the side (whatever that means) and has three ‘investment” homes up in the Sacramento/Elk Grove area. Currently he’s renting them out at a loss each month. (This, after they were vacant for three to four months and not selling for what he thought they should be.) Now he’s waiting for the magic of the Spring of 2007 to bail him out. Oh did I mention that his ’side’ business has all but dried up and gome away sort of like the Mercedes he was driving a few months back.
“Are they still making subprime loans to GF investers? Even after this weekend? ”
Apparently they are. Sorry GS, you’re just going to have to accept it. From now, through every dead cat bounce, right to the bottom there will be GFs buying houses. Each one convinced that they’re buying at the bottom, getting a great deal and are about to become rich through renewed appreciation.
As they used to say on Mutual of Omaha’s Wild Kingdom, “While it might appear cruel to us, we have to accept that this is nature’s way of maintaining the balance of life.”
“While it might appear cruel to us, we have to accept that this is nature’s way of maintaining the balance of life.”
ROTFLMAO!
I can just picture Marlin Perkins with his pith helmet
Well this is an email to me from a Sales Manager from Cambridge Homes in the new Elk Grove Maderia area so it appears they don’t think there’s an issue. Hummm
“I waited to respond as the market changes frequently and I did not know the price range until recently. Our homes are always competitively priced. As the market changed last year we offered incentives on all of our inventory homes, although we did have way too many homes available that no longer is the case. We only have 5 homes ready to move in Anatolia and I think Belavida is about 2 -3. And we will continue to offer discounts on those. Elk Grove has been an exception to any national trends and there are very few new homes available, resale homes a different case for sure. Madiera is the only new homes project approved in Elk Grove. The demand is already huge. I have 600 names on the interest list as of yesterday. I know many of those will not buy a house. But I have spoken with more than 50 in the last month alone that are virtually ready to buy, at the set price. The range will be in the $600K I do not believe we will be offering incentives, but we will of course do what the market trends are. Building a new home, especially ours are expensive, are costs do not go down when the market goes down, so we also have to price the home accordingly. Thanks and if you have any questions please email me and I will be happy to respond back. I hope we will be able to find you a home, but if the pricing doesn’t work out for you, I understand.
thanks
mike
Community Sales Manager”
I suspect part of this statistic is driven by the fact that new home builders are leading the market lower. This means new homes are of course selling better than existing, which may be more often occupied.
‘I suspect part of this statistic is driven by the fact that new home builders are leading the market lower. This means new homes are of course selling better than existing, which may be more often occupied. ‘
I think this is a big component of it. New home sales are up slightly. Prices have fallen most, incentives have risen, and new homes attract the more emotion-driven buyers.
Your comment doesn’t make sense though.
Homes ARE being bought. Much less than before, but there are still sales. Maybe all of these people are first time home buyers with 20% down, who knows.
The fact that the houses bought were VACANT is meaningless to them. They need to buy a house, what do they care about whether someone lives there or not. Why would they want to buy a lived in house as opposed to a vacant house?
Where it matters is that if all houses for sale are occupied, then those people, many of them anyway, will buy more houses in san diego. Kind of daisy chain like. They will sell and then buy. But if houses are currently empty then there is more supply then there first appears. IF the house sells it will not cause another house to be bought. The other house already WAS bought, with the first one being unsold. Or the houses are owned by speculators. Either case a high % of vacancy bodes ill for the market.
But it doesn’t mean people who DO buy houses are stupid for buying vacant ones. AFter they move in, it won’t be vacant anymore.
Getstucco is right . End-user buyers usually move in right away . The fact that you have over 50% vacant is a sure sign of high speculation % purchases .
I can say that the sub-prime lending and builder connection to sub-prime high % investor buying was a big part of the problem in creating a inflated market . In past lending cycles prudent lending would limit how many investors could buy into a tract .
The low interest rates started the up-market but the lack of prudent lending practice with sub-prime lending kept it going and turned it into a market based on speculation that real estate goes up every year so faulty lending wasn’t a risk .
In that any RE market can turn down at any time a real estate loan is a long term loan and must be underwritten for long term affordability . This is a really big mess I think we all know that .
In past lending cycles if you bought a investment property and it didn’t cash flow you had to put more money down or the neg. cash flow would count against your debt .
I think there are alot of investors out there that are waiting to unload in 2007 . If these investors don’t flood the market in 2007 the foreclosures will or both .
The point is that the seller of the vacant home has no need to turn around and buy a new home. Thus, the demand side of the equation is retarded. It basically implies that there has been a massive increase of inventory that needs to be worked off. And given the carrying costs of this inventory, you will see more aggressive sellers coming out as the 2-year resets on many of these “teaser ARMs” taken out in 2005 and early 2006 are reset.
Yes your right ,good point .These are just extra houses that were tied up by speculators or 2nd home purchases or flippers and they need to be sold and will add to the inventory coming up along with foreclosures .
Well, I think it is pretty self-evident to anyone capable of paying attention that a disaster is on the way. Like a modern day Pompeii. Seems like some of us in blogland had the seismograph plugged and tried to report heard some heavy rumbling. Our sensors have even detected the first belches of gas and smoke, but the volcano summit was obscured by clouds of NAR obfuscation for months. Now even the sheeple can see occasional flaming rocks raining down the lava and nue ardente racing down the mountain slopes toward them.
no, no that’s not a fart… that’s nue ardente… and yes it is glowing….
I am anxiously awaiting the Spring 2007 inventory avalanche (invalanche?). My guess is that people will not have learned, and still price their places high. Some of the places on my watch list have real winters, and by fall I might just pull the trigger if my right-priced lowball offer is accepted. I saw a few nice places sell for well below asking (10-15% below asking), but above what I think the intrinsic value is. One place that is too remote to make economic sense, but otherwise really nice, just shaved 20% off asking. That’s apprecion of 5% per year on what they paid. I think at 15% off current asking price (3% per year), we might make an offer. At that point it would be economically feasible for us. We’ll see if they are motivated when next winter is staring them in the face.
In California, I haven’t seen too much success lowballing, as sellers are amazingly stubborn. There are a couple of people sitting on a big paper profit in Modesto of all places, and unwilling to take a big gain and run. And in both cases they already own two homes. Losers. Next summer will be worse, and the summer after that worse. Opportunity cost is apparently a foreign concept. Because of the resistance to lowballing, people are just not getting any offers. By the time these people ratchet their price expectations down to where a buyer might consider negotiation, the buyers are gone, or have lower price expectation.
Yes, spring will be exciting, but as the tide continues to go out, summer and fall will be even more so.
“…financially distressed homes…”
Just thought I’d repeat that phrase, because it gives me so much pleasure!
Happy New Year, everyone!
“…squatting…”
Kinda like that one, too.
Reminds me of a book I think I saw:
“Dump” This House
by
Squat and Leaveit
That is the follow up to their first book:
“Taking a Dump in a House”
by
Squat and Leaveit
Another screen spraying evening…right on you guys!!
Upperdecker
by
Squat and Leaveit
Happy New Year to you, Auction Heaven. I notice you haven’t revised your auction heaven date…
Promise I will.
Just got lots to do at the moment.
Soon.
Personally I’m sick of all the anthropomorphic phrases. It falsely redistributes blame. Houses can not be financially distressed–people can.
Nah, you always have to blame something besides yourself - “Stupid POS house, it’s your fault we’re in this f*ckin’ mess.”
You call that appreciation! Bad house, NO biscuit!
LOL!!
“Maaske says the adjustment in inventory in the local MLS came for a combination of factors including fewer homes coming on the market, continued steady sales and expired listings of home sellers who have taken their listing off the MLS.”
Breakdown of adjustment in inventory factors:
Fewer homes coming on the market: 1%
Continued steady sales: 1%
Expired listings of home sellers who have taken their listing off the MLS: 98%
I’m waiting for some populist or “community activist” to get elected for mayor in someplace like Baltimire, and then declare that owners of vacant houses have to pay a steep non-use tax since they’re depriving people of a place to live. How cool would that be? Some socialist babe in France, who I believe is running for Prime Minister, just proposed such a measure to deal with the severe shortage of affordable housing in Paris. While it goes against the grain to approve of anything proposed by a socialist, I’d love to stick it to the flippers and speculators by giving them yet another compelling reason to dump all that vacant housing back onto the market.
That French ‘babe’(your words) is Ségolène Royal(Socialist Party) and she’s running
for President. Housing afforability will be one of the main items for all the candidates in France.
Hey, I’ve seen the picture. Babe it is. Can you imagine looking at her during the state of the union instead of watching Cheetah grimacing at the Rove-a-prompter?
I’m not certain the vacancies are intentional, viz.: I have been posting for several weeks about stagnant inventory of the lower-priced stuff in Morro Bay. It doesn’t grow, it doesn’t shrink, it doesn’t sell, it doesn’t fade, it’s sort of like trans fat. HOWEVER, the inventory of “long-term” RENTAL stock is suddenly climbing like crazy. People maybe finally getting it, that there’s no point in listing their POS for sale in the present environment, so they are hoping to defray some of the cost of Vacancy. This COULD just be a seasonal factor — I didn’t follow it so closely last winter — but an agent I’ve talked to up there used to call it a “tight rental market” and I haven’t heard him repeat that phrase since August. BTW, one of my favorite facts (still true) is the availability, for rent, of the back part of the Coldwell Banker office there.
az_lender:
I noticed a surge in long-term rentals in North and South SLO county showing up on Craigslist 2-3 months ago. Many of these listings were asking significantly above-market rents, and many included language such as “never lived in” or “like new” that I never used to see in rental ads. There also seem to be a lot of people renting out ‘executive homes’ (presumably to justify the very high rents). When street addresses were provided for these properties (which allowed me to check sales data), they had nearly all been purchased recently. This has really convinced me that there are many distressed owners in North and South county who are desperately trying to minimize their negative cash flow. I haven’t been seeing as many of these ads recently, so I don’t know if people managed to rent their places out, or if they gave up. Winter is typically a slow time for renting out here.
Do they rent by the hour? They’ve got some nice looking realtors who look like they could use an extra buck.
>>>and then declare that owners of vacant houses have to pay a steep non-use tax
But Marlo Stanfield’s crew made some use out of many of those Baltimore vacants.
Chico’s veteran RE agent “Tammy” says prices are not down here.
2006 Total Average Price Median Price DOM
845 $372,593 $335,000 63
2005 Total Average Price Median Price DOM
922 $364,463 $334,950 52
http://www.chicotammy.com/ChicoMarketWatch.htm
Tammy looks like an animatronic doll I saw at ToysRUs a few weeks ago. She’ll need new batteries if she hopes to keep spewing cr*p like “rest assured, the doom and gloom of double digit decrease in values is far from the truth.”
Recently lapsed Beautician’s license not exactly Nostradamus level qualifications for making these fu@ktard predictions.
She looks like a wheeling-dealing million dollar deal type genius. Wow! This real estate stuff is just so absurd. California chicky trying to imitate Donald Trump, a world-class jacka$$ in his own right.
Wow!!, you guys are amazing. First of all, you obivously are not familiar with my market area. The statistics quoted, are actual sales data, check them out for yourself and do the math. The media in my area wrongly suggested housing prices this past year to have dropped 20% in Chico specifically, this is in fact not correct. Ask about sales volume, that is another thing altogether. imploder, you may want to brush up on the difference between reporting the past, in this case 2006-versus a prediction; the last time this “chicky” checked my stat’s did not, have not and will qualify as a “prediction” on future market conditions.
Have a Great 2007!
Telling people to “rest assured” and referring to the ’so-called “bursting housing bubble”‘ is inferring that everything is “just fine” . That IS a (not so subtly inferred) prediction.
If that is not your prediction. OK, what is your prediction for 2007?
My comments, as stated before, are quite simply, a response to the past year of media coverage. Folks that I have come across have voiced concerns, due to local media reports, that they had already lost tens of thousands of dollars in their homes equity, that was not the case. I believe in reporting facts, whatever they may be, positive or negative, not just jumping on housing bubble band wagon and going with it. As to my prediction for 2007, I will write back after Thursday, I am attending our Tri-County Economic summit and will have more information then.
Here’s what someone from your area noted:
Comment by Big Bob Slob
2007-01-09 01:15:30
Let’s look at the real numbers in Chico not hidden within deceptive Averages and means.
The following houses are on the same street and are the exact same design, each have 1320 square feet.
1880 Devonshire Sold 2nd Quarter 2005 for $334,000
1868 Devonshire Sold 3rd Quarter 2005 for $322,000
1837 Devonshire Sold 2nd Quarter 2006 for $316,000
1841 Devonshire For Sale now $285,000
This is a 16% drop in values since 2nd quarter 2005 and a 10% year on end drop. Why? The biggest reason is that lenders are not lending to just anyone anymore.
Big Bob Slob’s prediction for 2007:
The values of Chico homes will continue to drop at least by 10% over the next year.
Reply to this comment
Comment by Big Bob Slob
2007-01-09 01:41:00
I should also note that Tammy’s numbers are very wrong. I don’t know how she came up with these figures but they are bull.
Let’s do that. I came up with these numbers, as stated on my site from the Sierra North Valley Multiple Listing Service Database. In response to your Devonshire example, 1880 Devonshiore sold 2nd quarter 2005, according to the MLS database this property was a 3/2 with “1856″ square feet not, 1320 square feet. Just to make sure the data that I pulled was correct, I verified through the county records the square footage there stated “1842″ In addition, I pulled homes sold the entire year of 2006, in area 1f of the MLS with a minimum of 3 bedrooms, square footage range of 1300-1400 sf, which includes the Devonshire street and came up with three- a 3/2 built in 1987 which sold for 261,830-16 Christopher Alan; 1837 Devonshire, built 2001 sold June 316K; and 1524 Ridgebrook, 3/2 built in 2001 with 1316 sf which sold for $350,000 on October 25th 2006. So, that kind of adjusts your figures a tad bit. I would also like to note Bob, there are many factors in determining market value and setting a price. Judging by means and averages, does not set an entire clear picture, just a tip of the iceburg. I personally have included the variances on the quantity of bedrooms on my site; we could break that down further into specific geographic areas within a city, what about condition of the home, has someone upgraded, is there a thrashed house next door? The list goes on… The bottom line, I have stated time and again my source, which I deem as accurate, is the database I utilize in my business daily. You stated my numbers are very wrong, show me where. Is the market shifting, of course it is, and this is to the buyer’s benefit. Our inventory of homes has gone from approximately 130 homes in March of 2005 to a high of 600 plus and now there are currently as of this minute 386. Buyers are able to take their time and choose the right house, for a good price; The mentality of Mr. Jones house next door sold yesterday for x amount of dollars and Mr. Seller just adds 10k to the price and gets it-is over. This is not a bad thing. As for your prediction for 2007 for the Chico area, I’m curious as to what your conclusions are based on. Employment? Poor lending practices? Or just a gut feeling?
“Statistics compiled by DataQuick showed San Bernardino County had 2,548 foreclosures in last year’s third quarter — up 100.8 percent from the 1,269 reported in the same period of 2005. (A) foreclosure web site showed there were 426 foreclosures and 5,617 pending foreclosures throughout the county in December”
I want to give a hi-five to all the IE specialists on this blog. myself included, who have been predicting that the IE/hi-desert outback wastelands would have a RE meltdown. If you know the humongous amt of inventory going up this decade in the IE, and the fact that many of the sales were to first-time marginal subprime borrowers, then it comes as no surprise that Riverside/SanBern counties rank 1-2 in cal in foreclosure rates. Add to this the lack of hi-paying jobs, no diversified economy, long gas-guzzling commutes, section 8’s, squatters, desert gangtas,meth labs,110% brain-numbing heat,ad nauseum, and presto, IE/hi-desert becomes a scorched wasteland of abandoned/squatted homes.
These areas of the IE/hi-desert are RIP:
Victorville,Adelanto,barstow,banning/beaumont,hesperia,29 palms, phelan, Lancaster,hemet,menifee,san Jacinto,perris and rosamond. Add a few coachella valley burbs to the list as well.
Gee don’t forget the beautiful cities of Mojave, California City and Boron!
Ridgecrest too. How about Tehachapi? Oh yeah how about the City of Kern and Wofford Heights.
Baker California too. Baker is the town that makes Barstow look good.
Mojave is such a gritty isolated rail/truck stop with a population of down-and outs living in shantys-depressed trailer parks that even the developers do not build in that city. Maybe on the outskirts or in nearby rosamond.
California city should have been on the list. Did drive thru there summmer of 2006 and saw quite a bit of constuction of new SFunits/developments plunked down in isolated sagebrush tracts miles from any roads or shopping centers.
“lack of hi-paying jobs, no diversified economy, long gas-guzzling commutes, section 8’s, squatters, desert gangtas,meth labs,110% brain-numbing heat,ad nauseum,”
But, other than this endless list of stuff, it’s like the Garden of Eden….
Plus, if you live in Chino, you know when your 2 hour commute is over and your almost home… cause you can smell it…
Yeah. I always get confused near Chino and slam on the breaks. “WTF, am I at Harris Ranch??”
posted ” Yeah. I always get confused near Chino and slam on the breaks. “WTF, am I at Harris Ranch??”
Damm near. The whole area was/is dariy cow land cow puckie 3 feet deep every where. Current feed lots operating next to new home development…. it’s really ripe during the long hot summer!!!!!!!!!!!!
East of chino is the depressing dreary dusty flatlands of Norco. Here, just west of the 15 fwy and just north of the 91/Santa Ana river basin, there has been a mega amt of new home tract construction.
These are the storied assembly-line waves of Mcs*itboxes stretching for miles thru the former Dairy pasture fields. If you drive along the 15 between 91 and the 60 while imbibing cow dung smells you will see a huge banner on a house tract retaining wall off the fwy saying”KB homes selling for $600,000″. That whole area sucks!Pancake flat,hot, dusty, smoggy, dung smells,the whole lot. Typical IE.
Congrats. Look out for meth labs blowin up!
“Collins says the number of defaults came in part when a new homebuyer just barely qualified to buy a new home and does so by paying a minimum payment. Then the value of the home heads down and the buyer needs to sell because of a job change and the home is worth less than what he can sell it for.”
—————–
Sounds like he’s in an okay situation! The home is worth less than what he can sell it for! Or did they mean the home will sell for less than what he owes?
Ok, forget the fact that this couple has 3 crazy real estate investments. Let’s just notice that their primary residence is mortaged to the tune of > $800K and their total combined income from four sources is only $58K. On what planet does this make sense?
Planet Nummy-Nuts
Planet Nummy-skull
These folks have leverage $2.4 million of real estate on $50k income. This is what caused a market where now people who make $100k can’t even afford to by a single home.
Thanks to Greenspan, Fannie Mae, Freddie Mac, Wall Street, and the idiot foreigners who keep buying all these mortgages.
and don’t forget to thank the author of whichever Get Rich Quick book they read. On second thought, maybe they just went to a seminar. Their literacy seems questionable.
The funniest part is the dumbsh!t financial planner does not notice anything whatsoever strange about these McTrumps’ “entrepreneurial” ventures. Just trying to reconcile the following factoids could give anyone with half an ounce of common sense a really bad headache:
1) Total household income = $58, 450
2) Real estate assets = $1,955,000
(Don’t know how they came up with the appraised values — probably used book value of some kind, rather than current market value)
3) Total real estate monthly debt service = $6,500 (Pretty low monthly for the proud owners of a real estate empiretta valued at near $2m)
4) 401(k) plan savings = $1,200
5) Supposed net worth = $426,700 (pretty high net worth for a couple with below-median household income and no savings!)
My head is spinning!
Maybe they’re related to Casey.
The Lebodas are going to get a nasty surprise if they try to liquify their supposed “net worth”. McTrumps indeed! Nice one GS.
No, no, no….. Not McTrumps…. McChumps…
I’ve done a Union Tribune Money Makeover and I will tell you the planner had NO say in what is printed. Moreover you get no say in who is selected as the client and may have to work with clients who do not match your firm’s usual client.
That said, it looks like this planner is an insurance agent and my guess is that the $3,500 fee would be further increased by extremely high commissions on products “advised,” especially insurance products. Although if the client signed the right type of contract it might be the fee covers everything.
Uranus?
Northwest Arkansas Housing Market Slumps
http://www.nwaonline.net/articles/2007/01/07/business/010707nwahousingslowdown.txt
“It just amazes me that with all the solid data available to bankers and builders related to supply and demand that banks are still willing to loan and builders are still building. It will hit a wall,” said John Dominick, finance professor and Arkansas Bankers Chair for the University of Arkansas.
Avalanche……….Slump………Hit a wall
“Never been a better time to buy”……hehehe
Well, we got our front page LA Times bubble story, but it’s not exactly what I expected. Apparently, the bubble is over and you’d better by NOW before prices go up this spring. LOL.
http://www.latimes.com/business/la-re-harney7jan07,1,1165831.story
The “Bubble” is over. Now the blood curdling disaster starts.
Hey,
Great topic Imploder! Disaster it is. Which horror/disaster film best describes the carnage to come?
Night of the Living Dead?
The Sixth Sense (I see debt people…(who said that anyway?!))
Alien (An FB has a realtor come out of their chest..)
Texas Chainsaw Massacre?
Apocalypto (Give me more gratuitous gore)
Last Days of Pompeii?
Armaggedon?
Snakes on a Plane?
‘The Descent’
Just when you think it can’t get any worse - it does…
Good movie by the way
Falling Down
Bevis and Butthead buy a house
Regarding this LA Times article…
I clearly remember reading something recently that pointed out that the margin of error of the stats cited in that article is greater than the values themselves. Therefore, those stats are MEANINGLESS. Can anyone find the link that stated the margin-of-error?
What a fu*kin joke!! All I see here in Valencia is price reductions!! Nothing is moving! I saw the article this morning, what a bunch of crap! These people will say anything to keep this thing going! One house we looked at last night was reduced over $200k!
Here’s what I wrote to him.
kenharney@earthlink.net.
Mr. Harney,
This has been a massive runup in housing prices where anybody who could fog a mirror could get a 103% i/o,option payment,arm mortgage….more of a credit bubble (loose lending standards) than a housing bubble.
Many of these new buyers(debtors) can’t pay their mortgage once it adjusts. In the past few years you needed more documentation to RENT that to buy a house. Remember when you had to QUALIFY for a loan? No more! Once lending standards tighten up the bottom will fall out of the market.
By reporting on this without really having a grasp of what is really going on, you are doing your readers a huge disservice.You have a responsibility to tell the truth, the whole truth, and not just one side.
Your readers depend on you for that.
Just watch….family after family will go bankrupt this year because they got in over their head.By 2008 foreclosures will be historically high.
Are you a shill for the Real Estate Industrial Complex?
Are they paying you to cheerlead for them?
Good comment, LILLL. I just told him puff pieces like his are the reason LA Times readership is collapsing. He should dust off his resume or maybe join the printers’ union.
“LA Times readership is collapsing”
The Tribune has turned the Times into a piece of CRAP!
49Dodge,
True….
Yep. I cancelled 2 years ago. This paper was good but not anymore.
The answer is yes, it was uncovered at the OCR blog.
He is employed in the REIC.
Linda, this guy makes a living selling ‘education’ to realtwhores and other REIC ‘professionals.’
He’s right up there with Liarrhea.
See his bio on the Realty Times website (posted below in my comment).
reduced over 100k, WTF how much does it cost in Visalia to drop 200k, do they pay you to move in.
Harney’s syndicated column appears every weekend in papers all over the country. Most papers run it in the real estate section, not the front page. He writes:
“All of this suggests that the 18-month market correction that followed the four-year housing boom has just about run its course.”
What correction? I haven’t seen (much of) any correction. I am so tired of hearing that “the downturn is over” when it hasn’t even started yet.
Sorry, I meant front page of the real estate section.
What is that guy smoking?
Let them have their happy thoughts. That will make their destruction all the more painful. A lesson is only learned when it is very painful and this is going to be a mutherfukker for these fools.
“What is that guy smoking?”
A box of Cubans he received as a Christmas gift from the NAR.
His email is at the bottom of the article!
Educate him please!
This guy needs massive negative response!!!
lainvestorgirl,
Check out this blogger’s data on total YOY dollar volume sales changes per zip code. Notice where Santa Monica/Venice fall among the zip codes. See anything that surprises you?
Oops! http://sbbeachbubble.blogspot.com/
Okay, so volume is down, realtor’s are going hungry, that’s great but where are my PRICE DECLINES DAMN!T? Excuse me, got a little carried away there.
Don’t let the inglewood Astronomical YOY increases fold you. Inglewood is a crapzone. I suspect some RE Mortgage fraud taking place though i have not done any deep digging. When 2 SFH’s in lennox 90304 sell for $600,000(per nov datquck) this should be a red flag, as lennox is one of LA.s notorious ghetto zones. Or the other possibility is a hugh amt of overappraisal/pushing of Toxic Mort products in inner-city cesspool areas to really naive first times buyers, and the irresponsible lenders approving/packaging of $400-$500,000 RE loans
in LA inner-city crapzones, such loans to be swiftly passed off to the the secondary SBA market before the ink is dry on the contract.
Yep, these areas are prime zones for the kind of straw buyer fraud outlined in today’s top piece on Colorado mortgage fraud. No doubt, Inglewood has many vacant properties purchased by people with long criminal records, no jobs, or anybody who is willing to sign some papers in exchange for a few hundred $$.
Holy cow. Take a look at the so called journalist’s background. http://www.postwritersgroup.com/harney.htm
Quote” Harney also serves as vice president and member of the board of directors of the National Association of Real Estate Editors. In 2006, Inman News named him to its list of the “100 most influential leaders in real estate.”
Sneaky git. He is one of “them”. Reminds me of the film http://en.wikipedia.org/wiki/Invasion_of_the_Body_Snatchers_(1978_film).
I’d just like to know how many properties Mr Harney is buying himself now that the market’s found its bottom.
Ah, the dreaded “acid test”….
“and what have you bought lately”?
Ken appears to be full of it, besides being a real estate apologist.
http://realtytimes.com/rtcpages/20060306_fizzles.htm
“Home sales may be slowing in major markets around the country, but the latest federal survey of price appreciation suggests that the real estate boom was alive and well — at least as of the final quarter of 2005.”
In today’s LA Times story,
“All of this suggests that the 18-month market correction that followed the four-year housing boom has just about run its course.”
Today he claims 18 months of correction after the boom ended, which would be mid 2005. But 9 months ago said the boom was still happening at the end of 2005. Wow, apparently the correction was happening and we didn’t even notice it.
If you’d like to find even more contradictions in claims and facts, visit
http://realtytimes.com/rtcpages/KennethHarney.htm
While some of the MSM is starting to cover the foreclosure problems Nationwide ,while advising people to be careful about the loans they take out ,at the same time they end their programs with a prediction of a rebounding market in 2007 ,(on CNN today ).
I would like to know why every major news station has to give any air time to the new myth by the NAR/realtor trade group predictions of a upbeat market this year . Why does the MSM repeat a ad campaign ? What a joke .
If the media was being honest with the people they would tell them that there are so many sub-prime and speculation purchases that are going to need to re-sell ,that the market is going to be flooded ,making it impossible for real estate prices to
rebound in 2007.
Without sub-prime lending ,where are the buyers going to come from to absorb this excess inventory with the affordability problem . Only way new buyers can come in to absorb the inventory is if prices come down to the point of affordability on a conventional loan . It’s a impossible situation . The industry stalled the problem in 2006 with the help of sub-prime lending being alive and kicking and builder game playing with loans and incentives .
I guess we all know this is a big mess .
It is quite apparent what is happening right now. In a desperate attempt to prop up the bubble (home prices), the government (per the fed) has begun a secret campaign to CONTROL the market…
In the first step, realtors convinced existing home-sellers to take their homes off the market until spring 2007 or later, assuring them it is in their best financial interests. Next, lenders, appraisers, builders, and realtors, using bogus buyers, chew through the massive inventory of new homes, selling them at inflated prices, putting large amounts of cash (thanks to the fed) into the builders pockets in exchange for them holding off on new starts. Then, when the builders inventory is at an acceptable level (very low), existing homes will be put back on the market at super high prices, all due to recent comps. This will give the appearance of a market swinging back in the sellers favor, prompting J6P to jump back in. Mania sets in again, and with continued loose lending, sales ramp back up to 2005 levels while builders hold off on starts. By late 2008, inventories are thin, and builders are jumping back in. The nation is, again, glowing with greed as the real estate bubble reaches a level, frightening even to David Liareah.
I don’t believe there’s any conspiracy when it comes to the realtors, an agent’s not going to turn down a commission for the sake of some grand plan to prop up the industry.
The media will do whatever they can to keep people wired into news. At this point, more of a downturn in the housing market is NOT news, but predictions of an upswing in the market IS news.
REIC Shill Alert! Did LA Times mention his affiliations? His major customer constituency seems to be REIC commission earners, among others.
—————————–
Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board’s Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation.
He served as a member of the U.S. Department of Housing and Urban Development’s Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation’s journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.
———–
From the NRDC website ( http://www.conferencecenter1.com ):
“Founded in 1981, The National Real Estate Development Center (NRDC) creates professional education programs and publications designed to assist the full range of disciplines involved in real estate including financing, legal, development, tax, accounting and construction.”
I found this on the Seattle Bubble Blog.
“Regarding Ken Harneys article today in the Sunday Seattle Times, I emailed him telling him that I thought he was irresponsible for prodding sellers into beleiving that the market is still very strong. His collumn is supossed to offer advice to buyers and sellers how best to deal with the current market. I think he is mis-leading all parties involved. He has not yet responded.”
How many papers did these turd appear in?
I read the column as well. My wife and I have actually been looking to buy in the San Gabriel Valley for some time now (just had our third child and need to get out of our two bedroom place) and when I tell the real estate agents we interview that it is my intention to offer 20% off of asking they say “oh thats not done” I tell them it will be when I do it and with some other agent and show them he door. What this is about is that they don’t want to let the comps go down and are fighting tooth and nail to prop up the dying market. The whole industry is a ponzi scheme and based on stupid people giving other stupid people their money. Regardless we still plan on buying in the next to months.
I just had my third and live in a two bedroom.
I agree you need to get a bigger place but eventually but you really have a year before it become a real issue. The newborn can readily stay in a crib in the parents room.
If you get a price your comfortable with move. If not rent a 3 bedroom home or apt.
With my third I now consider myself in the market to buy a home within 5 years ( maybe )
I did the same with my first property purchase. The agent said the same thing. I said “What should I bid then?” She said, “What you think the properties worth”.
I said, I think the property is worth 15% more than what they’re asking…but there doesn’t seem to be anyone else in the market who agrees with us….so for now, I’m only offering asking-20%”.
We negotiated from there but the nonsense of “agent reasoning” was fascinating even then. Agents seem to go to alternate reality school that aims to shame, embarrass or humiliate relatively ignorant people into accepting their stupid negotiating “structures”.
As if real estate was actually different from any other property or investment in life. Sadly, a lot of people “buy” this nonsense and let themselves get housed.
I watched a FLIP THAT HOUSE program last night . The flip was in Highland Park Ca. At the end of the show the RE agent told the Flipper that she was going to make over 200K on the flip .
I wish they would have follow-ups on these programs to see if the flippers really make as much as the RE agent claims the listing is worth . People watching these programs get the idea that its easy money .
They have a few other real estate t.v. shows that irk me also . One show is called WHAT IS MY HOUSE WORTH .
A real estate agent comes in and tells a seller what their house is worth and advises them on potential improvements etc. Than the real estate agent comes up with a price the house is worth at the end of the program . The sellers jump with glee because it’s usually worth more than they ever expected .
My beef with this program is that the RE agent isn’t a certified appraiser and the program makes out like you can trust real estate agents to give you accurate appraisals . Some of the advise I have seen the shills give these sellers sucked . One agent told a lady that if she upgraded her kitchen by 50k she would get another 200k for her place .What a joke .
Just as blogs have surpassed the MSM for ‘print’ journalism, I think this is a perfect opportunity for enterprising folks to pick up their digital video cameras and get busy reporting on the facts on the ground and the bigger picture (a la the correspondent from Montana (or was it WY?) on this blog who made that excellent video about the RE market there). Time to give the TV networks a bloody nose.
There is a show on TLC called Property Ladder where they DO show the final purchase. Plus they show carrying costs, all while showing the flipper sweating as the DOM gets bigger and bigger. The last two I’ve watched the flippers barely made it out alive.
I have seen that program you speak of and it’s find if they show what really happened to the property, but the show that ends on the real estate agent claiming how much the property will sell for is misleading IMHO.
I have been reading up on the show Flip This House, when I found out about this dirt bag Sam. He has ripped a bunch of people off through the years. I can’t believe A&E even hired him for the show. I will post the website where I found some info on him but here are a few tidbits.
Sam P. Leccima of the Atlanta-Based Season 2 cast of “Flip This House” had his Real Estate License revoked on September 26, 2005 according to page 18 of the Georgia Real Estate Commission’s list of sanctions since July 1, 2001.
Stephen Wolfe wrote:
I am a real estate investor in Atlanta, and I have researched the validity of these shows with my own Realtor and they are FRAUDULENT! I even went to a viewing party for the 2nd episode (last night) and numerous participants of the show informed me that it is a SHAM. From the purchase date and price, the cost of rehab, the DURATION of the rehab, and the sale date and price — they are all FABRICATED. I would take the inspiration of Sam Leccima and his crew with a grain of salt. I have been investing full-time for over a year now and it is a very difficult profession. It is certinaly not as easy as Flip This House portrays it to be. Posted on 14-Aug-06 at 6:12 pm
http://www.flipthislawsuit.com/2006/08/29/samuel-p-leccimas-license-revocation-documents/
Hi,
I’d like to know if anybody here cantell me what’s going on with this house:
4415 Pleasant Valley Ct N, Oakland, CA 94611 2 beds, 1.5 baths, 1,035 sq ft
According to Zillow, it sold for 400k in May of 2006–then again in July 2006 for 560k. It’s listed again, (right now) for 599k with a messgae that the owners are “motivated and willing to look at all offers” http://sfbay.craigslist.org/eby/rfs/258928707.html . My wife and I really like the area and was thinking of possibly putting in a lowball offer. Any information appreciated!!
Thanks, Lu
Interesting comment at Broker Outpost forum by “mudshark”. I like the sound of “BPO” (broker price opinion) which I haven’t seen mentioned much around here.
———–
Everyone is spoiled by “fast” money and rapid appreciation. Now get ready for rapid depreciation. I’m already on the 2nd round of rebuttal on a BPO and have brought the cut in value from 120k to 60k. Watch your appraisal as many investors will be putting more weight on a BPO (the pricing for what it will take to dump the property in 30 days) as opposed to an appraisal (possibly prepared with comps from 4-6 months back in a slowing/declining market).
link: preview.tinyurl.com/yzl7mf
Comment by NYCityBoy
2007-01-07 12:42:04
Did they at least sell good dope?
Reply to this comment
Comment by LostAngels
2007-01-07 15:30:32
I don’t know cause they forgot to leave their business card.
(Comments wont nest below this level)
Comment by imploder
2007-01-07 18:22:38
Gee, They usually just carve their cell phone number into the hardwood floor.
I was laughing so fricking hard I fell out of my leather office chair!!!!
I remember in the 90’s going into this forclosed abandoned house to show a client… we walked up to the door there was no DOOR HANDLE…. I pushed it open to see mattress’s, garbage, dirty blankets, sh*t, you name it, it was there right in the middle of the living room. The walls spray painted. The smell was so bad…. the client looked at me and I looked at him…. and we practically ran back to the car! I should have known when there was no door handle just the hole….. I guess I would say I was very naive! I was in my early 20’s and never realized people could live like that.(Squatters).
Shows are not real….
http://www.flipthislawsuit.com/2006/08/29/samuel-p-leccimas-license-revocation-documents/
Samuel P. Leccima’s License Revocation Documents
The Georgia Real Estate Commission finally sent me information about Samuel P. Leccima’s real estate license and the reason that it was revoked. First, let’s look at his certification. He got his license in 2002, and except for a few periods of inactive status, he remained licensed until September of 2005.
But then there’s the revocation. I will let you read it for yourself, but it appears that Mr. Leccima had several problems throughout his career as a real estate agent that involve some seriously questionable dealings.
In one 2002 deal, a purchaser’s earnest money was not returned when the deal didn’t go through. The administrative court found that Mr. Leccima altered the contract after the deal was signed, and was involved in some curious financial dealings.
In 2003 there was another property that failed to close. Mr. Leccima claimed to be working for a real estate company that he was not actually affiliated with. The administrative court found that Mr. Leccima failed to deliver the sales contract to the purchaser. Once again, earnest money was not returned when the deal didn’t complete. The administrative court further found that Mr. Leccima added the language “After inspection, earnest money is nonrefundable” to the sales contract without authorization or consent after it had been signed.
You can read more at the website posted….
Comment by btpena
2007-01-07 22:46:51
I read the column as well. My wife and I have actually been looking to buy in the San Gabriel Valley for some time now (just had our third child and need to get out of our two bedroom place) and when I tell the real estate agents we interview that it is my intention to offer 20% off of asking they say “oh thats not done” I tell them it will be when I do it and with some other agent and show them he door. What this is about is that they don’t want to let the comps go down and are fighting tooth and nail to prop up the dying market. The whole industry is a ponzi scheme and based on stupid people giving other stupid people their money. Regardless we still plan on buying in the next to months.
This is precisely why we have not bought another home after the sale of our last one. We got sick of dealing with stupid ass real estate agents and their refusal to low bid homes, and thier agressive arguments over how low I should really price my home (They too bitched about me f**cking up the comps for the area too. Like I cared. I just want my homes to sell, and if that means I have to adjust the price, then so be it). It was a hassle when I sold and an even larger hassle when I went to buy.
Screw ‘em. I’ve bought before in a really down market, and thier attitude then was totally different. At that point, they become so desperate for sales that they will agree to lowballing sellers just so they can get a home sale+commission, any commission. I have no problem waiting it out for another down market again.
Oh yeah, rent a larger home until that point.
can people move in house without permission from the owner no rental agreement like squatter when house is vacant do you have to evicted the people