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July 27, 2007 at 4:42 PM in reply to: While not a perfect solution, the best way to avoid foreclosure . . . #68266
Bugs
ParticipantYeah, but even you won’t pull the trigger unless you think we’re getting somewhere reasonably close to the bottom. You’d like it at $700k, but you’d LOVE it at $600k.
ParticipantYeah, but even you won’t pull the trigger unless you think we’re getting somewhere reasonably close to the bottom. You’d like it at $700k, but you’d LOVE it at $600k.
ParticipantAu contraire. I think these people will continue to trickle in. Remember, the bulls are fond of saying that we’re almost through this downturn and next year it will start racking up 3% – 4% per year. With each tick of donwward adjustment there will continue to be some would-be buyers who come to the conclusion “THIS IS IT, I have to jump in now while I can before it shoots up again.”
The REIC is depending on these people to slow the pace of decline.
You just know ol’ Scruffydog is waiting to utter the I-told-you-so that’s dangling at the tip of his tongue.
ParticipantAu contraire. I think these people will continue to trickle in. Remember, the bulls are fond of saying that we’re almost through this downturn and next year it will start racking up 3% – 4% per year. With each tick of donwward adjustment there will continue to be some would-be buyers who come to the conclusion “THIS IS IT, I have to jump in now while I can before it shoots up again.”
The REIC is depending on these people to slow the pace of decline.
You just know ol’ Scruffydog is waiting to utter the I-told-you-so that’s dangling at the tip of his tongue.
ParticipantI believe what you meant to say is that the EFFECTIVE demand creeps up. As the prices come down, a larger percentage of the population can afford to satisfy their desire to buy. I wouldn’t expect this region to ever get to 40% affordability, but there’s no reason it can’t get to 30% or more. Especially when considering that nationwide it’s usually over 60%.
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The NAR position that buyer psychology is the problem is hilarious. I never heard them complain about the psychology when they were feverishly stoking it to run the prices up. Buyer psychology IS one of the economic fundamentals. It built this house of cards in the first place and as it reverses it will dismantle that house just as quickly.
A couple of you guys are flirting with making the same mistake I made back in the 1990s. I thought then that enough people had gotten burned badly enough by the last bust that they’d remember their lesson and refrain from doing it again. Now I know better. Individuals may be smart, but PEOPLE are as dumb as a bag of rocks and have a memory span that’s only half as long.
It’ll happen again. The question is when will it happen and how bad will it be next time.
ParticipantI believe what you meant to say is that the EFFECTIVE demand creeps up. As the prices come down, a larger percentage of the population can afford to satisfy their desire to buy. I wouldn’t expect this region to ever get to 40% affordability, but there’s no reason it can’t get to 30% or more. Especially when considering that nationwide it’s usually over 60%.
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The NAR position that buyer psychology is the problem is hilarious. I never heard them complain about the psychology when they were feverishly stoking it to run the prices up. Buyer psychology IS one of the economic fundamentals. It built this house of cards in the first place and as it reverses it will dismantle that house just as quickly.
A couple of you guys are flirting with making the same mistake I made back in the 1990s. I thought then that enough people had gotten burned badly enough by the last bust that they’d remember their lesson and refrain from doing it again. Now I know better. Individuals may be smart, but PEOPLE are as dumb as a bag of rocks and have a memory span that’s only half as long.
It’ll happen again. The question is when will it happen and how bad will it be next time.
ParticipantConsidering there were a lot of homes in La Jolla that sold for less than $400k prior to this last runup, I would think $600k in Encinitas for a reasonable home may very possibly occur by the time it’s all over.
Outside of real estate circles, Six-Hundred Thousand Dollars is a lot of money.
ParticipantConsidering there were a lot of homes in La Jolla that sold for less than $400k prior to this last runup, I would think $600k in Encinitas for a reasonable home may very possibly occur by the time it’s all over.
Outside of real estate circles, Six-Hundred Thousand Dollars is a lot of money.
ParticipantSome developers include the personal property in the sales contract for the realty and some write up separate sales contracts for realty and personal property. Of course, I’ve also seen some pretty creative accounting when it comes to allocating which is which.
This is one reason appraisers are required to review the sales contract, to identify any non-realty interests that might be included in them. Cash back at closing, 2-week vacations, new cars, 60″ plasma, etc..
Unfortunately, there are enough appraisers out there who haven’t been doing what they’re supposed to do. Enough so that a lot of the developers have becomed accustomed to not providing sales contracts for review and acting surprised when an appraiser asks for one.
That was then and this is now – as others have commented, the lenders are going back to underwriting their loans. And they’re actively looking for sales concessions and other non-realty interests in these transactions.
Anyways, the tax assessment is usually based on the sales price for the realty, but there are exceptions when there are indications the transaction price doesn’t reflect the market value.
ParticipantSome developers include the personal property in the sales contract for the realty and some write up separate sales contracts for realty and personal property. Of course, I’ve also seen some pretty creative accounting when it comes to allocating which is which.
This is one reason appraisers are required to review the sales contract, to identify any non-realty interests that might be included in them. Cash back at closing, 2-week vacations, new cars, 60″ plasma, etc..
Unfortunately, there are enough appraisers out there who haven’t been doing what they’re supposed to do. Enough so that a lot of the developers have becomed accustomed to not providing sales contracts for review and acting surprised when an appraiser asks for one.
That was then and this is now – as others have commented, the lenders are going back to underwriting their loans. And they’re actively looking for sales concessions and other non-realty interests in these transactions.
Anyways, the tax assessment is usually based on the sales price for the realty, but there are exceptions when there are indications the transaction price doesn’t reflect the market value.
ParticipantWait a couple years and you’ll probably be able to buy lots of land in close to town – that could pay off in a few years.
ParticipantWait a couple years and you’ll probably be able to buy lots of land in close to town – that could pay off in a few years.
ParticipantWe’re already halfway to 50% declines in some areas of Riverside County, and based on current volume levels it’ll be YEARS before the trend reverses. That trend will make it a lot further west than Chino Hills or San Dimas or Glendale before it reverses.
Don’t kid yourself – there is no safe haven in a region that is defined in terms of driving distance. If the same home costs twice as much in Santa Monica as it would in Pomona and the home in Pomona declines, the Santa Monica home isn’t going to stay the same just because Santa Monica is “special”.
BTW….
“It hasn’t happened yet” is not at all the same thing as “It’s not going to happen”. There were a lot of permabulls in SD who were making the hasn’t-happened-yet-argument who ended up eating crow when it did happen. You’re making the same mistake now.
ParticipantWe’re already halfway to 50% declines in some areas of Riverside County, and based on current volume levels it’ll be YEARS before the trend reverses. That trend will make it a lot further west than Chino Hills or San Dimas or Glendale before it reverses.
Don’t kid yourself – there is no safe haven in a region that is defined in terms of driving distance. If the same home costs twice as much in Santa Monica as it would in Pomona and the home in Pomona declines, the Santa Monica home isn’t going to stay the same just because Santa Monica is “special”.
BTW….
“It hasn’t happened yet” is not at all the same thing as “It’s not going to happen”. There were a lot of permabulls in SD who were making the hasn’t-happened-yet-argument who ended up eating crow when it did happen. You’re making the same mistake now.
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