A post on Housing

User Forum Topic
Submitted by cr on October 16, 2008 - 3:17pm

Seems like they're rare these days, so I thought I would point out what IMO is a change in media sentiment. A sign I have been looking for that indicates that bottom is approaching, because I believe the hysteria at the peak that housing was invincible, will be somewhat matched by equally irrational fears that housing will never come back. Though we're not there yet, recognition that housing won't rebounding soon is surfacing.

Home Prices Seem Far From Bottom
by Vikas Bajaj

The American housing market, where the global economic crisis began, is far from hitting bottom.
Home prices across much of the country are likely to fall through late 2009, economists say, and in some markets the trend could last even longer depending on the severity of the anticipated recession.
In hard-hit areas like California, Florida and Arizona, the grim calculus is the same: More and more homes are going up for sale, but fewer and fewer people are willing or able to buy them.
Adding to the worries nationwide are rising unemployment, falling wages and escalating mortgage rates -- all of which will reduce the already diminished pool of would-be buyers.
"The No. 1 thing that drives housing values is incomes," said Todd Sinai, an associate professor of real estate at the Wharton School at the University of Pennsylvania. "When incomes fall, demand for housing falls."
Despite the government's move to bolster the banking industry, home loan rates rose again on Tuesday, reflecting concern that the Treasury will borrow heavily to finance the rescue.
On Wednesday, the average rate for 30-year fixed rate mortgages was 6.75 percent, up from 6.06 percent last week. While banks are moving aggressively to sell foreclosed properties, the number of empty homes is hovering near its highest level in more than half a century...

Read the rest here.

‹ "Dear Homeowner, we lowered your payment" letter Are builders still building homes? ›
Price is still sticky in
Submitted by flu on October 16, 2008 - 3:49pm.

Price is still sticky in carmel valley, although there appears to be signs of a big let down coming in the attached markets...

SDR, my favorite discussion. The Crest at Del Mar.
The agent did lower the price 4 times...though the last one was a $1000 discount. Whoohoo.

3/3bedroom now sits at $475k and 107 days on the market.

http://www.sdlookup.com/MLS-080046466-12...

"Motivated seller" means that the person is facing foreclosure.

I forget which seller, but one of the owners selling in this complex, took equity out and invested it elsewhere in RE, so I'm told.

Off 23% from pre-peak of 2004, and about 29% off from peak of 2005.

My buy in would be probably around $390k and change.
...almost there..... :)

I was wondering when somone
Submitted by peterb on October 16, 2008 - 4:21pm.

I was wondering when somone was going to post a housing related story. Once the market settles down, if ever, the knife catchers can get back into action. If there's any left at that point.

There's still an awful lot of
Submitted by lonestar2000 on October 17, 2008 - 1:26am.

There's still an awful lot of job losses to work through, and many have lost a bundle on the stock markets this year, so I don't think we're that close. Even if we reach a bottom of sorts, you'll have plenty of time to snuff out the house you want, there's nothing to indicate that we'll have a quick turnaround into positive appreciation.

Guess who are back on the
Submitted by flu on October 17, 2008 - 1:54am.

Guess who are back on the market in CV?

Pardee Saratoga....

http://www.sdlookup.com/MLS-081025123-10...

http://www.sdlookup.com/MLS-086027573-52...

Also, public records indicate (unrelated to above sales) in these pardee communities... although, as indicated before, default status doesn't necessarily indicate financial duress.

1 Person has defaulted on $28k in prop tax
1 Person has defaulted on $10k in prop tax
1 Person has defaulted on $19k in prop tax
1 Person has defaulted on $13k in prop tax

FLU, What's disgusting about
Submitted by CA renter on October 17, 2008 - 1:59am.

FLU,

What's disgusting about those two listings is that both of them think they "deserve" a profit...from 2006 prices!!!!

We are nowhere near a bottom, especially in the better areas, IMHO.

BTW, still seeing lots of wannabe flippers out there, guys. Be careful, and don't compete until they are all washed out of the market. I remember the bottom of the last market, and there were few/no flippers to be found. Bubble mentality is still alive and well because "the govt is going to save us."

I think it takes 5 years of
Submitted by peterb on October 17, 2008 - 8:21am.

I think it takes 5 years of not paying property tax before the govt can take the property. So it's a logical place to start not paying if you're broke. Which may be a good indicator the owner is in distress and stiffing the lender as well.
Short sales seem to be too damaging to the seller and the lender would have to recognize the loss.(Which they do NOT want to do right now.) So best to let these die a natural and ugly death.
The flippers like Bruce Norris claim they're getting the lender to sell them at 40% of the loan or less at a no-reserve auction. But remember, these guys are total pro's. Notice that they dont want to keep the properties either. Even at positive cash flow as a rental. What does that tell you?

The flippers like Bruce
Submitted by FormerSanDiegan on October 17, 2008 - 8:26am.

The flippers like Bruce Norris claim they're getting the lender to sell them at 40% of the loan or less at a no-reserve auction. But remember, these guys are total pro's. Notice that they dont want to keep the properties either. Even at positive cash flow as a rental. What does that tell you?

Simple.
It tells me that Bruce Norris has the ability to generate 20-40% profits on flips in a three-month holding period, and prefers that to long-term cash flow at effectively 10% annually.
Which would you choose for your business: 20% in three months or 10% annually ?