Housing won’t hit bottom ’til 2012

[briansd1]

[quote=UCGal]
Here’s a 92109 example of what appeared to be a solid equity seller who wasn’t… Bought in 1995 for $760k. Listed in Oct 2009 for $3.85M, lowered the price in Oct 2010 to 3.39M. Foreclosed on yesterday.

Beautiful house (I’d live there.) But the owners appear to have pulled a lot of $$ out of it. (owed more than $2M) Then couldn’t get their wish price after more than a year on the market.

http://www.sdlookup.com/MLS-090059233-92106

http://www.sdlookup.com/Forums/RegionsandNeighborhoods/tabid/62/forumid/198/postid/114001/view/topic/Default.aspx

Even high end areas, even homes bought before the bubble, can be at risk.[/quote]

Thanks for a real world example. I’ve seen the same thing.

Long time holders of real estate in San Diego rode the gravy train of appreciation to wealth. But they are just ordinary people. Their staying power is limited and the fall in the value of their assets is hitting them hard.

[bearishgurl]

[quote=deadzone]How about this for a bet: I say December 2012 Case Shiller for San Diego will be at least 10% lower than December 2010. Dinner at Donovans.[/quote]

deadzone, this could very well be true, due to the OVERWHELMING numbers of NOD’s, NOS’s and “shadow inventory” in popular tract subdivisions built in the last 7 years or so. These numbers COULD drag down the Case Schiller for SD County as a whole.

But if this happens, it will SAY NOTHING about the value of 35-80 year old custom properties in choice coastal areas (which you indicated is your buying area of choice). They’re two completely different animals.

You’re assuming here that folks buying the 1947 small (ex: Pt Loma/upper OB) house are “interest-rate sensitive.” I can tell you that in the last 15 years, I watched several neighbor “boomers” from 91902 (where I’ve spent much of my own life) HAPPILY DUMP their 2700 sf+ albatross on 1/2 AC shortly after their last kid graduated HS and/or finished with CC. They were EAGER to dump the maintenance, utility bills, and 20-30 minute trek in traffic to Shelter Island or MCRD, where they slipped or dry-storaged their “large toy(s).” I watched them give away the bulk of their furnishings/household goods and pets to their kids and move into 1200 sf or so where they could “lock and go” (w/o HOA dues). They wanted to live =< 1 mile from their slips/dry storage, so they could easily access their “large toy(s)” whenever the mood struck them for an impromptu cruise or road trip, etc. Life is too short for daily hassles after you have already paid your dues.

Whatever interest rates were at the time these boomers “downsized” was what they were. Some took out small mortgages and others paid cash for their “WWII boxes.” Besides buyers with construction backgrounds/connections (purchasing a principal residence), boomers are the principal buyers of “smallish” antiquated (as brian would say, lol) well-located coastal SFRs. Neither of these two categories of buyers are particularly “interest-rate sensitive.” Boomers have seen and bought during all levels of interest rates, mostly at rates far higher than now. I should know how boomers think, cuz I AM one. They could give a rat’s a$$. They’ll just eventually retire their small mtgs or leave them for their heirs to pay off when they’re gone.

If you are waiting for the best and most conveniently-located SFRs on the best streets in LJ/Pt Loma to cave in value due to possible future interest rate fluctuations, you may find yourself in perpetual suspension, deadzone.

[bearishgurl]

[quote=deadzone]How about this for a bet: I say December 2012 Case Shiller for San Diego will be at least 10% lower than December 2010. Dinner at Donovans.[/quote]

deadzone, this could very well be true, due to the OVERWHELMING numbers of NOD’s, NOS’s and “shadow inventory” in popular tract subdivisions built in the last 7 years or so. These numbers COULD drag down the Case Schiller for SD County as a whole.

But if this happens, it will SAY NOTHING about the value of 35-80 year old custom properties in choice coastal areas (which you indicated is your buying area of choice). They’re two completely different animals.

You’re assuming here that folks buying the 1947 small (ex: Pt Loma/upper OB) house are “interest-rate sensitive.” I can tell you that in the last 15 years, I watched several neighbor “boomers” from 91902 (where I’ve spent much of my own life) HAPPILY DUMP their 2700 sf+ albatross on 1/2 AC shortly after their last kid graduated HS and/or finished with CC. They were EAGER to dump the maintenance, utility bills, and 20-30 minute trek in traffic to Shelter Island or MCRD, where they slipped or dry-storaged their “large toy(s).” I watched them give away the bulk of their furnishings/household goods and pets to their kids and move into 1200 sf or so where they could “lock and go” (w/o HOA dues). They wanted to live =< 1 mile from their slips/dry storage, so they could easily access their “large toy(s)” whenever the mood struck them for an impromptu cruise or road trip, etc. Life is too short for daily hassles after you have already paid your dues.

Whatever interest rates were at the time these boomers “downsized” was what they were. Some took out small mortgages and others paid cash for their “WWII boxes.” Besides buyers with construction backgrounds/connections (purchasing a principal residence), boomers are the principal buyers of “smallish” antiquated (as brian would say, lol) well-located coastal SFRs. Neither of these two categories of buyers are particularly “interest-rate sensitive.” Boomers have seen and bought during all levels of interest rates, mostly at rates far higher than now. I should know how boomers think, cuz I AM one. They could give a rat’s a$$. They’ll just eventually retire their small mtgs or leave them for their heirs to pay off when they’re gone.

If you are waiting for the best and most conveniently-located SFRs on the best streets in LJ/Pt Loma to cave in value due to possible future interest rate fluctuations, you may find yourself in perpetual suspension, deadzone.

[bearishgurl]

[quote=deadzone]How about this for a bet: I say December 2012 Case Shiller for San Diego will be at least 10% lower than December 2010. Dinner at Donovans.[/quote]

deadzone, this could very well be true, due to the OVERWHELMING numbers of NOD’s, NOS’s and “shadow inventory” in popular tract subdivisions built in the last 7 years or so. These numbers COULD drag down the Case Schiller for SD County as a whole.

But if this happens, it will SAY NOTHING about the value of 35-80 year old custom properties in choice coastal areas (which you indicated is your buying area of choice). They’re two completely different animals.

You’re assuming here that folks buying the 1947 small (ex: Pt Loma/upper OB) house are “interest-rate sensitive.” I can tell you that in the last 15 years, I watched several neighbor “boomers” from 91902 (where I’ve spent much of my own life) HAPPILY DUMP their 2700 sf+ albatross on 1/2 AC shortly after their last kid graduated HS and/or finished with CC. They were EAGER to dump the maintenance, utility bills, and 20-30 minute trek in traffic to Shelter Island or MCRD, where they slipped or dry-storaged their “large toy(s).” I watched them give away the bulk of their furnishings/household goods and pets to their kids and move into 1200 sf or so where they could “lock and go” (w/o HOA dues). They wanted to live =< 1 mile from their slips/dry storage, so they could easily access their “large toy(s)” whenever the mood struck them for an impromptu cruise or road trip, etc. Life is too short for daily hassles after you have already paid your dues.

Whatever interest rates were at the time these boomers “downsized” was what they were. Some took out small mortgages and others paid cash for their “WWII boxes.” Besides buyers with construction backgrounds/connections (purchasing a principal residence), boomers are the principal buyers of “smallish” antiquated (as brian would say, lol) well-located coastal SFRs. Neither of these two categories of buyers are particularly “interest-rate sensitive.” Boomers have seen and bought during all levels of interest rates, mostly at rates far higher than now. I should know how boomers think, cuz I AM one. They could give a rat’s a$$. They’ll just eventually retire their small mtgs or leave them for their heirs to pay off when they’re gone.

If you are waiting for the best and most conveniently-located SFRs on the best streets in LJ/Pt Loma to cave in value due to possible future interest rate fluctuations, you may find yourself in perpetual suspension, deadzone.

[bearishgurl]

[quote=deadzone]How about this for a bet: I say December 2012 Case Shiller for San Diego will be at least 10% lower than December 2010. Dinner at Donovans.[/quote]

deadzone, this could very well be true, due to the OVERWHELMING numbers of NOD’s, NOS’s and “shadow inventory” in popular tract subdivisions built in the last 7 years or so. These numbers COULD drag down the Case Schiller for SD County as a whole.

But if this happens, it will SAY NOTHING about the value of 35-80 year old custom properties in choice coastal areas (which you indicated is your buying area of choice). They’re two completely different animals.

You’re assuming here that folks buying the 1947 small (ex: Pt Loma/upper OB) house are “interest-rate sensitive.” I can tell you that in the last 15 years, I watched several neighbor “boomers” from 91902 (where I’ve spent much of my own life) HAPPILY DUMP their 2700 sf+ albatross on 1/2 AC shortly after their last kid graduated HS and/or finished with CC. They were EAGER to dump the maintenance, utility bills, and 20-30 minute trek in traffic to Shelter Island or MCRD, where they slipped or dry-storaged their “large toy(s).” I watched them give away the bulk of their furnishings/household goods and pets to their kids and move into 1200 sf or so where they could “lock and go” (w/o HOA dues). They wanted to live =< 1 mile from their slips/dry storage, so they could easily access their “large toy(s)” whenever the mood struck them for an impromptu cruise or road trip, etc. Life is too short for daily hassles after you have already paid your dues.

Whatever interest rates were at the time these boomers “downsized” was what they were. Some took out small mortgages and others paid cash for their “WWII boxes.” Besides buyers with construction backgrounds/connections (purchasing a principal residence), boomers are the principal buyers of “smallish” antiquated (as brian would say, lol) well-located coastal SFRs. Neither of these two categories of buyers are particularly “interest-rate sensitive.” Boomers have seen and bought during all levels of interest rates, mostly at rates far higher than now. I should know how boomers think, cuz I AM one. They could give a rat’s a$$. They’ll just eventually retire their small mtgs or leave them for their heirs to pay off when they’re gone.

If you are waiting for the best and most conveniently-located SFRs on the best streets in LJ/Pt Loma to cave in value due to possible future interest rate fluctuations, you may find yourself in perpetual suspension, deadzone.

[bearishgurl]

[quote=deadzone]How about this for a bet: I say December 2012 Case Shiller for San Diego will be at least 10% lower than December 2010. Dinner at Donovans.[/quote]

deadzone, this could very well be true, due to the OVERWHELMING numbers of NOD’s, NOS’s and “shadow inventory” in popular tract subdivisions built in the last 7 years or so. These numbers COULD drag down the Case Schiller for SD County as a whole.

But if this happens, it will SAY NOTHING about the value of 35-80 year old custom properties in choice coastal areas (which you indicated is your buying area of choice). They’re two completely different animals.

You’re assuming here that folks buying the 1947 small (ex: Pt Loma/upper OB) house are “interest-rate sensitive.” I can tell you that in the last 15 years, I watched several neighbor “boomers” from 91902 (where I’ve spent much of my own life) HAPPILY DUMP their 2700 sf+ albatross on 1/2 AC shortly after their last kid graduated HS and/or finished with CC. They were EAGER to dump the maintenance, utility bills, and 20-30 minute trek in traffic to Shelter Island or MCRD, where they slipped or dry-storaged their “large toy(s).” I watched them give away the bulk of their furnishings/household goods and pets to their kids and move into 1200 sf or so where they could “lock and go” (w/o HOA dues). They wanted to live =< 1 mile from their slips/dry storage, so they could easily access their “large toy(s)” whenever the mood struck them for an impromptu cruise or road trip, etc. Life is too short for daily hassles after you have already paid your dues.

Whatever interest rates were at the time these boomers “downsized” was what they were. Some took out small mortgages and others paid cash for their “WWII boxes.” Besides buyers with construction backgrounds/connections (purchasing a principal residence), boomers are the principal buyers of “smallish” antiquated (as brian would say, lol) well-located coastal SFRs. Neither of these two categories of buyers are particularly “interest-rate sensitive.” Boomers have seen and bought during all levels of interest rates, mostly at rates far higher than now. I should know how boomers think, cuz I AM one. They could give a rat’s a$$. They’ll just eventually retire their small mtgs or leave them for their heirs to pay off when they’re gone.

If you are waiting for the best and most conveniently-located SFRs on the best streets in LJ/Pt Loma to cave in value due to possible future interest rate fluctuations, you may find yourself in perpetual suspension, deadzone.

[bearishgurl]

[quote=UCGal]. . . Even high end areas, even homes bought before the bubble, can be at risk.[/quote]

Yes, agree UCGal, if they have been ATM’ed to death over the years. This situation makes for a MUST-SELL seller.

This is why I advocated doing the plat map study for the streets of your choice if you are a higher-end-custom buyer in an established area — to check the level of overmortgaged properties in order to determine if current asking prices had any “froth” to them.

[bearishgurl]

[quote=UCGal]. . . Even high end areas, even homes bought before the bubble, can be at risk.[/quote]

Yes, agree UCGal, if they have been ATM’ed to death over the years. This situation makes for a MUST-SELL seller.

This is why I advocated doing the plat map study for the streets of your choice if you are a higher-end-custom buyer in an established area — to check the level of overmortgaged properties in order to determine if current asking prices had any “froth” to them.

[bearishgurl]

[quote=UCGal]. . . Even high end areas, even homes bought before the bubble, can be at risk.[/quote]

Yes, agree UCGal, if they have been ATM’ed to death over the years. This situation makes for a MUST-SELL seller.

This is why I advocated doing the plat map study for the streets of your choice if you are a higher-end-custom buyer in an established area — to check the level of overmortgaged properties in order to determine if current asking prices had any “froth” to them.

[bearishgurl]

[quote=UCGal]. . . Even high end areas, even homes bought before the bubble, can be at risk.[/quote]

Yes, agree UCGal, if they have been ATM’ed to death over the years. This situation makes for a MUST-SELL seller.

This is why I advocated doing the plat map study for the streets of your choice if you are a higher-end-custom buyer in an established area — to check the level of overmortgaged properties in order to determine if current asking prices had any “froth” to them.

[bearishgurl]

[quote=UCGal]. . . Even high end areas, even homes bought before the bubble, can be at risk.[/quote]

Yes, agree UCGal, if they have been ATM’ed to death over the years. This situation makes for a MUST-SELL seller.

This is why I advocated doing the plat map study for the streets of your choice if you are a higher-end-custom buyer in an established area — to check the level of overmortgaged properties in order to determine if current asking prices had any “froth” to them.

[permabear]

I think whatever happens to the $2M+ crowd will determine the direction of the market.

Right now there’s a flood of $2-5M homes. RSF has 2 years of inventory in that price range. You can’t spit without hitting a $2M custom listing in Santaluz.

If those sellers start dropping their prices aggressively, others will be forced to follow suit. So it seems to me a “who can afford to wait the longest” game.

sdr has good points about original owners who don’t have to sell. But on the flip side, my uncle builds high-end spec homes for a living. Over the past 2 years he has narrowly avoided certain death on more than one occasion. Many spec builders still need financing and in a place like Santaluz, a builder might be carrying at $15-20k/month until they (a) find a buyer or (b) exhaust their cash and get foreclosed on.

[permabear]

I think whatever happens to the $2M+ crowd will determine the direction of the market.

Right now there’s a flood of $2-5M homes. RSF has 2 years of inventory in that price range. You can’t spit without hitting a $2M custom listing in Santaluz.

If those sellers start dropping their prices aggressively, others will be forced to follow suit. So it seems to me a “who can afford to wait the longest” game.

sdr has good points about original owners who don’t have to sell. But on the flip side, my uncle builds high-end spec homes for a living. Over the past 2 years he has narrowly avoided certain death on more than one occasion. Many spec builders still need financing and in a place like Santaluz, a builder might be carrying at $15-20k/month until they (a) find a buyer or (b) exhaust their cash and get foreclosed on.

[permabear]

I think whatever happens to the $2M+ crowd will determine the direction of the market.

Right now there’s a flood of $2-5M homes. RSF has 2 years of inventory in that price range. You can’t spit without hitting a $2M custom listing in Santaluz.

If those sellers start dropping their prices aggressively, others will be forced to follow suit. So it seems to me a “who can afford to wait the longest” game.

sdr has good points about original owners who don’t have to sell. But on the flip side, my uncle builds high-end spec homes for a living. Over the past 2 years he has narrowly avoided certain death on more than one occasion. Many spec builders still need financing and in a place like Santaluz, a builder might be carrying at $15-20k/month until they (a) find a buyer or (b) exhaust their cash and get foreclosed on.

[permabear]

I think whatever happens to the $2M+ crowd will determine the direction of the market.

Right now there’s a flood of $2-5M homes. RSF has 2 years of inventory in that price range. You can’t spit without hitting a $2M custom listing in Santaluz.

If those sellers start dropping their prices aggressively, others will be forced to follow suit. So it seems to me a “who can afford to wait the longest” game.

sdr has good points about original owners who don’t have to sell. But on the flip side, my uncle builds high-end spec homes for a living. Over the past 2 years he has narrowly avoided certain death on more than one occasion. Many spec builders still need financing and in a place like Santaluz, a builder might be carrying at $15-20k/month until they (a) find a buyer or (b) exhaust their cash and get foreclosed on.

[Author]

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