The Boom Has Turned Into A Bust For Many
The San Francisco Chronicle reports from California. “Like a brick cast from the top of the Transamerica Pyramid, national and local home prices are rapidly accelerating on their way down. The average cost of a Bay Area home dropped 17.2 percent year-over-year in February, compared to 13.2 percent in January and 10.8 in December, according to the Standard & Poor’s/Case-Shiller report released Tuesday.”
The LA Times. “Los Angeles and Orange County home prices were down 19.4% in February from a year ago, among the sharpest drops in the nation, according to an index released today.”
“The Case-Shiller index compares the latest sales of detached houses to previous sales, and accounts for factors such as remodeling that might affect a house’s sale price over time. It excludes foreclosures.”
The Voice of San Diego. “In another month of record price declines, San Diego County home prices dropped 19.2 percent year-over-year and 24 percent from the November 2005 peak, according to the Standard & Poor’s/Case-Shiller home price index for February 2008.”
“The index tracks prices on the same homes over the years. It doesn’t measure condos or new homes. Broken into three tiers by price, the lowest tier continued to fare the worst but was followed by growing losses in the middle and high tiers, in tier breakpoints as of February 2008.”
“Lowest tier: (priced under $405,028) Prices were down 27.5 percent from Feb. 2007, down 31.6 percent from peak of June 2006. Middle tier: (priced between $405,028 and $609,200) Prices dropped 20.4 percent year-over-year and 26.1 percent from the Nov. 2005 peak.”
“High tier: (priced higher than $609,200) Prices were down 12.5 percent compared to a year earlier and 17 percent from the June 2006 peak. (Last month, this tier saw a 10 percent year-over-year and 15 percent from-peak drop, which were the larger drops yet at that time.)”
“Also this morning, RealtyTrac reported foreclosure filings for the three-month period ending at the beginning of April. San Diego County quarter one filings numbered 15,315. That marked a 48 percent increase from the previous quarter, fourth quarter 2007, and a 252 percent increase from the same quarter last year.”
“The total was more than eight times as large as the total filings recorded in the same quarter two years ago.”
The Daily Bulletin. “The San Bernardino-Riverside area ranked No. 2 nationwide in the first quarter of this year in foreclosure filings, according to RealtyTrac. Banks repossessed almost 10,000 homes in the region from January to March, while default notices clocked in at almost 23,600.”
“And buyers put money down on more than 3,700 foreclosures.”
“Real-estate expert Michael Carney isn’t surprised. ‘As more prices fall, there are more homes with no equity,’ said the director of Real Estate Research Council at Cal Poly Pomona. ‘If you have no equity in your property, and prices are falling, you have no incentive but to walk away.’”
From KSBY 6. “Half of homes up for sale in North Santa Barbara County are former foreclosures, according to the local Association of Realtors. DataQuick says it is a record quarter for default notices. In San Luis Obispo County, default notices compared to last year are up 112 percent. In Santa Barbara, it is up 141 percent.”
“According to Martha Beckman, President of the Association of Realtors, the average price of a North Santa Barbara County home is $375,000 to $400,000 dollars. Compare that to the price of $425,000 last year.”
“This because of the sheer number of homes - many foreclosure re-sales up for grabs. While prices may plummet a bit more, she suggests buying sooner rather than later.”
“‘Right now, we are close to the bottom if we’re not at the bottom, and you don’t know you’re at the bottom until it starts to come up again,’ Beckman said.”
The Tribune. “Sales of all homes in San Luis Obispo County plunged in March to less than half of what they were a year before, the latest mark of the real estate market downturn…according to DataQuick. The drop creates the county’s lowest March sales in 18 years, said spokesman Andrew LePage.”
“However, it is not the county’s lowest month for home sales historically, LePage added. That occurred this year when 178 homes were sold in January. Last month’s downward tumble comes at a time that traditionally marks the kickoff to the home-buying season.”
“‘Banks have really tightened up and are not offering what they offered a year ago,’ said said Kirk Lesh, real estate economist with the UCSB Economic Forecast Project. ‘Nowadays, you have to put 20 percent down to get a house, and not too many people have that sitting in their banks.’”
“Last month, the biggest decline was in sales of new homes, which plunged 68.3 percent year over year. The median price of a new home dropped to $439,500 in March, a 17.1 percent dip from $530,000 in March 2007.”
“For existing single-family homes, the median dropped to $480,000—10.5 percent lower than $536,500 a year ago.”
“Consumers who were once able to stretch their budget on tight incomes and low credit scores can’t now, said Steve Harding, Rabobank regional president in Arroyo Grande.”
“As well, loans that didn’t require strict research on personal income no longer exist because of today’s stringent verifications, he added. ‘There used to be ways to work around poor credit scores,’ Harding said. ‘But now, bad credit is totally out of fashion. It’s just not going to happen.’”
The Mercury News. “Bidding wars have remained common in high-priced places like Cupertino and Los Altos, where stellar school districts are the big draw. But with more than 900 houses for sale in Santa Clara County for $450,000 or less, many home buyers assumed that market was soft and are shocked to find themselves outbid on foreclosed, bank-owned properties in this price ran”
“Banks eager to unload their REO inventory - which forms a large chunk of the cheapest houses for sale in the county - have been lowering the listing prices. It’s become common to find bank-owned houses in South San Jose priced at roughly $400,000 that last sold in 2005 or 2006 for $600,000 or more, for example.”
“One San Jose resident, a mobile-home owner who has been looking for a house since February with a budget of up to $550,000, bid unsuccessfully on several short sales and half a dozen REOs before getting a bank-owned Evergreen house for $540,000 that was listed at $529,900. The buyer, who did not want to be identified, said he’s investing despite fears that valley home values may continue to fall.”
“‘I have a feeling it’s still risky to buy a house at this moment, but I want my kids to go to a good school, so I’ll take a chance,’ he said. ‘I might stay there for 10 years. I look for the long term, not the short term.’”
“Some agents who specialize in REOs said about half the buyers now scouring the market for deals on bank-owned properties are people who want to live in the homes, while the other half are seeking investment property to rent out.”
“But even at today’s REO prices, some investors are waiting to buy because they can’t get enough monthly rental income to cover their mortgage and expenses.”
“True, agent Peter Carey said, but the ones buying now are ‘gambling on better times’ in the future, he said, hoping to buy property in the $400,000s that will eventually gain value.”
The Modesto Bee. “Even during the boom years, when the housing industry was roaring and employment was growing, Northern San Joaquin Valley incomes were falling further behind the rest of California.”"Just-released statistics from the state Franchise Tax Board show that Stanislaus, Merced and San Joaquin county incomes didn’t keep pace from 1999 through 2006. Incomes in the three counties lagged about 25 percent behind the state as a whole.”
“That’s surprising considering that the valley’s economy appeared to soar during those years. But high-paying jobs apparently didn’t follow.”
“‘Bay Area folks who made the mad rush here for housing actually hurt the local job market,’ said Edward Hernandez, a human resources and business management professor at California State University, Stanislaus.”
“Hernandez said many of those newcomers quickly realized they couldn’t stand the daily commute back to the Bay Area, so they switched to lower- paying valley jobs.”
“‘Out of desperation they’d take any job they could just to get in. They really messed up our job market,’ said Hernandez, noting that starting salaries declined at some valley businesses because so many qualified workers were competing for openings.”
“The income statistics demonstrate that creating more jobs doesn’t necessarily generate wealth, said Carol Whiteside, president emeritus of the Great Valley Center. She said many of the valley’s new jobs were low-paying, entry-level or service positions, rather than a healthy mix of jobs from diverse employment sectors.”
“‘We always assume people in the Bay Area are top wage earners, but it was the Bay Area workers making lower salaries who were the ones moving here and making the those long commutes,’ Whiteside said.”
“The region’s economy started declining in late 2006 when the housing market turned. Stanislaus’ unemployment rate spiked to 11.3 percent in March, home foreclosures are at record levels and bankruptcies have risen dramatically.”
“‘The income (statistics) are going to look a lot worse the next time they release them,’ Hernandez predicted. ‘The boom has turned into a bust for many.’”
‘I have a feeling it’s still risky to buy a house at this moment, but I want my kids to go to a good school, so I’ll take a chance,’ he said. ‘I might stay there for 10 years. I look for the long term, not the short term.’
10 years isn’t long term. And what’s up with this might stuff? This guy is speculating, pure and simple. And like all speculators, when he sees there won’t be a profit, he’ll bail.
Way to go Mercury News. When the next round of FBs has lost $200k like the current bunch, I’ll remind you of this REIC piece.
When was the law changed to bar children whose parents rented from attending the local school?
I love it when ppl use their kids to justify a risky financial venture.
Heck yeah, one of the best arguments FOR renting is to put your kids into a better school system than you could otherwise afford.
I live on a street in Seattle that a friend of mine told me she wished she could afford. I rent for 1800/month. She and her husband paid a million for her house. WTF?
Um hey dude Evergreen, it’s right next to East San Jose. Silver Creek high is a ‘good’ school? Well gee I guess things have changed since I bought my first home out that way back in ‘78 for 58K. 540K?! Forget it I’d rather rent in Santa Clara for less than he’ll be paying to own in Evergreen.
If you take a look at the map that the Mercury News has in that same article (by Intero Real Estate) - then do a zip code comparison with RealtyTrac, there’s absolutely no comparison.
Intero has 95123 between 16-20 foreclosures and RealtyTrac has the same zip at over 400. Amazing!
At least in the comments section most people get it.
If a Realtor ever pulls that multiple offer BS with me I’m going to demand to see the offers.
How can you do that? I’d really like to know because I would like to do the same thing.
Won’t the RE agent just say the other offers are confidential or something like that?
Anyone know how you can force his/her hand on something like this? Maybe threaten to withdraw your offer if they don’t comply and show the offers to you?
Couldn’t they just forge the offers?
Seriously - I’d really like to know how you could do this. I’ve never bought before, but I suspect that when I finally do, I’ll have to deal with this kind of crap - it was rampant here in Seattle during the boom.
There is no law saying they are confidential and once you buy your purchase price is public record. They don’t want to show me the other supposed written offers I walk.
You deal with it by saying, “my offer stands”.
Then if necessary you go find the next, “perfect house”.
No way. If that ever happens to me then I’ll ask the realltor if I can change my offer. If so I’ll drop it 20%.
Couldn’t they just forge the offers?
Yes, or any one of a number of different dishonest tactics.
I think the better strategy goes something like: “Glad to hear they have better offers because I’m now uncomfortable with my own number, and should have offered less.”
It serves to put the salesman on notice that if they’re jerking you around, they can expect the next number to be even worse. And if they truly have a better offer, then everyone should be happy to part company and stop wasting each other’s time.
To take this one step further, is it feasible to pre-emptively add a poison pill term in one’s offer, making it invalid if other offers are received?
Is there something in CA (or other states’) RE law that would invalidate such a condition in an offer?
You can just put “contigent upon satisfactory termite, electrical, plumbing, roof, and general inspections”. Then, when one tiny little termite poop gets found, you can use that as an excuse to decline the transaction.
termite poop ??
LOL…Good one V…
Here in Florida, at least, you can put, “Subject to an inspection satisfactory to the buyer.” Unless it’s a brand-new house by a top builder or a builder who won’t use anything but their own contract language, it is very easy to bail with a subject-to-inspection clause.
I’ve heard of an investor using “subject to approval by my partner.” He didn’t tell anyone that his partner was his dog.
If buying for yourself, you could say your wife/husband gave you authority to put an offer down but is out of town until tomorrow and needs to approve it. Or other such spin.
Sleepless,
Did you know the houseboat in Sleepless in Seattle went up for sale for…$2.5 million??? You just gotta love it…
If I hear the words “multiple offers”, I’m out of there. If there truly are multiple offers, you will not get a deal because chances are you are bidding against fools. If multiple offers don’t actually exist, you are dealing with a liar.
You stipulate in your offer that if the seller or his/her agent represents to you that a higher offer has been received, your offer is lowered by $20,000.
some wise man on HBB once said if they tell you multiple offers, you tell them that your offer goes down 5% for every day or week, how ever you like.
I don’t think it’s BS. Most of the foreclosures here in San Diego have multiple offers. Some properties have so many offers the bank refuses to accept any more.
Apparently not too many offers are actually being accepted based on the sales numbers I’m seeing…
The article says that this guy is a “mobile-home owner” with a budget of “up to $550,000.”
Yep, just a typical house shopper. There is nothing remarkable about this story at all.
That’s what got to me, too. How is this guy going to make mortgage payments on a house that expensive? Rent part of it out?
The Merc is the biggest bull-crap paper I’ve ever read. Always probusiness, ignoring other aspects of the issue. Never mind that prices are drastically lower than they were last year (and declining). The only thing that matters is that banks are smart enough to list their houses a little lower than market in order to start bidding wars. Bidding wars, you say? I think I’ll wait out.
I really like the guy who is sad because he didn’t get to buy an REO for full retail price.
Crimeny, Ben, calm down. If he had said 20 years, would you be happy for them?
It has to do with motivation. If he is there to stay, fine. If he is really in it to make money, he will put the house up for sale when he sees there is no profit. It’s not an academic thing. Notice we have record for-sale inventory all over the country.
Greedy Sellers and the REIC gang will difinitely know when we reach the bottom.
They’ll all go SPLAT as the sudden stop kills them.
Right now, they’re merely screaming and kicking in terror as they freefall
1 st quarter foreclosures up 112%.
Prices down 12.7% in Feb.
Home sellers heads are exploding. Oh,the humanity!
You missed the best part, according to the CS Index - “In February, prices were down 2.6% compared with January for 20 key cities, with prices in the smaller 10-city index off 2.8%.”
Declines in major cities have accelerated to an annual rate of greater than 30% with no signs of slowing.
“no signs of slowing”
But many signs of acceleration!
“The Case-Shiller index compares the latest sales of detached houses to previous sales, and accounts for factors such as remodeling that might affect a house’s sale price over time. It excludes foreclosures.”
That last sentence is KEY for those blaming dropping prices on foreclosures. Imagine if they WERE included.
Foreclosures absolutely SHOULD be included. If there aren’t many of them, then they won’t affect the average. If there are a lot, well, that’s your market.
If foreclosures were included the average price would be higher. Banks bid what they are owed on the foreclosed house. What is included is an REO sale - the bank sells the foreclosed house.
You are too damned smart Hoz.
I am not half as intelligent as most that post here.
“LawnBott, the $2,750 robot which announced itself as your loyal automated lawn mower—capable of cutting 33,000 square feet of grass in a single charge—has revealed its true face: it wants to cut humans to pieces. Actually, just stupid humans, but the U.S. Consumer Product Safety Commission and Kyodo America have decided to “recall them immediately.”
Apparently, one of the owners lifted the mower from the ground while it was still on and “suffered minor lacerations from the moving blade.” Yet another case of stupid humans trying to win the Darwin Award….”
Gizmodo
I would have tried to lift it up to see how it works. LOL
One of my relatives bought a small electric lawn mower a couple of years ago. She plugged it in, turned it on, wasn’t sure it was working and lifted the edge up, it was.
Almost sliced a couple of her fingers off.
My hybrid car has a light on the dash board so that you know that it is on. Just one of the perils of electrical motor stuff. You can’t see things are charged or hear them either.
Touch line. REceive shock. On indicator.
Oh, I see.
Agree with the BigV. I live in Coeur d’Alene, Idaho. A really nice house in a great neighborhood that was bought for $442K was sold at auction for…$187,500. I was amazed to see that price. Luckily for us, we have not been so dramatically affected by FC’s as in California. However, that is not to say we have not been touched.
The combo of greed, aggressive selling pushing legal bounds, the macroeconomy, massive inventories, and the vortex of major Western markets has essentially frozen our market in place despite a major economic transformation and unemployment rates as low as 1.5%. So we see the legacy of the housing boom everywhere. That is not to say one cannot find a good/great deal out there. But one has to do his homework and negotiate aggressively.
One final comment…I am thankful we resisted temptations to buy in California and resisted temptations to buy upscale homes marketed to Californians here in Idaho. Those homes got nailed and are not likely to recapture value for a number of years. We went modest and recently completed a refi where the appraisal was higher than purchase price of January 2007. Lucky, lucky us…
I also wonder how many of those “sales” are sales contracts that nervous buyers subsequently cancel.
Not canceled because they where nervous tons of homes are falling out of escrow now because “buyers” cannot get financing.
This will only increase.
The index excludes the title transfer from the borrower to the lender (the lender typically “bids” the loan balance so the “sale” price is meaningless). The index does not exclude the subsequent sale of REO, which is a real, arms-length transaction.
“This because of the sheer number of homes - many foreclosure re-sales up for grabs. While prices may plummet a bit more, she suggests buying sooner rather than later.”
“‘Right now, we are close to the bottom if we’re not at the bottom, and you don’t know you’re at the bottom until it starts to come up again,’ Beckman said.”
Geez, these people have no shame. Even if we were to take her claim at face value, you’d still have a 50-50 chance of losing money just in case prices continue to fall. Everything points in one direction for these nimrods– it is a good time to buy.
Of course, for the informed (like those on this blog), we KNOW she is full of %$#!$!.
The bottom is really easy to find.
When prices STOP decreasing you are there.
And since historically the bottom stays for YEARS, you got plenty of time to find the house you want.
Oh, that’s wrong! Don’t you know - it’s a sharp V. The bottom only lasts about five seconds! And then its onward and upward!
Do you really want to miss out? It’s much better to buy a house and watch it depreciate for YEARS than it is to wait for the bottom and get the best price possible. After all, you’ll only be paying for it for 30 YEARS.
She is a simpleton. There are more than two options for house-price direction. Can anyone here list the possibilities?
Got me there, V - other than up, down or flat, what is there?
3 is more than 2. I think you got it.
“‘Right now, we are close to the bottom if we’re not at the bottom, and you don’t know you’re at the bottom until it starts to come up again,’ Beckman said.”
So…how do you know you’re close to the bottom then?
And…after the bottom, won’t we still be close to the bottom? Why is close on the way down better than close on the way up? I know which I would choose.
While we’re at it, what is “plummet a bit more”? Is that like getting slightly killed in a mild apocalypse?
” you don’t know you’re at the bottom until it starts to come up again,’ Beckman said.”
Nonsense. Around here there’s still a huge slug of Notice of Defaults, bigger than the current inventory of REOs on the market. As they work their way into foreclosure they prices will go even lower.
Increasing foreclosure inventory does not lead to a bottom. It leads to even more price declines. Unless she thinks prices are going to increase in the face of even more distressed inventory.
“Like a brick cast from the top of the Transamerica Pyramid, national and local home prices are rapidly accelerating on their way down.
I’d rephrase that. “Like an FB hipster flinging himself from his ‘urban pioneer’ condo tower to the wino-infested streets below, home prices are rapidly accelerating on their way to 1998 prices…”
No, wait: “Like lemmings plunging over the cliffs and into the sea, home prices are gathering speed as they hurtle toward the rocks of financial ruin….”
‘Like sands through the hourglass, so are the Days of our Lives.’
Wouldn’t a brick cast out of this building strike another part of it on the way down? It is a pyramid, after all.
It would strike repeatedly and break many windows as it went.
The metaphor had dubious physics on a couple of points:
Like a brick cast from the top of the Transamerica Pyramid, national and local home prices are rapidly accelerating on their way down.
1. As you correctly point out, the brick would bounce down the side,
2. a brick would not “rapidly accelerate”. It’s acceleration would, in fact, be a constant.
But the Important point: Prices are going to hell in a handbasket. Now THAT is a much better metaphor IMHO. And only theologians would argue about those physics.
I guess I could clear the whole “increasing velocity” argument up by asking a friend of mine who used to work in a downtown tower. He said a lot of overstressed executives would find amusement by heating coins with their Zippos, then dropping them to the winos on the sidewalk, howling diabolically when the latter tried to pick them up only to screech in pain and fury. Guess you had to be there.
Another great reason to read with pleasure the destruction of their home equity. Folks who actually earn their income doing something productive with their lives would not act so cruel as to hurt the homeless. Leave that to the 20-something salesman, mortgage brokers, stock brokers, etc.
Like an a-hole tumbling toward the craggy JT forest below, …
LOL. Your metaphor wins.
People who live in glass houses shouldn’t get loans…
For LA metro decline is 4.3% last month. This is around 50% on yearly basis. Bha-ha-ha! And when I think I have spoiled some relationships explaning what catastrohpy is coming. Nobody listens.
“‘I have a feeling it’s still risky to buy a house at this moment, but I want my kids to go to a good school, so I’ll take a chance,’ he said.”
Good schools in South San Jose?
Some gangs are more respected than others. He didnt say anything about book smarts.
Exactly what I was thinking FP, Probably have a great gang initiation upon entry.
Pat Tillmans old High School is considered pretty high.
http://leland.sjusd.org/
Pats run is this weekend in San Jose and AZ
Pat Tillmans old High School is considered pretty high ??
South San Jose yes but thats Almaden….Lots of wealth there…
Housing wealth…….
Evergreen is NOT south San Jose no matter how much the residents want it to be…it’s south of East San Jose on the EAST side of 101. South San Jose is known as the Santa Teresa area. The Almaden area is over or around some foothills from Santa Teresa in a valley known as the Alamaden Valley. It’s on the way to Los Gatos. Waaaaay different than the eastside
I agree with wanting to have little jr attend a good school, but a “good school” is not the be all, end all for anyone with enough natural talent or the drive to succeed. kids who really want to do well will flourish, even if they have to attend a (gasp) bad public school. if the parents encourage the kids to do well, and the educational system has at least a decent basis of support, then little tiffany will still do well.
it’s when the school is just overwhelmed with gangbangers or special needs kids that demand most of the limited resources is when you need to take a closer look at the opportunities for little hunter.
my 2nd grader was transfered, at my request, from a 88% ESL dominated elem school to one with a more even spread of english speakers, because she was forced to act as an impromptu teachers aid. She spent virtually her entire class time running around helping the non-english speaking kids get up to speed. I stopped by several times for quick visits to the classroom & was very upset to see my daughter’s education highjacked & sacrificied in order to help people whose parents wont help themselves. to go futher, what I resent most are the illegals dumping their massive amounts of children in the public school system while living in public housing & largely exempt from regular school taxes. The school admin/teachers feign anger but they know which side of the bread their salary is buttered, and that is the one with the most chlldren, as the state pays per head, regardless of how involved the parents become.
bottom line is that my children will NOT be drafted by overworked teachers to “help out ” with instructional duties. Let the districts hire the necessary amount of spanish/russian aides instead of giving themsleves ANOTHER pay increase. my children deserve just as much of an education as non-english-speaking, resource-soaking juan, xavier, dmitri, oxana, and the other melting pot residents of sacramento.
now flame on, but thats reality in a nationwide limited resource situation that was set-up to handle only a SMALL amount of teacher diversion from the main course, not the massive tidal wave that has hit.
remember this the next time you bitch about yer little brianna getting short-changed at the school but feel vindicated about hiring those guys on the corner to save a few bucks on yer housing remodel. hypocrites!
Pass a law to make child-bearing a crime and be done with it……..that or mass forced vasectomies, whatever, you choose. There! School problems solved.
Damn, a crime? Harsh. But yeah, at least take away that damned tax deduction bullsh!t.
nonsense, any law that encourages breeding is good for me, I need some generation to shovel bad fiscal policy on to when I get older, its the American Way (R).
Good public schools are great but I wouldn;t rely too much on the public school system. My wife volunteered pretty much everything my kid was involved in at elementary school. She was one of five parents that volunteered for events in the entire school. Five! Almost every kid in the the school new her name. We finally took my kid out and sent him to a private school (Catholic) (yes yes, I know but it’s not that bad. They still do the pledge of alegiance). At least all the parents volunteers. and we sit down with him every day to go over his homework. It does make a difference.
aquis,
Aren’t special needs kids in separate schools? Or is this one of those “mainstreaming” things? As for the parents with the illegal nannies and gardeners, I’m betting their kids are in private schools.
I’m sure you’re on it, but are there any schools open only by competitive exam or with a special focus..say science or art and music? IN NYC, these schools get the best teachers, and motivated students and parents. Anything like that your way?
In our school district (SE PA), most special needs kids are in the normal elementaries, mainstreamed as you put it. The other types of schools you mention are I guess charters, we have a few ones relatively newly opened here, they’re verrrry popular.
When we moved out here 5 years ago, we visited our elementary and all they talked about was how empty the K was, how quiet it was, how they were always way under the max class sizes. Now, it’s a whole different story. In a few short years WCASD elementaries have been inundated with mostly non-English-speaking children (of legal immigrants? I doubt it.). The classes are all full to the brim, they’re splitting the K’s into extra classes with dividers now. Lots of new problems they’d never had before just with ESL and absent/unavailable parents.
So, yeah, we’re doing parochial too. I’m glad to be Catholic! It’s hella cheaper than regular private schooling, even with the tithe.
“Aren’t special needs kids in separate schools”
no but they get aides paid for in part by medic-aid
spike66
as far as magnet schools, those are scattered around the the district & usually only available if you have a gifted child or live in the home area of the school. parents have to apply for transfer from their own lackluster school to one they would like little johnny to attend. however ,there IS a catch;
the schools that have evolved into “magnet” schools here in the san juan school district (n. sacramento) have done so by getting federal/state funds for their large population of disadvantaged kids.
the average schools who perform as needed dont get the xtra money that the ESL/poor/special needs schools receive. those schools are actually cutting edge, with things like new high tech interactive white boards (promethean boards) at $60k each, not to mention the legions of special ed teachers, special language teachers, special needs, special this & special that are mandated by state laws so every school district HAS to have ‘em. There is so much money spent on making sure that any child who even so much as sneezes is entitled to a horde of costly attention, to ensure they be mainstreamed, that there IS no MAINSTREAM TO MEASURE; every goldarnned child is “SPECIAL” !!!!!
you can thank all the overagressive type-A former business career idiot mothers who MUST classify their child as having some learning disability because it gets them attn & sympathy from their hen club, especially from the Poprah crowd. Hell, when you see her litany of sob stories so often & the endless medication commercials, is it any wonder mothers of school aged kids go looking for some ailment to fit her brood, because its the “in” thing to have a special needs child!?
typical CA education & self serving teacher union overkill; throw buckets of money at those who would just as easily benefit from some simple intensive personal hands-on help. no fancy whiz-bang needed. but then when yer a CA Teachers Union member with an expensive golden hammer, every problem is a bag o money to nail to the school.
abraham lincoln seemed to do pretty good starting with just a charcoal & shovel. I did ok with a chalkboard.
its the degree of instructional involvement, not the size of yer checkbook, that gets the best educational result.
parent. teacher. student.
simple, timeless, formula
that is all. for now
I attended school in the San Juan district lo these many years ago and did, in fact, attend “magnet” schools. Usually the class size was around thirty or more students— they keep screaming about increasing class sizes, so I wonder if it’s up from there or if it’s gone down in the interim.
Anyway, I think back on all of the things we were alloweed to do and the way the classrooms were set up and I just know that a number of those opportunities are gone. The classrooms had lofts, for example. I doubt that students are allowed on them now, if they’re even still in the rooms. Too much chance of falling down the steep stairs (a trick I once pulled in first grade.) Another room had a “science room” full of terrariums and aquariums and I bet it’s nothing but storage now. Or office space.
Anyway, if I had to pay a premium to get into a “good” school district I’d immediately look into… homeschooling. I’d have to work my butt off, but I’d probably be able to afford to stay home to do it!
“The school admin/teachers feign anger but they know which side of the bread their salary is buttered”
no, you know how much of a pain it is for the teachers? enough that he or she needed students to help her. it sounds like your child not only was up to par but was such a good student that she was helping others. she was helping break the cycle you complained about. hopefully there is someone as smart and caring as your daughter to take her place, right?
You have to know your kid and what will work for them. My kid would have never flourished if she had to attend a big institutional school. She was shy and very smart and just couldn’t get with the whole kids are so mean social atmosphere. We did public school for 2 years 4th & 5th grade and she was miserable even though at a westside LA prime school. Older one always went to public schools and did great, but she was very outgoing and confident. It depends on the kid, I think.
Quite surprised to see this diatribe coming from you, Aquias. Did it occur to you that your daughter is getting exceptional learning reinforcement by dint of her classroom teaching “duties?” The responsibility, authority, and translational skills can only serve her well in her academic career. I think you may have made a mistake in transferring her. Certainly your resentment must be puzzling to her….
Just for the record, my kid went to the crappiest public high school (86% Mexican,) in the crappiest district, in the second crappiest state in the country…and still got into a first tier college. A lot depends on your attitude.
“‘Bay Area folks who made the mad rush here for housing actually hurt the local job market,’ said Edward Hernandez, a human resources and business management professor at California State University, Stanislaus.”
That is really a low blow. After all that commuting for your negative equity house you’re told that “you messed up the local job market…”
I get a laugh out of this as well since for years I’ve been seeing people move to the Antelope Valley to buy cheap housing and then proceed to whine about the commute and complain that they can’t find any jobs that pay well.
“‘Out of desperation they’d take any job they could just to get in. They really messed up our job market,’ said Hernandez.
Thats really nice. You kill yourself commuting for your negative equity house, then take a local $9/hr local job and the local college prof. says you really messed up our job market.
I was in Florida recently, and went to a Starbucks for some coffee with a friend. The barista turned out to be a realtor! Realtor work was dead, so she took the Starbucks job (there are worse gigs, for sure) to get health coverage for her family.
I guess in some places the realtors are really messing up the barista market!
San Diego County quarter one filings numbered 15,315. That marked a 48 percent increase from the previous quarter, fourth quarter 2007, and a 252 percent increase from the same quarter last year.”
“The total was more than eight times as large as the total filings recorded in the same quarter two years ago.”
Remember a couple years back when we would talk about how San Diego is the canary in the socal coalmine? Well, it still is, and these numbers are showing us what the LA basin is going to look like next year.
The big difference between the 2 cities is, San Diego had oodles of land to build homes and L.A. didn’t…
I’d suspect that a lot of S.D.’s troubles are a result of people walking away from new homes, and if you bought after Feb 2004 in Tijuana-adjacent, you are now upside down, according to Case-Shiller.
TV Crew Members Still Feeling Effects of Writers Strike
And now, it’s time for the SAG negotiations… coming soon to a picket line near you.
“But even at today’s REO prices, some investors are waiting to buy because they can’t get enough monthly rental income to cover their mortgage and expenses.”
Then why do these retards buy rental property? If it loses you money it’s a poor investment. I guess those folks are slow learners.
—-
‘Right now, we are close to the bottom if we’re not at the bottom, and you don’t know you’re at the bottom until it starts to come up again…’
Can we sentence these bottom callers to HBB Prison? Of course, not without an HBB jury trial.
‘Banks have really tightened up and are not offering what they offered a year ago…’
No kidding.
‘Nowadays, you have to put 20 percent down to get a house, and not too many people have that sitting in their banks.’
With home prices falling at 30-40% annual rate who is stupid enough to only require 20% down? If it were my money I would require 40% down.
“For existing single-family homes, the median dropped to $480,000—10.5 percent lower than $536,500 a year ago.”
In SLO County median price of all homes is down 23% from the peak and by June 2008 the YoY decline is likely to be 30%+..
“But even at today’s REO prices, some investors are waiting to buy because they can’t get enough monthly rental income to cover their mortgage and expenses.”
They are paying too much for REOs and they will learn soon enough that they needed to wait.
Jas
Whats interesting is that this early wave of infestors will probably default in a few years continuing the foreclosures. If you think about it house prices are still at least 20% off bottom if not more so a lot of these infestors will be at negative or zero equity in a few years and I’m pretty sure rents will drop making cash flow even worst. So basically say at least 50% of todays sales will be the next wave of foreclosures. Its those that buy in two years with 20% down that will begin to break the foreclosure cycle and it will take years since you still will have a number of 5-10% downs foreclosing.
And this is not assuming a major recession/depression.
–
Good point, Michael. I believe that we will have minimum of three legs of 20%+ declines with prices flat or up slightly in between the down legs.
In terms of leverage, the housing bubble during 2000s was more like stock bubble during the 1920s (only 10% margin requirement to hold stocks).
Jas
Once the prices hit the bottom bottom ( not that bottom REIC is calling) they will crawl for a long time, 2-3 years. It always has been like that.( If gov puts proper regulations into the game we may never see the real prices of 2004-2007 ever again, and this is the most scary part for yesterday buyers) No buyer has rush job for buying, once we are on the down slope of the curve. This is showing my historical research . It is beyond me who and why is buying exactly in this moment. My head will explode to think about this people.
–
“It is beyond me who and why is buying exactly in this moment.”
What did PT Barnum said about the suckers?!
Jas
“‘Right now, we are close to the bottom if we’re not at the bottom, and you don’t know you’re at the bottom until it starts to come up again,’ Beckman said.”
______________________
Wait a minute - if you don’t know that you’re at the bottom until “it” starts to come up again, then how can you say “we are close to the bottom if we’re not at the bottom” if it is still going down?
Hmmmm.
Oh, wait a minute - I figured it out - Martha Beckman, President of the Association of Realtors is a flippin’ idiot.
Why wait to actually see the bottom when you can guess where the bottom is now and give her a commission today hoping you were right? I will never understand why the media asks Realtors questions regarding real estate investment. They are not educated in investing, finance or economics. They are salesmen whose only training is to fill in names, dates and numbers on a blank form document, stare at you confused if you have any questions or want to make changes to such document, and to open lockboxes and doors. Most I have used still get the names, dates and numbers wrong, and fumble around with the unlocking part.
so they are essentially a housing valet?
Just checked the raw data on the Case-Shiller report. based on the current values:
Current Phoenix value same as in April 2005
San Diego is at Feb 2004
LA is Sep 2004
San Francisco is July 2004
Denver is February 2004
Chicago is May 2005
Detroit: September 1999
yowza
–
Price Change Since Dec’03 in CA Counties and Select Cities as of March 2008 as reported by DataQuick:
-26.6% San Benito County
-26.0% SACRAMENTO
-21.5% STOCKTON
-19.4% Sacramento County
-18.2% Monterey County
-16.0% San Joaquin County
-15.3% Merced County
-14.6% Stanislaus County
-14.3% San Diego County
-11.9% Ventura County
-11.5% Placer County
-9.3% Sonoma County
-7.2% Solano County
-7.1% Napa County
-6.6% Yolo County
-6.3% GILROY
-5.6% MERCED
-4.6% Riverside County
-4.5% DAVIS
-4.1% VACAVILLE
-3.3% NORTHRIDGE
-1.7% Santa Cruz County
-1.6% Madera County
-0.8% HUNTINGTON BEACH
0.0% Orange County
0.8% MORGAN HILL
1.1% CHATSWORTH
2.5% San Luis Obispo County
3.4% LANCASTER
3.6% Santa Barbara County
3.9% PALMDALE
4.5% FAIRFIELD
5.3% SIMI VALLEY
6.9% San Bernardino County
8.3% Contra Costa County
10.9% El Dorado County
11.3% San Mateo County
11.4% Los Angeles County
11.8% Nevada County
15.6% Marin County
16.1% Alameda County
17.0% Santa Clara County
17.1% San Francisco County
32.9% Tulare County
32.9% Fresno County
33.1% FRESNO
39.2% CUPERTINO
55.2% BAKERSFIELD
55.6% TEHACHAPI
61.3% ROSAMOND
62.1% Kern County
Crispy, WE Are #1!
Jas
End of 3rd inning.
–
In the third the Bears hit a home run with bases loaded. I wonder which inning would be the worst for the Bulls.
Jas
This is the beginning of the third.
There are still mopes that think there will be a second half rebound in year 2008.
from the CME (Chicago Merc) Real estate contract San Diego
MAY08 —- —- 187.00 UNCH 187.00
AUG08 —- —- 176.40A -80 177.20
NOV08 —- —- 162.00A -220 168.20
FEB09 —- —- 163.00A 163.00 UNCH
MAY09 —- —- 161.80 UNCH 161.80
AUG09 —- —- 170.00 UNCH 170.00
NOV09 —- —- 160.00A UNCH 160.00
MAY10 —- —- 193.80A UNCH 193.80
NOV10 —- —- 153.60A -20 153.60
NOV11 —- —- 166.00 UNCH 166.00
NOV12 —- —- 154.40 UNCH 154.40
From this data a buyer can buy a futures contract on a house in San Diego in May 2009 for 161.80 (25.20 less than the current month); further notice that in Nov 2012 one can buy the futures for 154.40 (32.6 less than May 2008, another 17% drop not counting inflation)
Based on this data the market will be dropping for the next 4 years. There is even a “dead cat bounce” priced in from Nov, 2009 to Aug 2010.
If you think the market will rebound then go buy some futures and “lock in” a 17% drop in 4 years.
I spot-checked a few of these for which I have data, taken from Dataquick’s monthly reports; they don’t seem to match what you listed. Which section of Dataquick’s web site are you fetching your data from? If my numbers are wrong, I’d like to fix them.
San Diego County: 12/03 $405k, 3/08 $395k, -2.5%
Ventura County: 12/03 $414k, 3/08 $430k, +3.9%
Sonoma County: 12/03 $408k, 3/08 $409k, +0.2%
Solano County: 12/03 $323k, 3/08 $330k, +2.2%
Napa County: 12/03 $447k, 3/08 $469k, +4.9%
Riverside County: 12/03 $273k, 3/08 $306k, +12.1%
OC: 12/03 $467k, 3/08 $506k, +8.4%
San Bernardino County: 12/03 $215k, 3/08 $265k, +23%
CoCo County: 12/03 $401k, 3/08 $420k, 4.7%
San Mateo County: 12/03 $570k, 3/08 $723k, +27%
LA County: 12/03 $345k, 3/08 $440k, +28%
Marin County: 12/03 $629k, 3/08 $788k, +25%
Alameda County: 12/03 $425k, 3/08 $487k, +15%
Santa Clara County: 12/03 $494k, 3/08 $620k, +26%
San Francisco County: 12/03 $565k, 3/08 $755k, +34%
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I have the whole table saved for December 2004 DataQuick report for Cities and Counties that gives the revised data for December 2003. I am using that data to compare with the March 2008 report. For example, I have OC exactly at the same price of $510,000 for Dec’03 and Mar’08.
Just to make sure, these report give price for all recorded sales, New & Resale, SFH and Condos, except that the county data is for only the cities in the table, which represent most of populated cities/towns in the county. I have noticed that the county price data in this table is a good proxy for all sales in the county. In any case I am making apples-to-apples comparison by using the same data.
Wherever available I use the revised data. Otherwise, I use the first reported number.
Jas
OK, that’s interesting. I use the monthly “news” updates, which lists just the county data (Bay Area and SoCal are the ones I track). I too get the 12/03 figures from the 12/04 dispatch, for the same reason.
I think the numbers I’m using are for the entire counties, not just selected cities. It’s interesting how much of a difference it makes vs. your numbers. Also, I’m at a loss to explain the discrepancy for San Francisco (you report +17% versus my +34%), which as a one-city county one would expect to see reported the same in both data sets.
Not that any of this changes the end result, which is that prices are coming down fast and furious. But as a numbers kinda guy I’d like to quantify “fast and furious” as accurately as possible!
–
“Also, I’m at a loss to explain the discrepancy for San Francisco (you report +17% versus my +34%), which as a one-city county one would expect to see reported the same in both data sets.”
OK, by looking at the sales volume I just discovered that the Dec’03 number that I am using is for the whole year of 2003 (the table heading for the column says “Dec 2003;”
hence the mistake) and not for the month of December 2003.
BTW, 2003 price for SF that I have is $645K and March 2008 price is $755K.
Sorry for not noticing this before and thanks for pursuing the discrepancy.
Jas
23,600 I.E.D.’s went off, on the home front.
“The San Bernardino-Riverside area ranked No. 2 nationwide in the first quarter of this year in foreclosure filings, according to RealtyTrac. Banks repossessed almost 10,000 homes in the region from January to March, while default notices clocked in at almost 23,600.”
LEDs
Lava Lamp Shot Glasses Blink with LEDs, Turn You Into a Vampire
“…these $9-per-unit Lava Lamp Shot Glasses—which use multiple LED flashes to illuminate your favorite spirit until you empty them—promise never-ending enjoyment, quick drunkenness, and, according to the product shot, will turn you into a vampire….”
bfd. Wait til they put those pretty flashing LED things in the glass pipes the realturds are smoking their crack with.
As a renter in the fine city of Shallow Alto (Palo Alto), I continue to be amazed at the enthusiasm of sellers to get their prices. Namely: I’m still seeing homes listed between $900 to $1200/sqft. So a standard issue 1700 sq. ft home is listed for $1.7M.
Will it break this summer?
Will they ever run out out of greater fools at Google ?
I doubt that more than the first few thousand Google employees made enough off their stock options to pay for more than ONE house in Silicon Valley, and most of them probably already have one. Most who joined in the past two years is barely above water at this point. I think the “Google effect” on the housing market here is substantially overrated. There was FAR more crazy money flying around in 1999, when the median house price in Santa Clara County was about $375k, versus $620k today. The housing bubble was driven by bullsh!t loans here just as everywhere else, not by a few high-flying tech companies.
It has already broken. Palo Alto sales prices have begun to decrease, but the sheltered sellers haven’t noticed it yet. I actually hate Palo Alto!
Will it break this summer ?
IMO No..At least not in some significant way…This is why;
Estimated median household income in 2005: $93,400
California: $53,629
Races in Palo Alto:
White Non-Hispanic (72.8%)
Chinese (9.3%)
Hispanic (4.6%)
Two or more races (3.2%)
Japanese (2.3%)
Asian Indian (2.1%)
Black (2.0%)
For population 25 years and over in Palo Alto
High school or higher: 96.2%
Bachelor’s degree or higher: 74.4%
Graduate or professional degree: 43.0%
Unemployed: 1.9%
City-data.com crime index (higher means more crime, U.S. average = 323.2) Palo Alto = 188
Palo Alto compared to California state average:
Median household income above state average.
Median house value significantly above state average.
Unemployed percentage significantly below state average.
Black race population percentage significantly below state average. Hispanic race population percentage below state average. Foreign-born population percentage significantly above state average. Percentage of population with a bachelor’s degree or higher significantly above state average.
The substitution effect states that as prices fall for goods and services that can be substituted for a given good or service that demand will fall for the given G or S.
I did a little research and found the unemployment rate in Santa Clara County is 5.5% and in East Palo Alto is 10%.
Although high fuel prices do help localize markets, there is simply no way that Palo Alto can insulate itself from the problem of the (absurdly) overpriced housing market.
I think it probably will break this summer, in a significant way.
What does that have to do with anything? If prices were pushed up in the bubble (and they were), then they will continue to fall throughout the crash. The same forces acting on the way up are acting on the way down, but in reverse. Those forces were NOT race, age, and education. They were the housing bubble.
Hmm hate to break it to you but 93k a year supports home prices around 300k assume quite a few dual incomes at the median and you get to 600k on the outside. So Palo Alto is 200% overpriced.
Sure it will be expensive but the median should be about 400-500k at best IMHO. 600-700k if you want to add in a deep pool of greater fools. I live in Irivine CA which is a similar but cheaper “super nice” area and its finally started cracking. The median here was 84k family was 103k 2006 according to Wikipedia. Your family median is 117k. So 350-400k looks reasonable. It seem you have farther to fall then we do. But you will get there.
The median household income in Palo Alto is $88,646.
That’s according to Onboard Neighborhood Navigator.
True. A 90k avg household income supports less than a 400k average house price any way you cut it.
–
“Unemployed: 1.9%”
Unemployed can’t afford to live in PA so they move. Also, this number does not include those that have stopped looking for work. I know of long-term unemployed in Los Altos (more expensive than PA). The only way this couple stayed there is either by big bonanza during 1999-2001 or by home equity extraction, but not by being employed.
There is lot more than what is in the gross data. Details are all-important.
My view is that prices of the local tech Scams are a big factor in high prices in CU, LA, PA, Saratoga, etc. There are 320 Listings in the four townships and 91 homes were sold in March 2008. Last year this time the supply-demand situation in these areas was crazy.
Jas
Median household income $93k and median house price well north of $1 million? Oh no, no problem there.
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Seems to be tied to price of two Scams in particular — AAPL & GOOG. Listings went up 75%+ in CU, LA, PA from 3/1 to 4/12 and backed off slightly since 4/12.
In SCC, Active Listings are up to 5700 from 3400 a year ago. The rise is across the board. Sales have picked up for the past 4 weeks and should show up in May 2008 data. Lower prices are responsible for pick up in sales. Median Listing Price in SCC is down 28% from peak in March 2006. PPSF for the county is down 14%.
Jas
I’ve been looking at listings the past few weeks in the cheaper parts of Silicon Valley (San Jose, Santa Clara, Sunnyvale). There are a **LOT** of listings in all three of these cities where the FB has reduced the asking price multiple times, and where the current asking price is $100k to $200k below what he paid for it. Once these guys finally find buyers (and they will likely have to keep dropping prices to do so), the new comps are going to be startling. Based on this, I expect to see some very serious downward movement in the median sale price starting this summer.
GOOG’s revenue is directly tied to advertising so they will go up and down with the rest of the economy. Expect layoffs on the horizon and GOOG overtaken by bean counters.
AAPL same thing they are consumer products.
Same with Yahoo etc etc. Silly Valley is not really producing new software/hardware that causes business to change because its enhances the way people do business its now basically IT support/Advertising with a touch of fashion.
The Boom Has Turned Into A Bust For Many
Thanks for the mammaries (via HELOC, but of course)
Is nice!!!!
Question: there are REOs in So Cal now selling for 250 - 300K that sold for 500 - 600K at the peak. Does anyone familiar with the last downturn know how much lower they can/will go? Thanks.
1. That’s the sales price or the minimum bid at auction?
2. This is within reasonable commute distance to jobs, or out in the middle of the desert?
3. Why are you basing this crash on the last crash, even though you already know the two have different causes and properties?
Not sure how different the causes really were. There was an aerospace bust. However, their will probably be a cutback in the next admin too.
Last explosion in real estate was due to S&L getting over leveraged with debt. This time the S&L are gone and the big banks got in on the game.
Over extension of credit both times.
If by “crash” we mean RE market crash, i think there is a difference between RE being pulled down, and RE being the dead weight thats dragging everything else down.
There are still plenty of GFs with money. REO sales are aimed at them. The loans are structured to be safer but, imo, many will default as prices continue to fall.
While the price-bottom will have some relationship to incomes, I’m wondering if incomes will be dragged down along the way…
Economists know recessions don’t cause incomes to fall but we’re entering uncharted waters and .. who can know.
These are not auction prices, these are already bank-owned REOs, in decent areas, not antelope valley/bako/stockton/IE.
Already seeing this for decent SFR in Vista, Escondido, Oceanside, and San Marcos $250,000 - $300,000 for REOs, 3-4 bedrooms, built 1980 - 1990, decent size yards. All decent commutes to work centers in Carlsbad. Original sales prices for these same homes was $500+ during the boom. The banks are pricing to sell and most go into escrow in a week or two. I’d rather wait because prices are not going up and there will be more to choose from as time goes by
MLS #: 071045990
MLS #: 081025115
MLS #: 081024734
I should clarify “decent sized California yards”
Just enough for Fido to have an area to sh!t comfortably in.
She lives. Well, Fritzes closed so figures she’s back.
Not sure on the prices. I’d estimate that things will drop back to 4.3x median family income… probably deals at some point where owning is cheaper than renting on a per month basis.
Keep an eye on income and rents in the areas to help out. See if you are cash flow positive on day 1 (not counting Equity as cash).
Its early in the ARM reset universe. Sit back and wait till 2010.
last time 1990-1996 Ventura county was down 33% IIRC
how old are you? 20?
They can go low enough to pencil out as rentals. We’re not there yet in San Diego.
I can’t believe there’s no comments on this, unless I skimmed through too fast…
“LOWEST tier: (priced under $405,028)”
400K is lowest???? GOOD GOD THAT’S AWFUL.
“Real-estate expert Michael Carney isn’t surprised. ‘As more prices fall, there are more homes with no equity,’ said the director of Real Estate Research Council at Cal Poly Pomona. ‘If you have no equity in your property, and prices are falling, you have no incentive but to walk away.’”
http://www.youtube.com/watch?v=ei9JqUvPDMA
I rent in Cupertino - apartment-townhouse for 2100/month 1100sqft
To get a similar sized condo would cost about 850k to 1000k.
We just looke at a house in Cupertino to rent. 2900sqft house, 900sqft lot for 4200/month rent. Same house was listed for sale at 1688k. 4200/month supports a mortage of roughly 700k and assume 25% down (even though no one puts that much down in Santa Clara County) and you have a house ‘worth’ 950k to 1000k.
My intuition tells me that price have a long way to slide before they are realistic - maybe 30-40% drop. Is this logic wrong?
Just wait for the ‘consumer’ driven eCONomy to tank in the area, causing job loss, causing need-to-sell, causing lower prices. Virtuous cycle going up (ahem, $1.7mil for Crapertino?), and a vicious cycle going down. The median household income is ~100k currently, but I don’t see that or any other median income # NOT dropping with the onset of the Greater Depression. $50k/yr to rent a place is half the median income — to rent!! This whole area will get one big wake-up call — everything out here is driven by consumers (all those AAPL sales going bye-bye), and they all just ran out of HELOC & Credit Card money. A drop of over 50% is baked in, IMHO.
Rob
I recall running the numbers in 1997 or so in SoCal, and finding that in general it cost just about the same to buy as to rent, assuming a 20% downpayment and fixed-rate mortgage. This included taking into account the tax ramifications, insurance, and a half-assed estimate of maintenance costs.
I didn’t have the 20% down, and wanted to pay my student loans off first, so I didn’t buy. By the time I was in good shape to buy, the bubble had taken off like a rocket (2001 or so). The prices were insane, and I had a rent-controlled apartment with price locked in at 1995 levels +3% annual inflation. So I didn’t buy.
Of course I had no way of knowing that prices would triple from there, and anyone would correctly have called me insane if I said that that could happen.
But I would say in general that’s the right rule of thumb for the bottom of the bust - it shouldn’t cost much more, if any, to buy with a conventional mortgage than it does to rent.
2900sqft house, 900sqft lot…
This is either a typo or a 3-story house with basement?
Some trips require no physical transportation, to get you there…
r.i.p., A. Hoffman
http://www.latimes.com/news/obituaries/la-me-hofmann30apr30,0,5466127.story
hi guys I captured a great San Diego Housing program off public television and downloaded it off my tivo and converted it to .mpg, its 800 megs, 1 hr, is there any place to host such a large video, YouTube is limited to 100 megs. Title: “Gimme Shelter - A Housing Project” paints a bleak picture of San Diego housing. I would love to share it if anyone knows how.
Take the whole file and cut it into segments, nine episodes should do it — don’t know if Windows Moviemaker will crash with such a large initial file, but for those of you on Mac, will iMovie work?
Then upload individually onto YT as San Diego Housing Program, Part 1 of 9, etc.
“‘Right now, we are close to the bottom if we’re not at the bottom, and you don’t know you’re at the bottom until it starts to come up again,’ Beckman said.”
And you beckman don’t know sh%t until RE starts to go up again and I expect it to stay at the bottom for some time just like your commision .
Ms. Beckman is just plain desperate. Santa Maria ,Ca. is toast right now. She should go to Chumash Casino and see if she can win her mortage for the month. I bet they have better odds than her selling a house in the next 30 days.
US house prices
Published: April 29 2008 14:43 | Last updated: April 29 2008 19:20
Pity the person who bought a house in Santa Barbara county, California, one year ago. Since then the value of their home has dropped almost $6,000 – per week, that is. The median house price there has dropped 34 per cent since March 2007, according to the California Association of Realtors.
This stuff is getting surreal…
Flow of funds data put the value of household real estate at the end of 2007 at $20,155bn. Roughly calculated, the Case-Shiller index’s 5 per cent drop since then equates to $1,000bn wiped out in the space of two months – almost 10 times the size of the federal tax rebate. Much of that will be saved rather than spent.
The housing market’s continuing slide will strengthen doves among Federal Reserve officials meeting on Wednesday. A rate cut might boost short-term sentiment. But America’s swathe of empty, devalued houses illustrates the deep-seated problems at the heart of the economy.
Fall in US house prices accelerates
By Chris Bryant in Washington
Published: April 29 2008 14:27 | Last updated: April 29 2008 15:55
US house prices continue to plunge by a record amount, a new report showed on Tuesday, adding to pressure on consumers and threatening to prolong a domestic economic slowdown.
Meanwhile, confidence among US consumers fell to its lowest level in five years as shoppers reacted to the impact of the housing slump, tighter credit conditions and a weakening labour market.
“‘Right now, we are close to the bottom if we’re not at the bottom, and you don’t know you’re at the bottom until it starts to come up again,’ Beckman said.”
Can anyone make heads or tails out of this incredibly retarded comment?
By the way, anyone follow that new behemoth of a place called the Americana in Glendale by that crook Caruso?
Condos selling for $700K to $2.4Mill? Any thoughts on this?
Look in the archives. There was a thread on that development within the last three days.
I should add it was in the comments, not the body.
Cupertino Renter
I am a Santa Clara renter (Cupt schools), renting a 4BR 1600 sq ft SFH for 2100/mo. This is our 6th year here, and rent went up $100 after 4 years. Our home would sell for over 900K. So the buying math simply makes no sense. If you keep looking you will find decent rentals (even in the much vaunted Cupt school district). I know several people who rent homes comparable to what I have for 2K-2.5K/mo.
In normal housing cycles, it takes ~6 years to get from peak to trough. That puts us at 2012 before we hit bottom. But this has been anything but a “normal” housing bubble and the 2012 date is likely very optimistic.
There are people who say we are in the 3rd inning of the housing bust. I would like to chime in that this is likely a 22 inning ballgame.
I am really sick of the “Bay Area is immune/Tech is immune/BA real estate never falls/people here are loaded with money” arguments. I would like a return to the 2000-2002 era here. Only then will these excesses be washed away. Driving around here last weekend, I saw some very crappy homes in Rancho Rinconada (crappiest part of Cupertino) listed at 1.3M ! WTF ?
Jesus, I used to live in RR after my parents divorced. It was pretty shitty, although now when I look there have been many teardowns. The location is actually pretty good, assuming you have decent neighbors/lots. Plenty of trees, close to 280/Lawrence etc. I presume the houses you saw were the newer ones, and not the old POS’s (like I used to live in). Still, it was not so bad, got to stay at the same schools via address slight of hand.
Can someone please tell me what these acronyms stand for?
1. REO
2. FB
3. REIC
Thank you.
REO = Ransom Eli Olds (Speedwagon)
FB = Financially Bold
REIC = Real Estate Inevitably Climbs
Not really
REO = Real Estate Owned (by the bank)
FB = F*cked Borrower
REIC = Real Estate Industrial Complex or Real Estate Investment Corporation
Thanks and thanks for the laugh.
Diplomat
The home I saw for 1.3M was not a new home. It was an old home. At least 40 years old.
The newly built ones likely go for over 1.5M in RR.
The RR area is gentrifying and getting better, no doubt. But there are a lot of very old, crumbling homes around with weeds growing like forests in the front yard. How can any one buy a home for 1.3M or 1.5M there ?
I agree with you that RR is centrally located and has a lot of trees. But most of the homes there are basically teardowns. The whole neighborhood has a rundown kind of a look.
“Like a brick cast from the top of the Transamerica Pyramid, national and local home prices are rapidly accelerating on their way down. The average cost of a Bay Area home dropped 17.2 percent year-over-year in February, compared to 13.2 percent in January and 10.8 in December
Well, been away for awhile, but it appears that things are coming along nicely. I must confess it feels weird being so right about all this. I hope that one day our economy will once again be built on something solid.