‘It’s Shocking To Say Houses Are Places You Live In’: SD
The Union Tribune reports on the San Diego housing bubble. “San Diego County’s housing market was a quiet place last month as prices slipped in some areas and settled to an overall median of $505,000, DataQuick reported. The figure, off the all-time peak of $518,000 set in November, was only $1,000 more than in March and up just 4.3 percent from a year ago.”
“Resale houses and condos both had a dip of $5,000 in their medians from March to $555,000 and $395,000, respectively. More telling were sales totals, down 30.7 percent from April 2005 to 3,705 transactions, marking the steepest year-over-year drop since activity began sagging in mid-2004.”
“While sales were off sharply, the San Diego Association of Realtors reported a continuing surge in listings. That number stood at 18,225, which was 75 percent ahead of last year’s level. More than 35 percent of the listings carried prices that had been reduced from the original price.”
“Ross Starr, an economist at the University of California San Diego, said yesterday’s increase in short-term interest rates announced by the Federal Reserve means that buyers will be inclined to take out 30-year loans and settle for little if any appreciation for the foreseeable future.”
“‘It is shocking to say that houses are places that you live in, not places that you trade like Monopoly cards,’ Starr said, adding a caution forgotten by many in recent years: ‘It is not a universal law of nature that real estate prices go up.’”
“Kristian Cabuago hopes to spend his first night in the first home of his own, a 950-square-foot top-floor condo in the Gaslamp Quarter. It cost him $550,000 and he thinks he timed his purchase just right when he signed a sales contract earlier this year. ‘At that time the news was forecasting condos in downtown and everywhere were suffering,’ Cabuago said. ‘I thought that was a perfect time to buy.’”
“He negotiated the price down from $591,000. and considered it a bonus that his homeowner association fees will be $250. ‘For my age group, there’s no way I can lose,’ he said. ‘You can’t ask for more.’”
“As for sellers, they’re pestering their agents to schedule more open houses, advertise more to attract potential buyers and take all available steps to get their properties moving. After a few weeks, many take their agents’ advice and cut prices.”
“Peter Dennehy, who advises builders on how to position their projects, said many are boosting incentives, reducing prices and expecting it to take longer to sell out. But would-be buyers can’t sell their homes fast enough, sales manager Pat Setter said, to commit to buy at Bougainvillea Walk project in La Mesa, where all 16 homes are completed but only seven have been sold. ‘That’s our biggest issue for prospective buyers,’ she said.”
“Prices range from $583,990 to $690,990 for 1,911 to 2,093 square feet, and a project sign was recently changed to reflect lower prices, but that was because some homes offered were on less-desirable lots, Setter said. Of more than 90 ZIP codes in the county, all but nine posted median prices last month that were lower than their peaks set in the last few months, according to DataQuick.”
“Jan Havern, who is trying to sell her 3,900-square-foot house for between $900,000 and $1,050,000. The home on Vista Arroyo has been on the market 45 days with no offers submitted to date. ‘I’m as nervous as anybody else since I’m trying to sell,’ she said, adding that she and her husband have already bought a replacement home in Bend, Ore.”
“Her advice to fellow sellers: ‘They have to sit tight and maybe take a little longer,’ she said. ‘You’ve got to be realistic.’”
>> “Her advice to fellow sellers: ‘They have to sit tight and maybe take a little longer,’ she said. ‘You’ve got to be realistic.’”
What about being realistic on the price rather than the waiting time. Sure, if you price too high, it will sit. But if you price low enough, it will move.
Here is the Truth: If you want to sell today, you will need to lower your price.
The truth is that the agents don’t want the sellers to beat them by the punch. They want to unload their investment first while double talking the sellers to hang tight.
I agree with your assessment. Most specuvestors I know are realtors. And they are all bailing.
I agree, the choice is to lower the price 100K today, or lower it 150K tomorrow. hmm.. I think lowering today and getting it over with sounds like a better idea. I just don’t get people lowering prices 3K, like 3K or even 10K will make a diffrence.
To be fair, she’s lowered the price a 100k. So she seems fairly realistic. The house is on a huge 25,264 sq ft lot and it’s located in Mt Helix, a very exclusive area. It doesn’t seem that wildly overpriced.
The house
http://realtor.com/Prop/1056698965
I define a house as “overpriced” as a house that does not sell.
By your definition then those “cute” homes in Oakland that sold for 400k + weren’t overpriced.
Look at the cheap stove in the kitchen of a $1M place. At that price, I want a professional range.
Other than that, pretty nice place. I’d pay about 600K for it since it is in a nice part of San Diego.
Yeah, the stove is pretty disgraceful considering that it’s in a million dollar home.
You’re right on the mark as to what it’s really worth, IMO. That being said when you look at what 900k to million gets you here in SD right now that place looks pretty darn good. It’s an extremely nice area with a great country feel and lots that size are hard to come by in the city. I’d prefer that house to a stucco box in Scripps Ranch any day. Oh and comparable (well sort of) asking price is about 1.2 million in Scripps.
Oh yeah, we know these sellers in the Netherlands. There are quite a few in my area who have been sitting tight for more than 5 years now with their slightly unrealistic asking price.
thanks the Dutch tax system and Tricky Trichet, the yearly cost of owning a home is so low (about 2%) that owners don’t worry if it takes a few years longer to sell … they complain, but that’s about all.
nhz, an off-topic question: What are gasoline/petrol prices doing there? When I hear what Europeans pay I’m never sure how the US media gets that number or how they’re filtering it. You can convert it to US units if you want, but I really want to know the raw price in Euro per liter too.
Thanks.
In Finland 1.35eur per liter at the moment. I don’t complain. If it goes to 2 euros per liter, it’s still peanuts.
Let’s convert that 1.35eur per liter for the US folks. That translates to 6.6$ per gallon. And I really don’t care if it hits 2 eur per liter. I drive a 1.4 Corolla
Can’t believe there is another finn here.-Moi
well, I don’t drive a car so I’m not quite up to date but I think it was around EUR 1.60 per liter a few weeks ago. Most of the price is tax (’energy tax’ - which officially is there to make sure you think twice before using so much energy, however the really big users/polluters don’t pay any energy tax).
So yes, we have a laugh when we hear the US consumer complaining about gas prices
However, I do understand where the complaints are coming from as the percentage increase was probably higher in the US over the last year.
I just saw a comparison of European gas prices to USA prices, both net of taxes. The cost was cheaper, I believe about 10% cheaper per galllon in Europe, compared to the US. This is the price before taxes in several large countries including UK, France, Germany. It gave the actual numbers per gallon in each country and the taxes in each country. Very interesting.
Europe in general has a very different method of organizing their commuting. Cars are much more of a luxury there than here. Fuel is taxed very highly and licenses are both expensive and difficult to obtain. The prices you hear are correct, but include roughly $3/gallon in taxes unlike our $0.40-$0.70 depending on the state you are in.
Another thing to keep in mind is the average MPG for cars in the US vs the average MG for cars in Europe. I bet we drive more economical cars around here. And taxes, well, you typically get at least something for your tax money, even though much of the taxes end up used in ways I wouldn’t want them to be used.
Earth to Kristian Cabuago - you can lose when your $550K purchase is now worth less than half and your negotiated HOA is now higher because your building is vacant!!!!! LOL
Earth to Jan Havern - Her advice to fellow sellers: ‘They have to sit tight and maybe take a little longer,’ she said. ‘You’ve got to be realistic.’” - Lower your priced a lot more, and sell to get the H&LL out of Dodge.!!!
950 square ft. 950….. $550,000…..condo…(gasp)…”no way I can lose”…..(cough)……can’t breathe…..laughing too hard…..
bwahahahaha… bring on the depends. Too much laughter. pee involved.
LMFAO, can’t loose, huh? How about a jar of Vasaline for that guy!
Free Vasoline for everyone!!! (Costco size)
And it’s in the Gaslamp District of downtown San Diego. It’s a trendy happening place, that might be a lot of fun for a single 20-something, but in a few years he’ll tire of the constant noise and trash, I’ll bet.
But of course he’ll just sell then for twice what he paid now, right?
Cabuago thinks he made a smokin’ deal…LOL
He won’t be quite as bad a loser as peak buyers, but these “early adopters” of the downward cycle will also be sorry. Patience Mr. Cabuago…patience.
“He negotiated the price down from $591,000. and considered it a bonus that his homeowner association fees will be $250. ‘For my age group, there’s no way I can lose,’ he said. ‘You can’t ask for more.’”
It’s that can’t lose mentality that has caused this bubble and it will be the one to prick it.
My thoughts exactly. Hope he’s content to be a slave worker bee for the rest of his life.
I hope she takes a bath on both houses, and more importantly: decides not to move to Oregon.
“Bend, Ore.”?
More like, “Bend Over”!
“I hope she takes a bath on both houses, and more importantly: decides not to move to Oregon.”
Amen. I’m sure the native Oregonadians are about fed up with the money grubbers from the land of fruits and nuts anyways.
No, please take this lady off our hands and store her away somewhere in Ben Over Orgegon, please…
This process of relocation is exactly what Robert Shiller predicted in “Irrational Exuberance”. Once prices hit a certain price in certain areas, people do the rational thing and move to less expensive climes. Over a period of time this acts to bring prices down (less people = less demand = lower prices) so that real estate over time goes up slightly more than general inflation.
The rational aspect was her desire to move to a less expensive real estate area. The irrational aspect was her purchase of a home in Bend Oregon before she sold her property in San Diego. Now she’s carrying both homes — she’s is need of some financial counseling.
Nah, send people out of So Cal is better.
Let em ruin Bend, OR as well.
They already have ruined Bend OR. !!!
Traffic like the OC every day all day and McMansions going up everywhere. Then they say they want to maintain the rural atmosphere. They are moving here by the droves.
Yep, I know. I lived in PDX in 2004 and skied at Bachelor quite a bit.
Other parts of the nation need to experience what So Cal has put up with for over 20 years.
Exactly, Sunsetbeachguy. I like how everyone can complain about Californians ruining their state, but we’re supposed to welcome everybody with open arms. What’s going on now in other states (overcrowding, traffic, decimating natural and agricultural areas to build ugly stucco boxes, people wanting us to fit their lifestyle instead of assimilating to ours, etc.) is just a tiny fraction of what we Californians have had to put up with for decades.
true true
plus the fact that most of these transient “Californians” are often from other-than CA in the first place.
I think the prices in Bend are insane…
Median SFR price was down $5000
Median condo price was down $5000
But overall median price was up $1000
Huh? All three are reportedly median prices for month-over-month. What else is there that went up so much, apartment buildings? They’d have to go up a good bit for the overall median to still rise, wouldn’t they? What am I missing here? Don’t journalists ask these questions anymore?
From the article, it says that median prices for new homes/condos went up $20,000. So that’s why overall median went up $1000. Here:
“Newly built homes and condo conversions rose $20,000 to $495,000, a sign that sales of lower-priced conversion units were being outweighed by higher-priced new construction, market experts said.”
I know of neighbors and a few relatives in Chula Vista who actually bought new McMansions in Rolling Hills Ranch last month (prices range from $1mil to $1.5mil), but I know many of these haven’t sold their previous homes yet (some of these people, like my aunt, barely lived in their “old” home for a year!). So these purchases are definitely “distorting” the median prices. Unbelievably, I heard one of these recent buyers (friends of my brother) say that they can’t wait until next year or two when their new McMansions are worth $2 million! Sigh…
I think you might be confusing average with median
Those $1 million won’t move the median much but will move the average a lot. That’s why we use median to exclude the severe outliers.
The mean (average) is more sensitive to sales of very expensive homes. Very expensive homes do not sell very often (or they wouldn’t be considered very expensive). So if a $10mil dollar house sells, it will raise the mean but probably not the median.
My wife was recently in Chula Vista. She was completely astonished at the apparent glut of newly-build McMansions which sprawled before her very eyes.
Those hills used to be full of grass and cows.
Mission Valley was full of cows too. Did you know there is cow tunnel under I-8 in Mission Valley?
OK, so new stock is keeping the overall median up. Maybe next time, I’ll actually read the whole article.
The median price of SFRs is higher than that of the condos.
At this point, more SFRs are selling than are condos (the ratio has changed). Thus, even though individual SFRs are going down in price, and condos going down in price, the overall mix is now favoring SFHs which are higher priced, hence the overall median rises.
Example:
If prices were:
Condo: 1, 2, 3, 4, 5, 6, 7. Median price is 4
Home: 4, 5, 6, 7, 8, 9, 10. Median price is 7
Overall: 1, 2, 3, 4, 4, 5, 5, 6, 6, 7, 7, 8, 9, 19 Overall median is between 5 and 6
Now let’s say we have this:
Condo: 1, 2, 3, 4, 7 Median price is 3 (down from 4)
Home: 4, 6, 6, 7, 8, 9 Median price is 6 (down from 7)
Overall 1, 2, 3, 4, 4, 6, 6, 7, 7, 8, 9 Median price is 6. (up from 5/6)
So here, we see Medians for condos and SFHs both dropping, but the overall goes up due to the MIX of things sold.
hope that helps.
clouseau
Nice example clouseau!
You must be a statistician! It is not very intuitive that the medians of two categories can go down while the overall median rises.
NB
Simpson’s Paradox (not Homer).
The trouble with the overall median as a measure of sale price is that it confounds the change in price of comparable housing with the change in the mix of housing that is sold. If relatively more SFRs than condos sold this month compared to last, the overall median would go up, while if relatively more condos than SFRs sold this month compared to last, the median would go down, even though the separate groups’ medians both dropped by $5K.
Yes, but isn’t confounding what it’s all about anyway? I mean wouldn’t price per square foot be more meaniful.
no, because when the mix changes, the price per square foot changes just as well - it would probably be even more confusing.
In my country they reported average price per square meter until recently. I could never make much sense out of the numbers (even less then the average/median sales price statistics).
“He negotiated the price down from $591,000. and considered it a bonus that his homeowner association fees will be $250. ‘For my age group, there’s no way I can lose,’ he said. ‘You can’t ask for more.’”
It’s that can’t lose mentality that has caused this bubble.
What will they all think when they found out they lost? What will they think when they find out they weren’t smart? When they find out they were the greatest fool?
Then they will actually feel a little stupid…well, a LOT stupid. At 27 yrs old, he really doesn’t know anything yet, and possibly hasn’t felt the sting of job loss, employer move, major illness….you know, the curve balls that life throws at us when we are not looking. Let’s hope he’s saving a little, too….that is, if he has room in his budget to do that.
BayQT~
Poker mentality…
“You can’t ask for more.”
how about a lower price?
Get an attorney and file a lawsuit. It’s the Californian way LOL
“Starr said, adding a caution forgotten by many in recent years: ‘It is not a universal law of nature that real estate prices go up.’”
I almost fell down dead when I read this.
They really should put an alert in these messages, so that innocent bystanders aren’t killed immediately from the shock of such blasphemy.
I now have to go stick my head in a hole for a while, until these unclean thoughts leave my mind… or else I may be struck by lightning.
Besides, of COURSE RE doesn’t always go up. It plateaus permanently sometimes too.
clouseau
RE doesn’t always go up 20% every year. Sometimes it only goes up 15%.
Someone wrote that (sarcastically) a few months back. Still get a kick out of it.
Fortunately, in OC it’s going to go up 15% this year. Gary Watts said that it’s in the bag, and Suzanne researched it.
Nice. It must simply reflect the 15% wage increase that happens annually across the board. Don’t fret about raising interest rates, 90% of OC purchases are all cash. “The OC” show taught us a lot about the OC lifestyle.
Will someone PLEASE go to realtor.com > market conditions > California > Orange County, then read what Frances Caldwell has to say- it’s SOLID GOLD reading! (I don’t know how to post the link) Thanks
“Jan Havern, who is trying to sell her 3,900-square-foot house for between $900,000 and $1,050,000. The home on Vista Arroyo has been on the market 45 days with no offers submitted to date. ‘I’m as nervous as anybody else since I’m trying to sell,’ she said, adding that she and her husband have already bought a replacement home in Bend, Ore.”
3900sqFt? What is it that compels people to think they NEED 3900sqFt to eat, sleep and $hit in? Ya think maybe its a brady bunch keep up with the Jones inadequacy?
And WTF is a “replacement ‘home’”? Do they mean to say a HOUSE? Home is where I reside, as in a town or a state.
This “home” $hit is vomit inducing.
Here in Portland, OR, they list total sq ft, finished or not, in the MLS. I saw one this morning that says 3900 sq ft. At least they were honest in the comments and said 2700 finished sq ft. Half of that could be upstairs in a finished attic where coved ceilings prevent normal walking or furniture placement. And the duct work in the basement could be too low to finish out or walk normally under. So you could be looking at, in this case, almost $800,000 for 1500 sq ft of livable space. And of course there’s no extra storage included since every sq in of the house has already been accounted for.
some time ago a RE broker in my city listed a nearby historic home as having 6000 sq ft of living space; just from the size of the home I could calculate that was impossible.
But for the broker nothing was wrong with the number: they included an optional level that could be (re)constructed in the attic (which was 4m high, and maybe had another floor at some point in the distant past). That virtual floor increased the total space from a little above 4500 to 6000 sq ft …
>
I knew it Lingus, you’re an out-of-work homeless guy who blogs in the public library. That’s why you blame it all on Republicans.
yes. I’m out of work and blog from public libraries. Wow. You know everything.
How are you paying for your SLOburban then?
Agree with you.
Everyone agrees with me eventually.
I can think of only one reason to need 3900 square feet, and it’s not common these days.
That reason is lots and lots of kids— the Brady Bunch, as you said above.
Though IIRC, my father— one of nine— grew up in a house of less than 2000 square feet. But then, of course, there was probably only one or two bathrooms in the house. And the kids shared rooms.
These 2 greater fools and their statements are close to the most entertaining DUMB$HITs we have seen quoted on this blog ever. What do our other fellow stellar bloggers think?
still….can’t…breathe….laughing…..help!
I advise that Ben give an official warning not to read the blog while eating or drinking, as Ben shall not be liable for keyboard replacement costs- and they can get expensive.
It is also advisable that readers make frequent visits to the loo because there is a danger of sudden outbursts of laughter that have been known to involve a little bit of pee.
“Ross Starr, an economist at the University of California San Diego, said yesterday’s increase in short-term interest rates announced by the Federal Reserve means that buyers will be inclined to take out 30-year loans and settle for little if any appreciation for the foreseeable future.”
Although the only way the majority of SD-area buyers over the last year could make their monthly mortgage payment sufficiently low to qualify was to use an interest-only ARM (in many cases with the option to pay less than interest each month) with little or no downpayment, Professor Starr asserts that buyers will henceforth primarily buy with 30-year fixed mortgages. He also expects little appreciation, but cautiously left unclear whether he thinks prices have hit a permanently high plateau or will drop like a rock, or something in between.
How does that square with the ugly facts?
1) Since mortgage rates have spiked up across the lender’s product line, last year’s marginal 100%+ financed-I/O ARM- (aka a suicide loan)- borrower is now priced out of the market. Even if someone in the same financial position as last year’s marginal buyer currently chose the product which provided the lowest possible monthly payment, he would not be able to purchase the same home at the same price, due to the effect of much higher interest rates on monthly payments.
2) One reason lenders were making suicide loans last year and borrowers were taking them was that expected 10%+ YOY gains were priced in, reducing the risk to lenders and borrowers of a future short sale. Given that appreciation has ground to a halt, the risk to lenders and buyers is ramped up considerably, and the resulting lending risk premium due to the decrease in anticipated future home equity appreciation translates into a drop in the fair market value of a home from where it was last year before anyone with a bully pulpit (except for cranks like Shiller and Krugman) was talking about the slowdown.
3) The marginal buyer who cannot currently afford to use a suicide loan to buy a home at a particular price pointis even less able to afford the same home on a 30-year fixed, especially if a downpayment requirement is thrown in to give the lender some insurance against short sales.
So if Professor Starr’s assertion that the 30-year loan is the only kind buyers will be inclined to use going forward is correct, then his other assertion (”buyers will … settle for little if any appreciation for the foreseeable future”) is an understatement: Buyers over the foreseeable future will settle for falling prices, unless they buy at a considerable discount to last year’s sale price (which means that last year’s buyer experiences not “no appreciation”, but rather negative appreciation). Unfortunately, if lots of buyers get these discounts, that tends to set in motion a cycle of falling prices, kind of like the one that California had from 1990-1996. With SD inventory approaching seven times its Spring 2004 level and no sign the inventory correction is slowing, such discounts are in the cards.
Hasn’t the principal owed actually increased on many of these suicide loans? Methinks someone needs a snorkel
Yes, which is one reason why the purchase of GDW by Wachovia a couple of days ago resulted in the plunge of Wachovia’s share value. (Much of the “assets” on GDW’s books amount to accrued — i.e., unpaid — interest on suicide loans.)
SD’s ziprealty inventory is 20,138 today — that would be 129 more listings than as of last evening. I guess Thursday is a big day for new listings around here? I always heard that Monday was the heavy listing day, but we all know SD is “different.”
“At that time the news was forecasting condos in downtown and everywhere were suffering,’ Cabuago said. ‘I thought that was a perfect time to buy.”
He thinks this is the bottom? This is the gentle incline that leads to the edge of the cliff, and Cabuago is going to find out what it feels like to be a base jumper.
I say: “San Diego and Vancouver condos for everyone!”
Get back Jack…..
vancouver? i get a vancouver condo as well?
sf, yer the greatest bro!
I want a Victoria condo! Vancouver is passe.
I think the moment we’re in right now is like when Daffy Duck runs off a cliff and hangs in the air momentarily before he realizes his predicament and plummets to the ground. The only difference is that when it happens in the cartoons, they just get up and walk away.
True stories from this week in San Diego:
A spec duplex in La Jolla that has been vacant since it was completed in December 05 has been vandalized.
Open houses in La Jolla at noon on Wednesday.
The only people I know who have bought recently have both been ditzy 20-something chicks buying apartments, er, “condos.”
Real estate agents moving to Seattle.
And more…
All the construction people we know (or know about) say work has dropped off a cliff. Every one.
The contractor that does some work on my place now and then says business is still pretty good. He handles mainly small to medium-sized remodeling projects. I think with housing prices so high, many people are opting for the remodel rather than move.
Ditto Here….
Don’t forget that SD is ahead of you guys. We haven’t really had any appreciation in almost two years. Those who wanted to add-on already have, IMHO.
Please keep us posted if you notice any changes in your area WRT construction jobs, etc.
O.C. population growth slows, from OC Register’s Lansner.
Anybody see a trend here in these new stats from the state Department of Finance? Anybody guessing why population growth is slowing in The O.C. and statewide? By my quick check of state records, the past year’s growth appears to mark the smallest addition to O.C. population since 1991 — and I mean in absolute count, not percentage gain.
O.C. Population Year’s growth % growth
1/1/01 2,891,100 44,811 1.57%
1/1/02 2,940,743 49,643 1.72%
1/1/03 2,983,731 42,988 1.46%
1/1/04 3,019,889 36,158 1.21%
1/1/05 3,047,054 27,165 0.90%
1/1/06 3,072,336 25,282 0.83%
California Population Year’s growth % growth
1/1/01 34,441,561 568,475 1.68%
1/1/02 35,088,671 647,110 1.88%
1/1/03 35,691,472 602,801 1.72%
1/1/04 36,245,016 553,544 1.55%
1/1/05 36,728,196 483,180 1.33%
1/1/06 37,172,015 443,819 1.21%
Yes, the trend is more illegal immigrants and growth is going down the tubes…. but the economy is strong and everyone is happy. Buy, Buy, Buy!!!
Everyone wants to live here. Just not at the same time.
‘Kristian Cabuago hopes to spend his first night in the first home of his own, a 950-square-foot top-floor condo in the Gaslamp Quarter. It cost him $550,000 and he thinks he timed his purchase just right when he signed a sales contract earlier this year. For my age group, there’s no way I can lose,’ he said. ‘You can’t ask for more.’
Do newspapers deliberately seek these guys out, like the way Jay Leno selects his JayWalkers? I guess you could say Kristian was “Fooled by Randomness” –
http://www.fooledbyrandomness.com/
I just finished reading this yesterday (probably from an earlier post from you) and really laughed at some of the preconceived notions I was able to deconstruct especially regarding financial planners and traders. Black Swans for everyone!
The book, not the website BTW
Black Swans for recent downtown SD condo purchasers!
“He negotiated the price down from $591,000. and considered it a bonus that his homeowner association fees will be $250. ‘For my age group, there’s no way I can lose,’ he said. ‘You can’t ask for more.’”
———————————————————————–
Translation: I’ll still be alive when it’s paid off.
My family is part of the exodus in those numbers. But the birth of the illegal folks (not meant to pick on any ethnicity, but reality is reality) will more than make up for that. I am sure the banks will find even more creative ways to allow folks on welfare to buy $1M+ homes to keep the bubble going. And after that, Fido and Fluffy will be signing for the now priced $1.5M + home mortgages. After that, not sure who will be the greater FOOLs. Except maybe the idiots in Hollywood.
But the birth of the illegal folks (not meant to pick on any ethnicity, but reality is reality) will more than make up for that.
“Illegal” refers to resident status, not ethnicity, so no need to worry about your post.
Only in the technical sense. In a practical sense, illegal means Mexican. I saw the flags on TV.
Bingo.
“And after that, Fido and Fluffy will be signing for the now priced $1.5M + home mortgages.”
About time my dogs bought me a house. I’ve been supporting those freeloaders for way too long.
Another one from the Register.
Thursday, May 11, 2006
Impac Mortgage reports earnings down by half
Newport Beach-based Impac Mortgage Holdings earned $86 million in the first quarter, about half of what it made a year ago, according to a Wednesday filing.
The company, which invests in loans to people with spotty credit or other difficulty getting a traditional mortgage, said its costs were higher this year because of higher short-term interest rates. The company sells loans to investors as bonds, with bond payments tied to short-term rates. Profit also fell because of a drop in the value of derivative investments.
Cash dividends declared per common share were $0.25 for the first quarter of 2006 compared with $0.20 for the fourth quarter of 2005 and $0.75 for the first quarter of 2005.
Or those sitting in the Capital - unless it gets washed away in a flood.
This is the worst “May Gray” I’ve ever seen in San Diego. I’m sure that is helping the housing market. San Diegans like to leave town or sit at home in weather like this!
I kinda like May Gray and June Gloom. I like to think it discourages the tourists from moving here.
I enjoy May Gray and June Gloom too. It starts to get hot in SoCalif in July, actually gets hot in August, gets really hot in September, and by October, it has not rained for 8 months– and the fires start.
You missed the memo. San Diego has THE BEST weather. Just ask any Realtor.
When I moved to coastal SD from inland LA, it took me years to get used to the cold overcast. One year, we had almost 8 months of cloudy or overcast weather. Very depressing.
SD has absolutely beautiful weather in the fall and winter. Spring and early summer (’til at least mid-July) are really, really depressing, IMHO.
Ah, if you live at the beaches the marine layer can be pretty bad. I like where I live, about 10 minutes from Downtown SD. Close enough to the ocean to be cool, have the nice ocean breezes but I don’t have to deal with the funky marine layer.
This is the second time now in a week that somebody in the media has called houses a “place to live”.
What a sea change. That idea, once it takes hold, will bring prices down more than anything else.
I never knew you could live in houses before!
I’ll have to think about this strange and fascinating new concept. It’s a little disturbing to me.
Next you’ll tell me I should buy a house that
1) is in the same city as me
2) that I have seen before
3) that I can afford with a 30 yr mortgage and 20% down
My universe is really changing reading these posts!
LOL ….how funny .
Houses are investments. This is all nonsense. I don’t even know why they install functioning plumbing in them. Quit disseminating these radical ideas or I’m going to have to involve Suzanne.
>
“I say: Dark condo towers for everyone!”
I live about 10 miles from downtown San Diego. The most prominent feature by far downtown is the proliferation of high rise condos under construction. Glut glut glut. The newspapers are full of condo ads. The Padres games of TV feature condo sales. Nothing is moving except to idiots.
I say: “San Diego condos for everyone with a pulse!”
This morning, I overheard one of my cooworkers complaining about the housing market in her neighborhood. She is preparing to move from the SoCal to Georgia and needs to sell her house soon. She has had it listed on the market for over two months 470K and has had only six visitiors in three open houses. Many other houses on her block have been for sale for some time. A couple of weeks ago, one couple on her block had a serious domestic dispute, with police cars and everything. They listed their house for sale immediately after this, but at about $80K below the neighbors asking prices. They actually sold the house in 7 days for $20K MORE than what they were asking on the house.
Five of the neigbors then immediately dropped thier house prices by over $50K and have managed to sell within a week. My coworker stated how she wasn’t going to drop the price on her home because some idiot neigbors had a fight and decided to unload their house. She knows that it is worth what it is listed for, even though her realtor has asked her to reduce the price. She was very angry at her all of her neighbors for reducting their prices.
She also talked about a house on her block that has been on the market for over six months and has not sold. She said there must be something wrong with the house for it to sit on the market this long.
She is not necessarily a greater fool, but a fool none the less.
Sounds like your co-worker is HE-locked. You know - locked into a too-high sales price to cover the outstanding loans.
More like HELLocked.
Classic example of someone having an emotional attachment to an inanimate object. Happens all the time; houses, cars, etc. As this bust unwinds she will be happy to have sold it for the price the “idiot” neighbors did….am I the only one who thinks the spoil-sport neighbors are the smart ones in this story?
That is a very funny story.
She is the greater fool if no one takes her hot potato
“Jan Havern, who is trying to sell her 3,900-square-foot house for between $900,000 and $1,050,000. The home on Vista Arroyo has been on the market 45 days with no offers submitted to date. ‘I’m as nervous as anybody else since I’m trying to sell,’ she said, adding that she and her husband have already bought a replacement home in Bend, Ore.”
———————————————————————
Good luck. 3 houses on my block for sale, 1 for over a year, the other 2 for many months. Sellers refuse to drop prices, so prices will drop them.
The Ranch Plan builders submit plans
Rancho Mission Viejo submits its plan for an 810-acre project in south Orange County.
For you MV people…
http://tinyurl.com/gx3ng
I thought we were out of dirt?
Wildlife corridors, a concern of environmental activists, will be strengthened under the new plan, so that animals, possibly including mountain lions, can continue to range through the property.
Sounds like a great place to raise kids.
Well, there’s also enough dirt in the city of Irvine for them to project adding another 120,000 people over the next 15 years.
This is on top of “Foothill Ranch II” in Lake Forest that’s also in the planning stages. And now Rancho Mission Viejo.
There’s going to be a lot of guys paying good money to sit on the 241 and 133 tollways over the next 10-15 years.
My sentiments exactly. With all of the supply and shrinking demand, prices can only go one way.
Incidentally, 2 different friends of ours announced last week that they and their families are moving out of Socal. Both are renters and have been fed up for more than a year that they will never own a home here.
So, they both made trips to Texas and bought houses after 2 days of looking after flying out to their respective areas. (unrelated to each other)
The worst part of their expenses? The cost a U-haul. It is now cheaper to ship with a common carrier than it is to do it yourself. We even had one family that recently moved from our neighborhood (another renter family with 3 kids) who were able to hire a company to both pack and ship cheaper than the one-way Uhaul rental. Even getting out of Dodge is expensive cause everybody is doing it.
John Doe
The story about U-Hauls costing increadibly more for moving out of California than moving in reminds me so much of the big crash around ‘88 or ‘89.
The other stories about people being upside down are also similar. But back then people were sweating losses in the $10,000s. Today we’re talking about people being upside down in the $100,000.
I know the dollar difference in losses has been discussed on this blog before but it never ceases amaze me.
You are right, they still haven’t fully developed the “Northern Sphere” in Irvine which will probably add 8-10k new homes. And I don’t think that includes the Great Park development either. RMV recently approved something like 12k homes to be developed on the rest of the ranch (don’t know if that article was the start of that development) over the years. All the infill areas (like the old Tustin Air Base across the street from me) are being developed like gangbusters too.
using the sales figures and inventory # supplied, we there’s a total of 6.4 months of inventory for SD.
“David Fogg” a remax slimer just appeared on CNBC saying how wonderful the market is in LA. “Everything is great” he said. (Gee, I wonder who he took lying lessons from?)
Suzanne….
I think I missed something down the road. Who is this Suzanne person?
BayQT~
Suzanne is the harpy Century 21 agent in the offensive commercial where the wife browbeats the husband into buying a new home.
Oh yeah!! That must be the one where Suzanne is eavesdropping on the phone. HA ! OK…got it now.
BayQT~
I hated that commercial. That was definitely an ethical low point for Century.
BayQT~
All the references to Suzanne come from a somewhat bizarre TV commercial (I think for Century 21 Real Estate) where essentially a husband was brow-beaten by his wife and the realtor into agreeing to buy a house, dispite his concerns that it was beyond their means. The realtors name was Suzanne, and the money line quote from the wife was “Suzanne checked this!”.
Suzanne was very friendly and upbeat, of course; but the overall impact of the spot was strange and didn’t really leave one with a good feeling. I only saw it a couple of times, and haven’t seen it lately.
For your viewing pleasure:
http://russellarch.com/2006/04/century21-video-debate.html
Gack.
It’s like driving by a car crash. It makes me sick, but I watched it three times anyway.
Quite remarkable!
Actually, he said the market was “softening” and conceded that it began “softening” last March ‘05 (!) when houses became “too expensive”.
It is, of course though, a “good time to buy”, according to him.
Hispanics move up list of nation’s home buyers
Haya El Nasser
USA Today
May. 11, 2006 12:00 AM
Home buyers with names such as Rodriguez, Garcia and Hernandez bumped Brown, Miller and Davis down the list of most common buyers’ names in 2005, reflecting Hispanics’ rapid advance into the middle class.
A DataQuick Information Systems analysis of deeds and county assessment data shows a dramatic rise in the number of Hispanic and Asian home buyers since 2000.
Smith and Johnson remain the two most popular, but Rodriguez has replaced Brown in third place. Four Hispanic names are in the top 10, compared with two in 2000. advertisement
Hispanic surnames made up 14.6 percent of all home buyers’ names, up from 10.3 percent five years earlier.
“The Latino population is really integrating into the middle class - and rapidly,” said John Karevoll, analyst at DataQuick, a San Diego real estate information company that scoured public records in 38 states that accounted for 93 percent of the nation’s real estate activity.
Asians also are bigger players. Nguyen, a common Vietnamese name, moved from 23rd to 14th.
In California, almost 28 percent of home buyers are Hispanic and the five most common surnames are Hispanic. Only one was in the top five in 2000.
quién es el mayor tonto?
Los Realatorios ™
Scruz;….got to pick myself off the ground with that one…Funny..
tonto = stupid
kimo sabe = horse’s rear end
(even if this is urban legend it bears repeating)
Far side - not urban legend.
guess what names are popping up first and foremost on the foreclosure list? (several of these have houses listed on the same street. One street has 4 foreclosures.)
Sonoma:
Garcia
Martinez
Zaragoza
Cebrero
Lucatero
Sansone
Tercero
Ruiz
Cervantes
Calleja
Patrinostro
Poncia
moreno
I’m sure there will be plenty of anglo names joining them real soon. In a plane crash everyone dies.
I’ve got the list ready and about to post it today. There are many anglo names- its just I’ve been watching the list for a while and the first names that started appearing were ethnic… now the truly FB’s are joining them. I have noticed on today’s lists there are a couple foreclosures listed with the same owners… so the flippers are starting to get flocked.
Athena - Enjoy your website - thanks for the foreclosure post.
White, not anglo. I don’t understand why Whites suddenly become anglos when the counter-race are Mexicans, other than trying to use the words the Mexicans would use. (When they’re not using gringo.)
- anglo
+ non-latin origin sounding names
Do you mean Latin, or Latino?
Latin Surnames would include Brutus, Caesar, Servilius, etc.
because anglo refers to a group of people. “white” is a color.
It wasn’t “suddenly.” English-speaking whites have been “Anglos” in the Southwest at least since the American conquest. Even if your name was Schmidt or Koslowski or Sullivan or whatever.
No… I meant non-latin origin names were also on the list. There are more latin origin names than latino/hispanic… but there were also plenty of names that were non-latin origin…and “white” or “caucasian” would be inappropriate as any and all names on there could be representative of people who are african-american, or someone that identifies with something other than “white.”
Anglo as in Anglo-Saxon as in English (Angle-ish.)
Therefore, Anglo would be Smith, Brown, and Johnson, but probably not Olsamovskavich, Bierman, Chirac or de Soto.
If they truly are in the middle class and not just four lower class families squatting a single home, then this is a good thing. I’m sure they are NOT in favor of illegal immigration any more than a programmer is in favor of outsourcing to India.
I remember my Realtor (who was also my neighbor) telling me that in her office starting about Summer of ‘05 they saw a signigicant increase in Latino families buying homes.
She said it was usually several families going in on a single home. I couldn’t help thinking at the time how these people will probably be hurt the most when the market crashes good.
Home buyers with names such as Rodriguez, Garcia and Hernandez bumped Brown, Miller and Davis down the list of most common buyers’ names in 2005, reflecting Hispanics’ rapid advance into the middle class.
If advancing into the middle class means taking several lifetimes of debt, I will gladly give a Hernandez guy a try in place of me. I myself would like to avoid the priviledge.
Slavery is back, and this time, it has a new name.
Yes, one of these names took my hot potato. Thank goodness.
Any chance that SD goes back to 2002 levels or so?
I do a search on SD real-estate and 2000 sq foot houses on tiny lots are 800K-1M. Why so expensive? Does everyone there make a ton of money? I’m thinking about 1/3 of that might be OK. Maybe 1/2.
What was it like in 2001-2002?
My wife and I bought in coastal Oceanside on May ‘98 when the market was just on the uptick.
At the time we bought you could have bought just about any cottage within walking distance to the beach for under $200,000. We almost bought a house one block from the beach for $180,000 but it was older and smaller.
We watched prices double by about 2001 or so then double again from 2001-2004 after which prices seemed to plateau. We sold Feb ‘06.
Wages haven’t changed much. The neighborhood hadn’t significantly improved and in many ways had been declining.
Based on my own past personal experience, I strongly believe prices can go back down even to ‘98 - ‘99 levels or lower. Prices did decline between about ‘90 - ‘97. I also remember houses in San Clemente going for under $200,000 around ‘96. So it wasn’t just San Diego County that fell as we all know.
Yep and then some in all likelihood.
It also depends on nominal vs real prices.
I don’t think it will go back down to ABSOLUTE 2002 levels (it certainly might though).
But if you mean if the cost of renting vs owning will be equivalent to 2002 levels then I would definitely say yes. Even better.
2002 was still a bubble, it was a bubble in housing alone. Now we are in a full-blown credit bubble that will shake out everything.
Exactly. My situation was just like Huggybear’s. Oceanside, early 1998. Sold in 2004, (though our neighborhood still went up about 15% after we sold, most ‘hoods did not), and sitting in a rental now. When prices doubled by 2001, we were all laughing at how much people were paying for homes in our ‘hood. Everyone seemed to know it was a bubble. Then, prices doubled again and everyone thinks it’s now normal. Weird shift in mentality.
IMO, prices will go to 1999/2000 at least, depending on what inflation does.
Bought in Escondido summer of 97. Got 1650 Sq Ft for $148,000.00 if I recall correctly. We were about 10K higher than the neighbors, but we had an awesome hill side view. Nice house, tiny yard. Built in 1964. Nothing huge or magnificent, but a nice solid house for a good price. Homes around here are now asking above $400,000.00. Insane.
Mr. Fogg looked extremely uncomfortable when asked if it was still a good time to purchase in LA. His facial expression pretty much said it all.
My impression exactly. Bill Griffeth should have asked the ReMax guy if HE would buy a house now.
Story on jobs:
From Las Vegas to Orlando, sunny suburbs are the best bets to find fast-growing job markets between now and 2015. As new subdivisions spring to life, the infrastructure that’s required to support new residents – like mortgage lending and healthcare — is sure to provide steady employment. Best of all, this kind of work has to be delivered locally. These are jobs that won’t go offshore.
OK, if I could think of one job that is easy to offshore, it’s mortgage lending as it now exists. Talk about a business process that is fairly automated already, and doesn’t require a whole lot of specialized training. You don’t think you could make the applicant fill out all of the forms himself online (already done) and train someone in India to work the 10-20% of borderline decisions? And outsource the credit/background check (already done). You maybe need a couple of face men to show up at the closing. If software development, which requires about 100x the brainpower of processing a mortgage app, can be outsourced, give me a break. Any independent broker has to be counting his days in the business-this is going to be automated and done offshore in well less than a decade.
You can even outsource some medical procedures like X-ray imaging diagnostics, billing, AR, AP, and a lot of administrative stuff, but you need to keep bedside doctors and nurses.
Any chance that SD goes back to 2002 levels or so?
I do a search on SD real-estate and 2000 sq foot houses on tiny lots are 800K-1M. Why so expensive? Does everyone there make a ton of money? I’m thinking about 1/3 of that might be OK. Maybe 1/2.
What was it like in 2001-2002?
The weather is so much nicer now than it was in 2001 that everyone in the country now wants to live in San Diego, as opposed to Duluth MN and its fine weather then. Also, many more squirrels for all of the new homedebtors to feed. Source of this information by Suzanne.
LOL
Excellent Research….
“It is not a universal law of nature that real estate prices go up.”
What what what?!! (c) Kyle’s mom
Who will be the Greater Fool in this one? From the SF Chronicle website.
Pa. Woman With 97 Cents Gets $328K Home
Tuesday, April 25, 2006
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* Email This Article
Bondage File
Read more weird news in the Bondage File.
(04-25) 13:10 PDT Doylestown, Pa. (AP) –
A woman pleaded guilty to fraud and other charges in what a prosecutor said was his first case in which a defendant stole an entire house.
Wendy Jean-Francois, 44, of Morrisville, pleaded guilty Monday in Bucks County Court to multiple counts of fraud, forgery and related charges.
Prosecutors said Jean-Francois sat down Oct. 5 at a settlement table at Rainbow Assurance, a mortgage title firm in Falls, with 97 cents in her bank account.
But she used two checks totaling $63,000 and a letter vouching for them, purportedly from a Wachovia Bank manager, and left with the keys to a $328,000 home, prosecutors said.
The checks turned out to be counterfeit and the letter forged, said David Zellis, first assistant district attorney. “This just boggles the mind,” he said. Bucks County Judge Kenneth Biehn deferred Jean-Francois’ sentencing for a mental health evaluation.
Any relation to the homeless man in Florida who was found dead with 3 homes in his name?
Heck, why panhandle anymore when you can just lie on your loan ap and get a whole house. “Will Work For House”
We have all been looking for the shit to start flowing freely. Here is the first documented case. LOL
House Blasted by 3,000 Gallons of Sewage
Friday, April 21, 2006
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* Email This Article
Bondage File
Read more weird news in the Bondage File.
(04-21) 13:05 PDT Charlotte, N.C. (AP) –
Utility workers trying to blast out a grease clog from a sewer line forced 3,000 gallons of raw sewage into a couple’s home, forcing them to abandon their house while hoping that the city makes good on a promise to clean up and repair the damage.
Mac and Meg McCormick say city leaders have also promised to pay for their stay in a hotel until the repairs are complete. The couple doesn’t have any of the agreement in writing, and city officials have declined to discuss the case because it’s ongoing.
“We feel we have no choice but to put our trust and faith in the hands of the city,” Meg McCormick said this week as movers hauled damaged furniture from her house. “And I’ll be honest, that’s a little scary.”
Scott Denham, the risk manager for Charlotte and Mecklenburg County, declined to discuss the details of the sewage backup, but did say, “There’s no question of the severity of this event.”
City officials don’t even know how much the repairs and cleanup will cost, Denham said. Meg McCormick said she has received estimates of $75,000 to $150,000. The house has a tax value of $101,300.
We have been waiting for the $HIT to hit the fan (Housing). Here is the first documented case I found.
House Blasted by 3,000 Gallons of Sewage
Friday, April 21, 2006
* Printable Version
* Email This Article
Bondage File
Read more weird news in the Bondage File.
(04-21) 13:05 PDT Charlotte, N.C. (AP) –
Utility workers trying to blast out a grease clog from a sewer line forced 3,000 gallons of raw sewage into a couple’s home, forcing them to abandon their house while hoping that the city makes good on a promise to clean up and repair the damage.
Mac and Meg McCormick say city leaders have also promised to pay for their stay in a hotel until the repairs are complete. The couple doesn’t have any of the agreement in writing, and city officials have declined to discuss the case because it’s ongoing.
“We feel we have no choice but to put our trust and faith in the hands of the city,” Meg McCormick said this week as movers hauled damaged furniture from her house. “And I’ll be honest, that’s a little scary.”
Scott Denham, the risk manager for Charlotte and Mecklenburg County, declined to discuss the details of the sewage backup, but did say, “There’s no question of the severity of this event.”
City officials don’t even know how much the repairs and cleanup will cost, Denham said. Meg McCormick said she has received estimates of $75,000 to $150,000. The house has a tax value of $101,300.
We all know (apart from the realtors of course) that the median does not give a true picture of price movements. Also, taking the average or mean is also a problem as the mean can be easily distorted. The simple solution (apart from quoting median, mean and modal ranges) is to take the mean of means. In a small sample (as per NAR methodology!), if you spilt the sample into smaller samples, calculate the mean of the smaller samples and then take the mean of the smaller samples, you end up with a mean that is much, much more accurate. Its called the Central Mean Theorem. Thats how the house price mean should be calculated.
$HIT hitting the fan?
House Blasted by 3,000 Gallons of Sewage
Friday, April 21, 2006
* Printable Version
* Email This Article
Bondage File
Read more weird news in the Bondage File.
(04-21) 13:05 PDT Charlotte, N.C. (AP) –
Utility workers trying to blast out a grease clog from a sewer line forced 3,000 gallons of raw sewage into a couple’s home, forcing them to abandon their house while hoping that the city makes good on a promise to clean up and repair the damage.
Mac and Meg McCormick say city leaders have also promised to pay for their stay in a hotel until the repairs are complete. The couple doesn’t have any of the agreement in writing, and city officials have declined to discuss the case because it’s ongoing.
“We feel we have no choice but to put our trust and faith in the hands of the city,” Meg McCormick said this week as movers hauled damaged furniture from her house. “And I’ll be honest, that’s a little scary.”
Scott Denham, the risk manager for Charlotte and Mecklenburg County, declined to discuss the details of the sewage backup, but did say, “There’s no question of the severity of this event.”
City officials don’t even know how much the repairs and cleanup will cost, Denham said. Meg McCormick said she has received estimates of $75,000 to $150,000. The house has a tax value of $101,300.
$578 per sq/ft when you can build for $150 -$200 per and this person can’t see how they can lose?
Can’t build a high rise condo in San Diego for no $200. a foot….
“Home? I haf no home…” —Bela Lugosi, Bride of the Monster.
Considering all the crap you tell us about that goes on over there, nhz, I’m surprised real estate agents didn’t try to redefine the meter.
just a test…
In No Cal, a mortgage broker that we know said that the most popular mortage today is a 2.9% interest only loan, accruing 4% (reverse amt), and payments increase in 3 years. People are still passing around the cool-aid. Any slump will be felt for a number of years.
A few other thoughts:
1. The major public homebuilers are nervous (some rumors of builders selling at below their cost).
2. The advice of thinking of a home as a place to live is the wisest advice anyone can get. Compare cost/benefit of renting vs. owning. Most people will say that there are some benefits to owning that are difficult to measure, such as ability to do what you want to the home, security in knowing where you will be living, etc. But that benefit in my opinion should be measured in the 10-20% range (ie. willing to pay 10-20% more per month to own), NOT the 100-200% range.
3. An ARM you can’t afford when it adjusts is significantly worse than renting.
Why are condos so expensive? Is it the land? Building costs?
Are high rises just more expensive? Something doesn’t make sense.
Don’t know how you could justify paying 550K for an apartment.
VERY, VERY expensive to build high rise…Land cost is usualy a mute issiue because you get density as the offsetter…
Land costs for condos are based on the number of units that can be built, not the size of the parcel. For instance, in SF a few years back, you could buy land for condos at $100k per door. That’s why land in NYC is so damn expensive, because of the density.
If you are buying already approved condo land, density is not an offset. If however, you buy land that has zoning for low density and you get it approved for high density, well, you do very well by going through that entitlement process–and it is highly likely that the person who gets the land through the entitlement will be selling the land to a different developer to lock in the gain and not take the construction risk.
Worth noting–if the market value of a housing unit goes down by $1, the amount you can pay for land drops by $0.80 - $0.90. If market values stay steady, but the cost of construction increases by $1, same story, the land drops by $0.80 - $0.90.
If you end up in a situation (like we were in the past couple of years) where POTENTIAL (unentitled) condo land sells as if it were already entitled, AND costs are increasing (steel and concrete are the biggies here)–to the tune of 20-50%, depending on who you talk to, you can pretty quickly get underwater on your expensive land purchase. And if market values drop in addition, well, you simply don’t build the project.
I saw a piece of land for sale that was intended to be a new condo development in Vegas–small parcel of land by most measures. $50 million. To buy the same size parcel of land in, say, Bakersfield for single family homes? Perhaps a million or two–and that is even historically high.
That has never made sense to me, either. With condos (especially highrises) there is less land involved. As we all know, land is what costs so much here in SoCal. So….if they’re building high density housing units (such as highrises) that should be maximizing the usage of the land underneath, and therefore the units should each end up costing less, no? Of course builders are smart and pocket the difference. And all of the sudden, when you live in a highrise, you start paying for “the view.” Something that didn’t cost the developer a damn thing. But yet you’re paying for it?
I think these high-rise condos have gotten so expensive because of the high cost of building materials (from what I’ve read). Every builder is competing with each other. And don’t forget about China too…
No Jeff…High density land is VERY expensive but because of the density the unit cost comes down as it relates to the land..Material & Labor cost much more than typical SFR…
ockurt;…Different kind of materials….Steel instead of wood…Post tension slabs…Light weight concrete….Certified Labor…Engineering out the butt…and on and on….
Condos are so pricey because, after all, last time I checked they weren’t making any more sky! [followed by smug, elitist, condescending specuvestor chuckle]
What an idiot… Mr. Cabuago thinks he got the deal of his lifetime. Does’nt he know what a normal curve looks like. He bought at the top of a declining market and thinks he’s a genius. Let’s see how long that ship stays under water before he breaks even again.
Exactly! Mr. Chewbacca has got some uber-budget planning to do.
BayQT~
I saw an add at an intersection in Pacific Beach (San Diego) for a 3 bedroom house - 2 bathroom for 440k. That is the most amazing deal I have seen here in YEARS! I can’t wait for the comps to kick in after this one sells! Crash Crash Crash!
Wow, that is quite a deal. A SFH at the beach for 440.
I posted last night that there is (or was) a house in Carlsbad on an acre for 475 (which means 450 or less). 3bd, 2 bath, 1400 sq ft. It was in the latest coldwell banker magazine (volume 7 number 3). This is just the beginning, and yes, prices will go well below 2002 levels. Why? Prices were fully valued then; what has changed is
a tiny increase in real, true, demand (not flipper/greed motivated)
AND a HUGE increase in supply. Building everywhere, condos, houses,
whole tracts, hell, probably whole towns. Prices in San Diego are
starting to get interesting only because our frame of reference is the last few years where prices have been beyond insane, but its got so far to fall and we’ve just barely started. 2002 prices are going to be
blown out easy, thanks to the huge increase in supply without real
demand.
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