“From Better Buy Quick, To Better Wait”
The Union Tribune reports from California. “Sales of San Diego County homes in March dropped to their lowest level since 1995, but prices bounced back, DataQuick reported. There were 3,218 sales, up 12.4 percent from February, but sales were down 26.3 percent from a year ago, the biggest year-over-year decline for any March since 1995.”
“It was also the 34th straight month to show year-over-year sales volume drops.” “DataQuick President Marshall Prentice said in a statement that the medians are rising because of a drop off in starter home sales in Southern California.”
“A total of 21,856 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 32.4 percent from 32,320 for March last year, according to DataQuick.”
“‘The drop-off in entry- level sales is part of a normal real estate cycle. We actually thought this would happen four or five months ago. Lenders and buyers are being more cautious, the dicey mortgage financing has all but disappeared,’ said Prentice.”
“‘It’s becoming apparent that a lot of the 2004/2005 buying activity was drawing from the future, and that future is now. A lot of demand was pre-met, otherwise these low sales counts would have put more downward pressure on prices by now,’ Prentice said.”
The Orange County Register. “Orange County home shoppers bought 3,130 homes last month, 25.5 percent below a year ago, says a report from DataQuick out this morning. It’s the 18th straight month that home sales haven’t met the previous year’s pace.”
The Sacramento Bee. “Home buyers received the keys to 3,223 new and existing houses in March, representing a tepid opening to the spring sales season, DataQuick reported.”
“March escrow closings were down significantly from the 4,571 recorded the same month last year in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. The biggest year-over-year decline occurred in Sacramento County, which reported 1,749 closings last month compared to 2,587 in March 2006.”
“‘The hope in the (real estate) industry was that the data would begin to show the market was stabilizing without a doubt, and now there’s some lingering doubts, particularly in the Sacramento area and across the Central Valley,’ said DataQuick analyst Andrew LePage.”
The San Francisco Chronicle. “The California Association of Realtors predicted in October that statewide median prices will fall by 2 percent in 2007. Economist Mark Zandi called for an even sharper statewide drop of 6 percent.”
“DataQuick spokesman LePage attributed the soft numbers to the home-buying frenzy of 2004-2005, when California buyers snapped up houses that were rapidly appreciating, just to get into the market. So many people bought, demand is now soft.”
“‘Now you’ve got a change in psychology,’ he said, ‘from better buy quick, to better wait.’”
“‘Mounting foreclosures will also be a weight on housing prices as these properties are dumped into the already fragile market at a significant discount,’ Zandi said. ‘This outlook assumes that interest rates remain stable and that the job market outside of housing remains stable.’”
The County Sun. “Homes in the Inland Empire are more overvalued than almost any place else in the nation, according to a study released this week. Regional economist John Husing expressed reservations about the numbers.”
“‘We are not a market that is isolated out in the middle of Kansas,’ Husing said. ‘We are part of the Southern California market.’ Whatever the ‘overvalue’ figure in the Inland Empire is, Husing said prices will probably drop in the months ahead.”
The Daily Bulletin. “‘I don’t think we’re making any real progress on affordable housing,’ said Bill Ruh, government affairs director for the Citrus Valley Association of Realtors. ‘I don’t think we have a situation now where people making $50,000-$55,000 a year can get into the housing market.’”
“Indeed, he Occidental College study shows that a family able to make a 10 percent down payment on a $500,000 home and getting a 7 percent interest rate would need $4,043 a month to cover insurance, property taxes and mortgage.”
“To avoid paying more than a third of the family income, that family would need to earn more than $147,000.”
The Daily Bruin. “The conversion of apartment complexes into condominiums is a trend that has recently begun sweeping into Westwood, with one building already converted and two more considering the option for the future.”
“The apartment complex at 747 Gayley Ave., on the other hand, has no immediate plans to be converted, manager Ronnie Mehta said. ‘Condo prices are presently experiencing a decline,’ Mehta said. ‘They are currently the worst-performing real estate.’”
“In response to student concern, realtors emphasized the value of investing in a residence, rather than renting. ‘If you figure out what your mortgage would be and the price of renting, it could be more profitable to buy a condo,’ said Shannon Bedore, a Club California sales agent.”
The Desert Sun. “Local figures released Wednesday show higher overall median prices and a somewhat more resilient market that isn’t as hard hit as Riverside County or the rest of the country.”
“‘New home sales for February 2007 fell by 28 percent for the Coachella Valley from February 2006, but nearly 50 percent for all of Riverside County. So in that sense, the Coachella Valley is performing better,’ said Patrick Duffy, managing director of consulting for Hanley Wood Market.”
“According to DataQuick, which formulates its information differently, home sales across the Coachella Valley dropped 25 percent last month compared with February 2006, fueled in part by a nearly 43 percent decline in new-home sales, the DataQuick report shows.”
“After several years of double-digit home-price appreciation, could the Coachella Valley finally be in for a decline in 2007?”
“In January, the median price dropped 9.4 percent in the Palm Springs/Lower Desert region from a year earlier, but then rose 6.5 percent to $387,660 in February compared to February 2006, the California Desert Association of Realtors reported.”
“In some areas of the valley such as Indio where there’s been a surge in home building, many home sellers face plenty of competition. It’s not uncommon for them to trim 5 percent to 10 percent off the asking price to seal a deal, said Beth Allen Bentley, an analyst who tracks the valley’s home sales and prices.”
“Another factor affecting prices is steadily rising home inventories. With more than 9,000 homes now on the market, sellers facing more competition often have to hold out longer to get their asking prices, real estate agents said. Or they must adjust.”
‘To listen to a local radio advertising campaign, the Anchor Cove subdivision at Marina Bay is a wonderful place to live. But the beguiling ads fail to mention that Anchor Cove, with its ,salt-tinged breeze, and ,carefree living at its best,’ is in Richmond, a city with an undeserved, one-dimensional reputation for homicide and a perpetually smoking refinery.’
‘Signature’s omission has piqued several city leaders, who say Richmond should, for a change, get credit for the charming amenities being used to flog the condos that sell for $500,000 and up.’
‘Elmer Cortez wanted to remodel a fixer-upper he bought a year ago in Highland Park and flip it for a profit amid the still-sizzling housing market. Instead, his plans belly-flopped because of an unlicensed contractor who left a pit of beer cans, torn drywall and charred lumber at the job site and put Cortez more than $37,000 in the hole.’
‘Updated quarterly foreclosure data indicates that the number of foreclosures in the first quarter of 2007 rose approximately 20 percent to 414,000 filings compared to the fourth quarter of 2006. In addition, foreclosure activity in the most recent month (March 2007) rose more than 25 percent over the previous month to approximately 158,000.’
‘During the March 2007 period, the four states with the highest levels of foreclosure activity accounted for 52 percent of total foreclosure filings. California recorded more than 32,500 homes entering some phase of the foreclosure process, or one foreclosure for every 373 households. Of the estimated 158,000 homes representing the foreclosure activity in March, one out of every five was in California.’
$500,000 and UP for a condo in Richmond, CA???? Richmond is the pit of the Bay Area … crime-ridden, filled with gangs and drugs, and occasionally blanketed in smoke/toxic clouds whenever one of the nearby oil refineries or chemical plants has a fire or explosion.
Calling Richmond the armpit of the bay would be a compliment.
However, if you could buy something (like empty land without chemical contamination) cheap and wait for 20 years, it might work out. Eventually, those refineries and chemical plants will be gone, and it might be worth something. But buying a condo there now? Sheer Insanity. You will be living next to a Superfund site when those plants close, assuming that you don’t get shot first. And until they close, you’ll be living next to those plants.
20 YEARS???? Why even bother? I’ve got one life to live…I’m not going to wait around 20 years to bank in RE. Live for today.
RE is the most overrated crap out there. Unless you’re a RE flipper/shark, there are plenty of better things to spend my hard earned money on.
As an investment, it would need to be nearly free, and your time horizon would need to be decades, and the environmental insurance bulletproof (given potential pollution plumes).
Perhaps buy the land, put it in a trust for your kids and forget about it, but for my money, there are more immediate rewards to go after…
It gets better. I remember when those places were built and they were rentals for several years. Yes, another case of condo conversions asking a ridiculous amount of money to live in a highly questionable area.
For kicks and grins (actually, grunts and groans) read the ratings here from current tenants/owners.
http://www.apartmentratings.com/rate/CA-Richmond-Shores-at-Marina-Bay-formerly-Marina-Shores.html
BayQT~
Interesting that they complain about car vandalism - isn’t the place fenced, gated and guarded?
And those refineries aren’t going away for 100 years, if then.
Yep…it’s gated. Fancy that.
BayQT~
Don’t forget stabbings at the local movie theater!
We in Santa Clara County are actually getting more auto theifs than LA or East Bay. Go figure.. im talking nice areas too…
Thefts will only increase.
FBs gotta make the nut somehow.
Geez, Louie Louie, of course they are not going to steal in their own hoods the people in nicer neighborhoods have better stuff.
Beemer or beater, it’s still Grand Theft Auto.
These foreclosures can’t be for real. Citibank is taking care of all of this mess. At least that is what I read today…
I heard Citigroup already started their “heads will roll” campaign today.
My source tells me the Brea mortgage office was closed today and outsourced out of the country. That is quite a few people.
Considering March is 10.7% longer than February, I’d say March volume is flat in San Diego. Where is the spring bounce? It couldn’t have been the weather, it’s been perfect.
It couldn’t have been the weather, it’s been perfect.
No, that’s the problem. It’s too prefect. All the buyers are either at the beach or hang-gliding at Torey Pines,
San Diegan’s only buy when the weather is so-so. Just wait for the “June gloom,” and things will really pick up!
Two young guys at work (mid-late 20s), who have been looking to buy for over a year, both made San Diego home purchases in the last month. One was only recently lamenting how the declining market was making it impossible to sell his condo, which he bought pre-bubble. He decided to rent the condo to a relative and buy a 1960s 1600sq ft 3/2 in Poway for $510K. At age 26, he now owns probably $850K worth of RE, with at the very most a couple hundred K in equity in the condo, on a household income probably around $175K (his wife also works). The rent will probably cover the PITI on his condo, but I can’t understand why anyone would want to add $500K to their real estate holdings in a declining market. Unfortuntely, I don’t know the details of the other guys purchase. They’re both nice, intelligent guys (engineers), but I can’t help but think they should have waited a bit longer.
Why? Because there’s no accounting for common sense. Plain and simple. They wanted another house, so they did it…regardless of the declining market indications.
And another thing. It is highly questionable whether someone’s property is actually *worth* $850k in this climate no matter what the purchase price was/is. Personally, I use that word very, very cautiously because it’s only the “value of the moment”. It’s only good for current dinner party bragging. As soon as a comp is sold at a lower price, down it goes.
BayQT~
At age 26, he now owns probably $850K worth of RE, with at the very most a couple hundred K in equity in the condo, on a household income probably around $175K (his wife also works).
So then his wife is a doctor making $120k
LOL. His wife is a software developer. I was being kind with the $175K income estimate. It’s probably less than that. Also, point well take about using the word “worth”. I meant to use quotes in the original post.
“… but I can’t understand why anyone would want to add $500K to their real estate holdings in a declining market.”
It’s because they think the bottom is near.
You see the same thing in the stock market. If a $50 stock goes to $25 then the logical thing to do is buy more. The thinking is you get the same company for $25 that you used to have to pay $50 for. And with a 50% haircut the bottom can’t be far off.
Then when it drops to $10, why it makes sense to load up the boat. Same when it hits $5. And $2. And $1.
I knew guys who did this with Lucent some years ago. They bought in steps all the way down from $60 to something less than $0.70.
This sort of thinking (or lack of) prevails when emotions rule one’s decisions. Hard, stark, reality has a tough time penetrating the minds of these buyers.
“In response to student concern, realtors emphasized the value of investing in a residence, rather than renting. ‘If you figure out what your mortgage would be and the price of renting, it could be more profitable to buy a condo,’ said Shannon Bedore, a Club California sales agent.”
Gaaaahhh! First the loan companies drive up the price of a university education by making huge student loans, then a sales agent tries to encumber students with a depreciating asset that can only be purchased with a suicide loan! Not to mention the credit card pitches. Today’s students will be in their 60s before they see their first birthday with a positive net worth, if ever.
Where, oh, where in the state of Clownifornia is it possible to buy a place today and have the monthly nut come anywhere close to –much less below– rent on an equivalent unit? Oh, wait, she meant the teaser on a NINJA loan. Yup, it’s possible.
Oh, wait, she meant the teaser on a NINJA loan. Yup, it’s possible.
I cannot wait until the MBS bond buyers finally become properly scared of the issues. Then and only then will we see a reasonable credit policy. Oh, I bet it will swing too far the other way… but I’m ok with that!
Got popcorn?
Neil
“If you figure out what your mortgage would be and the price of renting, it could be more profitable to buy a condo,” said Shannon Bedore, a Club California sales agent.
She means more profitable for her, the Klub Kornholea Sales Agent…
This happens in Davis. The flipping parents buy the property for the kids while they are in school and then sell it when the graduate. In the meantime, people who actually work at the campus can’t afford anything. I’d love to see our tuition go up and the scanky-a$$ed parents loose the house.
And yes I am f@ucking bitter. My landlord just told us they were going to raise the rent and possibly sell the place. I hope they choke on their own vomit when they realize how screwed they are.
That is happening in every college town U.S.A. We are over run with these assholes(parents/grand parents) buying 250,000.00 to 500,000.00 condo’s and houses for 18,19,20 year old kids while they are in school. Many of their up yours attitudes will blow your mind (of course there are some hard working well raised kids in the mix). They trash up the place and plan to sell at enough profit to pay for school. P.S. We live in a poor state… S.C.
I just finished a four day meeting on personnel issues. In short, our staff base is declining by a staggering amount. The cause? It’s the double whammy of retiring boomers and younger employees separating from the campus and relocating to areas with lower cost of living, specifically out of the state.
The tricky part is that the bleeding of faculty positions has slowed down now that UC has aggressively marketed it’s seed money program. Yes your tax dollars can go to financing 3.5% home loan for a over the cap greedy professor.
One of the points that was brought up was that the staff separations from campus are happening so fast is because those administrative skills are so easily transferable to a lower cost area while those big degree jobs tend to cluster.
The funniest part was that while all this was going on, I got to watch a lot of laptop screens sitting in a back row. The majority of the browsing of the browsing I saw was people surfing the employment opportunities pages of other Universities, all in what we would call fly over states.
Oh the irony >; )
gyn(punn intended)
I don’t understand “while those big degree jobs tend to cluster” as it relates to the first part of the paragraph. Please elucidate.
(I am not in education which I think is obvious)
Well, considering that UC salaries for professors are the same as salaries at U of Iowa or U of Illinois, I wouldn’t exactly call them greedy.
They trash up the place and plan to sell at enough profit to pay for school. P.S. We live in a poor state… S.C.
Why would this make anybody mad? Housing on campus is way overpriced, sounds like a smart thing to do.
Not to worry, wmbz, those #ssholes you describe are about to receive an unpleasant surprise when they try to cash in on their “investment.” The party is over. And they are doubly screwed, because they probably used a HELOC to pay for the tuition for their little darlings.
#154 NOD’s last week in my part of the world
http://www.bakersfieldbubble.blogspot.com/
154*52 = 8,008. OUCH!!
Bakersfield,
Oil, carrots, pesticide dust and foreclosed houses…& free blanket & free one way bus ticket to WeedPatch
And since the 10th the first installment of property taxes were due let us know how many are delinquent when the numbers come out in the newspaper.
Excuse my ignorance - what’s a NOD?
Notice of default.
I have a primer on the subject here - http://bakersfieldbubble.blogspot.com/2007/01/notices-of-default.html
Seiders: New-Home Slump May Last Till 2011
The new home market may not return to normal until 2011, a top housing economist has told a meeting of multifamily builders and developers in Hollywood, Fla.
4 years - 95% of these builders dont have the $$ flow to last that long!
you could audibly hear the collective butts pucker when he dropped 4 years on the room…
Whaa da ya mean “Rectum” damm near killed him!
“Seiders: New-Home Slump May Last Till 2011″
REIC spokesmen are starting to sound more and more like Ben’s posters. My seat-o-the-pants estimate for the good case scenario is that the market bottoms out by 2011. But the bad case scenario goes out past 2020.
In 2020, there will be tens of millions more men, women and children living in this country. There will be plenty of new homes built between now and then.
When the new home markets gets to the level we’ve seen over the past 3 years? My guess is never, but then again, never is a long time.
Homes will be built…less money will be made. Life will go on. Before we reach that stabilization point though, LOTs of pain will be felt.
It reminds me of the Bay Area after the bubble/bust. Software companies were bitching about the market in I think 2003. They were making money, just not as much as in the heyday. I think Larry Ellison said something like “Well, you’re all waiting for the recovery? I’ve got news for you. This is it. Enjoy it.”
After the surviving homebuilders dust themselves off and start making a profit again, I suspect we’ll hear some of the same bitching about “when’s the recovery going to be here”. They need to recognize the market over the past several years was pure fantasy, brought on by ridiculous lending practices.
“It was also the 34th straight month to show year-over-year sales volume drops.”
Does that qualify as a trend?
“Real estate is always a good buy & never goes down” SoCal carpenter not living in Cali in mid 1990’s!{ He must have been referring to the Mexican banking system- run by Ben Bernake}.
As for the trend please don’t confuse us Morons with the facts.
That trend is so old it must be a bottom.”this never happpened before!” “Prices will only drop 2%this year in God’s country”
Oh, but suppply keeps comng on line…NOD’s, homebuilders, and people who bought last month hoping to sell their old home this month.
“a lot of the 2004/2005 buying activity was drawing from the future, and that future is now. A lot of demand was pre-met,”
This is hilarious! Mortgage activity was borrowed against future demand. Looks like they even got Neg-am terms. This is an excellent quote to pull out for when you start hearing about “pent-up demand”. Oh don’t worry, it’s pre-met. They’re getting NODs as we speak.
‘I don’t think we have a situation now where people making $50,000-$55,000 a year can get into the housing market.’”
“Indeed, he Occidental College study shows that a family able to make a 10 percent down payment on a $500,000 home and getting a 7 percent interest rate would need $4,043 a month to cover insurance, property taxes and mortgage.”
“To avoid paying more than a third of the family income, that family would need to earn more than $147,000.”
$147k?
Pple making this kind of cash weren’t buying $500k homes, they were buying $1.2M homes!
The problem is pple making $55k WERE/ARE buying homes for $500K.
The 30% max for housing is old school. It’s a new paradigm but I guess this guy didn’t get the memo.
$147k?
Pple making this kind of cash weren’t buying $500k homes, they were buying $1.2M homes!
The problem is pple making $55k WERE/ARE buying homes for $500K.
Don’t worry, that problem will be corrected soon. The question is soon 2009, 2010, or 2011?
Got popcorn?
Neil
2017, 2018, 2019 - there is a lot of air in this bubble.
If we follow the Japan Model bottom in 10-15 years.
But that would be painful for the economy.
I saw an article I think from the Economist (UK) this week
which said.. a FAST CRASH was better than a prolonged soft landing. A prolonged soft landing would drag the economy as it did in Japan into decades.
But as with the equity bubble of 2000 a swift correction (CRASH) would reset, absorb the losses today, and get the economy moving again. Which it did!!! Im all for a FAST KICK IN THE A$$ AHAHAHAHAH LETS ROCK!!!!!!
Louie Louie,
I think it will be toward the fast side. Once this avalance starts… what’s to slow it down?
Dampening factors that occured in 1990 that are not present today:
1. Protecting the down payment
2. Years of savings (Joe Sixpack might have 3 weeks of cash)
3. Equity in homes to extract in 1990: been there, done that
4. Today’s record ownership rate (few qualified buyers on the sidelines)
Oh yea, I blogged this.
http://recomments.blogspot.com/
Its going to be much faster this time.
One year? No way. 10 to 15 years? No way.
I think we’ll hit bottom by 2011 at the latest.
Hold on… 2008 is going to be a wild ride. 2007? Just getting started.
Got popcorn?
Neil
Neil,
One other factor. Interest rates were high in 90 and were declining year after year, thereby making it easier and more affordable at the same price.
THis time, rates were at “all time lows/50 year lows” -as so many radio ads repeat. Rates have been slowly rising and will rise more as lending gets tighter, exactly the opposite of the 90’s decline.
Neil, OC -
I agree with both of you.
It’s going to go down fast.
And then stay down - perhaps for years. Locally, in SF, I’m thinking a bottom in 2012 and then it will drag out with incremental (maybe less than inflation) gains for a number of years.
It all depends on credit, I suppose.
If Bernanke “Does the Volcker”, a “hot” real estate market won’t be seen for at least a decade from now. And that’s in the more “name” areas.
I should add that my version of “going down fast” is still three to four years in length (from mid-year 2006) in some locations.
Which probably doesn’t count as “fast” for most.
Neil,
Great points to add. Faster is better for all. Let the cleansing begin.
Subprime is unfolding suprisingly fast I think, and by the sounds of it we are already moving into Alt-A. That’s moving at a nice brisk clip to my mind. If things keep at this rate the unfolding will be pretty quick. If congress passes laws to fix things it might be even quicker. But these are only like the third and fourth dominoes to fall in a very long chain. So the bottom has a long way to go, and in the Bay Area the FB pool has yet to be exhausted but that HAS to be coming soon.
But anyway, good to see the school paper from my alma mater is still printing the same kinds of giberish it was when I was there. Well not the same but similarly as foolish. Ah memories.
Its funny that last year a lot of people were saying wait until fall 2007 for a correction. Now we know that it is not going to be corrected by then. A lot of last years posters were wrong.
this bubble was force fed Taco Bell for the last five years…
“I saw an article I think from the Economist (UK) this week
which said.. a FAST CRASH was better than a prolonged soft landing. ”
They would. It is a good magazine, but also the official neoconservative rag. They want it over fast so that everyone will forget and forgive quickly, so they can sell another vat of neocon snake oil.
Do you have any examples to back that up? Last time I checked it was a pretty damn good newsmagazine offering coverage of most of the world with more intelligent analysis than you could ever hope to find in the NYT, Newsweek, Time, etc.
“Neocon rag”? You must be talking about a different Economist from the one I read, which only grudgingly supported the Iraq war on the basis of WMD assertions, endorsed Kerry in 2004, and has very harsh words for the Bush administration.
A more correct label would be “centrist,” and if they do have a bias it’s a regrettable knee-jerk reaction in favor of free trade and far too much fawning over Google and the like.
The Economist seems to be center-right (European perspective, which looks quite centrist from an American one) and quite annoyed at many of the neo-con excesses.
They saw the US housing bubble for what it was back in 2005 (I think), and weren’t afraid to make a cute cover to that effect.
$500k will get you a wreck of a 3/1 wwII starter house here.
Almost 1mil will get you this MLS #: 70005921
Do they think this is the fab 40s? Davis is still a f@ucking central valley cow town!
yes I am f@ucking bitter today >; )
I love Davis. It was a great place to go to school, and I regret not buying the house we rented for three years–backed onto the greenbelt, easy ride to campus. And it is not really a central valley cow town, not compared to REAL central valley cow towns. You’ve got Mondavi, easy shot to Sac, and the Graduate! Been to Galt? Then again, I hear Galt is becoming an upscalish bedroom community, which boggles the mind.
If this doesn’t tell you what’s wrong, nothing will. I am in a similar boat but we make over 100K and we still can’t buy a starter home in our neck of the woods. It is damn frustrating, and the misses is getting really antsy, but no way I would buy a house at these prices. No way.
Right there with you buddy. We’re about 120K/year, DINKs, we are super careful with our money (drive older cars, no real toys) but unfortunately we live in West LA and I can’t justify spending the 40K we have saved up on anything in this market despite the fact the wife is also REALLY antsy to have a home instead of an apartment. Although I catch crap on this blog from some people for saying this, it’s just plain hard when your partner is aching for something like this and you constantly have to defend your position.
I feel for you, but don’t worry as things get much worse economicallt out there, your wife will have at least a handful of either relatives or acquaintances or co-workers who will lose their jobs. Then you will look a whole lot smarter for not having bought into the hype. Especially when said relatives / coworkers / acquaintances are getting foreclosed upon.
Sounds like your partner may not be your partner then. Sounds like you two are not on the same page. True partners are on the same page. You may have to eventually make a choice between having her companionship and “favors” or losing a boatload of cash.
It’s not fun to talk about, but it is the truth of your situation. You just have to decide if you will be happier with your cash intact or with her happy and the cash blown due to her ways.
Marriage and relationships bring out the best and worst of all things.
I say enjoy yourself now….get the toys, live your life…what are you waiting for? You’re young in your life only once.
Come join the rest of us expats in flyover land. The following is the sum total of everything that my family says was better in Southern California:
weather
mexican food
If you can get past the stereotypes and just go check a few places out, I think you will find that there are many, many desirable and affordable places to live near job centers, shopping, recreation, etc. There are obviously some undesirable places as well, you just have to choose wisely.
OSCAR:
You are absolutely correct and this is what I have been saying for years to people here. I have no idea what people see in California. As far as I’m concerned, it’s been a craphole for the past 40+ years. As if this is the only place that has sun, mountains, and ocean? How arrogant can people here get?
My family came here so as to be with others (as I am sure many do from all over the world), but I’ll guarantee that people who are from other places would go back were the given circumstances amicable. Alot of people in the US think people come here because they want to. Alot come here because they have no choice and being here, while beneficial in certain aspects, is not necessarily better.
Why is the Mrs getting antsy?
Her antsiness causes you stress and may possibly alter your judgement at some critical juncture, should she decide to up her level of antsiness. You should have her read regularly here so that she does not force you to lose money.
Ya’ll the markets are at the point where they gapped down that 500 point day. Amazing, huh? Like it never happened. Subprime? RE crash? Yesterday’s news.
I don’t think so though.
Sometimes you have the whack the 20# trout’s head against the rock more than one time…’till it stops flopping around.
Until the next shoe drops. The trick is knowing when.
What scares me is that I’m involved in a deal that needs to close before all of this liquidity dries up. Not RE - a corporate financing.
I think you’re safe there- smlandlord!
That is the only place banks can lend, especially if you agree to borrow 2 times your net worth and buy back stock until you have negative equity.
NYC bankers were in my office less than 30 days pitching this type of nonsence {program}. or 1.25% convert to buy stock back.
The banks won’t be happy until ALL earnings are used for sotck buy backs and thay hold all corporate assets as collateral!
The plan is to grow out of the sub-prime mess they created.
“‘I don’t think we’re making any real progress on affordable housing,’ said Bill Ruh, government affairs director for the Citrus Valley Association of Realtors. ‘I don’t think we have a situation now where people making $50,000-$55,000 a year can get into the housing market.’”
“Indeed, he Occidental College study shows that a family able to make a 10 percent down payment on a $500,000 home and getting a 7 percent interest rate would need $4,043 a month to cover insurance, property taxes and mortgage.”
“To avoid paying more than a third of the family income, that family would need to earn more than $147,000.”
Really now, Mr. Ruh. And how do you explain how those very same people got loans for $800,000 and up to “get into the housing market”? Are you calling yourself trying to *educate* people now? You make me sick.
BayQT~
Where’s the Ruh-Roh guy when you need him …
Aren’t statements like this amazing:
“….I don’t think we have a situation now where people making $50,000-$55,000 a year can get into the housing market.”
Now!?! Have prices increased in the last year or two so as to NOW push these incomes out of the buyer pool club? No? Well ….. then what is the changed “situation” that prevents them from getting that dream home today, since prices have been flat or falling for nearly two years…? If you can really afford the home, the situation is actually better today than in 2005.
Oh, wait ….. I replaced “a situation” with “toxic lending” in his statement, and now it makes sense. Never mind.
The only “real progress on affordable housing”, Bill Ruh, will be when prices return to 2001 levels, not the building of “Projects” so the poor renters can get their foot in the door.
“‘We are not a market that is isolated out in the middle of Kansas,’ Husing said. ‘We are part of the Southern California market.’ Whatever the ‘overvalue’ figure in the Inland Empire is, Husing said prices will probably drop in the months ahead.”
Isn’t this the same dude that called the IE the center of the universe last year and that there would be no declines?
Yep, the same guy. Here’s a quote from him on Calculated Risk.
http://tinyurl.com/ywbxv9
From the link:
“There’s just too strong an economy and too much job growth for much other than the “soft landing” Husing and other economists have been predicting for the end of the five-year housing boom.
“We are right on the cusp of a very powerful period in job growth,” Husing said. “Local [Inland Empire, San Bernardino/Riverside area] unemployment in May was 4.2 percent, and that’s the lowest I have seen for May in 42 years of studying the local economy.”
“Is the housing market vulnerable?” he asked. “Yes, it is. But is a bubble likely to happen? No, it is not. The underlying strength of our economy is too great.”
He didn’t learn a lot in 42 years of study.
Wrong, he knows EVERYTHING you might want to ask him about his navel, his chosen object of study…
That old geezer sounds like the gary imus of economists.
“Now if all the nappy headed hos would just move out of the ie…”
retire crusty.
correction: don imus
“his plans belly-flopped because of an unlicensed contractor who left a pit of beer cans, torn drywall and charred lumber at the job site”
Read the entire story. What a mess. But that’s what happens when you use cheap, illegal labor. Looks like licensed contractors are becoming extinct in LA. Everyone laughs at the laws. Even the homeowners, until they get screwed and then they whine.
That story made me laugh too. People shrug when illegals use forged docs to get jobs, or benefits, but are shocked, just shocked when the same guys use stolen license numbers to do contracting and rob them blind. HIre illegals, expect to get scammed.
“HIre illegals, expect to get scammed.”
Testify, spike! I hope every homeowner who employed illegal or unlicensed labor, or bought a home built with illegal immigrant labor, gets a good boning just like Cortez. Yep, let the public officials posture all they want and try to prosecute. I have no sympathy.
I ran a Insulation Branch in So Cal in the 80’s, we had 30-40 hangers, none were white. Whitey was a Meth-Head, stole, and claimed workmens comp. I cleaned house and only used Mexicans, hard working, family oriented. I cared for these guys and they worked hard. Face it, we need some sort of guest worker program to legalize the workforce. No migrants no labor.
Let me get this straight: white employees are all lazy, crooked, meth-heads that “won’t do” those jobs (not even if they paid decent wages or benefits, like they used to).
But those “documentation-challenged” paid-under-the-table guest workers are perfect angels that swoop in to save the day –all for practically “free”. And all the social services these $3/hour “perfect” laborers get (welfare, food stamps, public education, medical care, Section-8 housing, etc.) doesn’t cost Mr. Legal WageEarner one thin dime in taxes! It’s FRRREEEEE!!!
Uh huh. Well, it sure looks free to Mr. Illegal Employer, I’ll give you that.
A recent comprehensive study noted that the average person who does not have a high school diploma (read: nearly all illegal immigrants) use about $22,000 a year more in tax benefits then they contribute. This takes into account all sales tax, payroll tax, property tax, and yes even lottery tickets into account as tax generation. The benefits they consume, Medicaid, Welfare, food stamps/EBT, public schooling, fire, police, etc. are $22K a year and just over $1,000,000 per person, per lifetime OVER AND ABOVE all tax contributions.
It is far from free for those who play by the rules and pay the bulk of the taxes. Illegal labor is extremely expensive. The only one who benefits are the unethical companies who employ them. They socialize the costs, but reap the benefits privately.
You know we make it very difficult for highly skilled immigrants to come to this country, because they do it legally, but unskilled uneducated workers are given a free pass. It is totally insane, our social benefits system will collapse under the weight of all the new recieptients that will suckle at its teat. Just watch how angry the baby boomers get when their social security benefits are pared back become the system grows insolvent more rapidly due to the burden from illegals, you watch how fast those “gray foxes” pass some stringent rules regarding illegal immigrants.
Tell me what came first, Your builder customers telling you to lower your price or Pedro contractors will get the work.
Or you guys kept them [prices] the same and pocketed the Dif???
What about the licensed contractors who hire illegal aliens to do the work? That’s quite common here in Arizona.
License’s…. I thought those were reserved for PUBLIC WORKS.
Homoaners cant afford a real Contractor, so its Filepe, or Jose, or Antonio, or Ahmed or [insert culturally biased first name of illegal, undocumented worker who accepts cash]
I liked the term “Mexican Artisans” from the old “there is no bubble” website.
Where Trulia Went Right…and where Zillow went wrong
April 12th, 2007
Where Trulia Went Right…Trulia has built relationships with many of the most highly-respected figures in the real estate industry. Pete Flint, Trulia.com’s founder and CEO, is a true diplomat and politician. Also, he is clearly able to articulate his vision in a way that excites people and engages them.
…and where Zillow went wrong…Zillow has not followed Trulia’s example of relationship-building. They have tried to step over the largest group of independent business people in the US (Realtors) and form direct relationships with the consumer that supercede the Realtor. They wore on their chests as a medal the fact that they put tens of thousands of travel agents out of business with Expedia.com.
The idea behind Zillow is very clever indeed; however, the execution of the idea was not very clever at all. Arrogance has its price.
http://thehamptons.wordpress.com/
Another Bitter Realtor.
I don’t even know what truila is. I like the zillow user interface, I think their zestimates are unreliable, but not much worse than a biased insider’s opinion.
http://www.trulia.com/
Use the last sale when you market was sane… and add YoY rate of inflation or 3-4% form base year… for me its base year is 1998 prices around $100/sq ft and
Therefore for my area by St ft we are talking $135 per sq ft…
Zillow is great if you use the historical figures at prebubble years. Homes only appreciate at rate of inflation. This is a proven fact… For get zestimates… it will only be valueable after the prices crashes…
“Trulia” sounds an awful lot like “true liar.”
Excellent.
Yeah, stomping all over Travel Agent’s sensibilities sure did hold Expedia back, eh?
Has anyone quoted Gary Watson lately? Gary where are you?
No, it seems Gary “it’s in the bag” Watts has been pretty quiet lately. Just a guess, but I’m thinking that he might be a little worried about his prediction of 7% appreciation for OC for 2007, what with the inventory and foreclosures rising and the sales continuing to fall (18th straight month of YOY sales volume decline).
It is high time for Gary to insert the omitted negative sign in front of his 7% forecast and start convincing everyone that it was there all along.
We are not a market that is isolated out in the middle of Kansas,’ Husing said. ‘We are part of the Southern California market.
El Centro is also in Southern California.
Lancaster is also in Southern California.
The (UCLA) Daily Bruin article mentions Club California. That place has had sign spinners on the corner of Wilshire and Gayley every weekend for the past year. I wonder how that conversion is coming along?
Local observation: I drive past this house http://tinyurl.com/3xzad8 every week day. Its been for sale for part of each year, springtime, in 2005, 2006 and now as of today again in 2007. In 2005 it was listed in the low 800ks, in 2006 in the low 700ks, and NOW in the mid-low 600ks. Nice! Of course each time it appears on ZipRealty its a Brand New listing.
Zillow reports that somef*cked borrower bought it in 2004 for about what its going for now. Looks like someone has reached the “bargaining” stage. Haha! I think mid 400ks will be about right when this is all said and done.
That is in the Berkeley Hills, isn’t it? That might be the going rate although the lot is small so it probably still overpriced.
It is in Berkeley and getting hilly, the location is on a busy street but great neighborhood and very close to nice Solano ave. shopping.
It’s just interesting that not so long ago the person bought in 2004 for 600kish then less then one year later had the idea they could sell it for 800kish. Now they are just interested in getting out with their ass intact. It will probably sell at this price though, see a lot of lesser listings at the same price.
Folks are still ready to juggle the falling knives in this area.
“‘It’s becoming apparent that a lot of the 2004/2005 buying activity was drawing from the future, and that future is now. A lot of demand was pre-met, otherwise these low sales counts would have put more downward pressure on prices by now,’ Prentice said.”
Huh? Can anyone explain his reasoning? I don’t get how “pre-met” demand means that low sales counts now don’t put downward pressure on prices. Low sales counts, for whatever reason, should put downward pressure on prices. How does “pre-met” demand (i.e., stealing future sales) relieve that pressure?
Huh is right .Pre-met demand would not relieve downward pressure on price but the opposite .
I do think that the REIC did borrow demand from the future to the point that many people were put into homes they could not afford based on the fear of constant price appreciation .
Who would of guessed that the lenders would of financed such a over-inflated market based on myths of ongoing appreciation and shortages of land and property .
I think he means that the sales at lower prices would have pulled the median down with it, ie only higher priced property is selling because all the low enty buyer were used up in 2004-2005. I think so.
Don’t forget Myth #5: “Priced right”:
http://www.viewfromsiliconvalley.com/id320.html
Thanks!
There are some real issues there, but the general point is flatly false with a lot of experimental data to back that up. Pricing is an important part of marketing, if not the most important part. Asking prices that are too low or too high get much less attention and tend to scare away potential buyers.
The additional bit about selling quickly is a canard. Maybe some particular realtor claimed this, but the general rule that is being quoted here is just “If it is priced right, it will sell.” That is especially important now since the market is already at a point where badly priced listings are not even getting may open house visitors, let alone offers.
Shea Homes is downsizing on the Central Coast.
http://centralcoasthousingbubble.blogspot.com/
The joy of spring baseball,flowers,warmer weather, and then there is the housing market.
That is not so joyish, subprime fallout,overprice homes,no buyers,flippers who will do back flips to sell their property, agents leaving in droves,home builders pretending all is fine and dandy.
What will summer bring more baseball,wilting flowers,hot weather, and a housing market that jus may totally collaspe right before our eyes?
OK, let’s try something a little more experimental today.
Here is an ode from a patient buyer to a desperate FB:
Music from the Video, corrected lyrics:
I don’t wanna understand this horror
there’s a weight on your price I won’t commit
everybody ends up here in shambles
but the name tags are the last thing you wanted
as the world explodes you fall out of it
and you can’t let go because this
will not go away…..
there’s a house priced out in space
and I can see the thief that lives inside of your head
but I can get some schadenfreude as you’re slowly bled
and you don’t know what’s happening and you can’t pretend
but I can play ball, play ball
Someone help us understand who ordered
this disgusting arrangement - time and the end
I don’t wanna hear who walked on water
cause the hallways are empty, clocks tick
as the world implodes we fall in to it
and we cant go home because this
will not go away…..
there’s a house priced out in space
and I can see that thief that lives inside your head
but I can get some schadenfreude as you’re slowly bled
and you don’t know what’s happening and I can’t pretend
it’s a long, long get away, it’s a long, long get away
make it home again, make it home again
it’s a long, long get away, it’s a long, long get away
I can see that thief that lives inside your head
and I can get some schadenfreude as you’re slowly bled
you don’t know what’s happening and I can’t pretend
but I can be all, be all I’m here
but I can be all, be all I’m here
it’s a long, long get away
===
Subprime: Bailouts won’t cut it……..
http://money.cnn.com/2007/04/12/real_estate/foreclosures_prevention.moneymag/index.htm?postversion=2007041216
does anyone care to speculate on how a bailout would actually work?
Brad - sure:
1) FASB will declare that REO’s on bank balance sheets longer than 2yrs. is a depreciable Long term productive asset, and are qualifying assets for mandatory reserves.
2) Banks holding more than 15% of total assets or 150% of net worth in REO’s will earn a low income credit for tax purposes, that refunds taxes paid from prior years.
3) Government will provide low income housing ,rents going directly to the banks. Prior inner city property will go to HUD, to be demolished and sold to certain privlelged globalist in crowd corporations for a song. (aka REFO S& L bailout}
4) Majority of middle class files BK#13 and they are thrown out on the streets, while they watch govt. assisted living people move in to their homes. {aka Detroit in the early 1980’s.)
5) All others (still holding a job) will agree to Chatttel mortgages and sign their paychecks a way for life. {indentured servents aka pre 1776}
{It probably goes something like that.
Did I mention the FAT CATS get rich from items 1-5? }
No that is depressing.
It has happened before, it will happen again.
Is this what they mean by “Sweet Deal™ ” ?
NPR just announced a billon-dollar housing advocacy group set-aside to get people out of the predatory loans. Where is this money supposed to be coming from? That’s it I’m starting a revoultion! Owners vs. Renters, the south will rise again!!
Citigroup and Bank of America have pledged the combined $1 billion to fund the program, which NACA hopes will help as many as 10,000 homeowners at risk of default.
From the money article. 10,000 homeowners HaHa! That will be the equivalent of handing out free BigMacs to all the homeless in Kanas city. So where do we get started? Oh yeah New Orleans of course.
10,000 homeowners.
Are they the bank presidents relatives?
What about the other 1.2 million in distress?
Why aren’t prices falling ? Inventory is sky high, sales are just about nothing, foreclosures everywhere and yet the prices are holding. WTF ! Whatever happened to supply and demand ?
Something is going to come along and knock the bottom out of the housing market and take houses down 25-50%. I just can’t see what keeps the prices up there.
IMO, prices are definitely falling in CA, but are masked by the median flaw. Proof of this is the spike in short sales and defaults we read about.
actually looking on the MLS here in socal, prices are coming down, 100-150k on 700-800k houses, price per sq foot has dropped from 400$ to 300$.
I think it will become more evident a couple of months from now when loans are difficult to get and sellers really start to sh*t their pants.
The Realtors are still busy with Fake Multiple Bids as you walk into open houses. And you still see the homes sitting on the market months later.
Hi Ben…I can at least report that prices here in LA are not rising anymore. I’ve been posting price decreases when I find them, but so far they’re on the order of a $3000 dress at Bloomingdales being marked down 5%…not very impressive.
That’s right, investorgirl. A couple of weeks ago I wondered into an open house in Westwood and got a long spiel from the Realtor as to how she had talked her clients down from 1.8 to 1.650M or something ridiculous like that. If I got her spiel right, she meant to say that it was “impossible to sell” the house at 1.8, but it would fly off the shelf at 1.6M. I nodded in agreement, of course.
I think a couple of quotes are appropriate here:
“Though the mills of God grind slowly, yet they grind exceeding small.”
–Friedrich Von Logau
“To let understanding stop at what can be understood is a high attainment. Those who cannot do it will be destroyed on the lathe of heaven.”
–Chuang Tse
In this poor analogy, try to imagine the housing market as “the roller coaster” (as seen in the excellent video on Utube). The front of the roller coaster is going over the mountains (loss of higher paying jobs in the mid west - foreclosures), the roller coaster is picking up steam (66% of all Americans believe we are going into a recession - the public has never been wrong regarding recessions), getting faster (incomes cannot keep up with true cost of living - west coast /east coast defaults), all cars over the top (Fed cuts fed fund rate - France sells US T Bonds - rout is on).
12 years decline - do not get to anxious over the beginning. This is just the beginning.
Hoz,
just the beginning, you are correct, dig in for the long haul and don’t sweat the daily numbers fluctuation which are just background noise
I track 91915 in SoCal (Eastlake Chula Vista). You really have to have a long and consistant history of tracking prices to notice the changes which may not be apparent to the casual eye or reflect in the misleading “median” figures. For what I sold my 3 br, 2.5 bth, 2 car, Golf Course home for in July 2004, I could now buy a 4 br, 3 bth, 3 car, Golf Course home WITH a pool and spa! It still may seem expensive ($700K), but definately a downward trend. Another example, same zip: An acquaintance listed his house about a year ago for $835K (overpriced) but withdrew it after about a month. I just noticed it back on the MLS at $735K, however there is an identical floor plan house just around the corner listed at $685K AND is on a prime lot on the golf course, which the higher priced one is not. Back when we sold, people ALL said once you leave, you would never be able to get back in because prices would only go up (forever). Well they were wrong…but I still won’t go back unless things keep going down because I don’t want to pay the higher taxes.
Milpitas CA, KBH is putting up condos like crazy. I thinks its 2000 conods.
A typo I meant to say “gonads”. Only people with Gonads need apply.
I think you had it right, “conods” are condos with a NOD built right in…
They (all the builders) are putting condos up in Mt View, Sunnyvale, SJ, Cupertino, Milpitas, Fremont, SF downtown and next to Ball Park.
The RE shills have been saying for years there is no more land and the Developers keep proving them wrong… Death To Realtors!
“SF downtown and next to Ball Park”
*******
Drive by at night and many are dark and empty.
There are many more coming… in that area and nearby.
If these were included in SF inventory figures, the “months of inventory” available could rise a significant amount.
Certainly, the local REIC cabal does a good job of framing how they want the market to look.
CNBC covering the bailout debate this morning. They said that email is running 67% against bailout.
mailto:realtycheck@cnbc.com
Of that remaining 33%, how many of those respondents are waiting for the baliout for themselves?
why help people who lie about their incomes????
thats fraud!!!!
“DataQuick President Marshall Prentice said in a statement that the medians are rising because of a drop off in starter home sales in Southern California.”
This is interesting. The subprime implosion could have knocked out the low end of the income distribution from being able to buy homes in San Diego. If suddenly, only rich guys can afford to buy, then the median will paradoxically rise, even though demand will weaken overall. It is further conceivable that the quality-adjusted price has dropped, as there is not much support for prices without the base of subprime driving up the bids from below.
I think you can eliminate “could have” and “It is further conceivable”. Doesn’t seem like there is much doubt that the subprime implosion disproportionately knocked out the low end of the income distribution. And there is no doubt that prices for individual properties have dropped (i.e., quality-adjusted price has dropped) - just look at the number of NODs, foreclosures, and short sales; these wouldn’t be happening (at least not on the scale they currently are) if prices weren’t falling.
Thanks for the vote of confidence. I always try to state my “predictions” with cautionary language when I don’t have any data to back my claims other than what appears in DataQuick’s press releases.
Check out Ken Heebners interview about house prices declining 20%. Worth the 10 min. listen. Claims some hedge funds are levered up using yen to buy MBS to rake in the fees. After the bust they will close shop and start again. Hah!
http://www.bloomberg.com/
he also thinks these guys are sharp and will get out of the mbs without much damage. { Iread where Royal Bank of Scotland bought 78 billion of New Century’s subprime @ 30 cents on the dollar.
question is to what sucker do they sell their CDO’s to ???
Sorry heebr, you guys bought your own kool-aide this time!
Anyone hear John and Ken Show (KFI AM 640) rant against an FB bailout last hour?
Guess not. Well, John and Ken are the number one after work driving time talk radio hosts in LA, and I’d say they spent about 20 minutes talking about the real estate slowdown and in very unflattering terms about people who overpaid for houses in the past few years (I believe “meth addicts” and “morons” were the terms they used) and took a quick poll on whether to bail the FBs out. All the calls they took were in the negative, one lady even mentioned she’s been renting and has a big problem with being forced to bailout people who can’t pay their bills, she sounded like someone off this board actually.
Thanks for the summary. Speaking of radio, I think I would enjoy hearing what Don Imus would have to say on the subject of FBs
Too bad I’m not a listener…
FB’s? You mean those knappy headed motards? LOL
I miss John & Ken…used to listen to them everyday!
“‘I don’t think we have a situation now where people making $50,000-$55,000 a year can get into the housing market.’””
With upward pressure on American wages due to globalization you can expect wages to quickly rise to “catch up” with current house prices.
“A lot of demand was pre-met, otherwise these low sales counts would have put more downward pressure on prices by now…”
Demand being “pre-met”… That’s a Euphemism for giving a loan to somebody before they actually “qualify”. More terms:
Income pre-documentation: “What you will make in the future.”
Pre-value of the collateral: “What the home will be in the future.”
Pre-assets: “What you will have in the bank account someday.”
Pre-FICO: “Your future FICO score in the land of Shangri-La.”
Mortgage broker: Pre-wino pissing his pants.
Realtor: Pre-homeless bum.
No what they mean was that was it for people wanting to buy a home … there is no more demand .. no buyers!
Thats it… market saturation…you borrowed ( got all the future buyers) for the next several years or so.
I will be fascinated to see how the tougher credit standards impact sales. Right now, it seems you can still get a dicey loan if you have a solid credit rating, but at some point as things get worse, I suspect a large down and income verification will be the deal killer.
The NYTimes rent vs buy interactive from today’s surprisingly bearish article.
http://tinyurl.com/2sdtvd
0000000 Bail-out Has Begun!! 000000
http://money.cnn.com/2007/04/12/real_estate/foreclosures_prevention.moneymag/index.htm?postversion=2007041216
“A number of states are aiding subprime homeowners with assistance plans, but critics say that won’t stop foreclosures from climbing.”
——-
Our tax dollars have found a use! Finally, instead of funding a war, we are now bailing out FB! thanks goodness (sarcasm)
Bail-out Has Begun!!
http://money.cnn.com/2007/04/12/real_estate/foreclosures_prevention.moneymag/index.htm?postversion=2007041216
“A number of states are aiding subprime homeowners with assistance plans, but critics say that won’t stop foreclosures from climbing.”
——-
Our tax dollars have found a use! Finally, instead of funding a war, we are now bailing out FB! thanks goodness (sarcasm)
Well, better to bail out the lenders than throw it away in Iraq.
I don’t believe we can “win” either battle.
The War on Savers and War on Terror are being fought on two fronts. Foreclosure bailouts are an important part of the War on Savers, as it serves to reward people who buy stuff they cannot afford with free stupidity-risk protection. Luckily our Federal Reserve has a giant printing press, as fighting wars on multiple fronts quickly gets very expensive.
twomultiple fronts (almost forgot about Afghanistan for a moment there…)Which bailouts are you talking about? I haven’t seen a single one
“Idaho avoids crash in subprime lending
Expert attributes low rate of home foreclosures to years of rapidly growing home-appreciation.”
No bail-out needed here. Move along now.
http://www.idahostatesman.com/103/story/79156.html
Short version of that article about Idaho…
Wait for it….
It’s different here.
“‘It’s becoming apparent that a lot of the 2004/2005 buying activity was drawing from the future, and that future is now. A lot of demand was pre-met, otherwise these low sales counts would have put more downward pressure on prices by now,’ Prentice said.”
Hmmm … that’s funny, where did I here that bit of logic first. Wait, it was on Ben’s blog!!!
When??? WHILE the borrowing from future demand was happening.
Ben, you and all the great posters on here rock!
Another Ventura price reduction:
http://vcrdsmls.rapmls.com/scripts/mgrqispi.dll?APPNAME=vcrdsmls&PRGNAME=MLSLogin&ARGUMENT=niIwW5pCH9pLaCHCB98f4NfeH8aA7JGhaRyheUhhPr4=&KeyRID=1
A 1929 crapbox with only 624 sq ft for $399K? That’s what we call a scraper. Except the lot is only 5329 sq ft, so you couldn’t do much with it. Seriously, look at some apartment buildings if you’re itching to invest some money. You’re never going to get a decent return buying shacks like that unless the seller pays you to take it off his hands. The upgrades and maintenance on a 1929 shack will eat you alive.
First of all, apartment buildings in Ventura are running at about 13-14 times gross. Not exactly cash machines. Second, I’m just posting price reductions when I find them, I’m not necessarily considering buying any of these. Like, I posted some price reductions on million dollar homes in SM, and I would never consider going in on something like that for an investment. As for the Ventura MLS, I think it’s useful for us to see how they disclose the original price and the reduced price
As “Bill the Cat” from Bloom County would say:
“Aaaaack Thppppt! 13-14 times gross?”. That’s hairball territory. They must be full up with workers who have jobs in Santa Barabra but can’t afford to live there.
As to the price reductions, the fact that they’re stating them makes me wonder if the local Realtors are pulling a sticker-price scam like the used-car dealers they are.
If you can find anything in Ventura County, let’s say 6 -20 units, for less than 13 times gross, please, post it. I’m not saying that to be obnoxious, I would be legitimately interested. As for the price reductions I posted, I’ve been following that area of West Ventura for two years and I can confirm that these price reductions are not bogus, they are actually about 5-10% below where they were when I went shopping for properties over there two Thanksgivings ago. Not that they’re bargains, a house like I posted would rent for about $1000-$1300, so 399K is still too much to pay.
why the big hurry? impatience can be expensive
’ Zandi said. ‘This outlook assumes that interest rates remain stable and that the job market outside of housing remains stable.’”
You mean like a year ago HP,Intel, and Sun were having layoffs.
Im sure seeing attrition from these giants… Lets factor in M&A activity.
Now AMD is having restructuring ‘layoffs’ … how stable is that.
House Price Drop? That’s Unpossible!
When DL’s mother reads this she will be in tears again.
Will she say………that’s my bastard son?
http://www.fool.com/investing/general/2007/04/12/house-price-drop-thats-unpossible.aspx
NACA, the government, whoever, want to bail people out all these subprime lenders and/or borrowers. Numbers tossed around like 100 million dollars, a billion dollars.
My heart is warmed at the thought of bailing out people who lied on mortgage applications and drooled at the impression of the gravy train of ever-appreciating real estate, with ZERO MONEY DOWN.
That’s just terrific!
All the tragedies in Africa - Sudan, Rwanda, Sierra Leone, etc., who cares, right? They have little oil, they have no real estate to speak of, they have no money, they are mostly simple farmers trying to eke out a living off the land and they get slaughtered by the 100’s of thousands, but that don’t matter.
I suppose it’s just because they are savage Africans after all. Eh I guess I’m just cynical today.
All this does is delay the inevitable, and my acquaintances who bought with toxic loans and no money down can smirk for a few more months before the sh** realy hits the oscillator and their Hummers get repossessed.
Af for the Africans, well, simply put, they don’t vote (sarcasm).
The Daily Bulletin. “‘I don’t think we’re making any real progress on affordable housing,’ said Bill Ruh, government affairs director for the Citrus Valley Association of Realtors. ‘I don’t think we have a situation now where people making $50,000-$55,000 a year can get into the housing market.’”
In the article above, this local reporter (where I live) states that the average lawyer, doctor, dentist etc cannot afford a median priced home. I e-mailed this guy a couple of weeks ago complaining about his RE cheerleading and informing him that I am a lawyer who cannot afford a median priced home. I mention this only to show others here that educating your local media can have an impact on what they write, which in turn leads to more accurate reporting, which in turn helps market psychology turn bearish.
“‘New home sales for February 2007 fell by 28 percent for the Coachella Valley from February 2006, but nearly 50 percent for all of Riverside County. So in that sense, the Coachella Valley is performing better,’ said Patrick Duffy, managing director of consulting for Hanley Wood Market.”
Isn’t that like being the best looking dog in an ugly dog contest?