“One Indication That Buyers Hold The Upper Hand”
The Seattle PI reports from Washington. “Seattle’s median home price in January was the lowest it has been in a year, according to statistics released Wednesday. The median price of $379,990 was down from $420,000 in December, according to the Northwest MLS.”
“A dip might help home shoppers such as Bryan Ruppert, who was at an open house in Wallingford. He said he started looking for homes online in June, before moving to Seattle. ‘The prices are just outrageous,’ Rupert said. The selection is good, he said, ‘if you can afford it.’”
“The Northwest MLS reported that Seattle had 20 percent more homes on the market in January than the month before and 30 percent more than January 2006.”
The Seattle Times. “A nasty dose of winter last month meant sales of single-family houses and condominiums were down 4 to 14 percent throughout the four-county central Puget Sound region. Kitsap County had the biggest drop in pending sales, deals signed but not completed, last month. They were 14.2 percent below the same month last year.”
“Besides the weather, two other factors, the number of properties on the market and the rate of home appreciation, point to a continued sluggishness of the market. Compared with a year ago, countywide listings were up 25 percent in King, 31 percent in Snohomish, 42 percent in Pierce and 46 percent in Kitsap.”
The News Tribune from Washington. “Pierce County median home prices in January were the lowest in eight months, pointing to a market still better for buyers than sellers.”
“One indication that Pierce County buyers hold the upper hand: The number of homes sold in January fell compared to the same month last year as listings climbed.”
“Such statistics make for a buyers’ market, giving those on the hunt the luxury of taking more time than they could a year ago, said Mike Larson, a real estate agent in Lakewood. ‘I think sellers are realizing that there is a whole lot more competition out there,’ he said.”
“There were 5,776 homes for sale in Pierce County as of the end of the month, nearly 42 percent more than the same time last year. About 100 fewer homes sold, 888 last month compared to 990 in January 2006. Thurston County saw 49 percent more homes on the market.”
The Curry Pilot from Oregon. “What happening with the local real estate market? Depends on which Realtor one asks.”
“McVay and Caudell have been selling real estate in Brookings-Harbor for more than 20 years. According to McVay and Caudell, things are picking up a bit. ‘More buyers are looking,” McVay said, adding, ‘We had 22,000 more hits on our Web site in January compared to December.’”
“‘We’re getting busier every day,’ Caudell said. ‘My Web site has been having numerous inquiries. It’s a new Web site. I’ve only had it up four or five weeks.’”
“Caudell said that buyers are more cautious and are taking more time to study the market, and prices are going down.”
“McVay said the median price for homes in the area in 2005 was $300,000, dropping to $275,000 in 2006. ‘It’s going to be a great years to invest in in Brookings-Harbor,’ McVay said, ‘There are a lot of well-priced properties on the market.’”
“Eldon Gossett of Coldwell Banker agrees that the local real estate market began its downward slide in October 2005 and that home prices have come down, but he doesn’t see a real increase in real estate sales happening until 2008. He based his prognosis on what he sees happening to real estate in San Diego.”
“He explained that he keeps up with the real estate market down south because sales in California are one of the biggest indicators of what will happen to real estate sales in Brookings-Harbor. ‘The market has to turn around in California,’ he said.”
“Gossett insists that a primary cause of a drop in real estate sales in both states is due to jobs and salaries, which over the past two years have risen only about seven percent, while the cost of homes, in some cases, has doubled.”
“He thumbed through his listing book to show listing prices reduced on properties from $20,000 to $150,000, with some sellers indicating they might even accept a lower offer.”
“Broker Dick Wilson agreed that there was a slowdown in real estate sales in 2006. He said, ‘Last year was not as good as the year before, and people began pricing themselves out of the market. If you want to sell you have to have a realistic price.’”
“Associate Broker Cy Vandermeer, president of the Curry County Board of Realtors, agreed that there was a drop in real estate sales in 2006 as compared with 2005. ‘In 2005 sales were $114 million and in 2006 sales were $99 million, with average days on market 90 in 2005 and days on market in 2006 were 121,’ he said.”
“I think what’s happened with the market is that people don’t have to sell,’ Vandermeer explained. ‘They can hold out longer for their price, and with more properties on the market, buyers can be choosier.’”
‘The median price could be dragged down by the sale of condominiums, which made up a higher percentage of home sales last month than a year before.’
Bzzz…wrong answer:
‘There were significant increases in the number of homes sold that were above $500,000. In 2006, 307 homes in Whatcom County were above the half-million dollar mark; two years before, 116 homes in that price range were sold.’
‘The uptick in the sale of highend homes is a trend that appears to be true across the state, and it helps explain why many areas saw an increase in the overall average home sales price, even though the total number of homes sold dropped in 2006, said Glenn Crellin, at Washington State University. Crellin noted that for the first time ever, every county in Washington state had at least one home sell for more than $500,000.’
‘He believes several factors are contributing to a hot market for high-end homes, including the rising costs of building a home, especially buying undeveloped lots. ‘Lot prices have been rising dramatically in recent years, and developers need to recoup that expense by building more expensive homes,’ Crellin said. He added that a rule of thumb is for a developer to have onequarter of the cost of building the home be the price of the land. ‘So if prices for an undeveloped lot are climbing to $150,000, a developer needs to sell a home for $600,000.’
“He added that a rule of thumb is for a developer to have onequarter of the cost of building the home be the price of the land. ‘So if prices for an undeveloped lot are climbing to $150,000, a developer needs to sell a home for $600,000.’
I see a lot of stupid things in this Washington thread but this has to be the dumbest. Let me get this straight. The lot is always 1/4 of the price. Let me do some numbers. Let’s assume I’m building a small McMansion at 3,000 square feet.
Lot price $75,000 x 4 = $300,000 sales price
Lot price $100,000 x 4 = $400,000 sales price
Lot price $150,000 x 4 = $600,000 sales price
So, if I pay $75,000 more for the lot I get to charge $300,000 more for the finished product? Steam just shot out of my ears. All this guy is doing is trying to justify massive margins for whoever is building the house.
Somebody let me know if I’m wrong. You’ve got 10 minutes. After that I’m going to kick the neighbor’s chihuahua. I hate that dog.
CityBoy, kick that chihuahua for me too.
And count me as a fellow member of the Hates Yappy Little Dogs That Owners Won’t Bother To Control club. BTW, you can meet more members at:
http://barkingdogs.net/
LOL! That chihuahua is history. Kick him for me too…Just kidding. Actually, I like chihuahuas, snappy pekingese are the ones I want to punt out the window…
Yea, what a rationalizing slimeball that guy is…
This is just a guideline. If a developer buys land in a cheap neighborhood, they put in cheap houses. If they buy land in a ritzy neighborhood, for more money, they would expect to put in fancier houses. They don’t put the same house on a cheap lot as on an expensive lot.
That’s not the message I got from that article. I read that as stating that the builder would be building the same house on the same lot. In 2004 the lot costs $100,000 and he charges $400,000 for the finished house. In 2005 the lot costs $150,000 and he charges $600,000 for the finished house. His margin increases by $150,000. Sweet deal if you can get it.
I think you are reading too much into this and being way too gentle on these scumbag builders. They raped and pillaged and now the village is in smoulders. And they want a shoulder to cry on. Ha. “What’s in your wallet?” It sure the hell ain’t my money.
You can read whatever you want into the article, but they don’t state that that anywhere, and it’s a silly thing to believe. Developers know that when they want to get more for a house, they have to pretty it up a bit, make it a bit bigger, a bit fancier. How do you think we ended up with 3,000 sq.ft. McMansions with useless but pretty grantie countertops? Developers who bought land at a premium had to put big/fancy enough houses on them to justify the exhorbitant prices they were charging for the homes. Houses kept getting bigger and more elaborate to try to justify the increase price, which was actually driven by market conditions and land values.
I think you’re being a bit senstive. It does work to a certain extent, but you are calculating backwards.
If the end product is worth $400, and the cost of building & finance is $200, the required profit margin is $100 then the land is worth $100.
If the end value rises to $800, then one of two things have happened - either the house on the lot is bigger or better specced, therefore higher costs, or there is a imbalance of demand over supply in housing. This imbalance works it’s way out in two ways, as increased profit margins and as increased building costs (no cost pressures, plenty of profit for all).
Therefore, arguably, the figures would be $800 end value, $300 build cost, $250 profit, $250 land value. Now whilst that’s not 25%, it’s not a million miles away…
Loafer
The relationship of lot cost to home price is very poorly understood by most people. Lot values are a residual calculation. The cost of the “box” tends to be fixed, the variable costs of marketing, overhead, profit, etc, make up less than 25% of the price. Everything that remains is in the land (lot).
A $200,000 house may sit on a $50,000 lot (1/4), but a $400,000 house is sitting on a $200,000 lot, and a $1,000,000 house is sitting on a $650,000 lot. This is why land prices are so sensitive to changes in home prices. This is also why land prices skyrocket during a bubble. My company sold some properties for 10 times what we paid for it 3 years earlier. It is the land developers who take the big risks and enjoy the big rewards.
LMAO
“All this guy is doing is trying to justify massive margins for whoever is building the house.
Somebody let me know if I’m wrong. You’ve got 10 minutes. After that I’m going to kick the neighbor’s chihuahua. I hate that dog.”
LMAO
Generally the more expensive the lot the larger the house. I know I have built a few spec houses over the years. That rule of thumb generally works. This works for a small independant builder buying one or two lots at a time. As for the big home builders, they buy huge tracks off land. There cost per lot is cheaper even after road and utilities.
Yeah, from what I’m seeing, the majority of the new construction (not downtown) within the Seattle city limits is either townhomes on sliver-sized lots, or SFH’s priced above $700K. Not much in between except for a few places in the south end where the lot prices are lower.
Hey at least a realtor actually went on record to admit that what happens, “down south,” affects Seattle RE. Usually they just mutter, “its different here.”
Josh
He did not. He was talking about Brookings, Oregon RE. But I would be amazed if Seattle were immune to CA locust dynamics.
Seattle prices have NOT been immune to CA locust dynamics; moreover, they have been directly impacted by them. There has been major CA immigration into western WA the last several years. Just look at areas like Bainbridge Island. It’s loaded with locusts.
You mean Oregon and Seattle are different? Who knew…..
Josh
““A dip might help home shoppers such as Bryan Ruppert, who was at an open house in Wallingford. He said he started looking for homes online in June, before moving to Seattle.”
A “dip” implies that prices are, or shortly will, starting to going up again after a slight drop. See also, “blip”, “slip”, and “slight correction”.
““A dip might help home shoppers such as Bryan Ruppert, who was at an open house in Wallingford. He said he started looking for homes online in June, before moving to Seattle.”
There’s a dip in that sentence all right. But it’s not prices that are the dip. It’s Bryan who is the dip.
It should read, “A dip named Bryan Ruppert might help home sellers”
HIC
“A “dip” implies that prices are, or shortly will, starting to going up again after a slight drop. See also, “blip”, “slip”, and “slight correction”.”
And all the people who believe in the dip and buy the dip will be destroyed.
Don’t you mean “all the dips who believe in dips and buy the dips will be destroyed”?
Brookings, Oregon depends on the same thing as Eureka, California: equity locusts from SF and LA. So do numerous other small towns in Oregon and Northern California like Chico, Medford/Ashland, Redding, Shasta, et al. As the value of their properties decline, so does the incentive for them to move up north. Especially when you have to give up your $90/month tax on your $750,000 POS to buy a $400,000 POS in Eureka and get nailed with $400/month in taxes for those on a so-called “fixed income.”
I am getting encouraged by what I’m seeing in the past several weeks…some noticeable declines in Eureka and Humboldt county on properties under $350K. The more expensive stuff is still moving, but hey, it is a start.
Where are you seeing those noticeable declines in Humboldt housing prices?? Rio Dell or Willets? lol 85% of homes here rim the bay … those don’t appear to be coming down much.
Isoldearly,
Well, the same homes in Fortuna (on Tami street) that were priced at $380K last December are now at $325K. It is more movement that I’ve seen around these parts, and definitely goes against the conventional wisdom that RE can never go down. Hopefully, prices will be back down to $125K-$175K like they were as recently as 2003.
Anthony from you lips to God’s ear! thanks for the details — that quite a drop for Fortuna. Wish we had more data on the county; it’s closely held. Talked to three real estate dealers (different towns) yesterday and they all say, “sales are up and this is a GREAT time to buy … it’s different here … we don’t have no stinkin’ bubble!”
Anthony;….Point on with the taxes…..Property taxes are “Very Real” on any fixed income retiree comming out of a “Prop#13″ property…And, the realy painful part is that it continues to go up (2%) on a much higher baseline….As the value falls on equity rich retiree’s, the inertia increases…..
Same here in Ashland. We are finally seeing price declines. Median for Jackson County in December was down 10%, and zillow estimates are down~10-15 from the peaks.
It will be interesting to see if declines are like effect of global warming: just slowing melting glaciers or rather abrupt changes like we are seeing in the arctic ice pack. Either way, they are coming.
I’m waiting to see Bend absolutely crash. There are still 1000 houses on the market there, with most prices in the $300-500K range - absolutely unaffordable even with TWO incomes locally.
I’m waiting to see Bend absolutely crash. There are still 1000 houses on the market there, with most prices in the $300-500K range - absolutely unaffordable even with TWO incomes locally.
January numbers for Jackson County are out:
http://www.jacstats.com/
Looks like Ashland’s median price is down 7% YOY for January. Inventory up 21%. Things are moving in the right direction, albeit painfully slowly…
Nice site AshlandRenter,
I think the pattern described above for Bend fits Ashland too. A lot of homes overpriced and sitting. This will be the year of reckoning.
There is an article on WSJ, titled “Mortgage Refinancing Gets Tougher”. Here is the second half of it - it is another unbelievable ideas these people have. I am a math guy and still can’t figure out the logic. I guess math guy is too logical to see the “big picture” like these do
Michelle Thompson, a medical-claims associate in North Glenn, Colo., pulled out $30,000 when she refinanced her mortgage last year, boosting her loan to $183,000. She would like to refinance again in order to lower her monthly payment, but when she went to apply for a new loan, she discovered that her mortgage debt exceeded the home’s value.
Some borrowers are trying novel strategies. Charlotte Keyes, a program/project manager in Shawnee, Kan., refinanced her mortgage two years ago, pulling out $32,000 to consolidate her debt. With the rate on her loan set to rise to roughly 10%, Ms. Keyes is looking to refinance. Because she owes more than the home is worth, she plans on taking out a $13,000 auto loan and using the funds to pay down her mortgage.
With ARMs, “the tag line you always hear…is you can refinance with no problem,” says A.W. Pickel, a mortgage banker with LeaderOne Financial Corp. in Overland Park, Kan., who is working with Ms. Keyes. “But it is a problem.” The appraisal for Ms. Keyes’s last loan was inflated, he adds.
Mitch Ohlbaum, a mortgage broker in Los Angeles, says some of his customers have had to tap the equity on their primary homes in order to pay down a portion of the debt on an investment property and be approved for a refinancing. Other borrowers have had to take a mortgage with a higher interest rate because their high debt load makes them a less attractive borrower.
Some borrowers facing prepayment penalties are sitting on the sidelines for now. David Lorentz, a high-school teacher in San Francisco, recently tried to refinance the option ARM on a four-unit apartment building he owns as an investment. He wanted to pull out cash to pay for renovations and college tuition for his children, but found he would have to pay an $18,000 prepayment penalty. “I guess I didn’t get a good loan,” says Mr. Lorentz, who plans to refinance in August when the penalty period expires.
All these people are finding out that eventually you have to pay back all that debt.
What’s that old saying about the first thing you should do if you find yourself in a hole you’ve dug for yourself?
Is it “Keep on digging ’til you reach China”?
That’s pretty funny.
I like to use the “moth attracted to the flame” anology, myself.
It is amazing to see the debt mindset at work. If you have a debt problem, the solution must be to find a way to restructure the debt and/or add more debt. Paying off debt doesn’t seem to enter the equation.
And there are people out there that think we have too many abortions. I would say we don’t have nearly enough.
Disclaimer: I’m not joking.
Politically uncorrect,
But Roe v Wade in 73′ is what caused crime to drop in 90’s. There wern’t all those unwanted children all grown up commiting the crimes.
I know it’s unsavory, but I often wonder if anti aboriton (lock the bums up!) right would rather have the much higher crime rates.
For any doubters, this is corroborated (or was Rich’s original source?) in the book Freakonomics: A Rogue Economist Explores the Hidden Side of Everything.
This was debunked by Steve Sailor.
NYCityBoy,
Would you volunteer to “off” yourself for the good of society?
Soylent Green is food.
Please keep the discusion on housing and away from tasteless jokes.
First off, who was joking? Secondly, how is the supply of dimwits that keep getting pumped out generation after generation not part of the housing discussion? Third, lighten up.
please report to the dork board for joke free posts.
Pre-payment penalties, refinances out of teaser rates on adjustables, etc are all part of the “tools” used by the lenders, banks,as landlords to keep the serfs[home buyers, credit card debtors] in line as the biggest swindle in history is taking place now, transferring the wealth from the middle class to the rich upper class. Finally, a film is out “In Debt We Trust: America Before the Bubble” for all to see. For those with a “open” mind may go to http://www.indebtwetrust.com to inquiry.
Don’t forget the transfer of wealth from middle class to the low lifes. RE professionals working with crooks to defraud financial institutions by pumped up appraisals in the slums and ghettos.
The slums and ghetto differential with middle class neighborhoods is at a all time low from what i’ve seen.
Look at the bars on the window.
http://sfbay.craigslist.org/eby/rfs/272974588.html
In 2000 going for 71K
http://sfbay.craigslist.org/eby/rfs/275489325.html
http://www.zillow.com/Charts.htm?chartDuration=10years&zpid=24793012
Because she owes more than the home is worth, she plans on taking out a $13,000 auto loan and using the funds to pay down her mortgage.
How the hell does that work? I’ve never heard of an automobile loan that puts cash in your hands, as opposed to the hands of the seller of a motor vehicle you are buying.
The only way it could work, she bought a new car with the equity loan. There’s still some value to the car. She can basically sell her paid-for, newish car to the bank and finance it back from them.
Just like any other asset, you can take a loan and use the car as security. My credit union only allows it if you own the asset free and clear, but for-profit banks might be less picky.
Inventory for Whatcom county - informal tracking from local kw re website - all types of inventory (SFH, condo, land, comm’l..):
01/28/06 2,221
01/26/07 3,149
Increase of nearly 42% yoy.
Seeing more and better rentals available all of a sudden. Are people pulling houses off the market to turn into rentals? I’m guessing when they advertise all the recent upgrades (over and above new carpet and paint )that is a clue it is a flip gone bad.
You’re experiencing the “post super bowl boom”. Isn’t it great?
Rentals *have* really started going down! They’ll fall some more. In a few months, I’ll start looking for a better rental deal to wait out the crash in. I have to give myself some kind of incentive to keep myself from buying as prices fall and a great rental will do the trick!
Today on CNBC, somebody finally mentioned the obvious - an RE crash is all we need to get back to “affordable housing”. Hallelujia! People are slowly beginning to get some clarity on this! High home prices are a disatser for everybody. individuals and society at large.
Yes but people here still insist that rents will rise, or just asking rediculous rental prices. In my hood more and more rentals (SFH) are hitting when typiacally they were very few and far between, I’m guessing rents will rise for a few short months then head back down again. We have not hit a crisis in inventory yet, but still trending up and we will get there soon.
People have such short memories. An old aquaintance of mine was able to upgrade, within his same building, to a nicer unit with a view for LESS money back in 2001. Everybody acts like this could NEVER happen again. I think the Kool Aid in Seattle made its way into the drinking water. It is ripe for a MAJOR correction. And I wouldn’t be surprised if it happens sooner than LA.
Seattlerenter- the “people” who are insisting that rents are rising are the dregs of the seattle times reporters. You know, the same ones who’ve been lying to you about the market for over a year now.
Hello!!! just because a screwed flipper wants more rent than his place is worth does NOT mean you have to give it to him! Just say no!
Not only in 2001, but also in 1997, 2003 and 2004, I and people I knew were getting deals on rent just by saying no. Don’t fall for the bluff.
the Seattle Times is really pushing this rising rents scare right now, it’s their absolute last resort to putting some kind of cushion under the housing market. The absolute last resort.
An advertised rental price is just a wishing price. If you were a screwed owner, wouldn’t you try for the highest rent possible? Of course you would. Doesn’t mean you’ll get it though.
“Gossett insists that a primary cause of a drop in real estate sales in both states is due to jobs and salaries, which over the past two years have risen only about seven percent, while the cost of homes, in some cases, has doubled.”
Well, duh.
Sooner or later, the fundamentals always surface. This housing bubble is such a disgrace.
“It’s going to be a great years to invest in in Brookings-Harbor”
An investment property is a property where the payment you make is LESS than the rent you can charge, it is called ‘positive’ cash flow. With these prices, I doubt there is any actual ‘investment’ properties to be had.
Jeez, some of these realtors are simply thick-headed.
“It’s going to be a great years to invest in in Brookings-Harbor”
“Jeez, some of these realtors are simply thick-headed.”
I don’t think these realtors honestly believe this. To make that assertion, one would have to believe that all realtors lacked all common sense and logic since, all have been touting what a wonderful time to buy it is. The bottom line: they need the money BAD.
Sure they do. I grew up in Brookings….Current population about 3,500. Drop-dead gorgeous coastline north of town, but beyond that, absolutely nothing there…..and you’re a couple hours from even a small city for, say, decent medical service. Problem is, the equity refugees have flocked there for years. I’d be shocked to hear the local realtors have any memory of the time when no rational soul wanted to actually live, as opposed to visit, Brookings. Then there’s the sickening problem of toxic beaches during the warmer months, due to runoff….. So forget walking barefoot in the sand. Pristine place in the 50’s/60’s. Not so now. I am so fascinated, watching this devolution.
Last paragraph in the post really bopped me over the head:
“I think what’s happened with the market is that people don’t have to sell,’ Vandermeer explained. ‘They can hold out longer for their price, and with more properties on the market, buyers can be choosier.’”
I’d like to know who these people are who DON’T have to sell. I have yet to meet someone who puts their house on the market, just for the heckuvit.
Plenty of people who sell their houses don’t have to sell. There are people who are looking to downsize, move up, and plenty of people buy places, fix them up and sell and more on to something else. People in those situations don’t have to sell, they just want to sell.
The only people who really have to sell are those who find themselves in situations where they can’t afford the mortgage anymore or have to move because of work.
> Plenty of people who sell their houses don’t have to sell. There are people who are looking to downsize, move up,
One of those sellers less means also one buyer less.
> and plenty of people buy places, fix them up and sell and more on to something else.
They have some of their capital bound in the place or, worse, have to serve the mortgage. They might not be desperate but their incentive to sell increases with time. If they don’t sell, they cannot move on to a next buy either.
This might be one of the saddest parts of housing stupidity. The numbers of “house poor” that are out there are just astounding. They are slaves to their homes. We might never actually be close to anybody that is foreclosed but I’m sure all of us know a lot of people that are house poor. I bet Seattle is packed with such people.
Of course, if people made sensible decisions there would be no need for this blog.
Death, divorce and transfer BABY!
Can those that don’t have to sell hold out for six more years, the time to burn off the vacant inventory pluss only 600k new homes per year? I don’t think so.
I will love to watch these INVESTORS hang on. Funny as hell to watch the guys that bought my rentals lose $1,000/mo and have a home that is worhth $100k less than they paid. Oh, and they each refied twice (prolly cost em $10k) and now owe $200k more than their INVESTMENST are worth.
LMAO, I was happy to break even on them for 2 years and extatic when I was able to raise the rent by $150/home (in $25 pops over 3 years) and bought a new truck. The gravy was when I sold them for (net) $100k more than I paid ($100k less than the top =() and didn’t have to deal with the renters.
Now these INVESTORS bought my POS rentals, lose $1,000/mo, refied and bought new truck, and in six years I will buy them back for less than I originally (after inflation and ROI on my gains) paid for them. The thing that pisses me off is that lived like I have for the last 5 years and felt so smart when I was sad over the $100k I didn’t make =)
Ya know what, f&$k that $100k I didn’t make =). I will feel much less pain that they will at the $200k they will lose.
Welcome to Bushland’s new ride through the quant town of BEND OVER AND MEET THE NEW BANKRUPTCY LAWS…..
I laugh at the fact that these people have been dealing with renters in their spare time while living over a 3hr round trip to visit the rentals. They are both noticeably crappier than they were when I owned them. Once they all these twits run out of refi (now) options the game will be over FOR REAL.
Allways ammazed me how these people ever got it into their heads that a half a million dollars was not a lot of money. Inflation only really works in the borrowers favor when their assets keep pace, their purchases are not!
I know finance better than most, but it doesn’t take a very sharp person to divide the sales price $600k/360 loan term (totally ignoring taxes, interest, upkeep, lost opprotunity cost, sales cost, etc….) to find that it equals $1,666 and the POS will only rent for $1,500.
You know I used to feel bad (well a little =) when bloggers here would point out that these buyers deserve some sympathy, but that is BULLSHIT. Anybody that would put themselves in that situation with such obvious calcuable problems DESERVES what they get. If they can make a grown up decision to buy something that is so obviously a very very bad idea (VVBI) they can eat my ass before they will get any sympathy from me. In fact I will have nothing but a vitriolic hostile attitude when I go back shoping for my next rentals.
My broker recently had a listing where the seller was lamenting that she couldn’t list her home at his suggested price or she would lose money. His beautiful response “You haven’t lost money! You only paid $60k. You borrowed the rest and spent it! You owe $270k. You will write a check at escrow for $30k. You will live with it!”
This guy (broker) has a shitload in the bank and was yelling this at a client. He went on a rant, to the seller, about how stupid it was to spend more than you make. That he was pissed (broker) that you (seller) would come in his office telling him that the home the broker found him for $60k and had allways cash flowed (and he, broker, handled as a rental all this time) and was now worth $240k. He told the seller either sign the listing and not bother him again or get the fuck out and not bother him again!
He also told him he was going to move the renter (a good one) in this sellers home into one of his (brokers) now vacant rentals and no longer do property management for the sellers propert and also would no longer handle his other 2 rentals. Broker just kept getting madder and told seller to list his other 2 POS for $240k right now or get the fuck out!…
The seller signed all three listings and I am sure will do everything my friend tell him with no BS =).
I am much anticipating the day I can speak to people like this and not care about losing the commish.
There is much Realtor bashing here (much deserved), but it chaps my ass when a seller that I just made $200,000 on a property that I found for him and handled the property management for years bitches to me about my commision! F%^k them, next round when they call me to find them a DEAL they can go to hell. The clients that I like will be the only ones I deal with when this bottoms out. This next bottom I will have the opprotunities to make big bucks for myself and sure won’t do it for the ungrateful bastards that believe they were so smart and I was just somehow grubbing off of their well deserved wealth. Only my most loyal and deserving clients will ever have my expertise and property management services next time. It is one thing to list a home and sell it, the seller may be paying to much then. It is quite another when I found them the investment, handled their rentals for years, advised them for countless hours on other matters (many having little or nothing to do with RE) then get treated like a money grubbing slug when the deal they wouldn’t have had without me makes the $200k.
The funny thing is that ALL these recent investors viewed their agents as money grubbing slugs from the gate. Now they all want sympathy because the MONEY GRUBBING SLUGS did this to them.
I am a firm believer that you are where you put yourself in life. Unless someone broke into your life and assualts you, the bed you sleep in is the one you made.
No sir, no sympathy from me..
Amazing arrogance.
In the investment banking business, even the great Goldman Sachs kisses ass to the people who are putting their own dick and capital on the line.
Did the brokers also make the market go up, but “other forces” made them go down?
I don’t know how you deal with these idiots. I don’t even want to try and add up the $$ I’ve been offered to manager others’ money but I just refuse to do it. They all say they’ll leave you alone (I never every solicit anyone, don’t want their money) but the first time something goes the other way, they’re whining, questioning what you’re doing, etc. I can’t stand it so I forego a fairly decent amount for myself to say no to these “opportunities.”
My girlfriend’s dad tried to sell his house, but he couldn’t get the peak price. So now he is renting it out. He is nice enough to wait for my current lease to expire so that my girlfriend and I can move into his place. His place is nicer and newer than where I’m living now, but I won’t be paying any more.
He bought it around 1998 so he’ll break even renting it out. I am not telling that he won’t get his price for a very-very long time.
I have been speaking with some of the bigga RE Agents in the DC & MD. area. They are telling me that they think their will be a lot fewer new listings this spring. They told me that they haven’t received the usual pre-spring calls to list like previous years. I hope they are wrong.
We may have owners sitting on the sidelines this spring, but the buyers have much more comfortable seats. I know the ass grove in my chair won’t go away until the rent/buy ratio comes back into line.
‘We had 22,000 more hits on our Web site in January compared to December.’”
Great, how many of those “hits” have translated into sales ?
“‘We’re getting busier every day,’ Caudell said. ‘My Web site has been having numerous inquiries. It’s a new Web site. I’ve only had it up four or five weeks.’”
I still don’t hear anything about a sale imminent in that statement.
It’s probably just people from bubble blogs laughing at overpriced properties. I visit a lot of real estate sales sites and I sure as hell am not looking to buy now.
Check out this flipper on CNN Money
http://money.cnn.com/2007/02/08/real_estate/corey/index.htm?postversion=2007020815
“But, by the time he was ready to sell, he could no longer get the price he wanted. “It sat for five or six months,” he says “Nobody even looked at it.”
And he stands by the remodeling: “I put it together so that I could live there myself,” he says.
It’s just that the market is super slow. “Inventory is so high, I heard they had 1,200 homes for sale in [a nearby subdivision] The Villages, it’s very difficult to buy and sell,” says Corey, “I haven’t bought anything in 10 months.”
He looks forward to a time when the market starts to open up again and he can plunge back into the flipping business. “
From his looks, he might be in a wheelchair before the market turns around
Test
‘There are a lot of well-priced properties on the market.’
Well priced for the sellers. I think she forgot to add that part. It must have been an innocent oversight.
Well said.
“Well priced” even though they have doubled in two years…what self-serving idiots these folks are.
‘We had 22,000 more hits on our Web site in January compared to December.’”
Most realtors want to believe all those website hits are buyers just waiting to jump. But a lot of folks have gotten used to going to realtor web-sites because they provide information that enables them to watch the pulse of the market. So a lot of these hoped for buyers could just be people validating for themselves that the bubble is bursting.
I’m constantly checking Zip, but it’s solely out of morbid curiousity.
Ditto for me including Zillow and the Sacramento Bee recent sales, and DQ reports, and… yada yada yada
You’re correct. I use Zip, Windermere, Prudential, you name it. Am I a prospective buyer? NO! And I check sites every day of the week, probably more than a buyer.
Maybe it’s nervous sellers and people who already bought that are trying to see what their “investment” might be worth. They are most likely shocked to see that it is depreciating. But hey! There is always the spring selling season after the super bowl, then when that is a dud, there is the Easter Bunny!
reminds me of the “metrics” the CEO’s of the dot commers used every quarter when talking about things like revenue and profits werent possible Web hits…….hahahaha
‘More buyers are looking,” McVay said, adding, ‘We had 22,000 more hits on our Web site in January compared to December.’”
“‘We’re getting busier every day,’ Caudell said. ‘My Web site has been having numerous inquiries. It’s a new Web site. I’ve only had it up four or five weeks.’
How badly would you like to hit that site with a DDOS (Distributed Denial of Service) attack?
CityBoy, here I thought that I was the only one who thought such evil thoughts …
Look here Slim, you are not alone.
It shouldn’t be hard for January to beat December since the site was only up since the last week of 2006.
I’m an assessor who runs a web site to view property record cards. The rise in hits this time of year reflects the water and sewer departments looking for book and page references for new liens being placed on the properties.
Monthly parcel lookups went from an all time high of approx 7,000 in summer of 05 to 2600 in January. Of the 2600, I estimate 20% for for lien proceedings.
‘We had 22,000 more hits on our Web site in January compared to December.’”
And this then translates into what Mr. McVay? Maybe people are lining up the listings to swoop when they’re cheaper in the summer when the spring boom has gone bust?
They probably chose abunchofboobs.com as their domain name and 22,000 guys clicked on thinking it was another type of site.
Oh, CityBoy, you truly are evil .
About this falling median: maybe these dumbie buyers who were paying 1 million for homes that last sold for 400K in 2004 are finally beginning to figure out they’ve been had? The top end of the Seattle market went berserk last year for a while, even as other portions of it were falling.
Flipper has been flipping houses for years. But now he’s stuck holding. http://money.cnn.com/2007/02/08/real_estate/corey/index.htm?postversion=2007020815
Gamblers don’t know when to hold em. He better lower the price or he will be stuck holding this thing for years.
Never turn a trade into an investment!!!!!!!!!!!!!!!!!
“ “I put it together so that I could live there myself,” he says. ”
How convienient. He will now.
Used car salesman too…
Yet he cannot wait to get back in…
This means the market is no where near the bottom. Easy money hasn’t been scared away yet. Cest la vie. I’m about to sign a new 1 year lease.
Got popcorn?
Neil
I am selling my house and my realtor reported a huge surge in people looking in January. However I follow the market very closely, and I have yet to notice many houses going pending. I believe the lookers fall into 2 groups: 1) young and inexperienced people who don’t know any better because the only thing they’ve heard their entire adult lives is what a good investment RE is, and 2) sellers who are planning to sell into the spring bounce who are scoping out the competition
Bingo. Lots of people will stop and look at a car wreck too, but they’re not going to buy the car.
I love the weather excuses: It’s been unusually warm, no I mean cold.
I love that one also, “We had weather, so it affected our market this month”.
How do you think the markets would react it we had no weather? The price of RE on the space station would make the OC like 2,000 yera old chinese paper currancy compared to the state of Texas pilled 50 feet high in gold.
“How do you think the markets would react it we had no weather? The price of RE on the space station would make the OC like 2,000 yera old chinese paper currancy compared to the state of Texas pilled 50 feet high in gold. ”
I have no idea what this comment means, but I like it.
I don’t know either, but I ran outside real quick to pick up some of that gold and it wasn’t there. I guess this is, my first rodeo.
Yeah this is the second time Rich has left me scratching my head. I think Ben should print it on a t-shirt and sell them.
How do you think the markets would react it we had no weather? The price of RE on the space station would make the OC like 2,000 yera old chinese paper currancy compared to the state of Texas pilled 50 feet high in gold.
People in Seattle only buy houses when the temperature’s between 50 and 70 degrees farenheit. Last summer, when it went to the mid 80’s and low 90’s, we also had a “bad” home selling month which the realtors blamed on the weather, as reported in the Seattle Times.
We are VERY PICKY up here as to “ideal home buying temperature”. And it can’t be *too* rainy or *too* sunny either. The humidity and sunlight have to be *just right*. So we’ve had months when lagging home purchases have been blamed on too much sun, too much rain.
According to the WA. realtors and the Seattle Times, any “extreme” causes people around here to not want to purchase a home.
(this is such a load of cr*p when I think that this climate exhibits the least extremes of any climate I’ve ever lived in anywhere in the world. Too funny).
Met some high school kids in Brookings after steelhead fishing. They were out drinking beer by a bonfire on the river. Their aspirations? Join the military or get a job as a prison guard at California’s Pelican Bay prison (the ultimate-security one). Not many jobs there, and 60″ of rain. Nice place to retire though. I visit from Portland every year to fish. There are some nosebleed asking prices, which I imagine will fall.
Interestingly, 80 miles north in Bandon, people from across the country buy condos to stay in when they play golf at Bandon Dunes. That area would be a better investment.
HOT OFF THE PRESSES:
Lenders Direct Capital Corp Closes Wholesale Lending
http://bakersfieldbubble.blogspot.com
“The Seattle Times. “A nasty dose of winter last month meant sales of single-family houses and condominiums were down 4 to 14 percent throughout the four-county central Puget Sound region” ”
No, no, no. A nasty dose of GREED and STUPIDITY on the part of SELLERS meant sales were down. Which is good for me because I need prices to drop another 50% before I really commit to anything.
We’ll get there. Mark my words.
Who says you can’t get a cheap home for sale in Bellingham? A bunch of homes are on the market on Lincioln Street right next to I-5 in the low 200’s/high 100’s. I ride my bike to work past them and there seem to be more every day.
They say the sound waves/patterns of interstate traffic are similar to that of the ocean. How cool is that? You can learn to live with exhaust fumes and smells.
Hey how’s that big high-rise condo tower in Bellingham coming along? Did they actaully break ground, or did they finally put down the crack pipe?
“A dip might help home shoppers such as Bryan Ruppert, who was at an open house in Wallingford.”
I wonder if Bryan is a smart shopper? And if he will stop off at the grocery store to buy some tomatoes on sale before he exploits the price discounts currently available in the housing market?
“Eldon Gossett of Coldwell Banker agrees that the local real estate market began its downward slide in October 2005 and that home prices have come down, but he doesn’t see a real increase in real estate sales happening until 2008. He based his prognosis on what he sees happening to real estate in San Diego.”
What kind of crystal ball does he own?
“He explained that he keeps up with the real estate market down south because sales in California are one of the biggest indicators of what will happen to real estate sales in Brookings-Harbor. ‘The market has to turn around in California,’ he said.”
The market definitely has to turn around. But not until several years after the canary in the coal mine dies.
Hey, how are you. I thought we lost you or maybe you were on a mini-vacation.
It was a very labor-intensive vacation
“Gossett insists that a primary cause of a drop in real estate sales in both states is due to jobs and salaries, which over the past two years have risen only about seven percent, while the cost of homes, in some cases, has doubled.”
Salaries are not and never were sufficient to prop up prices to unaffordable levels. Try subprime loans, genius…
Bingo, GS! Sure it was salaries. What is he smokin’? You cannot afford a 600-750K McMansion on $75K per year. Eventually, something is going to give. In this case it is all the ARMs coming home to roost. How does this moron even get away without being called on such a statement? Never underestimate the lack of intelligence among the humankind.
‘More buyers are looking,” McVay said, adding, ‘We had 22,000 more hits on our Web site in January compared to December.’
More specators are looking. It is perversely enjoyable to watch prices tank.
Politcal correctness has led to the following observations in Silicon Valley:
The H1b would be in a more dire situation if we let him go instead of you. (2001)
All engineering schools in the world are equal and we can do more advanced development over there instead of here. Until IP disappears and then FBI is called in to investigate who is buying the stolen goods(2003)
The RE $/Sq ft in the Bay Area is flattening out, now places in Oakland “drive-by shooting” arena and the middle class with good schools have little or no difference. Expect in the income level of the people who occupy RE in those areas. BTW little or no new development in the hood go figure who is buying houses 40/50 year old houses in the Oakland hood for 500+K. (2006)
from hometracker re miami:
is it real..75 percentile falling to 559k from 574 k in 1 week!
median falling ~5k to 364k.
Date Inventory 25th Percentile 50th Percentile
(Median) 75th Percentile
02/07/2007 41,309 $257,500 $364,900 $559,000
02/01/2007 44,595 $259,900 $369,900 $574,000
01/28/2007 44,324 $259,900 $369,900 $574,000
01/21/2007 43,597 $259,900 $369,900 $574,900
01/14/2007 42,652 $259,900 $370,000 $575,000
What I REALLY want to know is: how’s the chihuahua holding up?
dd
Look up REO’s from Fremont Financial (stock ticker FMT)
http://www.1800fremont.com/REO/ReoProperties_Available.asp
One of their properties is 7711 Koyama Ct, Sacramento, CA 95829. They listed the price for $655K which is close to the $658K Zestimate. Sale History:
12/07/2006: $590,000
07/06/2006: $617,289
Now did the bank sell the REO for $590K versus their $655K asking or did they already foreclose on the latest sales price and trying to make a profit? Either way someone lost $27K last year.
Another lossy example:
11676 Windcrest Ln, San Diego, CA 92128
Zestimate: $784,602
REO Price: $711900
Sale History:
05/10/2006: $633,163
06/28/2005: $750,000
Someone lost $117K down the line.
The REIC had a dream of all home in the United States going for 1 million and over ,didn’t matter where the POS was , everybody wanted to get in on the action . No matter where you lived you were entitled to 20% in the bag appreciation per year .Homes were stocks and everyone in America was entitled ,(never mind local incomes ).
Where was the new latest place to invest in America ? Where had the prices not gone up yet where the locust could get in and drive up the prices . Real estate was the pathway to riches and the builders/REIC were there to build and market that idea . Lenders gave anyone a loan so affordability need not hold you back .Get in now or be priced out forever ,buy to flip ,why not buy 5 houses ,refinance and live off your home . Buy a house a week over the computer ,no need to even see the place .We don’t care about no stinking vacant houses anymore ,it’s the investment .
I can’t get my head around the fact that people fell for this kind of real estate investment idea in which a positive cash flow on the property didn’t matter .
It IS astounding how many people bought into the thrills and spills of negative cash flow. As if there was actually something *positive* about *negative* cash flow.
If that doesn’t describe the progressive dumbing down of a nation, I don’t know what does.
Anyone else getting sick of….
“Hi, this is Barney Aldridge of Benchmark Lending…blah, blah, blah…”there is no selling here”….blah, blah, blah…”we specialize in bad credit”….blah, blah, blah…”oh and guess what, we’re nice people too”.
It would appear there is no shortage of cretins….
Seattle Eric…where are you, man? I miss those cheery blog updates, full of certainties of a brighter tomorrow for all stupid greedy people.