The Homeowners Know The Truth In California
The Sacramento Bee reports from California. “California’s free-falling home prices sparked a fourth straight month of year-over-year sales gains during July, the California Association of Realtors reported Monday. Median sales prices were down a record 40.3 percent from July 2007, CAR reported. ‘Deeply discounted, distressed sales continue to drive volume in many regions of the state,’ CAR President William E. Brown said in a statement.”
“C.C. Myers couldn’t fix this one. The legendary highway contractor, has filed for personal bankruptcy. Myers is being sued for $40 million by Wachovia Bank over Winchester Country Club, an Auburn golf and luxury housing development that he personally developed.”
“‘There are some very unhappy people around here,’ said Richard Shepherd, a Bay Area transplant who retired to Winchester with his wife four years ago.”
“He said many homeowners were worried about declining equity in their homes. They’re also fretting that their club and golf memberships, for which they’ve spent tens of thousands of dollars, could decline in value. ‘We love it here,’ he said. ‘We just feel sorry for the people who’ve lost their equity, the money they pumped into being a member. It’s a mess.’”
“Kathryn Boyce, an analyst in Sacramento for consultant Hanley Wood Market Intelligence…said none of the project’s 24 custom-built luxury homes has been built or sold. Those homes, which Myers expected to sell for more than $2 million each, were supposed to snare wealthy Bay Area and Los Angeles buyers.”
“‘We’re talking about highly wealthy people who mostly travel on private planes,’ said Myers’ son, Clint W., president of the Myers’ firm’s home building division.”
“‘That’s our target. You can fly into Auburn with a Learjet,’ the younger Myers told The Bee in 2006.”
The San Francisco Chronicle. “In the Bay Area, sales increased 6.7 percent, and the median sank 21.2 percent to $663,190. ‘We are seeing a robust response to improved affordability,’ the Realtors’ Chief Economist Leslie Appleton-Young said. ‘But obviously the $64,000 question is when will we be at the bottom? I don’t think we’ll see that this year.’”
“Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley, had a more bearish take on Monday’s numbers.”
“‘It doesn’t reflect a recovering housing market; it reflects a broken housing market,’ he said. ‘It’s a reflection of the fact that foreclosed homes are being liquidated at very low prices.’”
The Contra Costa Times. “Contra Costa cities hardest hit by the foreclosure crisis say the county assessor has made their fiscal situations worse with wholesale downgrades of property values. Just doing my job, says Gus Kramer.”
“The county is not alone - assessed values dropped in almost every Contra Costa city. ‘You wouldn’t believe some of the conversations I’ve had and with who I’ve had them,’ said Kramer last week. ‘They’ve been ugly, very ugly.’”
“Kramer also acknowledges using foreclosures as comparisons in certain instances. Foreclosures used to be considered anomalies, Kramer said, and would not be considered in assessments.”
“‘Today, with 50 percent of properties on the market being foreclosures, they are the market. It’s like trying to ignore the 800-pound gorilla in the room,’ said Kramer, whose office is across the street from a Martinez subdivision he reassessed. Those homes were selling in the low $600,000s, and now peak in the high $400,000s, he said.”
“‘Look, everybody wants to blame somebody, but that’s OK. I’ve got broad shoulders. They can blame me until the cows come home. They know the truth and, more importantly, the homeowners know the truth,’ he said.”
The Merced Sun Star. “The New York Times, in recapping Merced’s housing market climb and crash, drew an obvious conclusion: No one planned ahead. And numbers from July — showing more foreclosures than sales — demonstrated the continuing toll from that lack of foresight.”
“Some residents genuinely can’t afford their payment, he said. Yet other owners see abandoning their home as a wise long-term financial move. So they accept about five year’s worth of bad credit and walk away from the house, real estate agent Andy Krotik explained.”
“It makes little sense for them to pay off a $300,000 investment that’s depreciated by half. ‘Is it better to have bad credit for five years or live up to your obligation?’ Krotik asked. ‘There are true sad stories, but there are a lot of business decisions out there.’”
The Ventura County Star. “Ventura County sales for existing homes last month rose 20.6 percent from a year ago and 25.6 percent from June, California Association of Realtors reported Monday. The median was $475,000, down from $480,340, or 1.1 percent, from June and from $682,930, or 30.4 percent, from July 2007.”
“Even in more prominent areas such as Thousand Oaks and Westlake Village, short sales and foreclosures are a problem, said Bob Merritt, a yacht broker who has been trying to sell his Thousand Oaks home for the past year and a half.”
“‘It’s everywhere,’ he said. ‘I don’t think there’s one area that’s immune to it.’”
“In order to compete with the distressed property selling for so much less, Merritt lowered his original asking price for his 2,653-square-foot, 4-bedroom, 2.5-bath home with a pool and spa from $969,000 to $799,900. But he won’t go any lower.”
The San Gabriel Valley Tribune. “Home prices in Los Angeles County dropped 3.6 percent in July compared with June, and they were down 27.3 percent from a year ago, according to a report released Monday by the California Association of Realtors.”
“Statewide, the median home price dipped 40.3 percent from 2007 prices, which was the largest decline ever recorded.”
“‘Once again, the 40.3 percent year-to-year decrease in the median price of a home was an all-time record, surpassing the previous record set in June with a 37.9 percent decrease,’ said CAR Chief Economist Leslie Appleton-Young in a statement.”
“Hacienda Heights’ median home price in July was $345,000, down 43 percent compared with July 2007. Last year, ‘the prices were just way too high, way too overpriced,’ said real estate broker Ann Ellis-Hall, who works in the area.”
“Houses down near the 60 Freeway have quickly lost value. ‘Those houses never should have been sold so high,’ she said.”
“A few years ago, said Realtor Martha Calder in Hacienda Heights, people illogically assumed that home prices would keep rising. ‘It didn’t take a genius to see these home prices were going to fall,’ she said.”
The Daily Breeze. “The South Bay’s median home price fell 13.4 percent in July to $597,250, compared with the same month a year ago. Local real estate broker Mercedes Santacruz said Lawndale is seeing numerous foreclosures and short sales. ‘There are quite a few that have gone to short sales and foreclosures. Prices are down,’ said Santacruz.”
“Lawndale’s median home price fell 20 percent in July, to $380,000, compared with July of last year. ‘Carson is terrible right now,’ she said. ‘The east side of Hawthorne is really bad because of defaults.’”
“Carson’s median for July was $357,500, down 30.6 percent from a year earlier. Hawthorne’s median was $480,000, down 16.3 percent. More upscale areas of the South Bay also were down. Torrance saw a median drop of 13.2 percent to $564,000. The median in Redondo Beach fell 10.5 percent to $752,000.”
The North County Times. “A North County real estate company has sued a lender for a failed short sale, a transaction that has become increasingly popular while home prices tumble.”
“‘To me, in general, (the lawsuit) speaks to the level of frustration people have in dealing with short sales,’ said John Woodall, a Vista real estate agent who specializes in foreclosures. He said about 50 percent of all short sale deals fail. ‘Most everyone is on edge in this market,’ he said. ‘There’s a lot of skittish, nervous and occasionally angry people in the real estate market. And justifiably so, it’s a tough market.’”
“A spokesman for Aurora Loan Services, a division of investment bank Lehman Brothers, declined to comment. Aurora holds a $587,000 loan on the Tucson, Ariz., home and accepted the short sale offer of $158,000, a 73 percent drop in value, according to the lawsuit.”
The Desert Sun. “The Coachella Valley’s median price dipped to its lowest levels since January 2004, helping boost July’s housing sales. July’s $274,000 median price is down 8.7 percent from June and down 28.8 percent from July 2007, according to new figures from DataQuick.”
“New construction continued to struggle. In July, 93 new homes were sold, which is down 53.5 percent from 2007.”
“A significant number of bargains are out there, too, said Sam Schenkl, executive officer with the Palm Springs Regional Association of Realtors. He mentioned Palm Springs condos that were in the $100,000-range and a listing that was priced in the $1 million range is now drawing multiple offers at $599,000.”
“The latest numbers show nearly half of the Coachella Valley could afford an entry-level home during the second quarter, a record rate. ‘Buyers are in the best place they’ve been in years,’ said Greg Berkemer, executive VP of California Desert Association of Realtors.”
The Press Enterprise. “Some of the people who used to build housing tracts in Inland Southern California thought the boom would provide them with a living for the rest of their working lives.”
“On Tuesday, many of them started learning about some of the alternatives. The Riverside County Economic Development Agency brought out-of-work construction workers together with job-training officials and union leaders for the start of a process to determine how the workers’ skills might match up with the current economy’s needs.”
“Jerry Carroll spent 11 years laying tile at high-end homes in the Coachella Valley. Carroll, like several other construction workers, never expected the residential construction industry to dry up to the degree that it has.”
“‘It’s in your mind it’s a bubble. We knew the bubble would burst but not this bad,’ said Bryan Ricks, 38, of Riverside, who owned a flooring company that employed 12 people. ‘It was perfect, smooth — and then it just dropped off to nothing.’”
The Bakersfield Californian. “Call it the last gasp of no-money-down. In recent weeks, homebuilders have loudly advertised zero-down options at entry-level tracts around Bakersfield. That’s because a seller-funded program - one widely used during the recent boom - is slated to end Oct. 1.”
“Bakersfield homebuilder John Balfanz said losing the program is going to hurt. ‘It’s been a good thing, so I hate to see it go,’ Balfanz said.”
“His company builds houses in a half-dozen communities around metropolitan Bakersfield with prices ranging from $1.6 million down to $200,000-plus units in Bella Vista, an entry-level tract south of Hosking Road on the west side of Highway 99.”
“Ads for Bella Vista currently tout the zero-down option, something Balfanz said will continue as long as loans continue to close before the Oct. 1 deadline.”
“‘I think people who buy right now are going to be smiling in three to five years,’ he said. ‘It’s a fantastic time to buy.’”
“Like many others involved in real estate, Balfanz thinks no-money-down loans are part of ‘what got us in this trouble in the first place.’ ‘Why not walk?’ he wondered, if your own money isn’t at risk.”
“The market could be healthier if buyers have to ’scratch and claw to put money together’ for a down payment, he said.”
“John Lara, broker of San Joaquin Realty in Delano, said about 80 percent of homebuyers his company works with make use of seller assistance. The coming change could ultimately nudge folks back to piggy banks.”
“‘If they want to buy a home, they have to start saving money,’ Lara said.”
“A North County real estate company has sued a lender for a failed short sale, a transaction that has become increasingly popular while home prices tumble.”
“A spokesman for Aurora Loan Services, a division of investment bank Lehman Brothers, declined to comment. Aurora holds a $587,000 loan on the Tucson, Ariz., home and accepted the short sale offer of $158,000, a 73 percent drop in value, according to the lawsuit.”
If the offer was accepted and the home sold, where is the failure? ME CONFUSED.
Another frivolous lawsuit.Maybe the house was foreclosed on before the short sale was complete.Sounds to me the house was not sold short.
As far as I know both lenders, 1st and 2nd have to approve of the sale so maybe a problem there.
I know a lot of 2nd loans are in bad shape right now because if their is default on the house the first gets paid in full before the 2nd gets a dime.A lot of these foreclosures usually don’t have enough equity to pay the 1st in full let alone a 2nd.So if the 2nd knows that a short sale will yield them nothing why would they agree? I wonder if the first and 2nd lenders ever talk about making a deal to let the 2nd get some money even if their really is no equity left for them.Sometimes I guess it could be an advantage to a 1st to throw a few bucks to the 2nd so they don’t lose as much in a short sale vs foreclosure.
I know a lot of 2nd lenders are not allowing a refinance because they would have to subordinate their postion to the 1st.I guess it all depends on the recoding date. If a 1st did refinance a loan then really they would be in second postion to the 2nd and they will not due that. I guess it might depend on whether the person was taking cash out of the house which would be more risky to the 2nd in the case of default.I imagine the second looks at the details of the refinance before making a decision on subordination.
I’ve also heard stories where the 2nd will try to buy the 1st at a reduced amount. I guess in this manner the 2nd might lose their original loan but make it up by getting the 1st for less?
We’re getting closer and closer to that 22 cents on the dollar standard that Merrill Lynch established…
Slim checkin’ in from rainy Tucson. (Second day in a row that I’ve gotten the bike wet and had to clean and oil it. Grrrrrrrr.)
Truth be told, most of the houses in this h’yar Old Pueblo shouldn’t sell for much over $120k. Why? Because the median income here is about $37-40k.
“Truth be told, most of the houses in this h’yar Old Pueblo shouldn’t sell for much over $120k. Why? Because the median income here is about $37-40k.”
That’s right, Slim! However, we’ll never see this logic in the public press; reality’s bitter truth.
As Beavis would say: “They said pump member”.
hehe hehe heh
‘We just feel sorry for the people who’ve lost their equity, the money they pumped into being a member. It’s a mess.’”
They pumped a mess. Hehe hehe
..Balfanz thinks no-money-down loans are part of ‘what got us in this trouble in the first place.’ ‘Why not walk?’ he wondered, if your own money isn’t at risk.”..
Why not walk? If you have to ask the question you wouldn’t understand the answer..
I’m sick of hearing how the bankers, govt, RE agents, brokers, etc are the only crooks and scammers in this game.
Some a-hole “buyer” who starts it all by signing on the dotted line, borrowing big money, and then walks away because he feels like doing so is as low as they come in my book.
They may get 5 years in legal-purgatory but it’ll be forever in my book.
It would be great if the IRS goes after them for loan foregiveness.
They won’t - Congress eliminated that possibility during the last round of ’save the FBs’ bailout legislation.
sure, but that will encourage yet even more fb’s to walk
silver lining department
Yeah, that’s why I like the tax forgiveness. It helps speed things along, much like most of the bailouts so far.
Too bad that aspect of the tax code was dumped last year.
That provision expires 12/31/09. Watch the massive walk-aways at the end of next year by people trying to beat the deadline.
That is going to be one heck of a show!
I’m sure Barack Obama will extend it! And he’ll give you a $25,000 check as well! After all, you deserve it because you’re an American Hero for spending so much money that you didn’t have.
$25,000? …a pittance compared to what Johnny Mac would give financial institutions on Wall Street. Let these behemoths die for their sins; same goes for the individuals who made bad decisions.
The law change about forgiven debt on a RE loan for a primary residence has a catch. The money involved HAS to have been used for the purchase or upgrade of the residence. If you pulled money out of your equity and used it for something else (car, school, vacation, etc.), that portion of the forgiven debt is taxable income.
I don’t know how most states have handled this, but California does not conform to the law change, so the forgiven debt is still taxable income to the state.
I’ve yet to see someone get hammered by the IRS for loan forgiveness on purchase money. If someone has been taxed on purchase money loan forgiveness, they had crappy counsel.
Are you able to read a book? Because if you read the CONTRACT, which is what the mortgage is, it basically says if you fail to pay, the lender gets the house back. Ever hear the saying “contracts are made to be broken”? It’s just business, hello.
What he/she said.
It was a contract. Don’t like it? Don’t sign a contract. That’s how it works.
Whatever you say. But to claim that the buyer is unethical for deciding not to buy a thing at a grossly inflated price, and exercising his option not to do so.
And that the bank is not unethical for selling that product at a grossly inflated price in the first place (and the bank, with the professional appraisers, is the party who should know what the thing is worth).
Strikes me as ridiculous.
It’s a contract. Both parties entered into it aware of the possible outcomes. that’s why it’s called a contract.
Guess what Bob Merritt ? If you don’t want to lower your price anymore, you won’t sell it! In the meantime, move along.Another FdB. hehehehehehe
bah… A contract between two people who wouldn’t hesitate to screw each other isn’t even worth the paper it’s printed on.
Ethics, morality and commitment are being purged from society while selfishness and greed are promoted. But, since “everyone” is doing it I can understand why you have no qualms about following suit.
I’m with you, catspit. Have reported before that, over a 15 year period, I had three repo’s and one short sale. On one repo I actually made money, on the other two I lost small amounts. I do not “blame” the borrowers, I was stupid for not making them pay more money up front. No more of that…the last loan that went awry was a loan I made in 2001. Whether they could’ve paid is beside the point. The contract said I would get back the property, and I did get it back.
Update on my current problem borrower (they skipped July payment but made August at the appropriate time). I had told them if they don’t make up the July payment by the end of the year, their monthly payment amount will increase. They are saying they will be putting money aside so that they can pay July with December. We’ll see, I think they believe me. They’ve been trying to refi with a bank (I’d love to be rid of them), but no soap radio of course.
I think a contract is kind of like the relationship between soccer hooligans and the police at a stadium. If one person breaks the “contract” by being an a-hole, then he gets his ass beaten, but if everyone riots, then we’re all effed.
az-lender.. i have a hard time believing you are with catspit on this issue..
If you lend someone money and they bail out and leave you holding the bag, are you gonna sign another contract with them EVER again? EVER again lend them money?
Can you (or anyone) write a contract wherein you can be positive they won’t have (and take) the opportunity to screw you over again?
These hypothetical discussions about law and ethics do not begin to approach the realities of business life. Sure, everyone gets one chance to legally f**k someone, but after doing so their name is mud.. and it applies in all walks of life, not just business.
I’d have to agree with catspit in this one. If a borrower were to be foreclosed upon due to unforeseen circumstances (ie not because the borrower wants to), and the house’s value were to appreciate, the bank wins because they can sell it for a profit as dictated by the FMV at that time (assuming appreciation of house prices). Now that house values are falling, and lenders are “left holding the bag” because of falling house values, then the borrowers are then viewed as unscrupulous? The terms of the contract didn’t change. Just the direction of the delta in the house’s value.
Just my opinion.
Banks loan money. You promise to repay that money + interest according to a schedule both of you agreed to.
The house, car or boat, beanie babies, their value, appreciation or depreciation.. color, style, useful lifespan, market conditions and anything else about the assets are all immaterial. Banks lend money, period.
YOU spent their money.
default: The condition of failing to meet an obligation.
renege: To break a promise or commitment; to go back on one’s word.
You guys can jerk this around any which way you like, but you do not have the moral high ground.
Joey -
No - you do NOT promise to unconditionally repay the money - you promise to repay the money OR the bank takes the house. Why do you think that the buyer must unconditionally repay the loan? There is no promise of any kind that says this.
There is no stated or implied other moral issue here.
If someone refuses to repay a loan there certainly are consequences, the precise nature of which could be any number of things… but the point remains that, to quote you, “..you promise to repay the money..”.
The idea behind the bank being able to lend the buyer the money is that bank accepts the value of the collateral (the house) in lieu of the buyer being able to repay the money lent (foreclosure). No one’s pointing the proverbial gun to the lender’s proverbial head to lend the money and accept the stated value of the collateral.
collateral (noun): Property acceptable as security for a loan or other obligation.
You’d like to think that the bank did its due diligence, performed the necessary underwriting and appraisal, and lent that money based on the information presented. You’d like to think that the bank looked at the inherent risks and made contingency plans. They made an investment and took the risks associated with it. By the same token, you’d like to think that the buyer did the same due diligence. Buyer reneges, surrenders collateral. So the value of the collateral declined, but that’s not part of the contract.
Then again, you’d like to think that the lenders then become aggressive in their underwriting and asks for stringent appraisal guidelines which effectively devalues collaterals to what the lender thinks they’re worth.
Or, they could always just ask for 20% down payments. But even that might not be enough in some areas where house values are still (steeply?) dropping given the current economic conditions.
Again, just my opinion.
The possibility that a borrower will default is always a risk. Lenders intend to minimize that risk. They do this through careful evaluation of potential borrowers.
If you want to be fair and righteous about it, tell the bank ahead of time that you fully intend to walk away from any obligation to repay the loan if the house value ever falls below what you still owe.
While they may thank you for being honest, they will certainly reassess the risk of lending you money… or may just show you the door.
By your reasoning, let’s look at a hypothetical situation:
Buyer 1 - high DTI, low FICO, 0% downpayment, and tells the bank up front that they intend to stay in the property even if its value falls below what they owe.
Buyer 2 - low DTI, high FICO, 20% downpayment, but tells the bank up front that they fully intend to walk away should the property’s value fall below what they owe to mitigate loss.
I suppose, then, that the bank is more likely to lend to Buyer 1, simply because they “stated” (let’s put it in writing even) that they intend to stay in the property?
Maybe it’s just me, but perhaps the bank might have a tough decision in its hands. Or perhaps I’m over-simplifying things. I’m putting this in a vacuum, but the question becomes: does one’s intent outweigh all the other identifiable factors to determine one’s creditworthiness?
Of course, there’s that whole “there’s a lot of other qualified borrowers out there. Thank you Buyer 1 and Buyer 2″ thing, and a bunch of other factors, but I’m just focusing on that whole “intent” thing.
Finally, please keep in mind that the written contracts I refer to were the ones made during this past housing mania, where Buyer 2 “learns” from the process (in real life, would they even tell their intent up front?) and simply goes to the bank next door where there is a more willing bank to lend money.
.. does one’s intent outweigh all the other identifiable factors to determine one’s creditworthiness?
If someone’s intent is to NOT pay me back the money i might lend them then yes, their intent does outweigh their creditworthiness.
The problem then becomes: how would you know? As it played out, most banks didn’t or couldn’t know (or perhaps didn’t even care since “this time it’s different”) a lot of what borrowers’ intents were then. They didn’t want to be fair and righteous.
If they only knew, indeed. And if I only had a crystal ball. Then I’d look for the BIGGEST Mega Million jackpot and bet on it.
But I digress.
If only life were so perfect.
By exercising some small ability to read people, I endeavor to deal only with people of good character. Such people highly value their reputation and won’t risk tarnishing it.
This alone can easily outweigh their net “worth”, or the security offered by a downpayment, the accuracy of an appraisal, or the exact wording in a contract.. the effects of an economic downturn, difficulties presented by unforeseen setbacks, etc.
They won’t promise what they know they can’t deliver. They won’t take advantage of your weaknesses or exposure. They want to prove themselves worthy of your trust (and btw, you’ll need to be worthy of theirs or they won’t do business with you).
Sure, despite their best efforts there’s a chance they might still fail in an obligation.. we all do at times.. but what more could you ask for?
Darn tootin’, FPSS.
Why, just last week, I was out on my evening constitutional when what should I see but a buncha folded up papers on the ground. Well, I needed some scratch paper for writing a note to myself, so I picked up the newfound treasure.
It was a lease on a nearby house. And it looked as though the prospective tenants read it, then decided not to sign.
Oh, well. Their trash was my scratch paper treasure.
I have no idea what that means Slim. You voting McCain? Probly should if you’re convinced middleclass serfs being foreclosed is solely their own dang fault.
A treasure and a story to share!
“In order to compete with the distressed property selling for so much less, Merritt lowered his original asking price for his 2,653-square-foot, 4-bedroom, 2.5-bath home with a pool and spa from $969,000 to $799,900. But he won’t go any lower.”
Like anyone gives a shit, pal. Someone will buy it from the bank in a couple of years for 350K. You’ll be down on the wharf servicing bums. See ya.
You mean, you’ll be one of the bums?
Seriously, I love how these sellers still think that they are in control of the price. Like they have some sort of power or status just because they “own” the house. When buyers with cash start to realize that *they* not only hold all the cards, but the more cash they have the *more* they can drop the price, we will start to see capitulation. Because very soon, the only buyers left *will* be the ones with only cash. Ie, most of us on this forum.
“Because very soon, the only buyers left *will* be the ones with only cash. Ie, most of us on this forum.”
I agree. There’s a dwindling supply of fools who believed the hype “It’s a great time to buy”, for the last year. Next leg down 2009.
Yes, you guys prop me up every time I start to think that I am just tired of waiting and wouldn’t mind overpaying a little bit for my next house. But it wouldn’t be “a little bit,” would it. Thanks for helping pass the time while we all watch paint drying.
IMHO, the capitulation won’t start until the mark to market of houses begins in earnest with heavy duty downward re-assessments by everyone envolved in this national RE FRAUD.
There’s untold billions in “paper-money and” wealth envolved here. These explosive equity vapors go all the way up to the FED and the US Treasury. No Smoking …Please !
Local RE agents, local banks, lenders, local gov’ts, cities, states, Wall Street and the Federal Gov’t with their agencies, are TERRIFIED of any legitimate and lawful downward re-assessments of houses because it is is loss of wealth, jobs, spending, productivity, revenue and even the national economy and therefore the financial/banking of the entire United States.
It’s “in everyones benefit”, in this housing SHELL GAME, to fight tooth and nail, the boogeyman on Main Street, USA … RE-ASSESSMENTS.
b..b..But that’s just mikey’s humble opinion
As has been said here before:
I won’t go any lower than $70/share on my LU shares.
(And please contact me if interested. I’ll throw in a free flat screen. LOL.)
I think I finally sold at $9 per share. Sound right? -:(
You guys mean post-reverse split?
“In order to compete with the distressed property selling for so much less, Merritt lowered his original asking price for his 2,653-square-foot, 4-bedroom, 2.5-bath home with a pool and spa from $969,000 to $799,900. But he won’t go any lower.”
Not a problem Bob, you just get to keep owning it. You probably didn’t really want to sell anyway. Being a Yacht broker I am sure you know it’s not really the price that counts, it’s what makes you feel good, and what you feel it’s worth.
I’m sure if some Chinese guy came along and offered 799,888 he would take it.
2 years ago we almost bought a 3/2/2 (about 35 years old) sfh in San Ramon. Asking 749k, offered 730k, they dropped to 740k, we countered 735k, they refused to come down any more. We said okay we’ll take it subject to the normal contingencies. Did inspections, found some minor problems (including vermin underneath the house), wifey and I looked at each other and asked ourselves “what in the hell are we doing?”, and backed out with our deposit but about 1k poorer after inspection fees, etc. House was sold soon after to the lucky “alternate buyer” for 735k. Today that same house would probably go for about 650k or even less, based on current comps. So that was the best decision we ever made.
Fast-forward today and we are still happy renters, and no longer bitter. Paying a high rent to live in a great school district and beautiful neighborhood, but about half as much per month (after deductions) compared to buying the same house (would sell for about 2 million or more today). Given the sticky nature of local house prices I doubt we’ll ever be able to buy here given my current salary prospects (I barely make over 100k) but we’ve found renting to be a viable option with the help of some fixed-income investments as a supplement. We eat well, have nice furniture, go on vacations, wife doesn’t have to work, I don’t have to kill myself at my job, all the while feeling that house prices are no longer running away from us. Even me losing some capital with ill-timed shorts in the stock market (yeah, really!) hasn’t affected our lifestyle. So while we are not really getting ahead, at least the feeling is we are no longer falling behind. Given our zero debt it’s an acceptable situation for us at the moment.
No problem renting. Me and my Wife have been renting the same four bedroom house for 5 years. The landlord loves us and we’re still paying 2003 rent prices.So what we pay is probably 1/4th that of buying even now. We’ve been saving for 7 years and as of now could easily move just about anywhere else in the country and buy for cash with some leftover. The Bay Area is heavily over-rated in my opinion. As soon as retirement is taken care of, we’ll be set and be on our way out. There’s a better quality of life to be had elsewhere.
Hi Jetson:
I think everyone agrees that the BA is overrated. Everyone I know plans to move out upon retirement. It’s really sort of icky here, don’t you think?
Every time I get a little urge to buy something, I just go over the numbers, in my head. I see how much more we are ahead each month versus throwing money away on interest payments, the urge quickly subsides. In New York the rent to buy costs are still so far out of whack it simply makes no sense to buy.
Me and the wifey did a similar thing in 2005.
One house we were pressured by the seller, their RE agent, and our RE agent (we were dumb, no other reason) about a $5.0k difference.
At one point in a meeting one of the RE agents said to me (why me, why can’t the sellers budge?) about our difference in price, “But it is only a $5000 difference.”
My response: “If you consider $5000 to be something that small why don’t you pay it?” And “I don’t make enough money to be throwing away $5000″. Of course, everyone made the statement that it would be over 30 years, so I coutnered with, “I don’t want to be paying interest on $4000 for the next 30 years.” No one could figure out why i said $4000 until I explained we had 20% down.
Needless to say, that meeting ended shortly after, thankfully without a purchase. I suspect that house fell by well over that $5,000; methinks more like $50,000.
“In the Bay Area, sales increased 6.7 percent, and the median sank 21.2 percent to $663,190.”
BTW, the headline of this front-page article in today’s SF Chronicle was “California Home Sales Soar As Prices Plunge”.
Sales soared??? The whopping 6.7% that was due to the large availability of foreclosures?? LOL.
I continue to be in awe of the gravity-defying prices in my neighborhood of Fremont (Mission San Jose). While admittedly the upscale part of town, units like the one I rent (duplex, 1700sf, 3br, 2.5 ba) are still asking 830K and going pending in <45 days! The last one is right across the street.
http://www.realtor.com/search/listingdetail.aspx?zp=94539&ml=3&mnp=37&typ=1&sid=5531b0504bd940bcaba5293618521f7d&sdir=1&sby=2&lid=1101701285&lsn=7&srcnt=154#Detail
http://www.realtor.com/search/listingdetail.aspx?zp=94539&ml=3&mnp=37&typ=1&sid=5531b0504bd940bcaba5293618521f7d&sdir=1&sby=2&lid=1101689661&lsn=8&srcnt=154#Detail
http://www.realtor.com/search/listingdetail.aspx?zp=94539&ml=3&mnp=37&typ=1&sid=5531b0504bd940bcaba5293618521f7d&sdir=1&sby=2&pg=2&lid=1101727720&lsn=12&srcnt=154#Detail
Wish the slide would get started already.
To be fair, the headline says California sales soared, not Bay Area sales. California July sales were up 43.4% YOY.
I wonder what the inventory change is? I looked at housingtracker.net, and found that San Diego, San Francisco, San Jose, and Santa Cruz are experiencing a slight decline in inventory. I wonder what that means. I don’t see how we could be close to bottoming out yet, at least not in the “good” areas. Perhaps the Stocktons, Los Banoses, and Modestos have bottomed.
No, What’s happening is the FBs that can are taking their houses off of the market. I have seen it in my own area. There was a house which was for sale for 4 months starting out at $1.2 mil dropping to $945k and did not sell. It was taken off the market probably until the magical springtime! What a joke!! There is one house up the road which started at $1.1 mil dropped to $845k and was under contract for 3 weeks until it came back on the market. The people probably could not qualify. The house is a wreck and needs about $200k in work. It’s the original owners (circa 1973) who aren’t HELOC’d, just GREEDY. I hope it ROTS!!
“Sales Soar”
Where are all the realtors, etc to complaining about media market manipulation. Double standard, realtors?
uh… and it was 6.7% over last year, which didn’t sales plunge last year by 40% or some huge number? (I’m too lazy at the moment to go dig for last year’s July sales plunge from the previous years.) as far as I’m concerned their support for the claim of “surging sales” is piss on paper.
Seems like statistical noise. David Rosenberg (No Am economist at Merrill) says the real supply is nationwide is about 17 months’ worth and needs to decline to 8 months before price stabilization can begin. Hard to see how Calif can be any better off than USA, probably worse.
There has at least been some price discovery in California. Houses will sell right now if priced at about 40-50% off peak prices. If you’re quick on the foreclosure market you can maybe get something that cashflows. But right now the prices are that low only in distressed markets, the subprime and places where there were block sales with wacky loans in the 2004-2006 time period. 2009 will be when that expands to the larger market.
“Kathryn Boyce, an analyst in Sacramento for consultant Hanley Wood Market Intelligence…said none of the project’s 24 custom-built luxury homes has been built or sold. Those homes, which Myers expected to sell for more than $2 million each, were supposed to snare wealthy Bay Area and Los Angeles buyers.”
“‘We’re talking about highly wealthy people who mostly travel on private planes,’ said Myers’ son, Clint W., president of the Myers’ firm’s home building division.”
=========================================
The more I learn about the supposedly rich people in this country, flying around in leased jets, the poorer they appear…
“‘That’s our target. You can fly into Auburn with a Learjet,’ the younger Myers told The Bee in 2006.”
But why would you? Smog and heat in Sacramento. Me thinks the Lear Jet crowd prefers Pebble Beach. And the “crowd” is not that huge.
That’s been my thought too. The number of Americans who ever legitimately could afford the posh lifestyle being envisioned was small, and it’s getting smaller rather than larger.
Especially in comparison to all of the cool places you could live with that kindo money.
“‘That’s our target. You can fly into Auburn with a Learjet,’ the younger Myers told The Bee in 2006.”
That line immediately jumped out at me. In 2006, Peak Oil was well-known; not among the mainstream, but by anybody who with a curious mind who wondered how we went from $10 per barrel in 1998 to $75 per barrel in 2006.
But not Clint, he didn’t wonder at all.
BubbleViewer,
You’ll get no argument from me! Isn’t it incredible that 10 bucks a barrel was only 10 years ago? I happen to think it will trend back toward $60 or $70 but that doesn’t really matter, everyone has their projections?
What I find simply amazing is that aero-mfrs. actually BELIEVED there were that many people that could actually afford it?! Are you kidding me? Now that you mention it anyone that owned a home ( in ‘06 ) had their own ATM machine so why not, right?
Well we’ve already seen articles about how these wingnuts are scaling back etc. Just look at all the trinkets we cranked out, ALL primed with home “equity”.
They are scaling back only in the US, or going fractional.
Overseas sales are 60% of the new deliveries this year. First time in the industry’s history where overseas sales exceeded domestic sales.
Last I heard, if you order one of the new Gulfstream G650s today, you might see it in your hangar in 2018.
Oh so at least we finally know where the name comes from? It wouldn’t surprise me though. In much of the rest of the world wealth is still measured by having lucrative and successful businesses. Unlike here it’s Job=FICO=Debt=Wealth.
( I’ve spoken to a lot of fin. planners etc. that have to smirk when they hear client’s wives say “I’ll never fly ‘commercial’ again!” ) Really dear?
If they are flying client’s wives, the clients are “paying” for the trip, not the company. IRS rules, you see. About 95% of the “personal” trips went away when the IRS put out the rules regarding personal travel back in 1986.
Where I am located, a trip to either coast is a three day slog in steerage vs. a one day out-and-back on the airplane…….meaning, paying three days worth of salaries, plane tickets, travel time, meals, hotels, etc. to do one day of business in NYC or Cali.
Plus, on your own airplane, you can actually get some work done, vs. having Mrs.Dilfarbs screaming brat puking all over your laptop. Nobody gets sick flying corporate jets, because you aren’t breathing the same air the guy in seat 18B is hacking his guts up into.
But I agree……when the high rollers go down the tubes, the first thing that gets shoved under the bus is the airplane.
A $200k Swiss watch might not get noticed somehow, resting on the wrist of a CEO anxiously hoping to impress others of his ilk, but owning a Gulfstream is like a cat marking it’s territory…
Nah
Gulfstreams are passe
The desired craft is the HondaJet. Quieter more room and better mileage.
“The more I learn about the supposedly rich people in this country, flying around in leased jets, the poorer they appear…”
I’m sorry, but if I had a private jet, Auburn is the last place I’d think of going.
The problem here in the Sacramento area is that they built all sorts of places for these rich people to buy.
This Country Club is not the only one. You have Serrano in El Dorado Hills as well. About 80% of the houses built there recently were by speculators.
Even in Granite Bay, were Eddie Murphy used to live, there is an incredible # of homes that were recently built. I would guess about 80% of them.
Most of the mansions built in the Sacramento area were by speculators. And some were built in the worst places imaginable.
We had a 9000 sq.ft. house in 1 acre with river view that was competing with a similar home, in .5 acres. Both had the same price. Neither have sold. The house built in the .5 ac parcel is not even located in a really nice area.
There was another 4000 sq.ft. that was built around houses that did not exceed 2000 sq.ft., with the average being 1500 sq.ft.
Of course, it is not mentioned that Auburn is far away from Sacramento…
That’s why we have helicopters, too.
I guess I would be good to comment on this since I live about 1 mile away from Winchester. Around 1996 I got kicked off the property by CC Meyer himself as I was mt. biking on some old horse trails. He’s a prick in my book ever since. Anyhow, he was in a Suburban with a bunch of other plaid noosed business types with a bunch of blueprints scattered around the big truck.
Technically, Winchester is in Meadow Vista. Nobody has heard of Meadow Vista and very few more have even probably heard of Auburn. As far as Winchester goes, all the houses are super nice. Some very rich people live there. The golf course was rated top 10 in California. Now they are opening the course to the public, this has the club house in a ruckus. Another thing that really got buyers pissed off was that Placer County would not let Meyer’s gate the property for Fire and safety reasons. No longer was this going to be a private access neighborhood, but anyone could go in, and we do.
Here’s the kicker. You have established places in Granite Bay like Las Logos. Pro basketball players living next to Eddie Murphy and John Travolta. There are a couple more around as well. Not only do you have Winchester, but you also have Dark Horse, its a cheaper version of Winchester. Nevada County had to take over the power and water as the owner/contractor ran out of money. Couldn’t sell a lot to save his life. Very nice golf course with a for sale sign on almost every house that was built and all the empty lots.
I cannot believe they are selling house like this in meadow vista.I lived there for a couple years and went to placer hills elementary school.Homes are way overpriced in that area.I wouldn’t pay over 300k for anything there.
Winchester country club, for sale:
For Sale: $1,595,000
4 beds, 3.5 baths, 4,643 sq ft
Monthly Payment: $ 9,016 30 year fixed rate of 6.28% with 20% down
Same house for rent:
5BR/3.5BA Single Family House $3,195/month
http://tinyurl.com/5n83gn
“The more I learn about the supposedly rich people in this country, flying around in leased jets, the poorer they appear…”
I’ve been thinking about this a lot lately, maybe because I am part way through “Your Money or Your Life”. I can never imagine being tired of ‘quality’ (fine tailoring, good craftsmanship, cashmere, cotton), but bling is a whole ‘nother thing. I have realized there is a whole other side to “value” that I never thought of before. Appreciating one luxury at a time and seeing the luxury in, for example, good quality food. Learning how to appreciate having what you have (especially if you have what you need) seems like an important key to happiness and to maturity - and takes a few hard knocks to learn.
On the Sopranos, sometimes they would show stacks of luxury items that “just fell off the back of a truck”. It was striking how unimpressive the luxury goods looked in large quantities.One gold watch looks special, a big box of gold watches is almost pathetic looking. It’s like the emotional side of supply and demand.
I like good food. I like good food a lot.
I probably blow 50% of my budget (after rent) on food, and I blow a lot, trust me.
Of course, I’m a really good cook and I seldom buy prepped stuff so the marketing/packaging/transportation stuff doesn’t apply to me.
Oddly enough, most of my meals (per person) are cheaper than McD’s. So what exactly are people blowing their money on? I am perpetually mystified.
“Of course, I’m a really good cook”
Me, too!
But I didn’t start off that way, it took a few years. I realized recently that this qualifies as an investment (the time and energy to learn to cook)…and it has tangible dividends! I like to to think my husband married into “dinners” if not “money”
I am going to be buying stocks of fresh tomatoes this weekend for a big batch of basic tomato sauce, which I will be developing into some nice frozen assets - ones which will shortly liquid again. hee.
(orange you glad I didn’t make a joke about “dough”?)
I can’t cook but I make really good garlic toast.
Keeps the vampires away
The biggest thing about cooking I’ve learned from experience is, easy on the heat. Lower heat and longer cooking times. 300 F is a really great temp. for frying
Your Money Or Your Life is a fabulous book.
it is, AS. I am trying to work out a value system for myself, and it helps. It is causing me to think about what I actually believe in. This is something that will take some time. The problem with putting together your own value system is that you will never completely ‘belong’ anywhere. On the other hand, I often find common ground with different people, so that’s good.
So far I believe in: dried beans! Cheap, good for the environment, good for your health, got them in every culture…possibly they could be a foundation for lasting world peace and they’re very pretty on my counter. They are the opposite of cheap mass-produced dollar-store “stuff”, which I am finding increasingly unbearable.
I believe that no one would be my friend if I ate beans.
I will be your friend. But then again, I am not in the same room as you
I know a fellow who’s so well off that he owns his jet. But he wasn’t the one who told me so. A mutual acquaintance did, and I couldn’t believe my ears. I mean, this fellow just doesn’t seem like the type.
The millionaire next door? I have a sorta-same story: Let me first say I wasn’t prying. While visiting my late-70’s folks, I noticed some papers on the kitchen table as we set talking. A report from my father’s broker listed his investment assets at 3M+.
This is man that wears 20 year old shirts, drives a ‘91 pickup, and never made 100K in his working life. But a true child of the Depression he is, and believes in the ultimate morality of a hefty saving account and zero debt.
You’re right, Slim. They never seem the type.
That’s how he turned the 2 mil into 3 mil, wearing old shirts and driving a 91 pickup.
Almost everyone that’s loaded never brags.
It is usually the new, new money that’s irritating.
Mike
Wait a second. How do we know they can’t afford it? And if they can, I thought the popular line around here was, “if it floats, flies, or f@cks, rent it.”
That line went out of style.
There are people selling $2M homes sites elsewhere… like in Hawaii.
“The latest numbers show nearly half of the Coachella Valley could afford an entry-level home during the second quarter, a record rate. ‘Buyers are in the best place they’ve been in years,’ said Greg Berkemer, executive VP of California Desert Association of Realtors.”
This bs line is annoying me. Again. I remember that in 2006 or so CAR changed their ‘affordibility index’ calculators so that zero-down, ARM loans became the standard by which they measured affordibility. That low-ball change managed to inflate the index about double the previous estimate.
My really slow-footed question is when will CAR revert to the calculators that represent today’s loan requirements? should I hold my breath?
turnoutthelights,
Now that is true. As long as we still convey serial re-financing ( and ever lower rates ) as the norm… things look much better don’t they? I have no idea where you would find purchase money for ZERO down these days? I don’t know, maybe CAR is just so f’d up they actually believe.?
I know what you’re thinking, Punk.
Did you refinance 6 times or was it only 5…
To be quite honest, you probably forgot in all the excitement.
Bein these are 3 year exploding ARMS, it’ll blow your checkbook clean off.
You gotta ask yourself a question…
+1
OK, that was just one sweet line!
Their formula was for a house at 85% of median, using an ARM with 10% down and payments at 40% of gross income as a first time buyer affordability index.
Problems:
* That’s a suicide loan. You can’t reliably maintain a payment at 40% of gross.
* They claim it is a “first time buyer” index, but they use the total population as the income base, including 40 and 50 year olds in peak earning years that are not likely to be in the first time buyer market.
What they’re really saying is that you can buy a bottom third house if you have a top third income and are willing to take on a suicidal loan and live like a hermit because all your money is going to the mortgage. No thanks.
The question the-hyphenated-one should be asking, is how long will it take for another $64,000 worth of value, to disappear?
==========================================
“In the Bay Area, sales increased 6.7 percent, and the median sank 21.2 percent to $663,190. ‘We are seeing a robust response to improved affordability,’ the Realtors’ Chief Economist Leslie Appleton-Young said. ‘But obviously the $64,000 question is when will we be at the bottom? I don’t think we’ll see that this year.’”
The real $64,000 question is, how many households that earn $64,000 can afford a house priced at $663,190 without using a suicide loan?
The $64,000 question is really a $663,190 question, it seems.
Really? I bet Leslie Appleton-Young heard that question a few years ago for, like, $22,000 and is hoping to make a tidy profit, now that she’s been holding onto it for a few years. I would be wary, and really lowball her on that question. It is probably full of grammatical errors and doesn’t even come with its own answer.
On the other hand, it’s also probably a stupid question and, as there is no such thing as a stupid question, it may be very rare and valuable.
Do you think I could get a job with the NAR if I practice thinking crazy-style?
Hmm, Lun and now A-Y. Is this the new talking point: “We won’t be on the bottom this year, so buy now!” ?
‘We are seeing a robust response to improved affordability,’ the Realtors’ Chief Economist Leslie Appleton-Young said. ‘But obviously the $64,000 question is when will we be at the bottom? I don’t think we’ll see that this year.’”
“Give him the medal!”
The medal was another figment of the imagination. According to the story, there had once been a leather medal for the best lie, but it had been — so the legend ran — buried with its most consistent winner.
However, the lie I sent to the Journal and the News was dressed up deluxe with a solemn story of the annual contest before a jury of newspaper men and lawyers — “their work making them competent to judge lies.” The award, my copy went on to say, was given to our retired sea captain, Anthony Delano, for his story of a whale he once passed that was three miles long. Naturally, the judges asked for proof. The captain furnished it: the ship had come abeam of the whale’s tail just at two bells of the morning watch, as the log was being heaved. The ship was running three knots an hour. At four bells, which is an hour later, the log was heaved again, and the speed was constant. And as the ship was just then drawing abeam of the whale’s head, it had taken a run of three miles to measure the whale, which was therefore three nautical miles long. Q. E. D.
For a runner-up to this yarn I offered the lagniappe of a spontaneous lie told by Police Chief Frank Beller. He, when asked for an entry in the contest, said “But I cannot tell a lie!” (Side note, for this he was the 1930 winner).
I have taken the liberty of submitting Ms. Leslie Appleton-Youngs quotes to the Burlington Liars Club. The Burlington Liars’ club gave an honored place to the Great American Yen for Overstatement. Although her lies are quite exciting, she doesn’t quite qualify “One thing is evident — and a matter of pride for America: all the stories are clean, parlor stories!”
http://www.burlingtonhistory.org/Liars_Club.htm
Foreclosure prices are the new comps, leading the market down the rathole, even in upper-middle income areas, as in nobody is immune anymore…
=========================================
“Even in more prominent areas such as Thousand Oaks and Westlake Village, short sales and foreclosures are a problem, said Bob Merritt, a yacht broker who has been trying to sell his Thousand Oaks home for the past year and a half.”
Excellent! We can only hope.
It’s unbelievable…people make a freaking living sell “yachts”…what a joke.
I knew one, he lives modestly, sells to Europeans. Mostly small boats, because boat makers in Europe had gone out of business in last decades (too much regulation, family businesses not profitable anymore, by now the skills are not there anymore). Thus Europeans buy from US a lot.
you all have probably seen this…
WASHINGTON (Reuters) - The number of problem U.S. banks on a regulatory watch list increased to 117 by the end of the second quarter from 90 at the end of the first quarter, the Federal Deposit Insurance Corp said on Tuesday.
The combined assets of the problem banks increased to $78 billion from $26 billion, the agency said.
Well, it’s a good this it’s contained, other-wise things would be really bad…
wamu is toast
‘We are seeing a robust response to improved affordability,’ the Realtors’ Chief Economist Leslie Appleton-Young said.
I don’t think it’s too hard to see a robust response when you are start from ZERO.
Hey there, Big V. Any word yet on when that East Bay BBQ will be?
No, I recently gave up on the whole auction thing. I’m waiting for real auctions to start. I mean the kind where they acution off REOs, not foreclosures. We might want to just get together and talk again, though. I want to talk about good ways of locating an RE attorney. Maybe we could put that on the agenda. I should send an e-mail.
Big V,
I took the assessor to mean he’s been called on the carpet by the commissioner(s), county controller, whoever — in an attempt to influence him into keeping prop values up, and tax revenues up in the face of some big budgetary hurdles.
….I didn’t take this to mean homeowners. Doesn’t seem like they’d have much to complain about.
fuBarrio
It takes real cojones to stand up to your county and tell it like it is, that they will be receiving much less in the way of tax revenues, and at the same time, telling people that their American Dreams aren’t all that.
“is it better to have bad credit for five years, or live up to your obligations?”
This is my (current) best guesstimate for a “good time to buy”
Six months before the Supprime and ALT-A Fu-buyers of 2007/08 get their bankruptcies and/or foreclosures cleared from their credit reports. This depends on how many Fu-buyers are in the location you are looking at, so the timing will vary…..sooner in Cali, Florida, Vegas, Phoenix, later everywhere else.
Fall 2012 ?
“‘I think people who buy right now are going to be smiling in three to five years,’ he said. ‘It’s a fantastic time to buy.’”
Smiling, no; more like the agony of gas pains. BTW: Maybe somewhere they got the idea that the younger set like Crisp who leased a jet was really rich indeed.
Maybe he was referring to that smile morticians give cadavers before they lay them to rest in their coffins!
Mortgage means either “death-pledge” or “agreement till death”, in French.
Coup d’estate
–
Is there something magical, or sacrosanct, about 3-5 years? I hear the same thing for the Scam Market, especially, Fraudentials, when they are down and no end is in sight.
Fascinated by the Great American Propaganda Machine,
Jas
It means in essence:
Please come back in 3-5 years and we’ll churn you into something else, no matter if you are up or down…
Most people don’t have enough stability to be able to plan on staying in the same house for longer than 3-5 years.
“Supprime = Diana Ross cover band
“Subprime” = What I thought, not what i wrote…..
What you wrote was pretty good!
–
“…the Realtors’ Chief Economist Leslie Appleton-Young said. ‘But obviously the $64,000 question is when will we be at the bottom? I don’t think we’ll see that this year.’”
So, Less-lie (Less lies is a good thing), are you suggesting that it would pay to wait? Just checking. I hope that people get the meaning behind your message.
Jas
Put yourself in the shoes of that rarest of birds, the prospective home buyer, right now…
They’ve been told by everybody and their brother that real estate is going down, and yet they keep looking for that “right” house, and should they find the house of their dreams, make an offer and it’s accepted, can still find a bunch of ways to squirm out of the contract, before push meets shove.
I’d suspect that many deals are falling apart, on account of this.
Just adds more fuel to the fire, already in full tempest…
I met one just last week. I tried my best to educate her that contrary to what her realtor and mortgage broker were telling her, that now is not a “Great time to Buy!”
She was mostly just irritated at me for upsetting her rosy view and eager and anticipation, but said she would “think about it”.
What this said to me is that we’re nowhere near bottom, at least not in Seattle!
Psychology still has a long way to go before the pendulum is at the opposite end of the arc from where it swung during the mania.
Agreed. Many think that the price declines seen thus far are like a “second chance” for them to get in on a sure thing. Until they’re flushed out of the que this is far from over.
It’s not the bubble buyers defaulting that will change buyer pyschology so much as it will be the knifecatchers defaulting that will change buyer pyschology.
Good thinking john. BTW which water are you at the edge of? The name always puts me in mind of a condo building on the St Lucie River that was actually called the Edgewater. Isn’t there a Laughlin casino by that name too?
Had similar conversation with very nice lady, but daughter is realtorr in: Las Vegas. She insists on buying - in LV !! - and discarded my input as twisted. Not only that. It was repeated again and again how her daughter would be able to help me with all my RE “needs”, as if she had not heard the arguments.
Cognitive dissonance!
A new world record in the hole-lympics?
“‘Once again, the 40.3 percent year-to-year decrease in the median price of a home was an all-time record, surpassing the previous record set in June with a 37.9 percent decrease,’ said CAR Chief Economist Leslie Appleton-Young in a statement.”
I got a couple stories about people walking, one guy i kind of know, not really a friend. anyhow, he bought a house in northern phoenix for 360K or so. did an arm loan, his job is weak lately doing sales, and the payment is too high. he can’t refi because of lack of income to qualify. so he found another house in the 200k range, and a realtor to help hide his current house from the new lender. if approved and even though he is not behind on the payment, he plans to do a short sale or just walk. only justice is he put 20% down! but still the bank will eat 100k due to his greed.
second story, sold my car online, but the guy bought from virginia, he had a friend in phoenix come look at the car. without prodding, we got onto housing. she told me she is under on her house in florida, can afford the payments but decided to let the bank have it back since it is under by 100k.
yes, by next year you will see an increase in walkaways, because all these people joined in the frenzy to get rich and now that that didn’t happen they will walk, cause bank failures and massive losses to the economy. they better not bitch when they lose there job at the bank!
Without income tax consequences on forgiven debt the decision to walk-away comes easily.
In all the new states of the Union, land monopolization has gone on at an alarming rate, but in none of them so fast as in California, and in none of them, perhaps, are the evil effects so manifest.
Henry George in 1870, as quoted in The Great American Land Bubble (1932) (Courtesy of Mr. Paul Kedrosky)
That’s because a seller-funded program - one widely used during the recent boom - is slated to end Oct. 1.”
This program was the downfall of the housing market along with the free money lenders gave away to anyone and everyone. We need to stop all zero down loan programs right now because the entire mortgage market has been a joke for years and things are only going to get worse.
http://oceansideterraces.com/floorplans.asp
I thought these were condotels.
But they are ocean condos for sale.
Enjoy!
“Ads for Bella Vista currently tout the zero-down option, something Balfanz said will continue as long as loans continue to close before the Oct. 1 deadline.”
“‘I think people who buy right now are going to be smiling in three to five years,’ he said.”
But as soon as they right themselves from being upside-down
Methinks the smile will turn into an unhappy frown