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CA renter.
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December 7, 2011 at 9:33 PM #734225December 7, 2011 at 10:21 PM #734228
sdrealtor
ParticipantThe irony is she has many a time told buyers that basing decisions and values on school boundaries or the current conditions in an area is foolish because they an change and henceforth impact those values. Isnt that what happened to South Bay? It has changed and/or not kept up with other areas of the county that have improved. LOL
December 7, 2011 at 10:47 PM #734229bearishgurl
ParticipantUCGal and SDRealtor,
How long do you think one should own a property with a 68-70% LTV mortgage (amortized EVERY YEAR of ownership [over 30 years] before they can recover their OWN $$ out of it upon sale?). Suppose they just did minimal improvements over that time, perhaps $10-$25K? Should they expect to be able to recover their initial and subsequent cash investments upon sale?
I know a few others in the same situation as myself. Neither of you have addressed the issue of lender malaise as the cause of this “gross undervaluing” in many areas. It’s gone too far the other way. I understand that what has caused values to tank is that 90% of the properties that are actually closing escrow right now are “distress-sales.” No one else in their right mind would bother even marketing their properties in this climate, even if they WANTED to sell.
Has anyone ever known an owner to LOSE their OWN INVESTMENT in a property bought 12-15 years ago at 78% LTV in SD County when they never refied or took cash out and also improved the property with their own funds?? If so, WHERE was the property and do you think they overpaid for it?
What say Piggs? If you are currently a prospective buyer, do you expect to find an “equity” resale out there (NOT a SS/REO) today where a longtime seller will accept ’99-’02 prices even though they have improved it in the last decade with, say $25-$50K of their OWN MONEY?? We’re talking in SD County, within 5 miles of the coast or bay. Truly, I want to hear your experiences…
sdr, you talk a good game about doubling your “investment” in “Nirvana” over the last 10-12? years. Haven’t you already removed most or all of your equity?? And the fact that you don’t think you will sell in the near future but are banking on “doubling your investment” when you finally decide to sell is suspect. This remains to be seen. The “fat lady” hasn’t finished singing yet and may not be finished for several more years :={
UCGal, you are fortunate in a couple of ways. You did not have a lot of building going on within a 10-mile radius of you in the last decade which was in direct competition with properties like yours and ALL financed with loose lending practices. There isn’t much distress in your zip code. In addition, your tax assessment is protected by Prop 13 for the life of you and/or your children/heirs in the property (if you decide to never sell it). This no doubt eases the pain greatly of your feeling you may have overpaid for your property. Since you paid your parents directly for your property, perhaps you will get some of it back when they pass…it isn’t like it was an arms-length transaction. How would YOU feel if YOU, as a single parent, lost $120K to $140K of your OWN money on a perfectly decent large home in a perfectly decent neighborhood after paying on it religiously for 14 years and never removing equity thru no fault of your own because you “had” to sell it in a fvcked-up market to finally “retire.” It’s not like “insurance” is gonna cover the loss, lol.
Save your pity, Piggs. In my case, it doesn’t matter. I will be able to “retire” anyway, and even retire the mtg, if it becomes necessary. If I keep my current mortgage, a tenant will pay the remaining years off left on it and I will have a few hundred to spare every month for repairs and vacancies. Otherwise, I’ll take the entire rental income every month (minus mgt fee) to supplement my “retirement.” Know any banks paying more than that these days??
SDR, how are YOUR investment properties doing? Are you underwater on any of them?? Do you have any negative cash flow on any of them?? How long have you held them? Do you put downpayments on any of them? If so, how much? When do you expect you can sell them and get out above water and with your downpayments (if any) intact?? Do you think you “deserve” to sell and get your initial investments out or do you really not care because you will depreciate them into the ground, anyway?? When will you finally purchase a home for your family to live in? Nothing wrong with this, but have you just decided to rent for the duration of your minor childrens’ occupancy?? If so, why??
My “story” is not about being “heartbroken.” We all know none of this had to happen. It is “business” plain and simple. There is obviously monetary incentives for these lenders to play this game and they are playing it hard to the ground. In doing so, they are fvcking up every honest property owner’s values within a ten-mile radius or so, depending upon area. I’ve owned several properties in this county in the last 32 years and I have NEVER seen values crater like they have in 2011. I’ve always recovered at least $10K over my purchase price upon sale, even if I just cleaned it up, held it for a few months and put NO improvements in it! YES, in SE SD and South County!!!
I’m sickened by this “lender malaise” and am not alone in my opinions in this regard. These “squat-mod” and “squat-SS” groups are driving free-and-clear late model luxury vehicles with their ATM’d “equity” (which has now “disappeared” down the rabbit hole). Many of these douchebag households own TWO of these vehicles AND various and sundry large “toys,” bought with their former “home equity.” I’m driving a VERY high-mileage 18 yo vehicle that I can’t currently afford to replace. Such is life. No, it’s not fair and never will be.
Why should these groups CARE if their credit is shot for a few years? They have everything they need, incl near new top-quality vehicles and 2% ? mortgages on properties that they will never in their lives “own” again if they now let them go into foreclosure (they couldn’t “qualify” for them in the first place).
Where do Piggs sign up for this “special treatment??
December 7, 2011 at 10:54 PM #734230Participant[quote=sdrealtor]The irony is she has many a time told buyers that basing decisions and values on school boundaries or the current conditions in an area is foolish because they an change and henceforth impact those values. Isnt that what happened to South Bay? It has changed and/or not kept up with other areas of the county that have improved. LOL[/quote]
sdr, can you name off some tracts in SD County which were built in the last decade in “top-performing school attendance areas” which have NOT lost value? Why don’t you start where you are most familiar … “Nirvana?” One “master-planned” community that comes to mind a few miles from your neck of the woods is 4-closure Ranch. Those values have got to be down 30-50% + by now. LOL
December 7, 2011 at 11:06 PM #734231briansd1
GuestBG, you personalize this issue too much. Try to look at it from a detached perspective.
Now you complain about lender malaise for causing property value to crater. But before you’ve complained about too much credit that causes people to overspend on things they cannot afford.
Lenders are now returning to asking for full docs and downpayments. That will bring sanity back to the market.
You’ve advized people to buy houses because, in your opinion, those deals cannot be found again. Why is Chula Vista different?
On the question of home improvements, those are consumption items. Even a kitchen remodel is consumption and not investment in my view. People who overdo and over-customize with moulding and colors, etc… will not recoup their money when they sell.
The “special treatment” you mentioned was made possible by irrational exuberance, the blind faith that markets were rational in the aggregate, and the belief that banks had institutional controls setup to prevent fraud.
In fact, the actors involved in selling financial products only cared about the commissions they could make. They couldn’t care less if the loans went bad after they were paid.
December 7, 2011 at 11:06 PM #734232Participant[quote=briansd1][quote=bearishgurl]
If you will reread what I have posted here, you will discover that I place part of the blame for my current undervaluation on urban sprawl.
[/quote]I hate to break it to you, but the regulations aimed at preventing areas from changing once they are built are what is causing urban sprawl. Populations grow and have organic needs that existing real estate cannot accomodate, so they move outside the city boundaries to build if necessary.
People’s tastes and requirement change. Real estate needs to change with the times.
Except for some core urban and luxury areas, the country is littered with neighborhoods that are past their prime that people have abandoned in favor of more desirable areas.
The older area of Chula Vista is past its prime. The only thing that can revitalize that area in the next few decades is development along the coast.
I’m afraid you’ll have to wait several more decades. It takes time for redevelpment to improve neighborhoods that have declined.[/quote]
I hate to break it to you, brian, but if these lenders don’t get all this “shadow inventory” (incl the inevitable re-defaulting “squat-mod and squat-failed-SS groups'” properties) foreclosed on and resold in the coming year or so, we are going to have a hangover of vacant single family homes like you won’t believe!! Even if they ARE sitting as “unprocessed REOs,” there may not be enough buyers for them, esp if the mtg interest rates go up even a little.
Portions of SD County are grossly overbuilt. There are not enough jobs in this county to support mortgages on these properties and people with REAL $$ aren’t going to pay cash in the stix for a zero lot line property encumbered by HOA/MR.
December 7, 2011 at 11:31 PM #734233Participant[quote=briansd1]BG, you personalize this issue too much. Try to look at it from a detached perspective.
Now you complain about lender malaise for causing property value to crater. But before you’ve complained about too much credit that causes people to overspend on things they cannot afford.[/quote]
brian, I don’t recall complaining about “too much credit” but “lender malaise” and “too much credit” are one and the same.
[quote=briansd1]Lenders are now returning to asking for full docs and downpayments. That will bring sanity back to the market.[/quote]
How many more years do you think this will take, brian?
[quote=briansd1]You’ve advized people to buy houses because, in your opinion, those deals cannot be found again. Why is Chula Vista different?[/quote]
What you are referring to here, I believe, are properties which are unique in their architecture or location. Chula Vista has properties like this, along with SD and many other areas.
[quote=briansd1]On the question of home improvements, those are consumption items. Even a kitchen remodel is consumption and not investment in my view. People who overdo and over-customize with moulding and colors, etc… will not recoup their money when they sell.[/quote]
Owners don’t expect to recoup all their home-improvement monies. They expect improvements to help them sell faster and expect to recoup a portion of “prudent” improvements (that is, improvements made that are appropriate for the area’s values).
[quote=briansd1]The “special treatment” you mentioned was made possible by irrational exuberance, the blind faith that markets were rational in the aggregate, and the belief that banks had institutional controls setup to prevent fraud.[/quote]
I disagree. The special treatment was made possible by political decisions from TPTB to fund the Big Banks and other institutional lenders so they could afford to “coddle” into oblivion the most irresponsible borrowers under the guise of “allowing them to remain in their homes,” even if those homes were clearly out of their league both now and at the time of purchase.
[quote=briansd1]In fact, the actors involved in selling financial products only cared about the commissions they could make. They couldn’t care less if the loans went bad after they were paid.[/quote]
This is true. I’ve witnessed a few of these disasters first-hand and tried to assist the resultant “home-debtors” with the fallout. I was disgusted reading their usurious settlement statements and then later finding out the precise amount of “yield-spread premium” these “mtg broker”/actors rec’d exactly 1.5 minutes after the borrower’s mtg was sold and shipped off to some poor chump “investor” … usually “out-of-sight, out-of-mind” on the east coast :=0
December 8, 2011 at 12:38 AM #734234ParticipantI dont know what you are talking about BG. I have tons of equity. My house is still almost double what I paid and I am not banking on anything. Never said I was.
How can you afford to retire your mortgage but not be able to replace your 18 yr old high mileage car. It doesnt make sense. I have a vehicle half that age in perfect running shape and condition that isnt worth $3,000. They are virtually giving cars away these days. 5 year old cars are close to worthless from a resale perspective. Why cant you pick one of those up for a couple hundred dollars a month. I’m calling BS on BG.
December 8, 2011 at 12:53 AM #734235Participant[quote=bearishgurl][quote=sdrealtor]The irony is she has many a time told buyers that basing decisions and values on school boundaries or the current conditions in an area is foolish because they an change and henceforth impact those values. Isnt that what happened to South Bay? It has changed and/or not kept up with other areas of the county that have improved. LOL[/quote]
sdr, can you name off some tracts in SD County which were built in the last decade in “top-performing school attendance areas” which have NOT lost value? Why don’t you start where you are most familiar … “Nirvana?” One “master-planned” community that comes to mind a few miles from your neck of the woods is 4-closure Ranch. Those values have got to be down 30-50% + by now. LOL[/quote]
Huh? 4S Ranch is about 30 minutes away from me. I could name lots of tracts including my own. As long as they were built in 2003 or before they are all doing great as far as I can see. You made bad choices BG. Deal with it.
Here’s one example. Lexington in Carmel Valley. 5344 Greenwillow was built in 2003 (thats 8 years ago) and sold new for $1.15M. It just resold in August for $1.675M. The backyard has a basic pool, nothing fancy and upgrades post builder looked minimal. Lets give them $100K on top of the purchase price bringing it to 1.25M. We’ll call that one up by 37% since then. Thats a higher end community than mine. The appreciation is higher at lower price levels. I could do this all day along coastal NC. Next question please?
December 8, 2011 at 6:43 AM #734236Participant[quote=sdrealtor]I dont know what you are talking about BG. I have tons of equity. My house is still almost double what I paid and I am not banking on anything. Never said I was.
How can you afford to retire your mortgage but not be able to replace your 18 yr old high mileage car. It doesnt make sense. I have a vehicle half that age in perfect running shape and condition that isnt worth $3,000. They are virtually giving cars away these days. 5 year old cars are close to worthless from a resale perspective. Why cant you pick one of those up for a couple hundred dollars a month. I’m calling BS on BG.[/quote]
This doesn’t negate the fact that the “squat-mod” and “squat-SS” groups (who are now ostensibly “broke”) are driving new and newer vehicles paid for by their “home-equity” they are now seeking to have “forgiven.”
You have previously posted you have removed equity on two or more occasions since you purchased (new?). An owner who has already removed equity does not have the same stake in getting back their downpayment at the time of sale as they have already gotten in back…lol.
Agree about the used vehicle deals out there. My vehicle actually also runs perfect (knock on metal) but it was not without making necessary repairs over the years. I would estimate its current value at $2500 – $3000. I’ve got three trips slated for it in the next 3 mos, one in the snow.
Now that you mention this, I was JUST on CL and AutoTrader.com YESTERDAY looking at 5-10 yo Japanese luxury vehicles for sale for a friend who got hit and rec’d ins proceeds and was SHOCKED at how cheap they are selling for now, ESP private-party sales! I also agree that this month, in particular, would be a good time to strike a deal on a good Certified-Used vehicle from a dealer (model year 2005 forward). I doubt very seriously that they will be putting their usual $3K+ in their pockets from these sales THIS month! :=D
If my vehicle needed a major repair, I would consider selling it at this time and using the proceeds to help purchase a ’99 to ’04 (AWD) model. At the present, however, I am enjoying no car payments and the lowest possible registration fees and insurance premiums.
I will be able to retire my mortgage later due to being able to receive proceeds from my retirement accts penalty-free (and possibly buy a newer vehicle as well).
December 8, 2011 at 7:06 AM #734239Participant[quote=sdrealtor][quote=bearishgurl]sdr, can you name off some tracts in SD County which were built in the last decade in “top-performing school attendance areas” which have NOT lost value?…[/quote]. . . As long as they were built in 2003 or before they are all doing great as far as I can see. . . [/quote]
2003 was PRIOR to the “loose-lending” era (“FB era” for short). Thank you for bolstering my argument. One could posture from this opinion that ALL properties first sold PRIOR to the “FB era” and were not intentionally overmortgaged by their longtime owners should sell for enough to recover the money their owners put in them, given their improvements were “appropriate” for their areas. In other words, they should at least be worth their 2003 price today (+ some or all of the cost of any improvements made SINCE 2003) today. Why should they be worth less?
Not talking about replacements here, unless those replacements were double or more the value of the old item and the investment was appropriate for the area (for instance, replacing WWII-era wood sash windows with Anderson wood windows). And I’m not talking about recouping the ENTIRE cost of a project. But why should a buyer today expect to get 6 yo Anderson wood windows for “free” (at a cost of $14K to the seller) if the seller is not in distress and never was??
December 8, 2011 at 9:09 AM #734247ParticipantExcellent recent short news video explaining what I’m talking about here:
December 8, 2011 at 9:12 AM #734248ParticipantWhat are you talking about? You asked me to name tracts built in the last decade in top school districts and I answered your question. Then you twist off on some tangent. The properties in NCC built during that era havent held their values….they have soared in value. If that home in Lexington was built 2 years earlier (10 yrs ago) it would have sold for closer to 700K and would have doubled by now. Time to get back on your meds!!!
Even homes in SEH built in 2001 and 2002 which is not a top school district, has big MR and has HOA fees but you get nothing but some common areas with signage on them have not lost value. The SB has gotten hammered and thats where you chose to live. You say you had no choice but we always have choices. Deal with it.
December 8, 2011 at 9:14 AM #734249ParticipantCant beleive I missed this crazy thought. Who cares what kind of windows you put in and how much you paid. Have you forgotten your RE mantra….location, location, location. Thats what determines value. Put those windows and gold plate them on a house in Detroit and tell me you should get that money back.
December 8, 2011 at 9:25 AM #734251UCGal
Participantbg – I’ve tried to make the point several times. Your “own” money was exchanged for a house. A house can fluctuate in value. Until you understand that this discussion is kind of pointless.
But to address some points in your very wordy post…
[quote=bearishgurl]UCGal and SDRealtor,How long do you think one should own a property with a 68-70% LTV mortgage (amortized EVERY YEAR of ownership [over 30 years] before they can recover their OWN $$ out of it upon sale?).
…
Has anyone ever known an owner to LOSE their OWN INVESTMENT in a property bought 12-15 years ago at 78% LTV in SD County when they never refied or took cash out and also improved the property with their own funds?? If so, WHERE was the property and do you think they overpaid for it?
….[/quote]
It’s all a matter of the market conditions at the time of sale. There are no guarantees that when you want to sell, you’ll be able to extract your investment.An actual example that fits your criteria. A friend had a horse property near escondido. (literally right outside the city bounds). They improved the barn and corrals. They put on a new roof on the house. They never took money out. When they got divorced and needed to sell, the market wasn’t good (mid 90’s). But they were divorcing and the property needed to be disposed of. They had to bring cash to closing. They lost their down payment and their investment (corals, barn, new roof).
[quote=bearishgurl]
If you are currently a prospective buyer, do you expect to find an “equity” resale out there (NOT a SS/REO) today where a longtime seller will accept ’99-’02 prices even though they have improved it in the last decade with, say $25-$50K of their OWN MONEY?? We’re talking in SD County, within 5 miles of the coast or bay. Truly, I want to hear your experiences…
…..
[/quote]
Buyers expect to pay market value. Why would a buyer pay over market?
Sellers either are willing to price to market and sell, or are pricing to high and have it not sell.
There’s a home for sale on my street. It’s been on the market since spring. It’s not selling because the equity sellers are pricing too high. They have made nice improvements (new roof, windows, landscaping, cosmetic stuff inside.) They want to pull out their investment and won’t sell for less than that. It’s been on the market a while and is not moving.[quote=bearishgurl]
UCGal, you are fortunate in a couple of ways. You did not have a lot of building going on within a 10-mile radius of you in the last decade which was in direct competition with properties like yours and ALL financed with loose lending practices. There isn’t much distress in your zip code. In addition, your tax assessment is protected by Prop 13 for the life of you and/or your children/heirs in the property (if you decide to never sell it). This no doubt eases the pain greatly of your feeling you may have overpaid for your property. Since you paid your parents directly for your property, perhaps you will get some of it back when they pass…it isn’t like it was an arms-length transaction. How would YOU feel if YOU, as a single parent, lost $120K to $140K of your OWN money on a perfectly decent large home in a perfectly decent neighborhood after paying on it religiously for 14 years and never removing equity thru no fault of your own because you “had” to sell it in a fvcked-up market to finally “retire.” It’s not like “insurance” is gonna cover the loss, lol.
….
[/quote]
There’s distress in my zip. But it’s mostly in condos. The bubble drove prices up (and down) everywhere. There was a short sale across the street from me. Previous owners had heloc’d the heck out of the house. There are no exempt areas.Not that it’s any of your business… I paid MARKET value for my house. If you had known my dad you’d know that this is the way he worked. The advantage I got was the prop 13. I will not deny that.
Since then I’ve been aggressively putting money towards retiring our mortgage. My debt reduction is not “my money”. It’s not cash. It’s not spendable. I made a choice to exchange money (liquid) towards retiring my mortgage on an illiquid asset. But I will have a fully paid for asset that provides shelter for my family. It may turn out to be a bad decision if hyper inflation happens. I will accept that.
I understand you’re frustrated. But you need to understand that “your money” was gone when you entered escrow. You have title to a house that is only worth what it is worth. Fair or not, that is fact. External factors DO impact the price. That is life.
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