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JES
ParticipantI agree with you FormerSanDiegan. I do think that laws need to be tightened to prevent the kind of flipping we are seeing because it can damage communities. But in the end homeowners need to be held responsible too. There are ways to stay away from flippers and investors. For example, my recent experience has taught me to be wary of all new developments because there are too many investors, buyers who are stretching their finances, and other games going on that make for an unstable neighborhood. Better to buy in an established area where the neighbors paid in the 300s for the homes, there are no investors, and where most people are there for the long haul and not many homes go up for sale.
ParticipantYeah, I would say that it is almost socially beneficial to flip if you are going to do repairs and upgrades. If someone buys an investment property and then flips it in a year, that seems OK to me as well. Unethical things I have seen include employees of homebuilders with inside knowledge buying multiple properties in early phases and flipping them. Also, I once saw a realtor who bought 4 x homes in a Centex community here during a hot market with waiting lists and she lived in one, flipped it, moved to the next, flipped it etc.
ParticipantParticipantThanks UTC. You can listen on the net at:
ParticipantDuplicate
ParticipantLet’s look to the stock market as an analogy. Is it unethical to buy stock in multiple companies with the intention of making a short term profit? Will it be unethical for baby boomers to pull their retirement funds out of stocks, cash in their profits and live off the proceeds? Is it unethical for you to put $$ in a education stock fund for your kids, with the hope of making good returns and sending them to college?
Definition of ethical = Conforming to accepted standards of social or professional behavior.
Flipping still passes the professional test as it is not illigal and is actually promoted by corporations and government policies. Whether it conforms to socially accepted standards is the real question!
ParticipantCouple points:
-I have been in that neighborhood numerous times and it is a fairly nice, gated community east and adjacent to Cal State.
-There is a Sprinter train station being built a couple hundred yards north of that neighborhood, at LaMore and Barham Ln. Possible reason for the # of homes for sale. We’re talking diesel trains, every 15 minutes all day long, and traffic from the station and students.
-The university has plans to build nearby as well, but I don’t know exactly where. It could be that a dorm will be built directly behind the neighborhood, who knows. Would have to look at the Cal State master plan for that.
-Look at the neighborhood to the west of this, Silvercrest by Centex (sold out) off of Shelley Dr. Actually go drive it…there are 12+ homes for sale on just the first 2 streets and all are reduced and none pending (last I checked). Edgewater Dr. is one of the roads in there.
ParticipantI couldn’t believe they got that price either!
ParticipantThanks for the reply. South Reno seems to be a new growth area and I have found a few new home builders who have projects there. It seems that prices are going down in Reno as well, 5% so far in the past year. They aren’t cheap right now, but nowhere near SD prices. 2000 sqft. Lennar homes are around 390-450 in south Reno right now, but that does not include any unadvertised specials that may be going on. Crime is above average, but like you said the newer part of town may be a different story. Anywat, it is worth a look for me!
ParticipantThe fact that so many CA counties with up-to-now hot housing markets made this list is an indication to me that many of these millionaires must have assets in second homes and investment properties.
ParticipantI think that it should be computed based on the assumption that the loan will be a 1-month interest only, that the buyer should be ‘allowed’ to overstate income by 100%, and that mello roos and HOA taxes don’t count as monthly costs. Additionally, median income for the area should be tweaked to reflect illegal earnings that go unreported such as gambling proceeds and Del Mar horse track winnings. We all know that most people here win a few k there every summer, and also go to Vegas and win anywhere from 5-10k. On top of that, we all receive gift money from relatives for birthdays and holidays and we should add that to the value as well. And why aren’t we including cash withdrawals from credit cards? Surely that should count as income as it helps make housing more affordable. Lastly, housing really is more affordable because we have to count the home equity line that the buyer will get the week after they close. That will really help cover payments…
ParticipantIn 2001 I piad 260k for a below average 1300 sqft. house in Vista that I sold in 2004 and is now comp’d at 525k. The economy has been smokin for a while and rates are still low, but homes sales there are dead. There are simply no economic factors left to improve to reinvigorate sales because everything is still going great, and yet prices are falling! Knock down one or more of these pillars – interest rates, exotic loans, optimistic buyer psychology (50% still think it is a good time to buy!),low unemployment, great economy – and a return to 2001 prices is more than likely IMO. Even at 260k that house is overpriced.
ParticipantIt was probably CAR comments that I read since they referenced San Diego…
ParticipantI have been of the belief that prices will fall 20-30%, but am now wondering if under the right circumstances they might go down up to 50% after reading this and the articles. IMO a bad recession would put that into the realm of possibility. So long as the economy is strong and rates are not too high I doubt we will see that big of a drop.
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