Waiting Out The Buyer-Seller “Standoff” In California
The Press Democrat reports from California. “Before retiring to Oregon, Bob and Nona Windus put their Santa Rosa house on the market. Now the couple are about to become landlords. Rather than accept an offer for $114,000 under their original asking price, they decided to rent the three-bedroom home and wait out the housing downturn.”
“‘We’re going to camp on it. I don’t want to let it go while the market’s in the pit,’ Bob Windus said.”
“Many never set out to own a rental home, but have become landlords out of necessity. The housing slump, combined with the traditional slowdown in home sales over winter, has led to a surge in the number of rental homes in Sonoma County, said David Rendino, an agent in Rohnert Park, who specializes in residential investment property.”
“Property managers said they are barraged with calls for help in finding tenants and managing properties. ‘It’s been really heating up as people hit winter and pulled property off the market. That’s when everybody decided to quit,’ said Rendino, who also co-owns Liberty Property Management.”
“Trent and Selena Phillips are seeking a tenant for the Windsor house they weren’t able to sell despite cutting the price $90,000. The couple called it home until they bought a house in Vallejo more than a year ago, when Trent Phillips earned a promotion that requires him to commute to Alameda.”
“‘We need to get a renter in there because right now I’m paying two mortgages. Every dollar I have coming in is going right back out the window,’ said Phillips. ‘We’re just barely holding on.’”
“Monthly rents likely won’t match mortgage payments for homes purchased within the past five or six years. But some have decided that renting is a better alternative than letting their homes sit vacant waiting for a buyer.”
“The Phillipses are in such a predicament and figure they have little choice but to be landlords. ‘I really don’t want to have to do it,’ Trent Phillips said.”
“A home they purchased just four hours after it was listed in spring 2004 couldn’t sell after a pair of six-month stays on the market between summer 2005 and December. They cut the price several times for their 1,900-square-foot, three-bedroom home, from $729,000 originally to $639,500 before pulling it off the market.”
“‘We did almost have it sold at one point, but of course it was one of those contingency deals where the guy who was buying our place couldn’t sell his place,’ he said. ‘I’m not going to give my house away. I’m not going to take it in the shorts.’”
“The $2,000 in monthly rent the Phillipses seek falls short of their $2,300 mortgage on the house. But it would ease the financial squeeze on the couple, who face $5,000 in total monthly payments for the Windsor and Vallejo houses.”
“Bob and Nona Windus don’t have to sell their former Santa Rosa home in order to buy a house in Rogue River, Ore., where they now rent. The couple don’t want to forsake the sizable chunk of equity they would lose if they sold during this current housing decline. ‘I’m still looking to sell it, but I’m waiting for the market to make a nice turnaround,’ he said.”
“Their house hit the market for $714,000 in August. Windus said a similar house sold for $740,000 four months earlier. Still, the only offer they received was for $600,000. ‘That was the straw that broke the camel’s back. We didn’t have to sell, so we decided to rent it out,’ he said.”
“Some hope to hold onto their rental units permanently. ‘So far I’m above water,’” said Carmen Nunez, who became a reluctant landlord last month and wants to keep his former home as a rental.”
“After purchasing a 1,500-square-foot, three-bedroom home on more than two acres north of Santa Rosa for $830,000 last April, Nunez turned to sell his former Healdsburg residence. Finding no offers at $685,000, he lowered the price to $650,000, yet still no serious buyers came forward.”
“Nunez pulled it off the market a month ago and found more interest for the house as a rental. He had a tenant within days. The $2,000 rent falls short of his $2,300 mortgage, but it helps Nunez make payments on his two mortgages, which total $7,300.”
“‘In a way I am working for my house. I just have to work harder,’ said Nunez. ‘But I feel it’s going to work out.’”
The LA Daily News. “Last week The New York Times featured an obituary on the late, great condominium market. That’s bad news, for sure. ‘These markets are getting crushed. Regardless of what the NAR (National Association of Realtors) is spinning, nothing is moving and prices are plummeting. Watch out for bank failures,’ Howard K said in an e-mail.”
“There’s an upside, though. The article did not mention Los Angeles. While the aforementioned markets certainly are in distress, Los Angeles seems to be OK, at least for now.”
“Builders are not yet abandoning the sector. ‘They keep pulling permits for them and they are not going to do that if they are overbuilt. There are some very large projects in the pipeline, and it continues to grow,’ said Ben Bartolotto, research director at the Burbank-based Construction Industry Research Board.”
“For example, last year builders in the county pulled permits for 16,277 multifamily units, both apartments and condominiums. That’s 18.1 percent more than in 2005.”
“‘I think you’re going to see sort of a period of moving sideways,’ said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp. ‘The (downtown) market has softened up. I think you’re going to see the number of rental units spike.’”
“John Karevoll, an analyst at La Jolla-based DataQuick Information Systems, doesn’t think the Los Angeles area condo market will follow the others into an abyss. ‘The market here is quite different than those markets. That (decline) would probably have to do with new projects that have not had as much interest as they anticipated,’ he said.”
“Buying patterns play a part, too. Karevoll notes that when markets level off, it first happens with discretionary buying - speculating or second homes. Nor does Karevoll believe the downtown market is in for an especially hard time, although it does need some more amenities, like grocery markets, that are conducive to urban living.”
“‘I’m sure it’s not as strong as some of the developers down there anticipated, but I think it will do fairly well over time,’ Karevoll said. ‘Right now there is just a standoff between buyers and sellers.’”
‘They keep pulling permits for them and they are not going to do that if they are overbuilt. There are some very large projects in the pipeline, and it continues to grow,’ said Ben Bartolotto’
But isn’t this exactly what did happen in those markets? The condos didn’t design and build themselves.
From the DAily news article:
“Those large projects he refers to are in downtown Los Angeles and the San Fernando Valley.”
See they are already committed to these towers and it’s all City politics. The ones downtown are all part of the Staples Center Master Plan. They are gonna build them regardless. One builder pulled out a few months ago siting lack of financial feasibility and some other downtown connected builder stepped up to the plate. I think the projects got massive tax benefits and subsidies from the city.
The San Fernando Valley Towers are all related to the Metro-rail initiative, and again City money and concessions, and subsidies, redevelopment funds etc.
These boondoggles have a life of their own.
“See they are already committed to these towers and it’s all City politics. The ones downtown are all part of the Staples Center Master Plan. They are gonna build them regardless.”
I have had a birds-eye view of the Staples Center/Grand ave dwtn Developments. Basically they are putting up at least a dozen to 20 Condo/apt/office towers all along Grand ave/flower streets from 8th st all way to 11th-venice blvd. The plan is to site these towers adjacent to the metro line crawling up along flower st. A few condos/lofts at grand/11th were already available, but most of the projects still either just beginning or at halfway point.
The problem with the Dwtn developments is that the entire Dwtn LA west of hill/south of 8th st has a cold concrete bunker aspect, or the streets are dingy and reek of urine/trash, and are hangouts for assorted dregs and the homeless. There are no parks nor even a single shade tree in this entire area:it is completely concrete-paved. The Dwtn LA condo market will be a gigantic boondoogle bust, as no one except for alternate lifestype beatnicks will inhabit these concrete fortresses.
The little tokyo/warehouse district lofts along alameda st and 1st-4th are no better, and have a hugh population of homeless encamped off alameda along 4th-5th-6th streets.
Turning LA DWTN into a livable walkable district is about as doable as turning Compton into Bevery hills.
There are sure a lot of empty “lofts” in Downtown LA near Union Station. I would say maybe 10% have tenants in them…
that is because it is one block from Box City. I suppose if you stay in your locked car until you hit your door, you may be fine. Other than that, you are stepping over dead bodies. Nice.
‘I’m not going to give my house away. I’m not going to take it in the shorts.’”
What this guy is doing is setting himslef up to do exactly that if not worse. IMHO, he won’t have any shorts left to take it in when the tide goes all the way out.
oc-ed posts from Thread story ‘I’m not going to give my house away. I’m not going to take it in the shorts.’”
I feel the same way you do about this story. Just wait untill this guy has been a Landlord for awhile….it can get worse, much, much worse!
Well sir, I believe you are half right. You aren’t gonna “give your house away”. You will end up selling at the current market price. However, you are going to “take it in the shorts”.
Given Buffet’s comment that you only find out who has been swimming naked when the tide goes out, I think this guy will not take it in the shorts ever. You just can’t take it in the shorts if you aren’t wearing any.
Imploder,
Your priceless quip about lowering the price now or “drawers” later was written for this sap.
I can hardly contain my glee at watching an equity locust getting squished on the RE superhighway.
We need more people like these that want be landlords. Imagine their dismay when the property management company takes their cut + the inevitable repairs. Ultimately they have sell for whatever the market bears at that point, which will be substantially less than the offers they had now. Plain and simple greed!
…allow me to join the “in the shorts” refrain…
‘I’m not going to give my house away. I’m not going to take it in the shorts.’
If the first statement is true…that makes the second statement false!
BWA ha ha haaaaa!!!
I’d like to thank my landlord. She is a medical doctor who decided to buy a new house and rent it out. She loses at least $700 per month. Since I sold my house and have become a renter. I live in a new bigger house in the city for less than the cost of my old mortgage. I now can afford the Comcast Gold package with HDTV, eat out every week, go on vacations, buy all new furniture and live a good life. Thank you my landlord for my 18 month lease. Keep working and keep being stupid!
My land lady was losing over 1500 a month in 98-99 in livermore. And that isn’t counting taxes or insurance. It was over priced in 99 and its doubled by now while she’s just about renting it for the same 1700. If she has it refied at its recent 600+K price she’s losing ~4K a month. You’d be surprised how much they’ll lose in the fantasy of future appreciation. Like the 72 virgins per dead terrorist that the fundamental islam groups say wait in heaven. lets see … that is 1 billion moslems so, 72 billion virgins. yes that is about right.
Cool.
Cow_tipping.
Not only will he be taking it in the shorts, it’ll be in the, um, less pleasant end of same. Well, unless he’s really in to that kind of thing.
Yes, the sense of entitlement alone seems like assurance that taking it in the shorts is in the bag.
maybe if they all hold hands and wish really really hard the Great Pumkin will come and make everything alright.
I guess the “Phillipses” mentality is why I personally hate renting (at least in California). The majority of landlords I run into are folks who really don’t want someone renting their house, but they need the money. They want top-dollar for their crapbox, but don’t want the responsibilities of being a landlord.
I can’t wait until they get renters and they tear up the place.
Tom posts “I can’t wait until they get renters and they tear up the place.”
Just wait untill the new landlords meet some greedy self-centered, cheep, people just like themselves. But these people have possession of your priceless, perfect home. The fun will begin….I could tell story’s
imploder posts ” Well sir, I believe you are half right.”
Is this like the half empty glass story? It sounds like a half empty butt story.
We’re going to be hearing a lot of this “I’m not going to give my house away” BS. And they are right. They won’t be giving their houses away. Those houses will be TAKEN away, one way or another. Denial. Still deep denial. These people who think they are so smart renting out their homes will be far more in the hole than the difference between mortage and rental. There’s still maintenance, repairs, contingencies, etc. And the other nasty surprises that life tends to hand out when you least expect it.
As a current renter, I don’t know why you all are so harsh on these new enterprising landlords.
More supply = lower prices = lower rents
means I’m all for it!
In fact, I’m thinking of putting together my exclusive $4000/seat seminar on how to convert your home-that-won’t sell into a profitable rental (and if you sign up now, I’ll give you $1000 discount.)
I’m hearing this over and over lately here in the BA lately. I’m not going to reduce the price, it will go up again” Seller after seller is pulling their house off the market and waiting until later this spring or renting it out (these are people holding on by a thread…great candidates to be landlords). They tell me, things are going to turn around in the spring and summer. Why? I just want to know what will be different THIS spring/summer from LAST spring/summer. I still have not heard the logic behind this statement. Just vague mumbling about how it will be better bacause, well gee, it’s the Bay Area and it’s different here.
Suzy K posts ” I’m hearing this over and over lately here in the BA lately. I’m not going to reduce the price, it will go up again” Seller after seller is pulling their house off the market and waiting until later this spring or renting it out (these are people holding on by a thread…”
Sounds very much like GWBush’s new Iraq policy…. Double down with a pair of duce’s.
I know, FDR should have withdrawn US troops after D-Day, instead he chose to “put more troops in harms way.” These people are crazy.
Idiot!
The housing market reached unbelievable heights and these guys are upset because they missed the peak by 10 or 15 percent. I think the altitude from the recent market is affecting their thinking and it is going to cost ‘em in the long run.
I’m seeing a surge of rentals hitting craigslist and the paper in the past couple of weeks.
> I’m hearing this over and over lately here in the BA lately.
The most recent experience is the minor pause in prices that came with tech bubble bursting. Prices had a little blip and then it was off to the races. Methinks that scenario won’t happen this time.
Better yet no one will want to buy their homes because others will be far less to purchase. Many homebuilders will lead in dropping prices far below todays prices. HB will not care about the prices. Its just business, nothing personal about it.
How long do you think it will take before we hit the bottom of this thing? Remember a few months ago everyone kept saying wait until 2Q 2007. Is this still accurate? I’m afraid it might take longer.
I’ve been saying (as have a few others) that it won’t be time to buy until 2009-2012. There is also the possibility that we may see a deflationary period where it won’t be “profitable” to buy houses for decades.
Until the “globalization”, immigration, currency exchange, Baby Boomer effects (pension, SS, healthcare, as well as a declining population in this demographic) & wage arbitrage situation is settled, the true “bottom” for housing prices cannot be determined, IMHO.
Real estate cycles are typcially years long. Anyone who thinks the market will straighten out sometime in 2007 is totally dreaming. Years, I say. Years.
The math in the articles ignore vacancies.
Any churn at all in the property results in 30-90 day vacancy depending on how badly they trash the place.
Lets not forget taxes and insurance. In Florida, that at the minimum, will stain your shorts.
Plus if you rent out the place you don’t get the homestead tax exemption, but how many people aren’t claiming that? It’s fraud and they are breaking the law. Do they know or even care?
If we know of rentals can we report it? I also think that they aren’t under “save your homes” which only allows taxes to go up so much. if you rent, don’t you pay taxes at the new assessed rate? Can we report this?
You can report it and most of these part-time landlords don’t claim rental revenue as income. A friend of mine got screwed over by a landlord when moving out so he reported him to Revenue Canada (the Canadian IRS). The landlord hadn’t declared for years and was in deep trouble last we heard.
Sure you can report them. I ran into my county’s property tax assessor at the grocery store last weekend. I used to hang out with her brother years ago. She told me she was concerned that property values were not going up like they were last year. As a result, she feared many owners would be challenging their property taxes. To make up for the loss of revenue, she said they would be looking harder for unreported home improvements, illegal apartment conversions, and cheaters in general. I also sat in on a meeting where the local city councilors indicated they would be cracking down on people who don’t pay correctly for rental trash pick up and water/sewer. I say turn them all in. Call your city/county/IRS, or whoever.
Love it. I just filed that bit of information away for the future.
I think some of them just don’t know. I recently tried to explain to a work colleague that buying condos and renting them out was not a great strategy right now in the DC area. Part of the plan involved the assumption that he could deduct mortgage interest for each of these rentals.
“I recently tried to explain to a work colleague that buying condos and renting them out was not a great strategy right now in the DC area. Part of the plan involved the assumption that he could deduct mortgage interest for each of these rentals.”
Ummm.. I agree that buying condos to rent in DC does not make sense. But you CAN deduct mortgage interest for each rental property you have … You declare the rents received as income, and you deduct the expenses related to the rental, including mortgage interest.
These folks are grasping at straws. They flippantly dismiss carrying costs - as has been repeatedly pointed out here. Can everyone really become a landlord? Back in normal times, what percentage of the overall population owned successful rental properties? Any guesses? I imagine that number to be far smaller than the number who now think renting will save their hides.
This never ceases to amaze me……
People don’t like their options to they do nothing. I want to give them a copy of the test rules:
You have TWO options. Option A is lower your price. Option B is foreclosure. THERE IS NO OPTION C
This is a timed test and you will be graded. Check your wallet for test results…….
There actually is an option C. They can hold onto the property for a while and see what happens. I know that the idea is mocked here, because so many people seem to think that prices are going to collapse back to 1970’s levels and stay there, but property values have historically always gone up over time. Unless the last few hundred years of history were a fluke, then home values will rise again eventually, Whether the person wants to hold onto their property 5-10 years to wait out the slowdown is another matter. Keep in mind - the man in this article isn’t a flipper hoping to make a quick profit, he bought this house before the bubble rose dramatically and has a good enough job that he can afford to pay both mortgages. He may not like his current financial challenges, but he can cover both his mortgages, even without a renter. That puts him in a different category than the poor fools who bought with 80/20 adjustable loans at the top of the bubble.
Diane,
I will give you that point, that those who are carrying a low enough loan on the property and have enough income to carry more than one note can indeed hold on. I posit that there are far fewer of that group out there than those who may have bought low, but later refi’d, took cash and thus joined the FBs who bought at the higher prices with 0 down and toxic loans. IMHO, there are enough of these poor souls coupled with the flippers to make the first set look like a grain of salt in a pepper shaker.
I get this response from a friend who just bought a second house and can’t sell the first so is renting it out. He realizes he’ll have some significant negative cash flow issues but figures no big deal if he waits it out 5-10 yrs… I try to tell him that this is a fine strategy only of you are willing to delay you retirement. IMO the lost opportunity costs are too high unless you love your job so much that you are willing to work an extra 5 - 10 years at the end of your career.
Diane, for your convenience, home prices for the last hundred years:
http://graphics10.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
Steep price declines are in order.
Buy low, sell high.
Thanks for your comment, Diane.
Whilst there is an Option C, and many people take it, because they don’t want to “lose” the equity they thought they had, it is of course economically stupid, given the opportunity cost of capital.
I would like to say that it is absolutely wrong that you get flamed for making your point. This blog is healthier for a bit of contrary opinion.
Regards,
Loafer
UnRealtor
That was the best chart I have ever seen showing the current housing mess. You still have a nutty sence of history and current politics.
Oh he’s a flipper. Anyone who buys a new house without a contingency on his old house is a de facto flipper. They bet God would uphold his contract with America that real estate only goes up. God screwed them.
Tell him not to worry, he can do it…
“DIANE, I researched this!”
Diane — there is a term for your tactic, I just can’t recall it. But it’s manipulative. “I know that the idea is mocked here…” sets us up to be sympathetic, which generally we are — at least we don’t flame obnoxiously as on so many other boards. But then you throw in the ridiculous “…because so many people seem to think that prices are going to collapse back to 1970’s levels and stay there…”
Please show me any instance, in any previous post on Ben’s blog, where anyone predicted such rubbish. What many of us predict is a return to the prices of the latter 1990’s. You get sympathy if you state facts correctly; none at all if you make up your numbers.
It’s called “realtor speak”.
BanteringBear — sounds right. An REIC troll.
“so many people seem to think that prices are going to collapse back to 1970’s levels and stay there,”
Total bullsh#t. I’ve NEVER seen any regular posters here say prices will go back to the 1970’s. That’s nuts, an you know it.
“Unless the last few hundred years of history were a fluke, then home values will rise again eventually”
Yea, eventually we’ll all be dead too.
“hold onto their property 5-10 years to wait out the slowdown”
Do the math Diane. -300 a month, plus insurance, upkeep, and vacancy cycles. Hey if someone wants to pay this for 5 years They will be “taking it in the shorts.”
“He may not like his current financial challenges, but he can cover both his mortgages, even without a renter.”
Hey, if he wants to live on the edge that’s his business. We’re just pointing out that it’s nuts. One minor mishap and he’s financially ruined.
And gee diane what about his saving for retirement? Out the window, right? And what if housing just slides along, as the boomers retire and demand wanes? What if his houses don’t appreciate as he hopes? He will have put all his money into one basket, housing.
But by all means diane, if you or someone you are close to wants to follow your logic, be my guest. But don’t try and make the poster’s here look like “crackpots” but putting untrue statements in their mouths.
What Diane is doing is setting up a straw-man argument.
http://en.wikipedia.org/wiki/Straw_man
What’s up Diane, not selling homes, so you’re hanging out here?
Total bullsh#t. I’ve NEVER seen any regular posters here say prices will go back to the 1970’s. That’s nuts, an you know it.
Wait a minute… I’ve said that.
Call me nuts, call me a crackpot… call me whatever you damn well please, but I can make the case.
Many posters here can cite chapter and verse on the numerous huge issues facing housing and the economy, but few seem to grasp their cumulative impact. Make no mistake… current circumstances are entirely without precedent, and the consequences will be likewise.
I’ll go on record saying that some parts of the country could see prices go back to the 1970’s level. Japan saw the equivalent to this after their bust.
The bay area is kind of screwy because development is so much more difficult vs other areas so I do agree it is unlikely to happen there.
Oliver
Okay, so let’s see if anyone that jumped all over Diane and called her a troll wants to apologize now. I’ve never seen a better example of group think. Hostility towards someone who makes a point, rather than just says “woohee screw them FB’s” over and over again really takes away the value of trying to have a discussion here.
Diane does not have a clue what she is talking about. Typical realtor.
There are people who bought CISCO at the peak Split
adjusted, it was around $75 at the peak, today it’s $28.
CISCO will, of course, hit $75, one day. Eventually. So hold on to it. You will be able to sell it at $75, in say 2015. And then,
voila, no loss at all.
Yeah, right.
The typical realtor/specuvestor/GF have no idea about ROI, opportunity cost, or time value of money. Ask them about real rates, and their eyes get all clouded up.
There is no way to make a gain on an overpriced asset, by holding on to it, once the mania is over.
“Keep in mind - the man in this article isn’t a flipper hoping to make a quick profit, he bought this house before the bubble rose dramatically and has a good enough job that he can afford to pay both mortgages. He may not like his current financial challenges, but he can cover both his mortgages, even without a renter. That puts him in a different category than the poor fools who bought with 80/20 adjustable loans at the top of the bubble.”
I do not see how this is realtorspeak or REIC bogus arguments. Diane makes a valid point that many of us agree with. There are people who bought early and without insane financing. They may suffer during a downturn but it probably won’t destroy them they way the flippers and speculators are going to get burned.
Not all of us have the same viewpoint on how this market will play out. I’ve gotten flack for saying San Diego will (only) fall about 40% from the high in my estimation. In the real world I say 40% and people want to put me in a white jacket and feed me applesauce for life. Here, according to some, I am Pollyanna with my head in the clouds for not knowing RE will fall 90% plus.
All voices have a right to be heard. But it seems the more extreme, angry, and belittling you are the less you are questioned on this blog. Heck, even Ben received angry posts a few months ago when he stated in an interview that his beliefs about the housing price losses were less than others on the blog.
Lighten up. Express your opinion but quit throwing hateful comments simply because someone sees a different future than you do. Time will tell who is right. In the meantime, 98.89274% (yes - made up estimate) belive housing has a lot more correcting to do whereas only 7.7382615% (again made up) of the general population sees massive decline coming. We need to stick together folks - like every other persecuted minority in history!
“In the meantime, 98.89274% (yes - made up estimate) belive housing has a lot more correcting to do”
Change to: “In the meantime, 98.89274% (yes - made up estimate) of the posters here on this blog believe housing has a lot more correcting to do”
It’s Monday. Sorry.
Sure…..
He could HELOC cash flow. He could get a 50% raise to cover his cash flow. Since EVERYTHING is possible, you could add an Option D as well.
Diane posts “There actually is an option C. They can hold onto the property for a while and see what happens. I know that the idea is mocked here, because so many people seem to think that prices are going to collapse back to 1970’s levels and stay there, but property values have historically always gone up over time. Unless the last few hundred years of history were a fluke, then home values will rise again eventually, Whether the person wants to hold onto their property 5-10 years to wait out the slowdown is another matter. Keep in mind - the man in this article isn’t a flipper hoping to make a quick profit, he bought this house before the bubble rose”
Well you are right on this narrow point. This case is far from the rule or none of would be here flapping our lips. If the house was paid for it would not be an issue, one way or another.
In most current case’s they are not.
Diane posts “There actually is an option C. That puts him in a different category than the poor fools who bought with 80/20 adjustable loans at the top of the bubble.”
If my Aunt had a dick, she would be my Uncle.
Property values even when they go back up after going down (its already gone down quite a bit as his 600K offer suggests) they will start to go back up from the low they ahve hit, not from where he can make a profit.
Cool.
Cow_tipping.
NO NO NO. Do some proper research. Home prices do not “always go up over time”. I saw a recent graph by Prof Shiller (sp?) that showed real home prices adjusted for inflation going back to the mid 1800’s. For most of the 20th century real housing prices were flat or declined. It was only towards the end of the century that housing “always went up”
“‘I’m sure it’s not as strong as some of the developers down there anticipated, but I think it will do fairly well over time,’ Karevoll said. ”
Sure, those condos will fill up over time in downtown LA….. 30 years.
Downtown LA is toast. They tried to sell it as super upscale and hip, but nobody with money wants to live there. They would have been better off building section 8 housing in all of those loft conversions.
I should take some pictures of some of these lofts and the surrounding environments….all the homeless are back under the 6th street bridge too….it is very curious to see 30 tents next to a movie production on Santa Fe Avenue south of SciArc on Saturdays….there is filming there nearly every weekend. I forgot my camera yesterday…I was on some street and Washington Blvd and wanted to take a picture of one of the original McDonalds with old style arches, totally Mexifornia’d out.
dude! Exactly!!!!!!
What’s to say that the LA downtown condos won’t be turned into section 8 housing once the condos are complete?
“They would have been better off building section 8 housing in all of those loft conversions.”
But they did build section 8 housing, they just don’t know it yet.
I don’t think people who have not lived in LA can fathom the scale and intensity of the downtown homeless problem. It’s straight out of “Escape from NY” down there — sofas in the middle of the street, covered bus stops turned into tents, endless urine and trash. It literally feels as if you wandered onto a a movie-set, but stinkier.
How many more times are we going to be hearing these greedy ignoramuses say:”I’m not going to give my house away.”
All I know is that, based on all the vacant homes, there are alot of people carrying two mortgages, and many if not most are incapable of holding out for too long. Thinking of primary residences as investments is going to come back and bite these fools in the a$$. Whenever I start to question a housing implosion, all I need to do is read an article like the one from Santa Rosa, and it becomes clear that the only way this ends is with much, much lower prices.
Thing is, this retired locust is almost certainly sitting on several hundred in equity. $600k is hardly giving anything away in Sonoma Co. He feels “entitled” to inflated bubble prices,but would certainly not give a second thought to selling his home to some poor family for twice what it is worth. The greed is just revolting. I home he chases it right to the bottom.
LOL. I agree Mr. Fester. As if several hundred thousand in gains is not enough, these locusts want to hold out for every last penny. Heaven forbid they leave even one hair on the buyers scalp.
“…The couple don’t want to forsake the sizable chunk of equity they would lose if they sold during this current housing decline. ‘I’m still looking to sell it, but I’m waiting for the market to make a nice turnaround,’”
I won’t shed a tear should I read in a few years that these greedheads retired to a homeless shelter after have been found living off dog food in a cardboard box. Serves ‘em right.
“I home (hope) he chases it right to the bottom.”
Mr. Fester, it seems to me this FB has “staying power” (the ability to muddle through and keep paying both mortgages for years, albeit with lots of pain) so he may very well do it. And I agree with you, serves this greedy man right.
Markets never care what a person’s financial goal is. This person’s remarks indicate complete ignorance of the way markets work. She expects the market to compy with her goals. The odds favor her financial future being dim.
“How many more times are we going to be hearing these greedy ignoramuses say:”I’m not going to give my house away.”
We’re already seeing less and less of these types of quotes in news papers, because it sounds like a broken record through constant repetition. Talented news paper journalists do not want to constantly repeat the same thing over and over again, week after week, month after month, etc. Old news, old quotes, is non-news, and it makes the journalists sound like talentless morons, repeating the same thing over and over again.
but they are talentless morons!
Oh yeah, your right. I forgot.
Talented at quoting Lereah and LAY?
IMHO, the only people who should resort to renting out a home in order to wait out the market are those who aren’t dependent on the rental income to meet monthly expenses. In other words, its a luxury that nearly all FB’s cannot afford.
Slightly OT: How long do you guys think they should “wait it out”, i.e., how long to get back to 2005 levels? 2015? Would be interested to hear…
Elliotwave theory says that market research shows that the Golden Ratio when mulitplied times the length of the boom, will render the length of the downturn (how long it takes to reach the bottom). Assuming the boom started in 1997 (according to Shiller’s Graph) and ended in 2005, it will be 8 x 1.618 = 12.944 or 13 years rounded off. Add 13 to 2005, which is 2018, and this is when the market will hit bottom. These poor fools will be waiting a *long* time for a “nice turnaround”.
Yes and just like Nortel there will be “Buy Now” calls all the way from ~240.00 to 0.50…
Diane “researched this” and she says: “eventually”
Make your plans accordingly.
Melissa,
Considering the fact that the last downturn in LA took 10-11 years to get back to ~1989 peak levels, I’d say 13 years sounds pretty much on target.
Additionally, one must always consider the effects of suicide loans which were not nearly as prominent in the 80s/early 90s bust…AND the fact that Boomers were forming families (and buying primary homes) during the last downturn.
This time, we are likely to have a downturn which lasts **at least** 10 years, IMHO.
2018 for the bottom. You kidding ??? I think it will hti it rapidly, cos the underwater ones will send the keys to the bank, who will shave 20% off and put it back on the market, that will lower the comps and put more neighbors under water, who will again mail in the keys, and another 20% later … more and more … this guy who thinks he owes less than his house can be sold for, but doesn’t want to lose that “profit” will soon realise he will make a loss depending on cops and will cave and sell it for market $$$.
Cool.
Cow_tipping.
I think the argument for why it will take a long, long time is that our hapless government will do everything it can to “keep people in their homes” with tax credits, interest rate cuts (like they’re planning with student loans) and so on. Of course, nothing they do will really be of any help and will serve to turn the decline into a slow, grinding affair.
I agree that the bubble popping will be more rapid than previous housing bubbles. The average US person has never had access to this much credit in such a speculative environment with such a thin equity base.
The US government can do all they want, and it still won’t make a difference. Bubbles collapse under their own weight. Without abnormally high rates of housing appreciation, people cannot afford their homes. We’ve already had rock-bottom interest rates already. That trick only works once in a cycle.
People often bring up the Japanese real estate bubble to show how real estate can go down little by little over many years, but that occurred because Japan collectively had the financial strength to spread the pain out (whether this is better or not is a different issue). But Japan then had a massive savings rate compared to the laughable US rate of today. Relative to the US FB, the Japanese could hold on because they had the financial means to do so.
Melissa “Elliotwave theory says that market research shows that the Golden Ratio when mulitplied times the length of the boom, will render the length of the downturn ”
Elliot has hole’s in his shoes. Elliotwave = Idiotwave…The angle of the dangle is equal to the beat of the meat.
My sister-in-law has some houses she rents out. She knows the rules, she investigates prospective renters, she has the resources to wait another month for a qualified renter.
Better to take have a problem banker than a problem renter.
“‘The (downtown) market has softened up. I think you’re going to see the number of rental units spike.’”
This is bullpucky. The downtown LA market never “firmed up”. Thjey got in late to the frenzy and It was “limp” from the begining. It will all likely be converted to rentals. Problem is, they build super high-end luxury condos. I mean bars and pools on the rooftops, doormen, like it’s park avenue. Young, single, downtown office workers can’t afford the rents to make them pencil out. WAY TOO many units. I think they are gonna loose money big time.
Whenever I see condo units for sale in downtown LA I think of the Chuck Heston film Omega Man, with a heavily armed Heston blowing away the mutants at every opportunity. Alright, it’s not that bad, but I’ve lived in LA for nearly 40 years, and I don’t know of a single person who has moved to downtown.
I don’t get it…
Builders will build as long as building is profitable. This means they will buy cheaper lots and build cheaper homes while sellers sit on their properties.
And about renting; guess these people have never met a bad renter before.
I see rude awakenings in their future…
Right. I just love these guys who blithely say “We’re just going to rent out”. They have NO experience with it. Wait until the rent doesn’t get paid and they have to evict. So now, not only do they not have the rent coming in, but the expense of eviction. Or, wait until some asshat tenant gets drunk and causes damage.
I’d like to see the look on the new landlord’s face when his new tenants begin uploading cases of Sudafed and ask where the gourmet kitchen is……LOL
“I’d like to see the look on the new landlord’s face when his new tenants begin uploading cases of Sudafed and ask where the gourmet kitchen is……LOL”
Yes, what a rude awakening for these new “green” Landlords…they’ll just love the calls in the middle of the night because little Timmy flushed the kitten down the toilet; Holes punched in the walls; animal feces impacted carpets; neighbor complaints becuse of parties. The ist is endless. I was talking to an oldschool Landlord that said prospective renters can look straight as an arrow and turn out to be your biggest nightmare.
I rent…and had a real bad gut feeling about my new neighbors that just moved in. Landlord said they “took a chance” a rented to what they thought was a nice woman’s Mother who was living on disability. She (Landlord) said she could barely sleep for two days after handing over the keys to the woman’s very scary looking Mother. Turns out the whole family’s alcoholic, verbal bouts, people coming and going, smoking and flicking butts wherever. Beer cans on the backyard and two new pets that the Landlord has yet to be informed of. Nice. Thank God I live on the other end of the fourplex.
Now my Landlord’s going to have to figure a way to get these beauties outta there. Not fun.
DOC
Especially now, with ownership at an all-time high. Aside from us bears, anyone with a job and a half-decent credit rating has already bought; so the renter pool will consist largely of the dregs.
A $2300/mnth mortgage on a 830K house?
The rent may allow Carmen to stretch out the 115% amortization date of his loan by upping his payments.
“Nunez pulled it off the market a month ago and found more interest for the house as a rental. He had a tenant within days. The $2,000 rent falls short of his $2,300 mortgage, but it helps Nunez make payments on his two mortgages, which total $7,300.”
“‘In a way I am working for my house. I just have to work harder,’ said Nunez. ‘But I feel it’s going to work out.’”
NO Response necessary, ROFL, popcorn anyone
he just has to work harder to subsidize someone else’s rental house.
The tail truly does wag the dog.
The renter better stay on Nunez’s azz to make sure he’s making the rent subsidy/mortgage money. Awesome.
“The $2,000 rent falls short of his $2,300 mortgage, but it helps Nunez make payments on his two mortgages, which total $7,300.””
Of course, this Real Financial Hero probably hasn’t realized yet that rental revenue is not pure profit. He still has to pay taxes (property and on the rental income) and insurance plus any maintenance issues that come up. And any legal costs involved if the rental goes sour.
During the very brief time that I considered purchasing and managing rental properties, I came to a conclusion that the rental income would have to be about 125% of the mortgage payment just to break even–and that assumes that there a major, unexpected repair doesn’t happen. In the Sacramento area over the past few years, the numbers just didn’t come close to adding up.
So anyway, this guy probably thinks that he can weather a $300/month loss. But he’s going to find it being a lot closer to $900/month after he adds everything up, so he’ll be eating at least $10,000 in year 1. And that’s assuming that he’s lucky and finds a good tenant (a lot of amateur landlords don’t). If that happens or there is an uninsured loss, he will quickly find himself tens of thousands of dollars underwater.
I know we lost our ass when we had to rent our house in Dallas for a year because it would not sell! We weren’t selling due to greed, but due to a job transfer! We ended up selling at a $20k loss and glad to be rid of the house! Luckily we had wonderful renters who actually helped us fix up the house to sell it. I thank God everyday for our good fortune! I know being a landlord was a truly miserable experience! We were about $800/mo. underwater on the loan (30 yr. fixed) and it was torture! Many, many arguments between me and my husband. It has been one of the worst times of our lives!!!! I will never, ever be a landlord again! And we had wonderful tenants!! The stress is UNBEARABLE!!!
I was in the unintentional-landlord game for about six months. I had good renters and a trustworthy realtor, and it was still a nerve-wracking experience. If these guys think it’s just a matter of collecting the rent and making the mortgage payments, they’ve got another thing coming.
LARenter, all these comments reinforce my resolve to sniff the rental market with a lot of caution. We have been tenants to a wonderful old-school landlord with a lot of experience for 12 years, but unfortunately the place is too small now for our family. I’ve been looking around, but seeing all these newly minted landlords makes me very uneasy. You were wise enough to realize that your tenants were not at fault for your plight, but I don’t see that attitude around LA these days. They all seem to fall back on renting out as a kind of “lesser evil” plan B, and they have no notion of what’s involved on their side.
Quite seriously, there’s a business opportunity here for someone to teach all these would-be landlords the ropes. I bet you a bunch of these GFs would pony up for a seminar or CD/DVD set on Landlording 101.
A think we need a new term: “Accidental Landlord.”
Hey LARenter–it’s Bryce. Glad to see you still posting. Hope you two are doing okay in the new year. Gimme an email sometime.
“business opportunity here for someone to teach all these would-be landlords the ropes.”
As in: “here put one hand through this rope, ok, and the other through that rope…alright”
“Say, what is this called?”
“Oh, this? This is called a Wiping Post”
He still has to pay taxes (property and on the rental income)
There isn’t any rental income on this property, which is just another way of saying there is a housing bubble.
I was one of these fools just a few years ago. Relo’d from Denver to SF in late ‘03. Couldn’t get what I needed for the house as the Denver market had been soft since ‘02 (purchased with a 0 down VA loan). Thought I’d rent the place out. Flaky property management company, idiot renters…the works followed. When I wrote the $10k check at closing as I finally sold the POS (which my dad and I put AC and woodfloors in) I had the worst feeling…now I realize it was one of the luckiest days of my life.
The kicker on the whole fiasco was I thought, “at least I’ll get a nice tax writeoff on the loss.” Not bloody likely. The Man eliminates passive activity losses after a certain amount of income, which if I recall correctly is not that high of a figure. This happened when I was 32. You better believe I am thankful to have learned that lesson sooner rather than later.
Never again.
The few times that I briefly considered purchasing and managing rental property I also arrived at a similar conclusion.
It dawned at me then that the RE industry is the second leading lying industry to work their craft on our population, the first being tobacco, and perhaps new/used car retailing coming in at a close third place.
“‘In a way I am working for my house. I just have to work harder,’ said Nunez. ‘But I feel it’s going to work out.’”
It’s amazing that people choose to live this way with this mentality. Sad actually.
Recently, I looked at an income property in ATL and when I asked the seller about the cap rate, he started talking about the appreciation of the area. There was no positive cash flow even with 20% down. Any thoughts what a market cap rate is these days for income properties?
Last time I was a landlord, I had a minimum of a 12% cap rate before I would even consider a deal.
So now this FB is a slave who is going to “work harder” for his slavemaster, an aging building that will consume him with interest (and other) payments while its market value depreciates.
If people want to enslave themselves in their mindless pursuit of homedebtorship because of their brainwashing (by the RE insdustry) then that is their prerogative. I will watch from the sidelines with great insterest and curiosity as these people’s lives rot in their servitude.
figure at current rates $600 / MO per $100K thus assuming no down 4900 MO + $800 for property tax + a couple hundred insurance etc and of course maintenance costs, so I am thinking this guy is upside down by a whole load of cash, unless he has $600K in untouched equity, in which case at 5% rate of return he could have been earning around $2500 / MO in interest or thereabouts. Gives me chills thinking about it
A professional colleague of mine who is taking a position overseas, but who wants to hang on to his house here in Colorado Springs, asked me if I’d be interested in renting his house in Pine Creek, an upscale executive neighborhood on the north side of Colorado Springs. When I asked him how much he’d be renting it for, he said $1800 “because that’s what I need to cover my mortgage.” I just smiled and said, “No thanks.” He looked a little disappointed, so I told him bluntly, “YOU need to cover your mortage - I don’t.” End of coversation. The rental market here is saturated with very nice SFHs with a sweet spot of around $1500/mo. He might get lucky, but I have a feeling he’s going to have a vacant house on his hands unless he gets over the delusion that creditworthy renters will line up to pay his entire mortgage for a place he bought at the peak of the market.
What some of these idiots fail to grasp, is that allowing the house to sit vacant for just a few months while holding out for the $1800, just cost them more money than if they would have leased the thing for $1500 for one year. The lack of financial acumen is astounding.
Well said Bear…
Don’t you love the math skills of this nation?
Got popcorn?
Neil
I am an accidental landlord in Colorado Springs right now. I had leased a house in Fairfax subdivision on a 9 month lease and after 2 months into the lease transferred back to OR. I am able to break my lease, but only after someone leases the house. The lease on the 2800 sq. ft. home in a decent cul-de-sac is $1350 per month. I can’t get anyone to take it over despite offering free months rent each month. Fortunately, my contract does end in June, so at least I know when my bleeding stops.
Fortunately for me, I actually waited until my house sold in June 2006 in AZ before making any offers on anything in Colorado Springs.
I did make some offers in Colorado Springs in July of 2006 before discovering this blog and the good advice here. However, I don’t think that I am welcome in Colorado Springs after insulting the sellers with low ball offers. One house that was listed at $650,000, we offered them $450,000. They had had paid $534,000 a year earlier. They didn’t take our offer in July, but funny enough, when we landed in Colorado Springs in September, they asked if we would give $500,000 for it. At that point, I said no, but I would give $400,000 for it. Insulted the sellers again, but I expected them to come back with $450,000. Of course the mood had passed for the house anyway. Needless to say, that house is still on the market for $599,000. Why they don’t just lower the price to $500,000 is beyond me. It is a very funny story about how the current owner bailed out an idiot relative of theres and now they are going to take a bath on the house. They did rent it out and the tenants trashed the place and didn’t pay their rent.
The extra rent money I have been paying is a very small sum compared to what I would have lost had I bought a house in Colorado Springs in Sept. 2005 when I first started looking. Of course I was going to make so much money on my Chandler (85249) home, that I was looking build in some development named “Cathederal Pines” and the houses were going to be million dollar homes. At the time, I had my house just about to go on the market for $899,000 after paying $450,000 for it when it was built 10 months earlier. Gee when it sells for 899,000+ since everyone will be bidding it up I can then get a million dollar home and turn it into 2 million - I’m a genius.
Now in 2007, as I have posted before, I sold the house for $705,000 and very happy to be a renter in Hillsboro, OR given today’s housing news even in Oregon “where it is different”.
Oh, did anyone hear that the Colorado Springs Intel fab is for sale? My understanding from a friend is that if it doesn’t sell before production is done in 6-12 months, it will be closed. That is going to help that market out a bunch when ~1000 people are looking for work. Good luck renting out the place in Pine Creek for $1800.
On a side note, while there an acquaintance of mine had a plan to rent out his current house and buy another house to get his rental empire started. He had just bought a house in Wolf Hollow??(whatever is on the east side of the Powers and Woodman) and asked how much I was paying in rent on the house in Fairfax - which was bigger and nicer than his home he wanted to rent out. I gladly told him the huge sum of $1350/month. The look on his face was priceless. He was a math major in college and it didn’t take long for him to figure out that he wasn’t going to make much renting his place out in that didn’t cover his monthly mortgage payment. I think that he put the rental home dream on hold -temporarily of course because things are really going to go up in the spring.
“because that’s what I need to cover my mortgage.” I just smiled and said, “No thanks…..YOU need to cover your mortage - I don’t.”
I love these blunt, ruthless posts. I bet that cold bucket of water is just what that guy needed.
How’s the old saying go?
Poor planning on your part, does not constitute and emergency on mine.
so I told him bluntly, “YOU need to cover your mortage - I don’t.”
OUCH!! LOL
Sammy posts “because that’s what I need to cover my mortgage.”
You gotta’ love it! What planning, what deep thinking! I respect those who what to know where they are going to land when they “jump”…. I like and respect the thoughtfull thinking of let’s say if Plan A fails we go to Plan B or have a fall back plan or course.
Was the guy’s name GWBush?
No - it was Lincoln as he fired McClellan and hired Grant and Sherman. Just like GWB just did. I’m glad he sh-t canned the report from Baker and the surrender group. Baker’s biggest client is the Saudi royal family. Didn’t know that did you appeasers? Rant off now!!!
posted “No - it was Lincoln as he fired McClellan and hired Grant and Sherman. ”
It only took your boy a mear 4 years to decide to do that. What was he doing in the mean time? Appeasing or just having a happy war?
“If General McClellan does not want to use the army, I would like to borrow it for a time.” - Pres Lincoln
“Baker’s biggest client is the Saudi royal family. Didn’t know that did you appeasers?”
Oh, I absolutely knew that. And maybe YOU didn’t know, or maybe you forgot, that the Bush cartel is also a big client of Baker’s. How do you think Bush became prez in the first place? Righteyo! Baker, Baker the kingmaker. It was Baker and the Saudi royals who put Bush into office in the first place.
If he hadn’t overpaid for his house, he wouldn’t need to charge such a high rent. Your answer was right on the money, you don’t need that kind of landlord.
Where do these people renting out these houses think all these renters are going to come from? I’d have to think that the majority of renters look at apartment buildings before they look to rent a house. When I was a renter the last thing I wanted was to rent a house.
There aren’t a lot of markets that haven’t been totally overbuilt from SFH to condos. If there isn’t anybody left to buy your overpriced box, there probably aren’t a whole lot of people who are willing to rent it.
I really think they believe the BS that there are a lot of losers who got priced out forever.
Maybe. I think it is another sign that these financial geniuses did not do their homework. RE always goes up, you can always sell quickly and profitably after buying, and if not, you can find a renter to cover your mortgage. I am guessing they have not researched any of these assumptions. Being a greedy, impulsive idiot paid swimmingly on the upside, but poor planning is going to cause all sorts of casualties in the rough seas we are now in.
Well there is always that new crop of renters after their Mc Mansion has been foreclosed on…
while the landlords are still delusional about finding “credit worthy” renters they will not be inclined to want to rent to someone who just had their house foreclosed.
“Well there is always that new crop of renters after their Mc Mansion has been foreclosed on…”
…oh wait. But now that newly-empty McMansion is ALSO for rent!
I called about a house for rent recently and asked some questions. Then the gal said “Can I ask you a question?”, I said “sure” and her question was “Do you have a job?”.
Ha ha. Nice. I’m looking for a new rental now and I’m not so interested in a big SFH. There are only two of us - no kids. We have excellent credit and good jobs but don’t need a lot of space or a yard to take care of. Probably we’ll just rent an apartment in a nice complex, or maybe a townhouse.
and thus, so much for the “rents will rise to support the current prices” theory. As we have said all along, this is not going to end well for those who expect to retain the bubble values in their properties.
http://www.ewee.com/SinkingShip.jpg
Renting a house is the last thing on my list. I much prefer renting in apartment complexes. The maintenance is much more responsive, the amenities (pools, jacuzzi’s, club house, and so on) are not equal to a house. I cannot understand why someone would pass up swimming pools and jacuzzi’s - sometimes tennis courts, in favor of a ho-hum house! I like my current place, but my next place (another apartment complex) will have private garages as options, in addition to the swimming pools/jacuzzis/club house stuff.
Pets. Try stuffing 3 dogs, 9 birds, and 1 cat into an apartment with a balcony and no yard
posted “Pets. Try stuffing 3 dogs, 9 birds, and 1 cat into an apartment with a balcony and no yard”
Do you live up-stairs from me?
They are going to need one huge cat box.
“Pets. Try stuffing 3 dogs, 9 birds, and 1 cat into an apartment with a balcony and no yard”
You’ve got to be kidding.
House or arpartment. Does it really matter?
Must be nice walking into that cage that used to be a home and take a nice long breath of animal stank. I don’t care how fastidious one is. Still gonna stink. Never could figure out the attraction of having more than ONE pet, unless there was a little…ok, a lot of OCD involved. But then I guess “the pets” would just be the “side attraction.”
DOC
Plus the noises above, below and beside you as your neighbors have fun!! I hated living in an apartment! We rent a 6 year old house in a gated neighborhood with wonderful pool and bbq facitilites. I would never live in an apartment again!
This usually works for me: I rent the most expensive apartment I can find. Head bangers, rap “music” types blaring out their violent lyrics, druggies, party types and college students tend to go for cheap places. I go for the upstairs units. I personally would be bored to death living in a single family home with no pool/jacuzzi and no nearby watering holes (unless I get the ocean view PVE place for $1000 per month rent). I’m single and enjoy this carefree lifestyle.
I rented a house, now reside in upper scale apartment. I brought my hiphop capable music production equipment and nightclub lights with me. Yay for building from the 1920s with insane concreate floors. Not enough power to run lots of high powered lasers or racks full of computers
“Concrete” and “upscale”. I should really re-read my posts before I submit.
On another note, there are record numbers of apartments availible in the building now, and rents HAVE GONE DOWN! This is after the local paper, the Virginia Pilot, ran an article about how the rents would go up.
Va “beyatch” (ah ha). I forgot to mention, I had a great apartment in New jersey, with a lease agreement about keeping the place quiet. New neighbors below me were loud until 2 am when I went downstairs and rapped on their door. Next night the same thing. I reported to the manager and she said they are violating their lease agreement. Noise stopped right away. Some people have to work for a living. Mind you, this NJ place was no where near a college. There is a time to grow up and be considerate of other people and not think you are in your own little world. If you want to make a lot of noise, get a house on ten acres. Or move into a college area apartment. I am a working engineer and my career is important to me.
Va “beyatch” wrote “On another note, there are record numbers of apartments availible in the building now, and rents HAVE GONE DOWN! This is after the local paper, the Virginia Pilot, ran an article about how the rents would go up.”
Probably due to what you said in your previous post. You brought your “hiphop capable music production equipment” with you. And you probably used them full blast. DUH? Chased them out. And the stupid landlord keeps you there? I hope your first post is just a joke. Otherwise I would certainly move away from you.
I have never lived in an apartment in my life, and most likely never will. But I have always had a furry friend or two. The people I know who have lived in them are never short on complaints.
Let’s see what the Good Book has to say on the subject of apartments/condos/townhouses: “Woe unto them that join house to house, that lay field to field, till there be no place that they may be placed alone in the midst of the earth!” [Isaiah 5:8]. Does this mean condo developers are all going to hell?!
The next verse is even better: “In mine ears said the Lord of hosts, Of a truth many houses shall be desolate, even great and fair, without inhabitant.” [Isaiah 5:9]
Whoa. I knew Isaiah was a great prophet, but it’s downright uncanny how he foretold all those empty McMansion developments!
Sammy,
I was talking with a real estate investor who does the whole lease to own option here in Colorado Springs and he says he’s getting rid of all his properties. He told me that rent prices in the springs are dropping significantly because no one can sell so most folks are putting their houses up for rent. I told him good luck with that.
I had to rent my house for three years for $1050 a month. That was well below my mortgage payment. There was no way I could ask for more and still get it rented. People will just not pay the rent price that’s the same as a mortgage, unless they can’t qualify for a mortgage. And then, you wouldn’t want them renting your place in the first place.
Sammy posts “Let’s see what the Good Book has to say on the subject of apartments/condos/townhouses: “Woe unto them that join house to house, that lay field to field, till there be no place that they may be placed alone in the midst of the earth!” [Isaiah 5:8]. Does this mean condo developers are all going to hell?!”
Pat Robertson say’s God talks to him. He is very lucky most people talk to God but God does not talk back to them, let alone start the conversation. I wonder if God says things like this to Dear Pat? I do know Pat said God told him GWBush would win the 2004 election and he did so I would not take this post lightly.
AE,
Does your logic process really work that way?
“People will just not pay the rent price that’s the same as a mortgage, unless they can’t qualify for a mortgage. And then, you wouldn’t want them renting your place in the first place.”
Ashter — that says it all.
The old testament was written by and for people who lived a rural lifestyle. The Detroit Freepress will say better things about the Lions than the Raiders. The point? It’s home team spin. They were a non-urban people and their cultural tales had a dim view of city life.
Or alternatively, a big bearded man living in the clouds who knows everything decided to reveal his wisdom through riddles and incoherent rambling so that we’d know (by deciphering the riddles and ramblings) which ones of us would be eternally tortured. Because he loves us.
posted AE,
Does your logic process really work that way?
Yes. I did not make this up either. Pat said that very thing.
http://www.gazette.com/display.php?id=1328957&table=story_archive&sec=1
Another reason not to live in an apartment, especially when the dregs of society have disputes with their ex-girlfriends and burn down the whole complex.
I can tell you that it majorly sucks to be suddenly uprooted from your apartment because some asshat tenant burned the place down. I know, because it happened to me over the holidays. I was really happy with my place, too. Not so happy where I am now, but at least glad to have a roof over my head. That’s why I urge any renters on this board, please, PLEASE, if you don’t have it, get renter’s insurance. I would have been screwed if I hadn’t had it. I’m lucky I did. But even so, it still sucks trying to get your life back together.
Also, I want to put in a big plug for the Red Cross. You don’t realize, until you need them, how much they can do. They put us all up for a few nights in a hotel. A couple of the tenants got a debit card for food and clothing (I didn’t need it, but if I had, they would have given me one). They were awesome, at least here in West Central Florida they are. Big plug. It’s a charity worth giving to, if you’ve got a few extra shekels.
palmetto,
Didn’t know you had to go through this. Very sorry to hear about it.
You’re right about the Red Cross. Although they have been getting some negative press the past few years, it is a top-notch organization, and very worth charity.
Thanks for the advice about renter’s insurance. Something we’ve mulled over, but haven’t gotten around to. Will do so this week.
Best of luck to you!
CA renter, thanks for your kind thoughts, much appreciated. You know how people say when they’ve been through something: “If my story helps one person, it was worth it”. I almost dropped my renter’s insurance and then decided to go for it. I am so glad I did. I don’t know if you rent a house or condo or apartment, but if you rent a condo or apartment, and especially if you have children, definitely get it, because the actions of others can affect your life in a heartbeat. Also, we are living in a very disturbed period of time and what with all the widespread criminality (as evidenced by the housing bubble, LOL), renter’s insurance can be a good thing. I pray you never need it, but getting it was one of the best things I ever did.
Bill. What’s good for the goose is not always good for the gander. Or, more appropriately, different strokes for different folks.
True. Until recently, this 2 bedroom 2 bath apartment had a dog and a cat. Now just a cat. My sister moved out (thank goodness!). The apartment complex I rent is through a big corporation that has complexes all over the U.S. Pets are allowed here. Get a 3 bedroom 2 bath unit for your family and your dogs. Some neighbors of mine are like that. And it’s not noisy here either.
2 humans and 3 cats in this 2-br, 2-ba apartment with terrace. Our upstairs neighbors get a bit noisy when the Raiders games are on, but that and the ‘no dogs’ rule are all I have to complain about. We have a pool and hot tub out back, plus we are within 4 blocks of over a dozen restaurants, a grocery store, some bars, and other local businesses. Oh, and a reserved spot in the covered garage.
Having a dog and maybe a small vegetable garden would be nice, but not at the cost of all that extra maintenance on a house.
Hi Bill…I rent a duplex (3BR) and put in my own hot tub in the back yard. Plus my cats have a whole big fenced yard to run around in. Can’t find that in most apartments.
Slash — …and you don’t catch any diseases from use of the hot tub by people you don’t know.
Benefit of renting a house: a yard, greater square footage, more privacy, less noisy, likely easier parking situation, and so on.
I’ve never rented a house myself, just apartments, but if I were to ever become a renter again I’d insist on a house over an apartment.
I hated apartment living because of the noise. I will never live in an apartment, which is why condomania is a puzzle to me. Living in a condo is like living in an apartment, only it costs more and it’s far more difficult to move.
Houses can be bad too. I am the on the HOA in my development. I have had some complaints that people are clogging up the street parking and it affects everyone but renters tend to be smaller families and as such have a smaller foot print. In addition to that, the Homeowners have to notify the board its a rental, so we are extra severe on the warnings etc if they dont maintain their house, and the rentals are very well maintained as a result.
In any case apartments have someone to complain to. In a house you’re screwed in that regard.
Cool.
Cow_tipping.
I’ve been renting apartments and now a condo for the past two years after selling, but am now looking to rent a house. I want to escape from smokers, noise, and get a yard and privacy. Prices in my area have begun to enter my range, so I’ll find one for six months and renegotiate the rent next fall when I believe there will be a LOT of houses on the rental market.
The $2,000 rent falls short of his $2,300 mortgage, but it helps Nunez make payments on his two mortgages, which total $7,300.”
That means his new house mortgage is 5000 a month….
plus insurance and probably taxes. So this guy is making 300,000 a year? Bet not.
imploder posts “So this guy is making 300,000 a year? Bet not.”
Why of course he makes 300k per year! Or he never would have gotten the loan. Did you ever think about that?
I pretty much figured everyone except me makes 300K. How else could they afford all these expensive homes
I was wondering why nobody was commenting on that, geez, 7500 a month? What the hell do these people do for a living?
Pat post 7500 a month?
Sorry 300k per year is 25k per month. I am not picking on you. It is all the more mind blowing. How can this be?
One sign of a market in a state of equilibrium flux: Pricing does not compute. I ranked a few 2-3 bedroom homes from my area of SD currently listed on ziprealty by sq ft of floor size. All are in the 1100-1134 sq foot range, but prices are all over the waterfront — from $260K to $470K. Anyone want to buy a 2br 1154 sq ft home for $470K ($407 / sq ft) when you can buy an 1100 sq ft home in close proximity for $260K ($236 / sq ft)?
11350 MATINAL CIR, SD - Rancho Bernardo, CA 92127
2/2 1,100 N/A 06/30/06
$359,000 - $369,000
17647 POMERADO ROAD #246, SD - Rancho Bernardo, CA 92128
2/2 1,100 N/A 10/04/06
$260,000 - $265,000
16834 BLUE CRANE WAY #2, SD - Rancho Bernardo, CA 92127
2/3 1,108 N/A 08/15/06
$410,000 - $425,000
12022 ROYAL BIRKDALE #B, SD - Rancho Bernardo, CA 92128
2/2 1,112 N/A 09/08/06
$399,999 - $399,999
11323 MEADOW FLOWER PLACE, SD - Rancho Bernardo, CA 92127
2/2 1,132 N/A 11/05/06
$440,000 - $450,000
12280 CORTE SABIO #4108, SD - Rancho Bernardo, CA 92128
2/2 1,134 N/A 10/03/06
$329,900 - $339,900
12240 CORTE SABIO #1104, SD - Rancho Bernardo, CA 92128
2/2 1,134 N/A 11/09/06
$330,000 - $340,000
16555 CAMINITO VECINOS #39, SD - Rancho Bernardo, CA 92128
2/2 1,134 N/A 09/12/06
$299,900 - $299,900
16566 CAMINITO VECINOS #31, SD - Rancho Bernardo, CA 92128
2/2 1,138 N/A 12/30/06
$305,000 - $305,000
18622 CAMINITO CANTILENA #320, SD - Rancho Bernardo, CA 92128
2/2 1,140 N/A 01/05/07
$338,000 - $358,000
18674 CAMINITO CANTILENA #250, SD - Rancho Bernardo, CA 92128
2/2 1,140 N/A 01/12/07
$349,000 - $349,000
14955 AVENIDA VENUSTO #31, SD - Rancho Bernardo, CA 92128
3/2 1,152 N/A 10/17/06
$355,000 - $355,000
10378 RANCHO CARMEL DR, SD - Rancho Bernardo, CA 92128
2/2 1,154 N/A 01/05/07
$470,000 - $470,000
10226 RANCHO CARMEL DR, SD - Rancho Bernardo, CA 92128
2/2 1,154 N/A 12/17/06
$465,000 - $485,000
GS, I’m seeing the same here in LA. Today I went to 2 open houses ON THE SAME BLOCK, both 3×2, both flipper owned for less than a year and refurbished, very similar square footage. One was 1M, the other 1.1.
Casually noticing the same thing in the NOVA suburbs. It seems there’s a real split in listings - people who must sell and have come to grips with the market place, and people who are holding out for someone dumber than they were.
Considering our position in the timeline (the next few months will show seasonal increases in listings + loans resetting) I think this is the beginning of a completely irrefutable slide in prices. Comps, fraud cashback, relistings, _statistics_manipulation_ and other acts of deceit will be unable to hide it. The next six months will finally reveal a sizable group of people who have no alternative but to slash the prices.
That or REO auctions will be a huge craze. Either way the result is almost the same.
“The market here is quite different than those markets. That (decline) would probably have to do with new projects that have not had as much interest as they anticipated,’ he said.”
It is quite different in LA, John. More subprime loans + a worse home price / income ratio = worse than most other coastal bubble zones.
I sold my NYC coop and now I will rent til the bottom comes up. I expect to rent for 2 to 3 years. I also expect to save money renting instead of buying. This savings includes property taxes, insurance and any [unlikely] appreciation. Gordo nyc
…maintenance/repairs, interest on the mortgage…
‘But I feel it’s going to work out.’
Kind of like a huge splinter, or a boil.
or that kung pao he put on his credit card yesterday B-)
LOL.
U.S. Gypsum cutting production:
http://www.gypsumtoday.com/news/viewnews.pl/id=932
I feel for the hard workers who are losing their jobs. Its not that this wasn’t obvious it would happen… Query: How many jobs?
CR did a nice plot showing why in March-May we’ll lose a lot of construction jobs (and have a further slowdown in demand for supplies). Ouch… Cest la vie.
Got popcorn?
Neil
That gets back to my argument that, for those of us with the time and stomach for it, now is the time to think about building, rather than buying an existing new or used house. Compared to 2005, the land is cheaper; the labor is cheaper; virtually all building materials are cheaper and going down.
Sure, there are some areas where this is not true, but it is true enough to keep the great majority of us very happy, IMO.
“‘We need to get a renter in there because right now I’m paying two mortgages. Every dollar I have coming in is going right back out the window,’ said Phillips. ‘We’re just barely holding on.’”
Go ahead and let go, the fall is not bad at all. Of course the splat landing will smart a bit!
“‘We need to get a renter in there because right now I’m paying two mortgages. Every dollar I have coming in is going right back out the window,’ said Phillips. ‘We’re just barely holding on.’”
just keep “barely holding on”, things will come back “eventually”, like 5 or 10 years. Everything is fine. Diane researched this.
We just moved to a new rental in Sonoma. There is tons of inventory for rentals on the market. However, too many FBs are definitely still drinking kool-aid and believing they can rent it out for enough to cover their mortgage payment. There are places in chithole boyes springs with falling down fences, tarps on the roofs of houses next door, chicken wire fencing, total chiholes that idiots are trying to rent out for $2000 a month. This is the place where the bus would drop off the sex offenders newly released from San Quentin.
We went to great effort to look up the sale history of most of the places we were interested in renting, and refused to rent from an FB. 24 out of the first 30 places we looked up were all FBs.
We found a great place with long time owners (20 years) kept up nicely and there was no time between the last tenant and us moving in. Good landlords know how to attact good tenants.
These FB reluctant landlords are going to be their own nail in the housing bubble’s coffin. They don’t have the money to hold on to the place, they don’t have the money to maintain the place. The maintenance won’t get done and the property values will fall even further. They don’t want to take it in the shorts now… well, by the time the market is done with them, they will be dropping their shorts.
Athena, isn’t it interesting that only a year ago we were a bunch of bitter renters. Now we are life savers.
Oh well the talk of the town now are all the specuvestors who bought houses and claimed they were going to move in to them… and of course immediately rented the house out after purchasing it. Now those neighborhoods are going to have the dreaded renters… LOL…
Then there is the talk of the specuvestors that have empty houses sitting and sitting and sitting on the market, and it is only a matter of time before they try to rent it out, and so the hens are a clacking about those fools who are bringing renters into their hoods. LOL… most of these gripers would be lucky to have people like us as renters.
“We went to great effort to look up the sale history of most of the places we were interested in renting, and refused to rent from an FB. 24 out of the first 30 places we looked up were all FBs.”
Athena — that should be Rule #1 these days for renters of non-apartment housing.
No kidding! It was truly an eye opener. It was one thing to suspect that FBs were chasing the market down and opting to rent because they couldn’t sell. But it was another thing entirely to actually look up the addresses of the places for rent and see how many were bought at the top of the market. Several real estate agents that showed rental properties that were still listed for sale told tales of the growing list of FBs that bought their upgrade house and couldn’t sell their previous residence and are holding two mortgages. They even seemed to realize their clients were also asking too much in rent, but weren’t receptive to the guidance they were giving that they would have to lower their asking price.
Sellers/accidental landlords are still being very stubborn and clinging to their sense of entitlement. That is what will make the crash all the more painful… there will be a big wave of holdouts that finally topple when they can’t bear the weight of their financial folly any longer… and nobody will forget the splat heard round the town.
And that’s exactly how crashes happen. Look at Enron for instance. They kept the game going as long as they could doing whatever they could, but then there’s a tipping point and they just can’t hold it together any more. And the whole thing unwinds very rapidly. Your scenario could very well play out in the RE world.
There’s an easy solution to this for renters, just agree to six months and expect to renegotiate or move a couple of times/year. Rents should be dropping pretty rapidly and renters may benefit from this. It might be a hassle, but the alternatives are apartment living or buying something that is no longer 90% overpriced, but merely 75% overpriced at the moment.
Athena: I’m looking to rent a house soon and am wondering how you looked up the history of the homes you were looking to rent?
I use zillow.com, the sales data are accurate, zesstimates are 10-20% too high in many cases.
‘I’m not going to give my house away. I’m not going to take it in the shorts.’”
This pervasive attitude among current home sellers is exactly why I’m going to continue to rent. Why? Because I’m more fiscally responsible than them, likely make more in salary, have excellent credit, am not leveraged, and, most of all, can hold out longer and wait for the opportunity that always accompanies someone else’s misfortune.
When all these fools from Santa Rosa realize that their homes are only worth half what they paid a few years back, then there will be some opportunity. BTW, what is it with that place? Quite a few of the new arrivals in Humboldt County, CA are from Santa Rosa and I find them to be pretentious and overly snotty. I guess they’ll have theirs coming to them soon enough.
I also would never pay their crazy prices either! My husband just lost his contract job and we will be living on just my income for a while. No problem!! I make plenty enough to support us both and still max out my 401k ($15k/yr). If we had fallen prey to the peer pressure and bought one of these overpriced POS we would be in deep do-do!! Heck, I just went out yesterday and signed my husband up for a gym membership since he now has time to workout!!! People are stupid!!
LARenter, do you have a sister who’s single? Your husband is so lucky to have you.
I hear you Anthony,
Over here in Ashland, we are deluged by Sonomites and Marinites with their beemers and snooty developments with home owner associations. I would love Schadenfraude to come out and camp out at some of our open houses with a 40 oz. “scuba tank” of Schlitz. As those markets go, so does the N.Coast and S. Oregon. So, I am enjoying the BA bleed immensely.
Oh, please. Could you be any more judgmental? I’m a former Sonomite, now living in Colorado. I don’t drive a BMW. Rather, I run around in a 10-yr-old Subaru Outback. I’m not a wine snob, and homeowners’ associations give me hives. Give us a break and stop generalizing.
Did they run you out of town?
“Did they run you out of town?”
Very funny! No, not exactly. A job opportunity took us to Colorado.
I still take exception to Mr. Fester’s characterization of former Sonomites. Most, not all, but most of my neighbors were normal suburbanites, not the obnoxious tools he describes. I’m sorry that he’s having to deal with a few rotten apples, and I certainly hope that I don’t come across that way to my new neighbors. That said, I loved living in the BA, and someday I’d like to return. It’s a great place to live, far from perfect, but still one of my favorites.
Hi Redhead,
Nothing personal and good for standing your ground. The culture clash between the haves and have nots is just particularly stark in our region. And BA folks can be a bit much, I suppose I could concede they are just people too….And I must confess they do good things at times, like support schools, arts,libraries, etc.
Don’t take the snarkiness on this site to seriously-it is our place to blow off steam.
Just a little touchy. Probably should have let it go. I get so tired of the assumptions people make about me and my family because we came here from California. It’s exhausting. I know I’m a “have” vs. a “have not” and trust me, it doesn’t feel good all the time.
Right now, I’m watching my neighbor go through foreclosure. It’s heart-wrenching, and I can’t stop it nor would want to do so. They will be much better off once this is over and they have the opportunity to start again, hopefully a little wiser this time. Still, it’s hard to stand by and see them suffer, even it they did bring it on themselves.
The fact, is I’m a lucky person who bought in the right place at the right time and had the sense to sell before things got ugly. I try to be sensitive to the culture clash you describe, and if anything your comments will help me be moreso.
Peace.
It’s possible that the previous commenter was referring to people who make no effort to “fit in” in their new community, not people like you. Those folks do come across as snooty and clueless. (Favorite example: people who buy outer-suburban McMansions and then complain that the farm next door “stinks.” Anyone who knows anything about farming knows that ahead of time and wouldn’t buy a place next to a farm if the smell would bother them…)
Nicely said quietann,
The parallel here is people who come into S. Oregon and immediately protest logging, claiming the timber industry is not needed for jobs (can’t we all just mountain bike instead?). Which it isn’t if you “retired on the house” or telecommute to the BA. Or are a “yoga instructor” who just paid cash for a $500k house..
Needless to say, working folks usurped in housing by semi-retired, wealthy, and pontificating exurbanites get annoyed with them, especially if they always come from the same point of the compass. So, sensitivity is key to fitting in, as is an interest in talking about something besides the glories of the BA.
Perhaps this won’t endear me to you, Mr. Fester, but I did make an obscene amount of money selling my bay area house, and I did pay cash for my current digs. (However, I am not a yoga instructor.) I have a great deal of financial security because the windfall. That said, I don’t flaunt it in my neighbor’s faces and it wouldn’t do much good even if I did. I live in a small town crawling with very wealthy ranchers who wouldn’t be impressed anyway. I live modestly, give generously, and try very hard to fit in to my new community. And, I’m not all that different from my former California neighbors, believe it or not.
Most Californians get a pretty bad rap when they move. I think it’s envy since we live in the “Golden State” (whether or not that’s really true any more is debatable). I have traveled all over the U.S. and I have to say every state has its fair share of cretins as well as decent, honest folk. We’re no different here.
I think the envy is simply economic. People who got “rich” by parachuting out of a bubble zone into a lower cost area annoy those who have to earn their money paycheck by measly paycheck and cannot compete for housing. Locals have been marginalized by bubblers in many places. I don’t think anyone is saying Californians are any better or worse than anyone else as a whole, but the hordes of equity nomads do seem like Viking plunderers at times.
Mr. Fester wrote:
“the hordes of equity nomads do seem like Viking plunderers at times”
Fair enough. I’m sure it is very frustrating at times.
No kidding. When my new landlord got my application and saw my income there were visible eyebrows raised, and I could tell they thought it wasn’t quite true, because it was more than enough to qualify for a median priced house, but there I was asking for their very inexpensive rental…I am sure they thought I was lying…and then they did the verifcation… quickly followed up by a phone call and the happy voice saying they would be happy to give us the lease with all the terms requested by us.
It was a good feeling.
Anthony -
I lived in Sonoma County for a year and was totally miserable. Not friendly, expensive, and pretentious. I was very glad to leave.
“Before retiring to Oregon, Bob and Nona Windus put their Santa Rosa house on the market. Now the couple are about to become landlords.”
This is going to be repeated tens of thousands of times as the stupid boomers find out they have to compete with each other for renters. This is a case of too many boomers chasing too few GFs/renters. Demographics of boomers have been known for decades. Also mentioned over and over, but denied of course by boomers, is that there are fewer gen-xers and even more fewer gen-Yers to keep the RE asset bubble expanding. Not even educated immigrants have helped to make a difference. This is very amusing to me to see these greedy people who speculated for their retirement financing to suffer instead. Personal Finance 101 did not say the way to retirement is through real estate investing. But hey, if I can get a FB in Palos Verdes Estates to rent me an ocean view 2,000 square foot home with horizon-less pool and jacuzzi for $1,000 per month, I’ll take it!
I just saw a great comment on my blog… something about Windus Bagus and Boobis Americanis…. LOL ;-D What a great name! You just can’t make that stuff up!
Good point Bill,
I have considered this too, and I am certain it has been discussed on this blog before. The craziness of boomers investing in RE for retirement. When they dump all their properties, who will buy them. Prices must plummet.
Also, I wonder if we have reached the outer edge of this cycle of voracious consumption. Perhaps the next generations will actually want to live their conservation values (smaller homes, smaller cars or public transit,etc.). If that is the case, the demand for miles of McMansions must also plummet. I would love to see the last few year’s moronic greed, entitlement, war-mongering, school-strangling tax cuts, religious tomdoggery, am radio ranting, resource swilling self-satisfaction recede in the rearview mirror. I would like to be proud of my country again.
You’re waiting for people to not be greedy and self-serving?? Good luck. Makes me think of a scene from “Team America: World Police” when the puppet Tim Robbins talks about everyone eating organic food and driving hybrid cars.
You’re waiting for people to not be greedy and self-serving?? Good luck.
How about SLIGHTLY less greedy and self-serving? I’ll take what I can get.
Heh Heh! I agree. My sister and I laugh at Hummers. We both think any place over 1200 square feet is a mansion. I’m a fervent capitalist but not a consumer - kind of hypocritic, and a clean air aficionado, but I would not call myself a tree hugger. The American excess grosses me out. “Super Size Me,” the documentary, is the epitome of America - more is better.
‘I’m not going to give my house away. I’m not going to take it in the shorts.’”
An by holding on and struggling to cover the carrying costs as the bubble deflates over the next decade is not taking it in the shorts how??
I took a 65k haircut due to my ill timed relo w/ the bursting of the bubble. One of my new co-works said, “You’re much better off with the sale now. I still have my old place in Conn. that I could not sell when the market tanked over a decade ago. The untold number of hassles in being a landlord are not worth the hope that the market will recover. Right now if I sold the place it would cover the loan’s CURRENT balance, but the place needs about 20k in repairs, so I am still holding off and just renting it out and I just keep making the 400 dollar monthly difference”
Right then & there I said to myself, oh ok now I understand the big picture in all of this, and I’ve been much happier about the matter ever since.
I’m not going to give my house away. I’m not going to take it in the shorts.’”
Giving your house away implies that you are gifting it to someone and taking nothing of value in return. So, unless this dude was really offering the title for free to someone, he was NOT giving his house away. He is going to SELL it for a lot less than he wants to, but that is not giving it away. Well, as for the shorts and taking it. Already well covered. LOL
A thread yesterday asked about people leaving CA for another area. I am now in Albuquerque NM. I am well qualified to speak on that subject. The pros of leaving: greater house affordability - now have a nice home at 25% of what it would have been in the BA. Child is much happier because she more things to do, more space to play, more friends, better learning environment, more social, etc. Same for my wife. Same for me also. Many other things much less expensive. Area here has abundant outdoor items like mountains, hiking, scenic beauty. Much less traffic, and much cleaner air. People much more laid back. A few drawbacks - wages are much lower. We took a paycut to leave CA. We are paying more $ for housing now from a small apt to a bigger house. But overall great move.
A thread yesterday asked about people leaving CA for another area. I am now in Albuquerque NM. I am well qualified to speak on that subject. The pros of leaving: greater house affordability - now have a nice home at 25% of what it would have been in the BA. Child is much happier because she more things to do, more space to play, more friends, better learning environment, more social, etc. Same for my wife. Same for me also. Many other things much less expensive. Area here has abundant outdoor items like mountains, hiking, scenic beauty. Much less traffic, and much cleaner air. People much more laid back. A few drawbacks - wages are much lower. We took a paycut to leave CA. We are paying more $ for housing now from a small apt to a bigger house. But overall great move.
Man, swap North carolina for new mexico and it can be me.
Cool.
Cow_tipping.
Yes, swap with North Carolina here as well. My husband was born and raised in Cali and I lived there beginning age 4 and after he had a heart attack and triple bypass in his mid 40s we left the high salary of SV/BA. We made a great deal on the property we sold but we live very frugal since life can throw you a curve-ball at anytime. You honestly couldn’t pay us a million to go back, the quality of life has suffered there enormously and the cost/reward has no justification I can think of. It was a wonderful place 20+ years ago but I truly shudder at what it’s become.
“‘We need to get a renter in there because right now I’m paying two mortgages.”
Hope you get a better one than I had. I once rented out a house I couldn’t sell to move out of state. The renter eventually burned the house down when he learned I had it in escrow. Luckily it was insured.
What was that great dialogue from “Band of Brothers” when some scared private talks about fear in battle? Ah yes…
“You hid in that ditch because you think there’s still hope. But Blithe, the only hope you have is to accept the fact that you’re already dead. And the sooner you accept that, the sooner you’ll be able to function as a soldier is supposed to function. Without mercy. Without compassion. Without remorse. All war depends upon it.”
- Lieutenant Spears
My two cents: all successful investing too depends on acceptance of ice-kalt reality. Most of these blithely-ignorant amateur landlords are dead already; they just don’t know it or they don’t know how to deal with it. A very small percentage of people in general have what it takes to become successful landlords and by successful, I mean cashflow-positive from day one of a new acquisition or in the worst case scenario, break-even after ALL outstanding taxes, mortgages and expenses and a 15% vacancy factor is included.
But the RE salesman told me that real estate only goes up and my property would be cash flow positive after all costs. NOT
“You hid in that ditch because you think there’s still hope. But Blithe, the only hope you have is to accept the fact that you’re already dead.”
Reminds of a great line in last week’s episode of Rome. Brutus and M.Antony are trying to figure out the mess after the assassination of Ceasar, so Brutus (an FB) says:
Brutus: But we have men of quality
M.Antony: And I have an angry mob who will roast and eat your men of quality on the ashes of the Senate House.
Oh, don’t tell me any more…
I love “Rome” but don’t have HBO so I have to wait until the DVD’s come out on Netflix. I have to satisfy myself with the preview videos on http://www.hbo.com. That show is awesome.
OK, Grant, sorry for the spoiler. I’m so glad I found about the show from a review in the papers. My family is a little freaked out because I never watch TV and now they know they cannot talk to me while I am watching Rome. Great acting.
One of the things I like about that show so much is the supporting cast is excellant. I really like the way the actors who play Brutus, Cicero, and Antony portray their characters. And Posco is one of my favorite characters too. I was glad that he only got bumped on the head at the end of season one. Oh, wait, this is a housing blog. Umm, those Roman houses were pretty overpriced, weren’t they?
And I love you characterization of Brutus as a FB …
Oh, wait, this is a housing blog. Umm, those Roman houses were pretty overpriced, weren’t they?
Oh, yes, and they also had marble entries and faux finishes
Grant, in a way watching Rome is like sitting out the bubble. You are watching these guys go about their business, but you know they are toast (I can’t wait to see how they deal with Cicero’s assassination).
My girlfriend’s dad is doing the same thing in Sonoma County. He couldn’t sell it for what he wanted, so he is renting it out now. He also had to drop the rental price from $1800 to $1600. I wish the timing was better so I could switch to his nice house after my lease is up.
Sounds like I will have a larger selection with better prices in general.
LOL
http://dallas.craigslist.org/rfs/266232037.html
lol, this has to be a joke….
Flagged down.
Dangit, it’s alredy been flagged.
txchick, why don’t you copy the text of the ad into your posts?
Here is what the post said….
HI I AM LOOKING FOR A PARTNER TO START REAL ESTATE BUSINESS WITH.I LIKE TO FLIP THE HOUSES AND MAKE IT PROFESSION.I NEED PARTNER BECAUSE I DON T HAVE ENOUGH MONEY AND I AM NOT GOOD AT ENGLISH,MY CREDIT IS NOT GOOD BECAUSE I AM NEW IN USA AND I WANT A FRIEND AS WELL.
IF YOU HAVE NO MONEY BUT GOOD CREDIT IT S STILL FINE.BECAUSE WE CAN TAKE LOANS AND EVENTUALLY CAN MAKE PROFITS OF COURSE.I HAVE GOT SOME PLANS.I AM LOOKING FOR FEMALE PARTNERS,NICE WITH NO STRINGS ATTACHED.ABOUT MYSELF I AM UNHAPPILY MARRIED LOOKING FOR SOME FUN WHO WOULD BE MY BUSINESS PARTNER.
I LIKE TO EVENTUALLY MAKE A LONG LASTING RELATIONSHIP WITH THE PARTNER FRIENDSHIP AND BUSINESS BUT UP TO YOU OF COURSE.DETAILS WHEN YOU REPLY ME.
SINCERELY YOURS
IFTI
I’d say that about sums up your average flipper…
When he finds his new “friend” together they will make “two wild and crazzzy guyyyyys!”
Just bringing all your money and a nightie and I am promising you this will be a most fair and wonderful deal and we both will make lots of profit. It is guaranteed.
“SINCERELY YOURS
IFTI”
More like “shifty”
“IFTI”
Is that for I flip the idiots? (or any other f word that fits),
posted ” I AM NEW IN USA AND I WANT A FRIEND AS WELL.”
Buy a dog.
“Buy a dog.” Hmmm, why do I get the feeling that this moron is from somewhere that you only buy a dog for…dinner.
Borat? is that Borat Sagdiev from KAZAKHSTAN?
I found this in the Sunday LA times online. I don’t currently live in LA, but did recently and it’s been fun to follow the housing market from Japan. Though Japan is in the middle of it’s own condo/office building boom. Guess they didn’t learn the first time around.
http://tinyurl.com/2s3d2w
I like the comments about how the market will return to a more normal pace. You can just see the double talk in this article and a lot to read between the lines
diane.wedner@latimes.com is in “bed” with LAY, lereah, NAR, CAR and Larry goldilocks Kuntlow. Just ignore her. she knows not what she writes
They have been wrong, how many times already. If we were to use their numbers we shouldnt be down in voumn and price and no glut.
So much for rents going up in SF Bay Area.
Recently heard on news blip KGO 810 AM rents are being pressured downward due to swelling home unable to sell. It turned out this is happening elsewhere in other states. Many reluctent landlords out there who couldnt flip for a profit. With all this inventory of rentals out there competition for rental income to landlords will be fierce. Its all a GLUT!
*sigh* My (San Mateo) rent went up $75 a month when we re-upped the lease back in October. The LL asked for an $100 increase but accepted our counteroffer, which was about a 4.75% increase. It’s more than we would have liked to pay, but not worth moving out over. Next year, though…. we’ll see.
Our rental in Cupertino went up $50 when we renewed our lease earlier this month. Not too bad.
I just got a +$50 on a 2 bdrm in San Mateo. Not bad, considering I bargained for $50 off when moving in two years ago.
I signed for $1320/mo in Sunnyvale in April, rents went up a bit this summer, but I saw a price sheet for a similar apt in my complex for $1295.
“The $2,000 in monthly rent the Phillipses seek falls short of their $2,300 mortgage on the house. But it would ease the financial squeeze on the couple, who face $5,000 in total monthly payments for the Windsor and Vallejo houses.”
BAHAHA ! Property Tax + Maintenance + otherr costs… will bleed these so called investors dry.
‘In a way I am working for my house. I just have to work harder’
Classic. If only I were so lucky.
Another reason why the lenders are not doing their duty is they are letting people buy new houses without figuring in the cash flow neg. on their old house against the borrowers debt .
All possible debt has to be considered ,and if the borrower hasn’t sold the old house the debt has to be added in . So if Lenders were doing what they are suppose to 1/2 of these people would not of been able to purchase the new home while they keep the old house . But you know , lenders these days don’t check what a persons real debt is anymore . Just don’t list the debt and somehow than you don’t have to weigh the risk is the” new lenders ” name of the game .
I’ve been wondering about this, how do these people get the loans to buy the second house when the first house has not sold and is still a liability? This is different than the buyers who don’t qualify for standard loans for their first house and took toxic loans. There are so many different scenarios to watch with the housing bubbledebacle.
It’s bad lending . Your suppose to take the neg. payment and add it to debt if the house isn’t sold or the borrower has to prove it’s rented (but who can rent without neg. debt these days ). As I see it the lenders just stopped underwriting loans and just rubber stamped everything .
The couple don’t want to forsake the sizable chunk of equity they would lose if they sold during this current housing decline.
Newsflash: They’ve ALREADY lost that equity.
Equity = Current selling price - amount owed
“‘We did almost have it sold at one point, but of course it was one of those contingency deals where the guy who was buying our place couldn’t sell his place,’
And the house of cards falls…..
I guess the lesson to be learned in this housing boom is that easy money brings out the crooks,the unqualified , the flippers ,and the speculators and builder developers ,all of which are a poor risk because they can’t hold long term .
What i really hate about this RE market is that nothing can be trusted anymore . I don’t know where the check and balance systems went ,but it goes to show that you can’t allow one sector of the lending community to just do what they want (sub-prime lenders ) without it affecting regular lenders . You can’t have investor/sspeculators and flippers buying out a huge % of a new home tract without it messing up the regular buyers .
l
All these FBs turned FLs are just going to exacerbate the bust. One of the most oft-mentioned criterion for buying is costs approximating renting, is it not? The target is moving… down.
testing…
“‘We’re going to camp on it. I don’t want to let it go while the market’s in the pit,’ Bob Windus said.”
————————-
Funny that so many sellers don’t realize we are much closer to the peak than the pit. Delusional thinking is still going strong out there. We are nowhere near the bottom.