It’s A Different Good In California
The Ventura County Star reports from California. “With the influx of foreclosures flooding the market, the cooling market is freezing out traditional home sellers like the Vicentes. It has been 13 months since Rose and Manny Vicente put their Simi Valley home up for sale and started boxing possessions. They originally listed their 1,831-square-foot, five-bedroom, 2.5-bath house for $650,000.”
“In August, they lowered their asking price to $595,000. Back then, they thought that it might take another month or two to sell. Rows of stacked boxes have sat collecting dust ever since, and the Vicentes have lowered their asking price to $495,000.”
“‘We didn’t want to, but in order to sell, we didn’t have much choice,’ Rose Vicente said. ‘I’m surprised it’s taking this long.’”
“Most of all, sellers need to be willing to lower their price, said Vickie Howell, a Realtor in Simi Valley and former Realtor for the Vicentes. She says she had suggested lowering the price substantially to compete with nearby distressed properties.”
“‘If you’re not priced very well, or are not a short sale or foreclosure, you’re just not going to get a lot of people to your house,’ Howell said. ‘You’ve just got to ride it out.’”
“The Vicentes are willing to delay their plans to move to Texas to be with their daughter until they find the right buyer. ‘I want to move, but if it takes sitting on it for another year or two, than that’s what we’ll do,’ Rose Vicente said.”
“Realtors have told them that if they want to sell immediately, they should lower their asking price to $395,000. ‘My husband has worked too hard all these years to just give it away,’ Rose Vicente said. ‘This is an investment for our future.’”
The LA Daily News. “The price of a Southern California home plunged a record 27 percent in May from a year ago as foreclosures continued to hammer the market and sales hit a 20-year low, an industry tracker said Monday.”
“Prices declined by large amounts in all six counties and are now near 2004 levels, said DataQuick. In Los Angeles County, the price fell 23.3 percent, to $422,000, also a record percentage drop.”
“Over the past 12 months the region’s median price lost $135,000, declining to $370,000 from a record $505,000 in May 2007, DataQuick said.”
“Sales of foreclosed homes continue to dominate many inland markets and accounted for a record 37.4 percent of May sales. In Los Angeles County, foreclosures accounted for 27 percent of sales - the record is 33 percent in February 1997.”
“Although last month’s sales total was the highest for any month since last August it was still the lowest for a May in DataQuick’s statistics, which go back to 1988.”
“In May, 42 percent of homes sold for less than their prior sale price - about 34 percent less, on average, DataQuick said. Most of the prior sales occurred between early 2004 and mid-2006.”
“While the sales and price numbers are grim, some good news can be found. Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said he’s been hearing from businesses that the falling home prices are attracting new workers to the area. A year ago, the higher prices were keeping them away.”
“‘If you are a seller, this is just another dose of bad news; if you are a financial institution trying to get rid of a (foreclosure) it’s not good news. But if you are a potential buyer, it’s very, very good news,’ he said.”
The Union Tribune. “Home prices continued to tumble in San Diego County last month, with the median reaching its lowest level - $380,000 - since September 2003. San Diego’s median home price peaked in November 2005 at $517,500. Since then, the median has fallen 26.5 percent.”
“William Eierman, a retired banker living in Temecula, began looking for a downtown San Diego condo this week. He and his wife are in no hurry. They don’t plan on moving from their 2.5-acre home until their daughter graduates from school in about four years.”
“Although they’re not necessarily looking to steal a property, the Eiermans think their timing is good. ‘If we can buy it at today’s price and four years from now it’s worth what it was two years ago, how in the world could we go wrong?’ Eierman said.”
“What they found, though, was that they may have to pay more to get what they want - a condo up to 1,800 square feet with a big deck, so they don’t feel like they’re living in a hotel.”
“‘I hoped to spend $500,000,’ Eierman said. ‘It looks like I may have to spend $700,000 or $750,000 to get what I want. That’s OK, because that $750,000 condo was probably a $1 million condo a couple of years ago.’”
The Press Enterprise. “Bargain hunters streamed into the Inland housing market last month, with foreclosures accounting for almost 57 percent of existing home sales in Riverside County and more than 54 percent in San Bernardino County.”
“Lenders are aggressively discounting homes they have seized and want to sell, with a result that has home prices continuing to fall. Last month, the median home price was $290,000 in Riverside County, a drop of $116,000 from a year ago, and $250,250 in San Bernardino County, a decline of $111,500, according to DataQuick.”
“Richard Tegley, a listing agent in Moreno Valley, said when a lender allowed him to slash the price on a repossessed Moreno Valley house from $199,000 to $125,000 he received 18 offers within three days.”
“Andrew LePage, an analyst with DataQuick, said it is possible that the enticement of bargain-priced foreclosures in the more remote parts of Riverside and San Bernardino counties could wane if potential buyers can’t afford to fill up their gas tanks to drive to work.”
“‘Who is to say we won’t have an uneven recovery out of this downturn, where sales volume could come back and then erode again?’ he asked.”
“Among the things that could stall a recovery, he said, would be ‘a slow economy, if not a recession, the credit crunch, continued escalation in foreclosure activity and higher gas and food costs.’”
The Recordnet. “The momentum in existing-home sales in San Joaquin County has continued to build, with May sales reaching the highest monthly level since August 2005 as more buyers snapped up primarily foreclosure properties.”
“The median selling price also continued to slip, sliding from $240,000 in April to $237,000 last month throughout the county, the report said. That’s the lowest median price seen in the county since February 2003.”
“Art Godi of Art Godi Realtors in Stockton said the current sales market feels good, even though lending remains tight, but he added: ‘It’s a different good.’”
“In a traditional sales market, a cross section of houses sell, he said. Currently, about 90 percent of sales are foreclosures and short sales, and almost all are under $250,000, he said, ‘and that’s the bottom of the market. You can get a lot of houses now in that range.’”
“Meanwhile, the auctioneering firm of Hudson & Marshall, which in November staged the first auction of foreclosed homes in Stockton, will be back for another Stockton auction Wednesday. This is a reserve auction, which means sellers have the right to accept or reject any bid.”
“Hudson & Marshall put 61 foreclosed homes up for auction seven months ago. This round, there will be 76 homes. The firm will auction more than 500 bank-owned foreclosure houses this week in Stockton, Modesto, Fresno, Sacramento, Yuba City, the Bay Area and the Seaside/Salinas area.”
From CBS 47. “It’s the latest in a string of auctions in our area, but this time, fewer people attend and the winning bids are lower. It was certainly fast but Fresno’s latest auction of bank-owned homes wasn’t as furious as similar events just a few months ago.”
“At another auction held in Fresno last July, it was standing room only, with many properties prompting bidding wars. So why are fewer people willing to bid this time around? Some speculate prices could still go lower as more foreclosures hit the market.”
The Santa Cruz Sentinel. “More single-family homes priced under $500,000 sold in Santa Cruz County in May. And many of them were on the market because the owners were in financial trouble.”
“Thirty of the 37 sales less than $500,000 were either bank-owned properties following foreclosure or a ’short sale,’ according to Gary Gangnes of Real Options Realty, who tracks the numbers. That helps explain why the median price dropped to $610,000 in May from $661,000 in April. It’s down 19.7 percent from last May, when the median was $760,000.”
“One bank-owned home in Boulder Creek sold at a discount for $212,900; another bank-owned home in Corralitos went for $240,000. ‘Banks need to clear inventory,’ said Richard Robinson, an agent with Thunderbird Real Estate, explaining the discounted pricing.”
“The heirs of a 1911 cabin in the San Lorenzo Valley sold it for $155,500.”
“May sales were up 11 percent compared to April. The typical April-to-April increase has been 9 percent, according to Gangnes. Despite the increase in activity, the number of sales was the lowest in 12 years for the month of May.”
“‘Do you think it’s a coincidence that dropping prices equal more buyers? I think not,’ said Patricia Beckwith, an Aptos accountant who has looking for a home under $550,000 for the past 18 months.”
‘She sees a change in the number of listings she gets from her agent. ‘In the beginning, I got a listing every couple of weeks,’ Beckwith said. ‘Now I get three to five listings each week.’”
“Emilio Martinez, who serves on the city of Watsonville Planning Commission, predicts the median will drop to the low $500,000s. He contends prices were inflated by subprime loans to borrowers who couldn’t afford to repay and lenders who didn’t verify borrowers’ incomes.”
“‘I am still of the opinion that we did not have a work force back in 2002 to substantiate a median-priced home of $400,000,’ he said. ‘If the average income has not changed and the median was in the upper $400,000 or less at that time, we are still in a nose-dive tailspin.’”
The Sacramento Bee. “Developer Allen Wayne Warren once planned to build hundreds of new housing units on and around Del Paso Boulevard, the North Sacramento main street the city has worked for years to revitalize.”
“But the falling real estate market caused Warren to scale back his dreams. Now, he’s negotiating to sell three mostly vacant properties on the boulevard to the Sacramento Housing and Redevelopment Agency.”
“According to a staff report presented to the City Council, money for the purchase could come from $3 million previously set aside by the agency to subsidize a condominium and office project planned by Warren at 2001/2005 Del Paso Blvd. That property is among those he is now offering for sale.”
“If Warren accepts $1.4 million for the mostly vacant properties, he will be taking a substantial loss. According to property records, he paid about $2.5 million for the properties in 2005 and 2006.”
“In 2006, Warren told The Bee that Del Paso was where his New Faze Development was ‘going to make our statement.’”
“Warren was traveling Monday and could not be reached for comment. But in an April interview, he confirmed he was discussing a sale to SHRA. ‘I said to them, ‘We’re going to sell this stuff because we bought it under different circumstances,’ Warren said.”
The Times Standard. “The housing crisis is hitting home. Humboldt County’s notice of default foreclosures hit their highest mark in at least three decades in April.”
“The county’s 63 Notices of default in April represent the highest mark since computerized records began in 1979. The second-highest level was 51, hit in January 1981. Trustee deeds, which occur when the bank officially takes ownership of a property, are also near record highs.”
“HSU Economics professor Erick Eschker said that, with this precipitous increase, the housing market has entered uncharted territory.”
“‘In ‘81 and ‘82, that was during the biggest recession since the Great Depression,’ Eschker said. ‘This is very different. Foreclosures are skyrocketing and we are not in a major recession. People say we may be entering one, but the unemployment rate is, by historical standards, very mild.’”
“Eschker said the jump has less to do with the well-publicized loose lending standards and adjustable-rate mortgages than declining home values. ‘When prices go down, especially for people who purchased a home with no money down, they immediately have negative equity,’ Eschker said. ‘They owe more than the house is worth.’”
“According to figures on ForeclosureRadar, several homeowners in Humboldt County have found themselves in just that scenario. A home currently at auction on 18th Street in Eureka has an estimated value of $160,059. The amount owed is $217,902.”
“In McKinleyville, where 20 homes are currently in some stage of foreclosure, a house on Silverado Avenue is at auction with an estimated value of $140,940 and an outstanding loan amount of $267,719.”
“Similar situations exist in Fortuna, Crescent City, Rio Dell and elsewhere in the county.”
“Eschker said it may be a good time to sell a home, but buyers might want to wait a while longer. ‘If the economy continues to deteriorate, then it will accelerate this wave of foreclosures,’ Eschker said. ‘But (the wave) is not driven by a poor economy; it’s driven by the financial housing bust.’”
“The housing market will correct itself, he said, regardless of whether the government intervenes with bail-out legislation. And the rise in foreclosures, he said, may be collateral damage in a natural market correction.”
“‘Somebody has to chalk up a loss,’ Eschker said. ‘But I’d rather live in a world where housing is affordable, and I think most people would agree.’”
–
‘My husband has worked too hard all these years to just give it away,’ Rose Vicente said. ‘This is an investment for our future.’
No, woman, a house is NOT an investment. It is an expenditure just like furniture according to none other than Adam Smith. Get used to the reality and not stick to your fantasy.
Jas
I was going to respond to the same statement. My question is just exactly how did he work so hard to feel entitled to abnormal rates of appreciation? Why is he so much more special that those that have come before him and those that will come after him who would be lucky to get historically normal mean rates of appreciation?
If they didn’t heloc or refy and they’ve been paying it off, they should still have a hefty profit. Something’s missing.
I went back to the original article to see what it is this guy worked so hard at! It doesn’t say.
What can you possibly be doing that would make it so you DESERVED your house resale price to rise faster than wages do?
Perhaps to you it is not an investment but I bought a house in Cupertino in 1998 for $305K and it is now worth $1.1M. I guess if I stay and live in Cupertino through the rest of my life it is just house. What if I retire and move to a cheaper area? The proceeds become a retirement fund. I guess the answer is “it depends”.
The question though is whether such windfall is a reasonable expectation as to which you should feel entitled as these ppl certainly do. If you continue to hold on your property in Cupertino I would argue you should not feel like you are giving it away if you can only get 350k for it in a few years.
It is “worth” $1.1M in your mind alone, and that too because interest rates went from 18+% to 1%.
That process can only happen once not repeatedly, and when that ends, prices don’t end up on a “permanently high” plateau; they make their way towards what incomes in that neighborhood can afford.
If it is “worth” $1.1M, why not try to sell it? See if you get your “wishing price”.
You’ll be lucky to get half that in less than five years. People have forgetten 1989-1995, and this is far worse than that.
I live in 94087, the “Cupertino Schools” part of Sunnyvale. On my street itself, there were three sales in the past year for roughly the same house:
$1.4 Million
$1.2 Million
$999,000
Now, bear in mind that I paid $300K for my house in 1990. I don’t ever plan to sell my paid-up house, but I expect prices to keep going down to about $600K or so: 50 - 60% percent off the all-time high.
I hate to sound like an “it’s different here” person, but I think areas like Sunnyvale, Cupertino, in neighborhoods where there are single-family-detached homes, houses WILL sell at some price.
Which makes it different from all the specu-building in Sacremento, “Inland Empire”, Las Vegas, Central Florida, etc. where there will be (and already are) vast developments of empty houses that will essentially be worth zero. (Who wants to live on a block with boarded-up empty houses?)
So be happy, Zeb. There’s a good chance you prices will only drop 50%. Which is to say, they’ll revert back to where they should have been in the first place.
I should also add that it’s wrong to ever consider any value in your “Primary Residence” as part of your net worth!
Usually, four times a year around tax time I rerun my “net worth” spreadsheet. I list every liquid asset.
But I don’t count, and have never counted any imagined value in my primary residence. You have to live “somewhere!” In order to see any value out of that I’d have to sell, and move somewhere cheaper. Given the timing and logistics involved in pulling that off, counting it before it’s sold, makes as much sense as counting my “Ford” stock as being worth 10 instead of 6.5/share because there’s talk of a buy out.
I also own 20 acres of land in Central Florida, physically adjacent to Walt Disney World. Bought it relatively cheap, with the hopes of someday putting house in the middle of it, and a big wall to keep Florida out. Realistically, I probably couldn’t sell that land today at any price. (Again, it doesn’t matter. It was a relatively small cash purchase I intend to hold “forever”.)
This property also gets listed as “0″ on my “net worth spread sheet.” Something that there’s no ready market for gets a zero value in my book. (I’m sure the owners of the adjacent 20 acres, who’ve had it up for sale for 4 years for $4Million last time I checked, believe they’re multi-millionaires because they have a property listed for $4M!)
“it is now worth $1.1M”
you won’t know what it’s worth until you sell it…
She be smokin’ some mighty fine stuff from Humboldt County.
An’ yeah, she be a she because only one of them Californee SV hyper-granolas be walkin’ in here throwin’ down the gauntlet about how much her hows be worth.
Gonna be a damn fine day when SV gets taken behind that shed, and shot like them bitches deserve, and that day be comin’ up real soon.
What is this, Faster, you becoming a bucolic character and dropping all your punctuation thingies? Next you’ll be sporting a decorative bit of hay from your mouth and studying the horizon with keen eyes.
I, as it happens, am presently sporting a bit of horsetail from my mouth. I wanted to see what it tasted like, when I found it in my bootlace after I marched out of the forest. It’s gritty, and I don’t care for it. Probably the silica granules stuff, or whatever this unpleasant substance is.
I remember my great-grandma telling me how in her youth they would pick horsestails down by the river to scour out the pots after cooking, away out there in rural Utarr where soap and brillo pads was scarce.
Oh, and listen to this. I just got home after a busy day and as I zoomed by the Island Market I see that gas, the cheapest gas, is now $4.45 per gallon.
That is not going to work for a lot of the families out here. That is all there is to it.
For complicated reasons, like it being too hot, I have been unable to cook.
I really had my heart set on making broths. Like two of them.
So I have been forced to express my creativity in other ways. Such is life.
I had occasion this morning to take two vehicles to Sam’s club (cheapest gas in town) for fillup. First one was at 6:30am, second at 6:45am. Both times I was the only car at the pumps.
6 months ago there would have been a good chance I’d have waited to get an open pump. This station has 16 pumps.
No demand destruction going on here.
BTW, $4.52/gal at Sam’s in Palmdale.
$4.75 per gallon here in Crescent City, but of course that was this morning.
I’m not gonna be happy until I see the Neg-Am pain in SV.
I wanna see their children bleed.
Watch me roar then!
Zeb,
You sound like an arrogant jackass.
However, as tone is hard to catch on the internet all take some wags at Cupertino housing.
1) Median income is 105K
2) location is OK in San Jose area out of the way near the mountains.
The area is nothing special. I was just there as part of a relocation and turned down the job. I like LA better. Its not Marin or some uber trendy downtown NYC type area.
When you drive through you can’t tell if you are in Sunnyvale, Cupertino. Saratoga or Palo Alto… its all the same. Its nice but again nothing extrodinary. I was shocked at how ordinary it was. For all the claims about Saratoga’s income I thought it would be like Bel Air or RPV in LA. Nope. Just another sprawling subturd.
Median price should be around 450K. Rentals go in the 3500-4500 range (4br). So, that gives prices around 450-600K range i.e 120-200x rent. 200x rent is crazy in a deflationary enviroment.
Hence if you can get 1.1 Million for the place sell it today and rent till all this blows over. If you can get 800k sell it today and rent.
Anything over 800K is probably way over priced and only happens because of stupid loans. Yeah, I’m sure there are a few houses that are worth it but most of the properties I have seen are ordinary houses. In an ordinary location.
If you are going to argue stock options… well… not sure how much is out there. Probably not as much as you’d think or rents would be even higher.
There isn’t anything all that special about Silicon Valley. In fact I’m not going to be surprised that things are going to be very deflationary there as businesses move out.
Sell for what you can get and enjoy. If someone is dumb enough to pay that much, great.
Hot - you don’t know hot! It’s 112 at 6 pm in Palm Desert and the low is only 80 tonight. Got to get in that pool soon. It is absolutely dead here. Not just the snowbirds flying off. Starbucks & nail salon said it was the slowest they have ever been this weekend. Every place was dead and no traffic. It’s eery.
I will chime in on the gas as well.
Here in Rancho Santa Margarita, I paid for two cars. We fill them both up twice a month each. Last weeknd I filled the saturn 300L for $55 in cash and then on Sunday filled the Saturn SL for about $45. There you have it. $100 smackeroos for about 22 gallons of gazoleen. That comes out to $200/month.
However, if I was still commuting 125 miles/day, I would just shoot myself at this point. I would be anywhere from $600 - a grand/month, dep. on traffic and air con usage.
Olympia is right. Even in snotty South OC I can’t see people hanging on much longer without using CC’s and the such. I must confess I used straight cashola for my fillups. No CC, no HELOC. Good ol greenbacks while they are still good.
As an aside, know of about 5 families trying to unload the albatross for several reasons, mostly job transfers. This market is going to be paralyzed. People still think the $250K McCrapshack bought 10 years ago is worth $600K or more. I keep telling my wife wait another year and see what they are going for. Homes that would have been more than $600K last year and require a letter for purchase are finally starting to hit the $390-$400K area. Another year, $300-350K.
My wife still doesn’t think they will ever go for their original prices, but I keep telling her they will get close. When she argues I factor in all the impounds, i.e. taxes, HOAs (or Mello Roos), mortgage insurance, and fire insurance (forget earthquake, it is a waste for most people), and maintenance. I tell her for every $600/month in impunds, you could spend $100K on a 30 yr. note @ 6%. If nothing else, this will speed up the process, once people figure out the extra costs of debtorship, er, I mean ownership.
Olympiagal posted:
“Oh, and listen to this. I just got home after a busy day and as I zoomed by the Island Market I see that gas, the cheapest gas, is now $4.45 per gallon.That is not going to work for a lot of the families out here. That is all there is to it.”
I just filled up in Olympia today. $97. The prices are not working for me, either. In fact, BanteringBear is rethinking life as his income is dependent upon peoples discretionary spending. People are pulling back BIGTIME. Not good. So not good. If I were a drinking man, it’d be Captain Morgans on ice right about now…
My F-150 was over $100 this weekend. And that was at Arco - the cheapest around here in L.A.
OCDan:
“However, if I was still commuting 125 miles/day, I would just shoot myself at this point.”
Ha you’re a wimp. I know 2 people doing 150 miles/day (round trip) driving from Temecula and Murietta. Actually not anymore. One quit and the other was laid off.
Long live the drop in oil demand!
JimAtLaw:
F-150??? Wimp truck. Go straight for the snatch and get yourself one of those F-650s. That could be a $250 fillup (actually I do not know the size of the gas tank, and maybe I don’t want to know).
Nothing, and I mean nothing, says “gross excess and waste” like a Ford F-650. Saw one of those here in Costa Mesa a week ago on Harbor Blvd.
Filled my F250 Diesel, $205
Was under $80 to fill it two years ago, IIRC.
Yeah I don’t drive it much at all anymore except to tow my toys and pick up heavy parts.
That is true that I will not know how much it is worth until I sell. I am trying to address Jas Jain’s comment that a house is not an investment. A house could be an investment or a liability. It all depends on individual situation, real estate timing and some luck.
At best you can consider a house a store of wealth and an inflation hedge.
Most people don’t look at the carrying costs. That’s the big lie.
Luck has nothing to do with it.
Only morons talk about luck.
If you bought a house, leveraged, when ITIM payments were cheaper than rent, you should not be terribly surprised that in due time you make quite a bit of money (assuming you can pay the margin calls monthly.)
This is hardly different from any other form of “value investing”.
In another 3-4 years it’ll be worth 300k again.
I am interested to know how you can predict a $300K house in Cupertino 3-4 years from now. If you can convince me I might just sell now and run.
You know, if you march in here and throw down the gauntlet, don’t expect people to feed you information.
This is not the kindergarten potty-training class in RE.
But we’re decent people so we’ll throw you a hint. See what your house rents for (really rents for, not “wishing rents”), and back out what ITIM might be based on current interest rates with 0% down.
That’s the price of the house. P doesn’t count ’cause that’s just forced savings.
If you have no idea what P is or ITIM is, you need to get a clue.
Hi Zeb:
California economies cannot sustainably support a median house price of more than 4x median household income. This multiple is born of reason and of observation. The median household income in Cupertino is $122,676, which means that the median house there will probably cost less than $480,000 by 2012. Why 2012? Because most of the option ARMS will have reset by then. Of course, this all assumes that incomes don’t go down between now and then.
Zeb,
I will not convince you, this is fact.
You sell your house and you buy it back for a 25% discount in 2012. Interested?
Go to CME and buy a few futures contracts that are listed 25% below current market price.
Your money, your choice. Sell first - that is the hard part.
Save your breath. She’s one of them troll desperadoes.
Watch how she responds only to arguments that don’t severely contradict the “fact” that her house in Cupertino is “worth” $1.1M.
She’s rich, rich, I tell you, and everyone here is just a buncha rubes and retards. We’ll be kowtowing to her in no time since we’ve been priced out forever.
BWAHAHAHHAHAAHAHAHHHHHHHHHHHHHHHH!!!
I believe in the 4X affordability rule, but there are few hot shot young couple that are buying in Cupertino and you wonder how they can afford a $1M. You find out later that they put down 50%. These are VMWare, Google, Apple, Sun Power, and some Hedge Fund companies. I will start worrying when you run out of people like these.
Yeah, lots of that “Sun” power. Narrowly escaped being delisted.
Also them hedge fund companies. Which one? Peter Thiel’s?
They’re all gonna buy all the stuff up, and all the poor peasants are gonna be priced out forever.
BWAHAHAHHAHAHHAHAHAHAHHHHHHHHHHHHHH!!!
Sunpower is a solar power company. I was not referring to Sun Microsystem. Scion Capital Hedge Fund in based in Cupertino. The guy at Scion Capital actually made a boat load of money betting against the subprime. Oh, another young good looking lady just moved in the neighborhood. She made her money by cashing in her option of Intuitive Surgical stocks. She is only 28 years old living in a 4 BD/2BA house in Cupertino. You see these overpriced $1.1M - $2.5M homes are selling here.
FPSS,
Retract the claws darling. You’ve drawn some blood
Zeb:
Can you please show me the data that say there are a “lot” of young couples putting 50% down on multimillion-dollar homes? Cause the data I’m looking at show that there aren’t nearly enough rich people like that to buy up all those houses for sale in Cupertino. Of course, my data also show that Cupertino went through a mean RE bubble around 2000, and that lots of arrogant people lost their shirts back then, so it must be wrong, right?
SanFranciscoBayAreaGal,
OK, retracted. For you.
You see what would happen if I showed up in Shallow Alto?
BWAHAHHAHAHAHHAHHHHHHHHHHHHHHHHHHH!!!
Dude had it right when he noted carrying costs. They are very convenient to ignore when one is trying to address a loss.
I think the bottom will not be reached until the phrase “giving it away,” as used by a would-be house seller, is gone and not coming back for as long as I am likely to be around.
FPSS,
I knew there was a good heart underneath that cynical veneer
Comps in my mom’s area of Cupertino (recent) are in that range, and she is selling shortly. I am a huge believer in the bubble, but there are still areas where prices are insane. May not stay that way (or–will become/have become less insane), but as long as people are still buying, not much to do but wait to see if average income trumps whatever it is these buyers have in their pockets.
They have nothing but a mortgage in their pocket, to be repaid in money or in regret.
DB - who is buying? At what price? At what percentage of the actual selling price in 2005, 2002, 1999? “Buying” may not be the same as “closing” and I don’t say that to be in your face. IMO, if you want the simplest approach to measuring wishing list prices versus where they ought to be, compare current listing prices to what comparable properties sold for in 1998. Then adjust for astounding changes, such as, a new beach appeared in front of the subdivision, or a bombing range was established next to the subdivision.
My wife still tells me what people are “asking” for their houses. I still politely ask her to go to the tax records and see what places are selling for. Big difference. The difference isn’t getting bigger, but the asking and selling prices are getting lower. Just as we knew they would.
I agree, but without getting too metaphysical, if someone closes on a house in Cupertino and the public records show a sale price of 1.1 million, then I will call the person who takes out the loan the owner for the moment. Looking ahead the smart money is on serious price declines, but there are pockets here in the Valley where 50% down might make it “less expensive” but not affordable.
And I think James missed seeing the Saratoga and Cupertino I know. There is a huge difference between the two-in lot size and house (excepting perhaps the area of Cupertino up near/in the hills and some fringe Saratoga areas). Driving down HWY 9 a bit after crossing over Prospect (towards 17) and driving down Rainbow between say Miller and Johnson show you two vastly different neighborhoods. Cupertino generally has pretty normal housing, although north of Saratoga-Sunnyvale things are nicer in general (as I recall).
I do not live “home” mostly because prices are nutty for regular houses. BUt I also know of many friends who bought in the area with the help of family. Primarily Chinese and Indian ethnicity (friends born here), they make good incomes–above the median two professionals–but nothing near enough to afford the houses they are in. I have been conditioned by this blog not to expect that the Chinese or any other ethnic group will save the day, and that is perfectly rational. But part of me thinks the extremely high demand, and extended kinship networks, have probably put off the day of reckoning somewhat.
I remember Big V (I think) had data on the rising number of houses for sale in Cupertino, and perhaps that, along with real lending standards, will finally shatter the illusion of eternal high prices. I sure hope so. Of course, a few days ago my mom was watering out front when the mother of an ex-girlfriend, a lady I have known since 2nd grade, walked by and they caught up. Oldest daughter (first girl I said “I love you” to, using the scramble function on a speak and spell when I was 8), noted said daughter had recently bought in the area and was now a stay at home mom with a housekeeper, thanks to her Google stock. Hubby still works at Google.
Luckily for parental prestige my mom was able to say I have a relatively cool job with 5 staff members at home, and free housing (much nicer than what I grew up in Cupertino!). But it was just another anecdote about the allure of Cupertino to many who grow up in the region and manage to do ok. And I will ignore the number of people I know who have inherited houses and prop 13 exemptions (like I will with our other house) and decided to stay because they could.
Anyway, prices have fallen before. But I doubt my house will in the medium term will ever be affordable to a secretary and a retail store manager, like when my parents bought it. They got lucky, and it has turned into quite a…windfall? If I say investment I’ll probably get shot. I am getting too laid back here.
My wife got a reality lesson today. Took her compact car to the shop today. The dealership gave her an SUV to drive while her’car was being fixed. The SUV gobbled up almost a half a tank of gas just in one trip to town.
Your “$1.1M” house that you paid $305k for in 1998 is really worth about $500k, tops. Go ahead and try to sell it to see what I mean.
I’ve got some Worldcom stock that is “worth” $100 a share too…and you can have it for $90!
Zeb:
If you sell the house and then rent or move somewhere cheaper, then you got a good deal. Fine. But it would be irrational to insist that such a windfall is something you earned and deserve. It can be irritating to hear people refer to their houses as “investments” when the price is going up, but then imply that they should be “guaranteed” when prices are going down. I think Jas’s point for Mrs. Vicente is that she can’t expect to have a guaranteed investment.
She be smokin’ some mighty fine stuff, Big V, just like most of Cupertino (and Sunnyvale and Shallow Alto and Potty Valley.)
Let her make her ITIM payments on her loan, and we’ll see who comes out ahead (”Hint: not much of a contest.”)
Mmmm. She threw the Apple/Google names out there.
Guess there are 50,000 googlians ready to buy in Cupertino.
I mean you haven’t lived till you’ve had a Starbucks in Cupertino.
They might be getting a little bit low of googliots though.. sounds like prices dropped over the last year or so.
She also threw out a few hedge fund names. Scion and Clarium, and some “young good-looking lady” who put down 50%. What about the “interest payments” on the remaining 50%?
Ooopsies.
Yeah, yeah, yeah, Shallow Alto is special, Potty Valley is special, Woodsies is special, L-ackerton is special, and of course, San Francisco is über-special.
They’re all special. Yay! They all get to go on the special bus. And the googliots will buy all the special places and everyone everywhere can be special forever and ever more.
Prices will go up for ever and ever, and everyone that was not formerly special will turn into Deltas and Epsilons à la Brave New World, and we’ll have to truck in everyday from Los Banos to genuflect before our new lords and masters.
Yippee, yay, yay, for the specials!
Puss,
Your tirade is tiring. Give it a rest.
There’s a big difference between the arrogant people in this valley and the rest of us.
This is a nice place to live regardless of what some may say.
Overpriced? Hell yes, just like everywhere else.
My home is payed for so I don’t give a f*ck if it goes down in value. I’ll be giving it to my kids anyway.
Just curious? Does your home have a trailer hitch?
Mike
You guys are being a little harsh on Zeb.
It’s easy to point to a formula that says housing = 4X income and then plug in figures to land at “housing will be $500K”.
First of all, your math is incomplete. Median income may be $100K but you should use $200K because of the huge proportion of SVers that are married with double incomes. Especially in Cupertino. And 4X $200k = $800k. Not too far from $1.1M
Then there is the downpayment. There is a lot of money splashing around Silicon Valley. You don’t have to be a Google-aire to have a few hundred thousand in stock options, more than enough for a downpayment. And I know quite a few folks whose parents are wealthy enough to give them $500K for a home.
No doubt house prices will ease as lending tightens, but it would take a major income drop for a $1.1M home to crash to $500K. Massive layoffs. As long as global IT purchasing advances, Silicon Valley jobs are relatively buffered.
–
Big V,
We must also give some thought to an idea that Adam Smith felt necessary to address 232 years ago. He wanted to make sure that people don’t get wrong ideas about “house dwellings” and get easily misled by future charlatans. Smith was a moral philosopher and not an economist.
Jas
–
“What if I retire and move to a cheaper area?”
Zeb,
The key word is IF. Ever heard of getting lucky, or being at the right place at the right time? More importantly, are you gonna?
Best of luck to you regardless of what you decide.
Jas
Like I said before. A house could be an investment or a liability. I also want for the price to be more affordable for my kids.
No, it can’t.
Your moronic march into there notwithstanding, just because you lived through an extraordinary time doesn’t turn “depreciating liabilities” into “assets”.
That’s the cruz of the matter, Zeb. An investment is a liability. It is not guaranteed.
crux
Cruz is just crux in Spanish.
Zeb,
Did you read Ben’s post just above? Please note that prices are falling significantly month by month. I am sure you will respond that Cupertino is different and will hold it’s value. Then you might want to look at what happened to Cali real estate values during the last RE crash, around 93 or so. Could be instructive.
Or keep an open mind and keep reading Ben’s blog for a few weeks and see what you think.
Or not. By definition real estate is illiquid…and you have to pay taxes, insurance, maintenance et. al. It’s your money, not mine.
Of course I live in Manhattan, where the low end, under 850k is softening, and the rest of the market is stalling badly.
And it will crash, just like it did in the early 90s and people will take their losses if they can get out at all, but that’s Manhattan.
Not half so special as Cupertino, where job losses, credit crises, imploding industries and other unpleasant things probably will not occur.
I thought Cruz was “nice pair” in Spanish.
Yep - it was luck - Zeb was in an area that went up hard and fast, but to get the most bang for the buck, he should have sold in Spring of 06. If the house is worth over $1m now, what was it worth then - he he you already lost a boatload of bens. Some folks bought low, sold high and got it right, but not many.
May I chime in and ask Zeb if the rest of his financial house is in order? If you have pinned all your hopes on that house being worth a million bucks, you are screwed, particularly if you don’t have any savings. If you have been socking away the money you are saving on a (hopefully) small mortgage and investing it wisely, then feel free to stay where you are as long as you want. Just don’t bank on the house being worth as much as you think it is.
Are you frakkin’ kiddin’?
Of course, her entire plan is on the house being “worth” a million bucks.
Haven’t you seen this before? A troll just marches in in pure despair.
We’ve seen this a million times before. It’s just more entertainin’ in 2008, that’s all.
Zeb,
People (like you) just don’t get it. Hedge funds, options, solar, whatever the lateset is….there are only so many people making the kind of money necessary to service a million dollar mortgage and live their lives.
Seriously, look around you. How many houses are there and how many people are there at the top that can actually afford to live the million dollar mortgage lifestyle.
Basically I agree with everyone who’s coming down on Zeb, but we have to notice that Zeb DID say a sale very soon would be something to consider…IMO, Zeb should consider it quickly.
Zeb, you have little to lose by selling if you can. You will surely rent cheaper (even if you are in a high tax bracket), and if prices fail to decline to the levels we are predicting, they will certainly decline enough to cover your transaction costs. I guess you are worried about losing your low Prop 13 tax basis. That’s a reasonable worry, but I think it’s pretty likely the value of your house will decline to $500K or less.
Agree with Zeb that a house CAN be an investment when the time is right. Now is not a good time to be owning houses.
What if I retire and move to a cheaper area? The proceeds become a retirement fund.
As was already noted, you skipped a step. If you retire and sell the house at a profit and move to a cheaper area, then yes, the proceeds can become anything you like.
..and it’s not a fine distinction.. it’s critical.
The Vicentes are not really sellers. They have waited a year and are willing to wait several more.
I suggest they unload the packing boxes, put their feet up on the coffee table, make a mess in the kitchen if they feel like it, stop dusting, vacuuming and washing the toilet 3 times a day on the off chance a GF will knock on the door, and relax and enjoy the house.
Where is that cheaper area? In retirement communities on the North Coast, 300 miles north of San Jose, a 1960 3 Bed 1 Bath ranch house on 0.25 acre costs 1.2 million. Dollars.
Photo: http://tinyurl.com/6jqt7l
And a 720 sq foot 1 bed 1 bath costs half-a-million dollars. The Vicentes house in Ventura is beginning to sound like a bargain!
http://tinyurl.com/5g3hmd
Reduced to 459,000
Zeb’s dead, Baby. Zeb’s dead.
Zeb, you say your house is worth over a million dollars. You mean that’s what you think it’s worth or what someone has offered to pay you?
SubKommander Dred
No, the funny one is the expectation than in 2 years the house will still be ‘worth’ what they are asking for right now.
So they won’t ‘give it away’ at $395K right now.
In two years, they couldn’t ‘give it away’ for $395K, more likely $300K or less.
Still way too many people see the current downturn as but a blip in the endless RE appreciation.
Still way too many people see the current downturn as but a blip in the endless RE appreciation.
Some are waking up to the possiblity. Two of my folks neighbors are seriously considering cashing out. These are nice homes, fully paid off, and in one case remodeled to the best standards (it was his business… so it didn’t help selling to clients in an out of date home if they dropped by).
Note: Both saved during the bubble. Oh, the contractor didn’t do ‘cheap remodels’ either.
So I’m thinking some are waking up.
I still think the excitement really gets going this Fall.
Got Popcorn?
Neil
I think you’re right, Neil. I’m getting excited living here in Sacramento, where prices have been slammed, except for desirable areas like downtown. I’m hoping for them to fall after the spring buying season, and am considering getting an investment house if I can find one in a good neighborhood for a low enough price within the next two years.
Hate to be the spoil sport. However, depending on the sitch, they may not give it away, but the repo man may take it away!
Exactly Jas!
A house is not an investment.
Case Shiller index points out that real estate appreciates no more than 1% above the inflation rate over the long haul, while equities return 6 or 7 percent. Actually, if you think you should invest conservatively, intermediate term bonds are an even better deal than real estate.
A house is a place to live in. Make it your castle. Everyone should strive for their dream home. My dream home is a coastal California house that could be in Sunset magazine - a modern architecture north of San Francisco. But I’d have to have 5 times more the “worth” of that house in stocks and bonds than in that house.
I remember a few years ago, before the bubble started bubbling, a financial advisor on one of the local PBS station was telling people a house is not an investment (I believe his name is Jonathan Pond). I’ve held onto that piece of advice.
Bill, the history of “equities” is no guarantee that their future is equally bright. They may be less dangerous than RE, but then again, the dividend yield (which is the major part of that long-term total return) is now down to practically nothing.
“the cooling market is freezing out traditional home sellers like the Vicentes”
————————————————————————–
They better sell now or be locked IN forever.
I’ve been waiting for 3 years to say that.
its their retirement plan……… underfunded now it seems
Zeb,
I don’t think most of those replied know much about Cupertino, but your 1.1m house in Cupertino does not sound to me deserve a neighbor with tons of wealth from stock options or hedge fund. You should know very well that 1.1m in Cupertino buys you a shack - unless price has dropped significantly already. And I doubt that people with lots of money and putting 500k down want to live like that. Then again, you maybe one of those bought an old ugly shack neighboring with McMansions.
“The Vicentes are willing to delay their plans to move to Texas to be with their daughter until they find the right buyer. ‘I want to move, but if it takes sitting on it for another year or two, then that’s what we’ll do’, Rose Vicente said.”
Choices. Take a financial hit to be with their daughter or stay put and hope that they’ll get their price.
I like money as much as the next guy, but money can be replaced. Time with their daughter cannot.
Of course, they’re really taking a financial hit by not selling, but I don’t care. I think it’s funny.
They are also bleeding the ITIM payments monthly.
Even if prices were flat, that’s a lot of bleedin’.
Faster: what is ITIM?
Interest, Taxes, Insurance, and Maintenance.
Ironic deal is their daughter, I betcha, moved to Texas like all the California kids, to be able to Buy a House!
And as an added bonus, get away from annoying parents!
If that house is their retirement, they’re going to be needing to move REALLY close to their daughter. Like, in the room down the hall.
I hope her daughter isn’t counting on RE to always go up in TX.
RE always goes up.
What are you, a commie?!?
‘I like money as much as the next guy, but money can be replaced. Time with their daughter cannot.’
Hmmm. Yar. This would assume that the time with the daughter is well spent. Was this daughter raised right? Is she respectful of the elderly, mindful of a penny, prone to instrospection and willing of wise instruction?
More importantly, was the daughter born right? Lately I am beginning to think that people are just born the way they are, and that hopeful effort is misapplied when lavished on some people. I never thought that before, I have always operated under the theory that I, me, myself, would fix what needed fixing, by gum, whether you liked it or not. So sit down and buckle up, because this might hurt, but you’ll thank me for it later, probably.
But I could have been wrong. Oh, my. I can’t believe I’ve said that in writing.
You may need to slap yourself OG.
don’t be going all blanche du bois on us, OG. Get a beer and a grip.
Okay. S’ good advice. (Hiccup)
So true Combo. Learned that lesson 27 months ago and have never regretted it. Even the money we spent with the proceeds from the house were well spent.
-Paid off ALL DEBT.
-Wife stays home with kids. Will go back when youngest starts 1st grade.
-Live 7 miles from work.
-Go home for lunch.
-Less stress.
-Have gone on two great vacations, helped my filipino in-laws come here for their 50th wedding anniversary, and am going to Yellowston in August.
-Bought a new laptop.
-Son got braces. He really did need them. Wind could whistle through his teeth.
-Had repair work done on cars.
-Wife had some teeth work done. She also needed it, had some serious pain.
-Still NO DEBT.
-Did I mention we rent. No headaches there, see roof tiles blowing off in Santa Ana winds at 3 in the morning or the water heater leaking water faster than the Titanic at 3:30 in the AM. I don’t miss that or the property taxe twice a year. Let the Landlords deal with that stuff. Here’s the rent.
I could list more, but still no regrets. Sure, would I like all that cash back? Who wouldn’t. Bottom line is it is nice to be debt-free and have time for family and vacations.
Time is the one thing that no one is guaranteed. It can’t be saved. It can’t be hoarded. Without sounding too much like the Mastercard commercial, it is priceless. The adage “Time is money” is spot on, except that time cannot be inflated or deflated. You can’t hedge it. You can’t bribe for more, although you can try by praying to whatever you wish.
Nice post, OC.
What many people find of “value” these days is sad, stupid or sickening.
“until they [the Vicentes] find the right buyer”
I guess the “right” buyer is one who will offer their asking price.
I picture the Vicentes in a pair of trash cans, waiting for Godot.
“Richard Tegley, a listing agent in Moreno Valley, said when a lender allowed him to slash the price on a repossessed Moreno Valley house from $199,000 to $125,000 he received 18 offers within three days.”
This quote and anecdotal accounts I hear from friends indicate to me that there are still “savvy investors” putting down the last of thier bubble liquidity to catch falling knives.
How long until we run low on the supply of these greater fools?
This quote and anecdotal accounts I hear from friends indicate to me that there are still “savvy investors” putting down the last of thier bubble liquidity to catch falling knives.
How long until we run low on the supply of these greater fools?
I can add to those anecdotes. Entry level prices in the “affordable” area near me (Seaside) have fallen from $500K+ down to $250-$300K. They are selling pretty well, and a guy a work even talked about buying one as a rental. (He was smart enough to wait past the peak before buying his own house, but jumped in a couple months ago.) Another guy at work bought a $300K condo at $120K off the original asking price. “Great deals” all around…
This is the real estate equivalent of a dead cat bounce. Plenty of people who thought they missed out on the profits of 2003-2004 are using those prices as a yardstick. They foresee stability or another run-up in the near future rather than a negative overshoot. They’ll fall out of the market in ~2 years when they realize prices are not quickly rebounding and that “better” non-foreclosure houses are selling for what they paid.
Then the market will go quiet and prices will be “worse than imaginable”–it’ll be time to start shopping.
-John
I think it will be faster than that. The main differnece between the 90s and now is the credit crunch. I think the GFs buying today are mostly using up a war chest built during the bubble and every week that passes puts more formerly solvent homeowners upside down and underwater.
The accelaration rate of NODs continues unabeted. The acceleration rate in the negative direction on the median price graph is not slackening. We can all take solace, however, in the fact that it can only realistically fall to $0.00.
differnece?
“differnece” is the unabeted spelling!
It seems where we are in the game is the general public is now reluctantly accepting there was a housing bubble - damn you tinfoil hatted black helicopter whackjobs. But they only way they buy into it is to pretend that this is just a blip and in a few years, we’ll be back up to where we were and zooming into double digit gains forever. If you could actually prove to these vice grip closed minds, that there really never will be those types of gain again in our lifetime, they would probably commit suicide. People aren’t quite ready to give up on the big american dream.
“But they only way they buy into it is to pretend that this is just a blip and in a few years, we’ll be back up to where we were and zooming into double digit gains forever.”
The tactics of sellers show many still don’t understand what’s happening. Many sellers are still grudgingly lowering prices and/or renting their properties in the interim. This is what you might do if you expected prices to begin to recover in the near term. These tactics make no sense if you understand how far prices may still fall and just how long it might take just to return to today’s price levels, much less peak bubble levels.
Yup.
Here in Silicon Valley, I often hear whispers of “old money”, and how there’s enough of it to keep everything unaffordable in this town for generations. Well, quiet as it’s kept, that old money was wasted in the dot com crash, and is now being rewasted in the housing crash. People tend to remember what was “made” during the mania, while forgetting what was lost during the recession.
If you take a quick flight around the valley, you realize how much they have overbuilt. It’s unreal. There are houses are far as the eye can see.
Within, just where my sister lives (walking distance from Google incidentally), there are hundreds of condos that are empty.
Where are all the millionaires, I ask?
Yah, I head ‘google’ and ‘apple’ bandied about a lot, not so much with their stocks sagging lately, though.
I asked one of my friends who had the good fortune of buying a house in 98 from dot-com stock why he thought his house would be worth a dime more than before the dot bomb. I asked him to compare his salary and salaries of his friends to back then, and the value of their ’stock options’ too. He got a little quiet when he realized he wasn’t making any more than he did back then, and his ‘big score’ on stock options this time is worth 5 digits, not six.
There isn’t any more money in the bay area now than there was in 2000. Salaries are MAYBE 5% higher. Housing? 250% higher.
Methinks he’ll try and sell his house ASAP.
Your friend should own the house by now. If he’s not planning to leave, he should stay put and enjoy not having to pay rent or mortgage, as well as low property taxes from ten years ago.
Ah Big V,
Young lass old money doesn’t give a rats ass about real estate prices in Silicon or Jupiter Island or Lake Forest or Greenwich. For old money, RE is a home not an investment.
For the first time in modern history, anyone can work anywhere.
Sans my beloved alma mater, the Silicon would already be history.
Stanford man, I see. What a waste of a good mind.
Berkeley? Nah, Illinois or another Big10. lol (*until football arrives - sob)
I said “mind” not “mindless”.
Come on I went before it had a reputation and the school cared about teaching - only the young ladies were hard on the eyes - a condition for female admission, don’t distract the men - thank heavens for Mills. Wisconsin did not offer a full scholarship. LSJU offered me a scholarship and golf! The finest golf course I had ever seen. I would still play it every day, alack.
Said enough back to my malt.
Old money does not waste its time on SFR rentals or Condos. They buy commercial buildings and large apartment buildings.
Strip mall with 6 units at 2000 sq ft, 1 10,000 sq ft and one ooutbuilding that holds a Mcdonalds or such fast food,
You are looking at about 3,500 per on the 6, 15,000 on the big unit and another 15,000 on the fast food building for a total of 51,000 dollars per month rent collected on a strip mall. Why the hell would anybody with money want to waste their time buying a bunch of SFR’s and Condo’s. To make that kind of money you would have to buy 51 houses.
Now don’t get me wrong, strip malls, unless they are prime locations, are way overpriced right now. I think alot of business are going to go under on this one just like the 80’s and the 90’s and leave alot of strip malls half full. The difference is the banks will cram down for commerical more so than houses, just like a strip mall owner will cram down the rent to keep you in the building.
‘My husband has worked too hard all these years to just give it away,’ Rose Vicente said. ‘This is an investment for our future.’
Hey dumdum! Then don’t ‘give it away’. Keep it a little longer and you will get even less money, which is still more than you deserve!
I don’t like your name, feeky, although I approve of your thoughts. The name sounds germy and moist. How about you be ‘Sticky Fan-time’ instead? Hmm?
Totally with you on that….
I’m kind of partial to “Feeky.”
How about “feeky-time”?
I like the original though, I must admit.
‘I like the original though, I must admit.’
That is because you are presently pretending to be some sort of down-home rural farm-guy. Like in the movies; you know, the patient farmer in denim overalls that always can predict when rain in expected, and knows about crops and harvest moons and scythes and stuff. It’s like Marie Antoinette and her shepherdess outfit, except that I bet you don’t have a sunbonnet or any lambs. Or any blue overalls, come to that. Or any rain over the crops. Now that I think of it, do they have rain in Manhattan, or must they truck it in, in stages?
I’m kind of partial to “Feeky.”
You know, AZ, as I sadly contemplate my soggy phone, I too was cheered up to think of the name ‘Feeky’. It sounds better than it started. ‘Feeky’ sounds like a cat, a small black cat, with big ears and three mice stowed carefully away in the woodshed for later. It’s kind of a cheery name. Miles away from its origins.
In Manhattan, when they refer to the “original” above, they do so in a completely different context.
Growing up in Utarr, I bet you some golden showers, you didn’t know much about that back then.
Oh, now look at you, Faster! Swiftly abandoning all the farmer accents entirely.
As it happens, I learned about those unclean and decadent city-folk habits when I was first strapped down…when I went to donate plasma in downtown Provo, Utarr. (I needed money for textbooks for schooling. My scholarship did not cover textbooks. And unlike the girls you might or might not know, Faster, I really did need the money for textbooks. ) When I think back, did this happen to me on ‘Pioneer’ Avenue? I can’t remember, but I hope so. At any rate, I was strapped down to extract my fluids and right away I learned to only let myself be strapped down between slight Asian girls, because I heard allllll about that ‘Golden shower’ stuff you are talking about, from a person named ‘Matt’. Where is Matt now? Probably living in Manhattan, is what I’d guess.
Well, that’s how life works.
You learn the above, and I learn about wild mushrooms.
Balance? I suppose so.
What, the strapping down part? Only until I earned 134.oo USD for Intro- to- Biology 101 tomes. At that point I was outta there.* And untainted by city-folk ways, as they was germy and suspect.
I do think I still have them somewhere, probably in the garage, in a tidy mouldering pile. ‘Never leave a book’, is my motto.
* Until I needed money for the ‘Intro to Psychology/Philosophy’ classes. My course lumped many of them together, I think, for some odd reason. And don’t tell me that didn’t provoke discussion, when we came to the ‘Means to an End’ chapter.
“Although they’re not necessarily looking to steal a property, the Eiermans think their timing is good. ‘If we can buy it at today’s price and four years from now it’s worth what it was two years ago, how in the world could we go wrong?’ Eierman said.”
“‘I hoped to spend $500,000,’ Eierman said. ‘It looks like I may have to spend $700,000 or $750,000 to get what I want. That’s OK, because that $750,000 condo was probably a $1 million condo a couple of years ago.’”
———————————————————–
BWHAAHAAHAAAHAHHAHHAHHHHHHA!
(guess i have to work on my evil laugh punctuation)
where did this equation come from?
price 4 years from now = price 2 years ago
got housing blog?
; )
“where did this equation come from?
price 4 years from now = price 2 years ago”
That’s the equation the suckers of 2008 are using. To bad it won’t work that way. Just ask anyone who keep their money in stock index funds, for the last seven years. Or the suckers who bought the NASDAQ as it fell, convinced that it would be zooming back to 5000.
The article had a misquote - he really said “and TWENTY-four years from now it’s worth what it was two years ago”
az_lender and az_owner think identically in this respect.
“If we can buy it at today’s price and four years from now it’s worth what it was two years ago, how in the world could we go wrong?”
What a mental giant.
Do you REALLY think that in a dramatically-changed lending environment, with dramatically-changed buyer sentiment, and a dramatically-different economy that the market is going to pop right backa up to insanity in four short years???
Priceless.
“how in the world could we go wrong?”
Oh, I think you’ll figure that, Eierman…..in about four years.
This is what passes for a banker these days??
As soon as someone thinks anything can be “foolproof”, I think that person is a fool.
Weird. Eirman believes that he calculates his profit by subtracting his buy price from the seller’s buy price? I have always thought that one calculates profit by subtracting one’s own buy price from one’s own sell price.
IMO, this is proof that the bubble mentality is NOT gone at all. I’m seeing it all around me. Lots of knife-catchers who think they are getting a steal and prices will just zoom right back up again in a year or two…just have to hold on for 12 months.
No shortage of morons on planet Earth.
You have to remember how much us Californians have been conditioned over the last 20 years to think that a crapshack in the ghetto for $450,000 was a good deal.
It’s the same reasoning for buying crap on sale:
1. A penny saved is a penny earned,
2. He saved $250K by buying 2 years after the peak, so
3. He earned $250K.
Ergo, the more you buy, the more you earn!
Get it now?
What an asshat. For anyone to try to derive a price based on the peak “value” is insane.
–“In May, 42 percent of homes sold for less than their prior sale price - about 34 percent less, on average, DataQuick said. Most of the prior sales occurred between early 2004 and mid-2006.”
Very telling stat of what is going on — “forced” sales, including walk aways.
Jas
‘In May, 42 percent of homes sold for less than their prior sale price - about 34 percent less, on average, DataQuick said. Most of the prior sales occurred between early 2004 and mid-2006.’
My my, how did this important bit of info get past the LA Times? And the short holding time of these FBs highly suggests they were speculating and got burned. Oh dear!
34% less on “margin”, no less.
That’s a lot of losses.
Right again, Ben, how did this get past the gatekeepers?
Wow!
I’m not sure what to say… but wow!
Yes, this is mostly banks taking it in the shorts, but that’s quite a factoid.
To think, homes tripled in five years. So there are million of homes in LA county with of equity.
Got Popcorn?
Neil
But did they really get burned? With no down payment, neg-am mortgages, and slow foreclosure times, methinks these “burned” sellers have still made out pretty well.
Quick check on used SFRs listed in my zip code (92127 Rancho Bernardo West) on ziprealty.com shows that 205 of 236 current listings (87 percent) were built in 1998 or later. It appears that lots of folks who bought new homes here in the past ten years had the same idea: Live in it for a few years (at most), then sell it for a quick flipper profit. Now these homes sit empty with no offers at the prices the current owners need to sell for in order to avoid losing their shirts when they pay off their hungry alligator loans.
‘If we can buy it at today’s price and four years from now it’s worth what it was two years ago, how in the world could we go wrong?’ Eierman said.”
The key part of this idiots question is what is being ignored, and that is the “if” part. Okay, what “if” they don’t? Are you willing to potentially lose hundreds of thousands of dollars based on an “if”? If so, you’d better make sure your “if” is based on something more substantial than “real estate always goes up”. As for me, I’ll keep leaning on the “if” that asks “what if these ass-poundings have just begun?” Having done my research, my “if” is really no “if” at all, because I already know the answer to my question.
–
I was impressed by flawless logic! Would work great in every market that has fallen a lot in two years.
There must be thousand ways to make money off these idiots. I bet smeone is figuring out the next one.
Jas
Yeah, it’s called “financial planning”.
Double down, baby! Then quadruple down, and so it goes.
What do you call it? A martingale?
Naah, that’s for math-y types. The “financial planners” know better, of course.
“financial planning” — I hate to admit it, but I recently asked a Trust Co what they would charge to manage my whole wad including the mortgages. They said $30K/yr. I said thank you, I may be interested later. What I thought to myself was, Fat Chance, Bozo! Even the IRS did not take that much from me last year. However, the Trust Co’s high bid made me feel much better about measly stuff like gas prices. Think of all the money I’m saving by not hiring these thieves. Anyway, they wouldn’t have the slightest idea how to manage the mortgages correctly.
az_lender: your instincts have been great so far. I guess you just talked to those people to see if you were missing something. Now you realize you haven’t!
What is going to happen is banks are going to be badly damaged and investors will get burned. And some of the damage will get dumped on to tax payers.
That will probably result in some restrictive laws to keep this from happening again.
Assuming we survive this mess.
Which is hardly a given.
“And some of the damage will get dumped on to tax payers.”
yea like 5 dollar gasoline, a falling dollar and worldwide inflation because prices of commodities are in dollars.
Quick sell these people some beanie babies and tulip bulbs!
“The Vicentes are willing to delay their plans to move to Texas to be with their daughter until they find the right buyer. ‘I want to move, but if it takes sitting on it for another year or two, than that’s what we’ll do,’ Rose Vicente said.”
————-
That’s right, Rose, that *is* what you’ll do.
“You just have to ride it out”
That has been stated over and over again,by millions of RE shills and ‘owners’. I just have to guess that the vast majority have the inability to comprehend what is actually going on. This is not some passing squall, that you can duck into safe harbor and set sail tomorrow morning after it blows over. We truly live in a society that has blinders on, no worries the bottom is just around the corner, next RE prices will take off again. This will not end well, and the fools at the levers are in for a rude awakening.
‘If you’re not priced very well, or are not a short sale or foreclosure, you’re just not going to get a lot of people to your house,’ Howell said. ‘You’ve just got to ride it out.’
Elephant ride or JT ride?
“We truly live in a society that has blinders on, no worries the bottom is just around the corner, next RE prices will take off again.”
My thoughts exactly……BTW, what do these idiots think is going to propel prices higher after they buy? That’s right, they don’t know. They are just wishing it goes higher after they buy.
–
“While the sales and price numbers are grim, some good news can be found. Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said he’s been hearing from businesses that the falling home prices are attracting new workers to the area. A year ago, the higher prices were keeping them away.”
Jackie boy, pay must be good! Looking for a silver lining in the darkest clouds? It is a lightening strike.
Jas
No way, people ain’t movin’ to LA because the job market sucks and rental prices are insane. I have many friends from the East Coast, Chicago, Texas, etc. who think LA has the same job opportunities as where they came from and nice, big, new houses and apartments but when they find out that’s not the case, they end up going back. Everyone who moves here encounters some version of this and sooner or later and decides to leave. I myself will be leaving as soon as the opportunity arises. I love LA but see myself falling further and further behind if I stay here.
No kidding. I grew up in L.A., lived there most of my adult life, and even if prices drop 70% (or more) in nominal terms, no way I’d go back.
‘My husband has worked too hard all these years to just give it away,’ Rose Vicente said. ‘This is an investment for our future.’”
Ah yes. The compulsory entitlement attitude of Californians. Well, you can give it away now, or have it taken away later. What will it be, bit@h? Anyway, if you are so concerned about your finances and investments, why don’t you get a job rather than relying on your husband’s “work?”
‘My husband has worked too hard all these years to just give it away,’ Rose Vicente said.”
Hmmm…sounds like someone doesn’t have enough to retire on without the “windfall” from the house.
And here in CA, anything less than your wishing price is “giving it away.”
In Fresno California where I grew up, houses generally lose value over time, due to too much section 8 houses and the police department handcuffed from battling growing crime by illegal aliens. I looked in my parents’ zip code 93703 for comps for the house I “gave away” (LOL) in 2000 for $79,000. Funny how Zillow claims the houses in my parent’s neighborhood are worth $180,000 to $200,000. However NAR’s realtor.com shows houses for sale in better parts of that zip code for $145,000, and those are comps.
$95,000 would be more like it. And it will happen.
Have Pop tarts, but no pop corn.
Fresno rasin capital of CA, so when you moving back to Phoenix Bill ? I had them turn the heat on for you.
I can guarantee you most potential buyers in Humboldt county are trying desperately to secure financing. There is no talk about prices going down. A house down the street was on the market last month for $275,000 and sold that weekend for $270,000. I rent in a marginal area. I can guarantee you that the Times-Standard article will face a rebuke by REALTORS in Humboldt county in tomorrow’s paper. The last time there was a negative ad about housing, the REALTORS took out a full page ad trying to convince people to buy.
And, my suspicions about the house across the street are correct. For the last two weeks, they’ve been primping up the place and even moving crap out of their garage. Today a REALTOR comes by to snap photos. Zillow confirms is was bought at $124,000 in 1999. Wonder how much it will list for? $389K perhaps?
Erik Eschner has been the one voice of sanity in HumCo about this housing bubble. Many people I work with call him a flake, but they are also avid real estate “investors.” I’m glad that with each passing month, he is gaining more credibility with the media. I can’t imagine how many nasty emails and voicemails he is getting because he is actually telling the truth, telling overdebted people what they don’t want to hear.
Don’t worry, Ant. The hatmunches who live in Dumbolt county will face their demons soon enough. Without equity locusts from the rest of the state, your neighbor will have considerable difficulty finding a buyer in a county with little to no high-paying employment. I just hope they’re giving out hot dogs.
Hatmunches. Feeky. When it comes to new and interesting vocabulary, this thread has it all.
Thanks to you, slim. Now, don’t go being modest!
Mckinleyville ca has lost an average 13,000 in value in the last 30 days. If you are smart you won’t take a hit on the bong (humboldt equivilant to kool-aid), fasten your seatbelt, and ride the prices all the way down. It’s just started here folks. Don’t be impatient!
–
Anthony,
You live in a safe county with a population of a suburb like Palmdale, CA. There isn’t much action either way, but watch out below (in home prices) as the recession spreads. Below $100/sqft is a safe bet.
Jas
“‘Somebody has to chalk up a loss,’ Eschker said. ‘But I’d rather live in a world where housing is affordable, and I think most people would agree.’”
Really? The homeownership rate is around 70%. So, homeowners/homeloaners want to see whatever equity they have reduced for some supposed social good like housing affordability? Hey, while we’re at it, why don’t we drop the property tax rate too and see if the state, along with the public employee unions, agree? It would make housing more affordable and the only thing we would be losing are net tax consumers and a slight reduction in services. All in favor, say I.
Friar, I hope that was tongue in cheek. While I am not for the goobermint meddling, the market will take care of pricing. People making 100K a year CANNOT AFFORD $600K homes. I have said this for 5 years.
Prices will become affordable again.
What about the children OCDan? Do you want children that have inept parents to suffer the ramifications of lower house prices, which takes away their quality of life? You know, home equity doesn’t just grow on trees. That’s what my mom always told me. I shudder to think that you want to take the bread out of these starving little mouths. Affordability may be a 13 letter word, but do you know what word has 10 letters? That’s right, starvation. And that’s what is going to happen if market forces take their toll on parental home equity. So sit back in your lazyboy recliner, sipping your merlot with that smug look on your face, and inure yourself to the tears streaming down the faces of the youngest victims in this crazy affordability mess that you endorse. Cold and heartless, that is what you are OCDan, but I expected nothing less from you.
Tongue placed firmly in cheek.
friar,
While most people only think about their own interests, there are a number of parents (homeowners) out there who would like to see their children buy houses that are affordable and don’t strain their budgets.
There are also those few wise people who understand that the cause of all the foreclosures is unaffordable PRICES.
If you don’t want half the homes in your neighborhood vacant, growing weeds, attracting criminals and mosquitos, then you should want affordable prices. It’s really very simple.
Bogus! See my above post to OCDan. The children can’t sacrifice their current quality of life for some future good, even if that future good is in their best interest. Delayed gratification, at such an early age, will make them jaded and they’ll become miserly, bitter people. And do you know what we call those type of people? Renters, Bitter Renters. The only reason people are renters as adults is because they were deprived of enjoyments in childhood. Is that what you want? We can’t afford to have affordable prices, that is the paradox that continually stumps those who read this blog.
Tongue way down in throat.
I can only speak for houseowners in my family, who understand that falling prices will benefit many more than they will hurt in the long run. Of course, in my family people take out 30-year mortgages and pay them off early. For example, my mom has lived happily in her house since 1978, and it was paid off in 1985. She has ignored all of the fluctuations in prices over the years (although she did a little bragging in 2005 that she was “rich.”) She lives easily on her small income and savings, and plans to leave the house to her grandkids. If everybody could live the way she has, there’d be a lot of peace of mind out there. She says that she wants prices to fall to the point that all of her grandkids can enjoy the kind of security she has.
What your mom should be doing is extracting out some of that sweet equity in her home and buying gifts for the grandkids. What I am afraid of is that the grandkids will think of grandma as a miserly tightwad who failed to cater to their every whim whenever they went to the carnival or county fair. Those grandkids only get one childhood, and it will be tainted by want unfulfilled. The gift of time is great, but it doesn’t pay the bills. Is this what you want?
Tongue coming out my rear.
“Tongue coming out my rear.”
That tongue sure gets around. You should run for office.
Oh no friar, my point is that she has enough money to do things for her grandkids because she has very small living expenses. The little house inheritance will be a nice bonus someday. And please brush your teeth before you go to bed, or those fecal bacteria will overwhelm your immune system.
“Eschker said the jump has less to do with the well-publicized loose lending standards and adjustable-rate mortgages than declining home values. ‘When prices go down, especially for people who purchased a home with no money down, they immediately have negative equity,’ Eschker said. ‘They owe more than the house is worth.’”
The guy otherwise sounded mildly intelligent. I used to think the wave of defaults came before the wave of foreclosures and price declines but now I am not so sure. This guy seems to think otherwise.
He is actually a professor at Humboldt State in their business/economics department. Eschker has been talking about the bubble for years, and up until recently, had been cast off by the RE community as a “chicken little.” Even now, I get the feeling that people want him to shut up, as it may bring about a price decline.
He is on the right track. I just dont understand why he would confuse cause and effect. Maybe he was having a bad day. Clearly price declines create a downward spiral as far as foreclosures, but default as we hit the affordability wall and resets began was the trigger.
“Emilio Martinez, who serves on the city of Watsonville Planning Commission, predicts the median will drop to the low $500,000s. He contends prices were inflated by subprime loans to borrowers who couldn’t afford to repay and lenders who didn’t verify borrowers’ incomes.”
“‘I am still of the opinion that we did not have a work force back in 2002 to substantiate a median-priced home of $400,000,’ he said. ‘If the average income has not changed and the median was in the upper $400,000 or less at that time, we are still in a nose-dive tailspin.’”
Watsonville houses should be in the $100,000. Nothing there. No Industry other than agriculture. Migration to Watsonville was due to low housing prices compared to the Bay Area. That is going to change because the price of gas is hitting $5.00. Who in their right mind want to commute from watsonville to the Bay Area. The locals may not be able to afford a house more than $150K.
DadGUMit! I just went to see what the distracting thunky sound in the dryer was, and guess what? It was my cell-phone! My nice and freshly sparkling clean Kirkland (that’s Costco brand, to you non-Costco shopping folk) lemon-scented cell phone. I got home and shucked my filthy pants away, like a besmirched corn-husk, as they was covered in mud and horsetails and Bigfoot hairs and I never ever wanted to see them again, and now look. I never have my cell phone on me, as the reception out here is laughable even in good reception times, so how did it get in my pants? It crawled in there like some sort of alien larvae, is what. Like on the SciFi channel.
No jokes, either! This is sad.
Although I bet Target is having a sale on new fresh alien larvae.
Oly, it’s the gods telling you to spend more time writing and to forget talking.
You’re a born writer (but then again, I’ve never heard you talk…)
Well, I already invited you to come visit me here. Then you’d hear me talk. You’d probably smack me off the cliff to make me shut up. All your dogs would laugh, and smack each other merrily.
Have you seen Sasquatch? Why is Bigoot always portrayed in the media as a hideous beast? Didn’t they ever watch Harry and the Henderson’s? What about Chewbacca? Funny how Chewie was the mechanical expert, but he wasn’t a grease monkey, just some human-ape hybrid that had a face which reminded me of a shaggy dog. Give Chewie a nice facial hair trim, and that is one handsome furry bastard. Did you see that story making the rounds on the internet media outlets concerning men with body hair having higher IQs than their more effeminate, hairless brethren? Even more disturbing these days is the amount of male breast tissue that I’m continually assaulted with in public. Call me silly, but I believe breast tissue should be the sole domain of women. Am I wrong?
Yeah, Bigfoot is, like all calm and good, and only runs around in the forest doing good deeds! It is so true. We all know it. He never eats stolen chickens or jumps on the trampoline without permission. *
Somehow I missed that article about hairy guys being smarter and better than their pale and girlish guy-pals. But I accept it, and don’t even need any foot-notes.
OG
* That’s an errant lie.
But my point is, good cleric; Friar: I agree with you. The hairy pointy-headed ape-man (Bigfoot) is a good person. Well, he’s a good anthropoid–you know what I mean. He means well. His heart is pure, although life interferes, and he can’t find his keys, or his opposable thumbs.
Yes, the hairy anthropoid should be charmed with gentle, soothing words, and lured inside into the house and then fed nourishing fish-sticks, lots and lots of them, all he wants, and given a napkin, and then later rubbed gently about the temples, but he must not ever be shaved or subjected to discussions of breast-tissue.
Now that I think of it, that’s generally been my attitude towards all hairy pointy-headed ape-men.
And you know what? So far, so good.
Do those fish sticks consist of halibut? Halibut has those good Omega-3 fats that are great for Bigfoot’s coat, which I assume is brushed everyday as personal hygiene is quite important. Yes, never shave Bigfoot, that is what makes Bigfoot Bigfoot, besides the big feet of course. And I don’t think Bigfoot has a pointy head. You must be thinking of Dilbert’s boss, but I digress. Glad to hear that you treat the creatures of the forest with the respect they deserve. They aren’t just playthings for human entertainment to be locked up in zoos. Bigfoot would be very sad if locked up in a cage.
1. Halibut? I don’t know. Let me check the ingredients list. I’ll get back to you. I was mostly thinking about tartar sauce. I love tartar sauce.
2. Besides, shaving the Bigfoot would make a horrid mess out behind the tool-shed.
3. I still think Bigfoot has a pointy head. Look at the documentaries, man! Pointy.
4. I respect all wildlife.
Why does Bigfoot have to be a he? Because “he’s” hairy? Total BS (Bigfoot Shit). And Bigfoot only likes Rotisserie chicken and would only nibble on the meat from the leftover carcass.
The article never stated anything about paleness as an indicator of intelligence.I remember a textbook in elementary school that was trying its best to explain different races and their skin color. Something to the effect that when Jehovah was baking the clay human beings, Jehovah left some in too long (your so-called African people) and some in too short (that would be your pasty white British people) and some were just right (those would be called Americans).
1. Because, good cleric, there has to be a girl Bigfoot, or we wouldn’t have new ugly Boy Bigfoots running around akwardly dodging cameras. It’s one of them evolutionary mammalian breast-tissue things.
2. How do you know Bigfoot only likes to nibble delicately on left-over rotisserie chicken bones? I bet he could scarf down a goat, if he wanted, and it would still be baaing.
3. Good Heavens! You was educated by the Kabbala! I heard about them! Exciting. Tell us all more, I urge you.
Oilygal, my education is of little concern, for as you can see it was truly peppered with embellishments only a four inch high heel could grace. Grace, yes, that is what I wanted to write of. Gratuitious? No. Gracious? Yes. Where has graciousness gone? Do tell me you are gracious. Do you say grace? Does the forest provide you with wild mushrooms? If so, that is grace. Yes, Grace, God’s Race as I like to think. Not a color, but a sense. Sensible Grace, but not sensible shoes.
I do say grace. I pray most earnestly, murmuring quietly and at length into my cupped hands, perched quietly on the edge of my modest bed in the evenings. I pray that justice prevail and that I may serve what I love, that I may be worthy, and other prayer stuff like that.
And then I usually bound right up in order to yank the high-heels off, because they are hurting my ankles, and I go have a shower or a bath with lots of fancy pink girl stuff.
I see no conflict in these actions. Sweet Baby Jeebus likes high-heels on me, or He wouldn’t have made them, or me, right? Right.
Do you have hardwood floors or carpet near your bed? I think you should take the high-heels off before praying so that you don’t scuff them up. Baby Jeebus appreciates aesthetics as much as the next person and would be horrified if something were to happen to said shoes. Do you have flat feet? I never understood how the genetic trait of flat footedness could have been selected. It’s not attractive nor is it functional. How many professional athletes out there have flat feet? Do you use nighttime moisturizer? I assume up in Olympia that the humidity levels are at least 75% and would thus make it superfluous. My wife wants me to use moisturizer because she thinks my skin is dry, but unfortunately I have large pores and everything I’ve tried clogs my pores. I remember growing up with the commercials that stated dry skin is healthy skin. For me that seems to ring true.
You can see bigfoot on youtube, all kinds of them.
The urine drinking is still going full pace here in Silicon Valley. At lunch today, one of my co-workers, after boasting about having just spent $950k for a crapshack in Sunnyvale, asked me: “you don’t seriously think that house prices are going to REALLY decline HERE, do you?” Several other co-workers nodded approvingly. I opined that we would see similar declines to the rest of the state, even if it will take longer to get there. They looked at me like I was from Mars, and changed the topic.
It’s a win-win situation really. If I’m right, then I get gloating rights, and if they’re right, I’ll move back to SoCal and buy a house for half the price and never look back.
It is hard to comprehend that which you do not want to understand.
You don’t love Bigfoot! Is that what you mean?
Jerk.
Ladies & Gentlemen, The Main Event…
Scheduled for a full 12 rounds~
Silcon Valley Smug vs. Marin Smug
Lets get it on!
12 rounds is so weak. Gotta be like the old 15 rounders. That’s what real men do.
Realtors have told them that if they want to sell immediately, they should lower their asking price to $395,000. ‘My husband has worked too hard all these years to just give it away,’ Rose Vicente said.
——————————
I don’t normally believe in putting purchasing histories online, but since this greedy pig asked for it…
From what I can tell, it looks like the Vicentes purchased their home for in 1998 for $197,000. Guess how much money they put down??? Go ahead, guess! $-3,940. You read that right, they got a ~102% LTV mortgage on that house and now cry when they might get a $198,000 return on NOTHING!!!! (ummm, can one of our local mathemeticians calc the rate of return on that? I’m not very good with numbers…)
You probably already guess this…but they also choose to “free up” some of that there equity and got another mortgage for $276,800 in 2003.
They’re crying about that return????? WTF???????
You mean they were going to make $198,000 if they sold out…but they already spent another $276,000….in 5years so NOW they NEED to get $495,000 to break even
UnFrakkinbelievabull!
What exactly was all this work she is talking about? Note she didnt even bother to pretend her ass ever did any work, hard or not.
“What exactly was all this work she is talking about? Note she didnt even bother to pretend her ass ever did any work, hard or not.”
Maybe all that work was signing the loan docs. As for the work her ass did, that may be more than we want to know.
If the prices are down 27% from May 07 what are the prices down from the peak in 05 and 06?
Does anyone have those figures?
Interesting question. But my own rule of thumb is to never buy any real estate equal to more than 1/5 of my net worth. I had enough of bubbles. The only expenditure I’m willing to spend more than 20% of my net worth on is equities. So I don’t care how much a house costs. It’s gotta be my dream house, where neighbors are politically incorrect, and where crime is very low.
if nobody here saved and offers up the data, you can buy back issues and stuff from dataquick… but it’ll cost you a C note.
http://www.dqnews.com/custom.aspx
hey bill, how do you calculate 20%. You’d invest 20% of net worth in the form of a down payment.. right?
Tell them you are short a couple of San Francisco futures, or better still, sold naked calls.
From the Merc:
http://www.cme.com/files/cmehousing_contractspecs.pdf
“While the sales and price numbers are grim, some good news can be found. Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said he’s been hearing from businesses that the falling home prices are attracting new workers to the area. A year ago, the higher prices were keeping them away.”
______________________________________________________________
As far as i’m concerned, this Kyser clown is every bit as deluded as Snaith sayer…
‘My husband has worked too hard all these years to just give it away,’ Rose Vicente said. ‘This is an investment for our future.’”
Well, there’s the real problem, Rose.
You didn’t work too hard, you just took out home equity loans and squandered the $$$, and now you’re an underwater borrower. That’s why you don’t want to sell, because you would have to come to closing with $$$ you no longer have.
Your house now is a growing liability, not an “investment”.
A Rose is a Rose and by every other name their numbers are LEGION.
I was suprised to see 2 bedroom homes in my area renting for only $500/month! Looks like “savvy investors” are having a hard time renting out their units. How long can they hold on while losing hundreds of dollars per month?
Depends how much they have in their 401k and other retirement savings. People are smart.
Ben,
You gotta let in more trolls like the Zeb “Cupertino” lady. This is like the most fun ever we’ve had in a whole six months.
Yeah FPSS,
I thought Ben did that on purpose also. Helps us sharpen our rapier wit and stay mentally fit
There is a Zeb Montaloma here at Google but he is not a lady. He works in Google cafeteria.
Yet Nelson also estimates that in 2025 there will be a surplus of 22 million large-lot homes that will not be left vacant in a suburban wasteland but instead occupied by lower classes who have been driven out of their once affordable inner-city apartments and houses.
The so-called McMansion, he said, will become the new multi-family home for the poor.
“What is going to happen is lower and lower-middle income families squeezed out of downtown and glamorous suburban locations are going to be pushed economically into these McMansions at the suburban fringe,” said Nelson. “There will probably be 10 people living in one house.”
In Shaun Yandell’s neighborhood, this has already started to happen. Houses once filled with single families are now rented out by low-income tenants. Yandell speculates that they’re coming from nearby Sacramento, where the downtown is undergoing substantial gentrification, or perhaps from some other area where prices have gotten too high. He isn’t really sure.
http://edition.cnn.com/2008/TECH/06/16/suburb.city/
“Thirty of the 37 sales less than $500,000 were either bank-owned properties [snip] That helps explain why the median price dropped to $610,000 in May from $661,000 in April….”
april.. to may.. A $51,000 haircut in about 30 days?
hmm.. hours in a day.. minutes in an hour..
Average selling price fell at a rate of $1,700 per day, or $1.18 per minute.
What happened to the good old days when RE values dropped at only $1,000 a day? You Santa Cruz sellers best get on the stick.
Oops, I meant good luck to you.
Senator Dodds defense so far is that he didn’t know he got favorable treatment on a loan from Mozilo . Now I hear chatter that some of the Senators are saying that there needs to be a law for a procedure to allow Senators to apply for a loan to prevent them not knowing when they are getting a bribe .
So here we go again with the ,”there need to be a law enacted ” when its pretty clear what the law on the books is already regarding Senators receiving gifts .
Then why the f did Johnson suggest that Dodd call Mozilla? To say “how ya doin?” I hate these hypocritical cheaters.
In fact ,I think the new Defense of Choice these days whenever anyone is busted for anything is ,”There need to be a law enacted to prevent this activity”.
Lenders get busted for making fraudulent loans and passing them on to Wall Street ………..”There need to be a law enacted that prevent predatory lending “.
Borrowers submit liar loans ,than default ….”There needs to be a law enacted that will bail out borrowers who can’t afford their loans ”
Senator Dodds violates the gift laws and receives a gift of favorable treatment on a loan …..’There needs to be a law in which Senators can have a procedure to get a loan when they don’t have knowledge they are receiving a bribe. “
I have a question, at the risk of exposing myself as someone who, despite having read this blog on a daily basis for several years, is still in the real estate “kindergarten potty-training class”.
Let’s say that you sell a house you’ve owned for seven years or so for more than what you paid. After interest, taxes, insurance, maintenance, commissions, and all the other expenses you break even (no overall profit, no overall loss). Was is still worth it? I’m thinking, and I’m probably naive, that at the very least you lived in the house basically for free all those years.