It’s Like High-Stakes Poker
The Boston Globe reports from Massachusetts. “Looking to buy a house in Greater Boston? You better move fast. An already tight supply of homes for sale is even more dire in many municipalities this season, driving prices even higher, spurring new bidding wars, and frustrating would-be buyers. ‘There’s a lot of heartbreak out there,’ said Linda M. O’Koniewski, a real estate agent at Re/Max Leading Edge in Melrose. ‘This is great if you’re a seller. It’s like high-stakes poker if you’re a buyer.’”
“And while values in municipalities near Boston have soared, prices in others have yet to regain their prerecession peaks, leaving owners wary of selling at a loss. Of course, some homeowners may simply be holding out in the belief they will get even more money for their property next year, according to Timothy M. Warren Jr., chief executive of the Warren Group, a firm that tracks real estate transactions. ‘People may be stubborn about not selling before the peak,’ he said.”
“But there are still areas where the inventory is stable and the prices are down from previous years, or are increasing more modestly. The median price in Beverly, for instance, slipped about 1 percent from the previous year to $379,000. In Dedham, the median price fell 13 percent to $410,000.”
The Sun Sentinel in Florida. “Buying a house these days can mean putting up a fight. A surprisingly strong housing market this spring has put more homebuyers in the middle of bidding wars in South Florida, buyers and agents say. Heavy demand helped give the once-reeling market a boost and led to double-digit price increases in Broward and Palm Beach counties. That pace, though, couldn’t continue, and the market cooled in 2014. Now buyer urgency is back, fueled by loosening restrictions on mortgages and young families eager to find something before the next school year starts, agents say.”
“Agents and analysts expect the sales pace to slow this summer, easing the burden on buyers. Until then, they’ll have to strike a balance between staying vigilant and making a poor financial decision, said Keyes Co. agent Beth Patterson. ‘Right now their mindset makes them a little desperate,’ she said, ‘and more willing to pay more than they probably should.’”
The Washington Post on Maryland. “It started out as a favor for a colleague. A clerk in the Prince George’s County police department asked Lt. Charles Duelley to investigate after she found people living in what should have been her vacant Cheltenham house. That discovery launched the veteran detective into a two-year investigation that cracked open a countywide real-estate scheme involving three Prince George’s women. Led by former real estate agent Shannon A. Lee, the women forged property records to make it appear as if they owned homes that were abandoned or going through the foreclosure process, police and prosecutors said. They then rented the houses out on Craigslist, lived in the vacant homes themselves or, in at least one case, sold a property for a profit of nearly $200,000.”
“With more than 3,000 vacant homes and more than 18,000 foreclosure notices listed in the county, it is easy to see why people like Lee took advantage of the market, said Doyle L. Niemann, head of the economic crimes division of the Prince George’s State’s Attorney’s office. Houses are sitting empty for so long because banks have a backlog of foreclosures they can’t handle in a timely manner. ‘They’ve become an attractive target because owners have abandoned them,’ said Niemann.”
The Associated Press on Nevada. “Lawmakers who say a recent Nevada Supreme Court decision has given homeowners associations too much power to foreclose over unpaid dues are pushing for a last-minute legislative fix, saying the ruling could drag down the recovering market and threaten Nevadans’ ability to get federally backed loans. ‘If the bankers and realtors succeed in eliminating the super priority lien, the entire burden of unpaid assessments will shift to those owners that do pay while banks continue to strategically delay foreclosure,’ wrote Norm Rosensteel and Donna Zanetti of the Community Association Institute Legislative Action Committee.”
The News Times in Connecticut. “Although some towns, including Bethel and Redding, have seen a small increase in pricing for single-family homes, the median sales price for the greater Danbury area has declined about 6 percent so far this year, according to Bethel-based Scalzo Group Real Estate Services. A shadow inventory of distressed and foreclosed homes continue to be a drag on the market. ‘We are still seeing some houses going into foreclosure that are being forced into the market by the management companies,’ said Scott Cooney, managing broker of Coldwell Banker Residential Real Estate. ‘It’s not like it used to be during the recession, but it’s not gone yet.’”
“Robert Morey, regional director for northern Fairfield County at RE/MAX Right Choice, said they’ve had several properties in recent months in the lower price ranges that have received multiple offers over the list price. ‘Any listings we’ve have had in that range probably sold within a few days,’ he said. ‘The demand is strong and it’s always good to have strong demand, but there is a supply of distressed properties on the market and more on the way.’”
The Albuquerque Journal in New Mexico. “Eligible individuals and families who owned property in the Mariposa master-planned community have settled their class-action lawsuit against its former developer, High Desert Investment Corp., and Albuquerque Academy for $5 million. Negotiated by lawyers on both sides of the case, the settlement was approved by District Court Judge James L. Sanchez following a hearing Wednesday in Valencia County. The settlement covers from 225 to 235 owners who purchased their property on or before June 20, 2012.”
“A key element of the settlement is that the property owners, as a class, give up their right to sue High Desert and Albuquerque Academy on their own. ‘Prior to the final fairness hearing, we were contacted by over a third of the property owners,’ said Christopher Bauman of the Bauman, Dow & Leon, one of two law firms representing the plaintiff. ‘Some people who contacted us thought it wasn’t enough money — we’d settled too low — but the vast majority of the class seems to be happy with the settlement,’ he said.”
“Payouts will range from roughly $4,000 to a high of about $60,000, Bauman said. The money will be allocated according to a formula. In simple terms, owners of less expensive vacant lots will receive lower payouts, while owners of pricey lots with high-end homes will receive the highest payouts. Filed in 2012 and alleging breach of contract, negligence and other claims, the lawsuit basically sought compensation for property owners who suffered a financial loss when High Desert withdrew as Mariposa’s developer. When the housing bubble burst and lot sales dried up, the Mariposa community in Rio Rancho became a money loser for High Desert. The active 800-acre portion of the community was repossessed by lenders and eventually sold.”
‘People may be stubborn about not selling before the peak,’
Translation:
Everyone and his dog knows another crash is coming, though the timing is hard to predict.
‘People may be stubborn about not selling before the peak,’
But nobody knows when that peak thingy is going to come about so sellers wait to sell until there are clear signs that this peak thingy has finally arrived. None of them wants to leave money on the table.
But nobody can tell when the peak has finally arrived until it already passed. So sellers wait until the peak has already passed to put their houses up for sale - put their houses up for sale along with all the other sellers. Hence, after the peak, there arises a sudden shift in the number of sellers.
But what about the buyers? Where do they come play?
Buyers like rising prices but they don’t like peaks. So they’ll be willing - eager - to buy during the price rise but will balk at buying after the peak.
So during the price run up the number of sellers are few and the number of buyers are many. But after the price run up - after the peak - the number of sellers are many but the number of buyers are few. Hence the crash.
None of this would make sense in an Econ 101 world where price and value were separated from each other but it makes perfect sense in a crazy world whereby price and value are the exact same thing.
I like your explanation of crash dynamics, but don’t get why “price and value are the same thing”. It seems those are intrinsically different; otherwise why hold out to buy after the crash?
Price and value are the same thing when the perception of the value of something is determined by its price. People talk of rising home values when they really mean rising home prices.
This relationship between price an value does not hold up when the perception of value is determined by something other than price and this is why sales - price discounts - work well when demand among buyers needs to be stimulated, meaning dropping the price increased the number of sales - just as the way it was taught in Econ 101.
But dropping the price of price-equals-value items (houses, stocks, etc) does not encourage demand, it does just the opposite, and that’s because price and value are attached to each other - drop one (drop the price) and you automatically drop the other (you drop the value).
Few people set the price, yet value is different from one individual to another. If it’s not worth it to you but it is to one other person in the crowd, that one person sets the price.
“… that one person sets the price.”
He sets the price not only for the one item but he also acts to set the price for all the comparable items.
If the price of the comps are set by people who are crazy then the price of everything that is represented by these comps will reflect this craziness.
If enough crazy people (people I do not even know) decide to bid up the prices of houses that are comparable to my house then their actions will increase the “value” of my house, and this will increase the equity of my house, something that David Lereah said I should borrow against.
and this will increase the equity of my house, something that David Lereah said I should borrow against
You know that you “deserve” a high end luxury car (not some BMW 3 series, those are for posers), so go for it! YOLO, right? So what if you default and are eventually foreclosed upon?
GAWD, this rebubble is boring, isn’t it?
For a vulture, hearing of high stakes gambling with borrowed money is interesting.
Watching dumb.borrowed.money. in action is even more fascinating months or years after the fact.
Especially when dumb borrowers gradually wake up to the long-term financial consequences of their folly!
And as if the initial lifetime of losses arent enough, they typically grub and borrow more money to throw at it and go deeper in the hole.
Strange behavior.
These articles clearly show that bidding wars are taking place only in select areas, and that most of the country is still in post-bubble mode, yet the media would have everyone believe that the bubble is back, everywhere. I wonder why that is?
Bidding wars ANYWHERE = bubble mode.
If you disagree, dig up an article from any year before 1996 documenting bidding wars predated the Housing Bubble.
http://www.washingtonpost.com/blogs/wonkblog/wp/2015/03/10/a-legacy-of-the-housing-bubble-that-wont-go-away-home-bidding-wars/
Just a one article, but it supports your contention.
The headline is misleading, as it ignores that the mania is still underway.
In new normal, houses go to the nimble buyers
Mike Cronin, mcronin@citizen-times.com
3:55 p.m. EDT May 26, 2015
From the last quarter of 2014 to the first quarter of 2015, which ended on March 31, the number of home sales in Buncombe County, not including Asheville, spiked 29.2 percent.
(Photo: Katie Bailey/bkbailey@citizen-times.com)
Matt and Sarah Leggat got so used to having their offers rejected they developed a feel for who handled it best.
That would be Sarah. For Matt Leggat, the couple’s three-month search for a home turned into a blur of living rooms, bedrooms and bathrooms.
“We started in February and found a place a week ago,” said Matt Leggat, 43, a seventh-grade language arts teacher. “And that’s after pretty much constant looking.”
The Leggats’ experience reflects the new normal in Asheville and Buncombe County. Competition for residences in hot neighborhoods such as West Asheville has become so intense that real estate agents counsel clients to open bidding with offers several thousand dollars above asking price — within minutes of completing a tour.
From the last quarter of 2014 to the first quarter of 2015, which ended on March 31, the number of home sales in Buncombe County, not including Asheville, spiked 29.2 percent, according to data from Mike Figura, owner and broker of Community Lifestyle Mosaic Realty in Asheville.
In raw numbers, that’s a leap to 513 sold, up from 397.
CITIZEN TIMES
Average home prices in Buncombe hit record high
The number of homes sold in the county during this year’s first quarter was higher than in any other quarter “since the first quarter of 2007, before the crash, when there were 534 homes sold,” Figura said.
…
Asheville housing market
The number of houses available for sale also has taken a dive, particularly in Asheville.
A dearth of homes priced at $250,000 or below in Asheville has sent buyers outside the city, something that held true for the Leggats.
A seller accepted a bid the Leggat family submitted on a place east of Asheville, just inside the Buncombe County line. Learning from their previous failures, the Leggats’ bid was higher than the asking price.
The sub-$300,000 house is under contract and their scheduled move-in is mid-June. But West Asheville had been the couple’s first choice.
“We found a great place and we’re really excited,” said Sarah Leggat, 42, an accountant. “We think it’s going to be wonderful.”
As home sales have taken off in Asheville and Buncombe County, a low inventory of houses on the market has driven down sales.
Beginning in the last quarter of 2014 through the first quarter of 2015, the number of home sales in Asheville fell to 239 from 252, a drop of 5.1 percent.
The dynamic appears to be a repeat of 2005-08, when Asheville housing prices last peaked, Figura said.
“Buyers were priced out of the city so they moved to the county where they could get more house for their money,” he said. “Since the last real estate crash in 2008, prices have risen more quickly in the city of Asheville than in the county in general, making the county more affordable relative to the city.”
…
Likeable and walkable
Sarah Leggat described the couple’s home-buying experience as an “emotional rollercoaster.”
They put in multiple offers that weren’t accepted. Other times, a house in which they were interested would vanish from the listings before they had the opportunity to bid.
Then, there were the places with very high prices, very small square footage and a lot of repair and refurbishing work required after move-in.
“We went into this, pre-approved (for a mortgage) and ready to roll,” Sarah Leggat said. “We learned we had to jump at every house where there might be an opportunity.”
The three-year residents of West Asheville said they did everything they could to stay in their neighborhood because it has what they want.
They love that they can walk with their two daughters, Ruby, 10, and Nora, 7, and their yellow Labrador retriever, Bo, to places like The Hop West ice cream shop.
Ruby and Nora both attend Vance Elementary School in West Asheville, and will continue to do so. And Matt and Sarah Leggat enjoy the architectural oddities that are part of so many of West Asheville homes.
No sign of a housing bubble
Maggie Marshall, the Leggats’ real estate agent, works for Mosaic. She has been an agent for six years. Before that she was a house appraiser for four.
“What we’re seeing now is the backup of people who didn’t find anything in the fall and winter,” Marshall said.
The bidding wars have become especially intense during the last two months, she said.
“Before, you had time to negotiate,” Marshall said. “Now, that’s not true.”
And in all cases, Marshall’s clients “are getting beaten out by people from out of the area where home prices are higher,” she said.
Because of such battles, “it feels like there’s been a huge price increase.”
Sellers twice have increased the house price in between the time Marshall booked the appointment for her clients to see the house and when they arrived, she said.
Data showing what’s happening in the market today won’t be available until July, Figura said.
But for two consecutive quarters, the median home price in Asheville has been $225,000 – equaling the highest median price home costs hit in 2007, before the Great Recession.
Figura emphasized that what’s happening here is no bubble.
The low inventory, the absence of house-flipping and the fact that it’s cheaper to buy a house than it is to rent all demonstrate no real-estate bubble exists, Figura said.
…
You’d think that people would know by now that the absolute worst time to buy a house is when there are bidding wars, yet there are people on this site who express disappointment at not being able to snap up a massively overpriced piece of real estate because they can’t compete with cash buyers. Those cash buyers will be the ones regretting their purchases soon enough.
“They love that they can walk with their two daughters, Ruby, 10, and Nora, 7, and their yellow Labrador retriever, Bo, to places like The Hop West ice cream shop.”
They crave the hipstah high walking score hoods so much they can taste it.
Same thing happened last time. Certain cities saw the bubble first, but then it spread. Commute till you qualify and locust your equity till kingdom come.
Groundhog Day, anyone?
“regain their prerecession peaks”
Boy have you got a surprise coming.
Where have you been? I am sure you can appreciate that parts of our fair city once again are being overwhelmed by stupid.
Heh, I have a ringside seat for it, due to a little marketing project I’m involved in. South Tampa, New Tampa, Lutz, Land O Lakes, some of Wesley Chapel, Palm Harbor, Safety Harbor, Oldsmar, Carrollwood, St. Pete, Odessa, Lithia, all to the MOON, my friend.
But, this rising tide did not lift all boats in the Tampa Bay area, that’s for sure. Port Richey, New Port Richey, Spring Hill, much of Tampa excluding South Tampa and some other areas, these are languishing and rotting in the sun and humidity. I know the folks in Spring Hill who wanted to unload their homes ahead of sinkhole activity are not happy campers.
Gonna be ugly come September.
We also really dodged a bullet this year, too, by going right from winter into summer and skipping the spring dry season. No wildfires this year, and I hope we never find out what a wildfire season would do to all those subdivisions.
Conversely, Florida would never survive an inundation the likes of which Texas has recently experienced. So I hope the summer’s rains are moderate.
Unlike in southern California, I’ve never heard of a wildfire overtaking a subdivision here. On the other hand, highway closures due to smoke, especially parts of I-4, happen from time to time.
It wasn’t wildfire-related, but a few years ago there was a seventy-vehicle accident on I-4 when a “controlled burn” mixed with morning fog and dropped visibility to zero.
‘The U.S. Federal Reserve should consider lifting interest rates sooner rather than later to tackle speculative bubbles in the housing and stock markets, Nobel Prize-winning economist Robert Shiller told CNBC on Monday. “I’m thinking they (Fed policy makers) ought to be considering that, because that is the mistake they made in the past,” the Yale University professor told CNBC Europe’s “Squawk Box” when asked whether he believed the Fed should raise interest rates soon or later on.’
“They didn’t deal with the housing bubble that led to the present crisis. There’s a suggestion in my mind that they should be raising rates now”
“If I was asked to testify before them (the Fed) I might reconsider, but there is a tendency for central banks to ignore speculative bubbles until it’s too late,” Shiller said, talking about the need for higher interest rates. “It may already be too late. Stock markets in the U.S. are quite high and prices in the real estate market are getting high.”
http://finance.yahoo.com/news/rate-hike-needed-pop-bubbles-091100487.html
Yes, raise rates now that prices have shot back up, not two years ago when this started happening.
Why would they want to stop it? THEY STARTED IT DELIBERATELY.
If they know a rate hike would result in a crash, why wouldn’t they postpone liftoff indefinitely?
‘People pay up for something that they know is expensive for a few reasons: Either money is no object, the item is of top quality or the buyer thinks it will be worth more as circumstances change over time.’
‘American stocks are definitely pricey, with the median stock carrying a higher valuation than 98% of the time in the last 40 years, says Goldman Sachs. While low interest rates and inflation help explain this, they don’t make equities a bargain for anyone looking for future returns.’
‘One reason that folks are paying up for richly priced stocks is that money – for many – is not much of an object right now. U.S. companies have issued some $700 billion in new debt so far this year. That’s ahead of the all-time record pace set last year – and is enough to pay off the total national debt of Greece two times over.’
‘Companies, through their own profits and all that debt raised, are acting as if no price is too high to buy their own stock. Share repurchases are on track to exceed $600 billion this year.’
http://finance.yahoo.com/news/are-investors-not-price-sensitive-enough-115313923.html
‘Wall Street’s generous supply of funds to U.S. oil drillers helped create the American energy boom. Now that same access to easy money is keeping them going, despite oil prices that are languishing around $60 a barrel.’
‘The flow of money into oil has allowed U.S. companies to avoid liquidity problems and kept American crude production from falling sharply. Even though more than half of the rigs that were drilling new wells in September have been banished to storage yards, in mid-May nearly 9.6 million barrels of oil a day were pumped across the country, the highest level since 1970, according to the most recent federal data.’
‘It wasn’t supposed to happen this way. As crude prices began to plunge last year, many energy experts predicted a repeat of 1986 when U.S. oil companies lost their funding and the industry collapsed into a yearslong bust. Without money, companies had to slow or even stop drilling for the crude that helped create a global glut. Many were forced to sell out to rivals or go bankrupt.’
‘But the gloomy scenario of that downturn hasn’t played out on a large scale this time. That is because banks, private-equity firms and institutional investors have continued to pour money into the sector even as oil companies slashed billions of dollars in spending from their budgets and laid off more than 100,000 workers.’
“What makes this downturn different is there is a lot more capital available,” says Pearce Hammond, a managing director at Houston-based energy investment bank Simmons & Co. International.’
“Essentially, everyone that we talked to except for one small firm, wanted to do a deal with us,” says Mr. Langford, chief executive of Luxe. “There is a lot of money out there.”
“I’ve been surprised by the amount of money that has come into the sector” since oil prices started falling, said Paul Korus, chief financial officer of Cimarex Energy Co., a midsize energy company based in Denver. Much of that stems from a fundamental belief that investors should buy now when oil prices are low, he says. “We all think there will be some sort of recovery, but we don’t know when it will recover and what it will recover to.”
“A lot of the industry seems to function that if you give them a dollar, they will spend it. That leaves the capital markets as the only source of discipline,” said Michael Levi, a senior fellow at the Council on Foreign Relations. “If there is more capital than is warranted, you are going to see companies pick up drilling in the second half of the year and that will put pressure on prices.”
http://finance.yahoo.com/news/easy-access-money-keeps-u-202000892.html
‘American stocks are definitely pricey, with the median stock carrying a higher valuation than 98% of the time in the last 40 years, says Goldman Sachs. While low interest rates and inflation help explain this, they don’t make equities a bargain for anyone looking for future returns.’
If Goldman Sachs’ numbers are on target, then it is a worse time to buy stocks than 98% of the time in the last 40 years.
So why are folks going crazy at the moment buying on margin?
If they know a rate hike would result in a crash ??
I suspect they are not that worried about our markets crashing due to a rate hike…What I do believe they are concerned with, and rightly so, is the impact it will have on the strength of the dollar vs all other major currencies…Our exports are already under pressure…A hike in the current environment would deal another blow to our exports…The FED is trapped and we have 7 more months of 2015…2016 is a presidential election year…Is the FED really going to be that active in a election year ?? History says no…
You are right — there are many other reasons besides a crash prospect for the Fed to keep postponing rate hikes as long as possible. Don’t forget the Chair is a labor economist; the last thing she wants is to trigger a financial markets correction that inadvertently tips the economy back towards higher unemployment.
I agree Pbear…I expect a .25 basis point hike in September or December just to send the message that they are willing to do it…After that, unless the other world economies rebound, we could see the FED sit on their hands for a very long time after this bump…
…. which collapses demand and extends deflation further.
“If I was asked to testify before the Fed I might reconsider”? What the hell does that mean? I guess it’s OK for establishment economists to be casual with the truth like that.
I can only assume he means that he doesn’t be the one to point out the Emperor’s lack of clothing.
He seems half sloshed in that video.
‘Heavy demand helped give the once-reeling market a boost and led to double-digit price increases in Broward and Palm Beach counties. That pace, though, couldn’t continue, and the market cooled in 2014. Now buyer urgency is back, fueled by loosening restrictions on mortgages’
I’ve been trying to put a finger on this. It wasn’t that long ago that many markets looked like they were out of gas, inventory increasing, the UHS were telling sellers not to over price. Like I note the other day with these two Mercury News articles:
“How high does this ladder stretch? With spring buyers vying for a limited number of properties, the median price for Santa Clara County homes reached yet another all-time high in April. Sticker shock spread throughout the region, with prices for single-family homes jumping from a year ago in all nine counties, according to CoreLogic. ‘Prices are jumping,’ said Kristine Kim-Suh, a Palo Alto-based agen. ‘Some properties are selling for $30,000, $40,000 or $50,000 beyond last month’s comparables, and it’s making buyers that much more aggressive. For example, they know that the comparable is $825,000 and they’re bidding $885,000, they’re so anxious. It’s even surprising the listing agents.’”
“On the Peninsula, ‘nothing has slowed down,’ said Alain Pinel agent Nick Granoski, who recently worked with first-time homebuyers Becky and Brandon Stroy, who had been outbid and worn out since their house-hunting began in December. But by throwing an extra $400,000 on top of the $1,350,000 list price on a Mountain View ranch-style home in the Varsity Park neighborhood, the Stroys were finally winners. ‘There were 17 other offers and ours was sort of just barely high enough to win,’ said Brandon, an attorney. He received news of the successful bid while on his way to work, taking it in with ‘a mixture of joy and relief and surprise — and then terror, I guess.’”
http://thehousingbubbleblog.com/?p=9035
OK, but look at this from February 1, 2015:
‘“San Jose and San Francisco lead the nation in house flipping, according to Trulia, but the best days for making a profit may be over as price gains slow. Glenn Polf of Diversified Ventures Group in San Ramon said his group bought a house in East Oakland at auction but only broke even on the resale. ‘We overpaid. That’s what happens when you don’t get deals for a while. You get a little bit more aggressive. We were more optimistic than we should have been,’ he said.”
“‘The buyers are paying such a premium for houses, it doesn’t make sense for flippers,’ said Alisha Karandikar of CSR Real Estate Services in San Jose. ‘The acquisition costs are so high, that one little tweak in the market and they are going to lose their shirts,’ she said.”
http://thehousingbubbleblog.com/?p=8833
” — and then terror, I guess.’”
I’ll say! How does it feel to have massively overpaid!
What you are seeing is a geographically specific bubble driven by where tech employed (and off shore speculators) want to live/invest. It’s literally 8-12 miles from South of Market San Francisco to East Oakland. In South of Market San Francisco condo prices have far surpassed any prior historical pricing (even inflation adjusted) and are averaging $1300 to $1600 psf. In areas in East Oakland 2015 pricing hasn’t come close to touching 2006 pricing. It’s truly bizarre, but it explains why the flipper in East Oakland made a bad investment but at the same time Palo Alto and San Francisco prices are now completely unhinged and continue to push historically high levels.
Yet demand is collapsing across CA.
Remember…… I can ask $50k for my 10 year old Chevy pickup but where is the buyer at that price?
So it is with housing.
Mountain View, CA Housing Prices Fall 6%
http://www.zillow.com/mountain-view-ca/home-values/
That’s what I was going to say…you can’t compare anecdotes from Mountain View to anecdotes from East Oakland. They are going to be different because they are worlds apart.
People like to think of the “Bay Area” as a homogeneous market. It’s not.
I used to live in the City of East Palo Alto. You could not compare home prices in Palo Alto to what was happening in EPA. Quite literally, you would have multi-million dollar houses across the creek from apartments that house meth labs (and I know this because the road where my apartment was located was shut down once by a hazmat team because a meth lab was found).
Falling prices in Mountain View CA
Falling prices in San Jose CA
A distinction without a difference.
“I used to live in the City of East Palo Alto.”
Former repo hunting ground.
Speaking of high-stakes poker….
http://www.businessinsider.com/greek-prime-minister-alexis-tsipras-says-were-seeing-the-complete-abolition-of-democracy-in-europe-2015-6
Well, we’re looking at the abolition of democracy everywhere, in part because democratic governments in the twenty-first century have failed so badly.
Greece’s debts weren’t repayable years ago, they aren’t repayable now, and they won’t be repayable in anybody’s lifetime. Who is anybody kidding? I’m therefore surprised Greece hasn’t defaulted by now. I suspect that it hasn’t only because the new political leadership isn’t sure where the army’s loyalties lie.
I’m therefore surprised Greece hasn’t defaulted by now ??
Me also….The only thing I can think is that Greece has decided that if you want us to stay in the euro its going to be on our terms…Seems to me thats the only leverage they have…Alternatively, if you don’t do it our way, we are walking and let the cards fall where they may…I can see Greece’s point…If the deal that is being offered is no better than the consequences of exiting the euro, why take it…
If the deal that is being offered is no better than the consequences of exiting the euro, why take it…
They should have exited years ago—they would have largely recovered by now if they had! Instead, they have their current sorry state of affairs…
Well, we’re looking at the abolition of democracy everywhere, in part because democratic governments in the twenty-first century have failed so badly.
Because the FSA votes.
And those in power want to stay in power.
Isn’t pure modern democracy grand???
Ever wonder why democracy in America started by only allowing land owners to vote? And it worked.
Now we are at the point where many people are arguing to allow illegals to vote.
Not the point I was trying to make 2banana.
Can’t you see? Brown people are the source of all our problems!
” only allowing land owners to vote”
So we shouldn’t let renters vote?
‘The U.S. Supreme Court on Monday handed a win to Bank of America Corp by ruling that a second mortgage on an “underwater” home - one with a mortgage balance exceeding its current value - cannot by voided during bankruptcy.’
‘On a unanimous vote, the court ruled against two homeowners, David Caulkett and Edelmiro Toledo-Cardona, in Florida, where many homeowners have struggled to pay their mortgages following the recent housing crisis.’
http://finance.yahoo.com/news/u-top-court-says-2nd-143258657.html
‘they’ll have to strike a balance between staying vigilant and making a poor financial decision, said Keyes Co. agent Beth Patterson. ‘Right now their mindset makes them a little desperate,’ she said, ‘and more willing to pay more than they probably should.’
That is a poorly written article.
The first commentor makes some sense out of it.
————-
Horibly written article the missed the main point.
In bankruptcy, you can include in your plan to continue paying the mortgage and keep the house. If you can’t pay the mortgage, the house is turned over to the bank (forclosure) who sells it and gets as much as they can out of it. If the 1st mortgage is paid off, the 2nd mortgage gets whatever is left (up to the mortgage amount).
What these lossers wanted to do was keep the house and lose the 2nd mortgage. Since it’s a secured debt (the bank can force the sale of the house), thats not an option.
Why does the bank care if they won’t get anything? Because if people know they will lose the house, they are more likely to continue making payments rather than file bankruptcy. If they keep making payments, the bank with the 2nd mortgage recoups more of it’s money.
“The 11th U.S. Circuit Court of Appeals had ruled that homeowners in Chapter 7 bankruptcy can void - or in bankruptcy terms “strip off” - a second mortgage when the debt owed to the holder of the first mortgage is more than the property’s current value.”
In California, if the money was spent on the house, e.g., a new roof or additional bedroom and the home value was “upside down” then a bankruptcy judge would frequently discharge the 2nd lien debt. However, if the HELOC was used to pay a student loan, new car or vacation then discharge of the debt was unlikely.
Better luck next time. Better sell the Hummer, boat and flat screen and see if Friday’s is hiring!
Wow…Nice find Ben….Now times BoA by how many lenders there are with 2nd’s…The collection vigilantes for the remainder of your life or until paid….
This could cause problems for all kinds of people who thought they were out of the woods.
And that right there is the best reason of all to never step foot into debt!
“…Houses are sitting empty for so long because banks have a backlog of foreclosures they can’t handle in a timely manner. ‘They’ve become an attractive target because owners have abandoned them,’ said Niemann.”
Multiply this county by county all across the union and you get a clearer picture of the contagion.
That’s right. 25 million of them and growing.
Make banks eat their bad loans.
Get government out of the mortgage modification business or the “slow down the foreclosure process to buy votes” business.
And watch foreclosure be done within months…
“And watch foreclosure be done within months…”
+1 To the courthouse steps… SOLD for back taxes!
I’m packing away here in Las Vegas, having been served with a 30 day notice.
Two weeks ago the property manager informed us that the landlord is selling our rental. Told LL we’d leave before the July 1 start of showings (under Nevada tenant law you have to show it.) No answer from LL.
Suddenly received email from LL offering the house to us at $20K more than he wanted in June 2012, when he wanted $40K over market. It’s still less than all comparable properties have listed/sold for around here lately (except one) though my info is far from complete.
Well, 30 days can be a long time (and we qualify for 60 days due to old people in house and I think he just found out about that.) I’m going to take my time answering him, like he did with me, if I respond at all.
Absolutely you should entertain. Start at $20/sq ft.
I might do it for the entertainment value. His head would explode.
Unless it’s new, it’s not worth any more than $35-$40/. You have to start somewhere so it might as well be at 50% of actual value.
It’s a typical LV shanty, crap shack, etc. 2000 sq. ft. Marginal neighborhood. Last century appliances (or close.) One renovated bathroom out of three (done so long ago so I don’t think it counts.) I do believe it is worth only $80K, but that’s not going to happen. Asking is $175K (he wants me to counter.) 2012 asking price was $150K. I offered $110K at the time.
Still packing.
Like I said, it’s worth starting at $20/sq ft. Stop at $35.
That would be a very reasonable price, and we’re not having any of that around here.
Maybe not now but you will.
1. What does your lease say?
2. Make him a lowball offer. Point out the 6% sales commission savings, less hassle, flexibility, etc.
2 banana, we have a month-to-month lease which I asked for because I didn’t anticipate the market skyrocketing as it did.
It says we have to allow showings, which we went through at the last rental and don’t want to do again.
The first time we discussed buying it in 2012 he wanted to do it FSBO, and still does. But now he wants $25K more (he asked for a counter offer). I’m surprised he didn’t match what others around here have listed at lately ($25 to 75K higher.)
It’s starting to get crowded around here:
Fed’s Fischer Says Real Estate a Crisis Risk in Some Countries
http://www.bloomberg.com/news/articles/2015-06-01/fed-s-fischer-says-real-estate-a-crisis-risk-in-some-countries?cmpid=yhoo
“the median sales price for the greater Danbury area has declined about 6 percent so far this year,”
And easily commutable to NYC. Imagine that.
70 miles = easily commutable?
It’s called the metro Rental_Fraud.
Sigh, it might be time to start posting here again. Bubblemania all over again.
Welcome back!