Anecdotes regarding slowing market

[davelj]

Every sentient being with even a tangential interest in real estate knows that things have slowed down markedly, but I thought I’d share the following personal anecdote from last week.

I was in the office of an escrow/title company here in SD and I noticed that just one of six offices had anyone in it. I asked where everyone was and the woman working there responded, “We had five other people working here as of last summer but they’ve all been let go since, so now it’s down to me.” The freelance notary public that was notarizing documents told me that she was doing one to two appointments per day these days down from eight or more a year ago. The office I was in was so busy last summer that she was kept in-house to work there full-time. I asked the title/escrow woman, who told me she had been in the business for over 20 years, whether she had seen any changes in the types of borrowers she was seeing and she said, “Man, I gotta tell ya, the stuff that people are doing to buy places these days is crazy. I’ve seen so many people in here over the last three years that have no business getting the mortgages they’ve been taking on. This is going to get really ugly at some point.”

Granted, it’s anecdotal. But it’s a reflection of what’s happening from the standpoint of an operator who’s on the ground floor and has been in the business for a long time.

[davelj]

While I’m on the topic, here’s another:

I’m very familiar with a particular condo complex up in Carlsbad. All of the units have the same square footage, albeit varying views and renovations. Last summer two middling units changed hands at just north of $400K. Despite a handful of units on the market since that time there were no sales until last month – one sold for $345K and the other for $338K. There is now a unit for sale at $299K. I don’t have to tell anyone that that’s an enormous year-over-year change.

[CAwireman]

Dave, its good to get periodic updates like this.

The parents of friends of my son bought a place in San Marcos recently despite suggestions that they might want to wait.

People are still buying property despite the articles in the press warning of a downturn.

[carlislematthew]

People are still buying property despite the articles in the press warning of a downturn.

I think that until the declines continue further (like, into next summer) the overall psychology of the masses won’t change. It took a little while for the mania to really begin and I think it will take some more time for the masses to believe that this isn’t just a temporary dip. After all, prices never go down!

[Chrispy]

I have a friend who sold a house in Mt. Helix earlier this year – divorce sale, took awhile to get escrow done. She wants to buy again and is considering a 2/2 house in La Mesa which has a wishing price of $600K.

She thinks she might get the owner down to $550K – and she is convinced that the market is as low as it will go, and will go up again RIGHT AFTER SHE CLOSES.

I have a hard time with people like her. I want to be a friend, but she doesn’t want to hear it. I know someone else who closed last month… I heard this after I made comments about the market heading increasingly south.

[speedingpullet]

What can you do?
All you really can do is to say that you think its a bad idea, but for the sake of your friendship, you’ll shut up about it now.
If she ever turns on you and says ‘why didn’t you talk me out of it?’, point out that you tried just that, but she didn’t want to listen.

She’s an adult, and ultimately responsible for her actions. If she’s convinced that the market is going to go back up – and she’s among many who think so (at least amongst the majority of my friends, this is the mantra) – then nothing you say will dissuade her.

[tugg49]

Had the same with a secretary in our office that had the bright idea of buying a rental in Tucson last year. Financed her existing mortgage to cash out and buy the house. I have some horror stories in my past as a landlord and let her know that it ain’t that straightforward as a landlord in San Diego much less a six-eight hour commute to re-lay carpet and get the plumbing fixed. She went through with itand was beaming like a new mother. She’s working elsewhere now and I haven’t talked to her for a while but I know she’s sweating bullets. It takes a special type of will to buy in this market and I tried to impress on her that it really sucks to be caught holding. I was and will never landlord again. A personal residence is different but to buy into this market thinking it’s going to regain momentum is not the frame of mind to be entering into a life changing event like a bubble-mortgage. If you were here in the early 90’s you know that leaving the keys on the kitchen table and walking away is a very real reality. I’ve determined that a sleepless night is worth a hundred bucks. That statement is an attention getter!

[Doofrat]

My wife was watching Dr. 90210 the other night they had a stripper from Las Vegas who was getting a boob job (obviously) and she was 26 or 27 and was studying to be a hairdresser. Although I don’t like the show, I suddenly became interested in plastic surgery. While the Dr. was talking to her it comes out that she owns three houses in Las Vegas and she wants to buy seven more. The Beverly Hills plastic surgeon says something to the effect that he can’t believe that she was able to buy three houses so young and that he didn’t buy his first house until he was 39.
I wonder how all this will shake out in the end?

[PerryChase]

A good stripper should make good money — if she knows how to please her clients.

[mydogsarelazy]

Here are two anecdotes.

The house across the street — we live in a new area of Murrieta — has been for sale for $550 for six months. Talked to the renter who lives there today and found out that there has been NO interest. The owner offered it to the tenants for $450k and they said “No thanks.”

My other anecdote, a relative of mine needs to sell his home in Menifee. He has already closed escrow on another home so he is paying two mortgages. He has it listed, and of course there is no interest, but he wants to find another agent who will PRICE IT HIGHER!

Hello!

JS

[VCJIM]

One anecdote: This happened aboutover a month ago, I’ve been super busy and haven’t had time to post it. I found a used car online and made an appointment with the owner to go see it. The owner and I started talking, and I found out that he and his wife are both appraisers. He said their business is down 30-40% from a year ago, and his wife told him he needed to sell his “toy” (the car). I think there will be a glut of expensive / luxury cars as housing continues to erode.

[sdduuuude]

I think my neighborhood (Clairemont) is a little stickier coming down than the general county numbers show. I checked comps on a house I sold last year ($575K) and it hasn’t come down very much at all – maybe 2%. I thought it was down 5%-7% or so but the comps show different. If I were to sell it now, I think I would price it at $535, though, just to make sure I was coming in low.

Just shows that downtown condos, new north county McMansions and established centrally located neighborhoods will react differently at different times.

[4plexowner]

One of my friends has their Clairemont house on the market right now. Absolutely no activity in a month.

The house is priced well (one of the lowest priced houses on MLS in Clairemont) but not even a nibble. We have talked about lowering the price but don’t think it would make any difference.

The realtor has a flyer showing two ways to buy the house:

1. 20% down and a 5/1 ARM at 6% – monthly PITI $2989

2. 0% down with 5/1 IO ARM at 6.375% plus HELO at 9.15% – monthly PITI $3498

The first time I saw this flyer I laughed at how absurd it would be for anyone to pay that kind of money for a small, 50 year old house in Clairemont.

When I gave it some more thought these questions came to mind:
1. who has 20% down these days ($90-100K)?
2. why would anyone pay $3000/mo for a house that they can rent for $1700/mo?

I expect houses like this one to be available for about $275K (2006 dollars) when the market finally bottoms.

[barnaby33]

If I were religious, I would pray that its your wifes relative, not yours.

Josh

[JES]

Went to McDonalds today with the kids and noticed more people in line than usual. I listened and most were ordering water instead of drinks. Nobody donated change to the plastic fund container, and most ordered food from the $1 menu. One rather large lady – OK, she was fat – only ordered a small fry, not large. One guy walked in, looked at the prices, shook his head and walked out the door.

My observations lead me to believe housing will crash 30+% by the end of next year…

[Author]

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