[bearishgurl]

I see a qui-tam suit in the making … :=D

[bearishgurl]

[quote=ocrenter]go away, britus[/quote]

You mean “Brutus,” silly. He’s not here, anymore…

Luv it all, LOL!

[bearishgurl]

livinincali, my property is actually about a 2200 sf SFR with a larger yard. I’m not into mcmansions in lizardland and their requisite MR and HOA’s appurtenant. FWIW, it’s ~10 mi from dtn SD, one mile from the bay and I have about 50% equity. It’s no skin off my back if I rent it out for ~$2000 per month for a few years until Gen Y (the upcoming family-raising buyer-contingent) decide they don’t want to waste their valuable time and a huge chunk of their needed monthly income (needed to raise their children) to pay extra fees in lizardland anymore.

My ~65 yo hood (and its owners) are sufficiently “gentrified” that I don’t have too many of those types of “sellers” that borrowed their way into oblivion in recent years. In fact, the opposite is true. Most of them own free and clear 🙂

The problem I face is since I bought, my city (Chula Vista) has annexed two more zip codes and increased its population by about 175K people. Those two zips were entirely built between 2000 and 2006. There has been so much distressed new construction to choose from down here that the the vast majority of younger buyers in “family-raising-mode” have nearly all chosen the *newer* contruction at fire-sale prices in recent years. Never mind that they have a 3400-4400 sf lot (avg 3800 sf) and they can hear their neighbor’s toilet flush. Never mind that their MR is $4K to $5K annually. Never mind that their assn fees are $130 to $270 mo for an SFR or that their SFR is encumbered by two or more HOA’s. They want NEWER! They can’t see the value in OLDER areas with avg 7500 sf lots (many with 1/4 – 1/2 AC lots). They don’t want the 80+ yo trees to walk their dogs in … they want sticks and miniscule “community parks” for their ridiculous monthly fees. And they want to commute 8-12 miles farther from job centers on the fwys (with everyone else, lol) instead of take the surface street to dtn SD (like I can).

So there you have it. That is my “competition,” which was not known to me when I purchased the property. I can’t fix it now. It’s a “values issue.” My property will sell to a relative of a longtime neighbor. That’s the way it has always worked around here.

When it’s time, I’m going to go, regardless, and join my “brethren boomers” at a “typical boomer retirement haven” in Norcal (where I’m from), the sierras or the rockies.

There are MILLIONS of us who will NOT give away our property and all the improvements we did for NOTHING. So GET USED to the “inventory problem” and having to “pony up rent,” ostensibly to rent from a boomer who refuses to sell at “fire sale” prices.

It is what it is and it’s not going away…

[bearishgurl]

[quote=carlsbadworker]Or you can get a smaller one for $40 after rebate:
http://www.tigerdirect.com/applications/SearchTools/item-details.asp?EdpNo=4969041&CatId=4147%5B/quote%5D

I’ll have to check but I think that’s big enough for me. I’ve ordered from them before. Thanks, CW!

[bearishgurl]

[quote=spdrun]~

Lastly, the manipulation of the market started long before 2003. Late 90s, I suspect.[/quote]

Agree with your post except for the above.

spdrun, what do you “suspect” caused the manipulation of the residential RE market between, say, ’99 and ’03?

[bearishgurl]

Thanks, flu! I think I’ve got just about enough points to cover this so I’ll check this out for my laptop.

Whoops! Sold out. I should have read the thread first!

[bearishgurl]

[quote=livinincali]The market right now is one where there is low inventory and lower sales. Sales were good in the summer but they are weakening with the lower inventory. You have buyers that aren’t willing to pay significantly higher prices and you have sellers that won’t sell for current market prices. It’s a standoff and it could be this way for awhile.

I don’t buy the over corrected due to short sales and other arguments, the fact is there wasn’t a buyer at the higher prices whether you think there should be or not. There’s either a buyer that will pay you your price or there isn’t. If your neighbor found a buyer at a higher price you have to find your own buyer at a higher price. You only need to find and convince one to pay your price. In essence find your own sucker if you want to sell above market.[/quote]

livinincali, the reason there aren’t many buyers willing to pay prices circa when the market was ~normal (read: unmanipulated <=2003) in many local markets is because they are so used to "fire sales" at the market's "new normal" that they expect they are entitled to “fire sale” prices, even on well-located non-distressed properties which have been maintained properly. Close to zero percent of distressed property today priced at a “fire sale” price or whose seller is willing to accept a “fire sale” price has been maintained properly throughout the years … if ever at all. Much of it literally needs to be gutted and could likely not pass a termite clearance. In any case, the (institutional) sellers will not pay for the costly tenting and repairs.

You pay for what you get in this life … nothing more and nothing less. The “sucker” is actually the buyer (who is hell-bent on getting a “fire sale” price) who buys an REO without a Transfer Disclosure Stmt (TDS) . . . or a SS WITH a TDS where the (indigent or bankrupt) seller(s) lied through their teeth on it and also to their listing agent in order to consummate the deal and successfully dump “their” underwater property. The “sucker-buyer” then ends up finding out AFTER closing exactly what they bought (at the “fire sale” price). Practically speaking, a LOT of these issues cannot be seen and/or their extent cannot be determined by a $400 “home inspection” in escrow.

In other words, if there is a distressed listing in an area which attracts a buyer who wants it for a personal residence (but is otherwise unqualified to purchase in that area w/o buying a heavily-distressed property), there is very often a good reason for its “fire sale” price. If said listing was a “traditional or equity sale,” this same “sucker-buyer” would not even be considering it, as it would be too cost-prohibitive.

A REIT getting a few of these duds in a bulk sale can recover from this pickle, due to economies of scale and being well-funded. However, such a revelation AFTER closing can be financially devastating to an individual buyer, ESP a highly-leveraged FT buyer and/or head of a family with minor children.

[bearishgurl]

The annual tax savings alone is worth a fortune, of course, depending on how long you plan to keep the property!

The $64M question is, how much is the asking price in comparison to its “sold comparables” and how much will the sellers actually accept?

[bearishgurl]

[img_assist|nid=16747|title=Ponies for ALL|desc=|link=node|align=left|width=229|height=220]

[bearishgurl]

scaredy, just stick with your original write-in candidate, Vermin Supreme, and you’ll be fine :=0

[bearishgurl]

[quote=spdrun] ~
Lastly, low inventory isn’t a sign of a healthy market. It’s a sign that no one wants to sell because they’re underwater, and CA law allows them to squat for quite a long time without paying. A “healthy” market by your definition would have both higher prices and inventory.[/quote]

Actually, spdrun, chronic “low inventory” is a sign that no one wants to sell because they have carefully maintained their properties over the course of decades and perhaps put $50-$100K (or more) of their own money into capital improvements. Plus, they possibly put years of “sweat equity” into them as well and so aren’t going to “give them away” to “bottom fishers.”

Those “underwater” owners you speak of (termed “FB’s” on this site) have been washed out of the equation. They’ve always been at the helm of this debacle and are finally running out of options.

Yay for them!

Where one sits on this issue is where they stand. There are no doubt a lot of folks out there standing in the very same place I’m sitting right now . . . thus the chronic “low inventory” problems you’re seeing out there.

You can’t have it both ways.

[bearishgurl]

[quote=spdrun]Why bother in SD Co? REOs and shorts are getting multiple offers within 2-3 days if they’re reasonably priced. Let the market decide what the value is, as opposed to backroom deals!

As to people (including yourself — sorry, you seem like a decent sort otherwise) who bought at inflated prices, boo hoo hoo. Cry. Me. A. River. An investment shouldn’t always be expected to appreciate, which is why it’s called an investment. Not a “sure thing.”

As far as you buying 12 years ago, if you bought at an inflated price, you took your chances and played the game. Not much sympathy from this end.[/quote]

Of late, the “market” that has been “deciding” here has consisted of “bottom fishers.” However, decreasing inventory is helping to bring prices back up to 2003 levels. FWIW, I didn’t “buy at an inflated price.” I actually got a lot of bang for the buck at the time AND managed to receive cash back in escrow from the seller!

spdrun, you may not be familiar with what happened to many areas of CA which had heavy distress. The short sales, in particular, in those areas have had the effect of causing the RE market to (artificially) over-correct.

There were never any fundamentals in place for the market to correct back to ’99-00 prices as the “loose lending” didn’t come into practice until mid-2003. Owners who bought before then did so with “normal” credit standards and qualification ratios and the sales which took place during this window were nearly all “organic, traditional sales.” And the prevailing interest rate in ’00 to’01 for a FRM was 7-8%!

It was actually the short sales of recent years which sold for less than half their “boom” prices (and well under a “rebuild” price) which caused all surrounding owners’ values to suffer. The lenders decided to accept these ridiculously low (SS) offers because they waited too long and let their FB’s screw them whilst being subsidized to do so by the PTB.

This debacle is all due to a heavily “manipulated” market.

I for one am ecstatic that inventory is currently low (even if “manipulated”) and hope it stays that way for years to come. What’s good for the goose is good for the gander.

[bearishgurl]

[quote=UCGal]BG-
Interesting theory about folks tapping their retirement funds so credit scores be darned.

However – the reality is that the vast majority of boomers don’t have enough saved to fund their retirements, let alone have enough extra to pay cash for a house on top of providing an income stream.

Your scenario would only apply to a small number… and that number is made up of people who were aggressive savers… so likely to be more financially savvy, financially responsible… and therefore less likely to be in the short sale scenario in the first place.

Just my 2 cents.[/quote]

I think you’re probably right about it being a small number, UCGal. I’m acquainted with a couple of persons in this age category who were spurred by (younger) family members into buying during the “boom years,” against their better judgment. They’re now finding themselves underwater just as they prepare to retire.

Otherwise, in my experience, I have noticed that most boomers have done the best they can in saving for retirement and a large percentage have defined benefit plans and/or military retirement pay for life.

Unfortunately, I don’t foresee the same scenario for Gen X and Gen Y but must admit that their (overall) working conditions, pay and quality-of-life benefits far surpass anything ever offered to the boomer generation of workers, who were much more regimented and micro-managed during the business day. Most of those boomers still in the workforce voluntarily micro-manage themselves if there is no one there anymore to do it for them :=0

[bearishgurl]

As a potential seller in the next 18-24 mos, I really have no problem with “bulk sales” by REITs. If any of them are able to make a similar deal in SD Co (even for 50 properties at a time, instead of 699) this takes distressed properties off the lenders who might otherwise list them as REOs.

I’m wondering if these “bulk” purchases are even reported as individual “sold comps” by the assessor. I would guess no. Obviously, the assessor’s Change of Ownership form filed by Fannie and/or the REIT’s escrow officer is going to indicate “bulk sale” on each and every parcel affected.

Practically speaking, if it is reported this way, these (discounted) properties’ sold prices will not affect their surrounding “sold comps” for appraisal purposes. And they will also have the effect of taking shadow inventory off the market, likely permanently. And it might spur more lenders to foreclose in order to stockpile properties for bulk sales, which are a faster way of getting them “off their books.”

This is all good for current homeowners.

[bearishgurl]

[quote=spdrun]Those “deep SS prices” you speak of tend to represent a pro-forma cap rate range of 7 to 8.5% in good coastal areas of CA. Meaning that buying is cheaper than renting, and landlords can make a profit under prevailing mortgage rates (they are, after all, providing a professional service in maintaining and managing the property). In other words, IMHO they were fair prices.

The only people who possible got unjustly fvcked were the people who bought during the bubble. And they should have known better. Investing several hundred grand is NOT to be taken lightly nor emotionally, despite the Pollyanna propaganda that the Nat’l Assoc of Realtors chooses to push on us all.[/quote]

Those “unjustly fvcked” people should include persons who bought all the way back to 12 years ago, even if they NEVER removed any equity (I’m in this category). There have only been a couple of REOs but it is the surrounding SS’s have decimated the value of my property. Those properties should have instead been foreclosed upon in a timely manner and then immediately released to mkt as an REO and sold, forthwith.

However, there is light at the end of the tunnel. A “sold comp” (SS or otherwise) only lasts six months in appraisal-speak. As long as there aren’t too many more “strategic defaulters” who are allowed to get away with SS, we’ll all be able to recover from this debacle :=0

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