May 8, 2007

This Might Be Just The Beginning In California

The LA Times reports from California. “Plans for a $1-billion high-rise condominium complex overlooking Pershing Square park in downtown Los Angeles were unveiled Monday by developers who expect to build the tallest residential building west of Chicago. The project is drawing its doubters from people who wonder whether there is a market for another huge housing complex downtown.”

“Adding downtown housing is a risk, market observers said. ‘There is a huge supply that far exceeds demand’ at the moment, said real estate broker Stephen May, who estimates that more than 400 units are for sale.”

“Prices are holding level, he said, but may come down in future months as more new units hit the market and create competition.”

“‘People wonder if this is the right time’ to announce a large housing development, said economist Jack Kyser of the Los Angeles County Economic Development Corp. ‘Downtown is overbuilt and some other projects are grinding to a halt.’”

The Orange County Register. “Spring may come and go without the usual annual home-buying rush, says the math of Steve Thomas at Re/Max Real Estate Services in Aliso Viejo.”

“It would take 8.33 months for buyers to gobble up all homes listed for sale at the current pace of deals vs. 7.75 months two weeks earlier and vs. 4.43 months a year ago.”

“And Thomas notes: ‘Believe it or not, the Spring market is almost over. With the growing inventory, dropping sales, increased foreclosures (nothing compared to the Inland Empire and Central Valley), we can anticipate additional media attention which could continue to dampen demand.”

The Associated Press. “With a second child on the way, Chris Shields and his wife, Michelle, wanted to move from their two-bedroom apartment in Southern California to a house with more space.”

“But because their timing coincided with a shakeout in the mortgage market earlier this year, their credit now isn’t good enough to get a loan to purchase the house they wanted with no money down.”

“As mortgage bills came due, foreclosures rose, and the easy credit dried up for families like the Shields. ‘Now we’re stuck in the apartment,’ said Shields.”

The LA Daily News. “Finally, we have a reference point on the last two San Fernando Valley residential real estate market tankings. The current one and the Great Collapse of the 1990s.”

“In this year’s first quarter, both the median price and home sales fell from their year ago levels. The last time both sales and the median price fell in a quarter dates all the back to the 1995 fourth quarter.”

“‘I don’t think that this particular markets is anything like what we experienced in the early- and mid-90s,’ said Jim Link, the association’s executive vice president. ‘I think this market is a correction based on the longest sustained increase in median prices that we can recall.’”

“Back in 1989, the median price peaked at $245,000 on three occasions. It took 129 months to get back above that level.”

“And finally, the median house price moved above the year ago level again in March of 1997. It then increased 127 consecutive months on an annual basis, finally dipping below the year ago level again in November of 2006.”

“In the 1990s the market teeter-tottered. Sales and prices generally rose and fell in a haphazard pattern. That mostly held true for sales but prices started falling annually on a consistent basis in April 1992. We didn’t see another annual increase for 66 months.”

“The price bottom came at $155,000 in November 1995 but relatively attractive buying opportunities existed for about five more years.”

“We can pinpoint the pain threshold in this market, though. The fourth quarter of 2005, when the median price hit $600,000 for the third time that year. ‘Prices outpaced buyers’ willingness to buy, not buyers’ ability to buy,’ Link said.”

The Voice of San Diego. “The size-adjusted median price of San Diego resale homes rose in April. By this measure, single family home prices were up .6 percent from the prior month while condos were up 1.0 percent.”

“While the size-adjusted median is down from a year ago, and down still more from the peak, prices by this measure have been rising in aggregate since December. It’s possible that the size-adjusted median is being thrown off by the reduced presence of low-end buyers and thus overstating actual prices.”

“The answer may lie in the superior-but-lagging Case-Shiller HPI. The HPI has shown continuous price weakness through February, the latest available month, which would suggest that the size-adjusted median price gains to that point had been illusory.”

“Home foreclosures in San Diego County hit a 25-year high in April, public records show.” “Transfers of mortgage notes from owners to lenders jumped to 604 in April, up 20 percent from 509 properties in March. The previous record of 589 foreclosures in a single month was set in July 1996, according to The (San Diego) Daily Transcript.”

“‘This might be just the beginning,’ said Nathan Moeder, principal at San Diego-based London Group Realty Advisors Inc. ‘Right now it’s subprime mortgages, but down the road it might be from the middle-class.’”

The Bakersfield Californian. “The company formerly known as Crisp & Cole Real Estate Inc. is in the midst of reorganizing and downsizing as the local housing market continues to cool.”

“‘It’s a result of the downturn in the market in Bakersfield,’ said Jack Doremus, the former broker of record at Crisp & Cole Real Estate. ‘People are losing their jobs everywhere.’”

“Doremus said he resigned from Crisp & Cole in late March after Crisp told him and five others with high salaries that Crisp could no longer pay them. ‘He said, ‘I can’t make payroll for you guys.’ So we left,’ said Doremus, who said he has remained good friends with Crisp.”

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Comment by Ben Jones
2007-05-08 13:24:06

‘One Central Valley County has topped all others in the nation for the percentage increase of bank repossessions, says San Joaquin County leads the nation with a 1,056 percent increase in number of REO filings year-to-date compared to the same period in 2006.’

‘Sacramento County has seen pre-foreclosures jump 197 percent in the first quarter compared to last year. Auctions are up 383 percent, and REOs soared 989 percent.’

‘For the year to date, California leads the nation in pre-foreclosures with 65,208 filings or 5.7 per 1,000 homeowners, and also in auction filings with 33,045 or 2.9 out of every 1,000 households.’

Comment by mrincomestream
2007-05-08 14:10:50

Those numbers are getting pretty hefty and it’s early… Will be interesting to see what fall brings.

Comment by flatffplan
2007-05-08 15:46:45

91 to 97 to peak in ca last time

Comment by SDMisfit
2007-05-08 16:16:03

I finally saw two “bank-owned” signs on homes for sale while I was wandering around on other business. One was in Lake Forest (Orange County) while the other was in San Diego. I don’t know why they want to advertise that its a repo by putting “Bank Owned” in red letters at the top of the for sale sign. Seems like that information would strengthen the buyers hand.

Comment by AZ_BubblePopper
2007-05-08 16:34:27

They need desperately to stand out from the crowded field. These are MUST SELL properties and want to see ANY offers as carrying costs and REO numbers on the books worry regulators and the shareholders. Expect to see many more as they crowd out regular sellers…

Comment by DannyHSDad
2007-05-08 17:49:46

Here’s a sad ARM reset story:

“Exotic-animal shelter on brink of extinction”

Although the Almquists and the charity are looking at ways to increase income, they’ve run into a financial pothole many families now face.

A few years ago, they refinanced their manufactured home and the property, in part to make improvements to the sanctuary.

They did it using an adjustable-rate mortgage, and now their house payment has jumped 50 percent in the past year, from roughly $1,300 a month to about $2,000.

For information on the sanctuary, including photos and how to donate, go to

Comment by txchick57
2007-05-08 18:03:58

Thank you for posting that. I will donate a large amount.

Comment by Tulipsalloveragain
2007-05-08 19:42:07

Um, how do we know that isn’t Michael Jackson’s ranch?

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Comment by Mole Man
2007-05-08 21:15:05

Because they are a 501c3 charity it should be possible to confirm what you need by looking up their encorporation and if necessary using that to investigate further. Visiting and speaking directly with operators is often the best and sometimes the only way to be entirely sure of what is going on with a charity. If this institution endures, then some of the animals from Neverland might make it here when it ends up being converted to a dairy farm or whatever.

Comment by tj & the bear
2007-05-08 20:07:40

You’re a saint, tx!

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Comment by Rich
2007-05-08 20:34:34

The home value drops have barely started and there are like 5 homes in foreclosure on most any street I look up here in Stockton. This is gonna be brutal after next summer when there will be little doubt left about the state of RE here. Once the banks are drowning in these POS I have little trouble forseeing $1,100/mo rentals selling for less than $80k at the courthouse auctions. I’ll bet that the trashed ones will be selling for less than $50k.

Watching these “investors” must be similar to seeing frogs in a frying pan. The ones that had any skin in this are cooked. Those that used 100% financing and stand to lose nothing are the ones that piss me off, they need to be taken behind the tool shed.

Comment by BanteringBear
2007-05-08 14:03:34

‘San Joaquin County leads the nation with a 1,056 percent increase in number of REO filings year-to-date compared to the same period in 2006.’

LOL. Now we’re talkin’!

Comment by polly
2007-05-08 15:48:22

What does REO stand for?

And while I’m at it, FB wasn’t hard to figure out. But what is a GF?


Comment by mrincomestream
2007-05-08 15:57:22

REO - Real Estate Owned ie: bank owned property
GF - Greater Fool

Comment by polly
2007-05-08 16:00:04

Thank you.

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Comment by carlivar
2007-05-08 16:11:59

I’ve never understood “REO”. Real Estate Owned? So the real estate owns itself?

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Comment by gwynster
2007-05-08 16:31:24

Someone said it should be BORE for Bank Owned real Estate which I agree with.

Comment by RJ
2007-05-08 17:33:16

Perhaps it’s just a glimpse into the looking glass world of bankers. After all, real estate isn’t “owned” until the bank is paid off (satisfaction of mortgage).

Comment by azstone
2007-05-08 20:55:24

“Real Estate Owned” - it’s from the terminology used to describe real estate that a bank has repossed and is being carried as an asset on the bank’s balance sheet.

Comment by waiting_in_la
2007-05-08 17:17:15

WOW - a newbee !!!

Comment by ajas
2007-05-09 10:20:39

For the longest time I thought FB meant First-time Buyer. I thought you guys were just really anti-young people. I thought, hey I guess a lot of those are the subprimers contributing to the problem, but man, the people on the blog are mean.

Comment by house_boken
Comment by turnoutthelights
2007-05-08 14:10:30

Amazing. Simply amazing. Lereah bolts, and they replace him with another LAY - LArence Yun. Just too much fun.

Comment by mrincomestream
2007-05-08 14:14:17

Those Downtown projects are going to empty a lot of pockets and end horribly. Skid Row must be chomping at the bit for all that new “affordable” housing coming down the pipe. They are going to have to solicit the feds again for more Section 8 vouchers when it’s all said and done.

Comment by lainvestorgirl
2007-05-08 14:28:21

Are all those other new condos around Disney center even filled up yet? I can understand wanting to be close to your job and all, but I can’t believe there is so much to live in downtown LA, it’s so depressing there even during the day.

Comment by mrincomestream
2007-05-08 14:35:12

No, they haven’t filled up and are losing value daily. I spoke to someone recently who said they were 30 grand in the hole already without having to pay commission.

The only way Dowtown L.A. becomes viable for anything other than a homeless is to rid the city of illegals, Skid Row, and the A.C.L.U.. If not it will continue to be the worthless pit that it is, I continue to be amazed that any for profit entity continues to conduct business down there.

Comment by palmetto
2007-05-08 15:25:14

Heckuva job, Antonio!

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Comment by sm_landlord
2007-05-08 16:20:32

There is one thing that downtown LA seems to be good for, and that is telecommunications equipment. A number of large buildings that used to be offices are now packed full of servers and routers - One Wilshire, the Garland Building, and 530 W. Sixth are examples. This concentration of equipment works because of the huge expense of running fiber under streets and into buildings - so everyone takes the servers to the fiber, and there’s a lot of it terminating in downtown LA.

I can’t imagine living or working in downtown, though. It’s miserable to get in and out, miserable to park, miserable to walk, filthy, smelly, noisy, and full of low lifes.

How filthy is it? If the streets get wet, the EPA has to declare a water pollution emergency.

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Comment by Thomas
2007-05-08 16:40:51

“A number of large buildings that used to be offices are now packed full of servers and routers - One Wilshire…”

Hmph. Yet another reminder that my firm isn’t quite major league (as if their pay weren’t enough). The LA office is in a glorified telephone exchange.

Comment by sunsetbeachguy
2007-05-08 20:33:27

Don’t forget electricity is the 2nd cheapest in the state in downtown LA.

That one of the real reasons. They are saving millions annually compared to Long Beach, Irvine, San Diego or San Francisco.

Comment by sirimiri
2007-05-08 20:50:43

I actually like working in Downtown LA…I’ve been there on and off since 1999. However, the asking prices for condos there are an absolute farce.

Come to think of it, so are the rents!

Comment by lmg
2007-05-08 21:36:01

Maybe NSA servers and routers for illegal wiretaps….as they say, there’s always a way to make a buck, even if Armageddon’s approaching.

Comment by oc-ed
2007-05-09 10:18:12

I worked at One Wilshire in the mid 90’s at a Telco Switching center. They had a full blown Nortel switch on one quarter of one floor with backup batteries (tons of weight). Traffic in and out of LA was not bad if you left OC before 0600 and headed back before 3 pm. That is because commuters are serious drivers and know where they are going. Only took an hour to make the 45 miles each way. Going out for lunch was fine with lots of interesting places to grab a bite. Night shift was a different story as downtown is kind of scary at night.

Comment by Michael
2007-05-09 12:33:24

“The only way Dowtown L.A. becomes viable for anything other than a homeless is to rid the city of illegals…”
It does not work like this. It must be economically worth to live in a high rise near public transportation, rather than in a suburb. However, it will happen quite soon. I guess the break point is about 8-10$ per gallon in today money in California that will make it. People will leave their decaying McMansions and hammers to “illegals, Skid Row, and the A.C.L.U.”. Middle class will move into inner cities. That happened in New York. In early 80th Greenwich village, Soho, even Westside were not much better than LA downtown.
The question when we gonna have 8$ gas. It may be quite soon. Any major oil production decline in the Middle East is likely to cause it, since California oil reserves are quickly depleeting, the electrisity grid is outdated and unreliable in USA, nobody will ship coal to California from West Virginia, and it would make much more sense to sell oil from Alaska in China than in California.

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Comment by gwynster
2007-05-08 14:57:50

The thing is I can see demand, just not in the price range they need to make it work. Downtown needs affordbale housing, not glam condos.

These people have no clue who their real market is.

Comment by mrincomestream
2007-05-08 15:02:44

They do but there’s no money in it so they believe.

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Comment by Groundhogday
2007-05-08 15:13:51

There is money in it, just not “I’m going to be a millionare next year” kind of money. Working hard to make a living wasn’t part of the “go-go” mentality of the RE boom.

The funny thing is that you see this same pattern EVERYWHERE? Luxury downtown condos sit empty in Bozeman and Boise. Dozens of very high end luxury homes sit empty in Pullman, WA while people who work here struggle to find a decent house to buy or rent. THey are even building McMansions in St. Joseph, IL … in the middle of thousands and thousands of acres of corn and soybean fields.

A decent well-built place to live: who needs those?

Comment by mrincomestream
2007-05-08 15:45:45

Yeah, you’re right but see that’s the thing, the greed factor is out of control all across the board. When I first came into this business a guy was happy if he made 10-25k on a flip or 5-7 grand on a loan. But now everyone wants the home run and not just in the REIC it’s across the board whether it’s a company shipping jobs overseas to pick up a few million in cash flow or the consultant who skips all across the country for 3-5k a year annual increases in jobs to the bloggers here who want to pick up the Playboy Mansion for a 100k (well, they’d have to beat me to that one but you get the point.).

The genie is out of the bottle and it will be interesting to see how in the land of capitalism, how the greed factor will be reeled in… Everyone has a theory but it will be interesting to see what actually happens.

Comment by gwynster
2007-05-08 15:56:25

I think you are right are track. Everyone seems to have such big expectations these days.

Me? I’m just your average chick who wants a house close to work. Apparently that’s like asking for the cure for gravity.

Comment by pismoclam
2007-05-08 16:20:20

As long as M-3 is still being pumped at a 10% rate and as long as the real inflation rate is 6.5% (John Williams-Shadow Government) Not to worry .

Comment by Annata
2007-05-08 16:29:43

There is also no money in building luxury condos when you can’t sell them…

Part of what these developers are selling is the amenities that are supposed to be available in a vibrant downtown area. The catch is that in order to have these amenities you need the workforce to live near the area. You can’t build a vibrant downtown area by building exclusively luxury condos. The people who buy $500,000 condos are not gonna be working at the local coffee shop.

Developers predictably cry about cost of construction. I find that pathetic. Henry Ford figured out a way to turn a former high-tech luxury product into a household appliance that almost everyone could afford – and he made a fortune on it. Far more difficult things have been accomplished than making a profit by providing workforce housing.

Comment by sf jack
2007-05-08 17:48:44

Speaking of condos… below is a link to an article in today’s SF Chronicle about the Mission Bay Project in San Francisco.

Lots of talk about drab architecture and the project not meeting its aesthetic potential… though it appears to have a much better future in many aspects than Downtown LA, according to comments made here at the HBB.

However, what the Chronicle article neglects to mention is that most of the condos in the buildings pictured are empty (see also the video). Some of these were completed several years ago. As well, there are many more condos under construction or planned in this new neighborhood and in nearby ones; I imagine they could end up as apartments (until the next bubble, perhaps).

I say: “San Francisco Mission Bay/Potrero/South Beach condos for everyone!!”


Comment by Gwynster
2007-05-08 20:34:46

I like the Glassworks building, too bad it’s in SF. I used to love SF, did my undergrad there but now it’s become too pretentious.

Comment by Mugsy
2007-05-08 17:43:48

I’m thinking “Blade Runner”.

Comment by sm_landlord
2007-05-08 18:17:26

I git your Blade Runner right here in LA:

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Comment by Gwynster
2007-05-08 20:45:56

Love that building! It’s right up there with Gaudi’s La Pedrera in my book.

Comment by lmg
2007-05-08 21:41:09

The Bradbury is famous beyond just being a setting for Blade Runner.

One of the best episodes of Outer Limits was “Demon with a Glass Hand”, written by the great sci-fi author Harlan Ellison, and starring Robert Culp. It was set entirely in the Bradbury Building. The episode was done so well, that the Bradbury became almost an uncited cast member.

Comment by peter m
2007-05-08 20:07:55

“Are all those other new condos around Disney center even filled up yet? I can understand wanting to be close to your job and all, but I can’t believe there is so much to live in downtown LA, it’s so depressing there even during the day. ”

The one thing that Dwtn LA that stands out is it’s lack of walkable shady parks and charming Historical Plazas(Olivera Hist District is a degenerated area). It is esentially all paved concrete autoramps shooting off the 4 fwys or dense milling throngs of workers and assorted pedestrians along Broadway/sixth/fifth/main, ect during the day. At night dwtn emptys out and out comes the homeless and street-wise immigrant Hispanics walking/cruising the empty dwtn mean streets.
LA Dwtn is basically ringed by nasty slum edge districts which intrude upon the dwtn. Even the Garment/fashion district is quite seedy and overrun with derelects, homeless,and illegals. This during the day.
East of San pedro/main streets is the Warehouse District which runs all way to the LA River. Some really filthy sewage-strewn streets and slummy 100+yr old decaying industrial bldgs are here, though it is a beehive of activity for produce and garment warehouses/shippers.
Al this does not bode well for anyone thinking that DWTN LA will be some kind of magically transformed land of Oz for Yuppies owning swanky 1/2 to 1 million$ condos. Think again.

Comment by Slowkey
2007-05-08 22:47:20

Best description I’ve seen yet of downtown LA (where there’s at least a 50% chance that the fly-swarmed feces you step around is human)

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Comment by Its Crazy Credit!
2007-05-09 05:27:41

I stepped around a dead body on the sidewalk once in Downtown LA. Cops didn’t even really care. I would say it is probably beyond hope.

2007-05-08 14:45:58

I’m really anxious to see what happen to the downtown highrise condo market in Chicago between now and 2010. There is SOOOO much in the pipeline. Every building advertises as 50% or more “sold”. The may be “sold” but they haven’t been closed on yet. I believe people will be bailing out of these things like rats off the Edmund Fitzgerald.

Comment by gwynster
2007-05-08 15:00:51

“At 7PM a main hatchway caved in”… make that 2007

Comment by Giacomo
2007-05-08 15:21:46

I’m nearly 50 (born in L.A.) and businesses have been leaving downtown for most of my adult life. I think of it as an area one sneaks into (under cover of darkness) to go to the theater or to see a ballgame - then you get the heck out. As a lost cause, it ranks second only to the Los Angeles Unified School District.

Comment by Cayci in OC
2007-05-08 16:33:49

Indeed. I’m only there to see shows at the Ahmanson or Mark Taper Forum. In fact, recently was the first time I had ever really seen downtown other than the Music Center when we had dinner at a local restaurant/hotel before the show. I would consider living there if I worked there since I appreciate city living, but as a long-term thing with family? No way.

Comment by Bill in Carolina
2007-05-08 19:00:26

I’m getting a chuckle over these descriptions of L.A. Last week the posters were slamming Charlotte, N.C. Next week what- the Emerald City?

Where WOULD you all like to live?

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Comment by agitated in sd
2007-05-08 19:19:28

sedona, az

ashland, or

arroyo grande, ca

and if worse came to worse i’d settle for del mar, ca.

Comment by az_lender
2007-05-08 19:25:22

Pasadena is much more attractive (for living in) than downtown LA. So are some places on LA’s westside. The California state income tax structure doesn’t suit me personally, so I’ll probably be in PA next fall and spring.

Comment by cassiopeia
2007-05-08 21:32:48

Pasadena is truly lovely, but the air is bad.

Comment by sleepless_near_seattle
2007-05-08 18:16:46

Is your first name Sally?

“I’m 50!!”

Comment by peter m
2007-05-08 19:14:50

“Those Downtown projects are going to empty a lot of pockets and end horribly”

They wiil have to bring down those Dtwn Condo units to affordable levels of under $300,000 to get large numbers of folks to consider getting a unit in the generally unattractive grimy LA Dwtn. There really isn’t one area of dwtn which is even remotely attractive as walkable territory. Little Tokyo/Union Station/Oliveras Historical District does not cut it(too Many Homeless). South Park/Grand Ave near Staples Ctr has seen a bursts of hi-rise construction activity but that area still quite gritty especially down by the 10 fwy underpasses.
The Current razing.teardown and redevelopemt of Central city West(evident along Wilshire jusr west of the 110),
has to deal with clearing out the slums of Pico-union, a slow process when dealing with immigrant hispanic Housing activists. Still a generally filthy slum area.
The last area of current/projected hi-rise multi-units is the northwest Quadrant just west of Civic center near the proposed Grand Ave Project around Disney Concert Hall.
This area is the most promising as the immediate slums west of the 110 and in Chinatown are either easily clearable thru emminent domain and/or do not have as many homeless to deal with.

Comment by OB_Tom
2007-05-08 14:17:43

Bob Casagrand on San Diego:
March 2007: 1st Quarter 2007: San Diego Housing Market - single family attached and detached homes: Sales for the month of March were 2,361 down 24% from March 06 and down 39% from March 05. Pending sales in March of 2,769 indicate that April sales will be around 2,500 continuing this period of sluggish sales. Sales for the quarter were 6,189 down almost 15% from last year and down 30% from the same period in 2005. If trends hold, the first quarter sales indicate that sales for the year could end up well below the 30,000 mark. There are market issues that make predicting risky. The lack of availability of sub-prime loans will knock a substantial number of buyers out of the market, the increasing number of foreclosures putting more homes on an already crowded market and the continued outward migration of people from San Diego will have the effect of suppressing sales and increasing inventory. The need to sell is also increasing, we have seen more short sales close escrow so far this year than in all of last year and about 8% of our current inventory is listed as short sales. All of this put together will put serious downward pressure on prices.

While the smaller sized home sales dropped 30% and prices dropped about 10% the high end of the market (over 3000 sq ft) remains strong with no decrease in sales and prices remaining flat with last year. The average price for March came out at $636,000 up 2.6% from last year. However, adjusting for the change in sales mix to an increase in larger homes the average price actually declined about 7% from last year. The over 3000 sq ft homes represented 24% more of the sales mix in March and the under 1000 sq ft homes were 8% less of the sales mix having a major impact on the average price calculation. The change in price depends on the home you live in, price declines ranged from 2.5% to 10% depending on the size home with over 3,000 sq ft remaining flat.

Inventory ended the month at 18,373 over 7 months supply. This is an increase of 15% from last year at this time. Expired, cancelled and withdrawn listing so far this year number 10,603 versus 4,618 last year, a 230% increase. This is a good indicator of the difficulty people are having selling their homes. Listings for the quarter were 20356 down about 3% from last year. With sales down 15% this is resulting in growing inventory.

With declining demand, increasing inventory, increased foreclosure rates/short sales and continued population outward migration the balance of this year will see serious downward pressure on prices and the further the drop in demand the more the pressure will intensify.

Comment by Bearnanke
2007-05-08 15:44:57

If a home is forclosed is/can it also be listed on the MLS as a short sale? The reason I ask is that currently (ziprealty and we’re running 20% of inventory is forclosures. Add in 8% for the short sales and your almost 1/3 of houses are forced sale, not just “need to sell”!!!

Comment by sleepless_near_seattle
2007-05-08 18:21:59

I think they’re two separate things, meaning that a short sale is a remedy to sell the house, whether it’s in the process of foreclosure or not.

Comment by aladinsane
2007-05-08 14:18:08

so cal looks so so @ best…

Comment by lainvestorgirl
2007-05-08 14:30:21

Some price reductions around SM:

POW Login Page:
reporteddate: 2007-05-07 17:47:32Price Change - Decrease $799,000 3 Beds 1.00 Baths

MLS Number
3778 colonial ave,los angeles, CA 90066
Area: Palms - Mar Vista
Listed 13K below appraised value! Beautiful remodel w/great attention to detail. Enjoy cooking in the spacious, open kit while conversing w/friends at the breakfast bar. Relax in the spa tub in the lrg bthrm, which features fantastic tile work & upscale sink vanity. Original thin slat,white oak,hdwd flrs add to the warm,comfortable feel of this great home. 3rd bdrm has 2nd outside entrance which makes it perfect for a home ofc or roommate.Plenty of parking & lot of upgrades.All this & a cozy,pvt


Property Type: Residential-Single Family
Rooms:Breakfast Bar,Dining,Living,Pantry
Equipment:Built-Ins,Ceiling Fan,Dishwasher,Garbage Disposal,Range/Oven

reporteddate: 2007-05-07 16:35:04Price Change - Decrease $649,000 2 Beds 1.00 Baths

MLS Number
844 california ave,venice, CA 90291
Area: Venice


Property Type: Residential-Single Family

reporteddate: 2007-05-07 14:39:37Price Change - Decrease $995,000 4 Beds 4.00 Baths

MLS Number
4275 moore st,los angeles, CA 90066
Area: Palms - Mar Vista


Property Type: Residential-Single Family
Rooms:Breakfast Area,Family,Living

reporteddate: 2007-05-07 12:39:41Price Change - Decrease $875,000 3 Beds 1.50 Baths

MLS Number
3622 mclaughlin ave,los angeles, CA 90066
Area: Palms - Mar Vista


Property Type: Residential-Single Family
Rooms:Breakfast Area,Den,Dining,Dining Area,Family,Living,Patio Open

reporteddate: 2007-05-07 10:09:52Back On Market $679,000 3 Beds 1.75 Baths

MLS Number
3608 clarington ave,los angeles, CA 90034
Area: Palms - Mar Vista


Property Type: Residential-Single Family
Rooms:Breakfast Bar,Dining,Family,Living

reporteddate: 2007-05-07 09:50:55Price Change - Decrease $1,038,000 4 Beds 3.50 Baths

MLS Number
3665 stewart ave,los angeles, CA 90066
Area: Palms - Mar Vista
Remodeled 2 story home on a quiet cul de sac street in Mar Vista. Great floor plan. Three bedrooms two baths up and one bedroom and one and half bathrooms down. Lovely kitchen with granite counter tops; remodeled baths. Features include hardwood floors, central heat, French doors, wood burning fireplace, recessed lights, large attic, & a walled and private back yard. Move-in condition. Easy to show. Seller selects services.


Property Type: Residential-Single Family
Equipment:Dishwasher,Garbage Disposal,Microwave,Range/Oven

reporteddate: 2007-05-07 10:10:25New Listing $949,000 2 Beds 1.50 Baths

MLS Number
724 navy st,santa monica, CA 90405
Area: Santa Monica
Great location in Ocean Park Neighborhood just blocks to Main Street and the beach! Completely renovated with new kitchen, granite counters, stainless appliances, and bamboo floors. The architecturally designed master is bright and has over-sized French doors that open into the yard. Open Tuesday May 8, Thursday May 10, and Sunday May 13.


Property Type: Residential-Single Family
Equipment:Dishwasher,Dryer,Garbage Disposal,Hood Fan,Microwave,Range/Oven,Refrigerator,Washer

reporteddate: 2007-05-07 19:28:16New Listing $685,000 # of Units: 2
MLS Number
12040 culver,los angeles, CA 90066
Area: Palms - Mar Vista
This is an investors delight. The duplex has been completely gutted and the remodel is only partially completed. Bring your buyers that are interested in completing a remodel. There is a permit that was pulled to do the remodel. This property is in NOD. The property is vacant. Each unit is 1 bedroom and 1 bath. There is parking behind the units with alley access.


Property Type: Residential-Income

Comment by mrincomestream
2007-05-08 14:39:14

All hopelessly overpriced. It would be interesting to see what the original asking price was before the reduction. I don’t care enough to look it up. But it’s always funny to see the 5k price drops. Makes you wonder how prevelant ghanja is in this city.

Comment by BanteringBear
2007-05-08 14:45:35

“Makes you wonder how prevelant ghanja is in this city.”

I was thinking more along the lines of LSD.

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Comment by txchick57
2007-05-08 14:48:08

Walked the beaches in Santa Monica lately? LOL, you’ll get your answer.

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Comment by mrincomestream
2007-05-08 15:01:54

Went to dinner and a movie near 3rd St. Close enough to the beach for me… The place is a mess, homeless everywhere, gang-bangers… If i had not known I was in Santa Monica I would have sworn I was in the neighborhood of one of my ghetto palaces. For anyone too pay Santa Monica’s current prices you’re mixing crack, heroin, meth, and LSD all the while washing it down with a lukewarm bottle of Thunderbird.

Pure nonsense, complete idiocy.

Comment by sm_landlord
2007-05-08 16:25:11

Agreed. Downtown Santa Monica is disgusting. I used to walk over to the Promenade at least once a week to browse the bookstores and get some lunch. I also used to enjoy walks on the Pier. No more, it’s just too depressing to see what a mess they made of it. As you say, gangs and homeless as far as the eye can see and the nose can smell.

Comment by mrincomestream
2007-05-08 17:09:14

Yea, it’s a real shame what that has become… When I was a kid that was a beutiful place. Screwed by their own NIMBYISM. A little too liberal for their own good.

Comment by formerlahomeowner
2007-05-08 18:28:38

Hey guys. Stop dissing Santa Monica. There was a post several weeks ago that only rich people live there, and if you cannot afford to buy in Santa Monica, then you better get out of California. Who cares about the other cities - Santa Monica is the center of the universe.

Comment by LILLL
2007-05-08 20:09:34

From Santa Monica to Venice Beach…a freak show
…But mildly entertaining.

Comment by lainvestorgirl
2007-05-08 20:39:05

Yeah, SM is really horrible, awful, an abysmal pit, don’t even think of moving here, please, save yourselves while you still can…

Comment by sm_landlord
2007-05-08 21:16:46

Hey lainvestorgirl:

Here’s a little charmer in SM for you. A fulsome 576 sq ft house for only $869,000.

Comment by peter m
2007-05-08 22:22:01

“Agreed. Downtown Santa Monica is disgusting. I used to walk over to the Promenade at least once a week to browse the bookstores and get some lunch. I also used to enjoy walks on the Pier. No more, it’s just too depressing to see what a mess they made of it. As you say, gangs and homeless as far as the eye can see and the nose can smell”

Santa monica Is paradise compared to 95% of LA Countys neighborhoods and cities/districts. Try taking a drive from LA Dwtn along broadway st or main st south all way to the 105. Or take Slauson,Florence or Vernon east or west off the 110
10 miles either way. Or try Ceasar chavez/Whittier Blvd thru East LA. Or valley blvd thru the city of Industry. There are literally tons of begrimed, ragged, Tijuana Barrio hoods strewn throughout the lovely City called LA.
If Santa monica Has problems with Gangs and homeless, Long Beach is 10 times worse. We have a rotted out inner city hood region immediately sorrounding LB DWTN that Make SM lookm like the French Riviera.
Looks like the LA Gangs just got the Green light judging by the stupid reaction of LA city leaders and the MSM in coming down rather harshly on the LAPD for it’s handling of the rioters at MAcArthuer park. ThE LAPD will go into standdown mode as a result and LA County crime rates will skyrocket. It;s everyone for themselves: the City leaders did not back up their LAPD and showed that the Radical leftists/ anarchists/pro-illegal hispanic activists have the City of LA in their hip pockets.

Comment by Homer
2007-05-08 23:33:14

Have to agree with lainvestorgirl on this. All of those idiots bidding up the housing prices in SM especially should look elsewhere. You don’t know what kind of a hellhole you are trying to buy into. Beleive me, I know. I’ve been living here for over 20+ years. Willingly! I’m guess I’m just a glutton for punishment.

Comment by peter m
2007-05-08 21:54:28

“Some price reductions around SM”

To Lainvestorgirl,

This is your area:Venice, Palms, Mar vista, ect so i cannot presume to know it as well as you do but it seems that these properties still waaaay overpriced. Cm,on, were not talking Brentwood or Beverly hills. This Is Mar Vista. which is rapidly being overrun with multi-units Galore, and has some parts degenerating into section 8 slum apt districts. Ditto for Palms and even a few parts of Venice and even S/east Santa monica. That Navy street is near corner of Lincoln/Rose, which is a bit begrimed and ragged.
The addresses in 90034 off Venice are not all that upscale, and in fact are quite mediocre neighborhoods bordering Venice Blvd, which gets quite seedy along that stretch.
Moore might be okay but still overpriced. Have problems with the California ave Location, which is close to the gang-infested Oakwood section of Venice .

Not to say there aren’t lots of stlll well=kept up neighborhoods of Tidy SFH’s in Palms-Mar Vista but you have to pick and choose and carefully consider the surrounding areas. Lots of Teardowns, conversions, apartmentalizations, Downzoning going on all over Mar vista/Palms, which generally bodes ill for the Neighborhood Ambience,

Comment by speedingpullet
2007-05-09 07:36:33

Lainvestorgirl - I saw the Navy St one as a new listing on ZipRealty yesterday.

What they don’t mention is that the house is 850 sq ft on a 2000 sq ft lot. And that its in the most touristy part of SM/Venice - hence you will have literally no privacy at all for 8 months of the year, as hordes of people walk past your tiny house at all hours of the day and night.

What a bargain at just under a million dollars….(not)

Comment by tl
2007-05-08 16:58:19

Well, here’s one home that bucked the trend…

My friend had his home in Echo Park featured on that show called “How Much is My House Worth?” (or whatever it’s called). He was told it was worth about $950K. This was last month.

His house is beautiful, but it’s on a crappy little street with a bunch of Mexicans piled into at least on of the other homes on the block. His agent listed his house for $1.9M anyway, and it sold in five days for $1.3M. Amazing.

While I congratulated my friend, I feel sorry for the poor schmuck who bought the place.

Comment by mrincomestream
2007-05-08 17:11:02

1.3 mil for anything in Echo Park is complete lunacy.

Comment by Its Crazy Credit!
2007-05-08 19:42:24

thats no joke - scary area, at best

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Comment by the_voz
2007-05-08 19:51:40

finance it!

Comment by peter m
2007-05-08 23:03:48

“1.3 mil for anything in Echo Park is complete lunacy”

Whoever purchased that house must be a complete Moron as far as knowing LA RE locational aspects. Or this purchaser must like extreme diversity and adventures in urban living. Echo park has the third-world pockets along sunset/alvarado/glendale blvd and along the 110 fwy but it is also 10 minites from LA DWtN and is next to one of the very few decent large parks anywhere in the immediate dwtn area, Elysian Park. In anycase, 1.3 mil is nuts for that area which is immediately adjacent to the slummy Rampart and China town districts.

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2007-05-08 17:12:30

Where else can you pay a million dollars for a house and get a $1 taco from a roach coach out front?

Comment by plysat
2007-05-08 17:21:14

Buyers in L.A. are completely, certifiably insane. What the hell is gonna stop this? Who is buying this stuff?

Comment by sm_landlord
2007-05-08 17:45:15

I don’t know who’s buying or why, but man oh boy, there is going to be some impressive wailing and gnashing of teeth as this all falls apart. The FBs still buying in LA had better be praying for hyperinflation, because that’s the only thing that can save them now.

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Comment by mrincomestream
2007-05-08 17:49:48

Spot on…

Comment by Neil
2007-05-08 18:14:18

Nothing will save the buyers in LA. Hyperinflation will not increase salaries enough in two to three years.

I think long term there is a risk of hyperinflation. But short term… when people are hungry for work, any work, they accept lower and lower wages.

We’ve heard about it in construction.

I’m starting to get a lot more phone calls for engineering jobs… Hmmm… What’s up… the economy is booming!

I think this will turn rather fast. I wish I knew when, but its turning.

Got popcorn?

Decline into 2009! ;)

Comment by plysat
2007-05-08 18:35:09

I wish I knew when too, I’d really like to buy a house, but no way in hell am I gonna pay these prices, or anything close. I’m so f-ing tired of all the “it’s special, there’s lots of money here, prices won’t go down cuz LA’s like London or NY now” BS that I keep hearing. I can’t wait for some San Diego style drops to occur here. The GF’s must be weeded out! :-)

Comment by Gwynster
2007-05-08 18:38:41


People with real skills are leaving CA in significant numbers so employers are working hard to replace those losses in their workforce. The knowledge workers and skilled labor in places like LA will be sought out and recruited vigorously. I see this at work daily. Jobs remain open because no one can afford to move here to work unless UC (and therefore CA taxpayers) initally foot the bill.

BM, if he or she is out there reading, can speak to the UC envirornment in LA better then I. I just know what I see happeneing in Berkeley and Davis.

Comment by KirkH
2007-05-08 19:20:51

LA is actually growing as a venture capital hub for tech and health related startups. And I’d have to agree with the stories in the paper because a VC firm in LA just hired me and I’m having a hell of a time hiring tech talent for less than an arm and a leg.

You’re all forgetting about the wealth divide. Yes people are leaving San Diego and to a lesser extent LA. But the people who remain have money. It’s not enough to say the economy sucks without looking at who it sucks for. The rich people will migrate to the desirable coastal areas and real estate may hold but the inland empire will probably an implosion the likes of which are briefly known only to inhabitants of shoddily constructed submarines.

Meritocracies look good in theory but when the majority of American jobs consist of simple repetitive tasks and software is starting to improve reality starts to look a bit ugly.

We are in the early stages of a long-term shift from mass labor to highly skilled elite labor, accompanied by increasing automation in the production of goods and the delivery of services. Workerless factories and virtual companies loom on the horizon. While the emerging knowledge sector and new markets abroad will create some new jobs, these will be too few to absorb the millions of workers displaced by new technologies in the manufacturing and service sectors. Although unemployment is still relatively low, it can be expected to climb steadily and inexorably as the global economy catapults into the Information Age over the course of the next half century. Every nation will have to grapple with the question of what to do with the millions of people whose labor is needed less, or not at all, in an ever more automated global economy.

Comment by Chrisusc
2007-05-08 19:34:35


in the short-term I agree with you, but over the span of say, the next 20 years, you will definitely see a global revolution or insurrection by the poor peoples (under your scenario). There is no way that a handful of rich people can control billions of starving poor people. I figure they will just unleash a plague or something to thin the ranks a bit…

Comment by KirkH
2007-05-08 19:45:12

@Chrisusc Why do you think we’re funding good press for the Real ID Act?

That was a joke by the way, I’m not part of the secretive global banking cartel :)

Comment by cactus
2007-05-08 19:57:32

Technology is replacing many workers and will continue to do so…. Like what happened on the farms 100 years ago. VC money is yours from overseas ?

Comment by KirkH
2007-05-08 20:17:23

Money is from San Fran through an LA VC firm in Pasadena… It’s not like what happened with farms. You could transition from repetitive cow milking to paper shuffling. The knowledge economy kills repetition.

Comment by Neil
2007-05-08 20:31:05

I agree that coastal areas are going to higher wage jobs and that technology will displace a huge chunk of the low-skill workforce. (e.g., maid? Why, I have a Roomba and love the thing.)

But home prices to salaries are at 11.0X income (down from a peak of 11.4X). That is unsustainable. Right now workers in the 1.5X to 2.5X median wage are the group that seems to be leaving.

BTW, I do agree it will get worse for the unskilled. As the workplace computerizes, there is less need for low talent labor.

I had a meeting with several engineers from a competitor whom were bragging about the increases in manufacturing efficiencies they were seeing… They were shocked when I laughed at what their goals were: not ambitious enough. The “force multiplier” for automation they were using was far less than what was already common with certain companies!

I’ve seen the statistics on the debt the “knowledge workers” are taking on to live in the coastal areas. Many will be ok… Many will struggle but come out fine… Many are going to crash and burn. Cest la vie.

Got popcorn?

Comment by GH
2007-05-09 06:05:50

If you could put them all together in one place, I probably have a team of 5 full time chinese people making the crap I buy. What real reason is there that we need to keep the “work ethic” you are your job economy going at all? If no one is needed to work, why should one’s worth continue to be tied to an age old idea?

Comment by Arizona Slim
2007-05-08 17:34:03

But those Mexicans piling into houses are doing work that American house-pilers won’t do!

Comment by Another PS
2007-05-08 18:22:15

I think the problem is there just aren’t enough Americans willing to house-pile.

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Comment by BubbleWatcher
2007-05-08 20:19:21

This may change soon.

Comment by turnoutthelights
2007-05-08 14:19:42

LA, Florida, San Diego and Arizona make for great copy, given the amount of people involved. But at some point, when the true horror stories of crashing values and a housing-based depression are written, it will be of the Central Valley. This spring selling season isn’t just quiet here, it is absolutely silent. for instance, YOY sales in Merced County (per DataQuick) have fallen to 25% of last year’s numbers. Hundreds of houses were bought at 8 to 10 times salary’s, and 40% were sub-prime. From Bakersfield to Yuba City a crater is forming and nobody’s talking - yet.

Comment by Mo Money
2007-05-08 14:23:18

People are still buying new construction in AZ, I know that for a certainty.

Comment by crisrose
2007-05-08 17:08:26

Yes, my dumba$$ step-sister with an 80/20 is one of them.

Comment by aladinsane
2007-05-08 14:38:44

It’s going to get ugly in the Central Valley, just as the heat is being turned up a few notches…

Comment by the_voz
2007-05-08 19:53:47

when people are eating fish from the cali aquaduct (you know the one that drains lakes) it’ll be too late.

Comment by Gwynster
2007-05-08 20:28:28

People fish the central auqaduct all the time. Just travel the 5 between Patterson and Bakersfield.

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Comment by the_voz
2007-05-09 06:11:42

fishing for sport and fishing for food are two different animals.

Comment by shadash
2007-05-08 14:42:04

Who do you think bought in the Central Valley?

Hint, hint…
SF, Sac, LA, and SD

Comment by crispy&cole
2007-05-08 14:45:58

Right on!

I see the NOD’s everyweek. A significant number are “investors” from San Diego COunty, Orange County, Ventura County and LA County

Comment by turnoutthelights
2007-05-08 14:52:47

In 2003, 2004 van loads of ‘investment clubs’ would scour the valley looking for deals, and since everything they saw was 50% below the Bat Area, they bought like mad. Prices jumped 150% in 4 or 5 years, but now they want out. Sorry, folks…the valley was always poorer, and now it’s in debt too. Kinda reminds me of Hotel California.

Comment by turnoutthelights
2007-05-08 14:54:29

Bat Area. Batty. Yeah, still works.

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Comment by gwynster
2007-05-08 15:57:40

Speaking of Investment clubs, How is Jeff doing?

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Comment by KirkH
2007-05-08 19:34:07

From the SDCIA board:

“Well…as many of you know I own three terrible houses in Cape Coral Florida. Through a series of misjudgments and being taken advantage of (and lied to), I am losing ~$1000 on month on each of these houses when they are rented. I am just sick about them and often cannot sleep–like now.

Anyway, what should I do?”

Comment by the_voz
2007-05-08 19:54:55

i here some “Im a victim” in that little snippet

Comment by gwynster
2007-05-08 15:06:48

When I look at ads for people renting out new homes here around Sacramento, they almost all have BA phone numbers and the asian last names. The people renting out the old crap in Davis are almost all hispanic. There is a really interesting cultural study just waiting to be done here.

Comment by Ken Best
2007-05-08 17:00:16

It would be interesting to study the foreclosure list a few years from now, in term of last names, races, and income levels.

So far, it looks like Fraudie Specs 1 , Banks 0.

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Comment by Not Mssing It
2007-05-08 15:47:53

Who do you think bought in the Central Valley?

Hint, hint…
SF, Sac, LA, and SD

So true. I knew something was terribly wrong back in 02-03 when these dorks brought down RV’s and camped out for a new development opening. I would drive by them every morning on my way to work and stick my head out the window and yell “this is the freakin valley you idiots!!” Man what a bunch of sorry people they are now. You know whom you are buying those Centex palaces in that Craparral division of Visalia.

Comment by Norcal Ray
2007-05-08 17:39:29

A few friends bought 2 to 5 houses each in Sac and the Central Valley over the past few years. They live in the Bay Area of course. At least I was able to talk one friend out of it.

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Comment by KirkH
2007-05-08 19:41:22

I think we should start a thread about all the junk given to us by people we’ve talked out of buying houses near the peak. I’m up a bunch of Padre tickets and a ton of snowboard gear so far from two people.

Comment by the_voz
2007-05-08 19:56:03

dude, sweet

Comment by shadash
2007-05-09 06:06:15


Hi from PB. ;-)


Comment by ex-nnvmtgbrkr
2007-05-08 14:21:09

“anticipate additional media attention which could continue to dampen demand.”

Damn media again.

Comment by Patricia
2007-05-08 16:44:32

That’s what I noticed too. Kind of pisses me off to think the media intentionally held off on reporting this mess, always thought it was the conspiracy nuts saying that, but guess what? Looks like they were right.

Comment by ex-nnvmtgbrkr
2007-05-08 14:24:07

“With a second child on the way, Chris Shields and his wife, Michelle, wanted to move from their two-bedroom apartment in Southern California to a house with more space.”

One word for you Chris: vasectomy

Comment by Chad
2007-05-08 14:29:51

And now they’re “stuck” in that itty bitty apartment, boo friggin hoo. Count your blessings that you have a roof over your head, dingus.

Comment by OB_Tom
2007-05-08 14:32:09

“their credit now isn’t good enough to get a loan to purchase the house they wanted with no money down.”
Two years from now they’ll thank their lucky star they didn’t get that loan. Maybe even boast about what financial geniuses they were, staying in their apartment.

Comment by James
2007-05-08 16:46:54

Its great watching the switch. Right now I am an idiot because I didn’t buy a house.

In a couple of years I’ll be a genius cause I didn’t buy a house.

Sometimes its good to be disinterested.

Comment by Rich
2007-05-08 21:29:48

No, in a couple years you’ll be a genius for several houses. Well, unless your dumb.

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Comment by Rich
2007-05-08 21:31:26

genius for buying several.

Comment by Darrell_in _PHX
2007-05-08 14:34:11

1 word… LUCKY!!!

““Now we’re stuck in the apartment,” said Shields, 31, a firefighter who lives in Manifee, Calif. His wife gave birth to baby Gabriella at the end of March, and they are running out of space without options for a house.”

A couple years from now he’ll be SOOOOO glad he was’t able to buy!

Comment by turnoutthelights
2007-05-08 14:40:23

Make that $000000 glad.

Comment by homoaner
2007-05-08 16:08:16

“His wife gave birth to baby Gabriella at the end of March, and they are running out of space without options for a house.”

If kid #1 was pushed out in March, and #2 isn’t even born yet, they have _years_ before they need to worry about running out of space. Four or five years at least. Toddlers can share a room easy.

My mom and dad married and moved in with his mom right after he got back from WW2. Three kids (plus one on the way) later, they finally managed to buy a lot and build a house. They built it themselves to save money. My mom did finish work while pregnant, my uncles helped my dad with the major construction and plumbing.

Fifty three years later, I own the house. Every square foot was built - and built well - by members of my family. I slept on the floor until I was eleven years old, because we ended up with eight kids in a three-bedroom house. But ya know? - we survived the experience!

Comment by Thomas
2007-05-08 16:51:15

I’m living in a two-bedroom place with three kids, 5, 3, and 1. The kids share a bedroom (granted, it’s a big one), and love it. Seriously — the two youngest (boys) are like a couple of bear cubs, and everybody plays together.

Since when does each precious little Connor or Sierra have to have his/her own room? (Done up, of course, with the latest from Pottery Barn, courtesy of the latest HELOC).

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Comment by crisrose
2007-05-08 17:21:35

Single mother with two daughters and we lived in a one-bedroom apartment until my youngest daughter - who is now enrolled in Stanford - was five.

Yep, her life sure was ruined!

Comment by crisrose
2007-05-08 17:24:02

Should add - we eventually moved into a rented townhouse. But my children never lived in a SFH and I never owned.

It’s a wonder they survived…

Comment by lurker
2007-05-08 17:40:46

We rent a two bedroom and have two toddlers. Their room is under 100 square feet. Everyone we know thinks it is a form of child abuse.

Comment by mrincomestream
2007-05-08 17:47:47

“…Everyone we know thinks it is a form of child abuse…”

LOL, that’s funny

Comment by tj & the bear
2007-05-08 20:59:36

Two of us and two big dogs lived in a 1 bedroom condo for 12 years. NBD.

Comment by Arizona Slim
2007-05-08 17:35:34

Or they could just have an only child.

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Comment by Another PS
2007-05-08 14:41:00

Or they could just rent a house with more space. Or they could venture into the Inland Empire and squat in one of the many empty houses. Plenty of options other than buying.

Comment by az_lender
2007-05-08 19:40:19

Absolutely. Rental prices for houses are much lower than the expenses of owning those same houses.

Comment by LA-Architect
2007-05-08 20:14:06

You haven’t checked out the prices that FB are asking for their piece of crap houses in L.A!!!

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Comment by sm_landlord
2007-05-08 21:28:25

Gotta second that. Rental prices for houses are still crazy high. It’s as if the FBs expect renters to come along and make their insane bubble level mortgage payments for them. Good luck with that plan.

Comment by emcee
2007-05-08 14:42:00

Rent a 3-bedroom or rent a house.

Comment by gwynster
2007-05-08 15:12:06

In some places in CA, landlords are smelling blood in the water and are really increasing rents so moving may not be an option yet. In other places, everyone has gotten with the program and are lowering rents to compete with the increased inventory.

Comment by ex-nnvmtgbrkr
2007-05-08 15:51:39

Blood in the water? Really? Up where I’m at the opposite is true. Every hosed investor all at once got the bright idea to rent out their gator and hunker down until the storm passes. Rentals, rentals everywhere. Local property managers are not even taking rental listings unless they’re reasonably priced. Thus, many self listed “for rent” property signs are littering lawns everywhere. My wife talked with our property manager the other day and the gal said she telling her agents to tell any hot body that walks in the door to name their price, and that they’re flexable. We’re still renting 40 - 50 cents on the dollar here.

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Comment by mrincomestream
2007-05-08 15:55:48

I’m also seeing an increase in For Rent signs in all area’s during my daily treks. Looking at the foreclosure sheets I also find it interesting that a lot of 2,3, and 4 unit properties are going back to the lenders. A lot of interesting things are happening around here…

Comment by wtlf555
2007-05-08 16:36:45

I sold and began renting about six months ago. After looking through rental listings I thought to myself “I bet most of these “for sale” houses would be willing to rent. I stopped looking at rental adds and just drove around to the areas I wanted to be in and called on homes for sale (builders or fsbo) 3 of three agreed to rent at my price and I went with the best one. Brand new home with rent that includes front and back yard maintenance (back yard was dirt but I called owner and said it would be in his best interest to do something in back and he put a new yard in). My rent is 50% of carrying cost to own. Interesting times!!!

Comment by Norcal Ray
2007-05-08 16:43:45

Looks like a oversupply of housing hitting the rental and resale market. Nothing like too much capital going into RE the last few years with demand now falling off. We are running out of qualified buyers not land.

Comment by sleepless_near_seattle
2007-05-08 18:34:35

“..a lot of 2,3, and 4 unit properties are going back to the lenders.”

Eeeexxxxellent!! (in a Montgomery Burns tone of voice)

Comment by Gwynster
2007-05-08 18:58:57

Well in Davis, things are messed up. We’ve had almost no development in the last 4 yrs so everyone thinks they are entitled to 1700 for a 3/1 wwII dump.

What is intersting is that I’ve been contacted via a CL ad by 4 people willing to rent below market because they want to avoid students. The weird part is of the homes are vacant because of recent deaths.

Is Davis becoming like Gainesville where you have the very young renting and the owners all landed geriatrics?

And if anyone knows of someone willing to rent a 3br SFR at a reasonable rate to a couple who will fix their own plumbing, do their own yardwork, and clean the gutters, send them my way.

Comment by txchick57
2007-05-08 14:49:04

A little late now, but there’s a helluva market for babies out there.

Comment by gwynster
2007-05-08 15:13:14

LOL all I can think of now is Jim Beloushi saying “how much for zee little girl?”.

Comment by SteveH
2007-05-08 16:07:14

Wasn’t that John?

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Comment by carlivar
2007-05-08 16:16:25

Yes it was John. Jim would never say something that funny.

Comment by Gwynster
2007-05-08 20:32:44

LOLOL My DH says you are correct.

Comment by Betamax
2007-05-08 15:40:52

Baby, you’re the best.

Comment by SDMisfit
2007-05-08 16:31:52

Actually they need more kids that can work summers and afterschool hours to help pay the mortgage. Two incomes isn’t enough anymore in California. The Russian evangelical refugee families in Sacramento that average 8 children or more should do well.

Comment by Ken Best
2007-05-08 17:10:05

Second word: section 8.

Comment by Its Crazy Credit!
2007-05-08 19:47:46

that, or IOWA!!!!

Comment by Polestar
2007-05-08 14:29:11

“Back in 1989, the median price peaked at $245,000 on three occasions. It took 129 months to get back above that level.”

Why don’t they just say “It took almost 11 YEARS to get back above that level”. ???

Comment by turnoutthelights
2007-05-08 14:47:02

Monthly payment syndrome. ‘What would it take in monthly payments, kid’ - and then you’re hosed. Years!!?? Nobody thinks in years anymore…it’s just so, so committed.

Comment by Domi
2007-05-08 15:12:40

My point exactly, I have to divide 129 by 12 months… by that time I just forget about what the article was all about…

Comment by Chad
2007-05-08 14:30:58

I see Crisp & Cole mentioned in this article. Isn’t there someone with that screen name that posts here?

Comment by crispy&cole
2007-05-08 14:33:09

Me - LOL. Actually Crispy&Cole

Comment by Domi
2007-05-08 15:14:33

lol… I’m crying.

Comment by Not Mssing It
2007-05-08 15:50:57

be you them?

Comment by arroyogrande
2007-05-08 18:47:20

Silly, Crispy was/is the one blogging ABOUT them (click on his/her link above). Also, Crispy was on this blog long before you whippersnappers were in diapers. LOL.

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Comment by the_voz
2007-05-08 19:58:46

i prefer the term “crumb-snatcher”

Comment by Norcal Ray
2007-05-08 16:46:41

I knew Crisp & Cole would get hit by the downturn. Remembered the article about the broker’s super Benz and his plans to build a 20 story condo tower. Spending big bucks in good times and cash crunch in tougher times - classic story in business.

Comment by HelloKitty
2007-05-08 14:38:01

Yet another article dealing with median price. Median Price Is Hogwash.

Comment by Silversurfer
2007-05-08 14:45:23

Tall buildings are incredibly inefficient in many ways. I actually believe that the people who live in them should be charged for their utilities at commercial, not residential, rates as a disincentive for this kind of behavior.

Comment by kcdallas
2007-05-08 15:26:24

Really? Isn’t the detached single-family house far more expensive for heating/cooling, infrastructure (roads, water mains, etc), and of course the traffic gridlock?

Comment by Silversurfer
2007-05-08 16:23:40

Nah. Heating them and cooling them is a nightmare. Great big shiny glass fingers poking up into the wind and sun. When it’s too hot outside all they do is suck up the solar radiation. When it’s to cold, all they do is bleed heat into the atmosphere. Not to mention the sheer complexity of HVAC systems and the mechanical floorspace required to service them. Then there is all the wasted space that is needed for the banks of high speed elevators. (And the wasted space in general.

Also, the are not very structurally efficient because of the cubed square law, and the wind/earthquake loading they have to be designed to withstand.

As for sewage/water infra structure, it’s true that use less miles of pipe than a suburb. But the people in them drink and poo just as much (though I’m sure they like to think that they don’t), so there is still the treatment costs at either end.

They really can’t compete with a well designed single family, or small apartment building.

I don’t even think that you can make the gridlock argument very convincingly either. It would be fine if what ‘urbanists’ wanted people to believe was true - that people who live in high rises don’t own cars and walk everywhere and so do all their friends- but empirically this is just not true. Tall structures generate far more traffic per acre than any suburban development which is the real cause of gridlock.

They look impressive though, and politicians seem to like them.

Comment by Another PS
2007-05-08 18:39:30

I think urbanists view Paris as the model, not Manhattan. Most depictions I see from new urbanist show 3 or 4 story buildings, not high rises.

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Comment by ajmstilt
2007-05-09 06:31:10

correct 3-5 story row houses are the most efficient when it comes to heating/cooling materials needed, land use, etc.

Comment by SunsetBeachGuy
2007-05-08 17:52:33

They are charged at the main meter on utility rates.

Generally residential hi-rises have a relative attractive load profile (less usage in the afternoon).

Here is the killer secret. Building management will re-charge the individual units the residential rates and pocket the utility rate arbitrage.

Don’t ask how I know this and no the lay person will never be able to fully comprehend time of use electric rates and associated strategies.

Comment by Silversurfer
2007-05-08 21:16:02

That’s why I said they should charge the residents at a lower rate. Residents don’t build these things, management does.

As for attractive load profile, I can only imagine that is compared to other similar buildings, offices and such. Living in a sixty story greenhouse is still inherently wasteful.

Comment by ajmstilt
2007-05-09 06:32:45

well a 60 story greenhouse of 180 units averaging 600 square feet is still more efficient than 180 3200 square foot SFH

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Comment by Pazuzu
2007-05-08 14:48:21

“Back in 1989, the median price peaked at $245,000…

“The price bottom came at $155,000 in November 1995…

What is he talking about? It only goes up!

Comment by stockmarketguru
2007-05-08 14:52:05

2007 is the year of denial for California….
2008 will be year of anger…listings removed….
2009 year of acceptance…major price declines……
2010…..AN EXPLOSION….Depression…economy in the tank and housing collapse…..

All this in California of course

Comment by mrincomestream
2007-05-08 14:55:54

It’s going to go a lot faster than in SoCal, just from some phone conversations I have had… We’re well into anger…

Comment by turnoutthelights
2007-05-08 15:16:00

Ohhh. the good stuff…inquiring minds…inquiring minds…

Comment by la renter
2007-05-08 17:33:58

sorry- meant “mrincome” not micro….

Comment by Darrell_in _PHX
2007-05-08 15:23:28

Sorry man, but no way I see it going 2 years before price reductions. 1/3rd of people that are still willing to get in, have been locked out due to no $0 down. We’re also seeing lenders get much pickier about appraised price.

Within a year, foreclosures combined with lock out of $0 down borrowers , combined with the preasure of the lenders to use realistic values will be taking a big hit on prices, IMO.

As was said in the house banking and lending commette, or whatever it is called… This is the pilsbury doughboy. Push in one place, it comes out somewhere else.

The restructures are still defaulting. Locking out $0 down will take out buyers, pushing up defaults all the more. More defaults means faling prices means lenders want more down and more realistic appraisals…. Spiral down from here…. and I expect pretty quickly.

I think the NAR’s 1% will be closer to 5%… and since they cook the numbers by leaving out distressed sales (foreclosures and short sales) the actual drop of a particular house will be over 10% this year, 20% next.

Took 2 years to go up. We’ve been sitting at the top for 2 years. Now 2 years to crash back down.

Comment by Housing Wizard
2007-05-08 16:53:04

I agree with you that it will be a quick downturn of prices .

Comment by agentjmf
2007-05-08 18:22:15

sorry man…your timeline is way off. the number of homes going back to the bank will far surpass anything socal has ever seen before. the banks are in the process of slowly turning off the money supply. look forward to a dead, dead summer followed by year after year of declines.

many people (like that stupid old geezer jim link from the valley realtors) can’t resist the temptation of comparing what’s going on now to the 1990’s. it’s pointless and silly. i was here (l.a. county) watched it….profited from it. This time, we’ve outdone ourselves. Think about it. San Diego County has gone from peak median sales prices to record trust deed sales in just one year? That took 6 or 7 years in the 90’s.

I’m poised to prosper from this downturn, however i do fear what the larger implications will be for the broad economy. To be candid, i’m a little confused about what i’m wishing for.

Comment by desmo
2007-05-08 20:44:52

To be candid, i’m a little confused about what i’m wishing for.

Myself included, I think that goes for most on this board.

Comment by sm_landlord
2007-05-08 21:36:01

Me Three. I’m afraid that by the time we get through the correction, there won’t be any place I would want to live around here. I’m trying to figure out where to go to get away from the city once the SHTF. Maybe someplace in the hills out in Malibu. Distance seems more appealing than looking for a guarded-gate fortress neighborhood. But it has to be some place where I can get a T1 pulled into the house :-)

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Comment by Rich
2007-05-08 21:52:41

Confused, not me. I want $30k houses, $2,000/oz gold, $70/oz silver and secure borders. Although I will be happy with any two of the above =)

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Comment by luvs_footie
2007-05-08 14:53:09
Comment by Silversurfer
2007-05-08 15:34:02

Oh the irony.

That’s what I love about these finance guys. They make out like they are a bunch of hard-charging, take no prisoners, “warriors of business” types; but the second anything goes wrong they start to point fingers and cry for congress to bail them out. Wimps.

Comment by Inland Empire
2007-05-08 15:11:24

My wife and I were looking at homes this past weekend in (South) Corona, Ca. We decided that for fun we would go look at some of the pricier homes that were in a gated community called “The Retreat”. The homes were amazing and better than anything that I have seen in other developments in the Inland Empire. We decided to go into the KB models in this community called Sienna Ridge (I think that’s the name?) and I thought the homes were really nice, but the price was way too high for us 800K. The representative told us how they have dramatically reduced their prices from 1.7 to 1.1 million on their homes (this must’ve been nice for all the individuals who bought in the past two years). What was interesting is that she told us in very low voice that if the price was too high for us that we should wait a month because there’ll be another reduction of a 100K across the board for each model. Why would she say this I don’t know?

We decided to drive around the community to get a feel of the neighborhood and we noticed about 70 to 80 homes for sale (or lease option) or vacant. There are only 600 hundred homes in this community and we were only able to drive through a small portion of the area. We decided to view a couple of the owner occupied homes (open houses) and noticed that they were all staged. Now this is what really got me was that there asking prices were about 200 or 300K above the prices of the new homes. My wife and I were laughing are a$$es off at the individuals selling these homes. All I have to say is that those individuals are SCREWED!

Comment by turnoutthelights
2007-05-08 15:21:58

Why would she say this I don’t know?
Sucking air. A live body is precious, and if holding your attention for another month means a possible sale, screw the company. Great story, by the way.

Comment by Silversurfer
2007-05-08 15:38:07

She’s telling you about reductions because she sees sales drying up and probably figures that since she wasn’t going to sell today, she might as well see if she can sell tomorrow for less.

2007-05-08 17:26:29

Always Be Chasing…the next sale

Comment by SunsetBeachGuy
2007-05-08 17:54:55


In my line of work it seems to be “always be complaining”.

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Comment by Not Mssing It
2007-05-08 15:57:40

We decided to view a couple of the owner occupied homes (open houses) and noticed that they were all staged.

How can you tell?

Comment by Inland Empire
2007-05-08 16:05:58

The homes just looked like no one has ever lived there and the items that were present look like they were all brand new from the Z gallery. Also, my wife opened a few of the dresser drawers and noticed that there were no clothes in them or the closets.

Comment by Not Mssing It
2007-05-08 16:27:01

Ahh, makes sense

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Comment by gwynster
2007-05-08 15:16:50

Hey, at least you’re KB person talks to you. Mine is always ready to toss me out because I ask when the price reductions are coming >; )

Comment by Inland Empire
2007-05-08 15:32:59

I forgot to mention that we went into an open house of an owner occupied home right up the street from the KB models. My wife thought it would be funny to bring in the price sheet from the models and ask the agent why their home was 200K above the new ones. Woooooooowwww was the agent pissed! She really didn’t say much but her face told a whole different story. She said in a very polite snobbish voice that nothing was different. We said thank you and turned left the house with a BIG smile and lots of giggles when we got to the car. It was a precious family moment we’ll remember for the rest of our lives!

Comment by mrincomestream
2007-05-08 15:37:44

Priceless, that is too funny…

Comment by Redondo_Beach_Dude
2007-05-08 16:35:19

Yes, it’s hard to resist spending at least a small part of the weekend visiting open houses to antagonize the agents. Sometimes I wonder if this means I’m a bad person, but I figure that the hubris generated by these people over the last 12-15 years somehow alleviates my guilt… not to mention the collusion with the banking industry, et al, to drive prices up to twice what they should be. Aggressiveness shown back to the aggressor. Or should I be turning the other cheek?

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Comment by HARM
2007-05-08 17:20:21

Sweet, sweet schadenfreude… long overdue, well deserved, and completely appropriate –given the unbridled greed and arrogance of the object.

Comment by Housing Wizard
2007-05-08 17:21:49

I spent Sunday looking at new home tracts . One builder was offering a 3.85% fixed rate the first year , a 4.85 %fixed the second years and for the remaining 28 years the rate was fixed at 5.85% The tract saleswomen claimed that it was a zero down loan with no PMI . Has the market changed to zero down fixed rates loans or is this just bait and switch ?

I also noticed alot of incentives of upgrades by the builders that did add up .

One tract salesman tried to used the old urgency sales pitch by claiming in 6 months that the builder was going to raise the price .

They don’t have cookies anymore at the tracts so why go ? Also I can’t stand it when the salesperson wants to follow me around like a puppy dog thinking I’m a live one and than they throw the urgency factor on me .

I asked one salesperson a question and that person responded with not answering the question but asking me a question ,so I said to this person ,”Listen I’m the person asking the questions here.” Does anyone else get pissed when you ask a question and you get a question back instead of a answer .I’m getting sick of being looked at like a mark when I deal with salespeople.

2007-05-08 17:31:19

Housing Wizard you should know those rates are bought by the builder from the mortgage company. The mortgage might really be 6.85%, but the builder throws in enough down payment to make it look like 5.85%

Comment by Curt
2007-05-08 18:02:58

I’m getting sick of being looked at like a mark when I deal with salespeople.

Wizard, if that’s the case, I’ve got just the condo for you:

Comment by in Colorado
2007-05-08 18:07:36

You can do all kinds of things if you pay points up front. Basically its prepaid interest, which is why it is tax deductible.

Comment by Housing Wizard
2007-05-08 18:31:13

Yes I know that the loan is a builder buy down ,but the part that surprised me was that no PMI was attached to it with a being a zero down loan without a second .Maybe the builder was picking up the PMI for the first three years .

Comment by Housing Wizard
2007-05-08 18:36:36

Curt …LOL about the “Mark Project “. I needed a laugh.

Comment by cmhappyrenter
2007-05-08 20:14:33

Friend of a friend recently put an offer on a house that had been sitting for 5 months out in the Palm Dessert area. Amazing, the agent said they had two other offers going.

They asked to see them and LH, the agent was supposedly upset. At a later time time they were produced and amazingly they were in the same handwriting.

The friends withdrew their offer.

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Comment by gwynster
2007-05-08 16:28:45

LOL that made my day. Mind if I borrow that as a negotiation tactic?

Comment by Giacomo
2007-05-08 16:29:59

Kind of tragic…the follow-up question is: why do you - as a Realtor - bother with a listing that is 200K over market?

Comment by mrincomestream
2007-05-08 18:02:44

Not if you plan on eating…

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Comment by Chrisusc
2007-05-08 19:31:25

“My wife thought it would be funny to bring in the price sheet from the models and ask the agent why their home was 200K above the new ones. Woooooooowwww was the agent pissed!”

That’s was the funniest post today IMHO. I am lucky I wasn’t drinking anything.

Comment by crisrose
2007-05-08 21:14:40

I like your wife!!!

Comment by BanteringBear
2007-05-08 15:25:50

A snapshot of who’s still buying from the renorealtyblog:

“Hi Reno board.

Well it’s done - my escrow papers are signed (thanks Ticor) and my home sale will record Wednesday.

I bought a home that was listed for 200+ days at 730K, then 699K and expired. I saw it just before expiration, fell in love, and made a low ball offer. They came back, and final numbers were 695K.”

Comment by AwaySooner
2007-05-08 15:46:45

5k reduction for a 699k asking price, he sure suck at lowballing.

Comment by AwaySooner
2007-05-08 15:47:30

I mean 4k reduction.

Comment by mrincomestream
2007-05-08 15:52:39

“…he sure suck at lowballing…”

That’s an understatement, people are funny with the low-balling thing. I don’t get how you could feel anthing less than 40% off was a lowball.

Comment by luvs_footie
2007-05-08 16:16:59

I’m with you mrincomestream.

I have always believed that making a profit in real estate is all in the buying………if you buy right you can always sell right. A 4K discount on a 699K house wont even cover your selling costs. Oh well……..maybe I’m old fashioned.

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Comment by Carlsbad Renter
2007-05-08 17:09:14

“A 4K discount on a 699K house wont even cover your selling costs.”

Especially, when you can only sell it for 300K.

Comment by Chrisusc
2007-05-08 19:37:24

That’s funny Carlsbad.

Comment by SunsetBeachGuy
2007-05-08 17:57:03

If you don’t feel bad when writing the offer, it ain’t a lowball.

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Comment by Mikey(2)
2007-05-08 16:20:02

Amazing. 200 days on the market, and a 4% reduction fools some sap to buy it. Don’t these people have any family or friends to advise them ? Probably all as stupid as ther buyer. Emotion wins out over common sense. PT Barnum, right again.

Comment by auger-inn
2007-05-08 16:09:10

I bought a home that was listed for 200+ days at 730K, then 699K and expired. I saw it just before expiration, fell in love, and made a low ball offer. They came back, and final numbers were 695K.”
Ooooh, How shrewd!
Friggin dolt. 4k off of a 700k POS, great financial move. Next year you could have knocked another 100k off that price.

Comment by MMG
2007-05-08 17:18:22

Next Year?, how about next month.

Comment by az_lender
2007-05-08 19:54:40

The problem is the “fell in love”. The person who bought my house last summer made the same mistake, falling in love with the house. Falling in love with a house totally precludes rational negotiation.

Comment by Rintoul
2007-05-08 16:35:49

Sounds contrived… or am I just stating the obvious..?

Comment by sleepless_near_seattle
2007-05-08 23:07:16

I agree…I think it’s a BS story.

The writer is trying to set a perception of what the lowball rate is in that area. Others see it and think, “oh….so 4% off is a good lowball rate.”

Comment by arroyogrande
2007-05-08 18:56:16

“then 699K and expired. I saw it just before expiration, fell in love, and made a low ball offer. They came back, and final numbers were 695K.”

That’s not a lowball, that’s a peck on the cheek. I’ve stopped lowballing (30% off) for now because it looks like things will get worse than even I originally thought.

Comment by Rich
2007-05-08 22:02:15

730k and his lowball got him to 695k, this guy is surely a MASTER NEGOTIATOR and should really write a book so we can all benefit from his bargaining prowess.

Comment by Mark
2007-05-08 15:33:47

“I bought a home that was listed for 200+ days at 730K, then 699K and expired. I saw it just before expiration, fell in love, and made a low ball offer. They came back, and final numbers were 695K.”
Brilliance. The falling knife caught with extreme gusto and uncommon stupidity.

Comment by mikey
2007-05-08 15:42:14

I certainly HOPE that a DD slope ski PASS on Heavenly Valley CAME with that purchase. He’s going to need someplace High to JUMP OFF before this Christmas . ho ho ho !

Comment by GetStucco
2007-05-08 16:08:54

“‘People wonder if this is the right time’ to announce a large housing development, said economist Jack Kyser of the Los Angeles County Economic Development Corp. ‘Downtown is overbuilt and some other projects are grinding to a halt.’”

Maybe the developer thinks a subprime bailout is “in the bag” if they send campaign contributions to the right lawmakers?

Comment by sm_landlord
2007-05-08 17:53:54

They don’t need a full-on subprime bailout. All they need is directed subsidy. I read someplace that builders are trying to drum up veteran’s housing subsidies now - where the state and federal govts kick in up front bux in exchange for low prices for veterans. With all of the veterans we’re generating lately, it just might work politically.

Comment by GetStucco
2007-05-08 16:10:46

“As mortgage bills came due, foreclosures rose, and the easy credit dried up for families like the Shields. ‘Now we’re stuck in the apartment,’ said Shields.”

And what’s worse, with inflation pushing up above the Fed’s target range, there is little point in them bothering to save money for a downpayment on a home. It sounds like they might be priced out forever at this point, just like I am.

Comment by mrincomestream
2007-05-08 16:16:25


I’m starting not to like your tone damnit, have some faith… Hell, help Neil with the popcorn or something. You are starting to depress me… LOL

Comment by GetStucco
2007-05-08 17:08:13

Take my comments with a grain of salt, as I have been known to play the Devil’s advocate ;-)

Comment by tj & the bear
2007-05-08 21:17:13

You do need to work on your sarcasm a bit. :-)

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Comment by la renter
2007-05-08 17:31:55

micro- do you think there are areas in LA that are going to be more or less immune to the bust? Like Hancock Park? It seems like where the rest of CA is crumbling LA seems to be going strong in some areas. thanks for any info!!!

Comment by Chrisusc
2007-05-08 19:49:02

No way, L.A. is done. As I have stated before, when the illegals don’t have construction jobs and light manufacturing jobs to pay the bills, expect high crime. Also expect the same from the mostly blue-collar workers left in greater metro L.A., as the only reason these workers don’t currently commit crimes is due to the fact they currently have jobs. The 2 to 5% of upper middle class and rich homeowners won’t even be able to go outside for a walk in about another two years from now. I know many people want to capitalize on 70% off pricing in the next few years (so do I), but in reality, do you really want to live in a third-world type existence. Picture Mexico City, or something akin to that, where you have to have an armed bodyguard to go to the shopping mall.

I love SoCal, but it has already been decided by the powers-that-be that it is being given back to Mexico. Today, as usual, the mayor of L.A. spoke in Spanish while delivering a speech in regards the fire in Griffith Park. If that doesn’t make it clear whose side the government is on, I don’t think anything will make it clear. Anyone who spends over $250,000 on anything (besides a rental prop) in L.A. County in the recent year or so, is already screwed unless you have a stable job and an Hispanic surname.

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Comment by mrincomestream
2007-05-08 20:39:33


My circle says one and done for Mr. V. based just on those types of activities. There’s a real resistance building towards the illegals. A lot of my LandLord clients have had it up to their necks especially in the Pico Union area where because of Rent Control they can’t afford to make needed repairs and if they do the local bangers rip it out in short order. Compound that with Rocky D. and his code enforcemnt activities. Let’s just say I wasn’t overly surprised by LAPD’s reaction at the march there’s going to be more of that to come. There’s too much money on the line. I expect a severe backlash towards illegals in the next few years. If you watched the news today some illegals where involved in a planned terrorist attack on a base back East. The air doesn’t bode well for illegals going forward.

Comment by mrincomestream
2007-05-08 20:03:08

In short the higher the price rose the harder it will fall. No immunity anywhere. Although from looking at the sheets i expect anything east of La Cienega and South of Wilshire to be come a complete wasteland as far as pricing is concerned the other areas will do only slightly better.

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Comment by LA-Architect
2007-05-08 20:23:39

The SFV seems to be further ahead than the Westside. My brother-in-law is a realtor and has said that prices have already come down 10%. He said that I’d need to wait 1-2 to buy. The unfortunate thing is that rents have suddenly gone through the roof.

Comment by Gwynster
2007-05-08 21:31:17

The same thing is happening in the “prime” parts of Sac where there was no building. Where there was new building, they are coming down. It makes me wonder if landlords are trying to cash in on an upcoming crime scare.

Comment by CA renter
2007-05-08 23:56:31

I’m just guessing here, but San Diego was ahead of LA by at least a year. Our rents shot up dramatically (esp in the better areas) in 2005 thru mid-2006. They have since leveled out (but quite a bit higher than 2004 levels). Some on this blog who live in other areas of SD say they are seeing rents being lowered.

IOW, don’t let the rental market scare you. Yes, we will see higher rents as we move through the transition, but I believe that will also correct as more vacant housing comes onto the market (both as rentals and sales).

Good luck! :)

Comment by jbunniii
2007-05-09 04:35:01

Last time around some of the houses in Hancock Park were going for as low as $400k-500k.

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Comment by Neil
2007-05-08 20:36:28

Whatcha sayin’ bout da popcorn?

Comment by az_lender
2007-05-08 20:10:24

Stucco, what is the problem? you are a happy renter, are you not? And so long as you rent, you are getting ahead by being ABLE to save, no? If you believe there is a war on savers (your phrase), you must save in gold or at least in foreign bonds. If this strategy turns out not to be correct, it doesn’t matter, because if the Fed actually raises interest rates, housing prices will quickly descend to within your reach.

Comment by carlivar
2007-05-08 16:20:49

Does anyone know the situation at “The Burbank Collection”, the fancy condos that are being built across from the AMC 16 theater in downtown Burbank?

A couple months ago I emailed them asking if anyone had backed out due to mortgage problems. They said only one person and their condo was snatched back up on the same day.

I’m finding it curious that there is such demand there, unless they are just faking it. It is a good location though and good integration with the new retail there… just too expensive (of course).

Comment by M Nair
2007-05-08 20:33:33

Carliver , I am surprised you dont know the latest on this Burbank project. I live less than 1 mile from this place. The builders have gone bankrupt and if they dont come out with something like 21 mil by may 11 the property/land would exchange hands and new owner would be D BURBANK ( dont know who this is or are they talking about Burbank city ). THERE IS AN ARTICLE ON THIS IN LA TIMES LAST WEEKEND..forgot which day..

Comment by carlivar
2007-05-09 10:15:54

I must have missed that article. I don’t read the paper every day. Can’t find anything on or the general Internet about it. Interesting though…

Comment by Boombust
2007-05-08 16:40:51

“‘People wonder if this is the right time’ to announce a large housing development”

Didn’t they build the Empire State Building at the beginning of the Great Depression?

Comment by carlivar
2007-05-08 16:43:56

according to wikipedia, it wasn’t profitable until 1950!

Comment by walt526
2007-05-08 21:02:47

“Didn’t they build the Empire State Building at the beginning of the Great Depression?”

Yes, but they only broke ground on it because of the strength of the Dalek lobby.

Comment by ajmstilt
2007-05-09 06:44:55

what?! no way the Dalek’s would have approved any construction with stairs.

Comment by tj & the bear
2007-05-08 21:24:49

Ever hear of the “skyscraper indicator”?

Comment by Mr Vincent
2007-05-08 16:45:30

“‘Right now it’s subprime mortgages, but down the road it might be from the middle-class.’”

poor people = subprime mortgages = liar suicide loans
middle-class = Alt-a = liar suicide loans

No difference!

Comment by Wino Bear
2007-05-08 17:28:05

Yes. It’s funny how housing has become the great equalizer.

People from all sorts of socioeconomic strata will be equally broke because a lot of people bought homes at similar multiples to their salary. If they made more money, they simply bought more house, and they’ll be equally screwed.

Comment by Housing Wizard
2007-05-08 18:24:38

What a great points Wino Bear and Mr Vincent .

Comment by Gwynster
2007-05-08 19:33:29

excellent point. I see years of socioeconomic studies coming out of this, right up there with how rural sociology got a huge boost from the 80’s farming downturn in the midwest.

Comment by Hypocrite
2007-05-08 16:59:06

Ben left out the best tidbit from the AP article below re the Grad student making $20K a year qualifying for a $600K loan:

“Deborah Beatty recognizes that she and her family could lose their home in Jersey City, across the Hudson River from New York, because they can’t afford the mortgage. The newly constructed three-level home offers a view of the Manhattan skyline and the Statue of Liberty from Beatty’s master bedroom window.

“I’m going to miss that,” said Beatty, 53, who collects disability payments and does not work. “When I come in, I like to see the lady (the statue), especially when it’s a beautiful clear night.”

Her 29-year-old daughter, a graduate student with an annual income of less than $20,000, qualified for a mortgage of $600,000 with no money down, split into two different loans of 8.75 percent and 12.5 percent.

With income from tenants, which didn’t happen right away, Beatty’s daughter thought she could afford monthly payments of nearly $5,000.”

Mom and daughter’s monthly PRE-TAX income was probably no more than $2600 per month.

This is the best example of stupid money I’ve seen yet. Under this level of reasoning, I’m sure my 2 year old son could have qualified for a $300K loan.

Comment by Housing Wizard
2007-05-08 17:32:36

Liar fraud loan .
Now just what income was used to qualify this person since the rental was just theory when she bought the place . Any realtor and loan agent that set up a deal in which they used rental income that didn’t exist is scum .

Comment by Claire
2007-05-08 17:36:47

That was in one of his other posts

Comment by GetStucco
2007-05-08 18:35:04

“This is the best example of stupid money I’ve seen yet. Under this level of reasoning, I’m sure my 2 year old son could have qualified for a $300K loan.”

This is the type of buyer the FHA bailout proposal going through Congress right now will attract into the taxpayer-guaranteed subprime lending pool.

Comment by Gwynster
2007-05-08 19:29:55


It’ll never fly because she’ll have to document income and there is no way she’ll qualify. Not even with the pity vote because of dear old grannie.

I’ve enjoyed reading your comments for what seems like years (lI lurked long before I ever spoke up) but you really need to get some perspective on the FHA proposal.

Comment by ShaunT79
2007-05-08 21:27:37

I think you need to get some perspective just how bad our gov’t can bungle things.

(Comments wont nest below this level)
Comment by Gwynster
2007-05-08 21:55:16

LOL you know, I can’t argue with that >; )

Comment by Mike in Miami
2007-05-09 05:06:07

“Her 29-year-old daughter, a graduate student with an annual income of less than $20,000, qualified for a mortgage of $600,000 with no money down, split into two different loans of 8.75 percent and 12.5 percent. ”
What kills me, how can somebody get into graduate school without having even the most basic math skills. A disability check (mentally disabled?) and $20K income are not gonna cut if you have a $600K mortgage.

Comment by Recovering Homeowner
2007-05-08 17:08:46

OT but gotta mention that Casey Serin’s wife has had it with him - check the new entry on his blog - “Enough is enough!” She is now cleaning homes to make $$ and told him he, too, needs to find a job.

Always good for a dose of non-reality.

Comment by Arizona Slim
2007-05-08 17:39:54

Okay, what employer in his/her right mind would hire Casey?

Comment by SunsetBeachGuy
2007-05-08 17:58:40

Casey’s wife needs to DTMFA.

Comment by Gwynster
2007-05-08 19:16:17

From Casey’s blog:
“Just a suggestion…
maybe you should look for a job with an inflexible schedule, it’ll give you less time to make bad deals. ”

Rofl… some of the replies to this looser are a riot

Comment by GetStucco
2007-05-08 17:18:54

Something really weird is going down with SFR pricing in my zip code (Rancho Bernardo W 92127) — I call it “median clustering.” The median SFR list price and the next several lower-priced homes have the following list price pattern, with the amount below the median in parentheses:

$1.300000m ($0)
$1.299999m ($1)
$1.299888m ($112)
$1.299000m ($1000)
$1.299000m ($1000)
$1.290000m ($1000)
$1.299000m ($1000)
$1.295000m ($5000)
$1.295000m ($5000)
$1.295000m ($5000)
$1.285000m ($15,000)
$1.265000m ($35,000)
$1.250000m ($50,000)

Note the clustering above the one listed at $1,285,000. Do buyers with $1m+ to spend on a home really care much about pricing $1 or even $5000 under a comparable list price?

Comment by sm_landlord
2007-05-08 21:11:46

I think it’s about price searches. They are trying to list just below some cut-off point that they expect people to set as a limit.

Comment by GetStucco
2007-05-08 21:26:33

“I think it’s about price searches.”

Good theory, but it does not apply for, at least. If you put either a floor of $1.3m or a ceiling of $1.3m on your search, you get all homes listed at $1.3m. But the first of these searches would exclude the $1.299999 listed home. Based on this example, I think listing at cutoffs would generally be more inclusive that going down by $1.

Comment by peter
2007-05-08 17:57:03

I posted this on the tidbits bucket but have not gotten any response… let me try here.

Does anyone have any advise/opinion/experience on The Mili Group?

They seem to be a one stop shop for RE

Comment by manraygun
2007-05-08 18:02:53

This is so pathetic it’s hilarious. Some of the comments are almost as good. From the LA Times’ new “LA Land Blog”

“Audrey’s Condo Search Diary: Realty Bites

“Every day is another test in real estate purgatory. I’m still waiting for Realtor to call and deliver some good news, or at least some closure. It’s been 2 weeks since I submitted my final offer for the
condo, and all I’ve heard is my impatient, well-heeled toe tapping on the floor.”

Comment by mrincomestream
2007-05-08 20:48:33

That Investor Guy is going to get caught holding the bag…

Comment by flat
2007-05-08 18:36:05

wow 2001 pricing, anyone ?
any 02 or lower out there

Comment by Gwynster
2007-05-08 19:04:43

Someone said it didn’t sell at that price on the thread which is a pity.

Comment by irmaron
2007-05-08 18:49:50

“‘Prices outpaced buyers’ willingness to buy, not buyers’ ability to buy,’ Link said.”

Gee, before subprime was ‘outed’, in most areas of CA only 9% of the people qualified for a loan and that loan we now know was a subprime ARM. I wonder what type of job Mr. Link will have in the near future?

Comment by Housing Wizard
2007-05-08 19:52:37

After reading about the “bat basher ” salespeople I now know why they called the sub-prime market ” agressive lending “.

It cracks me up that now the lenders are suggesting that Wall Street wanted the fraudulent loan packages .The Secondary market has always wanted loan packages in prior lending cycles ,so when did Wall Street Investors say that now they didn’t care if the lenders prevented fraud or not . If I know investors like I think I know investors I believe that they did not agreed to receive fraudulent loan packages in return for yields or would they accept a faulty rating on the loan paper risk . Lets face it ,a fraudulent or liar loan would need to be made at 70% or less loan to value to offset the risk of default .I have seen investors invest in loans bound to go into foreclosure ,but usually at 60% loan to value ratio ,(not on a 100% loan ).
For loan agents or loan management to suggest that the junk loan paper they passed off to investors was wanted by the investors in loans is just absurd .

Comment by tj & the bear
2007-05-08 21:35:02

Yes and no. All this “liquidity” is boatloads of cheaply borrowed money chasing yields, and everyone’s willing to look the other way when the money’s right. How else do you explain that third world “emerging market” debt has been trading within a stone’s throw of first-world paper? It’s classic ponzi finance.

Comment by Van Gogh
2007-05-08 22:04:40

There probably is some real class action material floating around in this cesspool between the loan originators and the loan packagers and resellers. Wonder if any of the MBS holders or Mortgage “investors” will pick up on this and act on it. The Wall Street crowd really needs to be held to account for what they have done in this nightmare. (as does the Fed and Greenspan crowd)

Comment by Housing Wizard
2007-05-08 22:56:01

I agree Van Gogh . Given no change in the current trends ,the foreclosures are going to be so huge in numbers and so widespread that Justice will take a second seat to pure meltdown .
The gov. wants to get these sub-prime loans refinanced and out of the hands of the current MBS bagholders into the hands of something the gov. can deal with and pass on the tab to the tax-payers .

Comment by GetStucco
2007-05-08 20:23:50

“Your search has returned the first 200 of 18035 homes”

San Diego’s inventory of SFRs + condos has just blown through the 18,000 mark — up by over 3000 (20%) from 15,000 as of February 1.

Comment by Neil
2007-05-09 00:14:22


You’d better go out and buy one before prices start going back up! ;)

Seriously, when will people realize supply and demand set prices…
Its an elastic market folks…
And the demand curve has suddenly shifted.

Got popcorn?

Comment by Dawna
2007-05-09 04:12:12

How can LA be thinking of building a billion condo complex when NO ONE can afford to buy a house in so California now? Does that make sense to you? Has anyone seen what LA is like today, the city is a mess and it’s so full of illegals and homeless. If you could afford it, you certainly wouldn’t buy in the city of LA.

Comment by HarryD
2007-05-10 21:30:48

“With a second child on the way, Chris Shields and his wife, Michelle, wanted to move from their two-bedroom apartment in Southern California to a house with more space.
But because their timing coincided with a shakeout in the mortgage market earlier this year, their credit now isn’t good enough to get a loan to purchase the house they wanted with no money down.”

….and there are complaining because they didn’t overpay for a house they probably would have defaulted on anyways?

Comment by HarryD
2007-05-10 21:37:53

“The answer may lie in the superior-but-lagging Case-Shiller HPI. The HPI has shown continuous price weakness through February, the latest available month, which would suggest that the size-adjusted median price gains to that point had been illusory.”

Karl Case out of Wellesley College was very very late for example in the New England market - in conceding there was any bubble going on. I would like to know what if any conflicts of interest he was carrying between his consulting business and its fees and his supposedly objective conclusions

Who were his clients and how much money was coming from interested parties with a vested interest in keeping the illusion going?

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