‘A Lot Of Stuff In The Pipeline’: California
The Gilroy Dispatch finds the ’sellers paradise’ is over. “The housing market in recent years has been a seller’s paradise. But the market has started to swing the other way, real estate agents say. ‘We are no longer in a state where the second you see it you must put in an offer. Buyers can take their time,’ said Edwin Resuello, president of the Santa Clara County Association of Realtors.”
“With more inventory on the market, sellers are starting to lower home prices to stay competitive, real estate agents said. Buyers have even started to negotiate with sellers on the asking price, which hadn’t been the case in the recent past, Resuello said.”
“In May, 276 homes were up for sale in Gilroy compared to 149 in the same month last year.”
“‘This feels like a normal market. It might be weighted more toward the buyer, but (homes do) stay on the market longer in a normal market,’ Filice said. ‘But we’ve forgotten what a normal market is like.’”
“‘Agent Sheila White agreed that sellers are no longer controlling the market. ‘Last year, if you put (a home) on the market you would get attention very quickly,’ White said. ‘But that’s not happening anymore.’”
Inside Bay Area. “In the first five months of the year, East Bay multifamily housing starts increased by 40.3 percent to 1,522, up from 1,085 during the same period last year. However, Alan Nevin, chief economist for the California Building Industry Association, noted that the increase represents only a couple of big projects in Oakland.”
“Meanwhile, 2,217 single-family permits were taken out in the East Bay during the first five months, a 22.5 percent decline from the same time a year ago. ‘It’s sort of peanuts. The single-family (construction) has slowed down darn near everywhere,’ Nevin said.”
“Call it another sign of the cooling housing market. As interest rates have risen, home sales have declined and home prices have appreciated at a slower rate.’There was too much inventory out there, and it will take another three months to reduce that inventory’ before builders will start putting up houses again, he said.”
The LA Daily News. “So far this year, 52,780 housing permits have been issued by local government agencies across California, down 18.9 percent from a year ago. ‘I wouldn’t call it a strong year,’ said Alan Nevin.”
“In the Los Angeles area, multifamily permit activity, condominiums and apartments, increased an annual 31.6 percent, to 6,478 units. ‘L.A. is doing very well in multifamily. It’s the strongest in California,’ Nevin said. ‘The market is really hungry for condominiums,’ he said.”
“Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said that activity locally could cool toward the end of this year. ‘I think a lot of people were expecting home building to sort of be in step with the resale housing market. But there is a lot of stuff in the pipeline,’ he said.”
“In May, 276 homes were up for sale in Gilroy compared to 149 in the same month last year.”
“‘This feels like a normal market. It might be weighted more toward the buyer, but (homes do) stay on the market longer in a normal market,’
Gilroy is UFB. Will someone please tell me what is “normal” about a SB in the middle of nowhere in 100 deg heat going for $800,000 ??? Now multiply that 276 times. Insanity brought on by the heat perhaps.
Hey, median price in Nipomo is now 700k. At least you can get to the coast in 15-20 minutes from there. But even a couple of years ago, housing there was a lot cheaper than in the coastal towns and living in Nipomo had some stigma. Recently, I have been hearing people describe it as having “perfect” weather. I guess when your house is worth a lot, you decide you are living in a great place?
The median in Pismo is over 800k.Total insanity. Comon buyers have some restraint and make those low ball offers or better yet, make no offers.
“..make those low ball offers or better yet, make no offers”
Exactly. There is a lot of understandable sentiment on this board to stick it to swollen-headed sellers by making lowball offers. All this does in their mind is to confirm that folks are indeed interested in their house. The best way to stick it to them is to not make any offers and not even show up for open houses. Make their open houses seem like a Twilight Zone ghost town.
mad teager:
Low ball offer?
You must think I am CRAZY!
Lets see the DJI is still 11000, unemployment is reported 5.4%, Ford’s default swaps trade near $1million/ per year for 5 years on 5 million!
There is WAY to much optimism for me!
I patiently wait - no rent, no mortgage, no credit card debt, & no auto loans,…accumulating real money @ 1 oz per month!
Last year I was real stupid! they said!
They are not talking to me this year!
Not to offend - but “Pismo” should be nominated as one of those towns that should not have been named that !
How about Pepto? That’s what a lot of overpriced sellers that can’t pay their new arms are swollowing every nite.
I grew up in SLO… Pismo Beach is okay. It wouldn’t be a bad place to live, if a bit sleepy. There’s a number of sleepy beach towns on the central coast like it I’m sure all with inflated home prices. If you are a funky Cal Poly grad and into surfing they’d be just the thing.
Now Gilroy, Salinas, and Nipomo leave me scratching my head… wonder if it has hit Watsonville as well?
Fond childhood memories the central coast is, but all of that is just too slow for me now that I’ve been spoiled by LA, SD, and now SF.
Spoiled by LA? Now that really leaves me scratching MY head. LA is spoiled… ROTTEN.
Hey, but what about the Garlic Festival? Doesn’t EVERYONE want to live in Gilroy?
Seriously, one of the reasons we moved out of the bay area is that we got priced out of even Gilroy at the height of the stock bubble. Scratch that, we could have *afforded* Gilroy, but at the prices even back then, we didn’t want to.
There’s some dirt cheap taquerias in Gilroy, and some great mountain biking in Henry Coe–in mid-spring that is, and maybe in the fall. But, other than heavy traffic, those are the only two reasons I can think of to ever hit my brakes while driving on the 101 through Gilroy.
Comical. And there’s no bubble, returning to normal, balanced market now… blah blah blah…
The scale of this RE collapse will be nothing short of remarkable. In its wake, the staggering number of wiped out FBs will rock our society. It will either produce a prolonged recession or a shorter lived full blown depression. Think almost brand new cars for free & RE for anyone that has cold cash reserves. Party starts in Q1 ‘07. Get your spot in line for the fire sales…
It normal:
The NAR & Goverment report housing starts and new home sales near 2004-5 records.
While everyone else sees what was it 29% declines & 20% declines…Mortgage applications keep slipping to 6 year lows, while we await the 23% of the 2.3Trillion (that’s right with {T} worth of mortgage ARMS that reset in the next 12 months, on average at 400 more month.
Thank goodness its a normal market again! And we can catch our breath!
What about sales volume and total revenues from closed sales? Who is not making money because of a 30% drop in sales? Banks, brokers, agents, sellers, and what about the lower revenues from transfer taxes?
Prices do not have to come down to feel pain. The pain is already being felt through the lower number of transactions. Can someone tell me how much the total dollar amount, revenues have dropped month over month?
Lower priced home+lower volume+more agents=’s less money for RE brokers and agents. Simple economics101.
From what I have read, the dollar value of transactions have remained at or near the levels of the previous months. Not a lot of movement there yet…
Off topic: I was about to comment on the above, but right now I have a couple neighbors screaming at the top of their lungs at each other. They are really going at it! I hope it doesn’t get violent. In the area of town I live, I’ve NEVER heard that before. Financial problems? That what most arguments tend to be about. Okay they’ve stopped now.
You’ve chummed and set the hook. What were your neighbors yelling at each other for? Come on, tell us, I can’t wait.
Fountain Valley View has this to report.
Odd-ball bidding went down, not up!
Fountain Valley School District’s board of trustees on Thursday rejected four bids for a pair of closed school sites. Thursday’s re-auction brought low-ball offers of $16 milliom, $26 million, and $28million for Wardlow and Lamb schools, both in Huntington Beach. The set of campuses- totalling 20 acres of developable land- originally sold in February for $58 million to Centex Homes, which backed out of the deal in March. One developer did bid $40 million but wanted changes to the down payment structure. After that, Jones Real Estate bid $26 million, Etco investements of Beverly Hills bid $16 million, John Duong Bridgecreek Huntington Beach bid $28 million. All four bids were significantly lower than Centex’s original $58 million. John Duong said, “That’s a $30 milllion swing in six months. That’s indicative of the market.”
So what’s the problem? The trustees received four viable bids. Pick the best one and get on with it. The assumption underlying the board’s rejection of all four bids is that the lots really were worth the $58 million Centex was supposed to pay for them. Did Centex at least put down a deposit?
Fountain Valley is a landlocked city. There really is no “new land” to annex — what happens if they need those school sites after a population shift? You can bet the pols won’t have left that sale in a rainy day fund, to build new schools.
They really should have taken one of them. Of course I don’t know all of the details of the bids. I do know, because I work for the FVSD, that the money from any school site sale can only be put in a general maintenance fund and only be used for that purpose. However, interest generated from proceeds can be spent on anything within the budget approval.
The school enrollments are so low right now that they are dependent on transfering students from other school districts to fill classrooms. This was not the case in 2000 when transfer students were denied because of over-crowding. It could become the case that schools will get crowded again if home prices fall and families with school age children can once again move into the area. The existing school sites that were for sale have been closed for at least 10 years, they were leased to Boys and Girls club and private pre-schools. I don’t think this area will ever become the young family hey-day that it was in the 70’s
Eminent Domain.
Here you have irrational exuberance of a trustee board full of homeowners who cannot believe that Fountain Valley (BTW is that OC?) real estate could ever go down. This warped perception of the market will likely punish — in some way and down the road — the entire municipality (from the wisest of renters to the f@cked-est of speculative homeowners).
Yes, it is Orange County, sister city of Huntington Beach. I am really surprised tha a bid wasn’t taken. Centex pulled out because they were quoted as saying they could not build enough homes to make it profitable. They did walk away from their deposit. So, why would the board expect the same amount or more? I do know that I am being laid off because of the Centex pull out. They actually wrote that in a letter to everyone that got their lay-off notice. Probably some lame excuse and they just all need a raise for themselves.
Sorry to hear about your lay-off. Hopefully, somehow, it will result in an opportunity for you that you might not otherwise have had (and sorry if that doesn’t sound right but just trying to look for positives)….
I am fine with the layoff. I hate to say this but I only work 2 hours a day. Our kindergarten is a student to teacher ratio of 30 to 1 so an instructional aid is needed. I actually have a college degree but decided to not work full time and raise the kids. When they are not driving me crazy they are pretty awesome!
no bubble here, move along…
When Centex decided they could not make a profit and optioned out of its land purchase, did not the FVSD make a windfall on the option. How much was this? These greedy schools districts need a lesson in economics (which I sometimes wonder if these people are educated enough to teach our children) to understand that they should subtract this option money from the origional bid and come up with an acceptable number that benifits all. NEED not GREED…..
Great post! There is a lot of implicit fear elicited in that nose-dive land auction. It revealed the real mood of the people who made a fortune in RE. A 40% drop in land prices in 6 months. Who would have thought it could happen this swiftly in the OC. House prices will follow similar magnitude shortly. The crowded herd is suffocating at the exit, but their greed blinds them of the carnage in plain view just ahead. The entire herd is frozen in disbelief. Because of how quickly things have deteriorated, we are not likely to see a stampede, but rather a point blank sudden demolition.
the market has completely changed yoy in some very nice areas…how about a yoy 2 month to 10 year inventory change?see rossmoor ca 94525.
Almost bought in Rossmor early 90’s. My wife wanted it more than I so I agreed only if she would let me join the local CC Old Ranch. Zeroed in on a house then sat down in the back yard while my wife chatted with the RE agent… Instead of peace and quiet I got the distinct sound of a lovely freeway buzzing with cars in the not to far distance.
Needless to say, the snob that I am, moved to a beutiful area in the close by South Bay and couldn’t be happier.
With that said, If you want to see total insanity… Go look at Rossmor!
See fraud article,SC,CA
http://www.santacruzsentinel.com/archive/2006/July/01/local/stories/01local.htm
Love this one from the mortgage fraud blog:
“Ohio Man Allegedly Commits Mortgage Fraud With Family While Bonded out on Similar Scheme
A Grand Jury in Franklin County, Ohio indicted a father, mother, son and their associate for allegedly taking part in a scheme to artificially inflate the value of a Columbus, Ohio property in order to collect significant loan proceeds from an unsuspecting lender. The multiple-count indictment includes charges of theft, forgery, money laundering and secure writings by deception against Corey Hazel Sr., 44; Nadine Hazel, 44; and Corey Hazel Jr., 20, all of Columbus, Ohio. Their associate, Mark Corbin, 39, Canal Winchester, Ohio, is charged with forgery and secure writings by deception.
“In this particular case, the property was purchased in January by Mr. Corbin for $35,000,” Attorney General Jim Petro said. “Within three weeks, he transferred the property to Nadine Hazel and recorded the sale price as $235,000 with the Franklin County Auditor’s Office. He then placed a fictitious $145,000 lien on the home. This fraudulent activity gave the appearance that the property was worth more than it actually was.”
Subsequently, Nadine Hazel sold the property at 611 Kelton Ave., Columbus, Ohio to her son, Corey Hazel Jr., who obtained a $211,500 mortgage for the home based on fraudulent income information provided to the lender. As a result of the deal, Nadine Hazel received $168,800 in proceeds from the lender. According to investigators, the scheme was orchestrated by Corey Hazel Sr., who signed the transfer papers and contacted the lender, appraiser and title company in facilitating the deal.
Corey Hazel Sr., was already under indictment on 45 felony charges stemming from a larger scheme uncovered last year by Petro’s office and the Columbus Division of Police. In that scheme, Corey Hazel Sr. and his partner, Clemel Ronald Randall, allegedly submitted forged earnings and bank statements along with false loan applications and property appraisals to secure grossly inflated loans on 30 properties throughout Franklin and Fairfield counties in Ohio between March 2002 and September 2005. During the course of a nine-month probe, investigators determined the duo pocketed more than $2 million as a result of the scheme.
In the last three weeks, Columbus Mortgage Fraud Task Force investigations have resulted in the arrests or indictments of seven individuals for mortgage-fraud crimes.”
Here’s another story out of Columbus:
http://tinyurl.com/njo34
This one involves a slum lord, fraudulent appraisals, straw buyers, etc. Lots of folks in the country making some pretty fine money in this normal market. I like the fact that Columbus, Ohio has a Mortgage Fraud Task Force. You would think the banks might give a little better oversight to their lending and avoid these obvious scams. Surely business isn’t so go and plentiful that they can’t do just a smidgen of due diligence.
What does “secure writings by deception” mean? If I google it, I just get a lot of hits referring to this case.
It’s like these family members are the only people to ever be charged with “secure writings by deception.”
Here’s another from the Mortgage Fraud Blog:
“In the case of Decatur Ventures, LLC, v. Triage Realty Investment, Inc. (United States District Court for the Southern District of Indiana, Indianapolis Division), the court refused to enforce an agreement between parties to an illegal flipping scheme. In the action, the Plaintiffs essentially claimed that they were fraudulently induced into making investment purchases of residential real estate properties. The court stated that despite the Plaintiffs’ efforts to play the victims and characterize the scheme as a “non-traditional mortgage flipping scheme”, the case was nothing more than a traditional mortgage flipping scheme where the true victims were the lending companies.
The Plaintiffs, according to the judge, were willing participants in the “get-rich-quick” scheme that involved defrauding the lending institutions. Later, after realizing that they ended up with the short end of the stick, they brought a lawsuit against their partners in the scheme, “much like the case of the highwayman who sued his partner for an accounting of the profits of the robbery they had committed together.”
Off topic, but I just saw a ReMax commercial and they say:
“Now offering more listings than ever before.”
I am absolutely sure that this claim is true!
all of the mortgage fraud people should be publically executed for all to see.