“A Window Of Glut” In California
The Union Tribune reports from California. “San Diego County housing prices turned negative last year for the first time since 1995, DataQuick Information Systems reported yesterday. The market ended the year with a median price of $483,000 for all homes, off 6.4 percent from December 2005. But the downturn was not uniform countywide.”
“For example, Solana Beach was up 6.6 percent, to $1.2 million, on 87 single-family resales, but local broker Brett Gobar said sales at his brokerage were sluggish and prices had fallen 20 percent over the past 24 months. ‘We’re going to have to see a huge amount of activity in the next six months to prevent further declines,’ Gobar said.”
“Imperial Beach turned in one of the biggest single-family-resale price declines, down 6 percent, to $487,000, for areas with at least 75 resales, a situation Cheryl Schaumburg of One Source Realty blamed partly on media coverage of the real estate slowdown.”
“First-time buyer Andy Sobel faces foreclosure on a one-bedroom condo he bought for $240,000 two years ago in Rolando. Sobel took out first and second mortgages with adjustable rates to make the purchase, and once the monthly payments started adjusting upward and the value of his condo fell, he said he had no choice but to stop making his payments.”
“He’s now in the foreclosure process and while his condo is up for sale at a much reduced price, as low as $165,000, he’s had few nibbles. ‘I was a naive buyer, I’ll admit, but no one should have put me in this loan,’ said Sobel.”
“Shaun Anderson said he discovered a buyers’ market when he shopped for a home in Poway. After months of house-hunting, he bought a two-bedroom, $330,000 condo in November, priced $30,000 below recent comparable sales. ‘Things were way too expensive for me before,’ he said. ‘It is fantastic. It’s pride of ownership. It is an appreciating asset.’”
“Sylvia Starbird, broker in Mission Valley, said would-be buyers may want to buy at the bottom of the market but she cautioned against waiting, since no one can tell if that point has already passed. ‘For sellers, if they don’t have to sell,’ Starbird said, ‘they may want to wait a little bit before they do that.’”
The Voice of San Diego. “Of the 1,700 condos on the market in downtown San Diego, 1,485 are brand-new units, about one-fifth of downtown’s entire condo stock. Another 3,414 condos are currently under construction, having at least broken ground, according to the Centre City Development Corp.”
“Just the units currently available would take at least 12 months to sell at the peak activity rate of 2004, estimates Peter Dennehy of Sullivan Group Realty Advisors. He said adding thousands more units may only exacerbate downtown’s housing oversupply.”
“But the nature of high-rise development is that of a nonstop train, once developers start on a building, it’s nearly impossible to stop when conditions get tough. ‘Once they go vertical, they rarely go back,’ Dennehy said.”
“‘The glut potential of downtown San Diego is highly overrated,’ said Russ Valone of MarketPointe Realty Advisors. While he still thinks the market will weather the slowdown, he reluctantly admits there’s at least a little cause for concern. ‘Maybe there’s a window of glut,’ he said. ‘But it’s not a very widely opened window.’”
The Record.net. “The median sales price of existing homes in San Joaquin County was down nearly 6 percent from $425,000 in December 2005 in a yearlong slow market. Sales continued to slow, from 416 in November to 406 last month. That compares with 636 in December 2005.”
“Sales activity has been picking up a little recently, but the market still feels pretty dead, said Bob Riggs, president of Riggs & Associates, GMAC Real Estate, Stockton. ‘We’ve seen the phone ringing a little bit more, had a few more showings in the last few weeks, but it’s still slow,’ he said. ‘I don’t really see much pickup until, one, it quits freezing outside, and two, the flowers start to bloom. That’s pretty typical.’”
The Press Enterprise. “It seemed logical. With thousands of filmgoers and industry types in the Coachella Valley spending 10 days watching movies at the Palm Springs International Film Festival, more than a few had to harbor desires for a second home or a better first home.”
“Or not. One group of three people had taken the shuttle to the Murano development’s single-family, three-bedroom modernist model Saturday, sales counselor Alan Six said. By 12:30 p.m. Sunday, the shuttle’s only occupants that day had been its driver, Bennett Simon, and the company’s real estate agents.”
“‘It didn’t go great,’ Six said. ‘I suspect they’re here to see a movie, not see a model (home),’ said Six.”
“‘We didn’t want to step on anyone’s toes,’ said Candace Casey, senior vice president with Chicago-based developer. ‘It’s a down market and we need to create awareness at a higher level.’”
‘Southern California’s housing market continued to send mixed signals last month as prices reached a new peak while sales volume remained at a ten-year low, a real estate information service reported. While year-over-year sales in the region have declined for the last 13 months, San Diego County’s sales started to decline 30 months ago.’
‘Although Los Angeles County’s median home price rose 6.5% from the previous year, the number of sales fell 12.9%. Meanwhile, the majority of houses sit. The average days on the market for existing homes in L.A. County rose 5% from November to December to 104 days, according to multiple-listing service figures compiled by brokerage ZipRealty Inc. In the same period, the number of homes on the market declined 14% to 32,363. ‘Buyers are going after the same few homes, the low-hanging fruit that are the good deals,’ said Michael Davin.’
‘One trend Davin of CataList Homes has noticed in the last 45 days is the rise in the number of pending home sales that are subject to the buyer selling an existing home. ‘A lot more homes in escrow are contingent on the sale of the down-leg property,’ he said. ‘There are fewer first-time buyers now because of the high prices. They realize they won’t be making the same great appreciation.’
After looking at the rolled up numbers, I would have to say, December turned out to be a pretty good month for the RE bulls. A little discouraging. Rates dropped a tiny bit in Dec - sales & prices picked up from Nov. We will need a few dire months to drown out the crowing….
“As reported earlier, Los Angeles County’s median rose 6.5% to $522,000 while sales dipped 12.9% to 7,703.
The previous median price peak was $493,000, which was set in June. Year-over-year price increases have been in the single digits for nine months.”
The bulls are crowing…
“Orange County, which had no growth in prices year over year in November, saw its median tick up 3.4% to $642,000, while sales fell 28.9% to 2,719.”…….
“We need to remember that prices have gone up 100% in Southern California in the last four years,” Prentice said. “Most of that increase is here to stay.”
Oh really? Statistics versus facts:
‘First-time buyer Andy Sobel faces foreclosure on a one-bedroom condo he bought for $240,000 two years ago in Rolando. He’s now in the foreclosure process and while his condo is up for sale at a much reduced price, as low as $165,000, he’s had few nibbles.’
The median price is not very useful in a market in transition, IMO. Were there more elaborate homes sold? Concessions?
And where did all that inventory go? It wasn’t sold. The foreclosure numbers are way up in CA and growing. Builders keep building. The bubble psychology is evaporating and the subprime sector is as well.
The median is still climbing in Denver, CO. too, but not many are suggesting that prices are really going up.
Also if you look more closely at the OC number, resale homes and condos did poorly (.8% & -6%). New homes median is what brought it up, but note that homebuilders reduced prices and gave incentives, suggesting larger houses sold that brought the median up. Numbers can be very deceiving.
Right, wanna bet that the reason Sobel has cut the price so hard after two years is because he is in competition with dozens of new condos in this ‘window of glut?’ The developers incentives aren’t counted and his unit goes back to the bank.
I still say , why is a guy selling only after 2 years of ownership? Also , I would rather see this Sobel pay his damn mortgage rather than say he has no other choice . I don’t care if the dude can’t afford the place , get two jobs or take in a renter . Talk to the lender about recasting the loan to make it more affordable . Eat your mistake for years sucker .
But my real point is that this is why you can’t make low down sub-prime loans because the people walk so easy .
I still say , why is a guy selling only after 2 years of ownership?
Because he belongs to what DinOR likes to call the “24-month club”. 100% tax-free capital gains up to $500,000 after 2 years. At least, that was “the plan” until Mr. Market pissed on his parade.
“I still say , why is a guy selling only after 2 years of ownership?”
There are large numbers of homes on the mls in all bubble markets purchased new in 2004 and 2005. Most of these developments are nowhere near completion. These resellers are hosed. The builders are shutting them out due to incentives and price slashing. Foreclosures are starting to rear their ugly heads in these places.
Many flippers bought second homes but did not want to pay taxes for selling them. The law says they must hold the houses for two years or pay taxes on the profits from the sale. They should have sold earlier and paid the taxes!
Big Bob,
Not only did they need to own them for 2 years, they had to live in them as well… which will be hard to prove when the IRS sees their returns going to their primary residence for which they are deducting interest.
John Doe
I personally can’t imagine a scenario where the market can start to run. Frankly, I’m shocked at the relatively strong showing in Dec and for all of ‘05. I was expecting a steady unraveling and to see it pick up to the downside in Dec. This news, spun correctly, might shake some extra GFs out of the shadows, when the NAR starts crowing.
We might have a longer more drawn out decline than I was hoping for, unless the foreclosures continue to climb at 300% for the next few quarters….
Visited my mom in Victorville CA ….existing houses that were listed at 290k to 307k three months ago - are now 260 - 280k. Not even many sign twirlers, saw two for the same development on the same corner.
You can literally feel the slow down and the early signs desperation on the part of sellers even in an affordable area.
I was in the San Fernando Valley today. Saw my first Bank Owned REO advertised right up on Realtor for sale sign… house has been for sale for 9 months.
I was driving along the 60 fwy in riverside and saw a big billboard advertising foreclosure help. Looks like it was advertised by an investment company. Portent of things to come out in the hopeless IE?
Nice.
The thing I can’t believe is that despite the huge number of foreclosures and REOs on the market, each one is listed at all time highs. I can’t tell you how many REOs I’ve seen for sale at say $550k, when only 4 months ago they were last sold at $490k. Almost as if mortgage companies have decided to get in on the flipping game.
Yes, there’s a particular dump in one of the worst parts of Santa Ana that at the height of flipperdom would have never sold for $629K that is listed as a REO at $699K. I would probably sell somewhere around 560 right now if lucky. The lender is so stupid.
John Doe
This is why I like the size adjusted (median price per square foot) that I notice several bloggers using.
Ibet the price per sq ft is actually dropping,the median is a lousy way to judge what is happening.
Yes seriously….can someone explain this sham about prices going up while foreclosuers are increasing and sales are decreasing?
If so, I’d like to meet the dipsh^ts who are paying over $650K to live in Orange County, the nation’s centre of fraudulent businesses.
“If so, I’d like to meet the dipsh^ts who are paying over $650K to live in Orange County, the nation’s centre of fraudulent businesses.”
You Think paying $650,000 for an OC home is bad? How about the Dumb shmucks payng $500,000 for homes in Maywood and Huntington Park, which are 100% spanish speaking ilegal alien enclave zones in the grimy sooty alameda/710 fwy corridor in inner LA?
True. All of South / East LA should be under $300k.
What a silly piece of reporting, on the front of the print UT is a picture of a house in Solana beach with the triumphant statistic that Solana beach median is up 6.6% in a year, then buried near the end of the article where most sheeple would never actually get to is the quote “For example, Solana Beach was up 6.6 percent, to $1.2 million, on 87 single-family resales, but local broker Brett Gobar said sales at his brokerage were sluggish and prices had fallen 20 percent over the past 24 months.” But then there is no attempt to reconcile how prices can be going up and down in the same small community at the same time. Wouldn’t the average reader want to know? No, most people around Solana Beach will be comforted with the fact that their house is still appreciating by these statistics. I am around SB and I would say the -20% cited by the broker is a much more accurate portrayal, yet most people will never read that tidbit. Oh well, I commend the UT for even sticking that quote in the article.
I follow the solana beach market and I live in solana beach. On the same street near the water there were two condos sold in 2005. One of them is now lender owned and for sale at 604,900 (purchase price 799,990). The second one sold end of 2006 for 414,400 (purchase price 700,000.
Still grossly overpriced for apartment living.
Your numbers are much more acurate than mean statistics. Your numbers compare apples to apples. The mean just shows that the only people who can afford to buy a house now are rich people who are in for the long run.
You could consider a scenario where the lower 70% of the income population are getting squeezed by higher taxes, medical costs, credit card debt etc, and the top 10% are raking in the big bucks, making more than ever (far from accurate?) In this simplistic scenario, the only houses that sell to the top 30% and the bottom 70% are tipped out of the market… Cheaper homes stop selling and prices plummet across the board. The median sale price continues to climb even though the actual houses are much cheaper. I believe that paints a broad strokes picture of our current situation. I believe on the other side of the coin, this was used to downplay just how much some property prices rose over 5 years - especially on the low end. I saw condo’s which in 2000 were selling for $108K in Mira Mesa which is frankly a pretty mediocre part of town leap to 370K at the peak. Several sold in the last quarter of the year at $300K - these are crappy 907sf boxes with carports, but at over three times their 2000 value at the peak in 2005 … That is really something.
Don’t you just love this guy Sobel? Another example of Public Education!!! He should have ‘read’ the documents and questioned anything he didn’t understand. They should put a Regulation ‘F’d’ in the docs in 16 point type for idiots like him saying ,’ If you sign this you’re a F’d borrower’. hehehehehehe Why do I NOT feel sorry for him???
“As reported earlier, Los Angeles County’s median rose 6.5% to $522,000 while sales dipped 12.9% to 7,703.”
The LA county Dec data quick zip chart has not appeared yet but i will go on the nov figures and extrapolate. Looks like Some megarich buyers are paying several million dollars and up for estate homes in selected Westside LA zips. Though those sales are a tiny porportion-they could skew the YOY upward in those zips. At the other end of the spectrum, quite a few inner city LA zip areas registered 10-30% yoy gains. I know the geographics and population characteristics of the LA metro region and I am convinced that there is still heavy subprime/toxic loan lending/overappraisal/100% financing, I/O, neg am, option arms being sold to really naive first time immigrant families. Nobody trades up in the gang/graffiti-infested areas of Scentral LA. Is it astonishing to see zip areas such as Bell, wlimington, Compton,Sgate, zips 90011,90001,90248,90061,huntington park-all deteriorated inner-city LA slumzones- showing SFH selling prices for $450,000-500,000? Not at all if you know the shady-desperate tactics of the RE industry to push people into overpriced homes at over appraised prices, using the minimun pay option techique. Most of these purchases were made last two years(2005-2006) so the fallout effects such as skyrocketing foreclosures will not be felt widely in the inner city dumps till maybe spring-2007 at earliest. A lot of lenders/sba secondary holders will get screwed on loans made in inner LA cesspools.
As I’ve said before, LA continues to hold up sky high prices. Between the yuppy scum on the westside and the GF illegal aliens everywhere else, I don’t see this market going down so soon. But still fun to read about FL, AZ, NV, etc., maybe those will have to be the places to invest in 3-5 years. Crap, I hate flying.
“As reported earlier, Los Angeles County’s median rose 6.5% to $522,000 while sales dipped 12.9% to 7,703.”
The new homes sales figure showed a 14.8% yoy increase.
The total sales of new homes in LA county was just over 1000 in Dec.
A fair portion of these new homes must reflect the construction and selling/preselling of pricy MegaMcMansion/villas in such westside areas as Santa Monica, Pac Palisades, Brentwood, Malibu, ect. I did see a new tract of these pricy monsters going up in the Encino hills last year. I also did notice that developers/owners were doing teardowns,rebuilds, erections of these pricy villas even in built-up areas all over the westside/hollywood hills/toluca lake, ect. Basically squeezing in a new multi-million$ home into any available lot in the land-scarce exclusive westside burgs.
I think That the LA RE market is dead in the water- volume wise. 10.2 million in LA county and only 7,703 sfh’s homes sold! That 6.5% yoy dosen’t mean crap at this point. It just Means that The very hi-end multi-million $ homes in LA(homes of the rich and famous)still selling, and a lot of Inner-city GF’s overpaid for aging inner-city clapboards/stuccos at grossly inflated overappraised prices.
‘There are fewer first-time buyers now because of the high prices. They realize they won’t be making the same great appreciation.’
That is an encouraging statement. It suggests that perhaps the quaint notion that homes are meant to be lived in, not flipped, is coming back into fashion.
right on.
this house bubble is very damaging to the society in general. young couples can not start family in a stable environment to raise kids. those who bought with toxic loans are going into foreclosures; guess what will happen to those marriages. Divorce. that’s right. and what happen to the kids. traumatized. these are the social issues, which escaped greenspan and the likes. all they see are numbers, not people. greenspan to gallow.
So the GFs get off scott free? Blame someone else?
No one made them sign the papers, it was greed, stupidity, or both. People should be responsible for their own actions, and deal with the consequences of those actions.
No scapegoats needed.
Off subject, but I was driving through Oxnard today and saw a bunch of yellow signs with handwritten sign saying, “Sneaky ways to lower your mortgage payments, with an 800 number.
If you (or any other poster in this area) find out what that’s about, please let us know.
The new “affordability package” that will cause a new buying surge (albeit, a temporary one) this spring?
I saw one of those signs last night, too! Over by the “mall” with the Target on Vineyard. I laughed.
–
“‘We didn’t want to step on anyone’s toes,’ said Candace Casey, senior vice president with Chicago-based developer. ‘It’s a down market and we need to create awareness at a higher level.’”
Awareness at higher level?! And how about in an up market?
I think Ben should start to collect quotes for a best selling book.
Jas
That’s exactly what I was thinking as I was reading these quotes. Are these people really that stupid?!?
A “barely opened window of a glut”!
Man, it’s more like the size of the hole in Texas stadium’s roof and growing bigger.
The “barely opened window” more appropriately refers to the pupils in the eyeballs of conventional analysts who are just beginning to notice the outline of an elephant hiding under the living room rug.
‘Maybe there’s a window of glut,’ he said. ‘But it’s not a very widely opened window.’”
Don’t worry fool. When this avalanche of turd slams into your window of glut, your clients will all be up to their eyeballs in an ocean of sh#t.
“Shaun Anderson said he discovered a buyers’ market when he shopped for a home in Poway. After months of house-hunting, he bought a two-bedroom, $330,000 condo in November, priced $30,000 below recent comparable sales. ‘Things were way too expensive for me before,’ he said. ‘It is fantastic. It’s pride of ownership. It is an appreciating asset.’”
No, Shaun, it is a depreciating asset. But I guess you’ll find that out soon enough, as more condos around are sold for less than you paid. Nice job catching that falling knife.
Yeah. Someone needs to let Shaun know that he just set the new comp at $330k, which means after math is applied, the asset has just depreciated $30k from when it was “worth” $360k.
No, no, no! It’s still worth $360k even though he only paid $330k, so he got $30k in “instant equity.” (Which he should liberate immediately.)
Shaun is not the next Warren Buffett. Shaun may of just gotten on the FB list.
I’ve seen this one before.
It’s called “Shaun of the Debt”
POTD, that one.
‘It is fantastic. It’s pride of ownership. It is an appreciating asset.’”
What a phenomenally goofy, goofy bastard. Totally oblivious to what he just did. Hey, Brainiac- it had just fallen $30,000 immediately before YOU bought it! Do you really think its ‘done’ now? I shouldn’t get too worried though, because this Gomer is obviously too stupid to figure out how to breed.
Yep, Sold out for a less then 10% discount. Let’s see, up 100% in 3 years, and now I get the super bargain for not even a 10% discount. Yep, YOU IDIOT! You just joined the adopt a realtor program of GFs. Might even make you a charter member, and a legacy membership in the FB Club! Geez
Compare the two situations and it may be this condo is up for sale before too long:
‘Shaun Anderson, a 29-year-old general manager of an automobile repair company, said he discovered a buyers’ market when he shopped for a home in Poway. After months of house-hunting, he bought a two-bedroom, $330,000 condo in November, priced $30,000 below recent comparable sales.’
‘First-time buyer Andy Sobel faces foreclosure on a one-bedroom condo he bought for $240,000 two years ago in Rolando. Sobel took out first and second mortgages with adjustable rates to make the purchase, and once the monthly payments started adjusting upward and the value of his condo fell, he said he had no choice but to stop making his payments.’
Very true. Use to live there but got out in 2005. This is just the beginning. In 2008 and on it will be a nightmare as more people struggle to make ends meet. The debt levels are just to high.
I nominate Shaun for the title of Last of the Greater Fools from San Diego.
That was my point when I commented on this story in the bit-bucket today. The areas that are still going up are the areas where the really stupid GFs are buying…..
When you look at all the median price charts in the UT, they all have the same shape. Some of the zip codes have made it past the top, some are just getting there. In San Diego there seems to be a spread of about 6 months in the trend. But it’s the same trend….
Sylvia Starbird, broker in Mission Valley, said would-be buyers may want to buy at the bottom of the market but she cautioned against waiting, since no one can tell if that point has already passed. ‘For sellers, if they don’t have to sell,’ Starbird said, ‘they may want to wait a little bit before they do that.’”
BUT, OF COURSE, BUYERS SHOULDN’T WAIT. YOU SLIME.
What if you just want to wait until your savings are more in line or your salary catches up. There are a ton of reasons NOT to buy a house today besides just waiting to “catch the bottom”.
Perhaps Sylvia is trying to unload her “investments” before the pack.
We may want to “caution” her to price her investments at least 30% below the last comp. Else the flood of sellers will drive prices even lower than she can ever imagine.
What is Sylvia smoking? Oh, I know — she just took one big toke of self-interest and shouted, “DO NOT SELL! BUY!”
This type of statement is so typical, yet so pathetic it really doesn’t warrant a response. So she cautioned against waiting because…….. it might take you a month to realize that prices have started going back up again after we hit the bottom whereas it might take years till we hit the bottom were you to buy now?
I’ve heard this argument many times and it’s always BS.
In the name of accurate advertising, she should change her name to Sh#tbird.
Definition:
A completely useless individual who is unaware of his/her own complete uselessness.
Usage:
Tell that sh#tbird I’m out of the office. Until the 12th…of never.
posted “In the name of accurate advertising, she should change her name to Sh#tbird.”
65 years ago in Germany her name would have been changed to “useless eater”
“‘For sellers, if they don’t have to sell,’ Starbird said, ‘they may want to wait a little bit before they do that.’”
This is getting dangerously close to collusion. A relative of mine was told to “wait until Spring” before listing in Seattle. I told her that was insane, given what’s happening. It seems that the Realtors are trying to hold down supply, in order to attempt to maintain higher prices (and hence more willing sellers) - no different than OPEC (or big oil, for you Bush-haters).
Anyway, I told her to either get that listing in NOW, or find a new broker. Anyone who believes that the market is returning to normal would be very hard-pressed to find circumstances in the past where Realtors turned away listings - for any reason.
That kind of collusion never works. It is like a cartel: the incentive to cheat is greater than the incentive to toe the line. Each seller acting in their own best interest would encourage others not to list while they themselves sold.
True - just like with oil - there’s only so much they can get away with before they get undercut.
But even attempting to control the market (as I’m sure their idol DL is telling them to do) should get them a RICO look. Now that would be very cool.
The NAR is a cartel and a damb good one. OPEC is effective and so is NAR with their $40 million ad campaign. Every realtor i know is spewing this s#it. However, just wait until spring to sell your house like hundreds of thousands of other suckers. Come spring, sellers will be ready to kill their realtors.
“Sylvia Starbird, broker in Mission Valley, said would-be buyers may want to buy at the bottom of the market but she cautioned against waiting, since no one can tell if that point has already passed. ‘For sellers, if they don’t have to sell,’ Starbird said, ‘they may want to wait a little bit before they do that.’”
Hey, wait a minute. I thought DL & LAY said “it’s a GREAT TIME TO BUY AND SELL!?!”
I am getting mixed messages now. Maybe I’ll just sit on the sidelines until the RIEC gets their message straight. Then I’ll know what to do.
“Sylvia Starbird, broker in Mission Valley, said would-be buyers may want to buy at the bottom of the market but she cautioned against waiting, since no one can tell if that point has already passed. ‘For sellers, if they don’t have to sell,’ Starbird said, ‘they may want to wait a little bit before they do that.’”
Sylvia, it seems that you are basically calling the bottom, as you tell sellers to wait. The only reason for a seller to wait to sell is if you believe the price will be higher by waiting. Sorry, but I think that Sylvia’s “little bit” of waiting time will be more like several years (I’m thinking 5-7 years, but it could be more) before sellers see higher prices than if they sold today.
Standard realtor tactics - hey really do think it’s the inventory is the problem not price - and it’s scaring buyers off.
The drank the cool aid by the gallon - now it’s time to face the piper.
That’s why you have dead cat bounces…. Because you have dead brained GF that listen to future career dead realtors
“‘It didn’t go great,’ Six said. ‘I suspect they’re here to see a movie, not see a model (home),’ said Six.”
The failure of moviegoers to go and see a model home doesn’t say anything about the state of the housing market. It was a bad marketing strategy. But the need for someone to even consider such a low yield strategy speaks volumes about the desperation of REIC.
What did they expect ?
“Honey, on my way back from the movie, I stopped to pick up 2 more houses for you.”
Wake up and smell the fear. I have never seen so many depressed looking realtors in my life, and I was here for the last bust in the 90’s.
“What did they expect ?
“Honey, on my way back from the movie, I stopped to pick up 2 more houses for you.”
If my memory serves me, we did see articles very similar to that about 18 months ago. Out to buy a $5 drink at Starbucks, just happened to walk into a sales office and buy a condo.
Also, it wouldn’t surprise me at all to learn that some builder did a similar promotion at last year’s film festival and had a significantly better turnout, and made a large number of sales.
“Out to buy a $5 drink at Starbucks, just happened to walk into a sales office and buy a condo.”
I remember that article vividly! At the time I was just shaking my head, blown away by the cavalier attitude so many were displaying. I would love to see a “where are they now” article with that lady in it. God forbid she hooks up with Shaun Anderson and reproduces. People that stupid should probably be sterilized for the country’s economic well being.
sales counselor?
I noticed that, too. Like they’re trying to legitimize their “profession” by confusing it with real counselors who have advanced degrees and are held to a particular standard.
“The peak real estate market of 1914 was not exceeded in inflation-adjusted terms until 2005, fully 91 years later, which is in the middle of the expected range.”
Real Estate Will Underperform Inflation for Decades
only this time real wages and the dollar will probably contimue to fall
sht you’re scary me
And considering that inflation has probably been under-reported for the last 10-15 years (gov. trying to keep the inflation numbers down to control COLA adjustments), it was probably later than that.
Interesting timing, as the Fed was created in 1913. Are you forecasting a central bank overhaul as a possible outcome of the more recent bubble peak?
The article examines rents not cost to own? As the two often diverge, this says more about the equilibrium in housing supply.
Sylvia Starbird, broker in Mission Valley, said would-be buyers may want to buy at the bottom of the market but she cautioned against waiting, since no one can tell if that point has already passed. ‘For sellers, if they don’t have to sell,’ Starbird said, ‘they may want to wait a little bit before they do that.’”
This is such a crock of shit. Even if you don’t buy at the rock bottom time wise it’s not as if a bell will ring and everything will suddenly appreciate 200% again. Markets bottom, then go flat until confidence is restored.
Some of these sales people are more full of s__t than a septic tank. Trust no one, do your homework.
some?
I find that irritating as well. These money grubbing realtors always suggest that once prices bottom, they will most certainly start to skyrocket again. I was arguing with a distant relative, that appreciation is gone for maybe 20 years in certain areas.
rotfl
Yep… like it will bounce up again. Traditionally a market stays flat for 30+ months at *real* prices.
Appreciation is gone in so-cal for 17 years. That is unless Google2 to 20 suddenly opens shop.
Got popcorn?
Neil
Good call txchick. Heaven forbid a realtor pull out a historical chart that maps real estate cycles to establish patterns that one can make informed decisions on. If Sylvia were to take a look, she’d see that, historically, the market has got a couple more years of declines, followed by a few more flat years, and finally, if this bubble didn’t blow everything to hell, appreciation wil begin again. But no, this Einstein thinks we’ve got a 6 month decline, a couple of months flat appreciation, and then off to the races again. That’s some sweet rational Ms Starbird. Here’s your sign!
And given that they never hesitate to give a cheery prediction, how come reporters never say, ‘what’s the basis for that?”
Openly question euphoria, and risk selling cheaper real estate ad space.
And given that they never hesitate to give a cheery prediction, how come reporters never say, ‘what’s the basis for that?”
Of everything that’s going on with housing, I’d like to know the answer to this almost more than anything else. I don’t think it can simply be incompetence.
I don’t get it either, Ben. I know over the last few years I’ve used thoise words as a retort to many a overly opimistic housing prophet. I don’t know why folks don’t think for themselves. I guess it’s because they assume the title of “realtor”, “economist”, or ‘loan officer” bears with it a level of expertise that should never be questioned.
“Brennan, the Westchester house hunter, and his wife, Christina, eventually had an offer accepted on a fixer-upper that had been reduced to $799,000, in part because they were willing to close within two weeks. They wound up paying about 2% below the asking price, but that was still more than they had hoped to spend.
“We went through a major ordeal,” Brennan said, “trying to find a decent deal.”"
Hmmmm, my instincts would have suggested, screw the major “or deal” and wait for a SCREAMING DEAL while renting and watching as prices crater. This will likely go down as Brennan’s worst decision in his entire life.
I wonder how it feels to be the Greatest Fool.
A fixer-upper at $799,000. Wow, I really am poor. One would think that a person could find a darn nice place to live for that kind of money.
Probably a PoS crack house in a slum…
Paying almost 800k for a fixer upper in Westchester is only slightly better than paying 400K for a house in Compton.
I second that, dwr. Westchester? 800K? I swear to God, sometimes I think I’ve been cryogenically frozen for 30 years and have awoken to these bizarre prices.
I know several people who live in Westchester, they think they live in the new Beverly Hills, it’s ridiculous. “We have a new Whole Foods market opening, clearly Westchester has arrived”, “There are SOOOO many doctors moving in to the neighborhood”, “My house is worth at least $1.5 million and I only paid $400K in 2001.” I am always so tempted to say “How long did it take for you to be able to ignore 747s flying 300 feet away?” or “At least the public schools in Westchester will toughen little Johnny up”.
Yeah, they also have one of the best school districts too in Westchester headed up by their flagship high school - Westchester High. LOL. Westcheter is sooooo overpriced it’s a joke.
Westchester has one nice thing about it - LMU. Awesome school with a really nice campus ( and a lot of money).
I have a good friend who lives in Westchester. It’s sounds great, except for the time she and her kids witnessed the murder of a busboy at a local pizzaria, and the multiple times she’s had to switch her kids from schools because they’re so rotten. She’s even taken to homeschooling one of her kids who’s having a miserable time in a Westchester junior high.
I was just replaying the above to my wife, who reminded me that our friend’s eldest son had witnessed ANOTHER murder in WC. That’s two murders too many for me.
Everything west of sepulevda is OK. Everything west of Lincoln is nice, actually. The high school is like a lock down penitentiary right in the middle of the nicest part. No one that lives around it will let their kids go there. Westchester goes clear to La Cienega to the east, which is a pretty touch and go neighborhood. That’s what makes the High School so edgy.
You’re right, imploder, it’s not that bad. In fact, the area my friend lives is kinda cute. BUT, if you pay 800K for a modest house, you shouldn’t be afraid to go to the local public HS.
Yea, I’d say 350K-400k more like it. But if you have school age kids… Why bother? I know people over there. They all wish that the school would close. Crime rate would drop by 90%.
“Westchester goes clear to La Cienega to the east, which is a pretty touch and go neighborhood. That’s what makes the High School so edgy.”
Westchester Is okay as far as a clean decent burg but it seems to be hemmed in, just like El segundo. To the south is the LAX/airport district, which is rather scummy. To the north is the bluff dropoff. To the east past La Cienega is Inglewood, a pretty grimy edge city. This is LA, where good clean burgs often abut a crime-ridden gangland zone which might be on the other side of the freeway underpass.
Truthfully, the absolute worst place to live is on the borderline between the HAVES & the HAVE-NOTS. That’s where you can expect the most robberies, muggings, home invasions, rapes and the worst schools. If any civil unrest occurs the borderline cities are ground ZERO.
LA is 1 big borderline. The riots of 2008 are gonna be hell…
I have often speculated regarding the 1992 riots and their relation to the housing bust/rising unemployment factor due to the building collapse in the early 90’s. Who knows if we’ll have a rerun of those types of riots.
Like Brad Nowell of Sublime said:
Cause everybody in the hood has had it up to here
It’s getting harder and harder and harder each and every year
Some kids went in a store with their mother
I saw her when she came out she was gettin some pampers
They said it was for the black man,
they said it was for the mexican
And not for the white man
But if you look at the streets
It wasn’t about Rodney King
It’s bout this f***ed up situation and these f***ed up police
It’s about coming up
And staying on top
Brennan should have consulted with that poor flipper Seattle Eric. Paying premium prices for dilapidated homes never works out. Once the market adjusts, these folks will find that they could have purchased the same home completely renovated for much less than they paid for it trashed. Suckers.
Hey, whatever happened to Seattle Eric? He said he had a new game plan for ‘07 and his houses would absolutely sell…….any updates?
Yea, he got professional help to insure sale. The REO departments of his Lenders. Now houses will “absolutely sell”.
Seattle Eric’s new year’s resolution is “no more flipping”… Two bad two of his “flips” are still languishing on the market, unsold. I like how Seattle Eric is now buying up cheap out-of-state properties by the dozen to rent out, in places like Oklahoma and Buffalo, NY …. He’s crowing about all the positive cash flow and potential for appreciation he will have. If you read that San Diego real estate investors blog site, this seems to be a popular approach these days … West Coast “investors” buying lots of $100,000 SFHs in places like Oklahoma and Texas to rent out.
Interesting thought - If you are paying $800K for a “fixer-upper” exactly what is your $800K buying? I mean if I’m paying $800K and then have to
redo the kitchen, put in new windows, etc., then the house better god-da*ned well better be on a majestic cliff overlooking the Pacific Ocean.
I am still seeing the last of the suckers buying homes in my area here in So-Cal. There are fewer transactions, but at inflated prices.
Most new mortgages are still of the ARM loan type here. Financial suicide if comps drop when they want to re-fi.
I think the fed will NOT change rates anytime soon. They need to/will stay on the sidelines and let the market correct itself.
Maybe what you are seeing are frauds. It’s common to jack up the price and find a straw buyer, then pocket the money and leave the house to the back. Check to see if the new buyers move in.
I have noticed this phenomena in the neighborhood in Costa Mesa where I rent. In fact, this type of fraud is so rampant now everywhere, I wonder if it is also affecting the median price?
Of course.
The real question is, who’s lending the money to finance these purchases? This sort of fraud is so crude, so obvious, how on earth would any self-respecting banker buy this loan from the originator?
Then again, rumor has it that the MBS market appetite for subprime mortgages is dwindling rapidly.
the way i see it this bubble in l.a. will go on as long as their are lenders willing to give out the $$$, because there’s no shortage of fools wanting to buy at any price.
only when the risks get too big and the 2ndary market stops buying the s**t that’s out there will we really see the drops in price we’re expecting. once they start lending only what people can realistically afford to pay back based on their current incomes and debt levels and ‘gasp’ start demanding at least 10% down the bottom will completely fall out of the market.
Isn’t PIMCO loading up on MBS’s?
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The ““Window Of Glut” In California” is wide open. I would guess until at least 2012. Could be as long as 2020.
Jas Jain
The margin of error is too large to say that LA is up that much. I seriously doubt it.
Shaun, you’re a stupid fool.
If the REIC is spreading the rumor that rates are going to go down , why should a buyer tie up a home today if rates are going to go down? So it’s not a good time to buy if we accept the rates going down in the spring theory .
Simply based on oversupply and a affordability problem ,the prices should go down . To try to keep sellers from listing by promising increases down the road is a pretty rotten way to try to control inventory especially ,when it would be honest to say that the market might not go up for years …..many years .
I just can’t believe how the REIC has the whole story on how everything is going to go . I think the agents need to be treated for some sort of a mental disease called “self-serving wishfull thinking “.
It’s always a good time to buy?
Beat the rush before really selling takes off this spring and you’ll be able to avoid the bidding wars and cute letters to the owners promising to feed the squirrels?
Just refinance when the rates are better (as if refinancing is free)?
Lots of perfectly good reasons! You just have to know who to ask for the sage advice!!!
Yes your right it’s expensive to refinance and you don’t know if you can get the loan and you give up some of your rights if you refinance out of a purchase money loan regarding Lenders rights to a judgement .
“‘We didn’t want to step on anyone’s toes,’ said Candace Casey”
Lie, I tell ya, total lie.
If you read the article, what I got was she was referring to the less than ideal spot they put their shuttle so that it couldn’t be confused with the free shuttles the festival were offering to ferry people from one event to the next. She didn’t want to step on the cities or festival promoters toes by being to blatant on horning in on their event. This was part of her reasoning for her shuttle’s failure. But only 3 people?… Not good.
Wake up and smell the fear. I have never seen so many depressed looking realtors in my life, and I was here for the last bust in the 90’s.
——————————————————————————
On this note, I wanted to share a little anecdotal experience from this last weekend. My wife and I went to an open house in Las Flores (Orange County, CA). 4 Bdrm - 3.5 bath 2700 sq. ft home selling for $ 830 k. Nice house but overpriced for the neighborhood.
I don’t know if the RE agent was new or inexperienced or…maybe just someone hired to babysit the open house but this person looked absolutely depressed! She made no effort on sales spin to speak of other than a vague reference to how “clean the house always looks” and made no effort to get our address or email for a follow up. I kind of got the impression that the mood was more “going through the motions” than actually trying to SELL!
I remember seeing this exact emotion back in the early 90’s during the big RE sales drought!
In my area there was less than one sale for every two realtors in 2006.
Less than one sale for every two Realtors? Sounds like those Realtors could have done better with a day job at Wal-Mart.
Which means the experienced top sellers are seeing slow traffic, while newbie, ex-daytraders-turned-realtors are staring into the abyss.
Exactly.
Yet they still try fear tactics. I’m so sick of that. Only once at an open house did a realtor not try that. Heck, he pointed out (eventually) that the shown home probably would have its price dropped $150k and wouldn’t sell at that price either… (it was about $300k overpriced).
So there are very few realtors who earn my respect. Jim at his blog is one (he’s bearish except on stellar properties. Go easy, he gives out very good information and even won one of the REBA awards a la this blog):
http://www.bubbleinfo.com/journal/
But how many other realtors have a web site with “bubble” in the URL?
Funny… he’s selling homes.
and home sales are going to slow even more (inventory freaking buyers, affordability, sub-prime implosion, etc.)
Got popcorn?
Neil
Saw something similar when I was out cycling around Tucson on Sunday afternoon. Real estate agent (or her lovely assistant) putting an open house sign into her car trunk. And she did not look happy. Not at all. She drove off like she wanted to get far, far, far away from that open house.
Adult version:
Go Dog Go!: by P.D. Eastman,
Seller: “Do you like the price of my house?”
Buyer: “No, No, I do not like the price of your house!”
Buyer: “Will you sell it for $100,000 less?”
Seller: “NO, NO… I will not sell it for even $10,000.00 less”
Seller “Goodbye!”
Buyer “Goodbye”!
Yesterday I saw a realtor with dyed, styled hair, wearing a designer golf outfit, pitching his pro during a lesson in Irvine. He started with the Boise State game: “I was in Sun Valley over the holiday …” That caught the pro’s interest. They they started talking about real estate in San Diego. “You should buy a condo–I can get you a good deal.” The pro shrugged as if he couldn’t afford it. “You can use a stated income loan-they’re MADE for entrepreneurs like you. Whyt my income is nothing given my deductions, but I have three homes.” He continued the pitch: “If you bought in San Diego, your kid would be able to stay there in college.” The pro said his kid was two years away from needing it. “You’d OWN it,” the realtor said. I walked away, disgusted.
She made no effort on sales spin to speak of other than a vague reference to how “clean the house always looks” and made no effort to get our address or email for a follow up.
These people have been mere order-takers for years, perhaps their entire career; they’ve never had to ’sell’ anything and don’t know how, and now it’s obvious.
Some more stats for the Stockton area:
Dec. 2005 v. Dec. 2006
Homes for Sale: +57%
Sold Homes: -36%
Pending Sales: -12%
Average Days on Market: +62%
Average Price per sq/ft: -8%
sacramentolanding.blogspot.com
i got tired of looking at ziprealty bec. all the houses on there have been on there for like 200 days. Gee, think lower the price? NEVER! Actually most of them already have been lowered quite a bit, still sitting… I sold a good-sized boat awhile back after experiencing some financial difficulty. I remember how uncomfortable i felt knowing i was paying $500 a month dockage waiting for it to sell. Must be a real drag when it’s a 600k 3/2 which looks like crap in the ad because of all the dying grass and weeds in the unkempt front yard…
–
January 16, 2007
Santa Cara County SFH Median Price DOWN, $81,950, 0r 9.95%, In the Last Six Months
Dec-06 $738,000
Nov-06 $775,000
Oct-06 $775,000
Sep-06 $769,000
Aug-06 $770,000
Jul-06 $805,000
Jun-06 $819,950
The recent drop is even more remarkable because the Scam Options money was the highest in a long while. I do expect some bounce, but a nasty decline in 2007H2.
BTW, DataQuest SFH Price in down $61,500 over the past 24 weeks (I don’t have the peak price saved, but it is more like down $70K from the peak on DataQuest).
Despite the protestations of a Silly.con Valley Bull (SVB) who lives in Los Altos the prices in Los Altos are doing lot worse than in the less ritzy areas where working people live. On MLS:
Los Altos SFH! $1,493,900 -12.1%, YoY
Los Altos Condos $503,250 -21.1%, YoY
And whenever I present data that SVB doesn’t like he first trashes the data, or its source, and than me. I can see why falling prices can make a Silly.conman act silly!
Jas
Jas,
do you have a link for the price data? Thanks.
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Actually, most of the data is only available for a short period after it is posted on a website. Some for a month and some even less (CAR). I save as soon as the data is released and keep a spreadsheet.
You can find the latest data at:
http://rereport.com/scc/main.html
It is not a bad source.
Jas
Jas,
I since you use the same name for SV as I’ve chosen for a handle here, I can’t help but reply with a question about the valley for you. Do you know how to find out about Santa Clara foreclosure auctions/auction data? I would love to start tracking that data, to get an idea of when that market might be right for investing in.
Thanks,
SillyConValley
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SillyConValley,
I have been using Silly.con Valley for many years because of the Scam Options fraud that is the source of Valley’s “wealth.”
I don’t track foreclosures other than reading the press reports. You may start by looking at foreclosures.com.
I am sure that there are many here who can help you better. Why don’t you post a question separately to Bits Bucket.
Good luck.
Jas
Let’s start breaking the windows and watching the value fall in CA. LOL
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Places like Los Altos can use some excitement. It is very boring and drab. Broken windows will make people talk about something meaningful and get to know their neighbors. LOL.
Jas
“Imperial Beach turned in one of the biggest single-family-resale price declines … a situation Cheryl Schaumburg of One Source Realty blamed partly on media coverage of the real estate slowdown.”
Do the media report on train wrecks before OR after they occur? That’s like saying my traffic reporter guy caused all the wrecks on I-95 earlier today. Or, the weather man caused Colorado’s snow storm. Or, CNBC caused the dotCom crash. Cheryl Schaumburg — you belong in the hbb hall of shame.
“[Consider] the precarious fate of the imperial messengers of old Persia. Any such messenger assigned to the role of military courier had special cause to hope mightily for Persian battlefield successes. With news of victory in his pouch, he would be treated as a hero upon his arrival at palace. The food, drink and women of his choice were provided gladly and sumptuously. Should his message tell of military disaster, though, the reception would be quite different: He was summarily slain.” - (Influence, Robert Cialdini)
This is a (well?) known principle of association. At least its well known by politician and weathermen
People will almost always blame the messenger who brings bad news. Try to avoid being that messenger, if you have a choice.
It worked the same in the British Navy of yesteryear. Whenever something good happened, the captain would select a lieutenant, usually one he though deserving of promotion, to take the news back to London.
In a normal market, I think your analogy is correct. In a bubble market, I’m not so sure. Speculative bubbles have a large psychological (i.e. “hype”) component to them. I think the media helped to inflate the bubble, and I think it will help to pop the bubble as well.
“But the nature of high-rise development is that of a nonstop train, once developers start on a building, it’s nearly impossible to stop when conditions get tough. ‘Once they go vertical, they rarely go back,’ Dennehy said.”
What if prices go vertical — in a downward trajectory?
‘It is fantastic. It’s pride of ownership. It is an appreciating asset.’ Wow all that from a crap condo? Man you do have low expectations. Its as Ferris bueller said, “He’ll end up marrying the first girl who will screw him and she’ll walk all over him. You just don’t respect someone that kisses your ass.”
Josh
‘It is fantastic. It’s pride of ownership. It is an appreciating asset.’”
I wonder at what point in his condo search was the part of his brain responsible for language replaced with a real estate ad?
pride of bonership
When is your “Little Black Book of Imploderisms” coming out?
Wells fargo reporting profit.
http://biz.yahoo.com/ap/070116/earns_banks.html?.v=6
“Shaun Anderson said he discovered a buyers’ market when he shopped for a home in Poway. After months of house-hunting, he bought a two-bedroom, $330,000 condo in November, priced $30,000 below recent comparable sales. ‘Things were way too expensive for me before,’ he said. ‘It is fantastic. It’s pride of ownership. It is an appreciating asset.’”
Appreciating asset… it hasn’t been over the last year. What makes you think it will the next few years….Is that a crystal ball I see on your coffee table…hum… Shaun?
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Had he waited for a year he could have bought for $100K less. He will learn a whole new lesson — home is a depreciating asset, long-term. I know, it is very hard for most Americans to even imagine such a thing. Let the Old Era begin.
Jas
Notice how the SD Union Tribune managed to get through a lengthy article on the housing situation without once mentioning the most critical factor:
subprime meltdown.
Yes, GS. Matter of fact, the subprime meltdown isn’t getting much airplay at all in the MSM. Gee, wonder why?
Been waiting for years for the subprime credit implosion. It’s amazing how resilient it’s been. IMHO, **this** is what will bring down the housing market, as it’s the credit bubble which fueled the speculative bubble all these years.
Let’s just hope that they don’t manage to pull another rabbit out of their hats. Every time it’s looked like the party was over (some decent signs since late 2004), the market just shrugged it off and kept marching along.
This bubble should have been put to an end back in 2003, already.
Not very rosy on the surface for us California Bears. I know the spin will be murder for the next few weeks. I can see it now - “Dec was great and should lead to a strong spring rally” - BLAH BLAH.
However, we all know the facts - Inventory up significantly YOY and most important of all transactional volumes are WAY down. These real estate clerks will soon start getting very hungry and force the buyers to move prices WAY down and de-list. Unfortunately, with trillions of dollars of resets coming down the pipeline they will have no choice but to “chart a new course” as the current “stay the course” will not work any longer.
I still say watch the credit tightening (sub-prime blowup), inventory increases (YOY) and foreclosures; that will tell us how much worse things will get.
Don’t dispare. Start packin your own heat. With the number of transactions way down, find out the total dollar amount of current transactions, and compare that number to last years.
The discomfort from knowing this number, goes far and wide. Calculate from this number, how much less, RE agents are earning this year, as compared to last year. Calculate from this number, how much less, counties are collecting in transfer taxes from RE transactions. How much is the slower pace of this economic activity, affecting the over economy in the state. I would like to know what the transfer tax rate is in CA, and how much less the state is collecting this year, as compared to last.
I would like to see the guys over at Patrick, or someone else, do a whole thread on this topic. What are your thoughts?
The state of New Hampshire does some excellent revenue reporting to their citizens on their web site. In the July to June fiscal report 06, you can see real estate transfer tax collected was 14 million below plan, and 1.4 million below 05 receipts. This is what I’m talking about.
http://admin.state.nh.us/accounting/Monthly%20Rev%20June-06%2013th.pdf
I have to say this really summed up for me how I feel right now. I have been out of the country for the last 4.5 years.
“I swear to God, sometimes I think I’ve been cryogenically frozen for 30 years and have awoken to these bizarre prices.”
I do hope when we return home summer 2007 things will begin to look a bit more “normal” again.
SKB
–
“I do hope when we return home summer 2007 things will begin to look a bit more “normal” again.”
I don’t know what your expectation of “normal” is, but home prices will begin a nasty decline in 2007H2 that would last for years. There is no hurry to buy for at least three years.
Jas
Definately no hurry to buy. You won’t get a great deal in summer 2007. Sellers will just be waking up to the realization of how bad this housing market is.
Wait for more sub-primes to reset.
Wait for REOs to not only climb, but for them to finish going through the foreclosure process… twice. (That’s 18 months!)
The earliest possible sensible buying opportunity is Fall of 2008.
The low in nominal prices will probably be in 2009. When? I don’t know, but probably in the 4th quarter.
The low in real (inflation adjusted) prices will probably be in 2011 or 2012.
So be patient. This is a very slow, long glacier wreck.
Got popcorn?
Neil
I think you’re right on the money, Neil.
I think the disaster is going to happen sooner (6 months) than later. I looked up my neighborhood (zip 92107) on foreclosure.com. Only 3 foreclosures, and in crappy areas, not too bad. But then when you look at the pre-foreclosures, then you see something different (31 NODs):
http://tinyurl.com/3522oc
Looks like the Tisdale family (mum, dad, son daughter?) have received Notices Of Default on 8 (!) properties. I looked them up, seems like it’s a local construction company. These are houses up to $1.77M, hardly fixer-uppers one would think. There are a couple of other persons with multiple NODs. Some have had the house for less than a year. I think this is the first wave of flippers/investors going belly up.
They’re not the only ones — looks like a man near the top of the list is underwater on four properties.
All loan scams!! 1 or 2 bdrms!!!
This is totally off-topic, but new to Zip Reality’s site and i’m trying to watch the number of houses in my area, Washington DC. At one point it gave me listing totals in the search area. Now I can’t seem to find that figure. Any help?
Its pretty clear for all that has been written that a house is still being viewed as an investment vehicle and portrayed that way by realtors. When that is completely finished then we are at the bottom.
The statement will be “Its a little better than renting”.
Right now its far far worse
“Shaun Anderson said he discovered a buyers’ market when he shopped for a home in Poway. After months of house-hunting, he bought a two-bedroom, $330,000 condo in November, priced $30,000 below recent comparable sales. ‘Things were way too expensive for me before,’ he said. ‘It is fantastic. It’s pride of ownership. It is an appreciating asset.’”
This has got already many in this blog worked up…
I, Just can not but ask how Shaun could get this simple math wrong, while making the most $$$ expensive purchase in his whole life.
Per him, before things were way too expensive , now he got it for 30,000 Below the comp. (while obviously price has been coming down , considering he does not find it that expensive now….)
A third grader could say price have been falling and hence it is a depreciating asset, trend is downwards…
How can anyone protect people like him from themselves.
Ben can you think of other ways…this blog is not helping as much…
This blog is helping the people who tend to question the status quo and who investigate investments that “seem too good to be true.” That is all it can do. People are still buying houses because they want to believe the hype over the practical. How many of us have had the frustration of trying to talk someone out of a bad decision only to have them ignore our advice?
If we can’t talk some people we know out of making bad decisions there’s nothing more Ben can do. Time is a great educator, unfortunately. (Although many of these people will jump into the next get rich scheme too, convinced that wealth should be easy and quick to acquire.)
I was a naive buyer, I’ll admit, but no one should have put me in this loan,’ said Sobel.”
————————————————–
what in the holy name of Chicago Bears is this guy smoking….accountability-non-existant?
Preparing himself for the fallout.
Kind of like the men who pulled a shawl over their head in the hopes of boarding a Titanic lifeboat. We see you for what you are Sobel ……
I was a naive buyer, I’ll admit, but no one should have put me in this loan,’ said Sobel.”
I agree with this. A few years ago he would never have been allowed to take this loan. He will bear the responsibility and have to deal with the consequences, yes. But he should have not been able to get that loan and my guess is that in 2 years once again he will not be able to.
Sobel didn’t have a dime in the purchase and he was a speculator and now hes walking . This guy is trying to act like he wasn’t gambling on a short term gain .Sure it was a mistake that he invested but now hes crying the blues and doesn’t want any accountability .
I think it’s pretty stupid to believe sales puff by the REIC ,but apparently alot of people believed the myths of real estate always going up .
I think the lenders on this loan for Sobel are more stupid than Sobel .
Sobel must of submitted a liar loan application if he can’t afford the payments this fast also .
“I was a naive buyer, I’ll admit, but no one should have put me in this loan …..”
Housing Wizard –
I couldn’t believe I had to look this far down the thread to find someone pounding this whiner….. his comment just doesn’t have the naivety ring to it.
As though he is 3 years old and being put into a stroller. Amazing.
ResCap cuts 1,000 jobs,cites tough mortgage market:
http://bakersfieldbubble.blogspot.com
Bear with me for a moment as I play devil’s advocate. Let us assume that So Cal will not decline and that prices will hold. Let us also say that they may marginally increase. What does that mean. First, the REIC, sellers, and buyers are crazy. How would ever buy back into this kind of market? Second, for those who think they got a steal, even if there is appreciation, no one is left to buy and you are stuck with a very handsome mortgage. While my rent is still more than I would like it to be, it balances out in terms of quality of life and many other benefits. However, all the stinkin’ geniuses who can’t sell, even if they hold on, are goin’ find out just how miserable life can be when you have 360 monthly payments of $4K or more to make. Better hope inflation skyrockets to make that debt seem a little better. Than again, if it does your still screwed because you won’t be able to afford everything else in life.
Bottom line is this…
IF prices hold and then go up, you will never be able to sell
and
360 monthly payments really suck when you are sick and tired of the same place and stuck eating ramen every day AND you can’t sell because of above said reason of prices going out of range for anyone.
If these dopes can’t figure this out, well… there really is no hope for the public school system in this country or for this country , in general. I guess most Americans just love their debt too much to understand what real financial freedom is. It is not being stuck with an asset no one else wants while making over priced payments for 20-30 years on something you want to get rid of.
Oh well, as many of you have said in the past…debt=wealth or the new red is black.
I think I meant the new black is red.
Totally ignored in recent press, it seems, is the coming avalanche of ARM re-sets, as well as the timeless rent vs. buy formula(e). Rents where I am are going down, not up; until those rent ratios turn around big-time, it’s the wrong time to buy, for me.
What if rents continue to rise to be in balance with housing costs? Nobody ever talks about it. Is there so much vacant and otherwise available inventory to keep that from happening?
Renters cannot get neg-am loans to pay the rent. It has to come out of income. Rents are directly tied to income and population density (how many people are willing to live in a particular dwelling unit), IMHO.
Personally, if rents go up by much more, we will be very tempted to just pick up and leave. There’s just not much reason to stay in So Cal at this point.
What no one mentions is these ARM holders wont even qualify under the stricter guilines for lending. The no doc, no money, no job, 100% ltv days are over.
“Suppose a home is the site of a suicide or murder. If the individual who died was a friend or relative of the owners, they no doubt feel enormous loss and perhaps wish to move. But under some state rules, when they offer their home for sale the owners must tell buyers of recent events at the home, thereby lowering its value.”
http://realtytimes.com/rtcpages/19990525_stigmatized.htm
I guess we will be looking at alot of suicides and murders in the near future.
SD Zip has 160+ listings w/today’s date, and 200+ including yesterday’s. I wonder if the Charger’s loss is to blame for the sudden spike in used home inventories?
With respect to the surprisingly strong December numbers I would like to point out that in the Woodland Hills area (SFV) approx. 30% of houses that had sold have fallen out of escrow. Houses get relisted as new continually!
Anecdotal observations from Motown:
I was checking out the community post-it boards at the business school where I’m finishing my MBA (where people ususally advertise used books and so forth) and noticed that they were all plastered with condos and houses students are trying to unload!
The ghetto neighborhood across the street from the chemical plant where I work continues to add new inventory on top of last year’s unsold homes. Just looked at one flyer that advertises 0 down/107% financing for one that’s across the street from a boarded-up burnt-out place.
My in-laws’ house is in a nice area and they’re tired after cleaning up for open houses for over a year now, with no results. (They’re FB’s - can’t lower the price too much more).
As some of you have said, “It’s like watching a slow-motion train wreck”.