- This topic has 41 replies, 19 voices, and was last updated 17 years, 8 months ago by PerryChase.
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March 9, 2007 at 12:00 AM #47184March 9, 2007 at 6:16 AM #47189latesummer2008Participant
Westside RE Meltdown starts ! Perfect storm of bloated inventories, exploding arms, credit crunch, buyers stalemate, REOs, and MSM fear is gaining steam. Just found a 22% drop in Santa Monica in just over 21 months ! Check out
http://westsideremeltdown.blogspot.com
Sellers market is OVER, Buyers now hold the cards. This spring it will become evident and summer should be brutal with price wars. FINALLY…..
March 9, 2007 at 7:51 AM #47194ibjamesParticipantI hope all of you are correct, but prices have to drop so much to make things affordable that sometimes I have doubts
March 9, 2007 at 8:16 AM #47197LA_RenterParticipantI found this quote on a CNN article;
But Dean Baker, the co-director of the Center for Economic and Policy Research and a leading proponent of the theory that there has been a bubble in housing prices, says that he believes it could take five to seven years before prices get back to their highs on a nominal basis.
If prices are adjusted for inflation, he thinks that prices will never recover their recent highs.
“If you look at historical data, home prices have stayed pretty much flat in real terms, maybe being a few percentage above inflation or income,” he said. “That’s why the run-up in prices the past eight years was so peculiar. And the run-up is what created the bubble.”
Prices will never recover their recent highs when adjusted for inflation. Sounds like like Nasdaq 5000 doesn’t it. You will probably see the most severe nominal price drops late 2007 into 2008, then the forces of time and inflation will bring the market back to equilibrium. Common Sense dictates there is enough here to send the economy into recession. There is a legitimate debate on the degree (mild or severe?). This whole thing has thrown a wrench into a fiscal conservative’s-like me life. But it is what it is.
March 9, 2007 at 10:10 AM #47224PerryChaseParticipantHere’s the CNN article.
I agree with Dean Baker. The other economists quoted in the article are full of bull.http://money.cnn.com/2007/03/09/news/economy/home_price_slump/index.htm?postversion=2007030911
March 9, 2007 at 9:18 PM #47279latesummer2008ParticipantMore Westside Meltdowns! Just found 2 more drops of 15% since 2005 in Culver City and Westchester. If you are interested in the details of these drops on the Westside of LA, check out the following link for details
http://westsideremeltdown.blogspot.com
Checking Zillow gives you access to recent sales history and you can find more in your chosen area. Lets get the word out and get this train chuggin !!!
March 10, 2007 at 8:40 AM #47286DuckParticipantSD Realtor, take a look
at the active/pendings (less than 2/1) in La Costa Valley and the recent solds. Those are prices moving up not down. The premier properties are moving quickly. Again, I’m not sure why but that is the fact. Over in La Costa Oaks the best bargains are the builders closing out their last homes and there are still speculators which is why I think you’ll see more listings and more downward pressure than in LCV. LCV has about twice as many homes in the development yet there are more listings in LCO.
I also just noticed the main body of this thread and the author is talking about buyers of $2,000,000 homes and how lenders like NEW ceasing funding are going to affect that market. I’ve never heard of anyone using a subprime loan to purchase a $2,000,000 home. In this area there are lots of people that make $300k and more a year and they can afford to spend $8-10k a month on their home. The ratio’s for how much of your income you should spend on your home do not apply to high end earners because 20% of someone earning $400k is more than 60% of someone earning $100k. The amount you spend on food, gas, clothing, etc is the same no matter what you earn. It’s the same thing with retirement planners saying you need to have 80% of your peak income in retirement. Well, if I earn $500k and save about half of it every year because I live frugally, I sure as hell don’t need $400k per year in retirement when I was only spending $100k per year raising a family of 5. These ratios seem biased towards people that spend all of their income.
Quack!
March 10, 2007 at 10:58 AM #47300sdrealtorParticipantQuack! Plenty of downward price pressure in LCV! Plenty!
Quack, Several NOD’s and even one floreclosure on the market!
Quack! 4BR 2,400 to 2800 sq ft homes that sold in the high 800’s to low 900’s last year/summer struggling to sell in the mid to low 800’s.
Quack, almost without exception sellers in LC Oaks are losing money after all costs are added. Quack!
Quack! Duck has his facts all wrong! Quack!
Quack! I know a hard money lender that does plenty of sub prime loans in RSF for homes alot more than $2M! Quack!
March 10, 2007 at 3:26 PM #47317DuckParticipantYou seem to have your “facts” confused. There is one foreclosure on the market. The foreclosure is pending and will close next week I am told. So there’s one bank owned property out of 1050 homes that is putting all this downward pressure on the other 12 homes that are on the market. 13 total homes for sale in a development of over 1,000 homes. LOL.
March 10, 2007 at 5:45 PM #47318DuckParticipantI forgot about your subprime RSF comment. Hard money lenders lend based on the property’s value and they don’t use 25 year old appraisers who need $400 to make their next rent check to determine the value. I’ve done 10-15 over the last 3 years with great returns and a bunch of BK’s as borrowers. And they don’t do 100% LTV or anywhere near that unless they are stupid or have extremely stupid investors. Hard Money lending is all about the value of the property and has nearly nothing to do with the borrower and has no relation to a subprime lender that is using brokers they don’t even know to fish for loans.
Are RSF prices also facing downward pressure from the subprime implosion? RSF homeowners are more likely to feel the pressure because they invested $10-20mm in a hedge fund that has exposure to via CBO’s than from toxic RSF loans.
I’ll check back with you bittermen in 12 months and we’ll see where you’re at (assuming this site exists). Misery loves company and you have plenty of that on all these bubble blogs.
Quack!
March 10, 2007 at 7:11 PM #47321sdrealtorParticipantDaffy,
You are so off target it’s laughable. I am anything but bitter and own a fabulous home in that area with a very small mortgage fixed for 30 years in the 5%’s. My house is big, has a huge lot, a great view and a backyard as nice as any resort i’ve ever been to.I think those neighborhoods are phenomenal and as good as it gets in SD if not in the country. I dont think prices there are crashing but pricing is only headed in one direction there and its not up. You’re picking a fight with the wrong person. I know as much about that market as anyone on the planet. First off, the house in escrow is a short sale not a foreclosure. Second, there are at least 7 other homes with NOD’s filed on them. Third, there are at least 15 sellers that were unsuccesful last year and could/should be back on the market soon.
Fourth and MOST importantly, the only thing rising in that area other than NOD’s is mortgage fraud. The sales you are probably referring to as proof of rising prices involve 2 closed escrows and one pending that were all represented by the same buyers agent and listing agents. All sold without ever going on the market at least $200,000 above market. I’ve heard rumblings that there were payments back to buyers well into the six figures. Everyone involved should end up behind bars.
P.S. As you pointed out, based upon income the ratios don’t apply to me either. I’m not bitter, I’m joyful!
March 10, 2007 at 7:21 PM #47323PerryChaseParticipantDuck, yes I think that you picked the wrong person to argue with. sdrealtor has always been realistically optimistic about the market. From his previous posts, I can tell that he knows his market inside-out and he’s always cautiously optimistic.
Unlike most of the lousy Realtors you meet at open houses, sdrealtor doesn’t doesn’t have blinders on and ignore the data pointing to a down market. The info is right there for all to see. You just need an inquiring mind.
If you’re a RE professional you should take off your sales and marketing hat when entering this forum. The people here are not likely to be sold on fluff.
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