Housing won’t hit bottom ’til 2012

[sdrealtor]

[quote=jpinpb][quote=sdrealtor]ocrenter is perfect example. He bought his house at a time no one thought was a bottom but he found his own. The time to get what he got is past but he saw it and had the confidence to act because he was diligently watching the whole time.[/quote]

I could be very mistaken, since I don’t know where ocr bought, but something tells me it wasn’t a high-end luxury home along the coast. I think there’s still room to drop as the article alludes, especially the high-end. Already seeing some drops in 92106 that I didn’t see last year.[/quote]

I am not talking about general price levels dropping I am talking about finding oneself a remarkable property and a remarkable deal. I think ocr found one and thats all I say on that topic. They are out there now but very hard to find. If you are not looking for them constantly with laserlike focus you wont find one.

[bearishgurl]

[quote=deadzone]Can you give some specific examples of these “micro areas” where you think the bottom as passed?[/quote]

deadzone, I haven’t studied the incidences of Trustees Deeds being recorded, incidences of successfully-closed short-sales, incidences of REOs sold or incidences of owners being underwater in a particular “micro market,” but suffice to say, if owners that can wait for a better day to sell in your chosen “micro market,” they certainly will.

If you are in the market to purchase residential property and want to determine if the bottom is past (or now here), I would first determine the exact subdivision or micro area (if a “custom-built area) I was interested in and then conduct the above studies for myself, taking into account the total amount of residential units built in your “micro area.” If the majority of the recent “sold” comps are being generated from nearby “distress” sales and/or there are four or more Trustees Deeds recorded in the last six months per 100 properties in your micro area of choice (=>4%), then there may still be bit of “froth” in current sellers’ asking prices if they do not conform to the (very) local market realities.

OTOH, if you are interested in purchasing in an area where there are few recent sold comps due to lack of inventory and the area/subdivision is more than 33 years old, I would buy a plat map from the County Assessor for $2 a page and check its APN numbers against the assessor’s tax payment website for the prevalence of Prop 13 owners still on the tax rolls (existing owners, whether residing in the property or not). If the prevalence of “Prop 13 owners” is => than 20% and there are very few sales in the last ten years, then it is very possible that the owners there don’t NEED to sell in this “down-market” and can wait for a better day.

Regardless of Prop 13 status (affordable taxes), the biggest indicator that the asking prices may be too high in a particular area is a large percentage of local owners have encumbrances equal to or more than what their property is worth. This could signal future distress sales/walkaways, spelling an erosion of your own future property value AFTER purchase.

In all cases, I would closely study the comparable “solds” of my target property on SDLookup or other site which has sales history of a listed/sold property of close neighbors’ purchase prices in the last ten years (even if not currently in default) to determine if an asking price is too much.

If your desired property is situated in a micro-area which is more than 50 years old, I believe that after you conduct the above “exercises,” you may be shocked to learn than a very slim minority of owners there are currently in the “need to sell ASAP” category. In this case, if the seller of your desired property can’t get what they think is a fair price in accordance with their location and overall condition in comparison with the few recent sold comps that are currently available, they have the option of taking it off the market and waiting for a “better day.” Many of these older areas are VERY stable and have already “hit bottom.”

[bearishgurl]

[quote=deadzone]Can you give some specific examples of these “micro areas” where you think the bottom as passed?[/quote]

deadzone, I haven’t studied the incidences of Trustees Deeds being recorded, incidences of successfully-closed short-sales, incidences of REOs sold or incidences of owners being underwater in a particular “micro market,” but suffice to say, if owners that can wait for a better day to sell in your chosen “micro market,” they certainly will.

If you are in the market to purchase residential property and want to determine if the bottom is past (or now here), I would first determine the exact subdivision or micro area (if a “custom-built area) I was interested in and then conduct the above studies for myself, taking into account the total amount of residential units built in your “micro area.” If the majority of the recent “sold” comps are being generated from nearby “distress” sales and/or there are four or more Trustees Deeds recorded in the last six months per 100 properties in your micro area of choice (=>4%), then there may still be bit of “froth” in current sellers’ asking prices if they do not conform to the (very) local market realities.

OTOH, if you are interested in purchasing in an area where there are few recent sold comps due to lack of inventory and the area/subdivision is more than 33 years old, I would buy a plat map from the County Assessor for $2 a page and check its APN numbers against the assessor’s tax payment website for the prevalence of Prop 13 owners still on the tax rolls (existing owners, whether residing in the property or not). If the prevalence of “Prop 13 owners” is => than 20% and there are very few sales in the last ten years, then it is very possible that the owners there don’t NEED to sell in this “down-market” and can wait for a better day.

Regardless of Prop 13 status (affordable taxes), the biggest indicator that the asking prices may be too high in a particular area is a large percentage of local owners have encumbrances equal to or more than what their property is worth. This could signal future distress sales/walkaways, spelling an erosion of your own future property value AFTER purchase.

In all cases, I would closely study the comparable “solds” of my target property on SDLookup or other site which has sales history of a listed/sold property of close neighbors’ purchase prices in the last ten years (even if not currently in default) to determine if an asking price is too much.

If your desired property is situated in a micro-area which is more than 50 years old, I believe that after you conduct the above “exercises,” you may be shocked to learn than a very slim minority of owners there are currently in the “need to sell ASAP” category. In this case, if the seller of your desired property can’t get what they think is a fair price in accordance with their location and overall condition in comparison with the few recent sold comps that are currently available, they have the option of taking it off the market and waiting for a “better day.” Many of these older areas are VERY stable and have already “hit bottom.”

[bearishgurl]

[quote=deadzone]Can you give some specific examples of these “micro areas” where you think the bottom as passed?[/quote]

deadzone, I haven’t studied the incidences of Trustees Deeds being recorded, incidences of successfully-closed short-sales, incidences of REOs sold or incidences of owners being underwater in a particular “micro market,” but suffice to say, if owners that can wait for a better day to sell in your chosen “micro market,” they certainly will.

If you are in the market to purchase residential property and want to determine if the bottom is past (or now here), I would first determine the exact subdivision or micro area (if a “custom-built area) I was interested in and then conduct the above studies for myself, taking into account the total amount of residential units built in your “micro area.” If the majority of the recent “sold” comps are being generated from nearby “distress” sales and/or there are four or more Trustees Deeds recorded in the last six months per 100 properties in your micro area of choice (=>4%), then there may still be bit of “froth” in current sellers’ asking prices if they do not conform to the (very) local market realities.

OTOH, if you are interested in purchasing in an area where there are few recent sold comps due to lack of inventory and the area/subdivision is more than 33 years old, I would buy a plat map from the County Assessor for $2 a page and check its APN numbers against the assessor’s tax payment website for the prevalence of Prop 13 owners still on the tax rolls (existing owners, whether residing in the property or not). If the prevalence of “Prop 13 owners” is => than 20% and there are very few sales in the last ten years, then it is very possible that the owners there don’t NEED to sell in this “down-market” and can wait for a better day.

Regardless of Prop 13 status (affordable taxes), the biggest indicator that the asking prices may be too high in a particular area is a large percentage of local owners have encumbrances equal to or more than what their property is worth. This could signal future distress sales/walkaways, spelling an erosion of your own future property value AFTER purchase.

In all cases, I would closely study the comparable “solds” of my target property on SDLookup or other site which has sales history of a listed/sold property of close neighbors’ purchase prices in the last ten years (even if not currently in default) to determine if an asking price is too much.

If your desired property is situated in a micro-area which is more than 50 years old, I believe that after you conduct the above “exercises,” you may be shocked to learn than a very slim minority of owners there are currently in the “need to sell ASAP” category. In this case, if the seller of your desired property can’t get what they think is a fair price in accordance with their location and overall condition in comparison with the few recent sold comps that are currently available, they have the option of taking it off the market and waiting for a “better day.” Many of these older areas are VERY stable and have already “hit bottom.”

[bearishgurl]

[quote=deadzone]Can you give some specific examples of these “micro areas” where you think the bottom as passed?[/quote]

deadzone, I haven’t studied the incidences of Trustees Deeds being recorded, incidences of successfully-closed short-sales, incidences of REOs sold or incidences of owners being underwater in a particular “micro market,” but suffice to say, if owners that can wait for a better day to sell in your chosen “micro market,” they certainly will.

If you are in the market to purchase residential property and want to determine if the bottom is past (or now here), I would first determine the exact subdivision or micro area (if a “custom-built area) I was interested in and then conduct the above studies for myself, taking into account the total amount of residential units built in your “micro area.” If the majority of the recent “sold” comps are being generated from nearby “distress” sales and/or there are four or more Trustees Deeds recorded in the last six months per 100 properties in your micro area of choice (=>4%), then there may still be bit of “froth” in current sellers’ asking prices if they do not conform to the (very) local market realities.

OTOH, if you are interested in purchasing in an area where there are few recent sold comps due to lack of inventory and the area/subdivision is more than 33 years old, I would buy a plat map from the County Assessor for $2 a page and check its APN numbers against the assessor’s tax payment website for the prevalence of Prop 13 owners still on the tax rolls (existing owners, whether residing in the property or not). If the prevalence of “Prop 13 owners” is => than 20% and there are very few sales in the last ten years, then it is very possible that the owners there don’t NEED to sell in this “down-market” and can wait for a better day.

Regardless of Prop 13 status (affordable taxes), the biggest indicator that the asking prices may be too high in a particular area is a large percentage of local owners have encumbrances equal to or more than what their property is worth. This could signal future distress sales/walkaways, spelling an erosion of your own future property value AFTER purchase.

In all cases, I would closely study the comparable “solds” of my target property on SDLookup or other site which has sales history of a listed/sold property of close neighbors’ purchase prices in the last ten years (even if not currently in default) to determine if an asking price is too much.

If your desired property is situated in a micro-area which is more than 50 years old, I believe that after you conduct the above “exercises,” you may be shocked to learn than a very slim minority of owners there are currently in the “need to sell ASAP” category. In this case, if the seller of your desired property can’t get what they think is a fair price in accordance with their location and overall condition in comparison with the few recent sold comps that are currently available, they have the option of taking it off the market and waiting for a “better day.” Many of these older areas are VERY stable and have already “hit bottom.”

[bearishgurl]

[quote=deadzone]Can you give some specific examples of these “micro areas” where you think the bottom as passed?[/quote]

deadzone, I haven’t studied the incidences of Trustees Deeds being recorded, incidences of successfully-closed short-sales, incidences of REOs sold or incidences of owners being underwater in a particular “micro market,” but suffice to say, if owners that can wait for a better day to sell in your chosen “micro market,” they certainly will.

If you are in the market to purchase residential property and want to determine if the bottom is past (or now here), I would first determine the exact subdivision or micro area (if a “custom-built area) I was interested in and then conduct the above studies for myself, taking into account the total amount of residential units built in your “micro area.” If the majority of the recent “sold” comps are being generated from nearby “distress” sales and/or there are four or more Trustees Deeds recorded in the last six months per 100 properties in your micro area of choice (=>4%), then there may still be bit of “froth” in current sellers’ asking prices if they do not conform to the (very) local market realities.

OTOH, if you are interested in purchasing in an area where there are few recent sold comps due to lack of inventory and the area/subdivision is more than 33 years old, I would buy a plat map from the County Assessor for $2 a page and check its APN numbers against the assessor’s tax payment website for the prevalence of Prop 13 owners still on the tax rolls (existing owners, whether residing in the property or not). If the prevalence of “Prop 13 owners” is => than 20% and there are very few sales in the last ten years, then it is very possible that the owners there don’t NEED to sell in this “down-market” and can wait for a better day.

Regardless of Prop 13 status (affordable taxes), the biggest indicator that the asking prices may be too high in a particular area is a large percentage of local owners have encumbrances equal to or more than what their property is worth. This could signal future distress sales/walkaways, spelling an erosion of your own future property value AFTER purchase.

In all cases, I would closely study the comparable “solds” of my target property on SDLookup or other site which has sales history of a listed/sold property of close neighbors’ purchase prices in the last ten years (even if not currently in default) to determine if an asking price is too much.

If your desired property is situated in a micro-area which is more than 50 years old, I believe that after you conduct the above “exercises,” you may be shocked to learn than a very slim minority of owners there are currently in the “need to sell ASAP” category. In this case, if the seller of your desired property can’t get what they think is a fair price in accordance with their location and overall condition in comparison with the few recent sold comps that are currently available, they have the option of taking it off the market and waiting for a “better day.” Many of these older areas are VERY stable and have already “hit bottom.”

[Anonymous]

Actually it is an interest only loan. He put 10% down and has since paid off his 10% second. HIs first is interest only and went down several hundred dollars a month when the 5/1 arm reset at a much lower rate. I keep telling him to go to a 30 yr fixed but his payment is so ridiculously low he cant see straight to doing it. His mortgage is less than 1/2 what his property would rent for.[/quote]

This doesn’t pass the smell test. When did he buy it? For how much? How much do you suppose it would appraise for today?

[Anonymous]

Actually it is an interest only loan. He put 10% down and has since paid off his 10% second. HIs first is interest only and went down several hundred dollars a month when the 5/1 arm reset at a much lower rate. I keep telling him to go to a 30 yr fixed but his payment is so ridiculously low he cant see straight to doing it. His mortgage is less than 1/2 what his property would rent for.[/quote]

This doesn’t pass the smell test. When did he buy it? For how much? How much do you suppose it would appraise for today?

[Anonymous]

Actually it is an interest only loan. He put 10% down and has since paid off his 10% second. HIs first is interest only and went down several hundred dollars a month when the 5/1 arm reset at a much lower rate. I keep telling him to go to a 30 yr fixed but his payment is so ridiculously low he cant see straight to doing it. His mortgage is less than 1/2 what his property would rent for.[/quote]

This doesn’t pass the smell test. When did he buy it? For how much? How much do you suppose it would appraise for today?

[Anonymous]

Actually it is an interest only loan. He put 10% down and has since paid off his 10% second. HIs first is interest only and went down several hundred dollars a month when the 5/1 arm reset at a much lower rate. I keep telling him to go to a 30 yr fixed but his payment is so ridiculously low he cant see straight to doing it. His mortgage is less than 1/2 what his property would rent for.[/quote]

This doesn’t pass the smell test. When did he buy it? For how much? How much do you suppose it would appraise for today?

[Anonymous]

Actually it is an interest only loan. He put 10% down and has since paid off his 10% second. HIs first is interest only and went down several hundred dollars a month when the 5/1 arm reset at a much lower rate. I keep telling him to go to a 30 yr fixed but his payment is so ridiculously low he cant see straight to doing it. His mortgage is less than 1/2 what his property would rent for.[/quote]

This doesn’t pass the smell test. When did he buy it? For how much? How much do you suppose it would appraise for today?

[bearishgurl]

[quote=deadzone]No crap, if you pay attention to the ARM reset charts it has been obvious for a few years now that there is no chance for a real housing bottom until at least 2012. The bulk of the ARM resets occur in 2011 and 2012. So regardless of interest rates and other factors, there is no chance for a real recovery to begin until those ARMs (aka foreclosures) are out of the system.[/quote]

deadzone, your “theory” here ONLY APPLIES to those areas where ARM and “30 due in 7, 5 (or 3)” and/or I/O mortgages were prevalent. In areas where the vast majority of buyers did not have access to these products (b/c they did not exist at the time of purchase) and there were very few refinances/helocs taken out in the last ten years, this “theory,” won’t hold. If you have your sights set on properties within these areas, you will find yourself waiting for a “recovery” that will never happen, IMHO.

[bearishgurl]

[quote=deadzone]No crap, if you pay attention to the ARM reset charts it has been obvious for a few years now that there is no chance for a real housing bottom until at least 2012. The bulk of the ARM resets occur in 2011 and 2012. So regardless of interest rates and other factors, there is no chance for a real recovery to begin until those ARMs (aka foreclosures) are out of the system.[/quote]

deadzone, your “theory” here ONLY APPLIES to those areas where ARM and “30 due in 7, 5 (or 3)” and/or I/O mortgages were prevalent. In areas where the vast majority of buyers did not have access to these products (b/c they did not exist at the time of purchase) and there were very few refinances/helocs taken out in the last ten years, this “theory,” won’t hold. If you have your sights set on properties within these areas, you will find yourself waiting for a “recovery” that will never happen, IMHO.

[bearishgurl]

[quote=deadzone]No crap, if you pay attention to the ARM reset charts it has been obvious for a few years now that there is no chance for a real housing bottom until at least 2012. The bulk of the ARM resets occur in 2011 and 2012. So regardless of interest rates and other factors, there is no chance for a real recovery to begin until those ARMs (aka foreclosures) are out of the system.[/quote]

deadzone, your “theory” here ONLY APPLIES to those areas where ARM and “30 due in 7, 5 (or 3)” and/or I/O mortgages were prevalent. In areas where the vast majority of buyers did not have access to these products (b/c they did not exist at the time of purchase) and there were very few refinances/helocs taken out in the last ten years, this “theory,” won’t hold. If you have your sights set on properties within these areas, you will find yourself waiting for a “recovery” that will never happen, IMHO.

[bearishgurl]

[quote=deadzone]No crap, if you pay attention to the ARM reset charts it has been obvious for a few years now that there is no chance for a real housing bottom until at least 2012. The bulk of the ARM resets occur in 2011 and 2012. So regardless of interest rates and other factors, there is no chance for a real recovery to begin until those ARMs (aka foreclosures) are out of the system.[/quote]

deadzone, your “theory” here ONLY APPLIES to those areas where ARM and “30 due in 7, 5 (or 3)” and/or I/O mortgages were prevalent. In areas where the vast majority of buyers did not have access to these products (b/c they did not exist at the time of purchase) and there were very few refinances/helocs taken out in the last ten years, this “theory,” won’t hold. If you have your sights set on properties within these areas, you will find yourself waiting for a “recovery” that will never happen, IMHO.

[Author]

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