Very Few Willing Buyers At These Prices
The San Francisco Chronicle reports from California. “Bay Area home sales continued their downward slide in May, with fewer properties changing hands and the mix of sales tilting toward higher-priced houses. In the nine-county area, 5,487 existing single-family homes were sold in May, down 17.4 percent from May 2006, according to DataQuick.”
“‘Sales are really low; you’d have to set the clock back 12 years to find another May with lower sales,’ said Andrew LePage, an analyst with DataQuick.”
“Realtor Saraya Motley is selling four condos in Oakland. The seller has cut between $50,000 and $60,000 off the price of each unit, which now range from $299,000 to $369,000. The lower prices generated lots of interest and one accepted offer, but two other offers fell through because the buyers could not qualify for a loan, she said.”
“Tighter lending standards ‘are really affecting the bottom 20 percent of the market right now,’ Motley said. ‘The buyers don’t qualify because the whole bottom of the market really dropped out with the subprime issue.’”
The Mercury News. “Fewer Santa Clara County homes changed hands last month than during any May since the dot-com collapse. While the county’s median price increased from May 2006, it fell from April’s record high.”
“Two years of low sales volume show ‘a housing market with very few willing buyers at these prices,’ said Stephen Levy of the Palo Alto-based Center for Continuing Study of the California Economy. ‘I don’t see volume picking up very much without a price adjustment.’”
“He also attributed buoyant median prices to the change in which types of homes are selling, saying of the apparent increase, ‘It’s not real, and it’s not going to continue.’”
“For example, agent David Martz listed a house on San Jose’s East Side in April at $599,950, below the sales prices of comparable homes, he said, but there’s been ‘no activity.’ The East Side has some of the county’s highest mortgage default rates. The recent unavailability of no-money-down financing is choking off sales to first-timers there, agents say, and driving down prices.”
“‘There are certain areas of the valley and price points that are just getting creamed,’ Martz said.”
The Contra Costa Times. “In Contra Costa County, 1,366 homes were sold, a 29.5 percent decline from a year ago. Solano County saw 476 homes sold, a 37.6 percent drop from a year ago.”
“The market today is not the same as the red-hot market three years ago, said Realtor Earl Rozran. ‘There are a number of sellers that have still not got their arms around the fact that the market is not what it used to be. Buyers just have too much inventory to choose from,’ he said.”
The Press Democrat. “Sonoma County’s slumping housing market showed little sign of improving in May as many buyers remained on the sidelines, waiting for prices to fall even further. May’s median resale price fell to $575,000, down 4.6 percent from the same month a year ago.”
“Prices have fallen for 11 consecutive months, the longest decline since The Press Democrat began tracking home sales in 1990. Sales were down 15.1 percent from a year ago.”
“The county’s housing market continues to fall back from its peak in summer 2005, when the median resale price hit $619,000. Buyers are in control with a large selection of homes and even more coming on the market during the typically busy summer sales season.”
“‘I think the buyers are biding time,’ said Rick Laws, Santa Rosa manager for Coldwell Banker, which prepares The Press Democrat’s monthly home sales report.”
The Sacramento Bee. “A long, slow search for bottom continues across most of the region’s real estate market. ‘The market seems to change weekly,’ said Bob Bronswick, president of the Sacramento-Tahoe division of Coldwell Banker residential brokerage. ‘Memorial Day week was unbelievable. Properties were flying out the door. Then, all of a sudden, somebody turned the valve off.’”
“DataQuick reported 3,211 new and existing homes changed hands in May in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. It was still 1,031 fewer closings than in May 2006, DataQuick reported.”
“May closings fell to a 12-year low for the month in Sacramento County. Placer County’s sales numbers were at a 10-year low, according to DataQuick.”
“‘It doesn’t look like there’s a lot of steam building at the moment, and we’re coming up to the peak of the buying and selling season,’ said DataQuick analyst Andrew LePage.”
The Tribune. “San Luis Obispo County home sales declined nearly 30 percent in May year-over- year and the all-home median price fell about 2 percent, according to DataQuick.”
“It was a 14-year low for home sales in May and the 20th consecutive month that home sales have declined year-over-year, said Data Quick analyst Andrew LePage.”
“The most significant drop-off in sales was in new homes, which fell nearly 60 percent to 34 in May from 84 the previous year. Prices of new homes were also hit hard. The median price plummeted nearly 14 percent to $525,500 in May from $609,000 last May.”
“California’s weakening real estate market helped push foreclosures, particularly for speculators and others who took out subprime mortgages, higher nationwide in the first quarter.”
“Loans are beginning to reset, and payments are jumping by hundreds of dollars per month. As home prices have slackened, more average homeowners and investors are falling behind on payments or walking away from properties altogether.”
“Prices in many Northern California markets, including Santa Cruz, Fairfield, Stockton, Napa, Modesto and Vallejo, fell in the first quarter, as measured by federal data that track sales of comparable homes.”
“At the same time, the supply of homes on the market in the state has increased to about 10 months, up from four months several years ago, said Doug Duncan, economist for the Mortgage Bankers Association of America.”
“‘If you’re an investor in those markets and you bought using a subprime (loan)…you’re going to turn those keys in,’ Duncan said.”
From KSBY.com. “Several Central Coast homes…were auctioned off in less than a half hour, for much less than market value due to foreclosure.”
“The most expensive house at the auction was one in Nipomo, appraised at over $550,000. The Arroyo Grande realtor who bought the home for $437,000 expects to see more foreclosure auctions.”
“‘We’re in a down cycle right now, and foreclosures are on the rise, so auctions are probably a thing we’ll see quite a bit of here in the future with foreclosures the way they’re going right now,’ said Arroyo Grande resident Coker Ellsworth.”
The Record Searchlight. “About 100 people showed up Thursday morning as Pacific Auction Exchange staged its first public auction in Redding.”
“It took about 10 minutes to auction off the Vermeer Place home. The opening bid was $250,000. In the end, Ken and Jason Jones of Redding got the 2,730-square-foot home for $375,000, plus a $37,500 auction fee.”
“The house had been listed for $669,000 before it was pulled off the market in late April. Jason Jones, a real estate agent, figured the home was overpriced at $669,000 and probably is worth about $550,000.”
“Don Shearing just opened the Pacific Auction Exchange franchise in Redding. He also owned the Vermeer Way home that was auctioned off Thursday. Shearing said he owed about $389,000 on the house, which originally was listed in November for $689,000.”
“‘This is the truest forum to establish market value. This is what we did here today,’ said Shearing.”
“Monthly home sales in Shasta County have been down each month this year compared with the same month in 2006. The median sales price in April was $269,500, down 5.4 percent from April 2006, according to DataQuick.”
“Ross Domke, who owns Real Estate Professionals GMAC in Redding, suspects Shearing and company didn’t get the result for which they had hoped. ‘I was surprised how few bidders there were. It was probably set up more as a test to see how the area would respond,’ Domke said.”
Like the weather, the housing market in the Bay area differs markedly over the span of a few miles. Santa Clara sales are indeed in the dump. But inventory is lean and prices are rising in Palo Alto and Menlo Park.
I live in MP. While I haven’t seen anything that gets me excited to buy, I did see a townhome that didn’t sell last year at $1.6MM get re-listed this year at $1.375MM. It sold (don’t know the final price).
In any event, not everything is flying off the shelves at whatever prices. I know of some ultra-high end homes where the asking prices are falling.
We’ll see how long stable prices last.
Sadly it might be a little while… As someone on another blog I frequent pointed out:
Seller strikes are more effective when the sellers have a “minimum payment” option.
:-p
Been here in SC long enough to ask so whats special about PA or MP. I mean it more costlier than many other places, including LA, but little or no character. PA MP were similar priced as other cities in the region. The recent buyers are loony
“He also attributed buoyant median prices to the change in which types of homes are selling, saying of the apparent increase, ‘It’s not real, and it’s not going to continue.’
On a related note, I finally found some evidence on the ground that suggests that the prices are falling in my area of LA. My wife and I looked at a house about a year, year and a half ago that was in good condition. Updated and a decent size for a small family. The starting price was 610,00 and it evetually sold for 585,000. I just saw two homes (one directly across the street and the other about three houses down) with the exact same floor plan and nicer upgrades with a starting price for 520,000. Now this is certainly not a scientific comparison, but it shows me a lot more about what really is going on than the median.
I found some evidence 100 yards away in OC. The house went from $650K to $625 in one months time — still not sold. I don’t care how they spin it, any buyer who sees prices falling this quickly and inventory growing can figure out they have nothing to lose by waiting for more price drops. The Realtor® lies just don’t work in the face of such overwhelming evidence.
“The Realtor® lies just don’t work in the face of such overwhelming evidence. ”
It’s interesting you say that, I was watching one of the morning shows, can’t remember which one but I think it was Good Morning America but don’t quote me on it.
Anyway, they had this reporter/analysist whatever on there from the Wall Street Journal. Saying that it might be a good time to buy in some areas all were extreme bubble areas even though the walls are crumbling around folks in these areas. But when it came to Los Angeles it appeared she stumbled and was hesitant for some reason. After watching that segment and listening to the nonsense you wonder if these folks really do any research at all before they get in front of the T.V. and it also begs the question of just how the f*** did you get that job if you don’t know what you’re talking about.
Right now the MSM like in this segment where using rates as a scare tactic but how does any rational person not come to the conclusion that paying 10% on a 100k is a lot better than paying 7% on 400k. I don’t get it. Are people that brainwashed?
Are people that brainwashed?
Yes. Oh, and innumerate.
and financially incontinent…
“and it also begs the question of just how the f*** did you get that job if you don’t know what you’re talking about.”
Hmmmm……maybe I’ll apply this weekend. I love talking out my a$$.
Too bad TV can’t transmit aromas - my a$$ speaks multimedia!
“it appeared she stumbled”
There is your first hint.. SHE… no reason and plenty of emotions. Even female finance professionals I know dont even get this housing bubble.
It’s not even a matter of “buyers waiting for prices to drop”, you know? I mean, there’s no way in HELL I’d take on the kind of loan that is required to buy some of this crap in San Diego. I am waiting for prices to drop - which they will - I am being *forced* to wait for prices to drop due to simple affordability. I’m not alone, either, seeing as how only 10% of the population can really afford a median-priced house…
“The recent unavailability of no-money-down financing is choking off sales to first-timers there, agents say, and driving down prices.”
he sounds frustrated, to me that sound like good news
For those interested in the Bay Area market, here are two more articles from the SF Chronicle:
“I Do Not Have $1 Million
Ergo, I cannot buy a delicious home in San Francisco. Ergo, I am screwed forever”
(tragi-comic — funny stuff)
http://www.sfgate.com/columnists/morford/
“Is it time for buyers to get in the driver’s seat?”
(answer: not unless you’re seriously under the influecnce)
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2007/06/15/carollloyd.DTL
That first one was hilarious!
“You love the city? You don’t come from money and you don’t have a giant trust fund and you totally forgot to sell your soul to the devil/Rupert Murdoch in exchange for a Stanford MBA and a deeply unsatisfying but incredibly lucrative gig working 14-hour days in the Financial District and getting drunk the rest of the time out on the huge deck of your really, really nice split-level Edwardian remodel in Noe Valley?
Well. How unfortunate for you. You will likely die never knowing the deeper pleasures of San Francisco home ownership, of that cool freedom that comes with having your own urban space but which also comes with eternal mortgage payments and massive property taxes and the deep thrill of retiling your bathroom the entirely wrong style and then having to pay a small fortune to rip it out and start all over. ”
The author has great creative writing skills. Really a fun read.
BayQT~
“My real estate agent told me they were expecting 10 offers and so we should bid at least $850,000,” my friend told me incredulously. “Is that really how things are nowadays?”
Yes.. just walk into any office or open house and thats what you heard for the past 9 years. The problem is you cant confirm these so called bids. They are made up by agents. We all heard sales are down 50% and inventory is twice.
My dive into buying started with agents telling me the same … expect 10 other offers and you should bid 10% above asking. I did and was accepted. However we had layoffs before close so backed out and didnt buy. Guess what.. it sold at asking.. so where are the other bids? The SFBay Area market is full of lying cheating realtors.
Carol loyd is not much of a journalist if she isnt even questioning the whole fake bids that are being created by realtors.
“It took about 10 minutes to auction off the Vermeer Place home. The opening bid was $250,000. In the end, Ken and Jason Jones of Redding got the 2,730-square-foot home for $375,000, plus a $37,500 auction fee.”
“The house had been listed for $669,000 before it was pulled off the market in late April. Jason Jones, a real estate agent, figured the home was overpriced at $669,000 and probably is worth about $550,000.”
I’d say the house is worth $375,000!
of course this is coming from a non-realestate professional…………
My God!!
They’re giving them away!!!
IT’S NOT FAIR!!!!!!
“The most expensive house at the auction was one in Nipomo, appraised at over $550,000. The Arroyo Grande realtor who bought the home for $437,000 expects to see more foreclosure auctions.”
Appraised at over $550,000, sold for $437,000. I’d say the market value is $437,000. See any pattern here? There are no truer examples to show that what somebody says the “market value” is, including appraisers, is worthless.
And for $437,000, the new buyer won’t lose much more than another 30%.
Of course they can always go to Jocko’s on their savings. (if it is still open).
“The most expensive house at the auction was one in Nipomo, appraised at over $550,000. The Arroyo Grande realtor who bought the home for $437,000 expects to see more foreclosure auctions.”
Nice to see these industry idiots buying the dips. I wonder how they’ll feel about their “deal” when they are upside down…
$437k but including the auction commission possibly $480k?
I’m with you BB, I hope most of these auction “bargains” are going to the RE guys. May they all enjoy feeding their alligators while they wait for the “market to come back”.
What we need is a whole army of former Realtors (TM) telling their coworkers at Walmart that RE sucks big time. This will be the blue litmus test of market bottom. Will take some years to get there.
Got 10% down?
Has anyone used Redfin.com to buy a house? My husband and I are seriously thinking about using them when we finally do buy in the Bay Area (not this year! late ‘08 at the earliest). Curious to hear feedback on their service, whether in CA or Seattle (where they originated). Thanks in advance.
if it’s a condo or townhouse just walk and hand out lit
-you can make great NET .no realwhore deals that way
That quote from Jason Jones is hilarious. He buys a property at auction for $375,000, and then says with a straight face that it “probably” is worth $550,000. No, you bozo, it’s definitely worth $375,000, and only to you.
Something tells me that the house will be back up for auction shortly.
But thank him for setting the comp in the meantime!
He bought it for 400k with costs.
Ask him if he plans to turn around and put it on the market for $550K.
No, you bozo, it’s definitely worth $375,000, and only to you.
Yep. The great thing about auctions is that by definition they identify the greatest fool in the room!
“Tighter lending standards ‘are really affecting the bottom 20 percent of the market right now,’ Motley said. ‘The buyers don’t qualify because the whole bottom of the market really dropped out with the subprime issue.’”
So, from three years of “set the price and lower the lending standard until they qualify”, we now enter the stage of “tighten the standard and lower the price until they qualify”.
And all this time I thought the bottom dropped out because the homeownership went from 65% to 69% and there was no one left on the bottom.
“Loans are beginning to reset, and payments are jumping by hundreds of dollars per month. As home prices have slackened, more average homeowners and investors are falling behind on payments or walking away from properties altogether.”
These articles drive me nuts. They should be pointing out that the value of the house should not lead to homeowners or investors falling behind in payments. It just proves that it was a phony market where nobody could really afford what they were “buying”. There were only 2 driving forces behind the bubble and mania and they were 1) stupid lending and 2) fraud. That’s it. Everything else is just bull—-.
and less we forget hype from Lireah, Applesauce and Gary Watsup that real estate can only go up
The only reason it ever goes down is because of weather, at least that was the popular reason last weather…it will be too hot to build this Summer I suspect as well.
Comedy….and people in the media actually turn to these goofs for their professional opinion on these subjects….HA!!
NYCB
I feel the same way you do about people falling behind on their payments . These borrowers falling behind on payments were short term investors that could not afford the payments long term . These flipper/investors got caught in the downturn market and most of them I suspect got the loans pursuant to fraud .
I remember in 1982 I bought a house that I lived in for 23 years .During that timespan I owned that property the RE market took a dump 2 times but it had no bearing on me because I qualified for my loan payments . These borrowers that are walking now were just short term flippers or equity locust for most part .
I have never seen so many sellers that need to sell so soon after they have purchased a house .
I just told a friend/homeowner about the article in the San Luis Obispo Tribune. She refuses to look at the story and refuses to look at this blogsite. She owns in Atascadero and rejects the idea that the bubble collapse is real. I thank God she is alright in her mortgage (no refi or ARM loans). She is, however, the poster girl for homeowner denial. She closes her eyes, covers her ears and keeps repeating “real estate always goes up, they’re not making any more land, California is different”.
“She is, however, the poster girl for homeowner denial. She closes her eyes, covers her ears and keeps repeating “real estate always goes up, they’re not making any more land, California is different”.
Clearview: I know quite a few of these types in the Bay Area. They are also the folks who can never manage to save anything, are behind on retirement accounts, buy a new car every 3 years, carry balances on credit cards, etc.
The denial is so strong because these folks are SO screwed unless their Golden Goose “pays out” for them.
What is her rationale for not looking? Why would anyone not want to be informed?
Probably because she (and others in denial) are of the mind that if they don’t look then it (the housing problem) doesn’t exist. Period. If they look, they will have to admit (to their dismay) that they are/may be majorly and unquestionably, screwed.
But I know you know that. SHE doesn’t know that.
BayQT~
I think she is the way she is because she wants to believe her house is worth twice what she paid for it. In her mind she gained $250,000 in the past 4 years. It’s hard for her to give up that quarter million dollars.
Amazing… People have no concept of the difference between paper and principal.
“Why would anyone not want to be informed? ”
I keep running into this over and over again with friends, family, and stangers. Ive come to this conclusion: THEY ARE SCARED! It’s the old stick your head in the sand routine.
It doesn’t matter if you talk about the economy, the value of their house, or some sort of bad news in general. I estimate about one third or more of the population doesn’t want to know, as long as they have a job, can pay their mortgage, etc. Don’t rock the boat!
However, I’m like you, I need to know. I want to make the best plans (preperations) I can.
Never underestimate the power of human denial –it is very real and very formidable. Luckily, it has one powerful natural enemy: FUD.
Clearview,
The article is actually more optimistic than the reality (i.e. even here in San Luis where building is restricted, the true price declines are more like 10-15% than the reported 2%). I wonder why a homeowner who is secure in her mortgage would be in such denial? I can imagine feeling this way if I’d planned my mortgage payments or retirement around my home equity, but not otherwise.
So many people in the Bay Area DO plan their retirement around their home equity - due to the size of the mortgage, it’s all they HAVE. We could always tell the homeowners in Santa Cruz. They were the ones who drove the beater cars.
Yes, obviously everyone wants to live in Atascadero!
Atascadero, by the way, is Spanish for “mire” or “muck.”
“It took about 10 minutes to auction off the Vermeer Place home. The opening bid was $250,000. In the end, Ken and Jason Jones of Redding got the 2,730-square-foot home for $375,000, plus a $37,500 auction fee.”
10% auction fee!?!?! I would let the market age another 6 months and buy the house through a RE agent for the same price (or less). For the effort put in (by the auction house), a fee that large is a travesty.
If someone wants a friend in the RE business, they should get a dog.
Aw, Ray, you just insulted dogs.
How much do you think they should receive?? I’m just asking out of sheer curiosity.
Less than 1%, closer to .5%. How much can it cost to market this thing and bark about it for 30 minutes?
Don’t know but I’m sure there’s more to it than marketing and barking. How much do you think it costs to market something like that? I’m pretty sure the fee you’re suggesting doesn’t cover the marketing. But like I said I was just curious as too how much some thought they should be paid.
The percentage should be closer to 2%. $7500 is more than enough for marketing, showing and quick auction of a home. Since there is no negotiating, counteroffers, etc, it’s a joke to charge 10%. But it just goes to show that there are fools willing to pay it!
$3750 for that house at 1%.
-Any photos, flyers, and a person’s time to accomplish- $500
-That home’s portion of auction facility rental cost - $500
-1 hour of auction time, including auctioneer’s time - $500
This is subjective, admittedly, but what other costs are there? I’ve probably overstated the costs above (I would think) and we’re only at a cost of $1500. That’s $2250 in profit for the auction house. I have no idea what the costs are to hold an auction, but when you consider auctions having 10-30 homes if I remember correctly, 1% seems fair to cover costs and make some profit.
In fact, you’d think the auction fee would be a flat fee, not a percentage of sale.
First let me say this again I’m not trying to justify a fee. Hell if they can get 10% so be it.
But I would think it would take more than 1-2% per house to keep a company like that running year over year. You’re leaving out the cost of employees, taxes, rent not only for auction facility but headquarters, utilities, printing costs, phone bills, marketing of the company to banks to get inventory to auction, fuel for inspections etc, etc… those huge full page newspaper ads aren’t cheap they go for 15k a day last I checked for the L.A. Times and that was some years ago.
Again like I said not trying to justify their fee’s but there’s always a lot of discussion on this board about what folks should make. My curiosity was probably spurred by looking at the W-2 of a Postal Employee that carried mail making 120k a year and getting reports back that BK Lawyers are making $5,500.00 a head to save people from foreclosure. It seems the things people really should be screaming about is missed somehow.
Fair enough. I admittedly don’t know what all goes into it.
I will say I always thought RE services should be a flat fee. I really doubt my realtors did and paid more when I sold vs. the other properties they had listed at the time. In fact, given the house I had (very unique and well known in the neighborhood) they probably did less work….
It is typical for auction companies to charge 5% for RE sales, certainly that is what AK firms customarily charge. I think 5% is a tad high, but they may have expenses that
I cannot fathom. 10% is WAY too high in my estimation.
More thoughts on this… I have seen anywhere from 5% to 10% for RE auctions sales (paid by the buyer if the place sells), often plus a fee (say $750.00) for advertising (etc.) which is paid no matter whether the place sells or not. Usually (but not always) auction companies keep open all year by selling RE along with Estate Sale items, antiques, etc. (commissions vary over all types of goods from 3% to 10% typically), RE is a sideline to many auction houses, so they don’t have to have a steady stream of RE sales to keep open. Probably they charge 10% because (1) the buyer pays, so the sellers (who select the auction house) do not PERCEIVE that the 5%/10% differential will change their return appreciably, and (2) most of these auctions are not absolute, so there is a good chance that no sale will occur, so the auction house might need 10%. That being said, it is odd that there is a mix of 5% places and 10% places, one would think that a difference in, say, >$15k in expenses would make everyone move to the 5% businesses. All in all, it might be the case that the only buyers in auctions now are fools who don’t even think about the 10% premium while they are bidding against the shills…
OT: Ok, I’m insane and a little bord…. I just read little ol’ Casey Serin’s latest trials and tribs. Is there a bigger douche bag on the whole planet?
Went to Australia? Dumping the wife? (She should run like hell with this lucky break).
It’s about time for him to start dating Paris Hilton. Great pair.
But Paris has real money. What would she do with a low-rent con-artist like Casey?
“But Paris has real money.”
No doubt about that. It’s a shame that she doesn’t contribute anything meaningful to society. What’s she famous for, being rich? It must have taken a lot of effort to grow up a spoiled brat, coddled and doted upon by mommy and daddy. Maybe the slammer will wake her sorry @$$ up. No sympathy for that skank.
“It’s a shame that she doesn’t contribute anything meaningful to society. ”
At least she doesn’t think that she is a real estate mogul, like some other children of rich parents that I could name *cough cough Trump cough cough*
Share a prison cell ?
I don’t think he went to Australia. I don’t see him in any pictures except the one in the car - easy to reverse, no license plate visible. I think he’s in Excremento.
The Bay Area:
No jobs. Utilities increased monthly. Illegals double
in number yearly. Asians hire only other asians.
Houses the size of toolsheds, and cost a minimum
of $700,000. Groceries triple the cost of everywhere
else in America due to unions. Crime and gang-land
style executions increasing everywhere, and rampant
in San Jose. Corrupt governments.
No thanks.
and yet millions appear to dwell there…
Some people love the smell of cordite in the morning.
They are figments of QC’s imagination.
“Crime and gang-land style executions increasing everywhere, and rampant in San Jose.”
Huh ? Guess I better keep my head down.
Do you know the way to San Jose?
I’ve been away so long
I may go wrong and lose my way
Do you know the way to San Jose
I’m going back to find some piece of mind San Jose -a
L. A. is a great big freeway
Put a hundred down a by a car
In a week - or maybe two - they’ll make you a star
Weeks turn into years and quickly pass
And all the stars there never were a parkin’ cars and pumpin’ gas
I’ve got lots of friends in San Jose
Wo oh oh oh
Can’t wait to get back to San Jose
Wo oh oh oh
Do You know the way to San Jose?
Some of the other complaints may be true, but “no jobs”? Maybe not as many as during the dot-com heyday, but there are still more tech jobs in the Bay Area than anywhere else in the USA, and orders of magnitude more than in most other cities. Believe me, if Seattle or Portland had even 10% of the tech job market that the Bay Area has, I would move there in a heartbeat, but it ain’t so. Only Orange County and San Diego are even in the same ballpark (still a distant second and third place), and all of your complaints about the Bay Area are just as true in those cities.
The recent unavailability of no-money-down financing is choking off sales to first-timers there, agents say, and driving down prices.
Lower prices! that is terrible
Could one also surmise that the availability of no down financing helped drive prices up?
Only in Amurka are low prices on gasoline considered a good thing, and low prices on houses considered a bad thing.
Eventually we’ll figure out how to make gas prices into a bubble - then high prices will be a good thing! I know - I think I’ll go into business selling 10,000-gallon gas tanks you can put in your backyard. You can buy 10,000 gallons of gas today at $3 per gallon, then sell it in 3 years for $7 per gallon! Yeah that’s it! I’ll even offer I/O or adjustable rate loans to buy the gas! No income verification required!
And watch out - those who don’t buy their gas today will be priced out forever! Then you’ll be a bitter bus rider - a castaway of society.
LMAO!
And you could have former NAR members help you: “would you like me to check the oil sir?”
Don’t laugh–my dad did this. He used to have a 500 gallon tank of diesel out by the barn, to fill up his Mercedes 240D.
“Could one also surmise that the availability of no down financing helped drive prices up?”
I will go one farther, and conjecture the availability of no down financing helped shift the U.S. into a negative household net savings position. Why bother saving up when you can qualify to buy a house with no skin in the game?
Forgot the other detail, which is that once you buy a house with no skin in the game, you can enjoy a third household income that possibly eclipses your primary and secondary wage incomes until when prices go into reverse (apparently happening currently in the Bay Area). This is another reason why saving money was not necessary for the past several years, as the house was a perpetual money pump.
“Why bother saving up when you can qualify to buy a house with no skin in the game?”
And prices were going up so quickly, it was impossible to “save up” because the next year prices really were 15-20% higher. Even people who were trying to save for a downpayment couldn’t catch up with market appreciation.
But…but…but, everyone wants to live here no matter what the cost! Remember the Bay Area is special…we have the water, the weather and the San Andres! Now how can anybody baulk at that?
Who cares if East San Jose is just this side of a really big pit with nice weather. That doesn’t mean a 45 year-old 3 bedroom 2 bath tract house on a street known for gang activity isn’t really worth $650,000. Geez, if you buy there you can tell people you live in the Bay Area which automatically makes you more enlightened and smarter than 98% of the US. If you don’t believe me, just ask anybody who lives in Berkeley…they’ll tell you I’m right!
We just looked over in Livermore…a house listed at $614,800 that I would maybe, maybe pay $400,000 for on a good day when I’m feeling generous.
The next big one gets closer with every passing day…when the ground shakes again there are going to be a bunch of insurance companies wishing they never did business here because of the over-inflated values.
I live in the Bay Area and have decided to continue to rent.
Remember the Bay Area is special…we have the water, the weather and the San Andres!
Can’t FAULT that logic!
*ducking*
I am always happy to see stories about the CA central coast. All the evidence suggests that ultimately we should get a significant price correction here, but some days I find it difficult to believe that price correction truly is the most likely outcome.
An interesting observation: there is a 2BR house in Morro Bay listed under rentals as ‘rent to own’ for 4400K/month. This FAR exceeds the cost of ‘renting to rent’ (you’d be happy to get about half of this for a very nice 2BR with a good view). Per Zillow, the house was purchased about a year ago for 600K, then sold in 2/07 for 750K. What the heck were the buyers thinking?
Real Estate always goes up?
One of the first things I learned from a conservative father is one of life’s basic rules : “What goes up must come down”. Apparently this includes Real Estate
“Tighter lending standards ‘are really affecting the bottom 20 percent of the market right now,’ Motley said. ‘The buyers don’t qualify because the whole bottom of the market really dropped out with the subprime issue.’”
Is subprime still contained, then?
No, it’s just beginning…give it another year to really kick in. All of those I/O loans in 2003 that drove the market will be resetting to amortized loans with principal due. These are the people who couldn’t buy into the market using traditional or prime loans. When these loans convert, that’s when all hell is going to break loose here.
Resetting will be thr problem for a few months more, until the neg-am loans begin to RECAST. A recasting loan is a much bigger shock to the FB than a resetting interest rate.
Good question, GS. Is it your impression that some of the hedge funds are starting to worry, but that there has been nothing big enough to make the press yet?
Not quite…
Bear Stearns to liquidate holdings at one hedge fund
International Herald Tribune, France - 6 hours ago
http://news.google.com/news?hl=en&ned=us&ie=UTF-8&ncl=1117305168
i sent this letter to Mr. “In the Bag” Gary. I don’t expect an answer. But if I do, I will share it.
Gary. I am a former California and Orange County resident. I made what seemed to be pretty good money working for Pacific Bell/SBC during 16 years in California. I made on average about $70,000 per year. When I got married, my wife made about $55,000. Together that appeared to well above the average income for CA. I couldn’t conceive of paying $400K for any home, yet alone $623K. Alas, I never purchased a home in CA (was in the Bay area from 1996 to 2006). We were finally disgusted with CA and I was burned out on my job. We moved to Albuquerque, bought a nice home for under $300K (2700 sq ft, one of best neighborhoods, safe). Even paying a fixed 30 yr, best interest rate note takes enough chunk out ($2200/mo) of our $100K income. This house would have been $1.3M in Irvine or East Bay area where I last lived. People like me are leaving CA in drove. The best proof is Uhaul one way rates. Lake Forest CA to Albuquerque NM $2176 and reverse was $360. That means 8 trucks leaving your area for my area for every one returning. I also did financial planning for a couple of years and the people’s finances were in terrible shape. Best example, a family where husband/wife made $13/hr bought a $850K house. They were told they had a $2000/mo loan that wouldn’t change. Well, fine print said differently. Those folks are probably a foreclosure statistic. There are 10 of thousands of such people in CA that bought into those suicide loans. It should be obvious the math doesn’t add up. How can you sleep at night pushing more people like this to financial bondage and future homeless people? How can prices in CA do anything but go way down? Is the undocumented workers picking strawberries at $15K per year going to keep buying the $720K homes (documented case of such in Hollister). Please advise. I will share your answer with thousands of interested folks if you have the courage to answer this email.
Thank you
Alan - a former CA resident and glad to be out of there. If more people knew how nice life was outside of the crime, traffic, smog, high cost, crowds, high taxes, subpar health care, falling apart infrastructure, etc even more would be leaving and CA will be left with the uber rich (Paris Hilton if she is out of jail) and the dirt poor (draining what is left of any public money). I don’t think Arnold can save the day here.
I am not trying to be mean, negative, or anything. I would just like some straight answers and not the NAR fluff.
Not to rain on your parade or anything, but I will be reporting soon that there are radioactive particles in our drinking water here in southern New Mexico. Never found that in southern, northern, or central CA.
~Misstrial
We have MTBE in our water supply here.
Reality is coming to California as the middle class will have big problems just living in the sunshine state with upside down loans, higher taxes, living costs going up etc. Many will wake up and realize the price of “good climate” is just not worth the price being paid. Those who can will move, others will stay as their life styles will deteriorate what will be imaginable by todays standard.History in the making.
LOL good one… I suggest you get it printed in the local paper.
Letters are ignored … greater exposure will kick him in the teeth.
‘There are a number of sellers that have still not got their arms around the fact that the market is not what it used to be.’
I suggest they forget about getting their ARMs around the fact and try using their brains for a change.
After the years spent reading all the real estate agents & their mouthpieces nonstop hype, I pretty much don’t believe a word they say.
If they said ” I saw Jesus “, my translation is: homeless bearded guy in a good mood w. winning lottery ticket.
If they say ” good school district”, actual truth is: send kids to school in flak jacket w. cheap MP3 player painted white so when stolen no big loss.
etc
etc
“I am Jesus” = I can turn water into urine!
I thought the SF Chronicle article this morning was the most bearish I’ve seen out of our local RE cheerleaders. And the author actually explained UP FRONT that a rise in the median does not mean individual houses are going up in value. I think the REIC is trying to get sellers to understand that wishing prices have to start moving lower. Finally. The median’s been going up since sales slowed a year and a half ago, and they’ve never bothered to explain higher medians in the face of lower sales.
And right next to this article was an equally scary one on foreclosures & skyrocketing inventory. It was the perfect kick off for a Friday morning, and should scare the shit out of the FB’s. Game’s up.
“The median’s been going up since sales slowed a year and a half ago, and they’ve never bothered to explain higher medians in the face of lower sales.”
John Karevoll explained to San Diegans that this was due to millionaire purchases. Too bad this explanation does not pass the crap detector of anyone who passed basic college statistics, where one learns that the median is robust to outliers (like high-end sales activity).
“‘If you’re an investor in those markets and you bought using a subprime (loan)…you’re going to turn those keys in,’ Duncan said.”
Don’t sugar coat it, Doug.
I can’t wait until they say ‘…if you bought using a high LTV loan, you’re going to turn those keys in…’ Yeah, keep attention on subprime and away from the high LTV Alt-A…
Also only “investors” will turn in keys?
Also only “investors” will turn in keys?
, Santa Rosa manager for Coldwell Banker, which prepares The Press Democrat’s monthly home sales report.
wonder if his “report” shows the subsidies and incentives
canyon lakes - bonyton beach, florida
730,000 purchased - 550,000 appraised
all of south florida is upside down.
p.s. dont have to cut taxes when house values are dropping every day.
SLO…the cracks are beginning to appear all over the central coast,but the prices are still way to high,it still takes 500k to buy anything here,but heres the change those 500k houses were 650k last year,and the 850k were close to a million last year, still way out of whack for what us local working folk make….also no speculation from la and san fran there all upside down so the 2nd home market is dead,how fast will 7 years of gains be wiped out were talking an area with massive apperciation,200k houses seven years ago have sold for 700k and more and 500k house have sold for 1.2 million. i cant wait for the real show to start…..
Was it Shakspeare who said; “A dump at any prices is still a dump.”?
Sold in 04
From your mouth to God’s ears . . . .
There actually have been a couple of SFHs listed in San Luis for under 400K. Both are a real POS. Still, we are talking 399K POS as compared to 500K POS 2 years ago . . . . I hope that in 5 years, current prices seem like a bad dream.
Re Comment by mrincomestream:
“My curiosity was probably spurred by looking at the W-2 of a Postal Employee that carried mail making 120k a year”
I know a lot about the Postal system and a mail carrier cannot make that salary unless there is some hanky panky somewhere.I’ll forward this to a Postal Inspector as I’m sure one would be very interested as well as any Regional Manager.
Are you 100% sure? I was told it was because of overtime and seniority. I couldn’t believe it myself.
Government employees are increasingly overpaid. I guess an overreaction to the perception they were previously underpaid. Here in San Diego, the government is essentially bankrupt as a result of it’s practice of quietly increasing retirement commitments while not funding the retirement pot, and a good amount of corruption and fraud by our civic leaders.
I’ve always found that employees of PG&E, California Peace Officers & CDF firefighter management and California nurses were the most overpaid. Secretaries at PG&E can make upwards of $100K. Now I know where my utility bill goes…I think I’ll go solar!
We did see prices go down for a number of months early this year, but the prices seem to be going to again, at least in the Bay Area. You can see from the median price chart in this article. These price changes are quoted from MLS data, which is supposed to be pretty accurate.
- Henry