[no_such_reality]

Newblet, you’re somewhat right and somewhat wrong. Since you were in OC, you may recall the OC Register housing section had a set of charts. One was price over the last year, one was payment based on ‘standard’ loans. While pricing rocketed through the roof, the pricing barely moved.

Once the optional payment loans appeared in mass, the payment went even lower.

So you are right, interest rates may rocket upward once the “credit crunch” is over and the Fed returns to fighting inflation. All that will happen though is home pricing will go even lower.

When many on the board talk about prices falling 30%, 40% or so, they are making the comparison based on today’s interest rate environment and today’s rental pricing.

If rental pricing softens, the prices will have more downward pressure.

If interest rates increase, the prices will have more downward pressure too.

IrvineRenter on the IHB covered how the increases in the buyer’s loan terms accentuate the pricing loss. http://www.irvinehousingblog.com/2007/05/07/your-buyers-loan-terms/

To summarize for a short answer. In the current environment, median home price is $460K. It’s expected to correct, let’s say to fall $350K for example as ‘fair’ supportable price.

If interest rates rise to say 10%, instead of falling to $350K, the prices will fall to $240K. The reason is simple. The payments on $350K at 6% and the payment on $240K at 10% are the same.

The housing bubble is correcting because of affordability. If rates rise, affordability falls and home prices must correct further to restore affordability.

[no_such_reality]

Newblet, you’re somewhat right and somewhat wrong. Since you were in OC, you may recall the OC Register housing section had a set of charts. One was price over the last year, one was payment based on ‘standard’ loans. While pricing rocketed through the roof, the pricing barely moved.

Once the optional payment loans appeared in mass, the payment went even lower.

So you are right, interest rates may rocket upward once the “credit crunch” is over and the Fed returns to fighting inflation. All that will happen though is home pricing will go even lower.

When many on the board talk about prices falling 30%, 40% or so, they are making the comparison based on today’s interest rate environment and today’s rental pricing.

If rental pricing softens, the prices will have more downward pressure.

If interest rates increase, the prices will have more downward pressure too.

IrvineRenter on the IHB covered how the increases in the buyer’s loan terms accentuate the pricing loss. http://www.irvinehousingblog.com/2007/05/07/your-buyers-loan-terms/

To summarize for a short answer. In the current environment, median home price is $460K. It’s expected to correct, let’s say to fall $350K for example as ‘fair’ supportable price.

If interest rates rise to say 10%, instead of falling to $350K, the prices will fall to $240K. The reason is simple. The payments on $350K at 6% and the payment on $240K at 10% are the same.

The housing bubble is correcting because of affordability. If rates rise, affordability falls and home prices must correct further to restore affordability.

[no_such_reality]

Newblet, you’re somewhat right and somewhat wrong. Since you were in OC, you may recall the OC Register housing section had a set of charts. One was price over the last year, one was payment based on ‘standard’ loans. While pricing rocketed through the roof, the pricing barely moved.

Once the optional payment loans appeared in mass, the payment went even lower.

So you are right, interest rates may rocket upward once the “credit crunch” is over and the Fed returns to fighting inflation. All that will happen though is home pricing will go even lower.

When many on the board talk about prices falling 30%, 40% or so, they are making the comparison based on today’s interest rate environment and today’s rental pricing.

If rental pricing softens, the prices will have more downward pressure.

If interest rates increase, the prices will have more downward pressure too.

IrvineRenter on the IHB covered how the increases in the buyer’s loan terms accentuate the pricing loss. http://www.irvinehousingblog.com/2007/05/07/your-buyers-loan-terms/

To summarize for a short answer. In the current environment, median home price is $460K. It’s expected to correct, let’s say to fall $350K for example as ‘fair’ supportable price.

If interest rates rise to say 10%, instead of falling to $350K, the prices will fall to $240K. The reason is simple. The payments on $350K at 6% and the payment on $240K at 10% are the same.

The housing bubble is correcting because of affordability. If rates rise, affordability falls and home prices must correct further to restore affordability.

[no_such_reality]

Newblet, you’re somewhat right and somewhat wrong. Since you were in OC, you may recall the OC Register housing section had a set of charts. One was price over the last year, one was payment based on ‘standard’ loans. While pricing rocketed through the roof, the pricing barely moved.

Once the optional payment loans appeared in mass, the payment went even lower.

So you are right, interest rates may rocket upward once the “credit crunch” is over and the Fed returns to fighting inflation. All that will happen though is home pricing will go even lower.

When many on the board talk about prices falling 30%, 40% or so, they are making the comparison based on today’s interest rate environment and today’s rental pricing.

If rental pricing softens, the prices will have more downward pressure.

If interest rates increase, the prices will have more downward pressure too.

IrvineRenter on the IHB covered how the increases in the buyer’s loan terms accentuate the pricing loss. http://www.irvinehousingblog.com/2007/05/07/your-buyers-loan-terms/

To summarize for a short answer. In the current environment, median home price is $460K. It’s expected to correct, let’s say to fall $350K for example as ‘fair’ supportable price.

If interest rates rise to say 10%, instead of falling to $350K, the prices will fall to $240K. The reason is simple. The payments on $350K at 6% and the payment on $240K at 10% are the same.

The housing bubble is correcting because of affordability. If rates rise, affordability falls and home prices must correct further to restore affordability.

[no_such_reality]

Nope, it’s mostly just pet peeves from open houses and a little and mean little knowledge of trivially inexpensive some things are.

I have literally been in open houses with Million dollar plus price tags on them where there were Gerbil chew marks on the door frames of the kids rooms. It was one and quarter million for 2200 sf and 4 beds. No view and small lot.

Stepping over stuff on the master bedroom floor. Yep. $1.3 Million.

Paint slopped on the face plate of a light switch and outlets in a room, yep. Price $1.5 Million. Note, the face plate for the light switch and wall outlet are 37 cents. The outlet itself is 87 cents. $1.5 Million and they can’t replace a slopped and dirty plate held in place with two screws?

Bathroom sinks with dripping faucet and rust on the drain. Reduced for quick sale $999,000.

Dirty cat litter box in the bathroom, a variety of stains on the worn carpet. $1.2M.

Kids clothes scattered over the small bedrooms, doesn’t phase me.

Dirt and lint from the heating vents covering the wall, yep. Dirty finger prints on the doors, yep. Crushed carpet, yep. But hey, it had granite. $1.9 Million.

Mold, mildew in the shower stalls. Passe’ it is so common. Dust covering the ceiling fans and tops of the TV. Yep.

[no_such_reality]

Nope, it’s mostly just pet peeves from open houses and a little and mean little knowledge of trivially inexpensive some things are.

I have literally been in open houses with Million dollar plus price tags on them where there were Gerbil chew marks on the door frames of the kids rooms. It was one and quarter million for 2200 sf and 4 beds. No view and small lot.

Stepping over stuff on the master bedroom floor. Yep. $1.3 Million.

Paint slopped on the face plate of a light switch and outlets in a room, yep. Price $1.5 Million. Note, the face plate for the light switch and wall outlet are 37 cents. The outlet itself is 87 cents. $1.5 Million and they can’t replace a slopped and dirty plate held in place with two screws?

Bathroom sinks with dripping faucet and rust on the drain. Reduced for quick sale $999,000.

Dirty cat litter box in the bathroom, a variety of stains on the worn carpet. $1.2M.

Kids clothes scattered over the small bedrooms, doesn’t phase me.

Dirt and lint from the heating vents covering the wall, yep. Dirty finger prints on the doors, yep. Crushed carpet, yep. But hey, it had granite. $1.9 Million.

Mold, mildew in the shower stalls. Passe’ it is so common. Dust covering the ceiling fans and tops of the TV. Yep.

[no_such_reality]

Nope, it’s mostly just pet peeves from open houses and a little and mean little knowledge of trivially inexpensive some things are.

I have literally been in open houses with Million dollar plus price tags on them where there were Gerbil chew marks on the door frames of the kids rooms. It was one and quarter million for 2200 sf and 4 beds. No view and small lot.

Stepping over stuff on the master bedroom floor. Yep. $1.3 Million.

Paint slopped on the face plate of a light switch and outlets in a room, yep. Price $1.5 Million. Note, the face plate for the light switch and wall outlet are 37 cents. The outlet itself is 87 cents. $1.5 Million and they can’t replace a slopped and dirty plate held in place with two screws?

Bathroom sinks with dripping faucet and rust on the drain. Reduced for quick sale $999,000.

Dirty cat litter box in the bathroom, a variety of stains on the worn carpet. $1.2M.

Kids clothes scattered over the small bedrooms, doesn’t phase me.

Dirt and lint from the heating vents covering the wall, yep. Dirty finger prints on the doors, yep. Crushed carpet, yep. But hey, it had granite. $1.9 Million.

Mold, mildew in the shower stalls. Passe’ it is so common. Dust covering the ceiling fans and tops of the TV. Yep.

[no_such_reality]

Nope, it’s mostly just pet peeves from open houses and a little and mean little knowledge of trivially inexpensive some things are.

I have literally been in open houses with Million dollar plus price tags on them where there were Gerbil chew marks on the door frames of the kids rooms. It was one and quarter million for 2200 sf and 4 beds. No view and small lot.

Stepping over stuff on the master bedroom floor. Yep. $1.3 Million.

Paint slopped on the face plate of a light switch and outlets in a room, yep. Price $1.5 Million. Note, the face plate for the light switch and wall outlet are 37 cents. The outlet itself is 87 cents. $1.5 Million and they can’t replace a slopped and dirty plate held in place with two screws?

Bathroom sinks with dripping faucet and rust on the drain. Reduced for quick sale $999,000.

Dirty cat litter box in the bathroom, a variety of stains on the worn carpet. $1.2M.

Kids clothes scattered over the small bedrooms, doesn’t phase me.

Dirt and lint from the heating vents covering the wall, yep. Dirty finger prints on the doors, yep. Crushed carpet, yep. But hey, it had granite. $1.9 Million.

Mold, mildew in the shower stalls. Passe’ it is so common. Dust covering the ceiling fans and tops of the TV. Yep.

[no_such_reality]

Nope, it’s mostly just pet peeves from open houses and a little and mean little knowledge of trivially inexpensive some things are.

I have literally been in open houses with Million dollar plus price tags on them where there were Gerbil chew marks on the door frames of the kids rooms. It was one and quarter million for 2200 sf and 4 beds. No view and small lot.

Stepping over stuff on the master bedroom floor. Yep. $1.3 Million.

Paint slopped on the face plate of a light switch and outlets in a room, yep. Price $1.5 Million. Note, the face plate for the light switch and wall outlet are 37 cents. The outlet itself is 87 cents. $1.5 Million and they can’t replace a slopped and dirty plate held in place with two screws?

Bathroom sinks with dripping faucet and rust on the drain. Reduced for quick sale $999,000.

Dirty cat litter box in the bathroom, a variety of stains on the worn carpet. $1.2M.

Kids clothes scattered over the small bedrooms, doesn’t phase me.

Dirt and lint from the heating vents covering the wall, yep. Dirty finger prints on the doors, yep. Crushed carpet, yep. But hey, it had granite. $1.9 Million.

Mold, mildew in the shower stalls. Passe’ it is so common. Dust covering the ceiling fans and tops of the TV. Yep.

[no_such_reality]

You can’t change location. You can but it’s impractical to change the fundamental nature of the house (i.e. 3B/2.5ba/2g) so make it the ideal 3/2.5/2 entry level starter family house. If you have a 3500 sf 4/3 ‘luxury’, then it need to be ‘luxury’.

After that is comes down to making it stand out as the best house at the best price. Price it right from the start to the other homes that have sold recently. If your agent is marking up from comparables it’ll sit, get different comparables because they are looking at the equivalent of an entry level car with all the luxury features poured in which have no resale value.

What new renter said is good, but let’s go with real fundamentals since I’ve walked into so many open houses where the fundamentals were not addressed.

1. Clean it! Make it spotless. No dust, no grime.

2. Declutter. Your personal items that sit on flat surfaces should be removed. A few, meaning minimal, can be left if they are not too personal. This includes daily processing and removal of the mail and papers.

3. Green, trimmed and blooming landscape. AKA, clean and declutter the yards. Trim stuff back appropriately, remove detritus, use some planter space for blooming flowers from HD.

4. Fix all the minor annoyances and complete the minor repairs. No sticky doors, no squeaky floor, kitchen doors should all close easily and completely. No indications of a dripping faucet. Replace the door trim with the kid’s pet hamster chew marks on it.

5. Freshen paint, avoid monochrome white on white. It is cheap and easy.

6. Create space. Put your stuff in storage. This is true for the master closet, office and living/TV area. If your closet is bursting at the seams, they see their stuff not fitting. If you have a pile of DVDs sitting next to TV and a wall full of stuff, they wonder where they’ll put their stuff.

7. Arrange the furniture, remove your worn furniture, and emphasize socialization. Think functional, easy, fun. That’s what a room’s stuff should say. The kitchen should scream easy fun meals. The living room should say relaxation and friends and family.

8. Update fixtures and replace light switches and outlets. Yes, they don’t clean well, show age really well and are easy and inexpensive to replace. Door handles should be clean, matching and if they say 2007 instead of 1977 all the better. Do we need to say any more about plastic ‘crystal’ handles on bathroom sinks?

9. Eyeball your appliances. Are they spotless? Inside and out? Do they match? Do they show any wear? Consider replacement if so.

10. Sidewalk, curb, house numbers and drive. Yes, spotless, no grease, if possible no cracks. Freshen the house numbers on the house. Repaint the house numbers on the curb if you have them on the curb. If people strain to figure out which house is 2288 Bonehead Drive when driving it, you’ve started one step down.

Now if you still want to move, price it right and it will sell.

[no_such_reality]

You can’t change location. You can but it’s impractical to change the fundamental nature of the house (i.e. 3B/2.5ba/2g) so make it the ideal 3/2.5/2 entry level starter family house. If you have a 3500 sf 4/3 ‘luxury’, then it need to be ‘luxury’.

After that is comes down to making it stand out as the best house at the best price. Price it right from the start to the other homes that have sold recently. If your agent is marking up from comparables it’ll sit, get different comparables because they are looking at the equivalent of an entry level car with all the luxury features poured in which have no resale value.

What new renter said is good, but let’s go with real fundamentals since I’ve walked into so many open houses where the fundamentals were not addressed.

1. Clean it! Make it spotless. No dust, no grime.

2. Declutter. Your personal items that sit on flat surfaces should be removed. A few, meaning minimal, can be left if they are not too personal. This includes daily processing and removal of the mail and papers.

3. Green, trimmed and blooming landscape. AKA, clean and declutter the yards. Trim stuff back appropriately, remove detritus, use some planter space for blooming flowers from HD.

4. Fix all the minor annoyances and complete the minor repairs. No sticky doors, no squeaky floor, kitchen doors should all close easily and completely. No indications of a dripping faucet. Replace the door trim with the kid’s pet hamster chew marks on it.

5. Freshen paint, avoid monochrome white on white. It is cheap and easy.

6. Create space. Put your stuff in storage. This is true for the master closet, office and living/TV area. If your closet is bursting at the seams, they see their stuff not fitting. If you have a pile of DVDs sitting next to TV and a wall full of stuff, they wonder where they’ll put their stuff.

7. Arrange the furniture, remove your worn furniture, and emphasize socialization. Think functional, easy, fun. That’s what a room’s stuff should say. The kitchen should scream easy fun meals. The living room should say relaxation and friends and family.

8. Update fixtures and replace light switches and outlets. Yes, they don’t clean well, show age really well and are easy and inexpensive to replace. Door handles should be clean, matching and if they say 2007 instead of 1977 all the better. Do we need to say any more about plastic ‘crystal’ handles on bathroom sinks?

9. Eyeball your appliances. Are they spotless? Inside and out? Do they match? Do they show any wear? Consider replacement if so.

10. Sidewalk, curb, house numbers and drive. Yes, spotless, no grease, if possible no cracks. Freshen the house numbers on the house. Repaint the house numbers on the curb if you have them on the curb. If people strain to figure out which house is 2288 Bonehead Drive when driving it, you’ve started one step down.

Now if you still want to move, price it right and it will sell.

[no_such_reality]

You can’t change location. You can but it’s impractical to change the fundamental nature of the house (i.e. 3B/2.5ba/2g) so make it the ideal 3/2.5/2 entry level starter family house. If you have a 3500 sf 4/3 ‘luxury’, then it need to be ‘luxury’.

After that is comes down to making it stand out as the best house at the best price. Price it right from the start to the other homes that have sold recently. If your agent is marking up from comparables it’ll sit, get different comparables because they are looking at the equivalent of an entry level car with all the luxury features poured in which have no resale value.

What new renter said is good, but let’s go with real fundamentals since I’ve walked into so many open houses where the fundamentals were not addressed.

1. Clean it! Make it spotless. No dust, no grime.

2. Declutter. Your personal items that sit on flat surfaces should be removed. A few, meaning minimal, can be left if they are not too personal. This includes daily processing and removal of the mail and papers.

3. Green, trimmed and blooming landscape. AKA, clean and declutter the yards. Trim stuff back appropriately, remove detritus, use some planter space for blooming flowers from HD.

4. Fix all the minor annoyances and complete the minor repairs. No sticky doors, no squeaky floor, kitchen doors should all close easily and completely. No indications of a dripping faucet. Replace the door trim with the kid’s pet hamster chew marks on it.

5. Freshen paint, avoid monochrome white on white. It is cheap and easy.

6. Create space. Put your stuff in storage. This is true for the master closet, office and living/TV area. If your closet is bursting at the seams, they see their stuff not fitting. If you have a pile of DVDs sitting next to TV and a wall full of stuff, they wonder where they’ll put their stuff.

7. Arrange the furniture, remove your worn furniture, and emphasize socialization. Think functional, easy, fun. That’s what a room’s stuff should say. The kitchen should scream easy fun meals. The living room should say relaxation and friends and family.

8. Update fixtures and replace light switches and outlets. Yes, they don’t clean well, show age really well and are easy and inexpensive to replace. Door handles should be clean, matching and if they say 2007 instead of 1977 all the better. Do we need to say any more about plastic ‘crystal’ handles on bathroom sinks?

9. Eyeball your appliances. Are they spotless? Inside and out? Do they match? Do they show any wear? Consider replacement if so.

10. Sidewalk, curb, house numbers and drive. Yes, spotless, no grease, if possible no cracks. Freshen the house numbers on the house. Repaint the house numbers on the curb if you have them on the curb. If people strain to figure out which house is 2288 Bonehead Drive when driving it, you’ve started one step down.

Now if you still want to move, price it right and it will sell.

[no_such_reality]

You can’t change location. You can but it’s impractical to change the fundamental nature of the house (i.e. 3B/2.5ba/2g) so make it the ideal 3/2.5/2 entry level starter family house. If you have a 3500 sf 4/3 ‘luxury’, then it need to be ‘luxury’.

After that is comes down to making it stand out as the best house at the best price. Price it right from the start to the other homes that have sold recently. If your agent is marking up from comparables it’ll sit, get different comparables because they are looking at the equivalent of an entry level car with all the luxury features poured in which have no resale value.

What new renter said is good, but let’s go with real fundamentals since I’ve walked into so many open houses where the fundamentals were not addressed.

1. Clean it! Make it spotless. No dust, no grime.

2. Declutter. Your personal items that sit on flat surfaces should be removed. A few, meaning minimal, can be left if they are not too personal. This includes daily processing and removal of the mail and papers.

3. Green, trimmed and blooming landscape. AKA, clean and declutter the yards. Trim stuff back appropriately, remove detritus, use some planter space for blooming flowers from HD.

4. Fix all the minor annoyances and complete the minor repairs. No sticky doors, no squeaky floor, kitchen doors should all close easily and completely. No indications of a dripping faucet. Replace the door trim with the kid’s pet hamster chew marks on it.

5. Freshen paint, avoid monochrome white on white. It is cheap and easy.

6. Create space. Put your stuff in storage. This is true for the master closet, office and living/TV area. If your closet is bursting at the seams, they see their stuff not fitting. If you have a pile of DVDs sitting next to TV and a wall full of stuff, they wonder where they’ll put their stuff.

7. Arrange the furniture, remove your worn furniture, and emphasize socialization. Think functional, easy, fun. That’s what a room’s stuff should say. The kitchen should scream easy fun meals. The living room should say relaxation and friends and family.

8. Update fixtures and replace light switches and outlets. Yes, they don’t clean well, show age really well and are easy and inexpensive to replace. Door handles should be clean, matching and if they say 2007 instead of 1977 all the better. Do we need to say any more about plastic ‘crystal’ handles on bathroom sinks?

9. Eyeball your appliances. Are they spotless? Inside and out? Do they match? Do they show any wear? Consider replacement if so.

10. Sidewalk, curb, house numbers and drive. Yes, spotless, no grease, if possible no cracks. Freshen the house numbers on the house. Repaint the house numbers on the curb if you have them on the curb. If people strain to figure out which house is 2288 Bonehead Drive when driving it, you’ve started one step down.

Now if you still want to move, price it right and it will sell.

[no_such_reality]

You can’t change location. You can but it’s impractical to change the fundamental nature of the house (i.e. 3B/2.5ba/2g) so make it the ideal 3/2.5/2 entry level starter family house. If you have a 3500 sf 4/3 ‘luxury’, then it need to be ‘luxury’.

After that is comes down to making it stand out as the best house at the best price. Price it right from the start to the other homes that have sold recently. If your agent is marking up from comparables it’ll sit, get different comparables because they are looking at the equivalent of an entry level car with all the luxury features poured in which have no resale value.

What new renter said is good, but let’s go with real fundamentals since I’ve walked into so many open houses where the fundamentals were not addressed.

1. Clean it! Make it spotless. No dust, no grime.

2. Declutter. Your personal items that sit on flat surfaces should be removed. A few, meaning minimal, can be left if they are not too personal. This includes daily processing and removal of the mail and papers.

3. Green, trimmed and blooming landscape. AKA, clean and declutter the yards. Trim stuff back appropriately, remove detritus, use some planter space for blooming flowers from HD.

4. Fix all the minor annoyances and complete the minor repairs. No sticky doors, no squeaky floor, kitchen doors should all close easily and completely. No indications of a dripping faucet. Replace the door trim with the kid’s pet hamster chew marks on it.

5. Freshen paint, avoid monochrome white on white. It is cheap and easy.

6. Create space. Put your stuff in storage. This is true for the master closet, office and living/TV area. If your closet is bursting at the seams, they see their stuff not fitting. If you have a pile of DVDs sitting next to TV and a wall full of stuff, they wonder where they’ll put their stuff.

7. Arrange the furniture, remove your worn furniture, and emphasize socialization. Think functional, easy, fun. That’s what a room’s stuff should say. The kitchen should scream easy fun meals. The living room should say relaxation and friends and family.

8. Update fixtures and replace light switches and outlets. Yes, they don’t clean well, show age really well and are easy and inexpensive to replace. Door handles should be clean, matching and if they say 2007 instead of 1977 all the better. Do we need to say any more about plastic ‘crystal’ handles on bathroom sinks?

9. Eyeball your appliances. Are they spotless? Inside and out? Do they match? Do they show any wear? Consider replacement if so.

10. Sidewalk, curb, house numbers and drive. Yes, spotless, no grease, if possible no cracks. Freshen the house numbers on the house. Repaint the house numbers on the curb if you have them on the curb. If people strain to figure out which house is 2288 Bonehead Drive when driving it, you’ve started one step down.

Now if you still want to move, price it right and it will sell.

[no_such_reality]

Let them go!

They are right. If they don’t go, prices won’t go down as much. The reason simple, they’ll jump back in before it get’s back to fundamentals. Then hordes of people that waited instead of emigrating will jump back in and prices will rocket up again, then speculators will start watching reruns of “Flip That House” and the cycle will repeat.

Seriously though, California is not likely to see reasonable prices by national standards any time soon. The prices will be much lower than they are now, but for the price, you will still less than half of what you could get elsewhere, even adjusted for the difference in wages.

[Author]

Posts