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SD Realtor
ParticipantPersonally I am pessimistic as well. I believe that the annual figures that discuss year over year statistics do not bear out how really tough it is. I think John Hokkanens post about months of inventory is particularly accurate. Lagging indicators (in my opinion) are indicators that do not accurately reflect what is happening on the market. For instance the July year over year numbers just came out. The San Diego county numbers reflected the median price as being down 1.8% from July 2005. However sales are down over 30%. Also think about it. July sales mean that the properties went into escrow back in May or June…. Essentially the market is much worse then that. So not only is the median price a lagging indicator it is essentially innaccurate.
Your idea about submitting lowball offers is not a bad idea. Expect most people to decline. However ALL IT TAKES IS 1 to be accepted. I liked Powaysellers strategy. Even though she broke my heart and mentioned that other agent… (j/k PS)
Seriously though, I would really try to exercise patience if I were you. While you will get a good deal with the manner you plan to operate under, I believe the simple risk verses reward plays out for you to wait. The risk that the prices will go up again is quite low compared to the reward that you could realize.
I believe the return on something as simple as a CD will by far outperform housing appreciation over the next few years. I really believe it is a no brainer.
ParticipantI agree with Daniels view… a long slide for a long time… Resellers don’t get it and won’t get it… unlike bad stocks that they finally sold off in the dot come burst they actually can live in thier house assuming they can make the payments. Also I believe the recession will really slow down the NOD rate…People will scrape to get by and the low rates will help them do that… it will be an ugly slow road down…. The developers however get it and will continue to lead the market with lower prices… I only wish resellers had the insights of developers…
Powayseller – To be honest I am confused that you financed 97% of your home without PMI. To be honest I am not sure how you pulled that off… You sure you did not have an impound account for tax and pmi? What kind of loan did you get? Who did you get it through? Anyways, the PMI laws have not changed at all. So you have me stumped on this. Most everyone gets around it with a second or a heloc… if they cannot come up with 20% down.
ParticipantPerry you have to many useful insights… whenever you are ready to earn some money on the side call me up! hehehehhe…you are oh so correct about the emotional factors involved in a purchase or a sale.
SDAppraiser thanks for pointing out that the previous post. I remember putting it up there a few weeks ago. I agree with you that the there are strategic reasons behind the price range.
I put my posting up previously to try to root out the source of the value price range. At the time I thought it was prudential and by the postings in this post I think that may be true.
I think the key that we all seem to agree on is if you price your house correctly it will sell. If a value price range is going to be used I really do not understand a price range that is more then a few percent of the total. For instance a 675k-750k price range seems to be an excessive spread.
Anyways to each his own.
ParticipantJust a quick comment about inventory and the buyer sentiment. As a Realtor I cannot overstate the effect of the buyers sentiment changing. Personally, this has been the most profound change. Now I am not a 20 year veteran agent but I believe the change in attitude is much more responsible for the declining sales then anything else. While alot of sellers are still clinging to outdated pricing levels, there are a good majority who have priced more agressive. Mortgage rates are down significantly from the spring as the 10 year has rallied. Yet sales are SUBSTANTIALLY down. The fact is that the psychology is much different. Buyers do not feel they will be left out of the market by waiting.
Inventory levels should actually drop over the next few months due to seasonal factors. The heaviest listing volume always occurs in the spring. So in the fall and winter you see new listings decline and stale listings drop off due to cancellations and expirations. You also get people who gave up and decided to rent out thier home or sit tight. I feel the tide is going out (inventory wise) but the fun really begins in February when it comes back in. It would not surprise me to see it dip down below 20k into the high teens even. However don’t delude yourself, analyze the data and if the drop in inventory is not matched by a gain in sales then that would confirm that this is simply seasonal.
I believe that the months inventory is a great measure but it can be misleading when there are inventory fluctuations that are seasonal. So even that months (the fall months)inventory may be somewhat optimistic as we tread into the fall.
BTW Chris Johnston – If you ever need a lackey I am your man!
ParticipantSDAppraiser thanks for pointing that out. This is the other SD Realtor by the way. You are all to correct about the zoning… I think it was the late 90’s when all the new zoning designations were updated correct? Anyways I pointed out in my posting that density restrictions would most likely put the kybosh on the duplex idea anyways, which you correctly confirmed.
You do bring up a very good point to all buyers. Just because the listing may say a certain designation, do your homework and make sure of the updated designation. Also don’t just rely on the designation if you plan to do a bit of development. Do your homework first.
ParticipantFrom what my oil friend says…
Alot of the problems are and have been known by BP. In this case these particular problems are due to corrosiveness in the pipeline and that there is a threshold before there is a mandatory point of repair. In this particular section for this particular corrosion I believe it was 80%. In other words the corrosiveness level hit 81% thus the policy of BP at that point was to shut it down. There are several steps that are routinely taken for on going maintenance including pumping lots of anticorrosion chemicals through the line to slow down the corrosion process. Additionally they have monitors along the lines, take xrays and other steps for checking the rate of deterioration.
With that said I cannot help but to agree with rankandfiles last paragraph…
Participantlindismith –
I think the answer is that we don’t really know at this point. If you want to go buy a place, AND you are committed to stay for at least 7 years, (7 is a guess, 3 more bad years followed by 4 years to maybe get back up… and lots of people here will refute that… guys it is just a guess!)then you will be okay…
One thing that I do believe alot of us bears kind of overlook is quality of life. Look, if you want to live in a home and have things that you just cannot get from renting, AND you are HAPPY with it, AND you will not have to leave or relocate… then yeah you can go ahead and buy. Make sure you can afford it, don’t overextend, lowball the heck out of the seller, and get the best deal you can. Then enjoy life…
Also lindi you don’t LOSE money until you sell… so as long as you are living there then you are okay.
(I am sure the forum regulars are ready to string me up for the words I just spoke) so please read on…
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Now my PERSONAL advice to you would be to try to sit tight as long as you can. I think that if you could hang for say 2 years, you may be able to buy a nice 2 bedroom in the future for the same price as a 1 bedroom today. Deep down I do believe the correction will be of a more substantial magnitude. When you look at it from a risk perspective the risk of waiting is minimal to none, while the reward for waiting is substantial (perhaps) monetarily but not in a personal quality of life way (you would still be renting which does not sound palatable to you).
Though quality of life does improve with money…
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Along the lines of rausting people who don’t read the primer or who have differing opinions and don’t present thier arguments based on facts…. I also welcome thier postings and I try to respond in a measured response. I think it takes guts to come into this forum as an optimistic poster. I fundamentally agree that all of the data seems to be pointing towards some pretty rough times ahead. I am in the same boat as alot of us… I need to buy a home and I am currently renting. Yet as much as I want the pricing to come down and come down hard, I don’t WANT the economy to crash hard or for rampant unemployment. I know the data screams otherwise and so when people come in with optimistic angles it is like shooting fish in a barrel. I think one misconception about bearish points of views is that people think we WANT bad things to happen. That we would rather have bad things happen then not and stand corrected. I do not think this is true for the majority of us.
ParticipantAn experienced developer could most likely do something. It is real thin lot. It would not be an easy development either. They have no parking, nor is there any alley access behind the lot. So it would seem to me that if they were gonna build a duplex they would need to scrape the home, dig out the lot for underground parking and build. Perhaps they could get away with parking in the front of the lot and push the residence to the back. They would also have to watch out for density limitations.
Either way it is definitely not a job for beginners.
The agent that represented them was Kelly, an HUS franchise owner… I know him as well and he is generally a good guy… however I will admit this was not a good deal for these people…specially if you look at how long the home was on the market when they bought it. Shame on him…
ParticipantYeah a friend of mine who has fairly significant investments in domestic small wells called me last night on this topic. He said it is approximately 16 miles of pipeline. There is no word on the accessibility of the segments that need repair. If the accessibility is tough that could prolong the repair time significantly.
Of course BP actually has 3 pipelines up there and the other 2 are undergoing repairs right now… Well imagine that!
Let’s keep our fingers crossed for calm weather in the gulf as having a hurricane roll through there would not help oil prices…
Participantsdsundevil from where I sit, using the term “going to be a price correction” is incorrect. The fact is that the price corrections that are presently in effect are already of the single to double digit variety. We are already seeing the prices of solds in many neighborhoods down. So to speak of an upcoming correction is already an incorrect statement.
Also have you been watching the pricing on the new developments throughout the county?
What is true is that the corrections are of varying degrees dependent primarly by zip code and type of housing.
The frustrating thing for me as a Realtor are those that “don’t think it will be bad”. If you are not a seller, or a developer, then I wonder where you are gathering your opinion from. Perhaps other Realtors have differing thoughts but I have seen a very different buyer psychology emerging. Buyers are out there don’t get me wrong. However speculators are long gone, and easy money is now being replaced by smart money for the most part.
I guess we will all see how it pans out… Yet the data is already showing a clear depreciation that has happened, not going to happen.
Participantrankandfile –
The MLS contains all of the information about expireds, cancelleds and withdrawns. I am not sure how much of the MLS database is made available to third parties. For instance, the standard on line MLS providers like Realtor.com and those types receive active listings…Now someone like Zillow, I am not sure if they receive sold listings from the MLS or if they compile it from the county.
As a Realtor, (joining SDAR and paying dues) access to the MLS is one of the benefits. Since the MLS is really a private database, I do not believe the information is public domain.
Now I would assume Dataquick purchases MLS data to compile all of thier stats as well. Again, whether they purchase all of the other categories besides actives, pendings, solds is speculative. Maybe they do but they decide not to publicize it?
Sorry if the answer is to long winded…
Participanteq – I am not sure what sort of development plans they had…Either way (in my opinion) it was a bonehead investment and they are a typical example of people doing something that they shouldn’t have done….
Funny though because the owner called me this morning with a bunch of questions.
So it turns out that it is a short sale. The spoke to the bank last week who referred them to Coldwell Banker. The seller though was really concerned about the short sale and asked me if I knew about short sales. She called me cuz she felt that she had not received as much information on the process as she would have liked.
It turns out neither the realtor nor the lender told her about the tax liability of the short sale. Since they have 2 mortgages she had no clue about first position or anything like that. She said the realtor and the lender gave her and her husband a bunch of stuff to sign, most of which she didn’t understand.
It was all really sad to hear as these are nice, but naive people.
I told her that she should get a copy of everything she signed, and bring all of the unsigned docs to her attorney and her CPA. I also said that she should work with her realtor and tell her realtor that she needs more explanation on these sorts of issues. I have heard of her realtor and I believe she is a good realtor, perhaps she just needs to be a bit more thorough in her explanation of how things work with these particular sellers.
ParticipantThe home is on Diamond in between Jewell and Lamont… The couple that bought it had plans to redevelop it originally.
August 6, 2006 at 10:00 PM in reply to: Mortgage Lender to Answer Questions that You May Have #31009ParticipantSorry about the four postings… My connection was flaky…Irvinesinglemom I am a realtor and I am renting… You know when realtors are renting then that says something!
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