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ctr70
Participant“3. I was just offered a stated income loan at 3%, max stated income being 3x liquid assets after closing, letters of reference required. Don’t be so sure — creative financing is back, at least on the right coast. Of course, this is still better than a NINA or NINJA loan of years past.”
—–>Yes but you need a huge down payment for a loan like that today, 30-40% down. A loan with 20%-40% down has almost ZERO risk of default. 2003-2007 they were doing stated income ZERO DOWN for people with shitty credit! HUGE difference! Apples and oranges! So I disagree with you, creative financing is NOT back. Anything with more than 20% down is not creative financing IMO.
ParticipantI think house prices in Coastal CA could slow or flatten maybe in say 2015 or something, but I don’t think we will see a dramatic fall in price. Here’s why:
1. I think any additional supply will be sucked up very fast. There are so many first time buyers, regular families, etc.. that want to buy now, but cannot b/c they can’t beat out all the cash offers. So lot’s of pent up demand and household formation.
2. Tens of thousands of people who went through foreclosures and short sales the last 5 years are becoming re-eligible to buy….”boomerang buyers”
3. The crash in 2008 was much due to a “once in a generation” insane mortgage financing period from 2003-2007. The loans that have been made the last 6 years starting in 2008 are extremely solid. Some of the toughest underwriting standards and appraisals in U.S. history. The 2010, 2011, 2012 loan vintages are showing some of the lowest default rates in history. So we are unlikely to get more inventory from future defaults. Most of the problems loans are legacy bad loans made pre-2007.
4. Builders didn’t build anything for the last 6 years in CA further restricting supply. Yet population kept increasing. And it takes a long time for builders to rev up the machine and get large subdivisions on the market to ramp up supply.
5. Vegas, Phoenix, Riverside County, etc..*over corrected* in price to below construction costs. It was insane in 2009 when a typical Phoenix SFR new built 3/2’s were going for $90k! And even now a house payment is still less than rent and historically really low. The affordability is still really great even at 2013 home prices.
With all that said. No one knows the future. Black Swan events and unforeseen major economic shocks could throw off my predictions.
ParticipantBack to Phoenix….one good thing about rentals in Coastal CA is you get a lot of “pop” in rent. Rent in CA goes up over time nicely. Rents in endless suburban sprawls like Phoenix are not much higher then they were 15 years ago. Stucco box SFR’s in the burbs of PHX are still renting for $900-$950/mo.
You also get much better tenants & demand in Coastal CA (even in lower end neighborhoods) vs. places like Phoenix. With rentals in a lot of out of state areas with higher vacancy rates, you lose so much money on turnover, evictions, vacancies that what looks like a high return on paper turns out to be a much lower return in reality. In CA a lower return on paper can end up being a higher return as you have so much more demand for your rentals and better rent increases and appreciation over time. However I still would never buy a negative cash flow rental in CA just hoping it appreciates. That is bad business.
But that being said, the window has mostly closed to be able to cash flow a rental in Coastal CA with 20% down. Late 2008 to late 2011 there were a lot of opportunities to get great cash flow right in San Diego in great rental areas. But in those years the sentiment towards real estate was that it was “a bad investment that would never go up again”. LOL. So you had to go against the negative crowd mentality to be buying back then (like usual). And like usual, now that prices are going up, everybody wants it again. It’s “Animal Spirits” at work, just like Robert Shiller says.
March 24, 2013 at 8:22 PM in reply to: San Diego State Aztec mens hoops tip off 4:10 pm for trip to sweet 16! #760860ParticipantAztecs were absolutely horrible tonight in their loss. An embarrassment.
ParticipantI have not had cable for about 5+ years. Everything I watch is streaming via Netflix. I do miss watching certain sports games. There are a few sites where you can watch games, they are kind of rough and I don’t know where they get the signals and they seem kind of under the table. I watch the NCAA hoops tournament over the Net on the CBS web site.
I wish there was a really good solution for ONLY sports on demand over the Net. That is all I want to watch. The rest of TV is 99% complete garbage. And the advertisements are the worst (especially with sports), that alone is a reason to cancel cable. They are all corny, stupid, cliche and pretty much either beer, cars, or fast food.
ParticipantThis was a great Bloomberg article about the abuses of state of CA employee compensation and how CA state employees are the highest paid in the nation.
And at the same time CA has the highest paid state employees in the nation, they go and raise income taxes even more with prop 30 passing in 2012. Even though before raising the CA state income tax, CA already had one of the highest state income taxes it the nation.
I’m thankful every day that I now live in WA State with NO state income tax and it’s not my problem anymore. Ahhhh life is good!
March 4, 2013 at 6:22 AM in reply to: OT: Public Employee Unions Attack the City of San Diego/Prop B #760276ParticipantHave not heard a good argument yet with what is wrong with simplifying all public employee retirement programs and just changing them all to employee funded 401k plans just like everyone in the private sector gets. Done, over, end of story.
ParticipantYes and a lot of short sale comps may have went into contract a year ago, or more, and are just closing now. So the lower priced short sale comps can be based upon the lower end of the price scale a year or more ago, and are not reflective of today’s pricing on a standard sale.
ParticipantI have never ventured into buying trustee sales. That game is full of sharks and for the super, super experts. There are a TON of pitfalls. I would do some serious education before even thinking of trustee sales, and honestly I do not think they are worth it anymore. From what I hear there is way too much competition and properties are getting bid up to almost retail prices. You have to REALLY do your homework and know what you are doing or you can get killed.
Participanthttp://www.foreclosureforum.com/stats.html
From this site trustee sales are WAY down from Jan 2012. The trend is trustee sales have been falling for some time.
ParticipantI just Google mapped Phoenix to Alpine AZ and it said 4 hrs and 47 min. You can usually make it 30 min faster than Google so let’s say 4 hr 15 min. The White Mnts of AZ on the New Mexico border are gorgeous and not many Cali people know abut them. Total pine forest cool high alpine setting in summers & snowy in winters. I knew a lady in Phoenix that had a house up there she escaped to in summers. But yes that is a long haul & she could telecommute:)
ParticipantNo matter what you say bearishgirl Ramona is not a place I would want to live. Yes there are some nice mansions in the hills (still wouldn’t want ’em though), but that’s not what your getting for $350k. Plus the downtown is a dump IMO, I have driven through it a thousand times going out to hike. The thought of hanging out in downtown Ramona for my Sunday stroll makes me shiver. And it’s so damn hot & brown in the summers and far from everything. To me it would suck to live in Ramona period. And Lakeside too. Santee is a little better barely, but no character there, still yuck and no really downtown, just big box chain land down Mission Gorge.
Yeah I guess if you are super “horsey” type of person and got a nice ranch on some acreage in Ramona or Lakeside, maybe for someone. There are definitely tons of cool rural areas in other states and other parts of NorCal I would live, but to me most of East County is just not “quaint rural”.
ParticipantYes I agree the Homeowners Bill of Rights is the biggest crock of sh** ever. What a joke. There was no need to change existing foreclosure rules that were in place for 100 yrs in CA:
1. You miss 2 payments you get a notice of default
2. You miss another 3 you get a notice of trustee sale
3. Another 21 days pass and your houses gets auctioned.WTF that ever had to change is beyond me. You don’t make your payments should get booted out of the freaking house!!! Very simple concept that did not need to change!
ParticipantI also find it very interesting that everyone is now talking about chasing condos with multiple offers on them in C neighborhoods when they were treated like “lepers” in 2009-2011 on this forum. Really classic crowd following behavior on Pigg:
-2006 everyone should have been RE bears
-2009 just when everyone should have been backing up the truck on rentals, everyone jumped on the “bearish” bandwagon. It was all the rage to be the gloomiest, end of the world type. Just at the very time it was time to get greedy with real estate. Now in 2013 since it seems safe, everyone jumps in chases properties with 40 other offers when in 2009 we had way more inventory, tons of foreclosures, sometimes sitting with no offers at all for weeks or months.
-2009 when the DOW was at 7,000 everyone was panicking that it could go to 3,000, selling off their mutual funds. Now the DOW is 14,000
Very classic to me that just like people jump on bullish bandwagons in booms, people jump on the “bearish” bandwagon in busts, just at the VERY time when they should have been bullish, the peak of crowd following bearishness exists. Very classic. It will happen again and again and again. b/c most humans are psychologically crowd followers by nature. And those “bears” think they are being so smart and contrarian at those very times they should have turned bullish again. That is why there is a very, very, very small percentage of rich people like Buffet & Sam Zell who make a lot of money investing. As Warren Buffet says, “be greedy when others are fearful, fearful when others are greedy”.
Not saying I got it all right at all. I was a little too conservative in 2009 and bought into some of the “end of the world” economic stuff. Wish I was more aggressive with rentals. But I’m glad I did pick up some stuff and also held on to my mutual funds in 2009 when everyone was selling in a panic when the Dow dumped.
That’s not saying things couldn’t crash again. I do think the Fed printing $$$ massively, keeping rates way lower than they ever have been in U.S. history, & the way the Gov forced banks to not foreclose on people is responsible for much of bounce we have. We need to see incomes rise, more good jobs, lower unemployment before I get very comfortable.
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