Seeing Prices Drop Significantly Everyday
It’s Friday desk clearing time for this blogger. “If there was ever anything real estate agents could agree on, it’s that Sawyer County, (Wisconsin) is a buyers’ market. ‘One of the questions is: Has the bubble burst? Yes, it burst last summer. We saw a turnaround from a sellers’ market to a buyers’ market,’ said Tom Berlage with Area North Realty in Hayward added. ‘Now, easily, the inventory has doubled. It’s like, where are the buyers?’”
“Berlage and other agents receive ‘hotsheets’ regularly, where they are ’seeing prices drop significantly everyday.’ He said that with the higher-end homes, sellers are dropping their prices sometimes by as much as $150,000.”
“Call it a wave of price cuts or a market adjustment, but there is no way to mask the fact that people selling residential real estate locally have been dropping their asking prices in droves. Deal Estate combed through data from the MLS of Northern Illinois and found that one out of three single-family homes sold in the Chicago area so far this month were bought only after the initial asking price dropped at least once.”
“‘What’s happening is that people who priced their homes in early spring are coming down now anywhere from 5 to 10 percent,’ says Mary Duncan, the sales manager at Prudential Elite Realtors in Naperville. Last week, the sale closed on a Naperville house that Duncan had initially listed in early spring for $470,000, then cut to $450,000 and again to $445,000, before selling it for $432,000.”
“Plunging home sales on the mainland have many waiting to see if Hawaii will follow suit. Sam Chang is moving into a rental property because he believes it’s the wrong time to buy real estate. Chang said, ‘right now the math works out that it’s significantly cheaper to rent than to buy the same property.’ He’s not alone.”
“The Pierce County, (Washingotn) Assessor-Treasurer’s Office mailed new property valuations Friday to the owners of more than 248,000 residential properties. Home values overall have been tamed by a flagging real estate market, according to Assessor-Treasurer Ken Madsen.”
“‘The whole market has gone down,’ Madsen said.”
“Home foreclosures in the Northland have followed the national trend. In Clay County, (Kansas) the number rose to 695 in 2006 from 436 in 2005, an increase of 62 percent, according to the Clay County Recorder of Deeds.”
“‘I’m sure many factors play into the increase,’ said Platte County Recorder Gloria Boyer. ‘Including adjustable rate loans, which have now had an increase in interest rates; higher cost of homes; some lending institutions lending more than the value of homes; and people overextending themselves.’”
“If institutional investors rush for the exits, hedge funds will feel pressure to get out of CDOs, perhaps prompting a downward spiral. The broader housing market also presents a potential threat.”
“In Maricopa County, Ariz., which includes Phoenix, houses are entering foreclosure at a rate of more than 50 a day, according to Foreclosure.com, up 60% from last year, as recent buyers are hit by high payments and falling equity.”
“Home prices in the Baltimore metro area? Up 5 percent. In the Washington area? Barely budging. In San Diego, Tampa, Las Vegas and several dozen other metros areas? Down, down, down. But in this corner of Appalachia, home prices have just shot up 17 percent.”
“‘Anytime there is a large price differential between…neighboring regions, then the low-price region eventually catches up,’ said Lawrence Yun, senior economist with the Realtors group. ‘Cumberland is catching a little wave.’”
“Premier Lorne Calvert and Mayor Pat Fiacco love to go on tours to Alberta to recruit people to come to Saskatchewan to work and live. The only problem is that there is no work.”
“I know the real estate market is booming here, but do you know why that is? Is it because of new industry, more jobs, people moving here from other provinces? No, it’s because real estate investors and speculators from other provinces know this is the only affordable place to buy.”
“So, yes, in the short term, prices will go up. But in time, the market will drop because nobody earns enough money to afford these new prices.”
“KB Home has tried to weather the dreary housing market by building smaller, less expensive houses. The most recent loss came in spite of KB Home’s efforts to reduce the size, and, therefore, the price, of most of its homes.”
“Yet buyers have been staying out of the market, in large part because lenders have made it more difficult to qualify for mortgages and because of expectations that home prices will continue to decline.”
“‘There’s a feeling that consumers are not comfortable that home prices are going to stabilize,’ said Steve Johnson, a Riverside-based building industry consultant who focuses on the California market. ‘Consumers are looking for further discounts and further deals.’”
“My Dad was a repo man for GMAC, the lending arm of General Motors. At 3, I couldn’t tie my shoes but knew that if you didn’t pay your auto loan on time, Dad would come to your house at 2 a.m. and steal your car.”
“But what really stuck with me was his disdain for the people from whom he had ‘liberated’ the vehicles, people who had taken out massive loans to pay for cars they knew they could not afford, but who were surprised when he showed up.”
“‘How, exactly, did they think this was going to end?’ he asked.”
“Thanks to my early fiscal training, when my husband and I bought our South End condo in January 2004, we ignored the loan officer who wanted to sell us an interest-only loan for twice the amount we needed and instead got a smaller adjustable-rate mortgage.”
“Boxborough, Topsfield, and West Newbury, three of the wealthier communities in the state, showed the top three largest percent increases in foreclosures in Massachusetts in the past 12 months ending April 30.”
“So how do we fix the foreclosure problem? We don’t. Time does. We help the people we can and punish anyone who preyed on those incapable of making sound financial decisions. And the rest, sadly, will lose homes they probably couldn’t afford in the first place.”
“It’s called common sense, and if you abdicate it, guys like my Dad show up at your house at 2 a.m. Who, exactly, is surprised when this is how it ends?”
This was the week that proved there will be no spring bounce in 2007! My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics.
Will the spring non-bounce be followed by the summer thud?
Summer Of Thud© 2007
HelloKitty: then you would be Matt Dillon
http://tinyurl.com/22rqxh
Hmm….thud would mean that it stopped, as in the sound a brick makes when hitting the floor a thud. I would think more of a splintering crash, that would represent the wrecking ball plunging through the floor on it’s way to the next level to keep on going. So I would say crash.
Is ok to say ‘pancaking’ like the WTC? what too soon?
Or perhaps just the wind whistling by at it continues in free fall.
Anybody remember the movie “The Abyss”(?) where that huge crane comes crashing down…and just when it looks like everything will be OK, it slides off the ledge into the trench…still attached by the long cable? Is that where we are right now…the crane is just starting to tip for the second leg down?
More like the sound of one of those pink ceramic piggybanks shattering at it hits the floor. To the dismay of the bagholders, the piggybank was empty, as was the cookie jar.
It sound more like a collective bunch of Homer Simpsons rolling down a hill.
no, it’ll be followed by the high whistling pitch of a falling bomb.
No worries. I will just wait for the Spring selling season of 2008 and re-list my home and 5 other investor properties. Prices will be up again by then. LOL.
I don’t think so. I think this year will be different from last. Last year there was nothing in the MSM. Now it’s everywhere. Last year all of these ARMs weren’t resetting. Now they are. Last year there were still a lot of people making money. Now there is just a lot of pain.
Autumn 2007 will be the beginning of the real estate bloodbath. I predict that by November 1 the illusions will have vanished into thin air.
The Spring Sting!
“Plunging home sales on the mainland have many waiting to see if Hawaii will follow suit. Sam Chang is moving into a rental property because he believes it’s the wrong time to buy real estate. Chang said, ‘right now the math works out that it’s significantly cheaper to rent than to buy the same property.’ He’s not alone.”
Coming back from my honeymoon in Hawaii I noticed a few things:
1. Fear on Oahu. Denial on Kauai and the big Island.
2. The Japanese have become net sellers on Hawaii.
3. An amazing amount of construction, everywhere!
4. It was easy to get reservations at high end restaurants.
As Ben noted, no spring bounce in 2007.
Now we go towards the winter of despair.
Got popcorn?
Neil
congrats! did they throw popcorn at your wedding?
As Ben noted, no spring bounce in 2007.
Now we go towards the winter of despair.
I believe this will be the winter of discontent. the following one will be the winter of dispair. After that ….. This will take a LONG time to unwind, so stock up on that popcorn.
And, even with a rate-of-return of 0% - a check to Ben is a better investment than many/most of the properties we discuss here daily!
I think we have all gotten more than a 0% return participating in Ben’s Bodacious Blog. Kicking Ben a few bucks for the best education on the web is well worth it. I am sure everyone else will second my hearty thanks to Ben for his hard work on this blog. It is educational, as well as hilarious.
Absolutely! Ben, you have done something very significant with this blog by creating a community that has held a civil discourse on a complex topic. Even when the Trolls were thick under foot you marshaled us onward deeper into the caverns and helping us all to drag the beast out into the light of day where it sits exposed today.
Pitch in folks, there are more beasts hiding yet. Speaking of beasts, anyone heard from Gary, “in the bag” Watts lately?
Thank you, Ben!!! Hope your fundraising was a success.
You and your blog have definitely been a major part of many people’s lives over the past couple of years. Thank you!!!
Gary is trying to say he was half in the bag when he made his 15% appreciation comments. People who listened to his inane chatter are left holding the bag. Many people would like to give him a swift kick in the bag.
I’ll be here all night folks. Please tip Ben on your way out.
Was told by some friends who rent a bayside condo that they are seeing a lot of empty boat slips at their place because the owners can’t afford the additional fees.
There appears to be a fair number of empty slips here in MA as well, from Boston North anyway, don’t know about other areas.
Many, many boats still covered from this winter. I suspect many of these will remain “mothballed” for the remainder of the season.
I am hoping we are coming up on some kind of economic reset, where people’s attitudes about money and debt, come back to earth.
You can get a boat in New Jersey for a song. That is the word from our friends out there. Nobody is buying boats. But plenty are trying to sell. It sounds like the real estate market in Northern Joisey.
Isn’t Tony Soprano’s “The Stugots” available for sale in New Jersey?
‘Anytime there is a large price differential between…neighboring regions, then the low-price region eventually catches up,’ said Lawrence Yun, senior economist with the Realtors group.
This guy may be even worse than Lireah. Funny, does it not cross his mind that the higher priced market will catch up with the lower priced one, then they will both fall? This seems to be happening in many places now.
I agree. Everyone said to buy in the cheap areas an hour’s drive from the expensive areas. Guess what, the cheap areas are dropping faster now! No one wants those cheap locations except the greedy speculators who lose!
There’s a feeling that consumers are not comfortable that home prices are going to stabilize,’ said Steve Johnson, a Riverside-based building industry consultant who focuses on the California market. ‘Consumers are looking for further discounts and further deals.
Hey Steve. I believe that they are going down that flushing device in which most people eliminate waste from their bodies on a regular basis (daily). It makes a ‘whoosh’ sound. Also, where most statements from realtors, mortgage brokers, etc will also be heading from this point forward.
‘Now, easily, the inventory has doubled. It’s like, where are the buyers?’”
You mean the number of buyers did not magically double, either? That’s a shock! NOT!!!
What a stupid comment. I mean, do these people not expect that the market will behave according to actual, real logic?
So your inventory doubles, where they expecting 60% more buyers to show up to keep the party going?
Here in Tucson, we also have a shortage of buyers. But no shortage of “for sale” signs. If anything, they appear to be multiplying.
From the repo man story:
“Homeownership is not for everyone. There’s a reason it’s unattainable for some people, and as a society we’re too afraid to talk about it,” says Erin O’Connor Jones, executive director of the Family-to-Family Project.
Preach it, Erin, preach it!
I want to hear you preach it to those parents who bought houses for their college student children. (For the most part, the kiddies can’t handle homeownership even if it was handcuffed to them.)
I want to hear you preach to the people who just plumb don’t have the whatever-it-takes to maintain and repair their homes. (We’re talking about people who can’t even take a second to bend over and pull a weed.)
Okay, I’m finished dissing my neighbors. Gotta get back to work now.
“It’s called common sense, and if you abdicate it, guys like my Dad show up at your house at 2 a.m.”
hmm.. a Catch 22.
Abdicating common sense shows you don’t have common sense to begin with..
For a lot of “investors” it wasn’t abdicating common sense. It was playing a free-roll.
Buy a house with someone elses money. If the house price goes up, you keep the profits. If the house price goes down, you let the bank come take it.
Nothing at risk but your credit score.
“Nothing at risk but your credit score.”
And the world economy. But the losers end as losers and the big boys get ever richer.
Not this time. This time the bankersters loose bigtime.
“But what really stuck with me was his disdain for the people from whom he had ‘liberated’ the vehicles, people who had taken out massive loans to pay for cars they knew they could not afford, but who were surprised when he showed up.”
“‘How, exactly, did they think this was going to end?’ he asked.”
They thought that they would refinance their 7 year auto loan because their Lexus would appreciate in value.
haha….thats the best reply I’ve seen yet. Kudos Sobay.
The brother of a guy I played sport with 20 years ago was a repo man. He made no bones about it; he was the medium heavy who physically repossessed (mostly cars and trucks, but sometimes whitegoods).
He was not disdainful of the people he had to take the goods from, and told me was very often sorry for them because of their situation. (IF they surrendered the goods without any real argument.)
In fact, he had taken it upon himself to carry a list of charity and social security contacts, because the reposession often ended in an impromptu credit counselling session.
However, he also told me that if they started a fight or did a runner with the vehicle, then he had no sympathy for them at all. At that point in his eyes they were criminals.
O/T: two things
1) I took my wife to the Dr this am for foot surgery. The receptionist while logging in my wife struck up a conversation about how happy they are now that they are renting a house vs owning.
2) Radio this am was telling people that Tahoe was having massive cancellations and to please come as tourism is the life blood of Tahoe. Yes Tahoe is beautiful but it takes a long time or a good rainfall to get rid of that smoke smell.
Tahoe should be depleted….of people.
If it were my decision, there would not be a single human habitat allowed within 20 miles of the lake. I’d make it a national park, on par with Yellowstone or Yosemite.
I feel the same way about much of Florida’s coastline. Most of it should be national or some sort of public parks, nature preserves, etc., with limited resort and recreational development.
I agree with you and KThomas. Kind of odd of me, since I’m a pure capitalist. I like the Nature Conservancy charity. They buy up land and preserve it. There are too many people in this world and a lot of ‘em trashing it.
yeah.. you and the TRPA who, btw, have held this belief since their inception, imo.
..which gives me hope RE values will skyrocket post-fire since just rebuilding the burnt homes will likely be even more of an unmanagable, costly, enviro-political-nightmare hogtied with red tape than it has been.
Are you thnking that there are no peoplw within 20 miles of Yosmite valley floor? It’s more crowded than Tahoe.
I wouldn’t mind seeing that either. Much better for all of the people to be able to enjoy it, rather than the Michael Milkens of the world building monstrous eyesores with private beaches behind gates. It’s sickening what’s happened there.
that comment had a familiar ring to it but it took me a while to place it.
The theory of Communism may be summed up in one sentence: Abolish all private property. - Karl Marx
But of course our reasons, unlike those of the communists, are far more noble.
And nobody is proposing we abolish all private property.. well, i can’t say nobody. And we only want to take the really good stuff.
lemme outta here..
No, we’d make the good stuff (oceans, lakes, etc.) available for everyone to enjoy. Not everything should have a price tag on it.
So the person’s dad was a repo man, taking back the vehicles sold to people who couldn’t afford them. Shouldn’t his disdain be for the person who pays him, the same person that suckers the less intelligent into purchasing things they cannot afford?? I know, I know, everyone should know better. In the case of homes, they say not to worry, as the value will go up and you can refi, or similar dribble from realtors and brokers. Truth is, there is a huge amount of profit in doing that. A friend in elementary school’s father ran one of those lots. You can make really good money when you get to resell the same car 5 times over. Now I believe he plowed the profits into property over the past 20 years.
There was certainly some moral ambiguities in that article. But the fact that the moral of an MSM story is “Don’t buy stuff you can’t afford”, well, that’s a huge victory.
And for more on this fun-filled topic, see:
http://www.mypartypost.com/watchvideobig/2008/SNL_Stop_Buying_Stuff
“So what you’re saying is that I should buy things and then hope that I get the money to pay for it?”
“No!”
Hope I quoted from memory well enough…
Random (probably OT) notes from my three week jaunt around the US:
Many, many “For Sale” signs on mobile homes, etc. in the Upper Valley of NH/VT. Can’t tell if it’s confirmation bias, but it seems as though there are more than I saw last time I was there. Oh, wait. That was in Dec.
My friend with two duplexes (one with an ARM) in Boston still thinks that he is OK.
Local REIC member Sally “Puff” Courtney is still on the second page of the Telluride, CO local paper hawking absurdly expensive homes. Lots of colored, glossy photos in the paper (with the circles and arrows and the paragraph on the back of each one…) of said houses.
Yellowstone is going to burn like 1988. They’ve already had fires in June.
There are still homes under construction right off I-80 all the way from Wells, NV to SF. Couldn’t see anybody working on them. Are house builders giving their people Fridays off?
MrBubble
“But where would this ’saved money’ come from?”
Good times.
Tiiimmmmbeeeerrrrr!!!!!
“‘What’s happening is that people who priced their homes in early spring are coming down now anywhere from 5 to 10 percent,’ says Mary Duncan, the sales manager at Prudential Elite Realtors in Naperville. Last week, the sale closed on a Naperville house that Duncan had initially listed in early spring for $470,000, then cut to $450,000 and again to $445,000, before selling it for $432,000.”
Errrr….what? 10%? Who are we trying to kid, and some tard bought it at $432 from $445? We have a looooooong ways to go people, buckle up and sit tight. these people buying at still inflated prices are just propagating the current problem in lesser degrees.
Its sad but there are people who are still deluded. Don’t worry, most people will face reality in the next several months as prices drop much more than the 10% my dad and others think.
Little AZ update.
Co-worker put $15K down on a $500K house 6 months ago becuase they were offering $50K in incentives (pool, kitchen upgrades, etc) and closing costs. I signed assuming his old house would sell for $200K more than he owed. After repeated price drops on his oldee (2000) house is still would not sell. I convinced him to back out of the deal to buy the new house.
When he told the builder he was backing out, they took another $30K off the price. Yeah right….
Deadline to close came and went and he was intent on walking away from his $15K deposit. Then they sliced another $20K. Then another $40K.
So, $50K in incentives and $90K in price drops off a $500K house. Call it $550K house for $410K. $140K/550K = 25% reduction.
His wife made him do it… Wipped!
They closed yeasterday. 10 year I/O, 6.25% fixed. New payment is tripple their prior payment.
He is hoping to not take more than another 20% loss over the next 2 years with, then gain at 6% per year, putting him well above water in 10 years. I guess maybe that is reasonable. 25% + 20% is a good 40% off peak.
Still, his wife that has been a stay at home mom for 6 years will have to go get a job…
They closed yesterday. He had to take off at noon today to go home and comfort his wife because it finally hit her that they now own two houses with combined debt more than 7 times his income, and she really does have to go get another job.
Someone on these boards (think it was Ben) suggested that a great deal of the Bubble was a result of the female nest-building instinct compelling the husbands to buy, no matter what.
Interesting supposition, but makes a degree of sense.
We need to quit blaming wives for this sh#t. If the husbands are that big of pussies then they would screw up whether the wives were involved or not. They chose their mate. Place the blame where it belongs.
Yeh, men have been saying “The wife made me do it” ever since Adam and Eve. Awww, buck up, boys!
“Sorry I had to slap you around, but you went hysterical when I said, ‘no more’.” - Humphrey Bogart
Share the blame 50/50
I hope she has to end up working 50 hours a week to enjoy that McStucco
Uhh, excuse me, my husband is the one giving in and ready to buy now.. I AM the one saying wait it out! SO TAKE YOUR APPLE AND SHOVE IT! LOL!
Stay at home mom,
Schnooks
Hey my husband and I made the decision TOGETHER that we were buying a house $150K less than what we sold our home for because I didn’t want our payments to increase by more than the monthly car payment amount we just paid off..we ended up increasing our monthly mortgage payment by $300 dollars..So it takes TWO to TANGO…
Darrell, what size of sock have you had to stuff into your mouth when talking with this coworker?
Or, let’s put this another way: What is the poundage of the trout that you’d like to wallop him with? I suspect that Txchick57’s 20-pounder doesn’t quite have the heft you’re looking for.
I just lay out the statistics…
He tries stuff like “but in L.A., in prior corrections, the prices didn’t crash to half price.” No, but in prior run-ups, they didn’t double. In past crashes, they prices fell back to be in line with rents, since rents is a good indication of lack of housing.
“But everyone is moving here…” They were moving here for construction jobs, which are goin away. “Oh, but those people won’t leave.” 1) How do you know that? 2) Irrelivant. They don’t have to leave, just stop coming since we already have 11 month supply of houses on the market that we need sold and builders need to keep building.
Oh… deep down I’m sure he knows he’s toast.
While he was considering buying, I hit him with every stat to try to talk him out of it. Now I’m done…. I did what I could.
I’m sure his neighbors are going to love him, coming in at $140K = 25% under what they paid for a similar house 9 months ago. Wonder how he will feel when someone else comes in 12 months from now for 25% less than him.
Sounds like an episode I saw of big spender, what a great show that it. When the shopaholic mom in AZ I believe realized they had to sell the house and she had to get a job.
God I love that show, it make me feel good about my finances…HA!
god, not only stupid, but needy and unstable. he picked a winner for a wife
Who was the builder? He really didn’t do that bad (25% off is decent), except they bought too much house. I/O is crazy.
Meritage
The IO thing seems so stupid to me. It doesn’t really lower your payment all that much. I guess it is an ok thing, if you are disciplined enough to prepay, but c’mon, you know something else is always going to find that “extra” money each month. Mostly, it just seems like a way to buy more house than you can afford. I hate the sales pitch, where they justify it by saying, “you don’t pay much principal down the first few years, anyway”. Any time someone takes a loan, part of the loan agreement should be the amortization schedule. If people saw that, I bet they’d either think twice about the loan or make more of an effort to pre-pay. It is amazing how fast those pre-payments knock down the principal and the total interest expense over the life of the loan.
Amen to that. As a single woman, I was able to pay off my Silicon Valley townhouse in only 11 years because every time I made a mortgage payment, I paid *some*thing extra…over time, that added up.
If some salesman offers me any kind of a ‘deal’ as I back out, it’s OVER.
Just on ESPN2, show calls “AutoShow”
A beautiful TV personality talks about Newport beach CA (not from CA, and don’t know where it is). She was show casing Fletcher Mercedes as the largest dealer in the country. She ran off some quick facts to start the segment. Median house price $1.3M, median income “almost approaches six figures.” The whole story is about how this auto dealership found out a new way to attract customers. They open a clothing retail shop inside selling Mercedes Benz clothing. They also opened a cafe, and of course the putting green outside. The most ironic part of the show was when they showed the plush lounge inside where like-minded people can meet and perhaps do “major” business deals. What they show was a bunch of people sitting around looking bored. These are the supposed six figure earners, but from loose inspection suggest that they are working class folks and what appears to be Asians (shop owners).
Newport Beach where houses cost 13X income and working class buying Benz… At the end of the segment, they feature a newly open Lexus dealership just down the street.
Cinch
“..Median house price $1.3M, median income “almost approaches six figures.”..”
now there is a disconnect..ok, let’s say the median income is $100k even, that puts it at 13x. It sort of makes Mass at 5x - 7x look reasonable.
NB is douche bag central, rare to find a person there living in their means, more important driving around with a plastic smile and the top down with a phone on the ear as they blindly cut people off trying to look real important. If I won the lotto I wouldn’t live in NB, what is amazing is HB is next door and a world apart in the type of people between the two cities…at least Sunset and HB are not too different. Best part is you go to Sunset and they have a higher property value there, with free parking and millionaires all walking around in flip flops and t shirts…regular t shirts from Hanes. I like Sunset for the down to Earth feel there, as far as I am concerned they could carpet bomb NB and I would cheer them on from the hills.
“carpet bomb”..please no carpeting, it’s so 80s. Maybe they can “stainless steel bomb” it instead.
And when they are finished you may as well give them directions to the Bronx.
“If I won the lotto I wouldn’t live in NB”
If you win the lotto you might still not be able to afford to live in NB.
Typical lotto winnings: $7 million
After taxes: $3.5 million
Lump sum (instead of annuity): prolly $2 million
That’s pretty much a typical home in NB (my landlord lives in NB in a 3.5 million dollar house, according to zillow).
So even after paying for the home with lotto winnings, you’ll still need to cough up on the order of $2000/mo. just for taxes, not including insurance or possible HOA dues.
Not to defend NB (I grew up in Huntington, and Newport is way too plastic for me), but there is a LOT of money there, and just looking at median income to median price for a single town doesn’t always tell the full story. Now, looking at OC as a whole, we’re still screwed. The OC Register had an article showing that OC was the second least affordable housing market in the nation (only behind LA), with only 4.4% of houses in OC affordable to someone earning the median income. 4.4%. We are going to get hammered.
I think watching these two dealerships over time will give us a another view of how this is playing out. While there is a LOT of money in NB there are also a LOT of wannabes there buying the C-Class (a collector of MBs told me the C-Class meant CHEAP! and I’ve heard some horror stories about the C’s) and spending far more than they can afford just to appear wealthy. I guess it is the “fake it till you make it” attitude which to me is bogus. I go by the “form follows function” rule so my 99 Jeep is just fine thank you and I’ll rent my basic ranch for now and I really like to see my income bar higher than the expense bar in my Quicken budget reports because if my finances are not FUNCTIONING then the FORM of my life needs adjustment to make it function. But there are so many people here in OC that are running a completely different program. They want to be IN, they NEED to be IN.
In touch, in the loop, in style, in the groove, in the know, in the game, in-teresting, in-ternational, in-timate, in-triguing, in-describable, in-tellectual, in-play, in-dividual, in-dispensable, in-dulgent, in-ebriated, in-effable, in-ept, in-estimable, in-expiable, in-fallible, in-genius, in-sousciant, in-sufferable, in-tense, in-toxicated, in-tractable, in-destructable, in-vestors, in vogue. And IN DEBT. They have drunk the kool aid and are living the “new paradigm” of debt as wealth like there is no tomorrow.
This may be ground zero for the most historical “come to Jesus” moment in history when all of these Tourons (tourist + moron) realize that tomorrow always did exist and it is walking up the steps with the bills they need to pay.
i get a daily email from my realtor of new listings and revised listings. on tuesday and wed, i was mailed 9 listings for the lafayette/orinda/moraga, CA area (affluent area) and 7 of the listings had price reductions. more to come, i’m sure.
OT, but you just have to read this to believe it.
http://tinyurl.com/3yzezk
Yup, those Americans are working hard at committing acts of murder and mayhem. And that’s work that immigrants just don’t do.
“The percentage of foreign-born residents is … 40 percent in Los Angeles, according to 2005 census figures.”
No wonder I feel like I’m in another country when I go home to visit family in L.A.!!!
In Silicon Valley KB Homes is building large townhomes. At least they look large from the outside.
Last attempt to find the last fools in the valley.
I went into a KB development in Riverside on my way home from the course today. They (Bridgeport in Riverdside)had been selling from the low $700s the last time I past (in March). Now they start in the high $500s! That’s about a $130K drop. No messin around with small discounts, Let’s just whack 20% off! Problem is they still need to take another 20% off. There are several For Sale signs up on the lawns of homes as you drive into the tract. Those poor saps are SKREWED! $700k+ in friggin Riverside…..what were they thinking.
Real estate always goes up?
Since putting my house up for sale, and using a few Internet sites to help advertise, I get some of the strangest emails. The one below just doesn’t pass the smell test, and it never ceases to amaze me how quickly some people can come up with a scheme to separate another person from their money. The sad thing is, they succeed. I think the last few lines are rich, about needing 5 years to get your money back to you.
Hello,
I saw you property for sale on Craigslist. I may have an offer for your property. We can of course be mistaken, but this might be the ONLY offer you’ll get that makes sense.
First of all, allow me to explain that our offer is NOT for everyone. Our offer is NOT for you if you do not have one of these challenges.
- You owe more than what the house is worth and you want to save your credit.
- You have a negative cashflow.
- You do not have an offer that is enough to pay off your loan.
- There is not much equity in the property to pay for an agent or the closing costs.
- You have the property rented but the current rent is not going to be enough to pay your mortgage.
- You no longer want or able to keep paying the mortgage.
- You are paying more than one mortgage.
- The mortgage payments are too high and or rates are adjusting.
- You no longer want to be a landlord or a property owner.
- You want to sell your property but you can not afford the 10 month or longer wait on the MLS.
- Your house was listed with an agent but the listing has expired with little or no result. ie: Escrow didn’t close, loan didn’t funded or the seller backed out.
What we are looking for is very simple, but not all property qualifies. We are only looking for owners that can afford to leave their existing financing in place. With the existing financing or mortgages staying in place, your property would most likely qualify for a FULL PRICE OFFER. In return for keep the mortgages in your name, we would pay your payments for you. In many cases, we are able to cover 100% of the mortgage, taxes and insurance payments.
With home prices quickly dropping in this market, we would need at least 5 years to refinance or sell. When we are able to sell or refi, we would of course pay off your loan and pay you any equity we owe you.
What we offer is very simple; the opportunity to stop writing HUGE checks to pay for an empty or unsold house that is losing value everyday.
If this sounds like sometime you would like to consider, please call *****
This is a well-known scam, old as Earth.
http://www.consumeraffairs.com/news04/2005/ny_real_estate.html
I came across this story:
I put my relatively new home up for sale in April, for sale by owner. Doing that, I could cut the price and give additional savings to the buyer and to me. At the time it went up it was $15K less than the same model next door and $20K less than the same model a couple of doors down. Another house, same model, in the neighborhood I beat the price by $35K.
All but one immediately reduced their prices, the two houses near me had been for sale for over a year with agents. I was still $5K less than one and $10K than the other. Both those houses sold on the same day about 3 weeks ago. The buyers didn’t even bother to stop by to look at my place. And, to blow my own horn, my place looked great in comparison. The highest priced house had a mess of a yard, full of weeds and dead lawn. I guess a $5K or $10K savings on the identical house doesn’t mean anything to buyers. If course, no telling what their agents may have said about my place to discourage them from looking. I do intend to find out and, if I find they did milead those buyers, there are a couple of agents’ groin areas that are going to have targets placed on them for a swift kick.
Mine is a single story, I thought it would sell faster as those are getting harder to find and are in demand. I can’t figure what happened. Every person who came in to view the house thought it looked great, as I asked them their honest opinions. No, I don’t have ceramic tile floors and granite countertops. I dislike both, but the house was discounted enough that if someone wanted those things they could have easily had enough savings to do it the way they wanted it. I even warned people on my flyers that this was a smoking allowed house, so the anti-smoking crowd didn’t need to waste their time or mine. I had about a dozen viewings.
So, last weekend, I run an ad in the local newspaper on the house, for the first time in this area cutting the price below an unheard of for years $300K. Now this is a good area, most homes in my development are well over $400K, We border houses that are $600K to the west and houses over $2 million to the east, a coupld of blocks away, not exactly a slum neighborhood. I got one call out of the ad, and one call only. The woman came and insisted that, since it was a buyer’s market, she wanted ALL the savings I was going to realize by selling by owner, about $24K with an agent and if the house was priced at comps. And she expected me to WAIT until she sold her own house!! I was dumbfounded and irritated. Present me with an offer, but don’t take me for a fool.
Fortunately, I own the house outright, so could sell it for a dollar if I wanted to go insane. I’ve got to sell, as my mother who was co-owner, died in February and Nevada, and I am told soon California want penny for penny reimbursement for all Medicaid claims made for her since age 55. I am exempt, but my sister is not, and the only way I can save the inheritance it to sell the house. If I die tomorrow, my sister is on the streets.
I took the signs down last weekend and will put them up this weekend and try again, but sales here in Vegas are hard to come by. I’ve had several call wanting to rent the place because they lost their homes. That won’t do me any good as I can’t afford to keep one place as a rental and go buy another primary home.
There are over 27,000 homes for sale here, half empty. ANd the builders keep building and building and building more.
Yes, that’s my story, Rich. I question what relevance it has to the post I made above it. I wasn’t talking about the boring details of selling my home, I put up a post about people out there seemingly able to find a way to come up with suspicious deals regardless of whether things are going well or badly.
I’m sure no one wanted to read your repost of my old post again.
Sorry, Rich, the source of that post of mine wasn’t this blog but another website. I still question the relevance of that post to what was said here. I didn’t want to go into those details on this blog.
Seems that Rich was just sharing a post about a home sale, not knowing the seller was an HBB’er.
Since it’s here…I know a lot of us don’t much care for realtors, but in this market, I would seriously consider hiring a **GOOD** agent/broker who is honest & experienced. Though it might seem counter-intuitive, you often do come out ahead, especially in a bad market.
Good luck!
(If there was ever anything real estate agents could agree on, it’s that Sawyer County, (Wisconsin) is a buyers’ market. ‘One of the questions is: Has the bubble burst? Yes, it burst last summer. We saw a turnaround from a sellers’ market to a buyers’ market,’)
FOR THE LAST DAMN TIME, UNTIL PRICES GET BACK TO AFFORDABLE FUNDAMENTALS THIS IS A NOT DAMN BUYERS MARKET. THIS IS A RENTERS MARKET.
thus endth the lesson.
RE 5:24
How can it be a buyers market when there are no buyers. I personally removed myself from the buyer pool.The buyer pool has been drained.
No! No!
Repeat after me: “You are a buyer on the sidelines!”
“KB Home has tried to weather the dreary housing market by building smaller, less expensive houses. The most recent loss came in spite of KB Home’s efforts to reduce the size, and, therefore, the price, of most of its homes.”
Who do they think they are fooling? If the cost per square foot of their smaller houses are the same as the cost per square foot of their larger houses which are overpriced, the smaller houses are still overpriced.
DING!! Give that Phoenician a kewpie doll.
Actually it usually is higher but the total cost is still lower and some fools will still buy as a small house is all they can afford. Anyone with a brain won’t buy till the bottom(and we are far from that)
“Yet buyers have been staying out of the market, in large part because lenders have made it more difficult to qualify for mortgages and because of expectations that home prices will continue to decline.” Wrong!
Lenders Have Not Made It More Difficult to Qualify For Mortgages. The investors have made it more difficult to qualify for mortgages, by cutting off the excessive supply of money for mortgage lending. Interest rates are still at historically low levels, and anyone who can qualify for a loan, using prudent lending standards, gets one. The money that’s still available for mortgage lending, goes to the most qualified.
Of all the threads I’ve read so far, aside from the quote I just commented on, I find this thread to be the most truthful, by those quoted. I almost thought I was listening to a Ron Paul speech. The truth will set you free.
A friend of mine who bought a house in Beaumont, California last year got a new job up Norf and has to sell it. It was in a new neighborhood.
He is now learning that two other nearby houses of similar model type were sold recently, both short sales. One for about 1% off and the other for 20% off the original new home price that was paid. He thinks the 20% off one had a larger down payment. Whatever the case, that owner lost a lot of money. They certainly had to have been forced to sell. No one with any sense (except bubble home buyers) would throw 100k down the toilet.
Not that people were waiting with baited breath but I did in fact close on the sale of my condo in DC yesterday. I got my asking price after 3 weeks on the market.
Now, I’m going to sit on the proceeds for a while. Thank you Congress for not forcing me to buy something in two years. I think I’m going to like this renting gig
Here in St George Ut. People are very afraid. We have the driest winter on record, yet still now fires. Slowest housing market in 10 years, yet still building continues. Fire departments are worried a big one is comming. The housing market is about to implode. Everything is for sale, from homes, big boy toys, cars and trucks. Yet sellers holding on to price, and buyers not comming to the party. Weather this week 105 to 115 5% humidity 20-30 mph winds. And firework sales start today. Most retailers report slowest month for sales in 10 years.
Got a match?
Yay! Super dooper yay! Good news for my little ears. I hate what has happened to St. George.