‘Have We Finally Passed The Denial Phase Of This Bubble?
Some readers are guessing what phase of the housing bubble we are in. “Have we finally passed the denial stage in the unwinding of this bubble?”
Another said, “I was thinking the same thing. My take has been that lately I have noticed the media as well as ‘experts’ who have been bubble doubters (or deny-ers) in the past have been jumping on the band wagon. The latest of course is the CNN-Money article declaring ‘the bubble is over.’ How many of these past naysayers will jump on this band wagon, and say they knew it was a bubble all along as this thing unfolds? Ah, memories of the tech bust, can you say Jim Cramer?”
Yet another replied, “Have we finally passed the denial stage in the unwinding of this bubble? Alas, not. A very good friend of mine just informed me she bought a condo in Lafayette, CA on Sunday! Hasn’t even listed her home yet. Plans on getting a bridge loan or equity loan to buy this condo. Whats worse, is she cant transfer her prop 13 tax base, and now she will have HOA dues.”
“Oh well, I will just keep my mouth shut from now on. And no, sheeple are still buying homes.”
The Telegram reports that denial depends on where you live, in a article titled ‘Realty Check.’ “The Central Massachusetts housing market has cooled as available inventory has risen and interest rates nudge upward. ‘From what people are telling me, the housing market has (hit a plateau),’ said (builder) Paul A. Gemme. ‘We went through the transition from a seller’s market to a buyer’s market late last fall.”
“‘Sellers feel they have to lower the price. When inventory is plentiful, it’s a buyer’s market,’ said Mr. Gemme. ‘You’ve got to keep prices down,’ he said. ‘I’d hate to be sitting on specs right now. Some developers are.’”
“Judy Leonell, a realtor in Mendon said the slower market is having an effect on building, as builders shy away from competing with a larger inventory of homes. ‘Things are hanging around a lot longer,’ she said. ‘Builders are no longer in a hurry to purchase land. They used to call and ask, ‘What’s available?’”
The national media seem to be more accepting than local outlets. Probably because of past editorials, etc. I don’t expect papers like the Arizona Republic to admit to the matter for a year or two.
Kubler-Ross’ five stages of dying
1. Denial and isolation: “This is not happening to me.”
2. Anger: “How dare God do this to me.”
3. Bargaining: “Just let me live to see my son graduate.”
4. Depression: “I can’t bear to face going through this, putting my family through this.”
5. Acceptance: “I’m ready, I don’t want to struggle anymore.”
ben, front page az republic 5/7/06 ” realtors hurting as sales slow” 80,210 realtors in az. that would only be second to the amount of speed lab employees.
No sales since September. LOL. This clown will join the ranks of 99% of the Johnny Come Too Lately’s
Local media worry about hurting local perceptions = their own home values. National media has a less targeted impact on their own homes. It’s not just their own value concerns. It’s the local real estate advertisers who pressure ad sales who pressures edit.
Not all of us! What do SD-area builders have to say about rising for-sale inventories? “Don’t worry — be happy…”
http://www.signonsandiego.com/uniontrib/20060507/news_1h07south.html
“It’s not going to happen,” Kretowicz said of widespread foreclosures.
____________________________________________
BAHAHAHAHAHA.
Last year - Prices will only go up.
Today - inventory is not a problem and no Foreclosures.
Next Year - You want fries with that?!?!?
Homebuilders are like barkers at the county fair. It’s the nature of the profession. Sell, sell, sell.
During the 1990-95 housing crash in San Diego, they were all saying in chorus that prices couldn’t fall much more because there was a shortage of housing. New home prices did fall - about 30 to 40%.
I loved that article. Burried in the RE section. Half of the article doesn’t even address a shortage and is more about North County/South County home buying tastes. WTF. It segues nicely though with the illusion that somehow Wealthy Mexican buyers are a key buying group because ““It’s easier to buy in South Bay than trying to save in Mexico,” where 30-year mortgages are not commonly available, he said.
Mexican buyers also prize the security north of the border, he explained, in light of the rise in kidnappings in Mexico.”
Then the last couple of paragraphs are totally dismissals of the wind being knocked out of San Diego RE.
I love it. It sounds like all the wealthy TJ businessmen are moving here in droves. Maybe these clowns are counting on them to save ‘Diego RE.
NOT.
You can expect the data to become increasingly worse as we roll into May numbers and YOY comparisons. We are entering what was the “sweet spot” last year, and the comparisons will be horrible. They (the media) will make more month-over-month references to cushion the data. It will be undeniable by the time we roll into late August and have a large stock market fall under our belts because of poor 2Q earnings from the HBs as well as the broader economy.
Wow, I feel immortal now, that was my comment about the naysayers and “Jim Cramer”, thanks Ben.
That being said, every time I think the denial stage has passed I hear people saying how they are going to make money as the market keeps going up. I am in the process of relocating to Las Vegas and every time I go there I hear several young kids(mostly valet parkers, waiters, bellmen etc) saying how they are going to invest in RE and make money. I guess the less you know, the more you think you know. I really dont think we have even scratched the surface of the downturn. I think acceptance will come in 2007 and the real bust and fireworks (beginning of good buying opportunities) in 2008.
For me the saddest thing here is that one of my best friends will become a casualty of the bubble. He has left his job and is now a “RE investor”, his current project is a home in Miami that he bought last year for 480K and now can not even sell and break even on it, he is getting no calls or showings on it even at a reduced price, HOWEVER he still vehemently says RE will go up 5-10% this year, based on what the board of realtors is saying. WHAT?HOW?WHY? How do you spell denial and wishful thinking? We have replaced buy and hold with hold and hope. Very sad what will happen!
Bank CD’s are now paying 5.25% with zero risk. He will learn a valuable lesson and come out better (bitter??) on the other side.
What banks are paying 5.25?
How about all of these:
http://www.bankrate.com/brm/rate/high_ratehome.asp?params=US,416&product=15
My local credit union is at 5.25% w/ a 2 year lock and 2 optional bumps if rates go up.
What is his reduced price? 550K?
No, what was really crazy was 1 month after he bought it for 480, he listed it for 575K, now he is trying to sell it for 489K(his reasoning is that with transaction cost he will lose money). There are homes similar to his in the development listed for 399 that are not selling, what I want to know is why are people not panicking with things like this going on,I know my friend is not an isolated case.
The really sad thing here is when he went into contract for this home for 480, his appraiser came back with an appraisal of about 390K, I told him to run in the other direction, what did he do?, he got another appraiser(this one recommended by the selling agent), this one came in at 481K, very convenient!
So is he living in this house? How is he swining two mortgages if not?
Yes he is living in this house, but wants to move badly. He also has 2-3 other condo flips he is working on.
From the way he talks recently I think his cash reserves are being eaten up quickly.
Pure comedy!! LMFAO!!
oh my god, that’s the scariest part.
that an appraiser would tell him he thinks the house is worth a full 100K less almost, and he went and got another appraisal so he could spend 100K more than it was worth.
I’m sorry for the wrench this throws into your friendship with him, but man, that anyone would play a game like this, with such obvious risks and such obvious goals of doing naught but taking advantage of the next fool, just hoping that you are not the one left holding the bag, has really little choice but to accept the idea that it be *him* left with the rotting goods..
what a strange game of hot potato this is, til it all gets cold and sickly and the eyes are growing all over it and it has that nasty smell of mildewy earth….ew.
I was at borders and checked out the new issue of harpers mag (but I couldn’t bring myself to buy it; it’s 7 bucks an issue dammit! The subscription price is 11! maybe i’ll start subscribing again instead…) and that story was great! it wasn’t in the least bit ‘conspiratorial’ as some had suggested, or even really dour..very matter-of-fact about it all, as though this were now common knowledge and inevitable and without any ridiculous RE shills coming in to tell us how it really is. lovely! only the art was alarmist (not the graphs, they were merely graphs!) with the cover of the guy under a big house, and the ’serfdom’ comments at the beginning. All else was great, very straight-forward economics perspective. Thank you Michael Hudson, distinguished prof of economics at U-Missouri.
I tried to get my hubby to read it…look, 20 easy steps, mostly boxes with accompanying graphs, but he saw stuff with acronyms like FIRE and terms like ‘rentier’ and freaked. Oh well. I think people still motivated by fear and wishing that it is still okay to buy a house right now won’t really take anything but threats of divorce to heart! So, I should trust your judgement about the housing market, then, says he? If this bubble burst doesn’t get going soon, things will get interpersonally intolerable for me! He won’t even read things, cause then he can blame me if he *does* get priced out over the next few years, as he fears will happen. Still, that sounds better than having given in to buying and being miserable in a place I hate and being a debtslave. Right now, we’d still be stretched bigtime to get anything we’d want, even with prices falling the little they’ve fallen so far.
So, I should trust your judgement about the housing market, then, says he? ….. He won’t even read things, cause then he can blame me if he *does* get priced out over the next few years, as he fears will happen.
Interesting that he says that, shel, because isn’t he actually expecting you to trust “his” judgment, too? At the very least, he should read and study both sides of the issue and discuss the options with you. He wouldn’t go wrong doing it that way. And then neither of you can blame the other down the road since it would have been an agreed upon decision….whatever that decision turns out to be.
BayQT~
there’s a 100% foolproof guaranteed way to keep your man distracted from this mess
fellatio
suzanne researched this.
yes, I think he’s mentioned that he’s pretty sure that would work. Frankly, I find that scenario….hard to swallow. I’d have to be doing little else, or maybe hire suzanne for some alternate employment during this ’slow period’ in RE as they like to call it here.
I like BayQT’s suggestion that I point out that he’s asking me to trust his judgement as well and try to discuss it thoroughly. Emotions get involved so easily though…it’s like that wife saying I just want that house I want that house. I can imagine a version of the suzanne commercial where they actually have pro and cons columns and wife still trumps it with ‘i want that house; i want that house; i want that house’, so part of me prefers the passive-aggressive “so, I should trust your judgement then?” lol!
in any case, I don’t think I’d be happy for too long with the sexual favors in exchange for ‘deference’ on economic issues.
Hey, I don’t recall anybody suggesting that any guys provide sexual favors for their itchy-to-buy gals!? I think “dump ‘em” was the advice, no? Nobody even suggested distracting the foolish ladies with new shoes or spa days
Too funny
Don’t buy in Vegas. Give it a couple years.
The inventory of homes will be so massive by mid June that it will be record-breaking in many States. Buyers will back off . When everybody want out ,nobody wants in .
Quote of the week: “When everybody wants out, nobody wants in” — just start flashing that around, and it will spook off the remaining morons who just can’t wait.
I made an offer this past Wednesday on the house that was priced at $1,200,000.00. The agent did not even call me to ackowledge receipt of the offer (it was faxed with a confirmation.) The house went into escrow on Friday (after onbly 14 days on the market).
This was the house that I told you guys about a week ago. A 3 bedroom with no family room and needs major work. (easy $150,000).
Absolutely no denial in this area. (Glendale, CA) Thank You.
Another example-a year and a half a house in Burbank (CA) was for sale $995,000 and never sold. Amazingly, they brought the price up to $1,349,000-One and half years later and after six agents-it is now in escrow.
These are not flukes-there are other examples.
Again, No Denial-(maybe it really is diferent this time).
I know the 1082 sq. ft. house that I sold last June for $715,000 (with no commission) is worth about $775,000 today.
No denial yet.
Classic selling strategy: Raise the price higher than you really expect to get, then sell it for a lower amount to make the buyer (sucker) think that he got a great deal! As long as the Loose Lending bait is dangling, the suckers will continue to bite.
http://www.homepricebubble.com
Congratulations on not getting the house. You won’t regret it.
I hope to God you are right.
Why on Earth would you bid $1.2 million for a home like that when you could rent a nice place in Glendale for less than half the monthly cost of owning?
Because I want to own a house-not have to be be-holden to some landlord who can kick you out, raise the rent, etc. Plus, I can deduct the interest.
You can deduct the interest and still pay drastically more while being a prisoner in your own home because you will be unable to sell it for what you owe.
ahhhhhh, there really is freedom in renting and many people will not admit it. So what if they kick you out? There are so many units that they would be foolish to 1) raise your rent and 2) to kick you out.
Think about it. You can easily get a job transfer or move and say screw you to the landlord. You can’t really say that to the bank without being taken to court.
Renting is basically the same as owning, except you lose out on the appreciation/depreciation rights.
You deduct interest but that benefit is about 1/3 of the interest. Some people mistakenly think this means interest is free. Deduction, not credit.
You also have to pay insurance, real estate taxes, upkeep (can be significant), etc.
If you can rent for 1/2 the interest payment of owning, don’t know how you can lose renting.
Suppose you want to move? If you rent you have freedom, if not you may be stuck. You may be brining a 300K check to closing.
Thanks for the info-however-it does not make sense.
As far as a job transfer-that can happen or it may not happen.
I remember my parents had a tenant who had $300,000 in the bank when he filled out the application to rent one of their apartments. This was about 7 years ago. My did had to ask him why he was renting and not buying.
His response was basically the same as all renters.
Guess what, the house he could have purchased for cash 7 years ago is worth about 4 times that much today.
He eventually moved out due to rent increases. (Actually moved to a rent controlled area-Los Angeles).
His money today is worth a lot less than only 7 years ago.
Inflation is at an all time high-the statistics that the government spews out are a cover up for the real thing (that is why they stopped publishing the M3-Remember that?)
$10 billion dollars a Month is being spent on two wars going on today.
Do I believe prices are going down?
Of course, however, they will not tank as long as their are people willing to live in an area.
Not too many flippers here-however, there are plenty of homeowners.
By the way, did I mention the $280 million dollar shopping center that is currently being built in Glendale, or the $75,000 that is currently under way.
Just to name a few small projects.
if he rented at a much lower cost vs. buying (mortgage, taxes, HOA, insurance, utilities, etc.) and invested (dollar cost averaged) the difference every month, he should be sitting pretty now - especially after the correction.
never forget:
1. home ownership expenses.
2. reversion to the mean.
This could have been part of his retirement savings, yes? Just because he had the money in the bank to purchase a house didn’t mean that it was best for him to buy. And he moved to a rent-controlled area? Sounds smart to me. If he continues to save he’ll be in much better shape than a LOT of people when the time comes to retire comfortably.
BayQT~
and there is something to be said for being “LIQUID”. Liquid Investments pay you cash every month, a home only produces expenses.
When I sold my home-I made out pretty good-even with the expenses.
I helped a relative purchase an apartment building for $1,600,000 about 10 years ago-he sold if approximately 8 months ago for $3,400,000 (imagine that $300,000 above asking with multiple offers).
Nice bit of retirement their.
Come on ladies and gentlemen-you cannot be this negative on real estate.
“never confuse luck with skill.” but - “it is better to be lucky than good.”
sure if you get lucky and buy near the bottom and sell near the top (whether it be a stock or RE or whatever) you will do well. it depends on which snapshot of time you look at. look at people who bought RE in 1988 and sold in 1995. like stocks, you will be OK with RE if you hold it long enough to ride out the cycles (10+ years). and you will do really well if you are lucky enough to time the top and bottom exactly. but you can get burned if you are over-leveraged and buy too high and have to sell too low. i bet your relative wouldn’t buy anything in this market right now.
I remember my parents had a tenant who had $300,000 in the bank when he filled out the application to rent one of their apartments. This was about 7 years ago. My did had to ask him why he was renting and not buying.
His response was basically the same as all renters.
So failing to buy at the bottom of the market justifies buying at the top? Because some guy missed the bottom of the market seven years ago doesn’t mean you should now jump in at the top. Plenty of people bought seven years before this guy did, in the late 90’s, and got killed when the market tanked.
Those who wait for the bottom to fall out in Cali will wait forever.
“You cannot be this negative on real estate”. Real estate has gone up in the past, therefore it will go up in the future. It’s a mental trick that your mind plays, but it’s not true.
Think how good an investment the Nasdaq was in the spring of 2000. It had DOUBLED in 6 months!! It had gone up 10 fold or so in 10 years!! How could anyone be negative about it? Technology was the future. Would people use the internet more or less in the future? MORE!!!
So the Nasdaq was a buy, right? I mean it had doubled in 6 months. Right? Then it fell 80% over the next 3 years.
It takes more than “as long as people want to live here” to keep prices up. People have to be ABLE TO AFFORD to live there even after their negative amortization loan doubles in price.
Real estate has always been closely tied to income levels. Have income levels in San Diego or LA gone up 4x in the past 6 years? No? But housing will keep going up. People making 60K buying 700K homes will be making the same 60K and buying 1.5M homes (the same house) in the future, right? And how would they afford 100K in interest costs per year?
let him spend his money. after all the info available on this site and some guy still doesn’t get it then who gives a flying flip?
i choose to be very patient out here on the west side of LA
You just saved $1.2 million and you are unhappy? Before I made that deal I would have to be VERY CERTAIN that I was not buying the top. I would say you just dodged a crippling investment decision. Now go buy a lottery ticket.
It takes more than “as long as people want to live here” to keep prices up. People have to be ABLE TO AFFORD to live there even after their negative amortization loan doubles in price.
_______________
Exactly. Only a fool would think that this past run-up was due to “people wanting to live here.” It was a result of lax lending standards and exotic loans. Nothing more, nothing less. People who assume otherwise haven’t been around very long, IMHO.
Any doubt about that “denial,” folks?
If by forever you mean later this year. Cracks are everyone. There are signs of desparate panic, botoxed under control. Turns out home equity wasn’t free money, in fact you have to pay it back.
Methinks I smell a bit of desparation in Only-a-matter-of-times argument.
I can be ‘this negative’ on real estate.
Thing is, I’m feeling pretty positive right now.
I love hearing comedic stories of crushed flippers dreams.
I’m smiling from ear to ear.
Guess you might say I’m ‘positively negative’ about real estate right now.
It’s nice to see that we weren’t nuts, and that fundamentals really do matter.
Even Mr. Buffet agrees, as you can tell by his recent remarks on housing.
Now dammit…which one of you guys is Buffet?
I know you’re out their on Ben’s Blog, Mr. Oracle…
…I can smell ya…
I also live in Burbank. There is a home close to me that has been up for sale for almost two years. (It’ll be two years in June.) The price has been reduced two times. There is another house about 5 houses away from that one that sold once in 2004 to someone who flipped it in 2005 (and didn’t make any money). The new buyer has it back on the market for less than they paid in 2005.
I’m not sure but I think Only-A-Matter-of-Time is the one in denial! I’ve lived here for 20+ years and I know how much the house prices can swing around here!
our local paper,the santa rosa press democrat called the las vegas market “one of the hottest in the us” yesterday…our inventory is shooting up,median price down 10% since august…paper says maybe only high single digit appreciation this year…..not many people talking about their real estate “investments” anmore,though
Take it from someone in vegas; real estate is dead as a doornail. The same people who wouldn’t shut up about their investment properties last year don’t want to talk about it, period. I know of open houses that have been going on every weekend for months, and inventory is up, up, up.
“Matter of fact” you are going too get a lesson in economics soon.
All markets are cyclical not linear. What has happened in the last few years does not create a good argument about future rises. In fact if history is cyclical it means an even more dangerous market situation and over extension of inflated valuations. The fact that you claim too have sold a $700,000. house and have recently made an offer on an over million dollar property indicates an interest in trading up. I think you may have a rather rude surprise regarding the vulnerability of these markets.
Many people in this blog seem too think that the Fed Chairman can just print money. The Fed can only lower the rates and encourage banks to lend. That worked once and is unlikely to work twice. Almost everyone is in the pool. Those looking too buy on 20% dips are next..then look out. Unlike Japan in the 90’s we will not have the USA too export our deflationary pressure too.
An eventual run on the dollar will cause our interest rates too go abnormally higher then the economy would warrant. In the panic that would follow, there will be excellent opportunities. You are way too early to make even low ball offers in my opinion. Wait until the economic storm hits. Then pick amoung the wreckage.
Patrioric Bear - when do you predict the eye of the storm to hit land?
Holy cow - inventory in NoVA has gone from 18,000 to over 19,000 in five days. If anything, it looks like the growth in inventory is accelerating during the season when it’s supposed to be going down. Inventory on May 7, 2005: 4,500. Inventory on Jan 1, 2006: 9,303. Inventory has more than doubled in five months, and has quadrupled since last year.
If it continues to accelerate through the summer and fall, *that* would be fun. Usually inventory tops out in the summer. I was checking the Prince William County tax system this morning on new houses on the market in the Haymarket area that were bought last fall and winter, and immediately re-listed for 200K more than purchase price. (Now they’re “reduced” to only 100K more). Ugh. Greedy Pigs. No, they’re not selling. The odd thing is that the owners generally have foreign-sounding names. Curiouser and curiouser.
That same $200K markup BS has been going on for a long time in Loudoun and Fairfax Counties (that’s why we didn’t buy). Haymarket is in for a world of hurt. Other than tract homes and townhouses there’s nothing there, and the commute to/from DC is brutal.
And you’re right about the foreign-name thing. I see this all the time in the county tax records. Seems to be a lot of Asian and middle-Eastern names. It appears that many immigrants have formed the impression that real estate speculation is the path to riches in America.
Dominion Valley - a Toll Bros. Community in Haymarket - 100 resale properties there alone and several for rent. And they’re going to be building in there for the next five years. And Toll Brothers thinks they’re going to start a new community in Warrenton this year. There’s a glut of McMansions out here. Nobody can afford them. This is a place where Mom generally stays home. That’s part of the trade-off for living this far out - only one commuter.
My friend is a long-time, honest and reputable real estate agent. One of the best people I know. He told me flat out, that the only people buying now (and for the most part the last two years) are the Hispanics and Asians.
What this means? I don’t know, but he also stated that this is well know amongst realtors in the area.
“He told me flat out, that the only people buying now (and for the most part the last two years) are the Hispanics and Asians.”
Could be, but don’t they count?
I think the point is that the current buyers are rather new to the country/area and haven’t a clue what they are doing. They do not understand the fundamentals or price trends of the area. Most are not aware of the current credit/debt bubble, so are willing to pay any price since their Realtors warned them not to “get priced out forever.”
Foreign sounding - Did you mean non christian - western european origin name?
Sorry I meant christian - west european origin?
Asian and Middle-Eastern seem to be the flippers du jour. Of course, the Chinese folks in my microeconomics class in college who spoke practically no English were geniuses in the subject and seemed to relate to the instructor via osmosis. I, on the other hand, had trouble staying awake.
Y’all, I mean’t nothing racial by my comment. I was stating a fact, according to my friend who is a real good, straight forward realtor. He doesn’t lie to his clients, if they are doing something risky, he tells them.
Why only Asians and Hispanics for the most part are buying in NoVa in the last year I don’t know.
Part of me wonders if many are being taken advantage of. But like ArwenU mentioned, most of my Asian friends are much more gifted than I in the brains department, so perhaps all of the Asians and Hispanics were buying up.
I don’t know. That’s what I said.
It would be good if people didn’t pull the race card when someone posts an OBSERVATION.
Sheesh.
Many, many, many of the seriously overpriced homes in the Balto area are Asians that have come to work at JHU at the right time, and overprice so it sits and winds up selling for $60K less after 8 months. I can give you 5 links right this second. If I see an overpriced house, that’s my first guess, and the tax record more often than not proves me right.
The Islamic terrorists are buying in masses. They will default in masses in an effort to BK our financial system. Not that we need much help.
I know that a substantial share of the Merrifield condos in the Washington D.C. area were bought and sold by foreigners who had a lot of money to start with. They bought some and because of certain RE restrictions had their family members by and sell some.
It makes me sick that some joe blow is now paying $100K+ more for a condo because people with a lot of money are manipulating the real estate market.
Regarding arlingtonva’s comment:
When I was living in a bad part of Loudoun was selling and thought at first of buying again, no matter what I thought I could afford, I was outbid, at the time by foreign investors from outside the U.S.
I say that b/c I wonder how much of this has to do with not only inter-US flip mentality but extra-US market play?
How much? Who knows? But I’m not sure that aspect has been counted in.
Take into account that I was not bidding on McLean 1mil+ homes I was going 550 or less (come on, in a single income.)
Roach throwing in the towel made it official to me. With the bank cds at 5.25% wouldn’t everyone be saying run for the hills dudes! Oh, wait, nobody has any savings to deposit!
I dont know how the fed is going to get themselves out of this mess, but I think it will get to the point where everyone who was waiting for a crash so they could jump in on the fire sales will also still want to stand aside. I expect the Dow to be below 9000 by next year.
5.25%? Well, that still puts us at least 1% below the true inflation rate, and that’s before taxes.
But 5.25% is more money than you will see from here on out than investing $500,000 cash on a POS overinflated bubble RE. I rent the same house that $1mil will buy and the half the 5.25% interest pays for the rent, without any HOA, maintenance or property tax issues that the house owner has. House owning during price declines is for morons. Take your money and run if you can and RENT! It’s going to be even cheaper with 30+% devaluations in a couple of years.
I work with a lady, well more of a kid (22). She is talking about buying a home. She was saying how it’s a great time to buy, people are fixing up homes, homes are sitting on the market etc. She then went on to say how she was pre qualified for 400K. She said her paranets were going to help her with a down payment. Um, I know what she makes (tho she did say she has some type of trust fund and gets $1,000 a month) Still, unless her parents “down payment gift” is 1/2 the house, I don’t see how she can make a mortgage payment like that…Even if it’s IO.
She was saying how it’s a great time to buy, people are fixing up homes, homes are sitting on the market etc.
Poor thing. She didn’t come up with this on her own since she has no, I repeat “no”, first-hand experience in the housing market or the boom/busts of the past. Mom and Dad are probably telling her that she needs to “get in now” or be locked out. Uh huh. Ok, so she “gets in”….did they also tell her about HOAs, electric and gas billls (depending on where she lives, air conditioning costs could be a “mother”!), maintenance, property taxes, groceries, furniture, phone…ooooh, and what about gas for the car? tsk tsk tsk
That extra $1k a month is a nice shot in the arm, but how long will she have that for? A nice timing belt replacement could take a chunk out of that the month she may need it for her mortgage payment. And if, God forbid, Mom or Dad gets ill, she can kiss whatever “hand out” they will be giving her goodbye, as they will need it.
So many things to consider, yet people seem to lose, misplace and just plain not use common sense. I rent, and even with that, it’s below what I can truly afford. Living below your means is the way to go. I value my quality of life and the ability to be able to save and to enjoy travel and entertainment. When your money is so wound up tight in shelter, you can’t even breathe.
For her sake, I hope she gets a fixed mortgage.
BayQT~
We (me and another guy who works there) did tell her about wages, rents, and that she could be looking at being 100K in the hole. We must of spent a whole 2 min on it. I don’t think she listened, but at least *I* can sleep at night if she does buy.
Yep, that’s all you can do. I was on a 2 mile walk with a friend last week and she was telling me that she was looking at property to buy (we’re in NoCal). During that 30 minutes I did a brain dump on the market, giving her a ton of examples and, of course, referencing this blog, and I think I gave her pause. I’d hate to see her in a place that she shouldn’t be in a couple of years. And she is very, very close to retirement. There was no way I could be quiet about it.
BayQT~
I hate the envy/contempt mixture I feel hearing stories like that…I want a 95% ‘death tax’ instantiated, and used to pay down the deficit. This is one of the things that scares me and pisses me off about the coming years, how many over-privileged youngins’ will not even need to make use of the educations their parents bought them in a system based less and less on merit all the time to make life even more economically unsavory for the rest. It’s in this domain that I see all those late-empire arguments gaining imagery-traction, except with the advertised fantasy of social mobility we have today the hordes are hoping to actually *be* the aristocrats, or at least wear the same shoes.
I don’t think her parents are wealthy. Maybe the lower end of upper middle class.
i think that of youre rich and you die, you should be able to leave your money to your offspring without confiscatory taxes imposed by the government and a redistribution of wealth.
“You could give a billion dollars to the poor and it wouldn’t solve poverty. The poor would eventually become poor again. Money only magnifies what you already are. You give a person that’s on drugs more money, they’ll do more drugs. A gambler, they’re going to gamble more. Money magnifies what you already are.” - Bishop E. Bernard Jordan
Notice, though, that I didn’t say we should re-distribute monies taxed at death to ‘the poor’…I thought it would be good to get that ‘death tax’ we’d dropped on the very wealthy back to serve the society as a whole. For instance, legislation is in the works to end tuition tax credits. I think going back to a nice chunk out taken out of the transfer of money to offspring from very wealthy deceased parents could be balanced against the apparent budgetary need to stop offering these kind of tax breaks for education, for instance, to the greater good for society.
I don’t think I mentioned giving poor drug addicts money from anyone’s inheritance…but hey, I digressed off topic!
education tax breaks simply give colleges the ability to raise tuition. look at the rate increase of tuition.
Yes, I do believe that once a person makes money, and it is already taxed, they should be able to do what they want with it. It’s why I only believe in an income tax (no prop tax, sales, “fees” or other garbage). My money is my kids’ money. NOBODY has the right to take MY family’s money away from my family.
“‘Sellers feel they have to lower the price. When inventory is plentiful, it’s a buyer’s market,’ said Mr. Gemme. ‘You’ve got to keep prices down,’ he said. ‘I’d hate to be sitting on specs right now. Some developers are.’”
I wonder what are land speculators going to do with the lands they can’t sell? Owning an overpriced land is worse than owning an overpriced home. You get all the expenses except maybe insurance, but unless it’s in a downtown area where free parking space is hard to find and you can turn the land into a parking lot, there is zero income with that investment.
Sorry I copied a wrong quote, it should be
‘Builders are no longer in a hurry to purchase land. They used to call and ask, ‘What’s available?’”
land is actually very cheap to carry….all you pay are taxes and interest (if you are levered), but no maintenance as you would have with built out land. Plus, there was never any capital cost associated with developing the land.
I just watched the slideshow, I love trying to count all the for-sale signs. some are hidden and such.
oh, with ameriquest closing offices, you can bet more will be closed in the mortgage industry. so much for investing in commercial real estate.
There are still a few buyers out there who can’t wait to jump in at the top of the market, but I think we’re scraping the bottom of the idiot barrel. Funny money is still available to those foolish enough to take it, but a sharp spike in defaults (coming soon to a city near you) and a clear downtrend in prices will bring that to an end, and then the party will really be over.
As for denial, the psychology really has changed. None of our friends and acquaintances tells us that we should be buying in Loudoun County now, and a few have acknowledged that we did the right thing by not buying. Last year, when we told people that we weren’t buying, they’d look at us like we’d just told them we were running a meth lab in our basement.
We owned for 12 years, and after selling last year and not buying back in, my father-in-law told us we were “gambling”. That really hurt as we’re all Presbyterians.
We’re renting now and our neighbors don’t give us the time of day. They’re very suspicious of renters. But we’re moving anyway. The rental market is still soft in the exurbs, we’re getting a better deal, and the kids are thrilled about the new “gated community” (long story, has to do with a “Silly Songs with Larry” from Veggie Tales about a “Gated Community”). Our landlord tried to get us to stay, poor guy.
Even our agent who desperately wants a sale told us to wait to buy until at least the fall. If she hadn’t said that I would likely have not wanted to use her services, anyway. She knows we’re pretty up on the market and couldn’t lie to us.
Whre are you at? I wish everyone would say what city they are in or what area. It’s hard to know.
From what I’ve read house prices are falling in all bubble areas except N. Ca and Seattle areas where prices are still good. LA hasn’t really fallen much either.
I’m 70 miles from Washington, D.C., straight south of John in VA.
NYC and its better suburbs are still firm.
About 1/3 of Seattle area homes are price-reduced. If by “good” you mean expensive, yes things are still “good” here.
But with so much price reduction going on, I expect it will get “bad” soon.
Sacramento (Cali) has rising inventory but not much softness in prices. A good future indicator, I think, will be how we come through the summer season.
Discounts are starting in the local San Diego market as evidenced in the Union-Trib RE ads:
*Lennar: NEW PRICING
*aloft at Cortex HIll: FREE 43″ plasma TV
*Centex-1 year free HOA dues, free furnshings!
*777Lofts: Major Price Reductions up to $90K! *(by 5/31/06)
*William Lyon: $25K move in package with 100% financing
*Paradise View: Up to $20K in incentives
*The Lido: Save up to $80,000.
*Belleza: $20K incentives for immediate move-in
*KHovnanian, Lake Rancho Viejo: 5 night Hawaiian Vacation
*Winterview Homes: $10,000 credit
*Waterbridge Rancho Bernardo: $25K off plus $10K in upgrades +4% broker co-op.
*The Missions at Rio Vista: up to $35K off
Last week had almost none of these offers. There we offers in about half the ads. I expect that every ad will be running major reductions and incentives by early fall.
*were
Denial phase is not over yet. Actually, in San Francisco, the things are still “hot”.
Here is an example:
The 995sqf property in San Francisco, CA (sunset district - kinda crappy part of town) was for $599,000. Too much since rent for this size of house is max $ 2200 - but ok, nothing unusual in this crazy world. However, I was amazed when I read that there is a bidding war on this house. Description says:
First overbid is $788,000. Court date 5/8/06 at 9:00 a.M. At 400 macallister st 2nd flr. Nice direct ocean view home,see the breakers too! 3 bedrooms on main level ,1bath,hrwd flrs,nice floorplan too,new ext.Paint ,garage,yard,eat-in kitchen, room to expand too! This is a probate sale subject to court confirmation. Submit 10% cahier’s check made payable to the consevatorship estate of leo may. Property vacant with supra lcbx commission is split 50/50 with successful broker only.
Who is doing this?
there are still bidding wars in NYC and its upscale suburbs, too.
ha. No way. What upscale suburbs? Westchester?
Manhasset, LI
Lingus,
Thought of you when I read this in the Kennebec Journal today:
May 07, 2006
Unexpected visitors ruin a planned picnic
Cay Gallant
In days gone by, there were fields protected by a small grove and hemlock trees. Critters often were seen scurrying to and fro — a welcome to spring.
It was my favorite place as a child to find checkerberries and to see whether there were fish in the brook that ran by our house and beyond the fields to the old Winthrop Road.
Back then, my folks never locked the doors or lectured about the dangers of “bad” people. I had been taught to trust and to be kind and polite. John Gunther in his 1946 book, “Inside U.S.A.,” wrote: “Drop a pocketbook in the streets of Augusta and a dozen passersby will return it.”
For me, the Gunther philosophy came to a halt one early spring day.
It was a Saturday, my dad had gone fishing and I had invited friends to have a picnic lunch down under the pines in the back field. It was a beautiful day. I made peanut butter sandwiches and mom provided lemonade and cookies.
My friends had not arrived yet but I heard talking outdoors. Perhaps it was mom with friends or neighbors.
As I came to the porch, I saw a very dark-haired lady with a long skirt of silky material and a scarf about her shoulders. I then noticed an old truck in the driveway with a person at the wheel, and another woman who sat next to the driver. The woman at the house was asking my mother for a glass of water.
She talked unlike anyone I knew. I wished my father was home. The man got out of the truck and sat on the running board. My 10-year-old mind began to wander. Why were they here? Why did they choose this house? They looked so different.
Our dog Buddy came out of his sleep and sniffed the woman’s muddy shoes. She kicked her foot at him and said, “Dogs, I don’t like!” Just then the telephone rang and I ran to answer it. It was Mrs. Hussey, who lived across the street. Her caretaker, Fred Whitten, had seen the trio and she warned: “Look out! Those are gypsies and they’ve been prowling the neighborhood.”
At that point I heard mother saying: “If you don’t like dogs, Buddy will know and might bite you. You had best go out the back door.”
As she opened the door, the gypsy lady said: “Could I have one of those sandwiches. I’m hungry.”
My mom quietly said: “Our daughter is having guests and the sandwiches are for them.” The gypsy woman suddenly grabbed one of the sandwiches and shouted, “A bite for the road.” Mom held Buddy back while opening the kitchen door. The woman ran down the steps. In doing so, mom locked the door and said: “We must keep the doors locked from now on.”
For us, that was the beginning of locked doors. I learned afterwards that my mom had felt sorry because the woman said their truck had to rest because it was breaking down. Mother felt sorry for this person until she kicked our dog. That’s when her hospitality changed, unaware of the neighbor’s warning call about gypsies.
My enchanted woods and fields were never the same after that day.
My special place as I remembered my growing up years will never be forgotten. It was the enchanted forest and I was fortunate to have it for my special years.
Today, the brook reeks with the salt and dirt from the road, trees are gone and the animals have left the area. Commercial noise, lights, and glitter are the welcoming signs of today.
Cay Gallant is reachable at 385 Western Ave., Augusta 04330 and by e-mail at galrick2@mainester.net
http://kennebecjournal.mainetoday.com/news/local/2706179.shtml
The gypsies in Europe call themselves ‘Roma.’ They believe they are authorized by God to steal because their mythology says they stole a part being used to crucify Jesus Christ.
I’ve always wondered if Al Pacino’s character (Richard Roma) in the real estate film Glen Garry Glen Ross was meant as a slur on Gypsies.
Plenty of denial in SoCal. Everyone who owns has given up just a little of “20% per year” story. But, everyone is quick to mention the elephant sitting in the room is just a soft landing, prices CAN’T GO DOWN. Only flatten. It’s different this time than 1990s. Besides, the akward silences are the fact that many have two mortgages now because their flip up the property ladder is stalled because of slow sales.
Yes, I agree. Now that things have stopped going up and some are going down the new Realtor tag line is RE will go up “only” 5-10% this year, I am still trying to figure out how they come up with this number.
because it sounds reasonable to them.
People in SoCal should stick to apple martinis and shopping the Prada catalog. I’ve lived here since 2000, and haven’t gotten one intelligent response from any of these assclowns.
In the OC:
Price increases of 38% annually = Normal Market.
Price declines of 5% annually = Impossible.
This from the same group of people who think Hummers and neg-am loans are rational.
Funny you should mention Hummers. A couple of weeks ago someone here mentioned that it costs around $93 to fill the tank on an H2. I just checked the specs on that H2, and with gas price increases over the last 2 weeks, to fill a 32 gal tank @ min. $3.50 (yep, that’s ~ what Premium Unleaded is here in NoCal.), it will cost $112!!
$112 per fill up, at 8 miles per gallon. And some people COMMUTE in these things. This is beyond ludicrous. According to a report that I read (link below) the average commute distance in 1996, round trip, was 30.6 miles. I have no idea what it may be now.
Moral of this story: Get a reasonable commute vehicle.
http://www.plsinfo.org/healthysmc/29/how_residents_commute.html
BayQT~
But this is America. If you can afford it, you should be able to drive whatever you want. Those who do it and cannot afford it will pay the price.
As I said in that same posting, parked in the garage of every foreclosure will be a Hummer.
Point taken, skip. But your key phrase, “if you can afford it” is *my* point. For sure there are many driving these who can afford them, but I’ll bet you can match that number with those who just want to *look* like they can afford them. Nothing magical about that…it’s the same as folks who have several credit cards with limits up to $10K, and many of the cards are max’d. They just *want* things and will do what they will to extend their incomes to get them. I believe it’s called keeping up with the Joneses.
If they *can* afford it, then more power to them. If they can’t, it’s just plain old garden variety stupidity.
BayQT~
Ding!
Have you guys been seeing all the used cars on the streets for sale?
Hmm…can someone say ‘overdue property taxes’?
The OC is BURSTIN’.
in dc the number of properties on the market with price drops is on the rise
http://dcbubble.blogspot.com/2006/05/old-threads-new-condos-at-11-v-streets.html
all this - and still no bubble in DC??? Ugh. You are killing me DC.
i have a theory that some of these “late” buyers are either:
1. people downsizing from a more expensive house that they just sold. (they have to live somewhere and they have a gain/money from prior sale).
2. people who are rushing in afraid that interest rates will go higher and they’ll miss the “lower” rate.
3. people who are the last of the “greater fools” of the end of this bubble.
p.s. the main point of my post was #1. regarding #2 and #3 - sorry to post the obvious.
#4) people are buying their 2nd, 3rd, 4th, 5th, 6th condo/home
Big time denial up here in Seattle. One of the local TV news ran a “damage report countermeasure” right after the 20/20 report on the housing bubble. Basically it was “we’re different”, “prices are going up”, “buy now or you’ll be priced out”, “great local economy”, “tight supply”….ad nauseum.
The suckers are still buying up here and the champagne is still flowing.
The high end is still “hot” as CA equity refugees and those who were able to sell locally “move up”. This is skewing prices up.
But there are cracks in the foundation. The pace has slowed considerably from last summer’s “peak”. The bidding wars are gone. A few “back page” articles about RE industry companies downsizing or even going under. And the RE “professionals” are having to play “tricks”. Houses are being taken off and relisted as “new on market”. (I track by address so this ploy is obvious).
When you are a “destination” for equity refugees (mostly from CA) you end up being one of the last dominos to fall. But the downside of being one of the last standing is that you end up looking relatively expensive at the end of the game. This could actually exacerbate the “fall” in Seattle as those places that fall first will also be the first to look like a good place to buy.
Seattle will remain in denial until the equity refugees from CA dry up and the flippers start unloading.
The autumn will bring the fall.
The exhuberance (and lies!) with which KOM) news “covered” the Seattle RE market after the 20/20 “death of RE” show indicated to me tthat we are past denial here and into outright fear.
Statements like “buying is hard in Seattle- everything gets bidded up!!!” : Blatant lie. Anyone who checks the tax records on sold homes knows it. It’s easy to confirm that MOST (like 80%) of Seattle properties sell under asking.
In fact, the neighborhood they highlighted in the story is one where 75% of homes have sold below asking since LAST FALL!! So the price reduction thing is not new news.
The high end is not hot either. Contrary to the article yesterday in the Seattle Times, Laurelhurst mansions are not being “swooped up” with cash the day they are put on the market. That’s an area that I have been watching since Jan ‘06.
Many of those HOT! properties have been on the market for more than 200 days and most have had at least one price reduction.
One equity rich Californian buying one Laurelhurst mansion for cash in one day does not make a RED HOT!!! market. Not when there are 20 other Laurelhurst mansions that have been sitting and price-reducing for months.
It was the vigor of the lies that convinced me we are now in fear mode here.
Also, you know the segment on KOMO where they “proved” the market’s still hot by showing the open house with 50 business cards on the counter (supposedly to prove it had been viewed by 50 people and that bids would soon be pouring in?)
Friends of mine who’ve been trying to sell a house for a few months now had that experience of coming home to a massive amount of business cards on their kitchen counter.
Guess what, their house is still on the market. No bidding wars there. I’m sure they’ll sell under asking, just like everyone else.
Seven house out of 100 homes being bidded up does not make a red hot market. But in Seattle, the media is focusing on those 7 houses- forget about the 93 others.
The media disinformation tells me we are in full fear mode.
Housing Wizard said:”The inventory of homes will be so massive by mid June that it will be record-breaking in many States. Buyers will back off . When everybody want out ,nobody wants in”.
100% agree! I track the bayarea’s house listings via Harbor Bay Realty Website. Checked this morning- its now a whopping 20% increase in listings in just 2 days! Maybe that article on the cover of Harper’s promped homeowners to jump in while they can? It’s downright scary.
Sidenote: husband and I went to Auburn,CA yesterday and stopped by the Honda dealer to check out their CR-V’s. The saleman told us that if we bought the CRV today, they have a special 5 month no payment plan available-(driving it for free for 5 months) I asked him why they were offering this, he said people in that area (El Dorado, Sacramento County) are taking out equity loans needed time to get the loan, but needed a new car immediately. (Perfect example of instant gradification!) what is going to happen when no one can refi to buy a new car? Or the smarts homeowners who refi years ago into 5 1/4% dont have the means to a decent equity loan interest rate? Who is going to buy all these cars and expensive consumer goods; and for that matter,what impact will this have on the travel industry? Cash will be king once again.
The mainstream media are finding it harder and harder to deny that prices have gotten too high. But while they often acknowledge a bubble, they are quick to pint out all the places that will defy gravity, such as yesterday’s NY Times piece on California RE:
“California has both political and geographical constraints on building,” said Dowell Myers, professor of policy, planning and development at the University of Southern California. “That drives up prices, and then it snowballs.”
The geographical limits on developable land are the hills and the coast, while the political restrictions are state and local regulations that prevent building new homes, in response to both environmental and congestion concerns.
“One of the key factors here is the basic law of supply and demand,” said James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. “California is in marked contrast to Florida, where you can expand without constraint. It’s more like the New York suburbs, where too many dollars are chasing too few homes.”
http://www.nytimes.com/2006/05/07/realestate/07california.html?_r=1&oref=slogin
Right now the RE industry and their shills are fighting back hard. This spring season is their last redoubt. Any good news is magnified will the increasing bad news is simply ignored, suppressed, or spun.
Expect this “war” to continue thru mid-summer. The RE/loan industry has the loudest megaphone but soon nobody will be listening as the truth will be obvious.
HOUSING HELL in the HAMPTONS?
Finally, the NY Times has published an article
alluding to the softening real estate market in the
Hamptons. Since probably every other muckety muck at
the Times owns out there, it was likely a very tough
thing to have to do!
Like so many of the mainstream media’s bubble
pronouncements, you have to read between the lines and
realize it’s much worse than what they’re saying. I
believe this is just the very beginning out there and
future articles will tell some real horror tales.
Related to this, following is where you can click on a
recent report that talks about specific price declines
in this area: “Real Estate Market in the Five Eastern
Towns of Long Island” in PDF
Format-http://www.suffolkresearch.com/report.pdf
Perhaps a nice 30-40% crash will humble some of the
people out there who seem to care about nothing but
bragging of their riches and how smart they were to
get them. The NY Times article will surely change the
tenor at cocktail parties this weekend!
http://www.nytimes.com/2006/05/05/realestate/05rent.html
From Realtytimes re the San Jose, CA market:
“Cambrian, like everywhere else, has been flat for awhile (really, mostly flat for about a year with some bumps up and down - but always within a “band” of pricing that hovers around the same place).”
“My general sense of the market is that we are due to “go flat” for the next 2-3 years, with some small ups and downs. I would not expect anything dramatic in either direction.”
So we’ve finally acknowledged that there can be “downs”, “small ups and downs.” Baby steps…
Hmm, you’d think the fact that the Cambrian area is mostly older homes that need exentensive remodeling would come into play. Only advantage I see is close proximity to highway 85.
The best part of Cambrian is the part that borders Los Gatos, IMO. However, I’d rather buy a townhouse in Los Gatos than a SFH in Cambrian.
For some reason, the real-estate market Silicon Valley has been surprisingly resilient. We need some more layoffs. Perhaps Sun will help us out…
You know in the options market “flat” is how the leveraged bulls go broke. All these home “owners” have nothing but out of the money call options at this point. Flat ain’t gonna cut it. The banks will get to keep the underlying asset, they sold covered calls that will expire worthless.
Interesting analogy, Ted. Except the banks are also at risk - the covered call writer loses if the asset price goes down.
Total denial still in Sonoma County… Sonoma Valley in particular. Agents here still have newspaper advertisements saying: “Hurry and jump into this HOT SELLER’s market!”
In the minds of locals… it is different here. If in fact word of a bubble gets out and does have an effect on Sonoma prices… others will be blamed. All those other areas that thought they were special and caused a bubble that rippled into Sonoma will be held accountable. Every other place ought to know that Sonoma is special and they are the chosen people, and all other places should stop pretending. After all… everyone wants to live HERE.
So when the bubble bursts in our enchanted valley, it will be the fault of all the poser bubble areas that screwed things up. :-/
Went to two open houses in two different town in RI, both agents said it’s a buyer’s market. One said we can make a low offer, but she doesn’t know how much the seller is willing to take. The second told me the house has been on market for one YEAR! It started at 599K, rejected an offer because he wants full price. Now it’s down to 525K, and they got a lowball last week. It’s so low that they think the deal won’t go through!
I cant believe it! Today my husband spoke with his brother-in-law who said he just read the article in the Fortune Magazine, and he says all the experts are saying we are in a “housing bubble”. Imagine that? We only take about the housing implosion everytime we get together, but now for some reason, since he read it himself, it’s reality! Just imagine when the headlines on Newsweek Magazine warn of the RE bubble, only then, will everyone pay attention!
I know it sounds unbeliveable to us but a lot of people don’t do much internet research like all of us on this blog obviously do. I suspect that many people live and breathe what they either see on network news or in certain high profile and respected newspapers and other periodicals. When it appears in either of these places then, like you said, it’s suddenly reality. It mattered not that someone was telling them for the past couple of years that a bubble was upon us.
Amazing isn’t it? I guess we can be happy for small favors, but if they had paid attention sooner, there wouldn’t be so many flopped flippers and FBs.
BayQT~
Of course there is still denial. Idiots will be in denial right up to the point they leave the keys in the mailbox and move to another state. The new coldwell banker magazine for San Diego is out, and prices are down again as they have been for many months. I saw an ad for a house in Carlsbad on an acre for 450K - 2 years ago that would be unheard of. And more inventory comes online everyday - even the magazine itself has at the top on the cover “See thousands of NEW listings everyday”. They got that right, inventory continues to climb. The local newspaper, the coast news, advertises a list of open homes as well as sold homes and they continue to print the same house that sold who knows when every week - the only sale apparently in a while. The bottom line is places that HAVE to sell are taking MAJOR hits, and this should affect comps (although I have a feeling some of those are probably bogus just like days on market).
around ann arbor MI this weekend the houses are still overpriced, with some loong-on-the-market homes keeping at those 5K reductions every couple weeks or months, so the sellers seem in denial still. I honestly don’t get what they’re waiting for. Some of these deals are held open every week or at least once or twice a month, and still keep the price. I keep meaning to check on the last sale price for some of the ones that haven’t sold in like a year and have had very little price movement.
One house I’d looked at in the fall finally fell to 45K off initial asking (on a 300K first asking price, so a ‘whopping’ 15% off !), and this place is an estate-y deal I think, with the thing paid off long ago presumably by the original owner now deceased. One place where houses had been selling for 10% more last year had had some very obvious reductions for weeks, bringing the price down to maybe 15%-20% less than last years ‘comps’, and it was being held open again today. People are actually talking now in town about what a “buyer’s market” it is. How folks aren’t having much luck selling their houses. But the prices remain too high. I’ve never felt like more than 25% of the people in this town really *can’t* lower their prices much, so there’s still a lot of ‘denial’ about what will get a house sold. It’s like watching people fish with boots tied to their lines and wondering why they’re not getting any bites, complaining about the declining fish stocks instead.
Don’t kid yourself, prices are definetely coming down here in the OC. Not a lot yet (maybe 5 - 10%) but it’s a start. Lot’s of denial still rampant here and I see a lot of people sweatin their 2nd/3rd investment purchases (usually condos) in LV, AZ and San Diego.
Once the Spring bounce splats and the summer goes by with record inventory on the market, you’ll see the big price reductions. Lot’s of people in the OC are heavily leveraged against volatile ARMS which start to re-set next year.