Nobody Wants To Overpay In California
The San Mateo County Times reports from California. “Home sales continued to plummet and prices fell in many San Mateo County cities in December as the worst housing slump in more than 20 years deepened, a new report revealed Tuesday. With buyers being extra cautious, home sales declined 34 percent in December compared to December 2006, according to the County Association of Realtors.”
“‘Sales are almost coming to a grinding halt in some areas,’ said Denise Aquila, broker in San Carlos. ‘People are nervous. Nobody wants to overpay on a home, and many buyers are scared the bottom will come crashing down if they do buy.’”
“There’s a huge sales slowdown on the coast, in places like Half Moon Bay and Pacifica and points in between. There’s also a big sales decline in Daly City, San Bruno and South San Francisco.”
“Cities hit hardest with median price declines included Daly City, East Palo Alto, South San Francisco and San Bruno, where an increasing number of homes are going into foreclosure and banks are taking over properties.”
“The median price of a single-family home countywide in December fell to $875,000, down from $922,500 in November and just over $1 million in October.”
“A year or two ago, home sellers were in the driver’s seat. Two out of three of them received more than their asking price. Now, many are lucky to get 90 or 95 percent of their asking price, the report shows. Some get less than that.”
“‘The trend is increasing toward homes sitting for a longer time on the market,’ said Richard Calhoun, a real estate agent in Santa Clara. ‘This year is going to be a very lean year, and a lot of real estate agents will be leaving the industry.’”
“Calhoun hasn’t seen sales this poor since 1984, and doesn’t expect a recovery until 2009.”
“A growing number of homes are coming on the market, as ’some people are trying to cut their losses and get out,’ Aquila said.”
“In Redwood City, some homes that sold for $950,000 a year ago in mid-range neighborhoods like Woodside Plaza are going for $825,000 or $835,000, said broker Joe Rodden.”
“He added that homes that sold for between $600,000 and $700,000 in the Fair Oaks area of Redwood City are selling for 10 percent less.”
From ABC 7 News. “Three homebuilding executives appeared on KGO radio’s the Ronn Owens Show with an optimistic view on new home sales in the Bay Area.”
“‘Palo Alto, I’m talking about a million-dollar condo, 1,200 square feet in Palo Alto and we are selling 5 a month,’ said Vickie Nyland from Taylor Morrison Homes.”
“These builders agree now is the time to buy property, and new homes may be a better deal than a re-sale.”
“‘We have to sell homes. We are building the homes, we need to sell them, we can’t take them off the market as you may do in a re-sale situation so new homes are a bargain right now,’ said Nyland.”
“Cynthia Kroll is with the Fisher Center for Real Estate at UC Berkeley’s Haas School of Business. She’s less optimistic.”
“‘It probably will get worse before it gets better. And here are the reasons, there is less money out there for people to borrow, second people haven’t decided how to respond to it yet,’ said Kroll.”
The LA Times. “The landmark Sears, Roebuck & Co. building in East Los Angeles is back on the market after a final purchase agreement with popular boxer Oscar De La Hoya and his partners was not reached by year end, the owner said Tuesday.”
“De La Hoya’s team acknowledged plans last summer to acquire the 23-acre property for about $70 million and turn it into a housing and shopping complex.”
“Owner Mark Weinstein said the deal stalled after about six months of negotiations…and no down payment had been made by year-end. he said. ‘They want certainty in an uncertain world. I appreciate that, but I want to get the project started,’ he said.”
“Weinstein’s original plans for the building included 480 condominiums, 180 apartments and 750,000 square feet of stores and restaurants. Instead, he decided last year to sell the property.”
The North County Times. “Home prices in North County continued to slump in December as a credit crunch took a serious bite out of the upper end of the housing market, according to a new report by the North San Diego County Association of Realtors.”
“The median price of detached homes was $569,000, down 9 percent from the same month a year ago, and 3.4 percent less than November’s price. Even steeper was the fall in the median price of condos and detached homes combined: an 8 percent dive in one month, to $485,000.”
“Year-over-year sales numbers for local homes priced more than $1 million fell 39 percent to 88, according to the report.”
“Market participants said that one reason fewer expensive homes sold is that mortgage defaults have led banks to tighten their lending standards, especially on ‘jumbo’ loans that are increasingly difficult to obtain.”
“‘I’m seeing just about the same (number of applications). The problem is we can do a lot fewer of them,’ said Dave Hopkins, a senior loan officer with a brokerage firm based in Rancho Bernardo. ‘The programs are just not available any longer.’”
“While the median price fell 3.4 percent from November to December, the median price per square foot in North County declined 6.1 percent to $263, or 14.6 percent less than in November.”
“That could mean buyers were getting more house for their money or that larger, more expensive homes were not selling.”
“‘I believe that the price drop is even greater than the median prices are showing,’ said Dennis Smith, a Carlsbad-based real estate agent. ‘If your house is 3 percent larger and you’re getting a 3 percent drop in price, it’s a 6 percent drop in real prices.’”
“Smith said he thinks the county could be as much as 18 months away from seeing prices hit their lowest point. But he still thinks consumers should buy a home as long as they plan to stay for a long period.”
“‘This is the best time to buy within the last three years because prices are down from where they were three years ago,’ Smith said. ‘Is there still room for them to go down more? Definitely.’”
The Press Enterprise. “KB Home, the largest Inland home builder, said Tuesday its fourth-quarter loss swelled to nearly $773 million, reflecting the downsizing under way throughout the home building industry.”
“The Los Angeles-based builder’s losses stemmed from declining sales and revenues and the falling values of land where it won’t be able to build and homes that it hasn’t sold.”
“KB Home surpassed Lennar to take the No. 1 spot in the two-county region, although its sales dropped slightly from 1,753 homes in the previous 12 months and plummeted almost 45 percent from the same period two years earlier.”
“As part of a belt tightening, KB Home last year closed management divisions for San Bernardino and San Diego counties and consolidated five counties, San Bernardino, Riverside, Imperial, San Diego and Orange, into a single division based in Wildomar.”
“Steve Johnson, director of a Riverside real estate consultant, said public builders ‘can’t cut their overhead fast enough to cover the drop in sales.’”
The Merced Sun Star. “Back in August I wrote a long story about Merced’s foreclosure crisis. One man, Mark Gallegos sat in his living room and told me how he had taken out several home equity loans to start a new business, the business failed and he couldn’t make his mortgage payments.”
“He didn’t want people to feel sorry for him; he was just willing to set aside personal pride to put a human face on the story.”
“Recently I got to see how his story ended. I wrote a story a couple weeks ago about how the Kings View Work Experience Center is cleaning up foreclosed properties. When the manager told me to meet him at a house on S Street to see his team in action, I thought the address sounded familiar.”
“Bingo, it was the Gallegos house. Their house was sold at a public auction a couple months after I wrote about them, and they moved out shortly after.”
“They left behind two messages. In the driveway they spray-painted the dates they had lived there: 7/7/73 - 10/10/07 and the phrase ‘Gallegos Lived Here!.’”
‘In the kitchen they wrote a small piece of graffiti: ‘This house was loved and lost by the grace of God by the Gallegos family be kind to it.’ Yes, they shouldn’t have damaged the property, but if you were leaving your home of more than three decades, you might be tempted to leave behind some mark.”
The Daily Bulletin. “Unemployment is rising. There’s no sign of an end to the housing slump. Oil topped $100 a barrel briefly last week. None of those three items are good news for the overall economy.”
“But Cal State San Bernardino’s Institute of Applied Research says that locally at least, things aren’t getting any worse. They may even be getting a little better. The region’s purchasing managers index for December came in at 50.9 percent, a decline from November’s PMI of 53.1. But since the number is still above 50, it indicates that the manufacturing sector is continuing to grow.”
“The employment index of 47 marked the third consecutive month below 50 for that number. ‘Nationwide data seems to suggest that unemployment is growing,’ the IAR directors said. ‘Further, as has been the case for the last several month, purchasing managers remain pessimistic about the state of the local economy for the coming quarter.’”
“Indeed, only 16 percent of those surveyed expect the local economy to improve in the first quarter of 2008, while 38 percent are predicting it will get worse.”
“‘We’re definitely on recession watch here in Southern California,’ regional economist Jack Kyser said. ‘Who knows how long it will be before the housing market recovers? We’re also seeing the start of a general shakeout in retail, with a lot of stores being closed.’”
“‘A lot of stuff is sorting out,’ Kyser said. ‘We don’t know how long it will take, but when it’s done, things will get better.’”
wah-ha ha ha! thanks for the rich article about the Bay Area. Much of it resonates because I’m seeing precisely what the article mentions which is that there’s really not a whole lot of anything moving or selling. My neighborhood has homes that have been for sale in some cases for well over a year.
Sales it seems just came to a complete stop somewhere between August and September. In my mind, anyone even considering buying a home in this area is either a complete idiot, or loaded. Perhaps both. Either way, I’m curious to see where this will end up. As I mentioned earlier, prices are still insanely high regardless of the report. But the fact that nothing is moving is equally compelling. Round and round we go, where it ends up nobody knows. Hopefully down.
All I know is that I’ve had about enough of the snarky self-righteous “we’re better than everyone” attitude that permeates out of the soil here. It would be nice to see some of those grins wiped away… except for mine since “bad ” news for these clowns means good news for me!
The best neighborhoods are the first to go up, last to come down, but come down they will. A house down the street is back on the market this year after failing to sell last year. I think I’ll be walking by that for-sale sign for a few months on my way to coffee on Sundays–unless someone hasn’t received the memo on housing.
The Bay Area absolutely refuses to consider that their homes are overpriced. They see nothing wrong in housing going from $350,000 to $850,000 in the space of 5 years.
I’ve been hearing this for years now. Someone last year said to me “well, the Bay Area hasn’t crashed like you said it would, are you going to buy now?”. It drives me crazy–people expect housing to move like stocks. Up and down in a day.
My favorite was “but they’re building new housing and it’s selling like crazy”. I showed this link to someone (thanks to whoever posted it).
http://www.sheahomes.com/main.cfm?dir=findahome&subsec=overview&temp=communityoverview&communityid=567
The reaction was somewhat disbelieving. Spread the word, housing in the Bay Area is SLOW.
P.S. One of these Shea Homes communities is within 2.5 miles of the main campus for Google.
Yeah there just ain’t THAT many Google employees. Geez the way people say it, it’s as if all 15K employees will be buying the entire stock of homes on the peninsula, several times over. (Like they’d want to even LIVE in some of the neighborhoods!) Get a grip people.Your crappy circa 1973 home isn’t WORTH a million bucks anymore because NO ONE IS BUYING IT! HAHAHAHAHA
Patience — GOOG will also crash, in due time…
Tell me about it. I frequent a number of East Bay Blogs which are ripe with more recent homeowners who paid in excess of 800K+ for their homes. They;re still 2 years behind and still in a total state of disbelief that their homes would ever be worth less. One reply was that ” His broker told him that there were only 3 homes left to sell in the development then there would be no more.” as if he lived on some sort of island and the homes in their little Mcmansion enclave was it.
If you don’t mind, can you please share the East Bay blogs. I would like to browse that too.
TIA
They really build up Pleasanton etc. Know folks that are in trouble - HELOCs suck - that needs to come out.
Id like to know which blogs you go to as well.
The Bay Area needs a price correction of about 40% - 50% for it to even begin to be affordable again. Especially here in the East Bay like in Pleasanton / Dublin.
All I know is that I’ve had about enough of the snarky self-righteous “we’re better than everyone” attitude that permeates out of the soil here.
It’s worse in San Francisco.
I’m a renter in Twin Peaks and was discussing RE with some people in the neighborhood who bought many years ago. I mentioned the SF Chronicle article a week or so ago about a surge of foreclosures and price reductions in the southern neighborhoods (like Bayview, Excelsior, etc).
They said to me with a straight face “Those neighborhoods are all South of the 280, prices certainly won’t go down here”. I could barely contain myself - like all of these s**tbox 1970’s condos on Twin Peaks constitute some upscale enclave or something.
The house I live in went up for sale at the beginning of last year for about 1.2 mil. No takers. Now zillow has it listed at about 950K.
And here’s something from a local Bay Area blogger - go to the link at the bottom of the chart for more indepth info.
http://patrick.net/housing/contrib/MedianListingPrices_1_2008.html
While I’m sorry that Mr. Gallegos’ business failed, I disagree with his decision to use HELOCs to get it going.
He probably does as well.
Really though, this isn’t even a housing related story, IMO. The guy puts his house up for collateral on a business gamble and loses. Why is this anything other than a failed venture story?
Exactly! The reporters never ask the tough questions, such as “You’ve lived in your house for 3 and a half decades, why wasn’t it paid off?” Instead, more bleeding heart sob stories from irresponsible people. They also don’t mention that he probably lived in the house for a year without paying the mortgage and that HELOC money was also used to buy big ass redneck trucks which will never be repossessed.
And now the Congress wants to bail out Prime ARM folks, too?
“And now the Congress wants to bail out Prime ARM folks, too?”
It’s an election year.
‘In the kitchen they wrote a small piece of graffiti: ‘This house was loved and lost by the grace of God by the Gallegos family be kind to it.’ Yes, they shouldn’t have damaged the property, but if you were leaving your home of more than three decades, you might be tempted to leave behind some mark.”
also ’someone’ wrote ‘Now is a good time to buy’ and a few ‘go #@*!K yourselves A*#%$#ES’ plus a few gang symbols…….any offers?
“the grace of God?”…..oh please, someone pass the Joshua tree. He should of just left a steamy dump on the countertop and saved us from his ridiculous boo-hoo essay. It would’ve been a lot more tolerable.
How many HELOCs did Gallegos do over the 3 decades?
‘many buyers are scared the bottom will come crashing down if they do buy.’
It is impossible for the bottom to come crashing down becuase, by definition, the bottom is the lowest point. It’s strange buyers are scared of this impossibility.
Semantics.
They mean prices will crash toward the bottom.
Might be semantics, but I think that there is an underlying point here. Ms. Aquila seems to think erroneously that the “bottom” is a changeable state by saying that the “bottom will come crashing down”. The REIC can’t say that people are afraid that the bottom isn’t here, so they use some liguistic tap-dancing to try to fool us into buying. No sale.
Actually, it’s kind of like the change in thinking from spending less at a “sale” to saving money. “Come into to Best Buy and save, save, save. Wrong wrong wrong. A fine point, true, but a very important one. I’d love to shoehorn a dig about “Mission Accomplished” here, but I can’t finesse it!
MrBubble
Regarding sale prices, Mom would always say, “I’ts not a good deal if you don’t need it.”
Everytime I go ice skating, I am scared that my bottom will come crashing down. And I’m sure anyone considering buying is skating on some pretty thin ice.
Realtor speak. The bottom can’t crash so It has to be a good time to buy.
Supply vs. no Demand
“‘We have to sell homes. We are building the homes, we need to sell them, we can’t take them off the market as you may do in a re-sale situation so new homes are a bargain right now,’ said Nyland.”
“‘Palo Alto, I’m talking about a million-dollar condo, 1,200 square feet in Palo Alto and we are selling 5 a month,’ said Vickie Nyland from Taylor Morrison Homes.”
Palo Alto will probably be one of the last bastions to fall. A friend of mine sold her house there in 2001 for over $1 million, and it was a 1500 sq ft POS clapboard 2/1 on a small lot - must have been 40 years old and built like a shed - flat roof (with leaks) and all. PA has been in a bubble at least since 1996, longer than most areas I can think of.
I expect that the condos will get hit before the SFRs, if it follows the pattern of most overpriced areas during the last downturn 1989 - 1994.
It still blows my mind that people will pay up for a glorified apartment. You can rent a apartment larger than 1200 sq ft, close to the beach in Santa Monica for about $3500/month. I expect you could do as well or better renting in PA.
Mountain View is going soft, and that is just down the road from Palo Alto. It always amazed me to see how much the houses with truly cheap construction cost in that town.
It’s not the houses - all full of termites - it’s the land. That area has been teardown city since the mid 80s or before. Shea is waiting, conserving capital - but not going away.
I have to agree with much of what is stated in the San Mateo Times piece and the ABC7 piece on Menlo Park and Palo Alto. What the Peninsula currently is experiencing primarily is not so much a real estate market collapse as it is a widening spread between the “haves” and the “have-nots”.
Stress in the real estate market is evidencing itself in the widening price spreads between the desirable areas (where values so far are holding firm) and the less desirable areas (where you can’t give a house away). As of right now if you run a search at MLSlistings.com for SFR’s in Menlo Park and Palo Alto you will find 85 active listings. About half are priced at $965,000 and below. The other half are priced at $1,248,000 and above. There is not a single listing between these two amounts–a spread of nearly $300k! Amazing.
Wooooh - are you saying $965K is targeting the “have-nots” ?
My brother used to live in the San Francisco, and I flew out from Florida to visit him back in 1996 and 1997. One day we drove around Palo Alto, Mountain View, etc., and he asked me how much I thought some of the typical 3/2 suburban houses we saw were selling for. Not knowing any better, I guessed $400,000, and he started laughing. “Try $750,000,” he said.
I remember a similar thing on CNBC. At the time, I doubled what the prices were in the midwest for the same mediocre houses ($80k -> $160k). I laughed my ass off when I saw that they were going for $400k.
Bah, the coasts suck.
Actually that cant be true .. price for 2000sqft TH were under 200K in Mt View and Sunnyvale in 1996-7… they reached 500K by 2000 and then peaked to 900K by 2005-6.
Im talking about the same homes … not med or avg…
Yes you can do much better renting in Shallow Alto. Ok so my son’’s place just off Embarcadero (1/2 mile from Stanford) is just a 1100 sq ft third floor Apt. in a Victorian….but he only pays $850.00/mo and banks the rest of his salary as a research asst. biding his time. (Oh and he only drives a used car he bought for cash and pays as he goes, no debt……gotta love that boy!)
“Palo Alto will probably be one of the last bastions to fall. A friend of mine sold her house there in 2001 for over $1 million, and it was a 1500 sq ft POS clapboard 2/1 on a small lot - must have been 40 years old and built like a shed - flat roof (with leaks) and all. PA has been in a bubble at least since 1996, longer than most areas I can think of.”
I used to rent in Palo Alto, CA in the seventies. It was an old Eichler home — concrete slab, lots of single plate windows, sloping flat roof, and a wall mounted natural gas heater; energy was not an issue when it was built. The neighborhood was very quiet at night, but too busy during the day. Looking back the only thing I really miss are those Kirk’s Burgers.
“These builders agree now is the time to buy property, and new homes may be a better deal than a re-sale.”
ZZZzzzzzz…..wake me up in two more years.
The builders probably agree that now is a good time to sell property, before its value goes down another 10 percent by next month.
10% a month? I wish. Ok, yes, its done that in incredibly overbuilt areas. But normally the maximum down rate is about the same as the rate it ramped up at. Since most areas saw a 30% rise in 2004… expect a 2.5% drop per month… in 2009. (Maybe late 2008.)
Got popcorn?
Neil
Sh!t happens…
“While the median price fell 3.4 percent from November to December, the median price per square foot in North County declined 6.1 percent to $263, or 14.6 percent less than in November.”
“‘A lot of stuff is sorting out,’ Kyser said. ‘We don’t know how long it will take, but when it’s done, things will get better.’”
but for right now….I got a real bad hangover and don’t want to talk anymore……you got any wine in your car?
Sounds like he’s snorting out.
“‘A lot of stuff is sorting out,’ Kyser said. ‘We don’t know how long it will take, but when it’s done, things will get better.’”
Thanks, Jack. That forecast is really helpful. I can’t believe that people get paid for this garbage.
How vague can you get. It’s like predicting that someday we’re all going to die.
Here is a little ditty I found amusing about the “house that Jack built” I copied off another site.
Jack’s wealth is professionally invested
In a safe managed fund who collected the fees
That invested in a fund of funds that collected the fees
That bought an exotic and inexplicably high-yielding AAA-rated security with no questions asked
And then five more on credit
And then bought twenty-five more using the ones they bought on credit as collateral
That were issued by a structured investment vehicle
That was created to evade bank credit risk regulations
By the bank where Jack’s cash sits, insured by Jack’s taxes
That was owned by the securities dealer who collected the fees
That created the synthetic CDO
That was rated AAA by the ratings agency who collected the fees
Out of twenty credit default swaps written against the same single security
Whose default risk and value was derived from a model of the CDO-cubed
That bought the CDO-squared
That bought the CDO
That mixed together different kinds of extremely risky securities to magically remove risk
And whose collateral consisted of credit default swaps, interest rate swaps, and non-performing loans
Plus a little bit of that high-yielding junk-grade mortgage-backed security
The mortgage banker who collected the fees issued that
That funded the broker who collected the fees
That funded the huge mega mortgage with the teaser rate
That bought the land
That lay under the house
That Jack built
“It probably will get worse before it gets better. And here are the reasons, there is less money out there for people to borrow, second people haven’t decided how to respond to it yet” Ms. Cynthia Kroll
I doubt if most people are even aware that there is less money available.
“It’s quite simple; it’s other people’s money”
People decide by inaction. “All human wisdom is summed up in two words ‘wait and hope’.”
Alexandre Dumas
All of us here are waiting and hoping that pretty soon there will be none of Other People’s Money available for the purchase of housing. If housing had to be purchased with One’s Own Money, the prices would be very reasonable and we could all buy safely.
“KB Home, the largest Inland home builder, said Tuesday its fourth-quarter loss swelled to nearly $773 million, reflecting the downsizing under way throughout the home building industry.”
They should have never branched out of the toy market…
“Calhoun hasn’t seen sales this poor since 1984, and doesn’t expect a recovery until 2009.”
I say, I say, do tell Calhoun what will bring about the recovery in 2009?
“‘Sales are almost coming to a grinding halt in some areas,’ said Denise Aquila, broker in San Carlos. ‘People are nervous. Nobody wants to overpay on a home, and many buyers are scared the bottom will come crashing down if they do buy.’”
I read an article today that mentioned that Q4 foreclosure numbers in MA appraoched the Q4 mls sales number.
YIKES!
PHX November, notice of defaults were higher than all exisitng home transactions. December extended the lead of NoDs over transactions.
There’s a huge sales slowdown on the coast, in places like Half Moon Bay and Pacifica and points in between.
Heh, that $3.45/gal gas will get you every time.
just wait till the 4 buck petro starts trimming the fat this august..
Yup, I know. We’re out of the Southwest and on to bashing California. But this tidbit from the Arizona Daily Star is just too fun to resist:
Hourly Update
Tucson real estate executives forecast turnaround by 2009
Arizona Daily Star
Tucson, Arizona | Published: 01.09.2008
Local real estate executives said at a forecast today that they expect the market to stabilize and possibly turn around in 2008.
And, a Tucson company says a stolen check is being used in scam.
Read today’s business developments at AzStarBiz.com.
Oh, dang. Forgot the URL. Here it is:
http://www.azstarnet.com/sn/hourlyupdate/219815.php
Only an idiot would spring a million bucks for a condo, regardless of what size it is.
Tell that to the Tokyo-ites.Last night I received a brochure for a new condo tower in a land fill area of Tokyo Bay called ‘Beacon’, the 95 square meter (just over 950 square feet) model was around $840,000.00. Their 105 square meter (about 1100 square feet) residence was around a million. Their official web site doesn’t have ALL the pricing and state that nothing is more than roughly 800,000 US$. But this is of course a flat out lie.
I’m not sure about the Beacon tower, but pretty much all new construction for most consumers has a very rental quality to it. Very cheap. Wife wants to go and take a look at the Beacon towers sometime and ‘check ‘em out’.
About the best thing about Japanese condos in the new condo towers are the views (well sort of) and possibly the Japanese style bath rooms. (Personal preference) other than that.. bland, sterile, cold.
Here is the web site for the Beacon tower residence. Sorry it’s in Japanese, set your web browser’s encoding to automatic->Japanese. Some of the menus are in English, mainly for show, but they are accurate.
http://www.beacon-t.com
Can foreigners buy property there?
Some more good news from downtown san diego. Bank owned taking ~40% haircut on one of the nicer buildings…
555 Front St #1904
San Diego, CA 92101
Price: $714,900
Sales History
Date Price Held Return Annual
01/02/2007 $1,150,000 11m 5% 5%
01/23/2006 $1,100,000 4y 7m 78% 13%
06/01/2001 $619,452 n/a - -
We’re starting to see a very tiny number of properties reverting to 2000-2002 prices. Very good start.
Just imagine…if the PTB allowed prices to drop to their natural levels **very quickly**. There’d be no abandoned homes, no long, drawn-out collapse, etc.
We’d all be able to get on with life and get back to work.
Too bad they won’t let that happen.
With gas prices an average of 40 cents a gallon higher in the Bay Area than nationally why should we even think that home prices will fall to anything approaching a reasonable level? Everybody knows the average household income in the Bay Area is somewhere around a gazillion dollars a year so paying $700,000 for a sh*tbox 3 bed, 2 bath house really isn’t an issue.
I mean really…we rent because we’re losers. I was just talking to my wife last night about how if we were really true Bay Area residents we would have bought that piece of crap house in Livermore at the peak price because then we could be like everbody else….she told me if we don’t buy soon so we can overpay for a house like her coworkers she was going to leave me…..I’ve called a Realtor(r) today and told her to go find us the biggest POS in Livermore she can…preferrably by the railroad tracks so we can join the club of Bay Area Home Owners. It’s an exclusive club because in order to join you need to make a gazillion dollars a year…
I guess I picked a bad week to quit sniffing glue….
A nice couple moved out of the corner unit (condo) in my (Fremont) building. Today there’s an auction notice taped to the door. Movoto shows it listed at 330K. Zillow says it sold in 2005 for 350K. I’m guessing it’ll be empty for awhile…
Send your wife to look at Mountain House…
The correct wording should be “I was just talking to my soon to be ex-wife last night about how if we were really true Bay Area residents we would have bought that piece of crap house in Livermore at the peak price because then we could be like everybody else.” Punctuation should be with a fist in the nose.
My ex-wife owns two houses, one in Livermore that she paid a fortune for and now one in Dublin, where the Realtor that she “trusts” talked her into buying because he was sure he could sell her house in Livermore or at least rent it out, no problem. Neither has happened in 3 months… Muuuhhwwaaa, the end is neigh!
Livermore is Death with a capital “D”. It is the exact opposite of Palo Alto–price spreads are contracting, not expanding. The price dominos are tumbling.
Example:
MLS # 40287643
Asking $990,000 (Last Sale: 9/05 Price: $1,085,000)
DOM: 161
SQFT: 3541
Thing is, in that very same neighborhood there is another listing:
MLS # 40313409
Asking $792,500
DOM: 30
SQFT: 3547
The folks asking $990,000 need to whack $200k off the price just to be competitive. Even then there’s no guarantee their house will sell.
I should add the asking $990,000 house was built in 2003; the asking $792,500 house was built in 2004.
Muuuhhwwaaa, the end is neigh!
Nah…
The end is nigh
The horses neigh
and the knights say “Nee”!
Another great line by ‘Sea Hunt’. Caddyshack I is starting now. Good by.
Quagga Chronicles…
“The Casitas Municipal Water District board today will debate the possibility of banning most personal boats on Lake Casitas with the aim of keeping the quagga mussel from invading the popular bass fishing lake.”
“While board members recognized it could be an unpopular decision among those who cite the lake as one of the best bass lakes in the West, they said immediate, if not radical, action has to be considered. They say the exotic species needs to be kept from entering the lake, which could alter the habitat and cause immeasurable and expensive damage to the district’s water delivery system.”
“After learning about the quickly planned meeting, some local fishermen started to rally against the measure they fear could limit their favorite fishing spot.”
“There has to be another way,” said Cy Chan, owner of Stanton Marine in Ventura, which sells some of the 30,000 boats that cruise the lake annually. “It’s like shutting down Disneyland.”
http://www.venturacountystar.com/news/2008/jan/09/casitas-board-to-consider-boat-ban-to-keep-out/
The Casitas Municipal Water District board today will debate the possibility of banning most personal boats on Lake Casitas with the aim of keeping the quagga mussel from invading the popular bass fishing lake.
A mussel? I always thought a quagga was a monster in the old Unix game Rogue….
There IS another way. Unzip your fly. We’ll take care of those stinkin’ mussels!
To the lady that said this morning on CNBC “You might think I’m on drugs but housing would improve if the war was stopped, that would be some good news” you are right you are ON DRUGS .
Sure, because all of those rich veterans would come home and buy million dollar condos. Brings home the troops and all of our housing problems are solved!
Not.
When I read about these piddling little percentage drops and realtors saying stuff like, “Last year it was $950,00 and now it’s $830,000,” I feel like sitting them down in a chair, giving them a good slap (is there a law against realtor abuse?) and telling them that these prices mean zip, zero, nada. The value is what it is - the value is what this property was worth 7 years ago because all prices after that are based on FRAUD. Thus, when the values drop to values of 7 years ago, we might - underline the word might because there is a lot of inventory out there - be around the bottom.
“Last year it was $950,00 and now it’s $830,000,”
…and seven years ago it was $500,000.
I’m sorry but I just re-read the title of this thread as “Nobody wants to overpay in California”…..Ben, I respect you but this time you’re totally off base. Everybody in California wants to overpay, that’s why we live here! We want to overpay on our taxes, groceries, gas and ESPECIALLY housing. That’s what makes California so special….everything costs more here because when you live in paradise you better be prepared to pay for it.
Oh, I’m like: “hurt me, hurt me!”
Whip me, beat me, make me write bad checks!
Grody…. to the max…
Si es sierto
cierto
Are you on crack?
I’m not on crack…can’t afford it because I live in California and I’m paying way too much for everything else.
Besides there’s only two types of crack addicts….former crack addicts and dead crack addicts.
When you say stuff like “everyone in California wants to overpay” I have to assume you’re smoking something…. you certainly don’t represent me or my many frugal relatives and friends who happen to be Californians. You can focus on all the sensational stories of stupid folks who happen to live in California (and probably moved here 2 years ago) but to say we’re all spend-thrifts is just another cliche.
Question…………
If the Countrywide stock price falls below $5.00……….do they get delisted from the SnP?
Acquaintance of mine who works at CWide suggests buying now because when they release year end numbers you will make a quick profit and by fall of 2009….Whoa Nelly, a windfall!
From what i’m reading in other places……………CFC could be BK before they announce year end numbers
Nope, that would mean his job is on the line, so that can’t be true. It’s all UP from here. It’s in the bag.
/sarcasm
Moody’s cuts Countrywide “Alt-A” mortgage loan deals
NEW YORK, Jan 9 (Reuters) - Moody’s Investors Service on Wednesday downgraded the ratings of 30 tranches of mortgage debt issued by Countrywide Financial Corp (CFC.N: Quote, Profile, Research), the largest U.S. mortgage lender.
Moody’s also said it may cut ratings on another 16 tranches from 15 deals issued by Countrywide in 2007, and five downgraded tranches remain on review for possible further cuts.
The collateral backing these classes consists of primarily first lien, fixed and adjustable-rate, Alt-A mortgage loans, Moody’s said. (Reporting by Walden Siew; Editing by Leslie Adler)
‘Moody’s cuts Countrywide “Alt-A” mortgage loan deals’
Before or after close of business? Could be the next nail in the coffin here for CFC…
Also DSL (Downey) is a good candidate for a PUT play. Down $5 this week.
Delisting Below a dollar a share.
I thought they already were. I thought I saw they were at $4.75 today. So much financial news and spin I feel like that girl in the exorcist with her head spinning around.
Nother question: Are they still “too big to fail”?
Countrywide Stock In Free Fall Despite ‘Too Big To Fail’ Belief
Dow Jones
January 09, 2008: 04:47 PM EST
NEW YORK -(Dow Jones)- In pummeling Countrywide Financial Corp. (CFC) stock, investors seem to have concluded that chances for the nation’s largest mortgage lender to weather the ongoing credit crunch are slim.
http://money.cnn.com/news/newsfeeds/articles/djf500/200801091647DOWJONESDJONLINE000877_FORTUNE5.htm
No.
Here’s the Presidents take on the housing market.
http://www.youtube.com/watch?v=dY38d1GghgQ
So who is going to lead us out of this mess? Will it be …
1) Moneybags Mitt, 2) Crocodile Tears Clinton, 3) Alvin and the
Chipmunks McCain, 4) Si se puede Obama, or 5) Huck Finn?
We’ve got us a horse race to entertain the sheeple.
Received an e-mail request to donate to the Ron Paul fund this past weekend. The two prior requests I donated. My donations at this stage are based on results from primaries. Looks like there are others with similiar thoughts as per his website he’s only taken in about $200,000 since the weekend. I want to see him win, but ??
Maricopa County (Phoenix Metro) Notice of Trustee’s Sales
Dec 05 749
Jan 06 726
Feb 06 687
Mar 06 790
Apr 06 638
May 06 764
Jun 06 797
Jul 06 851
Aug 06 1019
Sep 06 1114
Oct 06 1238
Nov 06 1493
Dec 06 1407
Jan 07 1624
Feb 07 1577
Mar 07 1720
Apr 07 1709
May 07 2007
Jun 07 2325
Jul 07 2501
Aug 07 3248
Sep 07 2834
Oct 07 3458
Nov 07 3544
Dec 07 3875
Fred,
Nice, wonder how high we’re gonna go? I did a Excel graph of that data and it’s a gradual slope that’s been growing. If you graph it out until the end of ‘08, it’s somewhere around 7,000 NOD a month. Is that possible?
Hi Fred,
For grins I fit the following regression model to the NOD data:
log(Y) = b0 + b1*Month + b2*Year1 + b3*Year2 + u,
where Y = ln(NODs),
Month = 1, 2, 3, …, 12
Year1 = 1 for 2006, 0 else and
Year2 = 1 for 2007, 0 else.
It fits the data almost perfectly (R-squared = 0.99);
predicted annual increase in NODs = 168 percent.
PB,
I thought there might be a mathematical formula, but is that English? 6510 NOD, thats just aweful.
I was trying to get an average measure of how fast they are going up over time…
PB,
As we in the stats-biz say: if your R^2 is above .9, your results are either trivial or meaningless.
You reported R^2 on a non-stationary dataset, so you win on meaningless. On the bright side, you also win on trivial — yes, the numbers go up over time.
Define “trivial” and “meaningless”? Does a worse fit indicate a less trivial result? References, please…
Actually, I was using regression in an an ad hoc manner to measure how fast the NOD numbers were going up over time. Why is the fact that they are going up over time at about 167 percent “meaningless”? I would think it will be quite meaningful if it continues for a few more years.
Your post reeks of academic snobbery and economic irrelevance.
hang on a second - this sounds dangerously close to a RE agent telling the truth - who is this guy? Revoke his RE merit badge and kick him out of the club quick!
“‘I believe that the price drop is even greater than the median prices are showing,’ said Dennis Smith, a Carlsbad-based real estate agent. ‘If your house is 3 percent larger and you’re getting a 3 percent drop in price, it’s a 6 percent drop in real prices.’”
“Smith said he thinks the county could be as much as 18 months away from seeing prices hit their lowest point. But he still thinks consumers should buy a home as long as they plan to stay for a long period.”
“‘This is the best time to buy within the last three years because prices are down from where they were three years ago,’ Smith said. ‘Is there still room for them to go down more? Definitely.’”
“could be as much as 18 months away from seeing prices hit their lowest point” —
jb, you are too kind; this is just the new version of REIC-speak.
“‘This is the best time to buy within the last three years because prices are down from where they were three years ago,’ Smith said. ‘Is there still room for them to go down more? Definitely.’”
So, why exactly would you want Buy Now?
I had to re-read Smith’s bs twice. Didn’t this guy use to be Goofy at Disneyland on Mondays? Amazing intellect.
yeah I know it was generous - I hate them all…
but this sounded to me a teeeny bit more like “if you absolutely gotta have a particular house AND you dont mind takin it in the rear for a few hundred thousand, then go ahead and buy, otherwise, hang around for some substantial drops [yes, the 18 months does put a number on it but at least he's not claiming 6 months like many]
http://www.uli-la.org/articles/437
“The landmark Sears, Roebuck & Co. building in East Los Angeles …..
Weinstein’s original plans for the building included 480 condominiums, 180 apartments and 750,000 square feet of stores and restaurants. Instead, he decided last year to sell the property.”
The above link provides a bit more background on this property. It is a washout. That entire area is pretty ragged, and 95% Hispanic and mostly working class to impoverished, and quite run down, though a bit above Scentral. Boyle hts does have a few interesting sights such as Hollenbeck park, a real hidden jewel with the really nice lake just up boyle ave from the Sears parcel site , though most angelinos never see it as it is tucked beneath the crowded east LA interchange fwy underpasses. There are also those ancient concrete bridges spanning the LA River but East LA/boyle hts is mostly dirt poor and pretty run down with decayed infrastructures abounding.
This old Sears bldg and parcel has no promise at all as an upscale mixed use residential/ shopping complex but might be used as a large central city Hispanic flea market like they have in Mexico and CAmerica . Or better yet another industrial sweatshop factory or industrail processing operation employing the abundant cheap labor in that area.
“The median price of a single-family home countywide in December fell to $875,000, down from $922,500 in November and just over $1 million in October.”
Annualized recent rate of decline for San Mateo county:
((875000/1000000)^(12/2)-1)*100 = -55 percent.
“While the median price fell 3.4 percent from November to December, the median price per square foot in North County declined 6.1 percent to $263, or 14.6 percent less than in November.”
Annualized rate of decline in price per square for for North County San Diego:
((1-0.146)^12-1)*100 = -85 percent.
Try not to catch yourself a falling knife!
it’s not going to be a straight line. very much doubt it’s gonna be 55% down in one year.
Annualized recent rate of decline for San Mateo county:
((875000/1000000)^(12/2)-1)*100 = -55 percent.
Cool!
In another 10 months it’ll have dropped 100% to a price of zero!
There is hope for San Mateo homeowners, as asset prices normally slow their rate of decline as zero is approached…
“People are nervous. Nobody wants to overpay on a home, and many buyers are scared the bottom will come crashing down if they do buy.”
Uhm… Ms. Aquila I don’t think it’s so much the buyers who are “scared” and “nervous”. Just a heads up.
Anyone else seeing unusual crimes in your hood?
Skateboarding Teen Attacked
Last Update: 1/09 5:35 pm
A 16-year-old skateboarder was jumped by three men and stabbed in an upscale North San Diego neighborhood but is expected to recover, police said Wednesday.
The stabbing in the 15800 block of Turtleback Road in Rancho Bernardo was reported at 6:10 p.m. Tuesday, according to San Diego police Sgt. Bob Dare.
http://www.fox6.com/news/local/story.aspx?content_id=3303a397-41e7-42f9-868c-65f7deac1213&rss=tick
There are a grand total of maybe 10 black people in RB. Something
strange about this story. No theft, just a random beating? Hmmm.
Ha, you are right, its full of Honkeys!
Knife stabbing… (and we do have more than 10 black residents — maybe 11 or so
)
“The driver of the vehicle is described as a black man, 18 to 20 years old, around 5 feet 7, weighing about 200 pounds. The passenger who used the knife is described as a black man, also 18 to 20 years old, around 6 feet 2, with long corn roll braids with white beads on the ends. The second passenger is described as an African American boy of around 16.”
Reverse hate crime?
Sounds like it, as there appears to have been no motive other than to terrorize an innocent youth. But this kind of hate crime is politically incorrect to discuss.
Up to my eyes with this whole housing market, especially in SoCAl. Went to Countrywide to get (re)pre-approved to keep up to date with our financing status. Now we qualify for 1st time home buyers programs with LA county, but this is my problem and I am asking anyone here if there are any unethical rules being broken by the lender. As we were talking about the programs available, the loan specialist blurts out that she and her husband are waiting for the funds to become available herself in regards to the 1st time home buyers which can be as much as $90K - depending on your income level. So we ask her if we already have a deal in the pipeline, will we still be able to get to qualify for the funds and she says yes, but would have to start the loan process all over again. Ok, we can live with that. So then we ask how will we know when the funds become available and she says that an email blast is sent out to the lenders notifying them of availabilty. She explains that at that time it is a first come, first serve basis - so now I’m sitting in an office with a loan officer who is vying for the same funds as me. It just feels like some sort of ‘inside trader/information’ scenerio. Is this ethical? It is not a level playing field at all - the RE agents/brokers bought so many homes for themselves to flip and whack out the prices, now we are competing with the very people for $$ that will never be available, because of persons within the industry will take that away also.
I am too annoyed and have no idea who to talk to. There should just be some sort of control. I do not want to change my career just so I can compete with RE and loan officers to purchase a home. Please help me out!!
“People are nervous. Nobody wants to overpay on a home, and many buyers are scared the bottom will come crashing down if they do buy.”
It’s more than just not wanting to buy overpriced houses. Can people AFFORD overpiced houses?
That’s what a lot of these real estate people don’t understand. It’s not just that people are scared to buy overpriced real estate. They can’t even afford it even if they wanted it, especially now that the idiot loans are harder to get (as they should be).