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earlyretirement.
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February 15, 2013 at 10:45 AM #20528February 15, 2013 at 11:11 AM #759466
CoronitaParticipantBTW: it was twelve strong offers in 24 hrs on a home that was offered @ 1.25 million, some cash.
So, I think a lot of folks are underestimating who’s on the sideline…. In a lot of ways, it feels a lot worse than it did 8/9/10 years ago.
Deflation my ass.
February 15, 2013 at 11:13 AM #759467earlyretirement
Participantflu,
Yeah, it’s BRUTAL. We made a few offers on places in Carmel Valley and finally gave up. Lots of cash offers going on there. I’m not going to chase it now.
I’m really curious how much of the buying is institutional. I know the cash % buyers are very high now.
I guess I should have bought another property back in 2011. Better prices and more inventory to pick from.
It will be interesting to see how the next year or two goes but I’m not going to chase it.
February 15, 2013 at 11:30 AM #759470The-Shoveler
ParticipantYep, from what I understand the rich are fleeing China as fast as they can (suit cases full of money),
I tell you they are printing a lot of money there, I would not want to be investing in Yuan myself, but what the heck do I know.
February 15, 2013 at 12:10 PM #759473CoronitaParticipantWow.. this went fast..
http://www.sdlookup.com/MLS-130006968-5293_Vista_Del_Dios_San_Diego_CA_92130
….So did this…
http://www.sdlookup.com/MLS-120026366-5427_Foxhound_Way_San_Diego_CA_92130
Mira Mesa brutal? CarmelV even more brutal..
February 15, 2013 at 12:44 PM #759474spdrun
ParticipantInstitutional buyers would likely be buying apartment buildings, not individual houses in the $1MM+ range. Not enough money in renting the latter out.
February 15, 2013 at 12:55 PM #759475bearishgurl
Participant[quote=spdrun]Institutional buyers would likely be buying apartment buildings, not individual houses in the $1MM+ range. Not enough money in renting the latter out.[/quote]
REITs are buying the $250-$400K SFR’s to fix up and flip or rent out, in addition to apt bldgs.
February 15, 2013 at 1:04 PM #759476Participant$250-400K isn’t $1MM. My point stands.
February 15, 2013 at 1:26 PM #759468CoronitaParticipant[quote=earlyretirement]flu,
Yeah, it’s BRUTAL. We made a few offers on places in Carmel Valley and finally gave up. Lots of cash offers going on there. I’m not going to chase it now.
I’m really curious how much of the buying is institutional. I know the cash % buyers are very high now.
I guess I should have bought another property back in 2011. Better prices and more inventory to pick from.
It will be interesting to see how the next year or two goes but I’m not going to chase it.[/quote]
It’s just kinda scary. Back when I was looking for my SFH, $800-900k seemed to be the “house deals” that would move quickly. I didn’t expect to see stuff like this in the 1.1-1.3 range that moved this quickly.
I doubt they were institutional…Previous owner was selling his place and already bought a 2.5+million place in RSF for cash… During the showing, someone with me talked to an agent that was showing home for another client..The client was from overseas and already purchased two homes in CarmelV, one for each their two children coming here for college. They were looking for a third themselves…..And $1million is pocket change for some of these folks me thinks. .Don’t know about other offers.
The price range where homes don’t appear to be flying off the shell seem to be those 1.8+ million.
Time to work harder/smarter….
February 15, 2013 at 1:32 PM #759477CoronitaParticipanthonestly. the only one I have to blame is myself…Unfortunately ,sometimes homes come up on the market and one’s not ready financially. I wasn’t really ready. It caught me offguard, and I wish I was in a better situation to have been more competitive…. But it is what it is…
That and lending standards were stricter so a bunch of income categories beyond salaried w-2 didn’t count, blah blah blah. And W2 income is suppose to be the easiest form of income to verify. I’m wondering how folks without a W2 how many hoops they would have to jump through….So it’s just kinda sad that that kinda puts people at a disadvantage too.
Then there was the issue of trying to juggle my existing primary. Initial thought would be to hold on to it and convert to rental to see if we get more appreciation next year… but even if I did pay it off, lender would limit my new loan on the new place and a bunch of contingencies. Ended up having to write an offer with contingencies that I sort of already knew it wouldn’t be a strong enough to hold, since I thought there would be maybe a a few other competing offers that didn’t have as many strings attached.
I just didn’t think it would have been like 12 offers…..And definitely didn’t think there would be so many cash offers that would be at asking or probably on top of that…. That to me tells me there’s a lot of strength in this sub market….
Lesson learned. In situations now, even if you can leverage to buy, conditions might not allow you to anyway….Oh well….
February 15, 2013 at 1:45 PM #759478ParticipantChina’s $3.8 Trillion Hemorrhage
To put this into perspective, China’s ownership of U.S Debt is about $1.2 trillion
Over the past decade, about $3.8 trillion has left China illicitly. The trend, if you’ll recall yesterday’s discussion, is accelerating. Somewhere around $50 billion per month is flooding out of China.
And
The amount of money flowing in from global markets is incredibly strong. To be more specific buyers from China are big players in many prime areas especially in California. Access to high quality universities and prime neighborhoods is simply another factor that will keep prices inflated more than people may think. Canadians have firsthand experience in this global real estate market push. If you think our real estate bubble was amazing you simply have no idea what is going on in China at the current moment. This past weekend, the Hong Kong government put on a 15 percent tax on property purchases made by foreigners. There is no question that the market is overheating and the government is readily admitting it and even going to these extremes. Put this into perspective with US real estate in 2007 when the Fed was still reticent to admit that we were experiencing a heated real estate market. At this point it is too late and places where this hot money is flowing like a few Canadian cities will feel a pull back once the current trend stalls or even reverses.
February 15, 2013 at 1:55 PM #759479paramount
Participantflu: Over the years I’ve learned a lot from your posts, and you’re way smarter than I am.
Let’s face it, there’s a reason I live in Temecula and you live in CV (or other 1%er area).
That being said, I could rattle off an impressive list of names and institutions saying we will likely be in a recession by the end of the year – maybe severe.
As has been said, if you think the Obama recovery sucked, just wait until the Obama crash hits.
Or is an area like CV essentially immune from economic contraction?
February 15, 2013 at 2:14 PM #759485ParticipantAs has been said, if you think the Obama recovery sucked, just wait until the Obama crash hits.
An artificially inflated stock market does not a “recovery” make — the recovery never happened for the average American schmuck. Not while labor force participation rates are at 63-and-change per cent, pretty much record lows for the last 10 years.
Yeah, a lot of institutional buyers and wealthy people have money and are taking advantage of the relative cheapness of real estate, but what’s new?
February 15, 2013 at 2:19 PM #759483CoronitaParticipant[quote=paramount]flu: Over the years I’ve learned a lot from your posts, and you’re way smarter than I am.
Let’s face it, there’s a reason I live in Temecula and you live in CV (or other 1%er area).
That being said, I could rattle off an impressive list of names and institutions saying we will likely be in a recession by the end of the year – maybe severe.
As has been said, if you think the Obama recovery sucked, just wait until the Obama crash hits.
Or is an area like CV essentially immune from economic contraction?[/quote]
The way that I view it. If/when the crap hits in the fan. I’d prefer to lose 20+% in the value of a house versus losing 30+% in the value of stocks/bonds or have my cash purchase power get consumed by inflation…
The red herring is if the USD devalues, that sucks for domestic people, but what about folks not tied to the USD? I mean, just thinking out loud.
Not to long ago, it was like
$1 USD: to 9 RMB…
$1 USD: to $1.3/4 CAD DollarToday, it’s
$1 USD: to 6.2 RMB… (and that’s even before the RMB is floated)…
$1 USD: to $1 CADI’m just looking at this from a more macroeconomic viewpoint. Wealthy folks abroad want safehaven place to park money….Canadians probably think RE prices here are cheap, with the trashed USD relative to the CAD…Despite what we all think, US assets are still probably safer than other assets. There was talk about Euro being better a few years ago…Well, we know where that went…Suddenly the world has gone silent on diversifying into euro… And let’s face it, rich people in overseas aren’t exactly 100% trusting of the government there protecting their interests either…US real estate looks cheaper relative to say Vancouver,BC which prices have been driven up astronomically there too. You probably won’t have folks from CAD or abroad buying in places like Detroit, but you probably would have investors buying in places like Las Vegas and Bay Area, L.A., Florida, etc….question exactly is how much is San Diego now on the radar of external influence..
Also, despite the economic mess that people are in the U.S., U.S. is still home to a bunch of people with a insane amount of money too..no amount of taxation, wealth redistribution policy, or backlash is gonna change that…So I’m not convinced all these strong buyers are also foreigners. There’s plenty of people it appears that have weathered this recession and probably done better. And I wouldn’t count Temecula out…If there’s any indication, it’s on an upswing too…
If the economy is so weak, where are all these cash buyers coming from? Not all of them are foreigners…These aren’t people in exotic loan products, stated income, or other things. I’ve gone through the lending process..It’s a major PITA…..Seems pretty healthy, non-institutional buyers to me with very little strings attached…
Where’s the shadow inventory? Maybe there is a lot of distressed properties, but if the banks can manage the trickle trickle trickle, maybe it is working to prop up prices.
February 15, 2013 at 2:21 PM #759486CoronitaParticipantSo again, I ask… If the economic situation is so bad globally, where are we getting buyers who can put up over $1million+, without much of a blink….
(no I’m not one of them)….
I mean if feels like some of these folks throw this kinda of amount around like it’s $100k or $10k…
We’re not talking LJ, or Del Mar or RSF or Del Mar Mesa or some custom home…It’s CarmelV for sake….It’s a frickin stucco box, albeit might be slightly nicer stucco box….
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