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May 17, 2007 at 9:01 AM in reply to: DR Horton Slashes prices $100k in Murrieta, Menifee, Wildomar and more in … #53208May 17, 2007 at 9:01 AM in reply to: DR Horton Slashes prices $100k in Murrieta, Menifee, Wildomar and more in … #53215
no_such_reality
ParticipantI see a lot of people waiting for an inflation adjusted drop. Just wondering what inflation rate do piggingtoners expect in the next 5 years ?
I’m not waiting for an inflation adjusted drop, I’m waiting for the nominal drop. Inflation adjusted is just gravy.
Basically it’s a way of us recognizing the $310K home that sold in 2001 which was bought for $300K in 1987 is actually cheaper now.
It’s also useful but difficult for adjusting my own thinking. I remember SFRs at $300K in the late 90s, adjusting for inflation, that would be $400K today.
Over the next five years, I expect about 15%. Provided we get fuel and food undercontrol, which I’m starting to have doubts about.
no_such_reality
ParticipantIf he works in national security and gets foreclosed upon.. he is going to have some real tough times with his clearance!!.
He said he works for Homeland Security. That’s not national security, that’s the TSA and likes. IMHO, the bottom of the barrel, (no offense to OP’s lawyer’s friend).
Homeland Security was basically a giant fraud of an employment act and Government graft seasion for corporations and the marginally employable.
no_such_reality
ParticipantIf he works in national security and gets foreclosed upon.. he is going to have some real tough times with his clearance!!.
He said he works for Homeland Security. That’s not national security, that’s the TSA and likes. IMHO, the bottom of the barrel, (no offense to OP’s lawyer’s friend).
Homeland Security was basically a giant fraud of an employment act and Government graft seasion for corporations and the marginally employable.
no_such_reality
ParticipantThe mix has changed. Instead of heavy buying in East and South County, the buying is much slower and a larger percentage of it is in North County Coastal and Inland.
Thus the median goes up when measured area wide. The NAR also provided a solution in their statement the other day where they admitted that the condo and entry level market is virtually no existant.
Hence, if before, the market was one entry, one middle-class and one upper middle class and now it’s just one middle-class and one upper middle class, the medium moves up, even if each home get’s less.
no_such_reality
ParticipantThe mix has changed. Instead of heavy buying in East and South County, the buying is much slower and a larger percentage of it is in North County Coastal and Inland.
Thus the median goes up when measured area wide. The NAR also provided a solution in their statement the other day where they admitted that the condo and entry level market is virtually no existant.
Hence, if before, the market was one entry, one middle-class and one upper middle class and now it’s just one middle-class and one upper middle class, the medium moves up, even if each home get’s less.
May 16, 2007 at 10:41 AM in reply to: DR Horton Slashes prices $100k in Murrieta, Menifee, Wildomar and more in … #53021no_such_reality
ParticipantThat makes sense, renting isn’t easy if you need space and it’s hard to come by up that way.
I was looking at another blog at a posting on Redondo. I knew prices were insane, but we’re talking really insane. It’s still 2 miles from the beach, Redondo and a 50% drop will still leave anything bigger than 1200 sq ft above the $800K mark.
no_such_reality
ParticipantThanks, just wanted to validate.
For me, the greater interest is in the (new-relist)/(pendings) ratio. It tells us how matched up buyers and sellers are. Pending/inventory tells us how much competition there is.
Assuming pendings represent just those properties that went pending since the last week. While high inventory volume is bad
May 16, 2007 at 9:50 AM in reply to: DR Horton Slashes prices $100k in Murrieta, Menifee, Wildomar and more in … #53013no_such_reality
ParticipantOk, I’m familiar with the area but a little out-dated. I’m really asking to understand the rationale. Is it buy for you to use or buy as investment, I was thinking from your other posts you’d be doing it as an investment, maybe I’m crossed over on posters.
I know there’s been a massive influx of commuters and some business is moving that way, but the most recent census numbers still shows median family income of around $45,000. As of 2005, it was running about a 6% vacancy rate on housing. Had substantial speculation, and have the impression that many buy out there because they can’t buy more in LA. However, that’s changing as Val become a center of it’s own.
May 16, 2007 at 9:15 AM in reply to: DR Horton Slashes prices $100k in Murrieta, Menifee, Wildomar and more in … #53009no_such_reality
ParticipantReally? Your buy point is $470K with a 2% tax and HOA?
no_such_reality
Participantsdr, just to be clear, care to define what you are dropping in each category? i.e. Are the new, new or new and relisted?
Also, probably refresh my memory, the difference between pendings and in escrow?
no_such_reality
ParticipantI’d agree with AN, turnkey is nice, but the primary problem with non-turnkey homes is the owner isn’t accepting the reality that they aren’t turnkey. That the difference between the turnkey and them is $50,000 of hard cash and 3 months or 6 months of having a contractor around the house.
That’s a hard, big hunk of money and time.
What I’ve seen in the OC is turnkey, new kitchen upgrades is $899,000. The one that needs paint, carpet, and has a kitchen from 1977 wants $875,000.
no_such_reality
ParticipantYeah, I know, no American corporation would intentionally employ deceptive marketing tactics …
Actually Bugs, REDC in their disclaimers opening publish the fact that there is a reserve and that they can make multiple consecutive bids until that reserve is met.
As for bear disappointment, that comes from three factors:
1. a very large turn-out (should have been expected in hindsight)
2. multiple reports of fast and heavy bidding (since they’re laced with shills, that also is predictable)
3. indication from our own that went show the properties bidding up to 20% of last valued at price. These last value prices were insane and often not based on current market condition.Once you shift your focus from how much the “buyers” paid to how much the banks made after expenses, it no longer looks so good. IOW, a little time to cool and your perspective shifts from “oh shoot, there’s a mob of buyers waiting to buy just below current prices” to without the hype of the auction, the banks are really going to need to slash REO prices to move them.
Overall, unlike the Bressi Ranch auction which was clearly a failure from the start with homes not making the reserve, this one appeared to make reserves on most. (thanks to the shills).
no_such_reality
ParticipantI’m trying to find out more. I’ll let you know what I learn.
sdr, as long as you’re checking on the expense side, any chance to your friend as an insight into how quickly bidding stopped after reserve was met?
The articles seem to say bidding was pretty fast & furious, yet as your contact indicated, final bid wasn’t great in the lender’s mind. I’m wondering if on top of the expenses, what the lenders really aren’t happy about is that bidding only got as high as it did because the audience had plenty of shills to drive bidding?
no_such_reality
ParticipantI’ve been percolating on this. I suspect they’ve lost a lot a skin.
The massive media campaign, the auction set-up, rumors that some of the homes were touched up, my guess is that was all paid up front from the lenders.
They’ve already done the foreclosure process, so that’s sunk money, now they get the net of the bid (the 5% buyer’s premium goes to the auctioneer). Subtract commissions, overhead of the media campaign and other up front costs and I’d guess they lost another 10% maybe more.
Look at sdr’s condo example and with a bid of $240, they may only be bringing $210 home. For a place that isn’t trashed, that’s a step discount from $310. If they’d have blown it straight out, at $250K, they’d have brought $242k home themselves.
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