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June 29, 2010 at 11:16 PM #574676June 30, 2010 at 5:15 AM #573689
pemeliza
Participant“So, while “the market” (buyers?) sets the price, it is the most foolish buyer who’s willing to take the greatest risks who sets the price in a supply-constrained market.”
That was true during the bubble years but now? I don’t see it much at least not in my neck of the woods. What I see are buyers that are sitting back and waiting for the market to come to them. The buyers are more picky and in tune with market value than I have seen in a long time. Right now, if you are a seller you had better have a damn sharp list price or your listing is going to sit, sit and then sit some more. If you really want to sell right now and your are priced above 750k it is best to start at 5% under recent sales and be prepared to work down from there. There is a short sale in my area that sold for 875k at the peak and eventually got reduced to 599k to find a buyer. That is 31.5% off of the peak price in mission hills and guess what the house just got relisted for sale. A few months ago that would have been a screaming price for an upgraded house. Now not so much. Who knows why the buyer walked but maybe it was not being able to close before the tax credit expired. If my guess is correct, the buyer had a deal 31.5% under peak and walked for 8k. As another example, there was a recent listing for 750k in north mission hills which was pretty much in line with recent comps in that area given the square footage. Well it went pending and ended up closing for 680k. There is another house on a prime street listed at least 50k probably 100k under the previous sale and the house is sitting.
I could give you dozens of examples. Basically, the type of foolhardy buyer you speak of may still be out there to a very limited extent but right now the market is being ruled by buyers that are doing their homework, looking at the recent comps, taking 5-10% off of that and working down from there. There have been some flippers in my area but when they list higher than market the house sits endlessly and then they end up selling it for 10-20% under there original wish price just to get out from under a sinking ship.
June 30, 2010 at 5:15 AM #573785Participant“So, while “the market” (buyers?) sets the price, it is the most foolish buyer who’s willing to take the greatest risks who sets the price in a supply-constrained market.”
That was true during the bubble years but now? I don’t see it much at least not in my neck of the woods. What I see are buyers that are sitting back and waiting for the market to come to them. The buyers are more picky and in tune with market value than I have seen in a long time. Right now, if you are a seller you had better have a damn sharp list price or your listing is going to sit, sit and then sit some more. If you really want to sell right now and your are priced above 750k it is best to start at 5% under recent sales and be prepared to work down from there. There is a short sale in my area that sold for 875k at the peak and eventually got reduced to 599k to find a buyer. That is 31.5% off of the peak price in mission hills and guess what the house just got relisted for sale. A few months ago that would have been a screaming price for an upgraded house. Now not so much. Who knows why the buyer walked but maybe it was not being able to close before the tax credit expired. If my guess is correct, the buyer had a deal 31.5% under peak and walked for 8k. As another example, there was a recent listing for 750k in north mission hills which was pretty much in line with recent comps in that area given the square footage. Well it went pending and ended up closing for 680k. There is another house on a prime street listed at least 50k probably 100k under the previous sale and the house is sitting.
I could give you dozens of examples. Basically, the type of foolhardy buyer you speak of may still be out there to a very limited extent but right now the market is being ruled by buyers that are doing their homework, looking at the recent comps, taking 5-10% off of that and working down from there. There have been some flippers in my area but when they list higher than market the house sits endlessly and then they end up selling it for 10-20% under there original wish price just to get out from under a sinking ship.
June 30, 2010 at 5:15 AM #574307Participant“So, while “the market” (buyers?) sets the price, it is the most foolish buyer who’s willing to take the greatest risks who sets the price in a supply-constrained market.”
That was true during the bubble years but now? I don’t see it much at least not in my neck of the woods. What I see are buyers that are sitting back and waiting for the market to come to them. The buyers are more picky and in tune with market value than I have seen in a long time. Right now, if you are a seller you had better have a damn sharp list price or your listing is going to sit, sit and then sit some more. If you really want to sell right now and your are priced above 750k it is best to start at 5% under recent sales and be prepared to work down from there. There is a short sale in my area that sold for 875k at the peak and eventually got reduced to 599k to find a buyer. That is 31.5% off of the peak price in mission hills and guess what the house just got relisted for sale. A few months ago that would have been a screaming price for an upgraded house. Now not so much. Who knows why the buyer walked but maybe it was not being able to close before the tax credit expired. If my guess is correct, the buyer had a deal 31.5% under peak and walked for 8k. As another example, there was a recent listing for 750k in north mission hills which was pretty much in line with recent comps in that area given the square footage. Well it went pending and ended up closing for 680k. There is another house on a prime street listed at least 50k probably 100k under the previous sale and the house is sitting.
I could give you dozens of examples. Basically, the type of foolhardy buyer you speak of may still be out there to a very limited extent but right now the market is being ruled by buyers that are doing their homework, looking at the recent comps, taking 5-10% off of that and working down from there. There have been some flippers in my area but when they list higher than market the house sits endlessly and then they end up selling it for 10-20% under there original wish price just to get out from under a sinking ship.
June 30, 2010 at 5:15 AM #574414Participant“So, while “the market” (buyers?) sets the price, it is the most foolish buyer who’s willing to take the greatest risks who sets the price in a supply-constrained market.”
That was true during the bubble years but now? I don’t see it much at least not in my neck of the woods. What I see are buyers that are sitting back and waiting for the market to come to them. The buyers are more picky and in tune with market value than I have seen in a long time. Right now, if you are a seller you had better have a damn sharp list price or your listing is going to sit, sit and then sit some more. If you really want to sell right now and your are priced above 750k it is best to start at 5% under recent sales and be prepared to work down from there. There is a short sale in my area that sold for 875k at the peak and eventually got reduced to 599k to find a buyer. That is 31.5% off of the peak price in mission hills and guess what the house just got relisted for sale. A few months ago that would have been a screaming price for an upgraded house. Now not so much. Who knows why the buyer walked but maybe it was not being able to close before the tax credit expired. If my guess is correct, the buyer had a deal 31.5% under peak and walked for 8k. As another example, there was a recent listing for 750k in north mission hills which was pretty much in line with recent comps in that area given the square footage. Well it went pending and ended up closing for 680k. There is another house on a prime street listed at least 50k probably 100k under the previous sale and the house is sitting.
I could give you dozens of examples. Basically, the type of foolhardy buyer you speak of may still be out there to a very limited extent but right now the market is being ruled by buyers that are doing their homework, looking at the recent comps, taking 5-10% off of that and working down from there. There have been some flippers in my area but when they list higher than market the house sits endlessly and then they end up selling it for 10-20% under there original wish price just to get out from under a sinking ship.
June 30, 2010 at 5:15 AM #574711Participant“So, while “the market” (buyers?) sets the price, it is the most foolish buyer who’s willing to take the greatest risks who sets the price in a supply-constrained market.”
That was true during the bubble years but now? I don’t see it much at least not in my neck of the woods. What I see are buyers that are sitting back and waiting for the market to come to them. The buyers are more picky and in tune with market value than I have seen in a long time. Right now, if you are a seller you had better have a damn sharp list price or your listing is going to sit, sit and then sit some more. If you really want to sell right now and your are priced above 750k it is best to start at 5% under recent sales and be prepared to work down from there. There is a short sale in my area that sold for 875k at the peak and eventually got reduced to 599k to find a buyer. That is 31.5% off of the peak price in mission hills and guess what the house just got relisted for sale. A few months ago that would have been a screaming price for an upgraded house. Now not so much. Who knows why the buyer walked but maybe it was not being able to close before the tax credit expired. If my guess is correct, the buyer had a deal 31.5% under peak and walked for 8k. As another example, there was a recent listing for 750k in north mission hills which was pretty much in line with recent comps in that area given the square footage. Well it went pending and ended up closing for 680k. There is another house on a prime street listed at least 50k probably 100k under the previous sale and the house is sitting.
I could give you dozens of examples. Basically, the type of foolhardy buyer you speak of may still be out there to a very limited extent but right now the market is being ruled by buyers that are doing their homework, looking at the recent comps, taking 5-10% off of that and working down from there. There have been some flippers in my area but when they list higher than market the house sits endlessly and then they end up selling it for 10-20% under there original wish price just to get out from under a sinking ship.
June 30, 2010 at 6:57 AM #573699SD Realtor
ParticipantAye caramba CAR…
“No, I didn’t go to the auction because I had not been following the trustee sales closely. Again, the flippers are there en masse.”
CAR you dont go to the auctions because you choose not to. You CAN but you don’t. So are you saying you want a competition free environment?
“What would TS prices look like if there were no flippers at the auctions?”
They would look the same!! CAR the flippers have nothing to do with setting the price. My goodness the price is set by the investors via BPO and APPRAISALS. Come on now.
“What would prices look like if there were no flippers in the market sucking up inventory and sitting on it at very inflated prices?”
Okay lets try this again. Prices, be it at the auction or on the free market are not set by flippers. They are set by the market. They are set by demand. What you really need to do is be honest and say WHAT WOULD PRICES BE IF THERE WAS NO FINANCING. You want with all your heart to blame the flippers. Blame the game not the players. If there was not any financing prices would be staggeringly lower be it at trustee sale or the overall market. The 1-2% homes that flippers sell have NO BEARING.
“See, there are smart buyers who don’t want to give flippers a profit, but there are enough foolish buyers in this supply-constrained market who will bid the asking price on a flipper’s property. So, while “the market” (buyers?) sets the price, it is the most foolish buyer who’s willing to take the greatest risks who sets the price in a supply-constrained market.”
Yes and it doesn’t matter if the home was supplied by a flipper, an owner or a lender.
“Yes, flippers absolutely affect prices because they remove supply at a certain price and add it back (slowly, if prices are not working in their favor) at a much higher price.”
Absolutely wrong. Flippers provide supply faster then a bank. Flippers cannot tolerate HIDING INVENTORY due to having MINISCULE resources compared to a bank. Flippers have to react to the market much faster then a bank. I cannot tell you how wrong you are here.
“Flippers are willing to pay more than o/o buyers because they are gambling on the FHA buyers who are willing to overpay and who will likely be in foreclosure within the next five years. For the more conservative buyers like us who have good credit and a large downpayment to lose, we’re not banking on rising prices; we’re making allowances for wage cuts and extended periods of unemployment and pension cuts. It’s a very different mindset.”
Once again you are off the road. You find me a SINGLE FLIPPER who prefers an FHA buyer over a conventional buyer. Find me a single one. No flipper wants an FHA buyer. FHA restrictions on seasoning FORCE flippers to hold properties longer. FHA inspections that spot unpermitted work turn transactions into nightmares. Again, you are projecting your frustrations into statements that frankly are not supported by any data at all. Are there FHA financing on flipped homes? Yes. Do flippers prefer that? Not a chance.
“If we had a market where the only bidders were organic (owner-occupier) buyers with a minimum 20% down and 28% DTI ratios (which should be the max DTI ratio on *after tax* income — the original ratio was made for better times; we all need to be more realisic about deflationary trends and a very different job market going forward), I think prices would be much lower than they are today. Add to that the supply that is being held off the market by lenders and the govt, and prices would probably be 20-30% lower *even in the “sacred” NCC areas.* Imagine what prices would do if we also allowed interest rates to float freely and if the govt stayed out of the mortgage market! (I can dream, can’t I?) ;)”
Yes if there was a rational method to purchasing homes that awarded those who saved money diligently and then had to put a large chunk for a downpayment down then of course things would be correct. Blame the govt and the banks, not the flippers. If you think that the place we got recently in Carmel Valley would have sold for any less had it gone to the lender and into the REO pool you are wrong. It would have sold for whatever the market determines that the sales price should be when it hit the market. You have this cast iron cement view that the market is set by sellers when in reality it is set by buyers. That flippers somehow constrain inventory when in reality they provide inventory QUICKER THEN BANKS.
“If we had done things my way, there never would have been a foreclosure “crisis.””
Yes I wholeheartedly agree with you on this.
June 30, 2010 at 6:57 AM #573795ParticipantAye caramba CAR…
“No, I didn’t go to the auction because I had not been following the trustee sales closely. Again, the flippers are there en masse.”
CAR you dont go to the auctions because you choose not to. You CAN but you don’t. So are you saying you want a competition free environment?
“What would TS prices look like if there were no flippers at the auctions?”
They would look the same!! CAR the flippers have nothing to do with setting the price. My goodness the price is set by the investors via BPO and APPRAISALS. Come on now.
“What would prices look like if there were no flippers in the market sucking up inventory and sitting on it at very inflated prices?”
Okay lets try this again. Prices, be it at the auction or on the free market are not set by flippers. They are set by the market. They are set by demand. What you really need to do is be honest and say WHAT WOULD PRICES BE IF THERE WAS NO FINANCING. You want with all your heart to blame the flippers. Blame the game not the players. If there was not any financing prices would be staggeringly lower be it at trustee sale or the overall market. The 1-2% homes that flippers sell have NO BEARING.
“See, there are smart buyers who don’t want to give flippers a profit, but there are enough foolish buyers in this supply-constrained market who will bid the asking price on a flipper’s property. So, while “the market” (buyers?) sets the price, it is the most foolish buyer who’s willing to take the greatest risks who sets the price in a supply-constrained market.”
Yes and it doesn’t matter if the home was supplied by a flipper, an owner or a lender.
“Yes, flippers absolutely affect prices because they remove supply at a certain price and add it back (slowly, if prices are not working in their favor) at a much higher price.”
Absolutely wrong. Flippers provide supply faster then a bank. Flippers cannot tolerate HIDING INVENTORY due to having MINISCULE resources compared to a bank. Flippers have to react to the market much faster then a bank. I cannot tell you how wrong you are here.
“Flippers are willing to pay more than o/o buyers because they are gambling on the FHA buyers who are willing to overpay and who will likely be in foreclosure within the next five years. For the more conservative buyers like us who have good credit and a large downpayment to lose, we’re not banking on rising prices; we’re making allowances for wage cuts and extended periods of unemployment and pension cuts. It’s a very different mindset.”
Once again you are off the road. You find me a SINGLE FLIPPER who prefers an FHA buyer over a conventional buyer. Find me a single one. No flipper wants an FHA buyer. FHA restrictions on seasoning FORCE flippers to hold properties longer. FHA inspections that spot unpermitted work turn transactions into nightmares. Again, you are projecting your frustrations into statements that frankly are not supported by any data at all. Are there FHA financing on flipped homes? Yes. Do flippers prefer that? Not a chance.
“If we had a market where the only bidders were organic (owner-occupier) buyers with a minimum 20% down and 28% DTI ratios (which should be the max DTI ratio on *after tax* income — the original ratio was made for better times; we all need to be more realisic about deflationary trends and a very different job market going forward), I think prices would be much lower than they are today. Add to that the supply that is being held off the market by lenders and the govt, and prices would probably be 20-30% lower *even in the “sacred” NCC areas.* Imagine what prices would do if we also allowed interest rates to float freely and if the govt stayed out of the mortgage market! (I can dream, can’t I?) ;)”
Yes if there was a rational method to purchasing homes that awarded those who saved money diligently and then had to put a large chunk for a downpayment down then of course things would be correct. Blame the govt and the banks, not the flippers. If you think that the place we got recently in Carmel Valley would have sold for any less had it gone to the lender and into the REO pool you are wrong. It would have sold for whatever the market determines that the sales price should be when it hit the market. You have this cast iron cement view that the market is set by sellers when in reality it is set by buyers. That flippers somehow constrain inventory when in reality they provide inventory QUICKER THEN BANKS.
“If we had done things my way, there never would have been a foreclosure “crisis.””
Yes I wholeheartedly agree with you on this.
June 30, 2010 at 6:57 AM #574317ParticipantAye caramba CAR…
“No, I didn’t go to the auction because I had not been following the trustee sales closely. Again, the flippers are there en masse.”
CAR you dont go to the auctions because you choose not to. You CAN but you don’t. So are you saying you want a competition free environment?
“What would TS prices look like if there were no flippers at the auctions?”
They would look the same!! CAR the flippers have nothing to do with setting the price. My goodness the price is set by the investors via BPO and APPRAISALS. Come on now.
“What would prices look like if there were no flippers in the market sucking up inventory and sitting on it at very inflated prices?”
Okay lets try this again. Prices, be it at the auction or on the free market are not set by flippers. They are set by the market. They are set by demand. What you really need to do is be honest and say WHAT WOULD PRICES BE IF THERE WAS NO FINANCING. You want with all your heart to blame the flippers. Blame the game not the players. If there was not any financing prices would be staggeringly lower be it at trustee sale or the overall market. The 1-2% homes that flippers sell have NO BEARING.
“See, there are smart buyers who don’t want to give flippers a profit, but there are enough foolish buyers in this supply-constrained market who will bid the asking price on a flipper’s property. So, while “the market” (buyers?) sets the price, it is the most foolish buyer who’s willing to take the greatest risks who sets the price in a supply-constrained market.”
Yes and it doesn’t matter if the home was supplied by a flipper, an owner or a lender.
“Yes, flippers absolutely affect prices because they remove supply at a certain price and add it back (slowly, if prices are not working in their favor) at a much higher price.”
Absolutely wrong. Flippers provide supply faster then a bank. Flippers cannot tolerate HIDING INVENTORY due to having MINISCULE resources compared to a bank. Flippers have to react to the market much faster then a bank. I cannot tell you how wrong you are here.
“Flippers are willing to pay more than o/o buyers because they are gambling on the FHA buyers who are willing to overpay and who will likely be in foreclosure within the next five years. For the more conservative buyers like us who have good credit and a large downpayment to lose, we’re not banking on rising prices; we’re making allowances for wage cuts and extended periods of unemployment and pension cuts. It’s a very different mindset.”
Once again you are off the road. You find me a SINGLE FLIPPER who prefers an FHA buyer over a conventional buyer. Find me a single one. No flipper wants an FHA buyer. FHA restrictions on seasoning FORCE flippers to hold properties longer. FHA inspections that spot unpermitted work turn transactions into nightmares. Again, you are projecting your frustrations into statements that frankly are not supported by any data at all. Are there FHA financing on flipped homes? Yes. Do flippers prefer that? Not a chance.
“If we had a market where the only bidders were organic (owner-occupier) buyers with a minimum 20% down and 28% DTI ratios (which should be the max DTI ratio on *after tax* income — the original ratio was made for better times; we all need to be more realisic about deflationary trends and a very different job market going forward), I think prices would be much lower than they are today. Add to that the supply that is being held off the market by lenders and the govt, and prices would probably be 20-30% lower *even in the “sacred” NCC areas.* Imagine what prices would do if we also allowed interest rates to float freely and if the govt stayed out of the mortgage market! (I can dream, can’t I?) ;)”
Yes if there was a rational method to purchasing homes that awarded those who saved money diligently and then had to put a large chunk for a downpayment down then of course things would be correct. Blame the govt and the banks, not the flippers. If you think that the place we got recently in Carmel Valley would have sold for any less had it gone to the lender and into the REO pool you are wrong. It would have sold for whatever the market determines that the sales price should be when it hit the market. You have this cast iron cement view that the market is set by sellers when in reality it is set by buyers. That flippers somehow constrain inventory when in reality they provide inventory QUICKER THEN BANKS.
“If we had done things my way, there never would have been a foreclosure “crisis.””
Yes I wholeheartedly agree with you on this.
June 30, 2010 at 6:57 AM #574424ParticipantAye caramba CAR…
“No, I didn’t go to the auction because I had not been following the trustee sales closely. Again, the flippers are there en masse.”
CAR you dont go to the auctions because you choose not to. You CAN but you don’t. So are you saying you want a competition free environment?
“What would TS prices look like if there were no flippers at the auctions?”
They would look the same!! CAR the flippers have nothing to do with setting the price. My goodness the price is set by the investors via BPO and APPRAISALS. Come on now.
“What would prices look like if there were no flippers in the market sucking up inventory and sitting on it at very inflated prices?”
Okay lets try this again. Prices, be it at the auction or on the free market are not set by flippers. They are set by the market. They are set by demand. What you really need to do is be honest and say WHAT WOULD PRICES BE IF THERE WAS NO FINANCING. You want with all your heart to blame the flippers. Blame the game not the players. If there was not any financing prices would be staggeringly lower be it at trustee sale or the overall market. The 1-2% homes that flippers sell have NO BEARING.
“See, there are smart buyers who don’t want to give flippers a profit, but there are enough foolish buyers in this supply-constrained market who will bid the asking price on a flipper’s property. So, while “the market” (buyers?) sets the price, it is the most foolish buyer who’s willing to take the greatest risks who sets the price in a supply-constrained market.”
Yes and it doesn’t matter if the home was supplied by a flipper, an owner or a lender.
“Yes, flippers absolutely affect prices because they remove supply at a certain price and add it back (slowly, if prices are not working in their favor) at a much higher price.”
Absolutely wrong. Flippers provide supply faster then a bank. Flippers cannot tolerate HIDING INVENTORY due to having MINISCULE resources compared to a bank. Flippers have to react to the market much faster then a bank. I cannot tell you how wrong you are here.
“Flippers are willing to pay more than o/o buyers because they are gambling on the FHA buyers who are willing to overpay and who will likely be in foreclosure within the next five years. For the more conservative buyers like us who have good credit and a large downpayment to lose, we’re not banking on rising prices; we’re making allowances for wage cuts and extended periods of unemployment and pension cuts. It’s a very different mindset.”
Once again you are off the road. You find me a SINGLE FLIPPER who prefers an FHA buyer over a conventional buyer. Find me a single one. No flipper wants an FHA buyer. FHA restrictions on seasoning FORCE flippers to hold properties longer. FHA inspections that spot unpermitted work turn transactions into nightmares. Again, you are projecting your frustrations into statements that frankly are not supported by any data at all. Are there FHA financing on flipped homes? Yes. Do flippers prefer that? Not a chance.
“If we had a market where the only bidders were organic (owner-occupier) buyers with a minimum 20% down and 28% DTI ratios (which should be the max DTI ratio on *after tax* income — the original ratio was made for better times; we all need to be more realisic about deflationary trends and a very different job market going forward), I think prices would be much lower than they are today. Add to that the supply that is being held off the market by lenders and the govt, and prices would probably be 20-30% lower *even in the “sacred” NCC areas.* Imagine what prices would do if we also allowed interest rates to float freely and if the govt stayed out of the mortgage market! (I can dream, can’t I?) ;)”
Yes if there was a rational method to purchasing homes that awarded those who saved money diligently and then had to put a large chunk for a downpayment down then of course things would be correct. Blame the govt and the banks, not the flippers. If you think that the place we got recently in Carmel Valley would have sold for any less had it gone to the lender and into the REO pool you are wrong. It would have sold for whatever the market determines that the sales price should be when it hit the market. You have this cast iron cement view that the market is set by sellers when in reality it is set by buyers. That flippers somehow constrain inventory when in reality they provide inventory QUICKER THEN BANKS.
“If we had done things my way, there never would have been a foreclosure “crisis.””
Yes I wholeheartedly agree with you on this.
June 30, 2010 at 6:57 AM #574721ParticipantAye caramba CAR…
“No, I didn’t go to the auction because I had not been following the trustee sales closely. Again, the flippers are there en masse.”
CAR you dont go to the auctions because you choose not to. You CAN but you don’t. So are you saying you want a competition free environment?
“What would TS prices look like if there were no flippers at the auctions?”
They would look the same!! CAR the flippers have nothing to do with setting the price. My goodness the price is set by the investors via BPO and APPRAISALS. Come on now.
“What would prices look like if there were no flippers in the market sucking up inventory and sitting on it at very inflated prices?”
Okay lets try this again. Prices, be it at the auction or on the free market are not set by flippers. They are set by the market. They are set by demand. What you really need to do is be honest and say WHAT WOULD PRICES BE IF THERE WAS NO FINANCING. You want with all your heart to blame the flippers. Blame the game not the players. If there was not any financing prices would be staggeringly lower be it at trustee sale or the overall market. The 1-2% homes that flippers sell have NO BEARING.
“See, there are smart buyers who don’t want to give flippers a profit, but there are enough foolish buyers in this supply-constrained market who will bid the asking price on a flipper’s property. So, while “the market” (buyers?) sets the price, it is the most foolish buyer who’s willing to take the greatest risks who sets the price in a supply-constrained market.”
Yes and it doesn’t matter if the home was supplied by a flipper, an owner or a lender.
“Yes, flippers absolutely affect prices because they remove supply at a certain price and add it back (slowly, if prices are not working in their favor) at a much higher price.”
Absolutely wrong. Flippers provide supply faster then a bank. Flippers cannot tolerate HIDING INVENTORY due to having MINISCULE resources compared to a bank. Flippers have to react to the market much faster then a bank. I cannot tell you how wrong you are here.
“Flippers are willing to pay more than o/o buyers because they are gambling on the FHA buyers who are willing to overpay and who will likely be in foreclosure within the next five years. For the more conservative buyers like us who have good credit and a large downpayment to lose, we’re not banking on rising prices; we’re making allowances for wage cuts and extended periods of unemployment and pension cuts. It’s a very different mindset.”
Once again you are off the road. You find me a SINGLE FLIPPER who prefers an FHA buyer over a conventional buyer. Find me a single one. No flipper wants an FHA buyer. FHA restrictions on seasoning FORCE flippers to hold properties longer. FHA inspections that spot unpermitted work turn transactions into nightmares. Again, you are projecting your frustrations into statements that frankly are not supported by any data at all. Are there FHA financing on flipped homes? Yes. Do flippers prefer that? Not a chance.
“If we had a market where the only bidders were organic (owner-occupier) buyers with a minimum 20% down and 28% DTI ratios (which should be the max DTI ratio on *after tax* income — the original ratio was made for better times; we all need to be more realisic about deflationary trends and a very different job market going forward), I think prices would be much lower than they are today. Add to that the supply that is being held off the market by lenders and the govt, and prices would probably be 20-30% lower *even in the “sacred” NCC areas.* Imagine what prices would do if we also allowed interest rates to float freely and if the govt stayed out of the mortgage market! (I can dream, can’t I?) ;)”
Yes if there was a rational method to purchasing homes that awarded those who saved money diligently and then had to put a large chunk for a downpayment down then of course things would be correct. Blame the govt and the banks, not the flippers. If you think that the place we got recently in Carmel Valley would have sold for any less had it gone to the lender and into the REO pool you are wrong. It would have sold for whatever the market determines that the sales price should be when it hit the market. You have this cast iron cement view that the market is set by sellers when in reality it is set by buyers. That flippers somehow constrain inventory when in reality they provide inventory QUICKER THEN BANKS.
“If we had done things my way, there never would have been a foreclosure “crisis.””
Yes I wholeheartedly agree with you on this.
June 30, 2010 at 9:14 AM #573763sdrealtor
ParticipantWhat I dont beleive is how someone can honestly believe that a flipper who has to cover transaction costs on the way in, selling costs on the way out, rehab costs, a return on investment and a very high ordinary income tax rate would possibly outbid an owner occupant looking for a longtime home that doesnt have these costs. It flies in the face of everyting rational particularly coming from a rational thinker like CAR.
June 30, 2010 at 9:14 AM #573860ParticipantWhat I dont beleive is how someone can honestly believe that a flipper who has to cover transaction costs on the way in, selling costs on the way out, rehab costs, a return on investment and a very high ordinary income tax rate would possibly outbid an owner occupant looking for a longtime home that doesnt have these costs. It flies in the face of everyting rational particularly coming from a rational thinker like CAR.
June 30, 2010 at 9:14 AM #574383ParticipantWhat I dont beleive is how someone can honestly believe that a flipper who has to cover transaction costs on the way in, selling costs on the way out, rehab costs, a return on investment and a very high ordinary income tax rate would possibly outbid an owner occupant looking for a longtime home that doesnt have these costs. It flies in the face of everyting rational particularly coming from a rational thinker like CAR.
June 30, 2010 at 9:14 AM #574489ParticipantWhat I dont beleive is how someone can honestly believe that a flipper who has to cover transaction costs on the way in, selling costs on the way out, rehab costs, a return on investment and a very high ordinary income tax rate would possibly outbid an owner occupant looking for a longtime home that doesnt have these costs. It flies in the face of everyting rational particularly coming from a rational thinker like CAR.
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