People Really Need To Sell Their Homes In California
The Press Enterprise reports from California. “The spring buying season got off to a weak start last month, with home prices dropping faster in Riverside and San Bernardino counties than anywhere else in Southern California and sales continuing to plunge year over year. In Riverside County, the median home price dropped more than 27 percent in a year to $306,250 last month, which was the lowest it has been since March 2004.”
“The median home price last month in San Bernardino County hit $265,000, falling more than 28 percent since March 2007. The median price in San Bernardino County hasn’t been so low since September 2004.”
“Riverside and San Bernardino counties last month led Southern California in percentage of foreclosure sales, reaching 56.4 percent of total sales in Riverside County and 48.7 percent in San Bernardino County.”
“Marlene Lopez, a real estate agent, has been trying to sell her five-bedroom house in Lake Elsinore for two months. Only three shoppers have come by to see it, she said, although the house that she bought two years ago for $535,000 is now listed for $399,000.”
“Lopez, who has to sell because of a divorce, said she is competing with a huge inventory of distressed properties, including empty houses in her development that the builder hasn’t sold.”
“Legislation raised the ceiling for government-sponsored Fannie Mae and Freddie Mac mortgages to $500,000 from $417,000 in Riverside and San Bernardino counties. But John Marcell, a California Association of Mortgage Brokers official who lobbied for the reforms, said they are not working as well as hoped.”
“Lenders who offer the larger loans are charging higher interest rates and tightening underwriting qualifications for borrowers.”
“Marcell said at the insistence of Wall Street mortgage investors, tighter lending qualifications also have been imposed on Federal Housing Administration borrowers since the ceiling on FHA-insured mortgages was raised to $500,000 from $362,790 in the Inland counties.”
“‘I don’t think Congress realized the investors were going to be so gun-shy, but they are because they got stuck with so many delinquencies and foreclosures,’ Marcell said.”
The North County. Times. “Foreclosed houses and bargain-hunting buyers have flooded Southwest County’s real estate market since year-end. Lenders have slashed asking prices as they scramble to clear foreclosed properties from their books to make room for more properties they’re seizing from delinquent borrowers.”
“The average price of single-family homes sold in the area fell to $337,000 last month, down 26 percent from March 2007 and 33 percent from a peak in May 2006, according to The Californian’s analysis.”
“A bank-owned house in Murrieta drew Dennis McCarbery last month from San Pedro, where he had lived for 40 years. A buyer borrowed the full $670,000 price of the 3,200-square-foot house in September 2006, when prices in Southwest County were peaking. When the market turned south over the next few months, he was unable to sell it to avoid foreclosure. The lender sold it to McCarbery for $385,000.”
“‘To move out here and get something that was a dream come true is quite a shock,’ McCarbery said. ‘It’s much more affordable than what I would’ve done’ in the Los Angeles area, he added.”
“McCarbery’s daughter Cynthia Nordskog, a real estate agent, said she’s sold houses to just two clients this year, including her father.”
“‘The increase in buyer activity will help define the floor in prices,’ Nordskog said.”
“Real estate agent Erin Lawrence ended an 11-month dry spell in late March when she sold two houses, thanks in part to the lower prices that banks are offering on foreclosures. ‘That’s all there is to show,’ Lawrence said.”
The Union Tribune. “San Diego County’s median home price stood at $395,000, down $20,000 from February and off 19.4 percent from a year earlier. It was the first time since November 2003 that prices were below $400,000.”
“About 36.6 percent of resale houses and condos that sold in March had gone through that process, a likely all-time high, according to DataQuick analyst Andrew LePage.”
“Dan Williams, president of San Diego Lending Solutions, said many of his customers are frustrated because even when they want to buy and can qualify for a loan, lenders take two weeks or more to grant approval.”
“‘It has absolutely gotten more difficult,’ he said, even for buyers with good credit and 5 or 10 percent down payments.”
“Christopher Thornberg, an economist with the Beacon Economics research and consulting firm in Los Angeles, welcomed the price retreat.”
“‘For all these declines, you still have home prices relative to income at higher-than-normal levels,’ Thornberg said. ‘Everybody tries to paint this as a problem with the subprime mortgage industry. It’s not. It drove people to speculate like never before, but now home prices are falling back to their historic norms and we’re maybe halfway through that process. You probably won’t see a bottom in prices until 2009.’”
“‘We still have quite a bit of inventory we have to work through,’ said Robert Martinez of MarketPointe Realty Advisors, which tracks the new-home market. ‘We’re looking at more than two years of inventory in both categories (detached and attached housing).’”
“Laura Godfrey recently sold her Ocean Beach cottage of two years and traded it in for a significant upgrade to a $957,000 Spanish revival house with an ocean view. While she broke even on the sale of her house, she was able to buy her new house for nearly $350,000 less than the original asking price.”
“‘I feel a little stretched, but I have the income potential, and I plan to stay here for awhile,’ said Godfrey. ‘I joke around that people will be dragging my body out of here in 50 years.’”
“There is little for homeowners to like, though, about the steep plunge in home values in inland areas such as west Escondido, Encanto, Paradise Hills, Fallbrook and Spring Valley, which experienced declines of 30 percent or more last quarter.”
The LA Daily News. “Price declines ranged from 18.5 percent in Los Angeles County to 28.2 percent in San Bernardino County, said DataQuick, and indicate that the housing slump is deepening. Foreclosure sales, now at record levels in some areas, ranged from 28.8 percent in Los Angeles County to 56.4 percent in Riverside County.”
“‘This was a correction that was much needed. If we didn’t have this kind of a correction in prices, I think the regional economy would have ended up paying a heavy price for it,’ said Nima Nattagh, a real estate market consultant.”
“According to DataQuick, there is no sign that foreclosures will ease anytime soon and further price drops are expected in the coming months. ‘There is hardly anything selling. There is just a freeze-out in some areas,’ said DataQuick analyst Andrew LePage.”
“In March, jumbo loans accounted for 15 percent of sales, down from about 40 percent a year ago.”
“‘I think prices in Southern California were way out of whack relative to what the economy could support,’ Nattagh said. ‘Rents and income did not support the kind of home-price growth we have seen over the past several years.’”
The LA Times. “Homeowners who aren’t facing foreclosure often cling to outdated notions of what their properties are worth, real estate agents say. A broker for 25 years, David Emerson, (in) Lakewood said much of his work now involved telling sellers what they might not want to hear.”
“‘You go from being like a doctor who delivers babies,’ in a booming real estate market, he said, ‘to being an oncologist, just giving people bad news all day long.’”
“Emerson also believes the worst is yet to come. ‘There are just too many foreclosures coming down the pike,’ Emerson said.”
“Natalie Neith, a Beverly Hills real estate agent, credited a recent sale of a house in the West Adams area of Los Angeles to the seller’s pricing it below others in the area. The four-bedroom Craftsman house could have been listed for $850,000 a few years ago, Neith said, but the owner priced it at $725,000 and sold it in a month for close to full price.”
“Like Emerson, Neith sees more foreclosures coming. ‘When I talk to sellers now, I say you need to reduce your price. You have the prospect of thousands of foreclosures coming. That’s going to be your competition,’ Neith said.”
The Ventura County Star. “Smacked by record foreclosures that continue to drag down home values, the housing market remained ’sobering’ last month. ‘I think distressed sales are causing virtually all of the decline,’ said Bill Watkins, executive director of the UC Santa Barbara Economic Forecast Project.”
“Sales of new and existing homes and condominiums in Ventura County plunged to 549 in March, down 45 percent from 999 a year ago, DataQuick reported Tuesday. It was a record low for the month.”
“Nearly 37 percent of the transactions were sold after being foreclosed on at some point in the previous year, said Andrew LePage, a DataQuick analyst. That represents a huge shift when compared with 4.4 percent foreclosure resales the year before in Ventura County.”
“Foreclosure filings, including default notices, auction sale notices and bank repossessions, have soared in Ventura County, with 2,415 recorded in the first quarter, up from 1,514 last year and 366 filings in 2006, according to RealtyTrac.”
“Ventura County’s median sales price was $430,000 in March, a 24.1 percent decline from $566,750 a year ago, according to DataQuick. The median has retreated to a level last seen in February 2004.”
“Some sellers say they’re not being forced out, but that it’s simply time to move on. Dana Snider listed her two-bedroom, two-and-half-bath Moorpark condominium a few weeks ago for $489,000. She bought the home three years ago.”
“Snider figures that she will lose thousands of dollars, selling the home for less than what she paid. But she hopes to recoup some of that loss when her next home appreciates.”
“Snider said there’s been some foreclosures in the area, which she’s found ‘unsettling.’ Still, her house hasn’t been listed that long and she doesn’t feel pressure to lower her asking price right now.”
“Now that she’s an empty nester, she said, ‘it’s time for me to go.’”
“Robert Merritt has tried to sell his house in Thousand Oaks for a year and a half. The Camarillo resident held weekly open houses every Sunday until last month.”
“Merritt hasn’t found a buyer for the house on Otono Circle. The city found his open house signs sitting throughout the neighborhood on public land and confiscated them.”
“Thousand Oaks has a policy designed to keep in check the proliferation of signs. A city employee in a city truck stopped by the house and told Merritt he had removed two of the signs, Merritt said. He added that in the back of the truck were numerous real estate company signs advertising open houses.”
“‘The real estate industry (has) been doing this, for gosh, how many years?’ asked Merritt. ‘Everybody puts open house signs up in the neighborhoods. Here I am, just some little guy trying to sell my own house.’”
“Merritt doesn’t intend on having any more open houses in the near future and has turned to potential buyers online. ‘I think it’s a terrible time to enforce it when people really need to sell their homes,’ he said.”
What’s Dana Snider’s problem? Hers is a clear case of “If you don’t HAVE to sell, then don’t put it on the market.” And she’s gonna recoup her losses on the appreciation of her next home? LOL
Someone should run a PSA saying “This is your brain (picture of normal brain), this is your brain on real estate (picture of Ms. Snider)”.
“Now that she’s an empty nester, she said, ‘it’s time for me to go.’”
She’s an empty nester, so she no longer needs her 2-bedroom condo?
Sounds like a real bird brain too. Her current place loses value so the next one MUST of course go up to make up for it.
“‘This was a correction that was much needed. If we didn’t have this kind of a correction in prices, I think the regional economy would have ended up paying a heavy price for it,’ said Nima Nattagh, a real estate market consultant.”
It looks like the national economy will be paying the price instead.
I like the way she places the correction in the past, as if there were evidence that it’s over (such as a flattening out or decrease in foreclosure filings).
The sheeple are deluded.
“‘I think prices in Southern California were way out of whack relative to what the economy could support,’ Nattagh said. ‘Rents and income did not support the kind of home-price growth we have seen over the past several years.’”
Understatement of the last half-decade!
What’s this WERE business.
LOL, good point.
What is this “we” Kimosabe?
giddiyup heeeeeeyaaaaa
Hey Desert: Have a bet going with my daughter about whether housing prices will go back to 2000 level out here in the desert. It is so overbuilt, particularly way down valley. She’s antsy to rent a better house for same amount (rent sent in 2005). Not seeing so many rental deals yet in mid valley.
Waiting for 1997-1998 prices myself in the CV myself.
I think you win your bet.
‘I think it’s a terrible time to enforce it when people really need to sell their homes,’ he said.”
Just exactly when would you suggest enforcing the law ? On the other hand after years of the Feds looking the other way maybe he has a valid point.
You would figure realtors themselves would be harvesting the signs of their neighborhood competition by now…
Here in Tucson, real estate signs are becoming graffiti magnets.
They were enforcing it in San Francisco a couple years ago. A friend of my husband’s got a night job plunking the signs down on sidewalks. He had to do it at night because it’s illegal. I think he got caught or something, and the cop threatened him with a ticket, so he quit. I’m not really sure, I didn’t talk to him about it. Funniest part about it is that the guy is a chemistry professor. I would die laughing if I saw one of my professors doing something like that.
“Funniest part about it is that the guy is a chemistry professor. I would die laughing if I saw one of my professors doing something like that”
Here is a Chemistry Professor with a second job and you would die laughing at him? Here is a guy who is not only smart but a hard worker. What is wrong with that?
Imagine going out one night with your friends, and there he is: your chemistry professor, elicitly placing for-sale signs on dark sidewalks before running back to his car and driving away without his headlights on.
You would never see him in the same light.
I always imagined that, if I were a professor, I would only exit the classroom through the window.
“A bank-owned house in Murrieta drew Dennis McCarbery last month from San Pedro, where he had lived for 40 years. A buyer borrowed the full $670,000 price of the 3,200-square-foot house in September 2006, when prices in Southwest County were peaking. When the market turned south over the next few months, he was unable to sell it to avoid foreclosure. The lender sold it to McCarbery for $385,000….
“McCarbery’s daughter Cynthia Nordskog, a real estate agent, said she’s sold houses to just two clients this year, including her father”
This deal was probably not made as a disinterested logical RE buying decision. Notice the buyers agent was his daughter. I wonder if the father made the deal in part to provide his daughter with a fat commission paycheck.
Murrieta not the worst IE region but $385,000 still way overpriced. Too much new housing speculative overdevelopment in Murrieta and too many Foreclosures flooding the market in that region. I think that he paid at least $100,000, maybe $150,000 too much even if it was in a prime part of murrieta. If he still works in LA/San Pedro/south bay the commute time and gas costs will be a killer. It takes average 2.5 hrs to get to LA from Murrieta and thats without a severe traffic tieup along the 91/15 fwys.
Yes, txchick, I am aware that I misspelled “illicitly”.
“Here is a Chemistry Professor with a second job and you would die laughing at him? Here is a guy who is not only smart but a hard worker.”
Or a FB desperate for extra cash.
Breaking Bad!
I was waiting for someone to mention that! Occasionally, life imitates art.
From the original post:
“‘You go from being like a doctor who delivers babies,’ in a booming real estate market, he said, ‘to being an oncologist, just giving people bad news all day long.’”
Yeah, but in order to be a doctor, you have to actually know something. You can’t just smile and look pretty.
Ah.. beat me to it. The level of false & inflated self-worth here, subconscious or otherwise, is simply unbelievable!
I’ve seen it all……a realtor comparing himself to a DOCTOR!!!
I think proctologist is more fitting than oncologist after their former clients get their Joshua Trees.
Side note, but was subtly yet rather smugly told by the doctor friend of a doctor friend that there is actually no such thing as a “proctologist”. They prefer “rectal surgeon” or something similar. Whatever the title, it’s definitely not an area of the body I’d choose to focus on.
The problem with all the ‘babies’ he delivered is that no one knows who the daddy is, but no one wants to take a paternity test and take responsibility.
And the proud parents? “Just send us our welfare
paymentbailout, and everything will be fine…”Got abstinence?
To switch from obstetrics to oncology, a doctor must complete a second three-(or four-) year-long residency. This is in addition to four years of college and four years of medical school. How long must one study to become a REALTOR®?
A few months.
Really??? Based on what I’ve heard of it, I highly doubt it would take the average person a few months to prepare for the realtard exam.
Well, consider the type of people who take the test. Yeah, they definitely need a few months.
You and me on the other hand, maybe a weekend. After a Friday night binge-fest.
My Realtor she said I could probably take the weekend mandatory class and pass the test, but I know a fair amount about real estate.
I was sharing some things about the market with my realtor and she exclaimed “Wow, you sure know a lot, you could be a realtor!” I bit down hard on my tongue so I would’t blurt out “A monkey could be a realtor!!”
I took the test in Oct 07. There was a 1000 question study guide. All one had to do was memorize the questions and be able to do 4th grade math.
Out of 60-70 people taking the test, I was the 8th one done and I do not consider myself book smart one bit. People were actually struggling with the test
You can ‘borrow’ someone’s license to be a ‘realtor’ as well. I have seen this before. How many of you check whether the self-claimed realtor is actually the realtor who passed an exam?
I admittedly still have a small chip on my shoulder for realtards, remembering how many of them would look condescendingly at me and brush me off when I told them I was only interested in looking at houses below $225k back in 01. I recently called one to ask about a potential listing they had - (just to browse but the price was interesting). I ignored the usual idiotic bullsh$t: great time to buy, going back up next month, blah blah blah, and just pointedly asked my questions. He says, “are you a realtor?” He seemed rather taken back when I (accidentally but vocally) smirked over the phone and responded, “uh…..no”.
In California you have to take three courses (available online) and the state exam. They force you to leave a month or so between courses, so it does take a few months. I did it last year. And yes, the medical and surgical board exams I took 20 years ago were a little harder!
I took a correspondence course at Allied RE school in the OC and then a crash course (for the state test) from the same company. They send you a 500 question review book that the 150 questions for the real test are taken. I was the first one out the door, and passed the licensing requirements in 70 minutes. Its a joke
I agree completely… so many real estate are morons who continually repeat “Of course it’s a great time to buy….” as their mantra…
To become a Broker in California, its an additional 24 units (IIRC), and the test is 8 hours. The Broker exam, should be the minimum to become an Agent. It would weed out the morons. I had Finance, Accounting classes, and Macro Econ already, so the concepts weren’t new. The residential and commercial worlds have a different draw to them.
Not a Cali topic, but I thought these Atlanta foreclosure numbers might be of interest…
ATLANTA (AP) “A record number of properties around the Atlanta area are scheduled for courthouse auctions next month, according to Equity Depot, an Alpharetta company that keeps track of foreclosures.
In the 13-county metro area, 7,335 properties are scheduled for courthouse auctions, Equity Depot said. The previous record was 6,992 properties reported in January…In the April numbers released Tuesday, Fulton County led the way with 1,844 problem properties, followed by DeKalb County with 1,284, and Gwinnett County with 1,145. ”
“The significance is we still have a lot of foreclosures going forward,” said Joe Brannen, president and CEO of the Georgia Bankers Association, whose members make loans to builders and developers. “That many people aren’t able to make their payments.”
wsbradio.com/news/041608atlforeclosures9a.html
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“People’s Need To Sell” in Santa Clara Co. has finally resulted in lowering of the prices and increase in sales. For the first time in a while I am seeing YoY increase in Pending Sales. They should show up in May recorded sales.
Inventory is also increasing, so the pressure on prices should continue. Inventory in former hot zip codes is increasing faster than for the Co. Sales in lower-priced areas has perked up due to lowered prices.
Jas
How long do you think it will be before Santa Clara County and the peninsula reach the same sort of free-fall state that SoCal is currently in? I’m thinking by the end of 2008, but I don’t have a crystal ball so can’t know for sure.
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I think that prices of local tech Scams is a big factor in peninsula home prices. If the recession gets severe (my forecast) then SCC should follow the rest of CA.
Jas
Here is the crux of the bad seller attitude. They think they are losing money because they believed that what they thought the house was worth, minus their loan balance is their money. Doesn’t occur to them that it’s not money until it’s in their hot little hands. Equity isn’t your money until you sell. A house is only worth what someone will pay for it when you attempt to sell.
“phantom equity”
Thanks Bear. That’s the term I was grasping for. What’s worse is that they are stuck on stupid and can’t get past what the inflated comparables were at the top of the market. Everything is “the house was worth $XK in 0__…..”
I don’t think I will deal with most sellers. Just going to stick with REO’s. At least the banks are getting religion.
Another concept from here “perceived equity”. What you believe to be true. It also brings to mind an old saying from a former TV show, from an actor who has had some, uh, litigation problems: “And you can take that to the bank.”
Or in these cases, not likely.
Compared to the last few years, inventory appears to be WAY up in some of the high-end Silicon Valley neighborhoods that I follow - Los Altos, Palo Alto, Mtn. View, Saratoga. Pretty sure I haven’t seen inventory numbers anything like this since I started watching in ‘04.
Increasing inventory with no buyers means the market is crashing. Its a race to the bottom, whichever seller can price the lowest sets the comps and gets the highest price, each next seller must be down 5%
I noticed the same thing. Big inventory numbers in Menlo Park. Just saw one house sit on the market for 6 months, then come off the market in West Menlo.
So, with all the good news about RE in the papers, do you think those trying to sell think it’s a GOOD time to sell? Or are they selling because they NEED to sell?
My money’s on NEED to sell…
“Snider figures that she will lose thousands of dollars, selling the home for less than what she paid. But she hopes to recoup some of that loss when her next home appreciates.”
“Snider said there’s been some foreclosures in the area, which she’s found ‘unsettling.’ Still, her house hasn’t been listed that long and she doesn’t feel pressure to lower her asking price right now.”
Lady, I have never seen such an intrepid entrepreneur such as yourself. I have a bridge that I want to sell you in Alaska…cheap!
“Snider figures that she will lose thousands of dollars, selling the home for less than what she paid. But she hopes to recoup some of that loss when her next home appreciates.”
To quote Parappa the Rappa - “you gotta behLEEEEEEEEVE”
To quote Papa Roach - “cut my life into pieces, this is my last resort”
“Lopez, who has to sell because of a divorce, said she is competing with a huge inventory of distressed properties, including empty houses in her development that the builder hasn’t sold.”
New homes always set the price, and builders can drop their prices and still turn a profit.
Income potential? You mean they’re still using possible future income, and not ACTUAL income to qualify people for loans? I can’t believe it. I need another chocolate.
“You mean they’re still using possible future income, and not ACTUAL income to qualify people for loans?”
V, you should see the mortgage I just pre-qualified for when I showed the banker the lottery tickets I just bought and claimed them as “possible future income”.
If you had referred to the lottery tickets as “Government Financial Instruments” you could have gotten an even higher amount on your pre-qualification.
“High-Leverage School Bonds”
V: and how many of us have just sailed through life as we thought it would be? No interruptions or nasty lesser of two evils choices to make. No unexpected life changes. I know my career has turned out to be just the way I pictured it! I need more than chocolate to endure all the ignorance I see flitting about.
Godfrey is an attorney. I don’t think it’s unreasonable for her to consider her income potential. Unlike most recent buyers she actually has a reasonable expection of increasing future income instead of merely wishing or praying for more money.
There is a huge difference between stretching yourself a bit and buying something you totally can’t afford.
And she’s not just an attorney; she’s a litigator at Latham & Watkins (as a 4th year, she has a base salary north of 200K + bonus) and clerked for 2 federal judges. So, she’s in pretty good shape in terms of affording this place.
She still overpaid for it by 200K. Hope she enjoys that in a couple of years.
And when she jumps on the mommy train how does that disrupt potential?
Sounds like she’s already established (at least 5 years experience). In that case, her income will probably only increase a little bit each year from here on out. It’s only the newbies who can be expected to make “a lot more” anytime soon.
“‘For all these declines, you still have home prices relative to income at higher-than-normal levels,’ Thornberg said. ‘Everybody tries to paint this as a problem with the subprime mortgage industry. It’s not. It drove people to speculate like never before, but now home prices are falling back to their historic norms and we’re maybe halfway through that process. You probably won’t see a bottom in prices until 2009.’”
This guy may be classified as a “bear” by some, but his prediction of a bottom in 2009 seems laughably optimistic to me. It took about seven years to hit bottom last time, and if anything it may take longer this time as the excesses were far greater and the recession is likely to be worse.
Oh I don’t know, if you look at graphs of housing prices over the last 20 years, and how the line turned almost vertically downward in the past 5-6 months, yeah, we could be at a bottom by December 2009, no problem!
But then what?
RE may bottom fairly soon but remain in a low-grade trading range for years.
True-and it probably will. Though different areas will reach bottoms at different times. In LA (the SFV)it feels like the bottom is falling out, yet people are still pricing a normal house for $700K+. Waaaay to much. Not close to a bottom there.But in North Hills–SFHouses for $299.Lake Balboa$399 is common.
Yes, in the ninties, it took four years to hit bottom, and then another four before things began to turn up. Thornberg has been right on. Hopefully the price decreases will accelerate over the next 1 1/2 years, as he suggests.
Thornberg is pretty level-headed, but I think he’s being optimistic about 2009. Assuming he’s talking about the CA market as a whole, and a 15% decline so far, he’s looking at a 30% drop from peak. Another 15% in a year? maybe, but I’d look more at 2010.
-15, -10, -5, -5, 5, 10, 20, 30
No, you were never a doctor of any sort. You were and are just a stupid RE agent. Learn to deal.
We should give him points though for even knowing what an oncologist was. That’s more than I typically expect from a realtard.
1/2 point. He missed “obstetrician”.
Eh. If he got obstetrician, I would highly suspect cheating going on. =)
Natalie Neith, a Beverly Hills real estate agent, credited a recent sale of a house in the West Adams area of Los Angeles to the seller’s pricing it below others in the area. The four-bedroom Craftsman house could have been listed for $850,000 a few years ago, Neith said, but the owner priced it at $725,000 and sold it in a month for close to full price.
I recall viewing several such houses in West Adams circa 2000 - they were mostly in the $300k range then, and will likely be so again within a few years. The houses themselves in that neighborhood are huge and generally well built, but many aren’t in great shape, and the surrounding neighborhood remains quite bad. Many are within breathing distance of the 10 freeway, too.
Who in God’s name would buy a 4 BR in West Adams for $850K??
“The surrounding neighborhood remains quite bad”?? Whaaa???
The area itself IS bad. It’s right near USC and downtown LA. Remember the riots anyone? Character it might have, but you couldn’t pay me to live there.
West Adams area of Los Angeles!
Even this street smart girl knows that area is not safe.
Do you think that article was about LAinvestergirl?
” The four-bedroom Craftsman house could have been listed for $850,000 a few years ago, Neith said, but the owner priced it at $725,000 and sold it in a month for close to full price.”
Astonishingly high price for that area of LA. I know it quite well. It have some of the best preserved craftsmen and old victorians in LA, though the surrounding area is a ragged hood. Some of the streets containing those Old Victorians are fenced off and gated:I have seen improvised chain- link steel fences thrown right across some streets off Adams blvd to keep out the street riffraff.
The high prices paid for those century-old stately mansions may be because of its proximity to USC campus and Dwtn LA. Plus some folks apparantly willing to pay premium prices on 100 yr old well- preserved homes . Could also be a future off-Campus dormitory house purchase.
Make no mistake about it, the tough graffitied inner La hood envelopes that area, though USC area has a good police presence.
For all we know it was some daddy deep pockets that wanted to give precious smochiey kins a nice place to live while she “attended” USC fishing for Mr. Right.
USC gave serious consideration to relocating after the Rodney King riots. Most likely would have ended up in Soviet Monica. No one will admit to it though, but the police enforcement is there for a reason.
Most likely would have ended up in Soviet Monica.
Where is there a vacant patch big enough to hold USC??
Oh, of course. Women only attend college in order to fish for Mr. Right. I swear, some of the guys on this blog have some serious intelligence issues.
Male graduates of USC never get over their fratboy days. Trojan Man, Trojan Man.
“Soviet Monica”
LOL.
VERY good police presence although hoo-boy, there is still an astonishing level of armed robbery in the area (I work at USC and get daily police updates via email!)
“‘I don’t think Congress realized the investors were going to be so gun-shy, but they are because they got stuck with so many delinquencies and foreclosures,’ Marcell said.”
I thought FHA loans were automatically taxpayer guaranteed. What is worrying the investors here?
I believe the article reference FNMA/FHLMC loans in general. They do, or did, buy some FHAs and had FHA PCs but most FHAs end up in GNMA pools.
“Marcell said at the insistence of Wall Street mortgage investors, tighter lending qualifications also have been imposed on Federal Housing Administration borrowers since the ceiling on FHA-insured mortgages was raised to $500,000 from $362,790 in the Inland counties.”
“‘I don’t think Congress realized the investors were going to be so gun-shy, but they are because they got stuck with so many delinquencies and foreclosures,’ Marcell said.”
_____________________________________________________________
And you expected our fearless elected leaders to have any semblance of foresight? And you expected investors to not care so much about capital preservation for a glorified bond? And you expected buyers to suddenly have the financial means to truly afford a home now with the tighter FHA requirements?
Expect the unexpected.
The mortgage investors have more control over bank lending standards than the Fed and Gov bank regulators have? Fed started calling for tighter (albeit weak) lending standards and nobody cared. It was only when investors would not buy the loans that forced tigher lending standards. I guess this is capitalism.
“You probably won’t see a bottom in prices until 2009.”
Has Thornberg suddenly joined the bull camp, or am I just unduly pessimistic? I would think with the Alt-A and prime reset problems that stretch out into 2010, a bottom would still be a ways off in California.
The YoY numbers near 30% are impresive, but the rate of fall is continuing to accelerate. If we don’t see at least a second deravitive break soon, then houses will be free within a year.
Remember, this is median. It is HIGHLY effected by the mix of houses. So, only the super cheap houses are selling now… More and more smaller and fewer and fewer more expensive. Afterall, it was the sub-prime that was going into default a year ago…. Low end.
Wait for the Alt-A defaults that started piling up 9 months ago to go through the full process and be dumped post foreclosure. Mix of houses could eailsy start making the median creep back up again even as the prices of specific houses continue to fall.
AND, I am sure he is not talking “inflation adjusted’.
“If we don’t see at least a second deravitive break soon, then houses will be free within a year.”
Fair enough. I expect the second derivative of California home prices to bottom out by 2009.
“Mix of houses could eailsy start making the median creep back up again even as the prices of specific houses continue to fall.”
I expect this, too. It should prove interesting from a housing statistics standpoint. Look for the median to start going up while the Case-Shiller-S&P index keeps dropping when this starts to play out.
Isn’t Thornberg the one who keeps pushing out his estimate? He’s the “reel ‘em in” guy. Or is that someone else?
Thornberg has been persistently in the bull edge of the bear camp, if you get what I mean. Somehow he just doesn’t want to look like the Lunatic Bear Fringe, but he never says a recovery is coming SOON. When he says “until 2009,” one must read, “until 2009 or later.”
Well said. I agree with this assessment of Thornberg.
Last fall Thornberg said the Boston market was showing signs of picking up and might be better by Spring. I don’t think he really believed that. I get the sense the same sort of motivation (whatever that is) is underneath this statement. He knows full well that 2009 will be unremarkable with respect to any bottom.
My observations of the Thousand Oaks market is that SFR prices are pretty stable, maybe 10-15% down from the peak. The shopping malls are full, retail strip parking lots are full on the weekends, no apparent “recession” here.
I have been tracking several listings and the decent ones (no “needs a little TLC”, or “contractors dream” descriptions) are going pending withing a few weeks, and are selling at $325 - $350 per square foot. Only the “beaters” or the ones near the 23 Freeway are selling for at or near $300/ft. There are some real nightmare SFR’s that are listed below $300/ft and they are sitting unsold.
Just my 2 cents…..
I suggest you buy as many houses as you can there with that windfall then. There is probably not a single market in the state only off that much. But keep believing that stuff, we need knife catchers.
Thousand oaks…home of Countrywide and Amgen? Yeah, those people are like the South Orange County crowd…skipping and whistling their way to bankruptcy.
I agree with JohnF - it is hard to believe, but true… (Ben, I dont think that he was suggesting a bottom or that one should buy, but instead simply stating his observations at this point).
Particularly the shopping malls, etc…. its just crazy, you would think the average income is 200k
Yeah, my inlaws live in Calabasas. Had to downgrade from 4 million to 2 million recently. Tough life. Whole family is full of mall rats.
Not true. The mall may be full, but have u notice people actually bought anything? I am a fan microeconomics so I can easily detect changes in spending habits.. I had friends who own businesses at the mall, they said bussinesses too slow and people come to the mall just to eat
Thousand Oaks has world-class weather with very comfortable average temperatures all twelve months of the year. Home prices will fall there, but it’ll be one of the last places to drop and the first to climb again.
Thousand Oaks is just more suburban sprawl. It will fall like everywhere else. Not so *special* there. I wonder how very expensive Hidden Hills will do? Are they well heeled or specuvestors?
I will move back to California when they pay more than Austin does for engineers. I like Thousand Oaks a lot but get real its $68 a share foot here $300 is just stupid when the sate takes 10% and gas is $4.00 a gallon. Burn baby burn
try $150 a SQ/FT in 2010.
Got Jobs?
CA takes only 7% of our income, and we make WAY more than the median household for the state.
The California income tax rate is 9.3% on all income over $40,000, IIRC.
I looked it up on the California Franchise Tax Board website, and that’s not what they said. You can type your income into their calculator, and they’ll tell you your tax.
Austin-Round Rock Median Household Income: $68,600
Average home price Austin-Round Rock: $197,000
State income TAX: 0
Los Angeles Median Household Income: $96,183
Average home price Los Angeles: $500,000
State income TAX 9%
So if you are making 90K in LA and you get offered a job making 95K in Austin do you take it?
California is toast, only service jobs will remain.
Nobody in Austin will offer you 95K if you’re making 90K in LA. Trust me, I’ve applied to a few companies in Austin recently. All of them want me to cut my salary by roughly 25% to come work there because “the cost of living is so much lower!”
Thanks, but no thanks.
I would never buy at these per-square-foot prices.
The thing that is working against major price declines is there is virtually NO new construction (Ventura Co is very anti-growth and there are very few houses in TO proper that have been built since the late 70’s) and hardly any subprime or alt-A loans - mainly equity locusts from the San Fernando Valley and a significant part of the population that purchased more than 10 years ago.
I can’t really comment on how much of the population here works at Amgen or Countrywide. My guess is, going by the traffic patterns, that most live in the SF Valley or the city of Ventura - and both of these areas have experienced significant price declines.
I would like to buy here, but I can wait for the time being - renting a 1,500 sq ft 3+2 for less that $2,000 per month. The equivalent house would cost at least $600,000 (at today’s prices).
Errrr–seen Riverwalk????????
Riverpark is in Oxnard and my impression is that the citizens there don’t have the political clout to stop the development. Virtually everywhere else in Southern Ventura County has very little new construction and acres and acres of farmland that could easily be developed.
I live in Westlake Village and find JohnF’s comments extremely amusing. Prices here are down about 22% from the peak and businesses are closing at a faster pace than anybody can remember. The Black Angus in TO just closed after how many years? On my corner sits an empty house priced in the mid 6s and this is in Westlake Village, 91361, which has far better schools than TO and a short stroll from the lake. Prices are dropping in excess of 2% per month in the high end areas, and the bottom has fallen out of “shackville” (along the 23).
Yeah, that makes sense considering what great shape the job market is there. You know, the one dominated by Amgen and Countryslide…two companies in the midst of just a “slight” downturn. 805 is and will continue to get pummeled.
Hi John:
10-15% price drops are unsustainable. Once they go 10%, the foreclosures start happening. Those push up inventory, which forces that 10% to more like 20%. Then you start getting your walkers away. Between those and the 2nd round of foreclosures, you should expect a 30% decline. With a 30% decline, so may houses go underwater that 50% is in the bag.
Got Popcorn?
-Neil Wannabe
My observations of Thousand Oaks is everyone is 65 plus years old and prop 13 protected.
If you want to live in Thousand Oaks that badly, just rent for a fraction the cost of “owning”
Option ARMs have yet to hit en masse–but it is coming, big time; the AVERAGE size of an Option ARM is something like $500k, and I’ve seen numbers as high as 85% of Option ARM borrowers are paying the minimum (reverse amortization) payment.
If Thousand Oaks is still as strong in the summer of 2009, then it may be strong enough to withstand the housing pain. Instead of foreclosures and falling prices you’ll simply have stagnation as every competing neighborhood will be far cheaper relative to Thousand Oaks as it ever has been before (similar to differences in prices between the Class A neighborhoods in the SF Bay Area, and where Class B/B+ neighborhoods are headed).
Prices are going to be AT BEST, stagnant in Class A neighborhoods, but in time could very well also fall.
There is no reason to buy today unless you are buying from a distressed seller…
“McCarbery’s daughter Cynthia Nordskog, a real estate agent, said she’s sold houses to just two clients this year, including her father.”
fast forward June 2009 after another 100k drop in prices:
Daughter calls dad: Dad….how come you never call me anymore….don’t you like the house?
Dad: click
“According to DataQuick, there is no sign that foreclosures will ease anytime soon and further price drops are expected in the coming months. ‘There is hardly anything selling. There is just a freeze-out in some areas,’ said DataQuick analyst Andrew LePage.”
Happily, we’ve had a HomeDebt RE “freeze-out” on Ben’s Blog area for years now
““‘It has absolutely gotten more difficult,’ he said, even for buyers with good credit and 5 or 10 percent down payments.””
Wake me up when 20-30% down is needed.
I’ve been watching closely sales and offerings in my neighborhood. The only “decent” house on the market sold last month for $400k (Long Beach, CA area) everything else for sale in my area is a dump, nothing has been renovated or so much as painted. My guess is that the current crop of foreclosures is weeding out the serious sub-prime that had no business owning a house in the first place — by the looks of complete lack of maintenance on these homes. Even the ones marked significantly below “market value” aren’t moving as they are old, ugly and need major repair.
Trouble is, prices have been so high that, even with the pick-a-payment deal, buyers have not been able to scrape up enough money for even repairs, let alone improvements. Now that exotic lending is vanishing, the same problem still exists. Prices are slightly lower, but payments are even higher. Those houses won’t get bought and fixed up until prices come back down to Earth.
Exactly. Nobody in their right mind is going to buy a “fixer” for $400k in a dodgy neighborhood — in this market. There is one down the street from me with parts of the siding missing for $250k…and it won’t be selling even at that price.
Those houses are probably gonna be worth land value. Tear those shacks down and build something decent.
“I’ve been watching closely sales and offerings in my neighborhood. The only “decent” house on the market sold last month for $400k (Long Beach, CA area) everything else for sale in my area is a dump, nothing has been renovated or so much as painted. My guess is that the current crop of foreclosures is weeding out the serious sub-prime that had no business owning a house in the first place — by the looks of complete lack of maintenance on these homes. Even the ones marked significantly below “market value” aren’t moving as they are old, ugly and need major repair.”
Hi arteclectic,
I See that stuff from my perch in LB westside. Have front row ringside seats watching the Great LA RE collapse and all the ugly particulars.
LB is 60-70% ghetto or quasi ghetto, basically the half or 2/3’s of it west of lakewood blvd, except the small bixby knolls pocket. The area ringing dwtn is an absolute pit. LB dwtn Condos are now at firesale prices of under $300.000.
$400,000 can now get U an REO 3/2 or even 4/2 1500-2000 sq ft on large lot in the good parts of LB such as 90808 and 90815. Even in adjacent clean lakewood a decent starter- sized home can be had for under $400,000.
LB is getting slammed hard by the collapsing RE meltdown, with median prices down by average 25% for entire city.
“Marlene Lopez, a real estate agent, has been trying to sell her five-bedroom house in Lake Elsinore for two months. Only three shoppers have come by to see it, she said, although the house that she bought two years ago for $535,000 is now listed for $399,000.”
M Lopez could’nt have picked a worse area or timing to sell her 5 bedroom MCCrapper. If anyone cares to know about it, LE is one of the IE dive zones where prices are collapsing like a brick hi rise in a 8.0 earthquake. ARea just got way overbuilt and too much speculative building of cheap stuccos on questionable land. Plus the lake is unappealing & stale, and entire region is nasty-hot with yellow-tinted air much of the year. Lots of impoverished immigrants/illegals around lake rim.
She will end up foreclosing or short selling or turn it into a rental boarding home for illegals.
If I had any motivation, I’d check to see if this “Lopez” woman has many any profit on past flips. She’s pan-handling for a bailout now, but she wasn’t offering to contribute to the public till when she was making a killing.
Just 7 years ago the place would have gone for $129K.
Median of 829K in Ocean Beach. Someone pick me up off the floor. I sold our place for 400K in 1989 and it was a crappy little shack, maybe 1100 square feet on a good day.
Beach paradise? Hardly. I loved it there but the water was cold and dirty, there were homeless everywhere, the sand was dirty, and there was giant kelp on the beach. Beach paradise is Naples, Florida or Hawaii. Someplace you can actually swim more than 2 months out of the year.
1989? Did you mean to say $40k?
Txchic-They just banned alcohol on the beaches. I was in OB last weekend and you don’t see near near the homeless there as were before the drinking ban.
You can see the begining of the end for the LA South Bay in this post. Guy moved from small house in San Pedro to Murrieta.
The outmigration is just begining. When it goes on for long enough then it will hit like a ton of bricks here.
Of course the guy moving into a McMansion (3000 sq ft) in Marrieta isn’t probably the best idea either. Plenty of slums back in Jersey with giantic houses abounding.
The new slums are on the way.
“Thousand Oaks has a policy designed to keep in check the proliferation of signs. A city employee in a city truck stopped by the house and told Merritt he had removed two of the signs, Merritt said. He added that in the back of the truck were numerous real estate company signs advertising open house”
I wish that more cities would have these types of ordinaces regulating or making it illegal to put up those eyesore RE signs. One property right near my house was a small fixer REO advertised for $279,000. It was a former PUNY POS REO squat box 2/1 700 sq ft
which had been shuttered for over a year. The realtor/ flippier or who ever purchased it from the bank put up 20 frickin signs and flags on the grand open house day.
BTW He was on that property all day without a single looker. I wanted to tell him that no one would buy that POS fixer for even $200,000 as it was right in front of a corner bus stop and had a 5 foot depth front yard. I did not say nothing as i find that most local flipper/realtors are brainless twits not worth my time plus i am rather blunt, do not mince words and would have gotten into a unpleasant argument with him.
I don’t even like reporting this type of crap to the local City ordinance dept as i cannot even stand dealing with the far bigger brainless twits at city hall. If a city is willing to allow their hood to be overrun and trashed out with half- finished flips, RE signs pulluting the hood, unsightly rebuilts , illegal add-ons, and other RE speculative crap i’ve seen all over LA inner hoods then so much the better as it will hasten the collapse of LA RE.
feel better Peter?
You, rather blunt? C’moooon i don’t buy that pm.
Peter M : You ‘ve made some right on observations about L.A. area. I have been down that way the past 2 weekends. I see some of your specifics and say to myself yep there it is.
I haven’t seen anything from Mr. In the Bag Gary? Did he crawl under a rock since his brilliant forecast went in the bag and out with the garbage?
Sad day when Fido and Fluffy are casualties of this bubble. I don’t know how to put a link directly for the link to it. It has a video currently on the main yahoo page http://www.yahoo.com/
Here’s Gary’s “in the bag” forecast:
http://www.impactre.com/Forecast.html
have you seen the little piggies playing in the dirt? and for the little piggies life is getting worse…clutching forks and knives to eat their bacon!
test
“Legislation raised the ceiling for government-sponsored Fannie Mae and Freddie Mac mortgages to $500,000 from $417,000 in Riverside and San Bernardino counties. But John Marcell, a California Association of Mortgage Brokers official who lobbied for the reforms, said they are not working as well as hoped.”
So… Con-gress’s “plan” to screw over responsible people, renters and savers by trying to artificially prop up prices isn’t working out as well as these scheming shitbags wished?
Boo-freaking-hoo.
‘it’s time for me to go.’ - it’s not yet, Dana, not with the place priced that way.
I have a question for all you smart people on this site. Yes, it’s natural for the housing price to come back down to Earth after what we’ve seen in the last 10 years. The question is how much further can it go down? We are currently renting a townhouse in West Covina, CA (In LA County). A unit with an identical floorplan sold just this past month. I did some calculations and I figured that if I were the one to purchase that unit for the selling price, with about 10% down, my mortgage + Assoc. Fee would be almost identical to the rent that I am paying. And I assure you I am not overpaying for my rent…it’s just that in LA at least, the rents have skyrocketed in the last few years trying to catch up with real estate prices. Granted this is a single example… but this brings up an interesting aspect that is not talked about too often. How much further can real estate prices drop if comparable rents are close to mortgage prices? unless rents are also flexible…do rent prices also go down ever? I thought rents were fairly stable and the home price vs rent calculations were good indicators of how the market is overvalued.