[gn]

“Is that the way to do business, or are they really rich?”

It’s called denial.

Of course, these homeowners will tell you that “denial” is not a state of mind, it is a river in Egypt 🙂

[gn]

If I want to move during the summer, I would put my house on the market in May & start house-hunting in May b/c if you add the time to find a buyer & the time to find a house & close escrow, it can easily take 3 months or more.

So, shouldn’t the “seasonal inventory surge” occur in May ? Am I missing something here ?

[gn]

If I want to move during the summer, I would put my house on the market in May & start house-hunting in May b/c if you add the time to find a buyer & the time to find a house & close escrow, it can easily take 3 months or more.

So, shouldn’t the “seasonal inventory surge” occur in May ? Am I missing something here ?

[gn]

Speficically:

– Are the houses in The Groves custom homes ?
– This house does not have granite & other anemities. Is it why it’s priced significantly lower than other houses in the area ?

[gn]

Speficically:

– Are the houses in The Groves custom homes ?
– This house does not have granite & other anemities. Is it why it’s priced significantly lower than other houses in the area ?

[gn]

“there is someone out there who would buy it at 375-400k…and I make money”

23109VC,

Why would anyone pay $375 – $400k for a 1900 sq ft when they can strong-arm the builder to get a 3600 sq ft for $420k (like newguy did). Sure, you have a better lot & landscaping but your house is only 1900 sq ft.

The previous owner was lucky that some guy happened to like his house so much & bought it for $350k. He should send you a flower bouquet for bailing him out 🙂

You must be dreaming.

[gn]

“there is someone out there who would buy it at 375-400k…and I make money”

23109VC,

Why would anyone pay $375 – $400k for a 1900 sq ft when they can strong-arm the builder to get a 3600 sq ft for $420k (like newguy did). Sure, you have a better lot & landscaping but your house is only 1900 sq ft.

The previous owner was lucky that some guy happened to like his house so much & bought it for $350k. He should send you a flower bouquet for bailing him out 🙂

You must be dreaming.

[gn]

This is similar to trading in your old car when you buy a new car at a dealer.

The dealer gives you a good price for your old car provided that you buy a new car at a huge markup 🙂

[gn]

This is similar to trading in your old car when you buy a new car at a dealer.

The dealer gives you a good price for your old car provided that you buy a new car at a huge markup 🙂

[gn]

Like the last bubble, we know that when a bubble pops, it’s not pretty.

Unlike the last bubble, this time around, the amount of the credit extended to investors was unprecedented. This means that the number of properties being held by “specuvestors” is also unprecendented. So, it’ll probably be uglier than the early 90s.

It’s like watching a horror movie. 15 minutes into the movie, there’s some scary part, but that’s just to warm things up. We haven’t gotten to the REALLY scary part yet.

[gn]

Like the last bubble, we know that when a bubble pops, it’s not pretty.

Unlike the last bubble, this time around, the amount of the credit extended to investors was unprecedented. This means that the number of properties being held by “specuvestors” is also unprecendented. So, it’ll probably be uglier than the early 90s.

It’s like watching a horror movie. 15 minutes into the movie, there’s some scary part, but that’s just to warm things up. We haven’t gotten to the REALLY scary part yet.

[gn]

“My difficulty, which SD R no doubt shares, is seeing homesellers actually radically adjust their expectations so quickly. People hate change and resist it at all costs”

It’s true that sellers are stubborn & unlikely to lower prices. But if they can’t deal with the ballooning ARMs, they’ll face foreclosure & their houses will end up being sold by the lenders at reduced prices.

[gn]

“My difficulty, which SD R no doubt shares, is seeing homesellers actually radically adjust their expectations so quickly. People hate change and resist it at all costs”

It’s true that sellers are stubborn & unlikely to lower prices. But if they can’t deal with the ballooning ARMs, they’ll face foreclosure & their houses will end up being sold by the lenders at reduced prices.

[gn]

waittobuy,

When prices go down, the less desirable areas go down first. This is why ocrenter said the following:

“Assuming $24,000 loss in rent, had we bought in 4S, we would have been looking at $100,000 loss in equity over the same period. had we bought in Temecula like a friend of mine did, that $24,000 loss in rent would be comparable to $200,000 loss in equity.”

This is because Temecula is much less desirable than 4S.

Relatively, 4S is less desirable than Carmel Valley. This is why prices in CV have held up better than 4S. When the dust settles, all areas (desirable or not) will have gone down by the same percentage. The difference is that the least desirable areas will hit the “bottom” first.

With that said, CV is further from the “bottom” than 4S. So, if you must buy right now, 4S is probably better b/c it is closer to the bottom. You’ll still lose a lot of money because 4S is still a long way from the bottom.

ocrenter made an excellent point. Financially speaking, the decision to buy does NOT depend on the rent vs. the mortgage payment. It depends on the money spend on rent vs. the equity loss.

I would suspect that: ocrenter would have paid $3k/month to rent that same house because the $36k spent on rent would still be far less than the equity loss.

“we think the biggest yearly drop in price in this cycle has happened”

Real estate is the ultimate momentum market. The price declines of the last 18 months has only began to pickup speed. So, the biggest yearly drop in price has not happened yet.

[gn]

waittobuy,

When prices go down, the less desirable areas go down first. This is why ocrenter said the following:

“Assuming $24,000 loss in rent, had we bought in 4S, we would have been looking at $100,000 loss in equity over the same period. had we bought in Temecula like a friend of mine did, that $24,000 loss in rent would be comparable to $200,000 loss in equity.”

This is because Temecula is much less desirable than 4S.

Relatively, 4S is less desirable than Carmel Valley. This is why prices in CV have held up better than 4S. When the dust settles, all areas (desirable or not) will have gone down by the same percentage. The difference is that the least desirable areas will hit the “bottom” first.

With that said, CV is further from the “bottom” than 4S. So, if you must buy right now, 4S is probably better b/c it is closer to the bottom. You’ll still lose a lot of money because 4S is still a long way from the bottom.

ocrenter made an excellent point. Financially speaking, the decision to buy does NOT depend on the rent vs. the mortgage payment. It depends on the money spend on rent vs. the equity loss.

I would suspect that: ocrenter would have paid $3k/month to rent that same house because the $36k spent on rent would still be far less than the equity loss.

“we think the biggest yearly drop in price in this cycle has happened”

Real estate is the ultimate momentum market. The price declines of the last 18 months has only began to pickup speed. So, the biggest yearly drop in price has not happened yet.

[Author]

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