[gn]

Thanks to everyone for the answers (especially HLS & Bugs).

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.

So, developers did this because it makes it easier for the buyers to finance the purchase ? That is, otherwise, the buyer would have to come up with the cash for the personal property ? And the buyer doesn’t mind because the higher property tax (higher assessment based on the higher purchase price) is a small price to pay ?

[gn]

Thanks to everyone for the answers (especially HLS & Bugs).

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.

So, developers did this because it makes it easier for the buyers to finance the purchase ? That is, otherwise, the buyer would have to come up with the cash for the personal property ? And the buyer doesn’t mind because the higher property tax (higher assessment based on the higher purchase price) is a small price to pay ?

[gn]

Bugs,

Can you please give me your thoughts on this ?

Thanks.

[gn]

Bugs,

Can you please give me your thoughts on this ?

Thanks.

[gn]

Scruffydog is backtracking/retreating

What a big surprise ! Scruffy is conceding that the RE market is SD has problems.

Don’t be surprised if, by this time next year, he starts conceding that the metro LA market has problems too.

I can see it now. Scruffydog is slowly retreating with his tail between his legs 🙂

[gn]

Scruffydog is backtracking/retreating

What a big surprise ! Scruffy is conceding that the RE market is SD has problems.

Don’t be surprised if, by this time next year, he starts conceding that the metro LA market has problems too.

I can see it now. Scruffydog is slowly retreating with his tail between his legs 🙂

[gn]

The Realtors control most of the media messages (completely controlled it until 6 months ago), the data is impossible to get accurate

Also, the data is tricky to interpret. For example, the median price.

The median price reflects what buyers spent on their purchases. Prices have gone down quite a bit, but that's not reflected in the median price. That's because buyers did not spend less, the spend the same & getting more house for their money.

The real estate industry understand this. But they conveniently chose not to mention it, letting people think that prices haven't gone down.

This is one of the biggest myths in real estate. If I get a dollar every time I hear people saying: The median price is holding up, everything is OK, I would be very rich.

 

[gn]

The Realtors control most of the media messages (completely controlled it until 6 months ago), the data is impossible to get accurate

Also, the data is tricky to interpret. For example, the median price.

The median price reflects what buyers spent on their purchases. Prices have gone down quite a bit, but that's not reflected in the median price. That's because buyers did not spend less, the spend the same & getting more house for their money.

The real estate industry understand this. But they conveniently chose not to mention it, letting people think that prices haven't gone down.

This is one of the biggest myths in real estate. If I get a dollar every time I hear people saying: The median price is holding up, everything is OK, I would be very rich.

 

[gn]

scruffydog,

Do you have any reply to this ?

http://piggington.com/mortgage_monster_0

Overall SD county supply is steady ~ 20k

Why is the supply currently at ~20k when it was ~5k 2-3  years ago ?

It's because the speculators who bought 2-3  years ago are now selling. Back then, they used Wallstreet's money to buy. This is why prices went up. Now, they are selling.

It's unraveling. It takes time. Slowly, but surely, prices will come down 🙂

[gn]

scruffydog,

Do you have any reply to this ?

http://piggington.com/mortgage_monster_0

Overall SD county supply is steady ~ 20k

Why is the supply currently at ~20k when it was ~5k 2-3  years ago ?

It's because the speculators who bought 2-3  years ago are now selling. Back then, they used Wallstreet's money to buy. This is why prices went up. Now, they are selling.

It's unraveling. It takes time. Slowly, but surely, prices will come down 🙂

[gn]

It sounds like you want to use the benefits from the relocation package before it expires. Your package probably pays for your closing costs, right ?

I was in a similar situation. When I relocated to San Diego, my relocation package included the closing costs of buying a house. This is pretty standard, so I guess yours is similar.

Anyway, I chose not to use that because the benefits (a few thousands dollars) is not worth the cost (loss of equity when prices go down).

[gn]

It sounds like you want to use the benefits from the relocation package before it expires. Your package probably pays for your closing costs, right ?

I was in a similar situation. When I relocated to San Diego, my relocation package included the closing costs of buying a house. This is pretty standard, so I guess yours is similar.

Anyway, I chose not to use that because the benefits (a few thousands dollars) is not worth the cost (loss of equity when prices go down).

[gn]

I know personally about 6 people who make six figures, own a home in the range of $700-1 million and struggle month to month to make payments. If I were a betting man, I would assume that at least 1/2 of the forclosures are not subprime but are people with good credit that just got in over their heads.

These people have loans that fall into a category called Alt-A.

It is sexier to blame people with bad credit …

The subprime loans are the first ones to "roll over" (i.e. blow up) b/c they are the weakest links. Also, sub-prime borrowers are the "poster child" of what's wrong with real estate. Therefore, it’s easier to blame them.

There is currently evidence that the "contagion" is working its way to the Alt-A loans.

 

[gn]

I know personally about 6 people who make six figures, own a home in the range of $700-1 million and struggle month to month to make payments. If I were a betting man, I would assume that at least 1/2 of the forclosures are not subprime but are people with good credit that just got in over their heads.

These people have loans that fall into a category called Alt-A.

It is sexier to blame people with bad credit …

The subprime loans are the first ones to "roll over" (i.e. blow up) b/c they are the weakest links. Also, sub-prime borrowers are the "poster child" of what's wrong with real estate. Therefore, it’s easier to blame them.

There is currently evidence that the "contagion" is working its way to the Alt-A loans.

 

[gn]

I think what you are seeing is the bottom half of the market in San Diego and much of Southern California basically becoming an unmitigated disaster. The top half of the market not as much.

On the way up, it was subprime & Alt-A loans that enable entry level buyers to bid up the prices of low-end houses. This enabled "move-up" buyers to bid up the prices of more expensive houses.

Now, the opposite is happening. The restrictions of sub-prime loans prevented entry level buyers to enter the market. This causes trouble in the low-end of the market first (we are currently seeing this).

Eventually, the effect will ripple up to the more expensive areas. In real estate, everything is connected.

[Author]

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