See A Laughable Flipper Property This Weekend?
Do you have a housing observation this weekend? See builder incentives or lots of for sale signs? Here is one a reader posted. “The bidding wars are, for all intents and purposes, over in Seattle. What used to be common is now few and far between.”
“Asking prices are still very high, but most homes sell under Asking (like 85-90%). The original AP is still very inflated so don’t expect a bargain even going under asking. There is no way to know about this development , however, unless you check the county records 1-2 months after sale. So the market still appears bustling on the surface.”
“Another interesting development: inventory here had been going up and down, up and down on a daily basis, for months. So there was a steady amount of buying. But since April 14, in the zips that check, it has been going UP only. So far, only one week of that so can’t call it a trend yet. The next couple weeks could be interesting, inventory-wise.”
Another, “I was in chicago in Februrary. Condo for sale signs everywhere. And that was february. nobody in Chicago moves in February.” From Arizona, “Six months ago was pretty much the top of the prices here in Phoenix.”
One from San Diego, “I found a laughable flipper property here in San Diego last night. Small 1960’s house that the flipper had purchased for 700K in October 05. They painted, redid the flooring, added a few vinyl replacement windows and some cheap tilework on the kitchen counters. It’s still nothing great and has just the remains of some old neglected lansdcaping.”
“They have been trying to unload it since February for almost a million dollars in a non-million dollar neighborhood. Good luck to them with that 3 month /300K flip that will be turning into 6 months soon.”
Plenty of negative cash flow flippers in the Cottonwood/Cornville, AZ area. In the small Verde Valley newspaper this morning, out of 23 single family homes for rent, 10 are ‘brand new’, and almost all of those say ‘pets welcome.’
Those Cornville developments are really depressing. I love Arizona but they’ve really gone too far with those.
Here’s one in Phoenix from Craigslist
http://phoenix.craigslist.org/rfs/153588718.html
From Zillow this house was bought for $210K in November and is now on the market for $330K. Looks like the flipper put some money into new floors and paint, but the house is
that house in craigslist… i used to rent down there… old town scottsdale.. there were meth heads all over the place riding bicycles and walking… guess they lost car to a DUI or pawned it for drugs.. not only that, i did an experiment in my apt complex… i put an old iron, (getting clothes flat) in the parking lot in the an open place… not 30min go by and some grimy dude on a huffy rolls in and pics it up… rides away. I even had my ‘dice’ valve caps stolen off my car. And… just about 1/4mile from that house… where the homes were 150k last May 05, there was a fatal stabbing in march 05. That house is also 1mile from that club where the ASU football players got in a shootout over a girl.
I’ve got one from the LA area (Sherman Oaks). The neighborhood near my MIL’s house is **going off** with flipper projects. They are scraping the small, single-story homes and building huge, UGLY, two-story, stucco boxes. You can see at least three or four on each small block (in progress or recently finished).
One recent buyer just bought a house (on a double-lot, which is still small –about 12,000 to 14,000 SF) for $1.4 MILLION. They’re already scraping it. That means they’re starting with a land price of $700K (if they split lots) for two houses. I have no idea what they’re thinking. I will be watching this carefully.
Sidenote: my MIL who has been strongly opposed to our bubble-sitting, and accused me of keeping her son from being a “homeowner” seems to be coming around a bit. She’s started watching CNBC and reading more, and although she will **never** say, “I guess you were right, I’m sorry,” at least she is starting to question all the flipping going on around her.
CA renter-
I grew up in the Sherman Oaks area, and now its the “turd world” in many areas. Those who are thinking that flipping is the way to easy money, will soon realize its an issue of central banks and liquidity, and that all this inflating of our money supply will not have a happy ending. Housing will not be saved by the inflationary policy of the Feds, and that salaries are not inflating, but deflating. Who’s going to be able to pay all the flipper’s price tag? Game Over.
If you factor in the energy crisis, price inflation, the real condition of the economy, then those zero zoned lot McMansions, next to the cute one-story homes, are going to sit.
On Victory Blvd in West Hills, I see many renovations of small homes, and I don’t see “Sold” signs. The greater fools are waking up to reality. The L A Times and Daily News are R E ad revenue streams, not exactly objective.
The Valley sure has changed over the years, hasn’t it? Not for the better, either. Question is, where can the middle class (what’s left of us) go? It seems the entire U.S. is going third-world.
Thousand Oaks (where we live) is looking like “Valley West”. The “turd worlders” are out here, making the area another SFV. The illegals like our schools and are just flooding them. Agoura has its share of them too, btw.
Regarding the SFV,even in the area of Platt and Victory, Valley Circle are full of third worlders. My God, Reseda looks like south of the border these days. When I was a kid, Reseda use to be a lower income shopping district, not a slum. Now it looks like TJ.
Amgen in T.O. is in love with H1-B’s (Professional Visa-Insourcing -mostly Indians) and sometimes I wonder how many Americans (of all races) have moved to other states. I did some research on the F A I R site (Federation for American Immigration Reform) and was just floored at the illegal population of all the states. If you get a chance, check it out. Amazing, is an under statement.
Glendale, CA-Property in extremely poor shape listed for $975,000 and right away sells for $1,015,000.00 in June 2005.
Same property just came on the market for $1,195,000.00.
Absolutely nothing done to it. Sellers are real estate agents. They claim they got permits for an enclosed patio which technically adds about 400 sq. ft. to the property-however, no physical work was done it it.
It will be interesting to see if it sells.
You all sound very white.
Third worlder here. The bubble is entirely the creation of white America (and Mr Raines), so please keep your pointless blame to yourself. Stop grudging the minorities who have the work ethic of your parents and grandparents - the folks who made America great in the first place.
yensoy,
The bubble is due to lax lending standards. The responsible people may or may not be white.
With respect to “grudging the minorities”…I’ve always worked with Latin immigrants and can vouch for their work ethic. What So Cal Broker and I are discussing is the changes in our childhood neighborhoods. Yes, I am white, FWIW (don’t know about So Cal). Am I bothered by the changes? Yes, I am; just the same as if People in Mexico woke up one day and found themselves the minorities in their own country. How would they feel if they were outnumbered and the new residents changed things for the worse (at least for those who were original residents). As you might know, there are some areas in Latin American countries where white/American cities are sprouting up. Of course the newcomers live much better than the native residents. Think the locals are happy about it? They wouldn’t like it (changes for the worse) and neither do we. It’s not about racism. Quite frankly, I’d feel the same if it were a band of roving Germans coming through as well, especially if their culture was very different from mine.
BTW, my mother is an immigrant who came through Canada on the way to the U.S. The canadians **hated** the Europeans who were moving through their nice, safe neighborhoods — all of a sudden they had to lock their doors. Europeans were known as theives back then. Every group of newcomers is going to be resented by “the locals” until enough time passes that people don’t remember what it was like before the “movement of the peoples.”
Thank you CA Renter for your last post. I am a minority 2 X’s over. I’ve seen So Ca (Thousand Oaks included) turn into a sh*thole. BTW, 80%+ of the illegals are Mexican, and are bankrupting this country. I could care less about offending criminals, or H1-B folks. We are more than a job bank or a market to sell stuff to, we are a COUNTRY. I’ve seen cute Lake Balboa starter homes stuffed like sardine cans, full of illegals, and my clients told me they’d rather rent, then live among sardines. I was happy to hear they made a wise choice. I’ve got them educated, and now they are waiting and saving more $. Their day will come.
Thank you, So Ca Broker. That’s why we’re renting as well. I think it’s funny how we’re told to “lower our sights” when looking for a home. Not gonna happen! If we have to rent for the rest of our lives, so be it.
Thank you for your updates! I grew up in Woodland Hills/West Hills, so love your info.
Take care!
Hilarious
Subject: Low Real Estate Home Offers (gilroy, south county)
http://www.craigslist.org/sby/rnr/153440304.html
Someone had the guts to offer 3% off the asking.
What is the world coming to?
those snobs in morgan hill can go phuck themselves
I expect to see more of the same- more signs, more inventory, with prices either flat or up. At some point the asking prices will have to come down to a point that gets reflected in ths stats, though.
BubbleTrack.blogspot.com
“They have been trying to unload it since February for almost a million dollars….”
Yeah, good luck with that. It would have been gobbled up in less than a day a year ago by some idiot who thought he/she would be able to turn it in a couple of months for $1.5 million. All these get rich quick folks that bought into this mult-level marketing scam at the peak will be completely slayed. How could anyone in their right mind look at that house and think it was worth what they were paying, let alone think that some greater fool was going to come along and pay even more.
I especially like all the pictures I’ve seen over the last year of houses with bars on the windows, in bad neighborhoods with asking prices near $1 million dollars in SOCAL. I find it incredibly hard to believe that ANYONE with the media, government, banking industry, etc. could look at a similar picture and not know immediately that bad shit was on the horizon.
I know why the government kept its collective mouth shut - in Texas, the news played a story the other day about the “unexpected” $8 billion dollar surplus and how the state government would probably piss it away.
I believe Florida, even with all of the storms, accumulated quite a big budget surplus due to all of the new tax money.
Almost everyone in this country has dirty hands when it comes to this Ponzi scheme. It’s semi fun watching it play out exactly the way I’ve been telling people for the last 4 or 5 years.
Well CA has prop 13, so current owners don’t need to fear the assessor charging them for the avarice of the latest, greatest fool. But we’re at a $4B+ structural deficit, and the Governator is begging us to pile more debt on to fix the levees so that the Central Valley sprawl can be kept relatively dry. Even so, with all of the new housing and expensive housing sales the last few years, where did the money go?
$4bn structural defict. Ever wonder why they need that funny word structural? Took in $97b, spent $113b. “Structural” defict $4b because we borrowed/defered $13b more.
Excellent point about Prop 13. People love to blame it for everything from El Niño to illegal immigration but ask almost anyone who understands and they’ll tell otherwise.
There are some loopholes that need plugged in Prop 13.
The commercial buildings that are owned by LLC’s and instead of selling the property they sell the LLC and they have never been reassesed since Prop 13 passed.
As far as residential homeowners go Prop 13 is great.
I saw Prop 13 kicking a dog the other day. Totally serious. Then it pushed an old lady.
Not even kidding.
“The bidding wars are”
Has anyone meet the other bidders when they made their first bid.
I doubt there really were that many bidders in some cases. In hotter areas it was more likely a tactic driven by realtors.
In fact you can read how bad it got in Australia. They called it ‘Dummy Biddings”
http://www.abc.net.au/worldtoday/stories/s323652.htm
Dummy bidding happens when agents and sellers install fake bidders in the crowd to push up the price of a property. One commentator says the practice is so widespread it has become Australia’s great, hidden, consumer scandal.
During the really hot streak in San Diego (spring 2004), it was insane. On one house we put an offer on, I was standing in the front yard and car after car was pulling up, people on their cells with their agents (us incuded). We were outbid. I was relieved because I really didn’t want to spend that much money.
Also, when we sold our house FSBO, the phone started ringing at 5:30 a.m. the day our ad came out in the paper. I was getting calls from that point on, at least one call every five minutes, AT LEAST. We also used an “MLS listing” agent for $300, and the house was sold within an hour of listing it. The buyer brought the contract in with her and filled it out within five minutes of walking in the door. As they were filling it out, other buyers were storming (literally running) through the door, then cursed at us because we didn’t take the sign down yet.
That’s a mania if I ever saw one.
We had 3 offers on our house. We sold it in Sept of 2004, for 3K over asking price.
This is a great concern with me. On several bids, all I was told ..Can you higher! I dont know who or what the the other bids were. A coworker last year sold his place and had only one bid only. The bid was 10% over asking. More recently I went 20% under asking. Same thing happened. Realtor came back and asked there were other bidders, ‘Can you go higher!’ Clear case of pinching my wallet. We may need some ‘transparency’ in this market.
You need to find and sign a contract with a buyers agent. If you don’t, the agent has no fiduciary duty to you. They will try to increase the buying price in anyway that they can.
I’ve put in some offers (below asking) for houses that were sitting for 60 days or more. Each time, the realtors would say “another offer is coming in tonight.”
Sure, whatever, here’s my offer, take it or leave it.
I had that “another offer is coming in tonight” spiel tossed at me once. I put in my same super-lowball bid anyway, and they sent me a counteroffer the next day. I asked my realtor “but what about the other bidder?” and she just shrugged. i walked away from that one.
Why did you walk away. I don’t get it
Scary thing is, I know of somebody who sold a house in the East Bay, CA, in February ‘06, after 2 weeks on the market. House was priced “fairly” (priced at about comps for spring/early summer of ‘05, by $/SF). There were 4 bids, one $45K below asking, one $30K above, one $40K above, and one $65K above. All ostensibly 20% or greater down payment. The top bidder’s loan fell through, and the next bidder was convinced to come up to the high bidder’s price. At least in this place, people are still trying to top each other.
I hope it’s ending now, but who knows.
This is not a common practice, in the offer, the buyer agrees to put down 20-30 percent to make the offer appealing. Once offer is accepted and the loan stuff is done, often they end up putting 0-10 percent.
So do not believe the 20 percent BS.
There is this house. A quick check with the assessor tells me it sold for $355K on 8/1/05
http://rgj.homescape.com/rgj/listing_details.jhtml?userId=SDAMI0ZARD2MFLAZGQQCFEY227532&filter_product_id=17342412&searchType=48&sbt=N&search_by_type=resale_mls%2Cresale&onTab=1&filter_property_type=single_family_home&filter_max_price=400000&filter_min_bed=4&filter_min_bath=2&filter_open_house=N&sort_result_order=price_desc%2Cattribute_count%2Clisting_age&geo_area_text_lookup_id=71439&areaIdHistory=52A60563A75574A71439A71439&print=false
399,900
1100 Coral Way
Carson City, Nevada 89703
Bedrooms: 4
Full Bathrooms: 2
Single Family Home
Sq. Ft. (approx.): 1,967
MLS#: 60005203
Description
Fixer-upper/handyman special! This home has been partially remodeled with the exception of the kitchen and front room. Kitchen demolition has been done. No floor coverings in living room, kitchen or master bath! Needs interior paint. Master bedroom features french doors that lead to the backyard & crown molding. Master bath offers a jetted tub. New laminated floor in all bedrooms and hallway. All new lanscaping in front and back. New roof, and rv parking. Hot tub ‘as-is” with no implied warranty.
Apparently the sellers ran out of money . Look at the house before this one on the MLS . Its so much more house for the money ,and I bet it doesn’t need 30 k or more to complete it. Still, all homes are overpriced right now .
Sorry to say the Carson City home isnt worth $350 or $399K
There arnt any job around Carson City to support that kind of price.
The price to gross income is over 7x. Its typical for ratio to be 3-4.
Clearly overpriced and ready for declines around 35-40%.
exactly!
I’m still watching the Westchester house (LA area) that was purchased for 599K in February and put back on the market at the end of March at $769K with some minor, tacky upgrades. Happy to report it is down to 749K, but there are still plenty of nicer homes in better areas of Westchester available for that price.
http://www.ziprealty.com/buy_a_home/logged_in/search/home_detail.jsp?listing_num=S921045&page=1&property_type=SFR&mls=mls_so_cal&cKey=h122gm5f&source=GSBRMLS
Isn’t that LAX next door? I hope you’re not actually looking to live there!!! Did that area “gentrify” or something? Last I remember, it was filled with “NUDE, NUDE, NUDE!!” clubs and such.
Nope, I just keep an eye on that area because a good friend purchased a house on that street last July. And yes, the planes coming into LAX look very close from there!
That’s on the other side which is not actually Westchester but Los Angeles. The airport is a nuisance though. If you don’t have double pane windows and other sound proofing your going to have many sleepless night. Why someone would want too live that close to LAX for that kind of money always amazes me.
749k will get you into north kentwood.
let him rot
Where are the reports of RE investors declaring bankruptcy. That’s what I’m waiting for.
Credit can be created and credit can be destroyed, I guess.
Wanna puke?
http://houseblogger.typepad.com/houseblogger
I just want to know who “Shakespear” is — he was referenced in one of this guy’s posts. Was that some famous bartender who made pear martinis? A guy who worked at a juice bar? Come on, spill the beans buddy!
Now Shakespeare … that’s a guy I heard of when I was getting my English degree.
The guy looks like Fred Flinstone.
Yabba dabba doo.
Flippers boost my income too…
Yea, best friend and brother buy a condo in Aug of 2005 for 605k. Yesterday they accepted and offer for 650k and they thought they did great. I explained, less commissions, p-tax (not paid and with penalties), neg cash flow for 8 months and prepay penalty on their loan that they would be bringing a check to the closing. “I will have to look in to that” is what I heard. They had no idea, no clue what they signed or what the numbers were. Hey, but they used the same realtor on both transactions, I’ll bet that guy knew exactly what the numbers were and knows exactly what he is making. Tooo funny.
So they stuffed about $40K into a Realtor’s pocket while losing money themselves. Maybe they can do ten more similar flips and make it up on volume!
Have been a lurker for sometime w/ this being my first post. Just scoped a house in Sherman Oaks south of the Blvd (San Fernando Valley) for friends. House was bought in November 2005 for $820K. It’s now listed five months later at $900K FSBO. Major problems w/ the house and at this price definitely no deal at all. Interesting fact is that the owner is delinquent on both property tax installments. Their reason for selling ….. “job move”….. Right.
Why people want to buy in this market is beyond me!
It probably was a “job move.” They found out that they needed to get a real one.
I couldn’t find an outstanding flipper listing in Craigslist SD today, but I did see several slightly rehabbed houses. All of them had been held for just about a year with an asking price of 75K-100K above what they paid for them the year before.
One particularly ugly one in University City had been purchased for $665K about a year ago (3 bedroom 1253sf. box circa 1973) and was being advertised for $745K. The remodeling had been a little more involved in this one, but the photographs had been carefully taken to avoid getting too close to the shoebox house and showing the busy freeway directly below the back yard deck. This old development is hardly prestigious, and I wish him a lot of luck in selling it. http://sandiego.craigslist.org/rfs/152046355.html
Why people want to buy in this market is beyond me!
Check out the comments on Wall Street Journal Blog…
http://discussions.realestatejournal.com/RealEstateJournal%20Discussions/1
Some times you buy because it makes sense.
My spouse and I are buying two units in a high rise condo with a doorman .One to live it, the other to be my home office (my place to take refuge when the ladies from church come to visit): (1) it is getting very difficult to take care of the house (health and age issues); (2) we literally were the first purchasers and we bought the units on very high floors with the best views; (3) it is easier (and cheaper) to customize the unit before it is built (grab bars, raised dishwasher, lower cabinet heights, extra wide doors, etc),
i’m in sonoma county,inventory is up 40% in the last month,about 25% of listed homes have price reductions (most of them a joke)and defaults are up 63% yoy.we have a lot of fsbo/craig’s list action and a slew of new stuff coming on the market…some with minor incentives.anyone want a new 6,000 square foot tract home on a tiny lot for 1.3 million ?
Didn’t see a laughing flipper, but I foreclosed a $380,000.00 house Friday afternoon. The buyer took title in August, 2005 and it’s already been foreclosed. No bidders showed up. None. Lender tried to sell it for $350,000.00 and no takers. This doesn’t bode well for NOVA.
http://put2.elpasoco.com/ptweeklysale.asp
Foreclosures are soaring in El Paso county, Colorado (Colorado Springs). More high-end (over $300K) properties showing up as well. Overall, foreclosures in Colorado were up 30% in March alone, giving us the dubious privilege of being #1 in the nation for the rate of foreclosures.
The house next door to mine finally sold about a month ago. No one has moved in yet and I have seen some people working on the house. I think flippers bought the house for 243K. It was origanaly listed for 268K. It sold about 18 months ago for 150K. Should be interesting to see what happens with it.
az, what’s the temps doing out your way? should be too hot for house-shopping pretty soon, no?
The temps have not gone over 100 yet but that is just around the corner. The best part of summer here is cheep golf. My boy friend and I do all the golf and lunch specials all summer. This place is miserable when the temps reach 120. Oh ya - its a dry heat!
This one has been on craigslist for a long time. Posted it on SoCalMtgGuy’s site a month ago as an FBer. The white elephant is still available. No price drop though.
$999000 - Bargain Home
Reply to: douglasfischer@earthlink.net
Date: 2006-04-20, 10:24AM PDT
If you’re looking for a bargain in Palm Springs, this is it!
-LOWEST PRICE PER SQUARE FOOT
-PRICE JUST REDUCED OVER $200K
-3BD/4.5 BA, 3982 SQUARE FEET
-SEPARATE 1-BEDROOM FULLY CONTAINED GUEST APARTMENT
-ALMOST 20,000 SQ FT LOT
-NEW PEBBLETEC P00L
-ALL WALLED & GATED
-FOUR CAR GARAGES
-OFFSTREET PARKING FOR RV OR MORE
To say that the seller is “motivated”, would be an understatement!
To see this listing and others click on the website link below and then click on “See My Listings”: http://www.DougFischerDesertHomes.com
Doug Fischer
Coldwell Banker
760.641.8401
DouglasFischer@earthlink.net
http://www.DougFischerDesertHomes.com
“In Tune With Your Needs”
What a difference a couple of weeks makes. It’s been that long since I got a Flagstaff sunday paper. There are a much larger number of homes advertised, many with ‘reduced’, ‘owner agent’, ‘buyers agent welcome’, and extra percentages offered to agents. Also, the number of ‘brand new’ homes is staggering; even in the ‘for rent’ section. It is interesting that all the ‘pets welcome’ notes are in the new houses’ ads.
One new thing; a full 6 columns of open houses. As mentioned before, the Ponderosa Trails subdivision seems to be flipper central in Flag.
Had to laugh when I noticed the home around the corner had an Open House sign out front. This has (seriously) been the case on no fewer than fifteen weekends since last summer. How many times do the owners need to hold an open house before they finally reach the simple conclusion that they will never be able to sell unless they lower the asking price in line with new market reality? (I guess they have not quite left the denial phase of the stages of grief thus far…)
“The bidding wars are, for all intents and purposes, over in Seattle. What used to be common is now few and far between.”
The dearth of bidding wars is easily explained by reflecting on the common practice of pricing off recent comps. When market prices are skyrocketing (as they were through maybe July 2005), listing off recent comps (even with a little bit added for recent appreciation) tends to result in a list price which undershoots the market price, and given the lean inventory of homes for sale, there tend to be many buyers in the market willing to bid above the list price in order to forego future search costs.
Now that there are five or more times as many homes on the market as there were back during the red hot phase of the bubble, prospective buyers have many homes to choose from. From the seller perspective, there are not many prospective buyers around who are interested in any particular house. This fact alone suggests the market price has fallen (less demand per home => lower demand / lower price), so sellers following the rule-of-thumb of pricing off recent comps plus a kicker for phantom appreciation will find that nobody is interested. A bid war could easily be sparked by listing a home at $1, but no seller I have seen has tried that so far:-)
We went to two open houses - one last weekend and one today in Newburgh, New York, which is about 75 mins via train from NYC. The first home was listed at 469K, we were the only people there between 1-4pm. The realtor pratically begged us to come back and make an offer. This past week they lowered it to 449K. Another open house this weekend; we drove by again, not a car in sight.
Today the listing was for 525K. We ended up leaving after the realtor said “the builder isn’t taking offers. If you want to come back and talk applicance allowance, drive way, lighting fixtures, etc…then he’ll listen.
“All these get rich quick folks that bought into this mult-level marketing scam at the peak will be completely slayed. ”
Yeas, they’ll sit and ruminate years from now about how stupid they were to get caught up in AMWAY in the 80’s, E-stocks in the 90’s, then RE.
DOC
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