‘Sellers Don’t Want To Miss An Opportunity’ In CA
Reuters found the inventory statistics that the CAR economist couldn’t. “California had more unsold homes in February than at any other time in the past eight years, as sales of existing houses slowed further with rising mortgage rates and high prices. The inventory of unsold homes rose to a 6.7-month supply last month, said the California Association of Realtors.’”
“‘There are a lot of people who can’t afford to buy at today’s prices,’ said John Burns, an Irvine, California-based consultant to home builders. ‘It looks to me like the market is headed for a soft landing.’”
“Existing-home sales in California last month dropped 15.5 percent from a year earlier, marking the fifth consecutive month of year-over-year declines, according to the report. February’s median price for an existing, detached single-family home for sale in California slipped 2.9 percent from January.”
“California’s housing market is slowing not only because buyers face big downpayments and rising mortgage rates, but also because sellers are holding out for top dollar and are willing to let homes stay on the market for longer times, said Leslie Appleton-Young, chief economist for CAR. ‘Sellers are not eager to sell,’ Appleton-Young said. ‘You have a marketplace where you had a surge in listings over the fourth quarter where sellers didn’t want to miss an opportunity.’”
And Inman News has this on the borrowing front. “The use of adjustable-rate mortgages for home purchases has declined significantly in California during the past three months, the result of more caution among buyers and lenders. The use of ARMs, which are easier to get and are considered by many to be an indication that buyers are stretching their finances, fell to 51.9 percent in February. This was down from 63.7 percent in January, 68.7 percent in December and 70.9 percent in November, according to DataQuick.”
“ARM usage peaked in May last year at 73.7 percent, up from the prior real estate cycle in September 1988 when ARMs accounted for 66.1 percent of all home purchase loans. ‘Some of the financing issues at play here..include this year’s higher conforming loan limit, the spread between the cost of an ARM and a fixed-rate mortgage, use of equity lines, and federal regulators who have recently told lenders to lower risk levels,’ said Marshall Prentice.”
“‘It’s a lot easier to loan somebody money when the collateral is going up in value at more than 20 percent a year than when values are going up at half that rate. What we have here is a market cycle that has passed its frenzy phase and is moving into more balanced territory,’ Prentice said.”
“The use of so-called exotic mortgages is plummeting in California as home buyers become less willing to use the riskier loans and lenders seem less eager to issue them. Some observers believe a reduction in adjustable-rate mortgages could exacerbate the housing slowdown, since the tool is widely credited with helping marginal buyers purchase a home, especially in a high-priced market like the East Bay.”
“Another report released Thursday noted that ’slam-dunk’ loans, those approved with a minimum of scrutiny, are also falling in California. The percentage of such loans dropped from 83.8 percent of the total between March and August 2005 to 79.6 percent from September to February. In the East Bay, the rate dropped from 84.5 percent to 81.8 percent.”
“‘The adjustable-rate mortgages aren’t attractive anymore,’ said Stephen Levy, economist in Palo Alto. He believes this waning allure is a big reason why the market has slowed as much as it has already. Across the nine-county region, home sales fell 16.8 percent year-over-year in February.”
“‘I think it’s a very good thing,’ said Edward Leamer, director of UCLA Anderson Forecast. ‘I never understood why (Federal Reserve Chairman Alan) Greenspan was encouraging people to go into short-term mortgages, because of the risk they entailed.’”
I found this today as well:
‘The great L.A. housing market downturn of the 00’s (pronounced uh-ohs) has officially begun. Problem is, homeowners don’t know it yet, so - as the L.A. Business Journal reports, they keep jacking up home prices while the sales numbers fall. But what’s tragic to watch - if completely understandable - is the way that homeowners are clinging to the notion that their houses are continuing to gain value.’
‘ Sales of median-priced homes in the L.A. area plunged 17.9 percent from the year-prior and 5.8 percent from December. In Orange County, sales were down 27.3 percent over a year earlier and 9.1 percent from January. San Diego County’s sales dipped 13.4 percent’
“‘There are a lot of people who can’t afford to buy at today’s prices,’ said John Burns, an Irvine, California-based consultant to home builders. ‘It looks to me like the market is headed for a soft landing.’”
Just how he jumped from point A to point B is beyond me. Nice conclusions.
It’s like saying, “There’s traffic jam. Looks like we should get there on time.”
Or like saying, “There’s no civil war in Iraq, it’s sectarian violence.”
LOL. Thought the same thing. Currently, the market is in free-fall, so calling a soft landing is a tad premature.
These people are spinning for all they’re worth, hoping to persuade the hold-outs to start buying in, but it’s not going to happen. The party’s over.
Totally thought the same thing. These people are starting to lose their minds - they’ll do anything to throw the “soft-landing” term in there.
You beat me to it! I know we all love to jump on the “soft-landing” proclamations, but this non-sequiter shows just how much the NAR has drilled their talking points into everyone’s heads.
Speaking of the good-old NAR, isn’t it fascinating that hundreds of billions of dollars worth of stocks, bonds, derivatives, and currency changes hands across the globe on the basis of data put out by an organization that also publishes documents that they themselves call anti-bubble reports?
Oh my. I just read the NAR’s Anti-Bubble Q&A, and they have an interesting Freudian slip/typo in the last paragraph:
Anybody see it? HA HA HA HA. ‘Breaking’ effect, indeed. Like a picture, sometimes a typo or grammatical mistakes tells a thousand works.
Words! Words! Tells a thousand worDs.
Ben, where is that comment preview feature?
Listening to the RE drivel these days reminds me of the scene from “Being John Malkovich” where he gets stuck inside his own head.
“Soft landing. Soft landing. Soft landing.”
“Soft landing?”
“SOFT landing?”
“SOFT LANDING!”
“Soft LANDING. softlandingsoftlandingsoftlandingsoftlanding.”
“Hey Mabel, doesn’t that look like a California wildfire approaching the freeway up ahead?”
“Yes, Orville, slow down or it will cross the road before we get there…”
The term “soft landing” has now been officially co-opted by the RE machine and has become a metaphor for ANY price reduction, regardless of how severe. This is similar to how the term “bubble” became a metaphor for any price increase, regardless of size. Interesting how these people attempt to control the dialog by double-plus-good language enhancements.
The good news is that we’ll be having a soft-landing this year.
Yep… as soft as hitting the concrete floor from 1000 ft without a parachute…
the plane descends from 32,000 feet. usually a good pilot will get it down softly.
but it still came down 32,000 feet.
Two economists were riding on an elevator to the 50th floor. As they passed the 30th floor the cable broke and the elevator plunged toward the bottom. As the elevator plumetted past the 3rd floor, one economist remarked, “Well, we’re still 30 feet higher than we were 5 minutes ago.”
It’s beginning to look a lot like the market is making a very hard approach to a soft landing, somewhere, way off the runway, down in a gulley, off a cliff.
Jumped from A to B. I say he jumped from A to C.
A = “‘There are a lot of people who can’t afford to buy at today’s prices,’
C = ‘It looks to me like the market is headed for a soft landing.’”
To arrive at Point “C” from Point “A”, then “B” must somehow employ the mathematics required for the median Irvine/OC household income, $62k, to afford the median Irvine/OC home at $610k. Ahh — I’ve got it!
B = Bullshit!
via city-data–2000 median household income 72k. With that + 30yr fixed @6%, no other debt, 28% Debt2inc, it gives you 210k loan amt. SHEESH….I know my problem now. I don’t have $400k down. Thanks for explaining it.
Great Math! It works in any situation. Now you only need the constant ‘B’ to resolve any complex problem.
A + B = C
Where B = Bull$hit
Pilot to passengers: “We just lost our horizontal stabilizer, but should be able to make a soft landing”
“Meanwhile, mortgage rates are going up, up, up, all those variable-rate mortgages that were so popular a few years back are maturing, and the chipper-as-hell buyer’s realtor I know tells me the listing realtors in his office are trudging around in sackcloth and ashes because their clients won’t drop prices low enough for sellers to bite. ”
These are the same realtors that have been brainwashing clients into believing prices won’t go down…now they’re complaining about clients not wanting to drop prices? That’s funny.
!!!!!!!!!!!!!!
Can’t find words strong enough to convey how this makes me feel.
!!!!!!!!!!!!!!!!!!
To this day, I have never seen an agreed upon definition
of a ’soft landing’. From the point of view of the
RE/Industrial complex, what on earth do they
believe constitutes a ’soft landing’?? Maybe some
of the borrowers go bankrupt as opposed to
all of the borrowers go bankrupt?
Soft landing = return to normalcy = There has never been a better time to buy real estate…
soft landing = going bankrupt gently ?
If you jump out of a plane and your chute doesn’t open but you land in a haystack breaking every bone in your body, doesn’t that qualify as a “Soft Landing”
Soft Landing = B
B = Bull$hit
“Problem is, homeowners don’t know it yet, so - as the L.A. Business Journal reports, they keep jacking up home prices while the sales numbers fall. But what’s tragic to watch - if completely understandable - is the way that homeowners are clinging to the notion that their houses are continuing to gain value.”
Maybe these homeowners read the OC Register article last week which claimed that home prices were forecast to rise another 8-11% this year. Or maybe they are listening to their realtors recite Gary Watts’ talking points.
While citing often to the Gary Watts of the world, the OCR neglects to tell its readers that their forecasts are usually based on last year’s median price and not on today’s sales prices OR that these forecasters are not likely to predict falling prices until after prices have been falling for some time.
Orange County will be the last to get it. They are so caught up in the big equity they have that they do not want to believe the economic cycles that all equities have gone through over time. By the time many finally realize this they will have eroded much of their so called wealth and will whimper at what is left.
Will their blindness result in another bankruptcy like the last time a bubble popped in their backyard?
“‘The adjustable-rate mortgages aren’t attractive anymore,’ said Stephen Levy, economist in Palo Alto. He believes this waning allure is a big reason why the market has slowed as much as it has already. Across the nine-county region, home sales fell 16.8 percent year-over-year in February.”
They never WERE attractive, unless you were a fool or a flipper.
‘I never understood why (Federal Reserve Chairman Alan) Greenspan was encouraging people to go into short-term mortgages, because of the risk they entailed.’”
Great words, but too little and too late.
Someone wondered earlier about all the baby boomers retiring and what that was going to do to housing. Me thinks many of those retirement plans will be cancelled. Of course that means unemployment will go up. I wonder how the Goverment will change how they calculate that differently just like the CPI?
Anyone over 55 won’t be counted as unemployed, just involuntarily retired.
I used to work with a lot of people who bought houses in SoCal in the late 1990s, pre-2002 period. Everyone of them bought with a fixed rate mortgage and laughed about those stupid enough to get ARMs. When interest rates started dropping, they all started to look at refinancing — but every person wanted another fixed rate mortgage, just with lower interest rates. Some were even talking about going to a 15-year fixed since the “per month” amount wasn’t that insane.
What was wrong with these people? Well, these folks wanted to actually OWN their houses. They weren’t planning to flip them. They wanted to live in them forever! They wanted the security of knowing that the mortgage would be X amount each month.
Everytime I read about ARMs and all that other stuff, I have to wonder “WHAT THE HECK WERE PEOPLE THINKING???!!!” Those are flipper tools, not for people who want to own a house!!
Very true observation and one not mentioned much on this blog. A large % of Californians have done just this…
said John Burns, an Irvine, California-based consultant to home builders. ‘It looks to me like the market is headed for a soft landing.’”
____________________________________
Add Mr Burns to the list of “soft landing”. Is the same Mr Burns from the Simpsons?!?!?
Soft Landing! Excellent!
The realtors in CA need to tell potential clients that their asking price is too high, otherwise they will not sign a contract with them. I realize this will never happen with the majority of realtors in CA however, the honest ones are not wasting their time with stubborn owners we don’t realize the current marketplace.
Something I’ve discoverd is where I rent In Fountain Valley Community called Greenvalley).
Many of the home’s In the Association are own by Realitor’s, who have lived there for many years. I’m not saying they own them all, but it give’s reason for why SOME Realitor dont want to lower the prices on the home your looking at,,, plus there the Agent for many of the people trying to sell In our community too, so he dont want to see the price of there home go down when It might effect his home value, why I say this?
This Realitor I met the first week I moved In, had a home just a few doors from me rented, but was evicting the family that was there I think. Anyways I wanted to see if the home was going up for sale or renting it again. He said he was remolding it, then moving In. He had another home just a few blocks over In which he lived and trying to sell In the high 800’s. To this day it’s still not sold, and 3months from now I’ll be there a year
He’s still trying to sell it In the low 800’s…
Good luck!
If realtors wouldn’t waste their time on overpriced houses, homeowners might get the idea.
But you have to love it… Realtors must have a lot of time to waste.
Bakersfield, Ca inventory up 3.3% this week. Must be a soft landing coming!
3.3 in 7 days?
niiiiice !!
2-1 1,970
2-15 2,080
2-21 2,120
2-22 2,200
2-23 2,220
2-24 2,250
2-27 2,260
2-28 2,270
3-3 2,280
3-13 2,340
3-14 2,350
3-17 2,370
3-20 2,390
3-22 2,400
3-23 2,410
3-24 2,450
Ya’know I luvs to annualize:
[(2450/1970)^(365/23)-1] X 100% = 3083%
Translation: If the rate of new listings continued apace through 2/1/07, there would be 62,706 houses on the market in Bakersfield at that time. (Are there that many houses in town?)
OT…but wanted to share something that a friend sent this afternoon:
Ever wondered how hard we work to fill our lives with luxuries that we hardly have time to enjoy.
LOOK AT IT THIS WAY…
You have bought a luxury Car, maybe a Land Cruiser, Rav 4, Mercedes but it spends 8 hours parked… chance is, it is driven for 30 min to the office and 30 minutes back home 5 days out of 7 (i.e. 5 out of 168 hours in a week)….
And whilst we sit on a not-so-comfortable chair in a small room (dimly lit for many with outdated wall cover) called an office; your 7 Bed-roomed mansion lies idle with only the maid enjoying herself to the ‘bacon and egg breakfast’ relaxing on that very expensive Leather recliner that we only sit on when we get home… and being so tired we just doze off to sleep anyway.
When tired of work or want a puff, you take a walk up or down the stairs, yet you have just finished repairing the lawnmower whose work is excellent on your manicured lawns, which sorry to say never have time to step on.
And that ain’t it! The only drama in your life is what is happening on the street. You don’t need a remote for the commotions and screams are remotely digitalized – you can’t switch it off. While this happens, your maid takes a break, turns on the TV and spoils herself with the fully subscribed DSTV, of course if she feels bored she can always turn on that brand name Hifi and swing a bit on the polished floors, while you walk on your weight on the knees to avoid scratching your high heels on that scruffy floor in the office….. (I can’t figure out what the part after the comma is really supposed to say. Obviously, some words were misused.)
And whilst all that is happening where are you?… you are eating a cheap take-away lunch everyday, in a dingy and noise restaurant … and oh! By the way, there is no breakfast really, because it’s just a cup of tea, a few slices of bread probably with some left-over from supper (for the fortunate few). Every moment you really wish it could just get to 4pm so that you can drive home and join….. Well – the Maid!! (Poor you!)
Oh! Did I mention about the bread you ate in the morning, it was cold from the LG fridge, bought last weekend when you thought shopping was a stress reliever? But hey, you just paid the electricity bill which left you cursing wondering whoever bathes that long with the hot water. But dear, it was from the oven. Every morning, she spoils herself to freshly baked confectionaries and since you have branded air fresheners and an AC, you never get to have the smells by evening.
I could go on….but then again you might be prompted to fire your maid. Come to think of it, what does she do all day? Your kids are attending ‘premier’, ‘international’, ‘academies’, ‘playhouses’ and similar weirdly named schools. So let out a sigh, this is your miserable lot for the rest of your working life… by the time you retire you’ll have no pleasure in any of this anymore. For by then, your children will have joined in the Rat Race of finding a good job working very hard and never enjoying the fruits of their labors… its all vanity isn’t it?
SO MY QUESTION IS… WHO IS ENJOYING BETTER THE FRUITS OF YOUR LABOR…YOU OR THE MAID?
BayQT~
“You have bought a luxury Car, maybe a Land Cruiser, Rav 4, Mercedes but it spends 8 hours parked… ”
Since when is a Rav 4 considered a luxury vehicle??
I was wondering the same thing. LOL!! Who knows who originally wrote this piece.
BayQT~
No kidding! My wife’s ‘97 RAV4 has 139,000 miles on it and is worth $6,500 on a good day. Graeat gas mileage still.
Nice story. Every time I think about simply biting the bullet and buying a home to have a nice place to live–knowing full well that prices should come down, I ask myself: “Does owning a home mean that my wife and I will be working less and at home more?” The answer is obviously no, since our cost per month will double - after tax, and we’ll be more driven than ever at work.
Forget it. I like living way below my means.
Same here. I’ve been living below my means for quite a while and I enjoy my life. And I’m always re-evaluating my expenses to see if anything else can be reduced or cut out. Leaves more for saving, more for enjoying life, friends and family. Lucky me, my daughters (both in their 20s) are savers, too. And they can put some MEAN outfits together with their thrift shop buys! My college student daughter has classmates telling her she is one of the best dressed women on campus….their mouths drop when she tells them how she does it. And this is at a school where there are a lot credit card carrying kids with “monied” parents.
Funny…
BayQT~
BayQT~
It ain’t luck, my friend. The apple doesn’t fall far…
Thanks, We Rent.
BayQT~
Obviously you weren’t like the parents in the OC Register business article today. Buying a 2 1/2 year old $110 jeans.
sorry missed thelink.
http://www.ocregister.com/ocregister/money/abox/article_1069385.php
That is truly disgusting.
This article makes me want to barf! Kids jeans for $110. Holy cow.
UNbelievable! No, asuwest2, I was definitely not like *those* parents. They may not know it now, but they will wonder how their little darlings turned into ungrateful teens and will insist on having a *new* car when they turn 16.
I’ve lived in CA for 32 years, but growing up in Chicago we really DID have to walk a few miles in the snow to school….not uphill, though. LOL!
BayQT~
Just the typical trap of the consumer society …
A few years ago, The Onion ran a fake opinion article about a temp worker in a law firm. The temp worker was laughing at the lawyers, who were working 80+ hour weeks so they could enjoy the things in retirement that the temp worker was already enjoying while working. I wish I had saved a copy of it because it was really hilarious.
Here it is:
Temp Hides Fun and Fulfilling Life From Rest of Office
BOSTON - Ty Braxton, 23, continues to hide his fun and fulfilling life from the full-time employees of Hale & Dorr, the Boston law firm for which he has temped since July.
http://www.theonion.com/content/node/27698
BayQT~
Don’t suppose you could post the text ? Our draconian web rules at work won’t allow us to see such a subversive and morally corrupt sight as The Onion
I tried to copy and paste in my previous post but The Onion won’t allow you to do that.
I Googled the article, and it looks like in as much as other blogs and sites have referenced it, they all use a link….no one has a full copy other than The Onion.
If someone had better luck, by all means post the text. If I have an ambitious moment, I may copy the text to Word and post later. How’s that?
Sorry it can’t be now, Mo.
BayQT~
Thanks for finding this. It was a great laugh.
You’re welcome. I hope that kid is saving some of his “mad money” though.
BayQT~
“fake article”
I refuse to believe that The Onion ran a fake news story. The New York Times, maybe. Not The Onion.
See you in court, mister.
BOSTON—Ty Braxton, 23, continues to hide his fun and fulfilling life from the full-time employees of Hale & Dorr, the Boston law firm for which he has temped since July.
The happily underemployed Braxton.
“At a job like this, where you’re surrounded by angry, perpetually stressed-out lawyers who are working 80 hours a week, it’s important to hide the fact that you’re enjoying a normal, balanced, happy life,” Braxton said Monday. “People get really pissed when they hear stuff like that.”
Braxton, who earns roughly one-fourth of what the firm’s lowest-seniority full-time employees make, said he has no desire to make his coworkers feel bad about their “boring, shitty lives.”
“If somebody complains about how bad it sucks to work overtime five days straight, I just nod and agree,” said Braxton, who spends his weeknights at parties, at concerts, and playing basketball in the park. “No point in rubbing in the fact that no matter how busy things are, I leave at exactly 5 p.m. every single day. If anyone asks me to stay later, I just say my agency doesn’t let me do overtime.”
After graduating from Wesleyan University in May 2000 with a degree in Russian literature, Braxton worked a series of part-time jobs in and around Boston. In December 2001, he signed on with QualiTemps, the city’s largest supplier of temporary office labor, which currently pays him $8.44 per hour.
“I have so much going on in my life right now,” Braxton said. “I’m helping a friend start up a little Cajun food stand, I’ve gotten way into this Russian poet Mayakovsky, I’ve been hanging out with this really cool girl I met when my band, Sophie Drillteam, did a show with hers. Honestly, I just don’t have the time or energy to put into some job.”
In spite of his happiness, Braxton said he makes sure always to project an air of dissatisfaction, in both facial expression and posture, while in the office.
“If I had a great time staying out until 4 in the morning the night before, I make sure to wipe away all traces of a smile before I walk in these doors,” Braxton said. “If anyone found out I’m not living a hellish existence like they are, I’d be asking for trouble.”
Braxton is also careful about engaging his coworkers in conversation.
“I stopped talking about movies, because no one here ever goes to them,” Braxton said. “Every time I mention a movie to someone, I have to sit there and listen to them go through the process of figuring out the last movie they saw. The other day, Andrew Walser, this intellectual-property attorney who’s trying to make partner, told me that his last movie was Gladiator. I was like, ‘Oh, man, that’s depressing.’”
In his long-term temp assignment as conference coordinator at Hale & Dorr, Braxton schedules employee use of the firm’s five common meeting rooms and is responsible for keeping the rooms stocked with cold refreshments and snacks. His other primary duty is to procure audio-visual equipment for meetings when requested, a situation that arises “only, like, one or two times a month.”
“People e-mail me about needing rooms, and I have to e-mail them back with room assignments,” Braxton said. “I also have to post the schedule on the meeting-room doors and order paper cups and things. All in all, though, it’s pretty easy. Everybody’s usually way too busy to give me any work to do, anyway.”
During his three to four hours of “down time” each work day, Braxton reads, surfs the web, and e-mails friends. He also works on long-term personal projects. Over the past six weeks, Braxton has translated 41 pages of Alexander Pushkin’s unfinished novel Dubrovsky for a new English version he dreams of one day publishing.
Braxton has never mentioned his translation project to coworkers, nor has he mentioned any of his other pursuits.
“I don’t want to rub in how much I get to do the things I want to do,” Braxton said. “I feel sorry for them. They go home after a hard day, and they’re so fried they just spend the night sitting in front of the TV. You know how these people spend their weekends? Resting. They rest.”
Another advantage Braxton enjoys over the full-timers is a significantly more relaxed dress code.
“They’re always on the way to the dry cleaners or the barber or shopping for another expensive suit,” said Braxton, who estimates that his average coworker spends five hours a week maintaining his or her personal appearance. “As long as I wear deodorant, keep my tie reasonably clean, and wash my one pair of Dockers over the weekend, no one really gives a shit what I look like.”
In his efforts to hide his happy, fulfilling life from his coworkers, Braxton has even resorted to lying.
“Just yesterday, somebody asked me about my last temp job,” Braxton said. “It ended in May, but I told them it ended in June. See, after it ended, I took about a month off and just kind of dicked around, traveling around Europe until my money ran out. I knew not to mention that to people who won’t be able to do anything like that until they’re 65.”
Though Braxton said he sympathizes with his coworkers, he added that the decision to pursue a prestigious, high-paying career path was entirely their own.
“They wanted to go for the brass ring and really live the good life,” Braxton said. “What they don’t seem to get is that the key to living the good life is to avoid that brass ring like the fucking plague.”
I’m sorry but the kid making $8.44/hr working 40 hrs a week with a degree from Wesleyan (isn’t that a girls school) isn’t going to have any cash for rent and bus fare in Beantown.
Thanks guys, that made my Friday.
You Rock, crispy!
Thanks for taking the baton.
BayQT~
My goodness, who can afford a maid? We just name our dust bunnies and regard them as pets.
Less than 5% of all households in Los Angeles/San Diego/etc can afford the median home price and we are in for a soft landing??
yeah, right. What kind of logic is that? Both assertions are are in conflict with each other.
I am beginning to believe that CAR expects all lower/lower-middle class families to buy up this glut of craptastic condo conversions being pushed. If the 95% who cannot afford the median, can afford the median minus $200K for conversion, then soft landing right?
Wrong again.
After saving for years trying to move out of apartment life. Are these same lower income individuals going to be happy to “own” (if you can call it owning when the land rights are not yours) their old apartment?
Why would you, when for the same money you can have a 2500 sq ft SFR in some fly-over state? That or continue renting for 2/3 the mortgage amount.
Or, in OC, you can rent for 40% of the mortgage price. What a total no brainer. I live in a $575k stucco sh*tbox that I pay under market for — $1200 a month (because the place is a bit run down but I never complain to the landlord or make any trouble so he nevers goes up on the rent). When I ran the numbers way back when, once I’d added in property taxes to the mortgage, we were talking closer to $3500 a month. How can ANYONE be so stupid? I truly don’t understand.
My aunt is a landlord. She is MY landlord. She prefers to have tenants who stay, so she doesn’t raise rents very often. She also takes into account any money you may be spending out of your own pocket for upkeep or upgrade of the property. This is something the new “investors” don’t have a clue about yet — but it costs money everytime you have a rental unit vacant and you have to update it for the next tenant.
Anyway, I couldn’t afford to buy the house I’m living in and I’m not sure I could afford to pay market rent for it either — but from what I have seen — hardly anyone pays market rent around here. Everyone is renting at a big discount. Most of the homes are owned outright by older landlords and they prefer to keep tenants for years and years and years (if they can).
I’ve been living in this neighborhood for over 20 years now and I can honestly say it is the same for apartments too. There are a couple of cute apartment buildings I have had my eye on for 20+ years. One had a vacancy years ago and I called on it. As it turned out, part of the reason it was so cute was because the woman that owned it did all of the gardening. She was super-fussy about who she rented to, and her tenants stay there for years because that was the only time she has had a vacancy in over 20 years. The other “super cute” place around here has never had a vacancy — not in 20 years.
So…. These landlords might be a dying breed, but God love them! They enable us poor Californians to live here!
Our house is valued at over $600K on Zillow.com. I can’t imagine anyone paying that much for it even though it is a nice place to live in. It’s only about 900 sq. ft. It was built in the 1940s. It has plumbing problems all the time! The backyard is really nice because it is big enough to put a pool into and we have a ton of wildlife in the neighborhood (it kind of makes you think you are living in a Disney animated movie!) We also have termites! And god only knows about the foundation after the last earthquake!
The house next door is valued at over $900K on Zillow.com. It’s a 4 bedroom house with a little more square footage. The owners own two houses and only use this one for 6 months every year. The other 1/2 of the year they are on the East Coast.
Anyway, SoCal can be weird as far as rents and home prices. For anyone hoping to move here and rent, I’d highly recommend trying to find an older landlord and a slightly rundown property. There are a lot of them around.
Sellers are not eager to sell,’ Appleton-Young said
————————————————————————–
Oh really? Something tells me they’ll be changing their minds very soon.
Come on — these multimillionaire CA real estate investors can eat negative cash flow indefinitely until the priced-out renters beg for the chance to make an offer above their list price…
“Reuters found the inventory statistics that the CAR economist couldn’t.”
The Missing Inventory Song
(sing this to the tune of “Oh Where, Oh Where Has My Little Dog Gone”)
Oh where, oh where have those inventories gone,
Oh where, oh where could they be?
With my Realtors (TM) mad and my new buyers gone,
Oh where, oh where could they be?
“Sellers are not eager to sell,’ Appleton-Young said”
Really? Is that why the SAME houses in San Jose and Santa Clara have been sitting for sale since last fall with no takers even after price reductions? Inventory in Santa Clara County was gone from 3666 on Monday of this week to 3789 today. But they don’t really want to sell! Er, okay.
I think they should sit for another couple of years, don’t you? They will be like street ornaments.
Hey, that gives me a great idea for a new business… Realestate Sign refinishing. Contract with the Realtors to go out every year or two and spruce up the aging signs!
“‘I think it’s a very good thing,’ said Edward Leamer, director of UCLA Anderson Forecast. ‘I never understood why (Federal Reserve Chairman Alan) Greenspan was encouraging people to go into short-term mortgages, because of the risk they entailed.’”
Surely Dr. Leamer is making a tongue-in-cheek remark here. Anyone with his considerable qualifications must recognize the sudden evaporation of demand which comes with the removal of the rock-bottom ARM interest rates, and the likely drop in prices which will ensue. On the other hand, perhaps he agrees with some of us posters here that lower prices would lead to more affordable housing, which would indeed be a good thing for the California economy (except for those who gambled in real estate…).
Bubbles happen and markets always correct. Fairly priced homes based on long standing time tested fundamentals will be good for the economy. But! I don’t think CA is going to escape the “R” word with this downturn. We are all going to suffer as a result of this stupidity. I was driving through LA today working hoping that I will be driving through LA “working” two years from now.
A sampling of the amount of RE speculation going on in Destin, Florida…
New TH community with ~70 units total…
I pulled up 60 sales in the development since the beginning of ‘05…
52 owned by investors
8 owned by occupiers of unit
Greater than 75% of the investors are from the local area… ie. Destin, Fort Walton Beach, Shalimar (all within 10 miles)…
No freakin wonder people thought there were not enough homes for the community… all the homeowners own at least 2
haha
Correct me if I’m wrong, but didn’t community CC&Rs have guidelines directly specific to percentage of rentals in a development? I can’t quote the exact details I’m looking for, but I thought there were rules to make sure that these communities didn’t turn into rental communities. This place is already 85% investor-owned of the 60 purchased!
BayQT~
These subprime lenders do not know anything about making loans .Violations of C.C.R.’s is going to come out in the wash also as it becomes apparent that Lenders didn’t have reasonable lending standards .
Just as I thought. My suspicions were correct.
Thanks, Wizard.
Another question: Will this violation also hit the specu-vestors? I’ve purchased rentals in 2 different communities in the last 20 years, and although the CC&R is a thick document, I read them front to back. I wonder if the specu-vestors are doing the same….or if they cared.
BayQT~
Just change the CC&R’s…investors have 85% of the votes!
Sellers are looking at mid 2005 price peak and thinking it will come back this summer or higher . I dont know what the real estate people are saying to them now ,but what ever it is , sellers still want to test the market .
Me thinks the like of Will Rogers Jr. would define a ‘SOFT LANDING’ as heading towards a pile of ‘THIT’.
That’s because you led people to believe that prices would keep rising into the stratosphere and that housing was a strong as ever.
There should be government regulations against people like her who make assertions that can’t be backed up. If my stock broker said about stocks what she says about housing, he’d be fined, out of a job, and maybe even jail time.
“‘It’s a lot easier to loan somebody money when the collateral is going up in value at more than 20 percent a year than when values are going up at half that rate. What we have here is a market cycle that has passed its frenzy phase and is moving into more balanced territory,’ Prentice said.”
How easy is it to make that loan if the prices are falling? Because that is where we are today; just look at the numbers Ben has put up this week for evidence. Is it legal for lenders to ignore this evidence when they make loans? Is it still OK to make suicide loans as long as you can dress up the paper for resale to your friendly issuer of MBS? Just curious…
‘Sellers are not eager to sell,’ Appleton-Young said. ‘You have a marketplace where you had a surge in listings over the fourth quarter where sellers didn’t want to miss an opportunity.’”
Oh please, how much longer can you spin this as a seller-driven market condition? Exactly what seller “opportunity” is Leslie reffering to? The buyers haven’t been buying in California because the prices against current inventory don’t support it. To see the chief CAR economist playing it like it’s the sellers dictating the market is just getting too exhausting for me. Apologies for my crudeness Leslie, but you can’t keep squeezing this out hoping for more milk. Take your solids like a grown up already!
Can a FULL BLOWN TRAINWRECK be described as a soft landing too?
5pm Amtrack coming in at 100MPH into a crowd of onlookers at the station anxious to witness its soft landing .
You bring to mind a funny story about San Diego. Last summer, there was a sizable earthquake up the Pacific Coast. With considerable consternation, the SD authorities issued a cautionary statement about the possiblility of a tsunami in low-lying coastal areas. Next thing you know, a flood of cars hit the streets; guess which way they were headed? (Hint: It is the opposite direction from East…)
The sellers don’t really want to sell! They just want to see what their houses will bring! They have all these *stupid* realtors that will list a house with no hope of selling it falling all over themselves trying to get the listing… And, what you get is the California Bubble!!
So what if no one buys it?! They don’t care!!! (Unless they are desperate — then they do care — and they are going to be the ones leading the comps down… down… down….
)
Some people must sell.
Delevopers need new buyers to buy.
It really does not matter if some (or many) of the sellers do not really want to sell. The increased inventory is a symptom. The desease is overpriced homes, exotic loans, and money infusion by the Fed.
The property taxes are killing the sellers! They want to sell but with all of the other debts they have(HELOCs, credit cards) they are still lucky to break even so sellers are afraid to lower prices.
“The use of adjustable-rate mortgages for home purchases has declined significantly in California during the past three months, the result of more caution among buyers and lenders.”
I wonder who’s exercising more caution that has resulted in the drop, the buyers or the lenders?
The Fed…
I’m know this is an over simplification, but if the use of ARMs is down to 51.9% in February from 70.9% in November doesn’t this % decrease mirror the % reduction in sales? So big surprise, people aren’t buying because they can’t get a loan (afford it). Easy credit is the obvious catalyst, followed by bailing investors, followed by further decreases in market liquidity, followed by a… “POP”.
What you see is the outgoing tide of subprime I/O ARM lending exposing all the nasty rocks that lay submerged from view when the tide was high…
Here ya go - hope it works (from the Onion):
Temp Hides Fun, Fulfilling Life From Rest Of Office
October 2, 2002 | Issue 38•36
BOSTON—Ty Braxton, 23, continues to hide his fun and fulfilling life from the full-time employees of Hale & Dorr, the Boston law firm for which he has temped since July.
Enlarge ImageTemp hides fun
The happily underemployed Braxton.
“At a job like this, where you’re surrounded by angry, perpetually stressed-out lawyers who are working 80 hours a week, it’s important to hide the fact that you’re enjoying a normal, balanced, happy life,” Braxton said Monday. “People get really pissed when they hear stuff like that.”
Braxton, who earns roughly one-fourth of what the firm’s lowest-seniority full-time employees make, said he has no desire to make his coworkers feel bad about their “boring, shitty lives.”
“If somebody complains about how bad it sucks to work overtime five days straight, I just nod and agree,” said Braxton, who spends his weeknights at parties, at concerts, and playing basketball in the park. “No point in rubbing in the fact that no matter how busy things are, I leave at exactly 5 p.m. every single day. If anyone asks me to stay later, I just say my agency doesn’t let me do overtime.”
After graduating from Wesleyan University in May 2000 with a degree in Russian literature, Braxton worked a series of part-time jobs in and around Boston. In December 2001, he signed on with QualiTemps, the city’s largest supplier of temporary office labor, which currently pays him $8.44 per hour.
“I have so much going on in my life right now,” Braxton said. “I’m helping a friend start up a little Cajun food stand, I’ve gotten way into this Russian poet Mayakovsky, I’ve been hanging out with this really cool girl I met when my band, Sophie Drillteam, did a show with hers. Honestly, I just don’t have the time or energy to put into some job.”
In spite of his happiness, Braxton said he makes sure always to project an air of dissatisfaction, in both facial expression and posture, while in the office.
“If I had a great time staying out until 4 in the morning the night before, I make sure to wipe away all traces of a smile before I walk in these doors,” Braxton said. “If anyone found out I’m not living a hellish existence like they are, I’d be asking for trouble.”
Braxton is also careful about engaging his coworkers in conversation.
“I stopped talking about movies, because no one here ever goes to them,” Braxton said. “Every time I mention a movie to someone, I have to sit there and listen to them go through the process of figuring out the last movie they saw. The other day, Andrew Walser, this intellectual-property attorney who’s trying to make partner, told me that his last movie was Gladiator. I was like, ‘Oh, man, that’s depressing.’”
In his long-term temp assignment as conference coordinator at Hale & Dorr, Braxton schedules employee use of the firm’s five common meeting rooms and is responsible for keeping the rooms stocked with cold refreshments and snacks. His other primary duty is to procure audio-visual equipment for meetings when requested, a situation that arises “only, like, one or two times a month.”
“People e-mail me about needing rooms, and I have to e-mail them back with room assignments,” Braxton said. “I also have to post the schedule on the meeting-room doors and order paper cups and things. All in all, though, it’s pretty easy. Everybody’s usually way too busy to give me any work to do, anyway.”
During his three to four hours of “down time” each work day, Braxton reads, surfs the web, and e-mails friends. He also works on long-term personal projects. Over the past six weeks, Braxton has translated 41 pages of Alexander Pushkin’s unfinished novel Dubrovsky for a new English version he dreams of one day publishing.
Braxton has never mentioned his translation project to coworkers, nor has he mentioned any of his other pursuits.
“I don’t want to rub in how much I get to do the things I want to do,” Braxton said. “I feel sorry for them. They go home after a hard day, and they’re so fried they just spend the night sitting in front of the TV. You know how these people spend their weekends? Resting. They rest.”
Another advantage Braxton enjoys over the full-timers is a significantly more relaxed dress code.
“They’re always on the way to the dry cleaners or the barber or shopping for another expensive suit,” said Braxton, who estimates that his average coworker spends five hours a week maintaining his or her personal appearance. “As long as I wear deodorant, keep my tie reasonably clean, and wash my one pair of Dockers over the weekend, no one really gives a shit what I look like.”
In his efforts to hide his happy, fulfilling life from his coworkers, Braxton has even resorted to lying.
“Just yesterday, somebody asked me about my last temp job,” Braxton said. “It ended in May, but I told them it ended in June. See, after it ended, I took about a month off and just kind of dicked around, traveling around Europe until my money ran out. I knew not to mention that to people who won’t be able to do anything like that until they’re 65.”
Though Braxton said he sympathizes with his coworkers, he added that the decision to pursue a prestigious, high-paying career path was entirely their own.
“They wanted to go for the brass ring and really live the good life,” Braxton said. “What they don’t seem to get is that the key to living the good life is to avoid that brass ring like the fucking plague.”
Hey do you guys know if ocrealestatefinder.com corrected its inventory # . There has been a sudden removal of 7000 listings over yesterday and today. Ive heard that the true inventory is around 10K and that ocrealestatefinder(had 17K listings) seemed high b/c of all the extra commercial and empty lot listings…
Actually, another 2K dropped today but it seems like they are switching servers…I presume that is the issue w/ it right now. Next week 18K and beyand….bwwwwaaa ha ha ha.
‘beyond’….damn.
“Can a FULL BLOWN TRAINWRECK be described as a soft landing too?
5pm Amtrack coming in at 100MPH into a crowd of onlookers at the station anxious to witness its soft landing .”
Soft for the train, not for the crowd.
LOL. I can’t control my laugh.
I have many friends who have been ridiculing me for my stubborness a.k.s home ownership. One of my friend who completely understood my logic and was with me surrendered to wife’s gotta haev a home.
A friend and his wife were lectcturing me as how the real estate never go down in Arizona (HAHAHAHA.) They recently bought a condo in Anthem (30 miles north of Phoenix)for 240k and believe it is 275K right now.
I pointed out to all the empty condos in the development and they said this is like resort and people come here in the winter-spring time. I asked them the date and season and guess what!! The date was February 10th
I love this softlanding scenario for housing bubble. I can actually visuallize a Billions of tons bubble droping on a heap of invetors/speculators/flippers holding their for sale signs with Reduced all over it and the height of the pile is annotated as SOFT Landing.
Hah! There will REALLY be lots of empty units this summer when the temp heats up past 115 degrees F.
i think the most fascinating thing to watch is what happens with the so-called “exotic” mortgages’ valuation. these things were sold off into the secondary mortgage market based on historic loss experiences, which were close to zero because increased valuations bailed folks out.
Yes. There is a classical error of false econometric inference there — looking at the recent past low default rates as representative of future experience, even though you could explain to your grandma why 10%+ annual home equity gains would cover up default risk as long as they lasted…
Some of this is too precious. But wasn’t one of yesterday’s posting saying that the answer was building more homes to meet the needs of the growing CA population? I thought Sac was running out of flood plain land on the delta in which to build more McMansions to flood in the near future?
When someone goes bankrupt and is on the hook for a large sum due to a negative equity sale, they won’t be using the bovine fecal matter statement of it being a soft landing. They will be working for years to pay for their loss. The realtors spinning this, and those that created this bubble should be prosecuted as the criminals that they are.
I think to the RE folks the “soft landing” equates to a levelling of prices, a plateau, or an adjustment of appreciation to neutral, flat, 0%. If they can sell that perception as the worst case then the next logical step in the persuasion process is to point out that even though house prices are not appreciating the interest rates are rising. This means you better take advantage of the larger pool of inventory and buy now “before you are priced out” by rising rates. I believe this is the logic du jour por RE.
The problem is that more and more “buyers” are realizing that a purchase at these grossly inflated prices is simply not worth it.
It is going to be something to watch how a soft landing is achieved in a ravine strewn with large boulders called “resets”, “lack of affordability”, “rising inventory”, and “crumbling pyramid”.
Patience, this is going to be very interesting.
http://www.bubbles.org/html/questions/pop.htm
Hi. I ‘m not a realtor nor related to or friends with any. I don’t understand a lot of the anger directed towards them. They’re commissioned sales people who are supposed push the product.
If someone is so ignorant / stupid and would accept “investment” advice from a realtor than they unfortunately have to suffer the results. Realtors are no different than a clothing saleswoman saying yes that pantsuit makes you look 10 pounds lighter and 10 years younger. I also suspect that like all professions they’re are good honest ones realtors (mortage brokers, too) and also some bad apples. A bad apple would do something illegal.
There’s fine line between being unethical and painting a very rosy picture of real estate, which many of the realtors probably themselves believed. Such is crowd pyschology. Glad I sold my house in April 05
It is unethical to lie to a client about the biggest purchase of their lives. When people strongarm you when selling used cars or penny stocks, they are looked upon as low life scum. Why not realtors, too.
It is unprofessional to simply spout the party line without doing your own home work. The fundamentals don’t work out.
OK, so you paid $300 for an outfit that didn’t look so good, you were taken and get a little mad (or maybe return the outfit). But a bad decision regarding RE can land you in the poorhouse and make you pay for years to come. It’s a matter of scale.
I think realtors are an overlooked casualty of the bubble. The profession is going to be very different in 10 years.
Anon in DC - I would accept that realtors are commissioned salespeople, and that these sheeple should seek an expert “NON-VESTED INTEREST” opinion (someone that would not gain or lose from the advice provided) before purchasing, and that there are ethical, honest ones. But the difference between the clothing salesperson is a vanity (and shouldn’t be financially threatening) and causing someone to be a financial slave for the rest of their lives in order to earn a commission for the sales person. That, is a big difference. I couldn’t sleep at night, knowing that I had put a family(s) in such a precarious position.
Anon - Congrats for selling your house before the bubble bursting. That is awesome. And many uneducated people are going to left holding the bag at the end of the day.
Regarding today’s new home sales figures…..
“The West saw a 29.6 percent drop, while the South saw sales fall 6.4 percent, as the two country’s two hottest regions for housing slowed. Sales in the Northeast and Midwest gained, but between them those regions accounted for less that a quarter of the nation’s new home sales last year.”
Dave Seiders, chief economist for the National Association of Home Builders,. said the drop reported in the West is so much greater than expected that he questions whether it’s a statistical quirk. Some recent changes in sampling by the Census Bureau could be a factor in the decline in median home prices, he added.
“I don’t know of anything that would have provoked a 30 percent month-to-month decline,” he said. “If that’s revised, it would have an influence on the national number.”
A statistical quirk? What a chump! Is that the best explanation he can give? Sorry dude, don’t buy it…i hope the industry stockholders see right through this crap.
Some people already missed their opportunity.
Just saw CBS Primetime Investigates. Had a story about a Nick Martinez and PrincessProperties.biz that was supposed to be helping people in foreclosure, and also guaranteeing investors an 18% investment return within 3 months. He was selling the foreclosure houses to his investors, and most didn’t get paid, and people were losing their homes. They also said this scam artist is a convicted sex offender on the Megan’s list (child). Princess Properties is now closed, and thousands of Bay area homes in foreclosure and trying to sue this company and crook. The guy has reopened under a new name and same business in the LA area. All people beware.
Zillow is much lower than the reduced price. HOA + prop tax = $750. Add another $500 and you could rent a similiar property. OR, get a huge mortgage. Which would you prefer.
http://www.craigslist.org/pen/rfs/145021899.html
$550000 - Open SUN 1-4:30pm! Bright End Unit! Remodeled 3BR* EZ 101/92! (san mateo)
Reply to: helenpchou@yahoo.com
Date: 2006-03-24, 8:16PM PST
OPEN SUN! Gr8 Remodel!3BR TH, 2 sty End Unit!View of Park, greenbelt…! Across of Lakeshore Park, near Foster City, Beautifully Remodeled 3BR townhome, Bright & Airy, 2 story Townhome, corner views * EZ access 101/92/shopping
******* Open house Sun (March 26th) 1:00 pm to 4:30 pm ********
******* Add: 1537-A Marina Ct., San Mateo, Ca. 94403 *******
http://www.mlslistings.com/common/properties/propertyDetail.asp?open=0&page=1&mls_number=608471&type=property&name=
MLS: 608471
address : 1537A Marina Court San Mateo, CA 94403
Perfect starter home for first time home buyer or small family!
***** Cross St: S. Norfolk/Hillsdale Blvd., *********
· Beautiful upgraded Marina Garden unique corner unit
· Best location, Lagoon, Lakeshore Park & greenbelt views from windows!
· Bright and airy
. Tile entry
· 3 Bedrooms upstairs
· Gorgeously remodeled eat-in-kitchen and breakfast bar with Verde Negro granite counter slabs, maple color cabinets with glass doors, custom designed tile work on floors and wall surrounds, all newer appliances
. Hardwood floors under upstairs carpets
· Refrigerator stays; pots & pans hook and rack stays
· 1 updated full bath with slate floors and shower surrounds
· Inside laundry room, washer and dryer stay
· All customs crown moldings throughout, customs window coverings stay
· Newer plumbing in kitchen and bath
· Forced air heating
· Living area approx. 1045 square feet per HOA, buyer to verify
· Large fenced front patio
· Easy freeway access 101 & 92 and shopping conveniences
· Association fee $324, pays for water, GAS, garbage, fire insurance, pools, exterior maintenance and landscaping…etc.
· EZ street parking in front of unit and 1 Car detached carport Parking No. 7
Motivated seller says let’s reduce the price from $585,000 to $550,000, we want to sell and move up now!
Century 21 Creative Realty 20560 Valley Green Dr.,Cupertino,Ca.95014 For more info, please contact: Helen Chou Cell (408) 828-8688
Office:(408)446-2664 or 973-1888
Data deemed reliable but not guaranteed, buyer to obtain independent verification.
Marina Ct. at HillsdaleBlvd/S. Norfolk google map yahoo map
* no — it’s NOT ok to contact this poster with services or other commercial interests
1537 Marina Ct #A, San Mateo, CA 94403
ZESTIMATE™: $513,909 (What’s this?)
Value Range: $447,101 - $560,161
Sale History 11/26/2003: $399,000
2005 Tax Information 2005 Property Tax $4,747
Total assessed value: = $406,865
Assessed value bldgs: $284,806
Assessed value land: + $122,059
WOW. Does this take the flipper cake or what? Flipper will get a bidding war over these granite countertops. Bonus. On a really busy street, full of noise, and in the “hood”. Somebody already made huge money on this - and you can repay that money.
http://www.craigslist.org/eby/rfs/144977809.html
$575000 - Motivated Seller! Will look at all offers! Remodeled 2bed/1bath (berkeley)
Reply to: hous-144977809@craigslist.org
Date: 2006-03-24, 4:55PM PST
Motivated seller! Will look at all offers!
1110 Carleton Street, Central Berkeley
This 2 bed/ 1 bath was completely remodeled. The home features a beautiful new kitchen with granite counter tops and new appliances, new bath room with granite counter top, re-finished hard wood floors and a new additional deck to enjoy the large back yard!
Plumbing and wiring is brand new and to code. Fresh paint inside and out.
Come and sit by the fire place and make yourself at home!
1110 Carleton Street, of San Pablo Ave
MLS# 40149119
For more information call Andrea( Licensed Real Estate Agent) 510-495-5451
1110 Carleton St, Berkeley, CA 94702
ZESTIMATE™: $502,110 (What’s this?)
Value Range: $441,857 - $547,300
06/17/2004: $450,000
05/11/2004: $224,000
03/29/2002: $125,500
2005 Tax Information 2005 Property Tax $7,142
Total assessed value: = $459,000
Assessed value bldgs: $321,300
Assessed value land: + $137,700