We all are aware of the We all are aware of the extreme low inventory right now. Yet, prices haven’t really move up (if at all), which cause owners (who have equity) to hold off from listing their house. So, who will win the stand off? Will buyers win and supply will increase again due to sellers giving in. Or will the seller win and price shoot up. Which will increase listings, but selling price will also be higher.
UCGal
April 12, 2012 @
8:28 AM
I would suggest that sellers I would suggest that sellers need to be divided into two camps. Those that need to sell (financial or relocation reasons) vs folks who have no need to sell but *want* to sell… to downsize or move up… whatever.
The folks who need to sell will lose out. Buyers will win.
The folks who don’t need to sell but just want to sell can hold out – and will win in the end.
Example – house on my street… owners are long term with high equity. List price was about $150k off peak price, but about $100k above zillow price. Listing was active for about 8 months when they gave up. Lots of showings, no offers. After they delisted a party that had seen it when it was active approached and made an offer. It’s now pending. Apparently (won’t know for sure till it closes) the offer was close to the list price.
In this case the sellers won. They didn’t need to accept a lower price, so they didn’t. But now they can downsize and simplify their lives.
bearishgurl
April 12, 2012 @
8:29 AM
Sellers with substantial Sellers with substantial equity have more staying power than they are given credit for. If they also have unfettered access to retirement funds (over age 59.5), then their choices as to how to dispose of a property they don’t want to live in anymore increase.
I think there will be more rental SFR’s available if the “shadow inventory” continues to trickle in for years along with SS’s being the predominant listing. Both hold appraisals down, making it difficult for a buyer to get financing to pay the price a seller needs/desires, even if they thought the property was worth what the seller would accept and was willing to pay it.
Otherwise, buyers will have to come up with more downpayment and waive the appraisal contingency. This is only doable for a fraction of them.
The-Shoveler
April 12, 2012 @
9:14 AM
Neither it will be the Neither it will be the Builders !!
When the builders start to build again, they will set the price for the area they build in what will truly be the new normal market (whenever it is we ever get there which may be a while yet).
NOTE: NOW IS NOT NORMAL (just in case you were wondering).
Essentially the move-up market is completely dead until one day in the (maybe far) future the builders start to really build again.
outtamojo
April 12, 2012 @
9:16 AM
Wow, so far 90% favor sellers Wow, so far 90% favor sellers – which leads me to another poll….
an
April 12, 2012 @
9:21 AM
The-Shoveler wrote:Neither it [quote=The-Shoveler]Neither it will be the Builders !!
When the builders start to build again, they will set the price for the area they build in what will truly be the new normal market (whenever it is we ever get there which may be a while yet).
NOTE: NOW IS NOT NORMAL (just in case you were wondering).
Essentially the move-up market is completely dead until one day in the (maybe far) future the builders start to really build again.[/quote]
Why does it have to be neither when the builders win? If builder set price high, then sellers win too. If builders set price low, then buyers win. If builder doesn’t build, you see the stand off lasting forever? You see buyers renting forever in the stand off and seller stuck in their house till they die?
Wah-Wah
April 12, 2012 @
9:22 AM
go ahead and have your “war”. go ahead and have your “war”. I’m gonna sit this one out til year end
🙂
an
April 12, 2012 @
9:24 AM
Wah-Wah wrote:go ahead and [quote=Wah-Wah]go ahead and have your “war”. I’m gonna sit this one out til year end
:)[/quote]
You can’t sit this one out. If you’re not buying, then you’re part of the war. If you are buying, you’re also part of the war 🙂
Wah-Wah
April 12, 2012 @
10:27 AM
AN wrote:Wah-Wah wrote:go [quote=AN][quote=Wah-Wah]go ahead and have your “war”. I’m gonna sit this one out til year end
:)[/quote]
You can’t sit this one out. If you’re not buying, then you’re part of the war. If you are buying, you’re also part of the war :-)[/quote]
what? this game is rigged 🙂
kidding aside, let me ask “potential” buyers out there. Why buy now unless you think price AND/OR interest rate will go up drastically by year end.
bearishgurl
April 12, 2012 @
11:00 AM
Wah-Wah wrote:AN [quote=Wah-Wah][quote=AN][quote=Wah-Wah]go ahead and have your “war”. I’m gonna sit this one out til year end
:)[/quote]
You can’t sit this one out. If you’re not buying, then you’re part of the war. If you are buying, you’re also part of the war :-)[/quote]
what? this game is rigged 🙂
kidding aside, let me ask “potential” buyers out there. Why buy now unless you think price AND/OR interest rate will go up drastically by year end.[/quote]
I’m not yet a “potential buyer” but I think if a buyer has a 30% downpayment saved (for “wiggle room”), can qualify for a sub 4% mortgage, find a property they really want and its seller will accept their offer then they should buy it.
It should be a property that is well-located and that they are willing to own at least ten years (whether or not they live there the entire time).
If the buyers have to depend on FHA/VA financing (due to lack of sufficient downpayment), then it’s not worth it to buy now, IMO. The fees and closing costs on these programs have skyrocketed in recent months and years and a buyer depending on them isn’t likely to find any sellers willing to make them a deal and also go along with the pesky “requirements” of these programs or help them with closing costs.
outtamojo
April 12, 2012 @
11:01 AM
Wah-Wah wrote:AN [quote=Wah-Wah][quote=AN][quote=Wah-Wah]go ahead and have your “war”. I’m gonna sit this one out til year end
:)[/quote]
You can’t sit this one out. If you’re not buying, then you’re part of the war. If you are buying, you’re also part of the war :-)[/quote]
what? this game is rigged 🙂
kidding aside, let me ask “potential” buyers out there. Why buy now unless you think price AND/OR interest rate will go up drastically by year end.[/quote]
What if you feel like there will be less selection later on?
bearishgurl
April 12, 2012 @
11:07 AM
outtamojo wrote:Wah-Wah [quote=outtamojo][quote=Wah-Wah][quote=AN][quote=Wah-Wah]go ahead and have your “war”. I’m gonna sit this one out til year end
:)[/quote]
You can’t sit this one out. If you’re not buying, then you’re part of the war. If you are buying, you’re also part of the war :-)[/quote]
what? this game is rigged 🙂
kidding aside, let me ask “potential” buyers out there. Why buy now unless you think price AND/OR interest rate will go up drastically by year end.[/quote]
What if you feel like there will be less selection later on?[/quote]
Sorry to “butt in” here again, but a buyer doesn’t NEED “selection.” A buyer only NEEDS one property he/she would like to own, can afford and where the seller will accept his offering price and terms.
Why don’t you ask the young Silicon Valley buyers of today if they are worried about “selection?”
outtamojo
April 12, 2012 @
12:24 PM
bearishgurl wrote:outtamojo [quote=bearishgurl][quote=outtamojo][quote=Wah-Wah][quote=AN][quote=Wah-Wah]go ahead and have your “war”. I’m gonna sit this one out til year end
:)[/quote]
You can’t sit this one out. If you’re not buying, then you’re part of the war. If you are buying, you’re also part of the war :-)[/quote]
what? this game is rigged 🙂
kidding aside, let me ask “potential” buyers out there. Why buy now unless you think price AND/OR interest rate will go up drastically by year end.[/quote]
What if you feel like there will be less selection later on?[/quote]
Sorry to “butt in” here again, but a buyer doesn’t NEED “selection.” A buyer only NEEDS one property he/she would like to own, can afford and where the seller will accept his offering price and terms.
Why don’t you ask the young Silicon Valley buyers of today if they are worried about “selection?”[/quote]
Well, that’s new one- “buyers don’t need selection” lol.
bearishgurl
April 12, 2012 @
1:50 PM
outtamojo wrote:bearishgurl [quote=outtamojo][quote=bearishgurl][quote=outtamojo]What if you feel like there will be less selection later on?[/quote]
Sorry to “butt in” here again, but a buyer doesn’t NEED “selection.” A buyer only NEEDS one property he/she would like to own, can afford and where the seller will accept his offering price and terms.
Why don’t you ask the young Silicon Valley buyers of today if they are worried about “selection?”[/quote]
Well, that’s new one- “buyers don’t need selection” lol.[/quote]
What I’m trying to say here, outtamojo, is that too many properties to look at is just confusing. If a buyer REALLY knows what they want and exactly where they want it (and possibly has a second micro-area in mind to shop in, also), all they have to do is wait until something comes on the market that they can afford and make a good offer on it. If they need to fix it a little after moving in or eventually remodel it room-by-room to their liking, then so be it!
In other words, if one needs a lot of properties to look at in multiple zip codes before making a buying decision, he/she does not really know what and where they want to buy in and they are too confused to buy until they figure all this out.
As an aside, I just perused 92106, 92116, 92115, 91941 and 92109 on SDL looking for representative “mid-century” ranch-style listings and if there is actually a shortage of SFR’s for sale in those zip codes, I didn’t notice it.
The-Shoveler
April 12, 2012 @
9:32 AM
AN wrote:The-Shoveler [quote=AN][quote=The-Shoveler]Neither it will be the Builders !!
When the builders start to build again, they will set the price for the area they build in what will truly be the new normal market (whenever it is we ever get there which may be a while yet).
NOTE: NOW IS NOT NORMAL (just in case you were wondering).
Essentially the move-up market is completely dead until one day in the (maybe far) future the builders start to really build again.[/quote]
Why does it have to be neither when the builders win? If builder set price high, then sellers win too. If builders set price low, then buyers win. If builder doesn’t build, you see the stand off lasting forever? You see buyers renting forever in the stand off and seller stuck in their house till they die?[/quote]
Well until they are forced, or feel there is something worth moving to. I say the builders because they will be the price setter when there is more than just distressed home sales.
an
April 12, 2012 @
9:38 AM
The-Shoveler wrote:AN [quote=The-Shoveler][quote=AN][quote=The-Shoveler]Neither it will be the Builders !!
When the builders start to build again, they will set the price for the area they build in what will truly be the new normal market (whenever it is we ever get there which may be a while yet).
NOTE: NOW IS NOT NORMAL (just in case you were wondering).
Essentially the move-up market is completely dead until one day in the (maybe far) future the builders start to really build again.[/quote]
Why does it have to be neither when the builders win? If builder set price high, then sellers win too. If builders set price low, then buyers win. If builder doesn’t build, you see the stand off lasting forever? You see buyers renting forever in the stand off and seller stuck in their house till they die?[/quote]
Well until they are forced, or feel there is something worth moving to. I say the builders because they will be the price setter when there is more than just distressed home sales.[/quote]builders are sellers. Sellers do not set prices, buyers do.
The-Shoveler
April 12, 2012 @
9:47 AM
So why do you thing they
So why do you thing they STOPPED building ?
an
April 12, 2012 @
9:49 AM
The-Shoveler wrote:So why do [quote=The-Shoveler]So why do you thing they STOPPED building ?[/quote]
Because buyers STOPPED buying.
The-Shoveler
April 12, 2012 @
10:00 AM
AN wrote:The-Shoveler [quote=AN][quote=The-Shoveler]So why do you thing they STOPPED building ?[/quote]
Because buyers STOPPED buying.[/quote]
Exactly
They stopped buying at the price the builders could make a profit, there are plenty of buyers out there right now! it’s just they only want a steal of a deal.
Like I said, now is NOT normal.
And SD is blessed, there is still quite a bit of really desirable land to build on compared to someplace like L.A.
bearishgurl
April 12, 2012 @
10:13 AM
The-Shoveler wrote:AN [quote=The-Shoveler][quote=AN][quote=The-Shoveler]So why do you thing they STOPPED building ?[/quote]
Because buyers STOPPED buying.[/quote]
Exactly
They stopped buying at the price the builders could make a profit, there are plenty of buyers out there right now! it’s just they only want a steal of a deal.
Like I said, now is NOT normal.
And SD is blessed, there is still quite a bit of really desirable land to build on compared to someplace like L.A.[/quote]
Shoveler, you said yourself in a recent thread that this “really desirable land” is situated in the far reaches of North County, i.e. NE Esco, Fallbrook, Bonsall.
Land in the far reaches is not necessarily “really desirable” to those who have to commute daily to work centers and those who wish to live close to amenities, airports and good medical care.
bearishgurl
April 12, 2012 @
10:08 AM
AN wrote:The-Shoveler [quote=AN][quote=The-Shoveler]So why do you thing they STOPPED building ?[/quote]
Because buyers STOPPED buying.[/quote]
I think they stopped building because they couldn’t make a profit anymore. They had to charge more per unit than the current market would bear and since about 2000, saddle all those units with exorbitant MR, while drastically reducing lot size. The cost of infrastructure (demanded by new-homebuyers) was higher than the up-front bond money the builders rec’d from the CFD agencies. The prices they charged from 2003 to 2008 in new subdivisions were so high (ESP in conjunction with high MR) that it left these areas decimated with distressed properties.
Except for maybe the subdivisions where the home size exceeds about 3500 sf, most of the new homes in recent SD County subdivisions appear to have been sold to first-time buyers and young families which may or may not be one and the same.
Older repeat buyers with money do NOT usually gravitate to new construction in the stix where the units are situated six feet apart and they do not need builder assistance with financing. They have many more choices in life.
SD Realtor
April 12, 2012 @
10:09 AM
You forgot a category for You forgot a category for winners:
Wall Street/Institutional Investors.
bearishgurl
April 12, 2012 @
9:57 AM
The-Shoveler wrote:Neither it [quote=The-Shoveler]Neither it will be the Builders !!
When the builders start to build again, they will set the price for the area they build in what will truly be the new normal market (whenever it is we ever get there which may be a while yet).
NOTE: NOW IS NOT NORMAL (just in case you were wondering).
Essentially the move-up market is completely dead until one day in the (maybe far) future the builders start to really build again.[/quote]
I don’t agree that builders set pricing. As you know, builders, IF they decide to build, are now left with the least-desirable land and will have to form CFD’s and issue MR bonds in order to obtain $$ for the infrastructure to service that land. WHY is this (remaining) land the least-desirable? Because the more-desirable land has already been built on. There are no sold comps nearby that “least-desirable” land with which to use to justify or set pricing. They will have to price the units in accordance with what their particular buying market will pay.
For this reason, I don’t believe the move-up market is dead. Not EVERYONE “moving up” wants *new* or *newer.* Some want sit-down ocean views and/or walking distance to well-known amenities. You can’t get these perks with new construction unless you are buying an infill spec home.
poorgradstudent
April 12, 2012 @
11:31 AM
No one?
You’ve got sellers No one?
You’ve got sellers stuck in properties they can’t get away from. You’ve got buyers who want to take advantage of low interest rates and move from renter to owner status who can’t find a property at a price they can afford.
I don’t see anyone “winning” until the overall economy improves more.
briansd1
April 12, 2012 @
12:22 PM
I voted sellers, but… I I voted sellers, but… I would qualify my vote as: sellers with substantial equity who acquired their properties at non-peak prices.
Sellers who bought or cashed-out refinanced near the peak are screwed anyway.
You’ve got sellers stuck in properties they can’t get away from. You’ve got buyers who want to take advantage of low interest rates and move from renter to owner status who can’t find a property at a price they can afford.
I don’t see anyone “winning” until the overall economy improves more.[/quote]
I didn’t specify time frame. So, unless you think we’ll stay at a stand off indefinitely, someone will win.
poorgradstudent
April 12, 2012 @
3:45 PM
AN wrote:I didn’t specify [quote=AN]I didn’t specify time frame. So, unless you think we’ll stay at a stand off indefinitely, someone will win.[/quote]
I think the standoff will last until the economy improves enough for buyers to be willing to meet sellers at their psychological sell point/acceptable loss point, coupled with inflation helping to dilute the real dollar cost a bit (i.e. 500K in 2012 is worth less than 500K in 2009 was).
I suppose if I had to pick, I’d say buyers will “win”. Motivated sellers will lose, unmotivated sellers will stay put. Motivated buyers are a nearly extinct species, and unmotivated buyers like myself and investors will continue sitting on the sidelines and only swooping in on the best deals. Realtors will continue suffering.
an
April 12, 2012 @
4:43 PM
poorgradstudent wrote:I think [quote=poorgradstudent]I think the standoff will last until the economy improves enough for buyers to be willing to meet sellers at their psychological sell point/acceptable loss point, coupled with inflation helping to dilute the real dollar cost a bit (i.e. 500K in 2012 is worth less than 500K in 2009 was).
I suppose if I had to pick, I’d say buyers will “win”. Motivated sellers will lose, unmotivated sellers will stay put. Motivated buyers are a nearly extinct species, and unmotivated buyers like myself and investors will continue sitting on the sidelines and only swooping in on the best deals. Realtors will continue suffering.[/quote]
Your two paragraphs contradicts each other. If buyers will eventually come up to meet the sellers’ desired price, then the seller win. But then you say you’d pick buyers will win. In order for buyers to win, those sellers who would like to sell would have to eventually come down to meet the buyers’ desired price.
Yes, motivated sellers will lose. That’s a given. I’m more interested in the RE market as a whole vs a specific group with the market. Motivated buyers are not a nearly extinct species. If they are, then we won’t see flipped houses AND fixer flying off the market. Price are not moving up because there’s not enough motivated buyers above the current market price. Which, in essence is what I’m trying to gauge with this poll. Right now, there are a pool of buyers who don’t have houses to buy (looking at the multiple offers that we’re starting to hear about). The question is, will they sit tight at the current price or will they give in to the lack of supply and increase their bids on the next time around? If they sit tight or even reduce their bid price (this require the entire buyer pool to participate), then buyer will win, because price will drop. However, if they start to increase their bid price, then seller win.
bearishgurl
April 12, 2012 @
5:38 PM
AN wrote:…Yes, motivated [quote=AN]…Yes, motivated sellers will lose. That’s a given. I’m more interested in the RE market as a whole vs a specific group with the market. Motivated buyers are not a nearly extinct species. If they are, then we won’t see flipped houses AND fixer flying off the market. Price are not moving up because there’s not enough motivated buyers above the current market price. Which, in essence is what I’m trying to gauge with this poll. Right now, there are a pool of buyers who don’t have houses to buy (looking at the multiple offers that we’re starting to hear about). The question is, will they sit tight at the current price or will they give in to the lack of supply and increase their bids on the next time around? If they sit tight or even reduce their bid price (this require the entire buyer pool to participate), then buyer will win, because price will drop. However, if they start to increase their bid price, then seller win.[/quote]
This is quite a conundrum, AN, and it is interesting that you are soliciting opinions on it here.
I feel that when semi-motivated buyers (who are currently renting or recently sold and ARE qualified to buy but currently don’t want to pay anywhere near market value) decide seriously that they want and need a family home, they will begin to look more carefully at resales comparing those in the same area with each other as to improvements completed, noise levels, position on street, views, etc. This is a little harder to do with an area is not on tract or on a tract which is so old that there are almost no original floor plans remaining. These buyers will then make realistic bids based only upon nearby “equity” resales, always keeping in mind location and flexibility of seller. Maybe some will be able to stretch to get into an area they only dreamed about by asking the seller to carry some or all of the paper.
The hard-core “bargain hunters” will keep playing the SS game until they land one or tire of it and turn into “semi-motivated buyers” :=0
The dearth of building in the near future will help with the “serious consideration of resales” as these buyers won’t have their typical “out” to flock to distant new home projects (after quickly viewing 2-3 *used* homes) and succumbing to the developer’s salespeople who will figure everything out for them.
Unmotivated buyers (who likely never owned anything here, thus will never be satisfied with what they can purchase in SD Co for a particular price, even if they can afford it) will continue renting or move away and buy elsewhere. That’s the way its always been.
Equity sellers hold the cards here. The aged or ill sellers who MUST move (to assisted living or children’s homes and their children don’t want the parent’s home) likely WILL meet bargain-hunting buyers halfway, ESP if they are moving out of county/out of state. Sellers not yet ready to retire/downsize or ready-but-flexible with the date will hold fast to their price because selling now is a want but not a need and they CAN!
CA renter
April 13, 2012 @
7:26 PM
It depends on the It depends on the timeframe.
I believe inventory is so low because with the artificially low interest rates…
1. PITI payments are close to rents which makes it easier for “distressed” sellers to refi and/or rent out their underwater homes (especially with the effective elimination of LTV ratios on refis) instead of having to sell/foreclose/short sale.
2. It makes it easier/more tempting for renters to buy IF they are financing the majority of the purchase and the PITI payments are close to rent.
3. It makes it more tempting for investors (or buyers of primary residences with a lot of cash earning close to 0%) who are having a very difficult time earning anything on more “traditional” investments — that’s why we’re hearing so much about the all-cash offers.
If interest rates rise, the game changes in every one of those scenarios.
Until/unless interest rates rise, this game can go on for a long, long time. The game changer is interest rates, IMHO.
If I were a potential seller, I would be listing our house TODAY.
Short term, sellers win. Long term, buyers win.
sdduuuude
April 13, 2012 @
11:24 PM
+1 to CA Renter’s post +1 to CA Renter’s post immediately above.
sdrealtor
April 14, 2012 @
7:47 AM
But the game doesn’t change But the game doesn’t change for all of them if interest rates rise. People who refied both with and without equity now have historically low rates locked for 30 years. Renters who buy have fixed rates and housing costs. If interest rates rise that will likely be due to inflation which will make their home an even better investment. Investors would also reap the benefit of higher rents.
What changes is the situation for future buyers that don’t benefit from current environmental conditions. The low rates buy everyone time. Over time the next big thing will eventually pop up and wash this all away. That’s the way the real world works in contrast to economic theories. Lather….rinse….repeat
If I am a non distressed seller I don’t definitely see a reason to list now. I see a reason to watch and wait. The worst has passed. Locals who have witnessed RE cycles have seen how quickly and by how much prices can rise. Not predicting that here but I would be a wait and watcher myself.
CA renter
April 14, 2012 @
6:12 PM
sdrealtor wrote:But the game [quote=sdrealtor]But the game doesn’t change for all of them if interest rates rise. People who refied both with and without equity now have historically low rates locked for 30 years. Renters who buy have fixed rates and housing costs. If interest rates rise that will likely be due to inflation which will make their home an even better investment. Investors would also reap the benefit of higher rents.
What changes is the situation for future buyers that don’t benefit from current environmental conditions. The low rates buy everyone time. Over time the next big thing will eventually pop up and wash this all away. That’s the way the real world works in contrast to economic theories. Lather….rinse….repeat
If I am a non distressed seller I don’t definitely see a reason to list now. I see a reason to watch and wait. The worst has passed. Locals who have witnessed RE cycles have seen how quickly and by how much prices can rise. Not predicting that here but I would be a wait and watcher myself.[/quote]
Yes, the people who can refi into a permanently lower rate/payment will be safe until/unless they “need” to sell at some point. I think short sales will be with us for a long, long time.
I’m referring more to how today’s interest rates are affecting today’s potential buyers and sellers. The low rates both increase demand and suppress new supply today. As a result of today’s rates, some “distressed” inventory can be kept off the market in the future, but I don’t see this stalled market continuing in perpetuity.
As far as the catalyst for higher rates…I’m not as sure as you are that the “inflation” conditions will be beneficial for wages or rents. IMHO, it will be a currency problem that causes the higher rates. Rents and wages **may** increase if there’s a currency crisis, but that’s not at all a given. What we might see is more bartering and black market transactions, not necessarily a more “robust” economy.
Again, whoever gets this right can do very well for him/herself. Nobody knows until it happens, though.
You’ve got sellers stuck in properties they can’t get away from. You’ve got buyers who want to take advantage of low interest rates and move from renter to owner status who can’t find a property at a price they can afford.
I don’t see anyone “winning” until the overall economy improves more.[/quote]
poorgradstudent, I’ll bet there’s plenty of active listings out there that buyers can afford. They just don’t want them. Or they don’t want them unless they can get them for 20-45% under market (priced in line with the recent surrounding SS sold comps). They don’t want them even if they can afford the asking price (or near it) and the “equity” seller(s) made tens of thousands of dollars of recent good and usable improvements on the property.
I feel today’s buyers (ESP FT buyers), for the most part, just don’t want to pay for someone else’s improvements (but will overpay for new construction). The reality is that they don’t realize the cost of materials and labor on a replacement project unless they have actually gotten a contractor bid themselves in the past or gone into Lowes/HD, priced it all for themselves and had their contractors install it.
So after their lowball offer is rejected by a seller, these buyers are free to lowball a neighbor’s listing (with the original LR wall heater and 60 yo leaky windows) where their “lowball offer” may be more successful :=]
Even an 80+ yo seller knows exactly what his/her property is worth on both a sunny day and a cloudy day!
That’s how longtime equity-sellers feel about it.
It’s a free country.
carlsbadworker
April 14, 2012 @
4:50 PM
I am surprised that almost no I am surprised that almost no one mentions the tsunami (or to a lesser degree) of shadow inventory (foreclosure/short sale), of homeowners who live there rent free. Do people think it isn’t substantial anymore? If so, there is NO WAY that the buyer would win. Buyer could win only when there is massive distressed properties in the market.
moneymaker
April 14, 2012 @
5:02 PM
Buyers! Always the buyers, Buyers! Always the buyers, because they have all the power.
sdduuuude
April 15, 2012 @
3:07 PM
Everyone has discussed the Everyone has discussed the inventory side and distressed sellers, but what about the buy side?
Seems to me there is nothing compelling buyers to overpay for houses or bid them up like the pre-bubble years.
The fact that prices are holding with very little inventory suggests that buyers can simply wait.
I guess in some cases, there is some compelling deadline – i.e. you want to buy into a new school district or you need more space with a baby on the way. Perhaps some would like put money into equity instead of rent.
But, what else is there? I don’t think anyone is expecting to be priced out of the market anymore.
Plus, even these “pressured” buyers have options that “distressed” sellers don’t. They can rent, add-on to their current home or just live in a cramped space a bit longer and save a bigger down payment.
It really is a standoff. On both sides you have a small group that is “distressed” – i.e. they need to buy or sell soon – and a larger group that would like to buy/sell but isn’t in a hurry and isn’t willing to do a deal at an unreasonable price.
There is sure to be a Spring bounce, but I still see the buyers holding out longer. Of course, I’m looking down the road a couple years at the effects of the European disaster on the world economy.
If I see the government pull out all the bailout/stimulus/support packages and the market still holds strong, then the true recovery is at hand. As long as they are supporting the market, it means the market just doesn’t have its legs underneath it yet to push those prices up.
sdrealtor
April 15, 2012 @
3:49 PM
It isnt really a stand off It isnt really a stand off that one can put a finger on. With that said, buyers have been programmed over the last few years to want ever lower prices. When they finally get out there they bid low and lose several houses before realizing going home shopping isnt the walk in the park they expected or the buyers market they expected. Prices are creeping up a little but it takes time for them to realize that. By the time they do they have already lost in a rising price scenario. I’m not ready to declare that yet but when it comes alot of buyers will get blindsided.
Dude, the RE market does not operate in laboratory. Lots of unexpected moving parts that are impossible to gauge.
sdduuuude
April 15, 2012 @
9:21 PM
It also seems that investors It also seems that investors have a strong influence on the market right now. Investors have a bottom line to meet and an important part of meeting that bottom line is buying at the right price. In other words, there is a natural cap on prices defined by real fundamentals such as rent, cash-flow, and ROI.
When I see words like “standoff” and when I see prices hold steady with low and shrinking inventory, I think that prices are about where they should be and won’t be moving much, except for seasonal impacts, for a while.
Again – I don’t see many factors pushing many people to sell below market. I don’t see many factors pushing buyers to buy above market.
I don’t operate in a laboratory, either.
an
April 15, 2012 @
9:38 PM
One factor that push people One factor that push people to buy is natural family formation. When you get married and have kids, you tend to buy your 1st home (if you didn’t already buy one). Most people don’t wait. Most people don’t do the math and say, oh, this place should rent for this much, so I’ll only offer that much. They’ll see what available and offer below or at asking price. If they get out bid a few times, they’ll start to increase their bid (over asking), until they get the house they want. On top of the natural family formation, you have the people who walked 3-5 years ago. They’ll have their credit cleared in a couple of years. Some of them will be back in the market. Then there are people who have been waiting (I assume this group of people are small). Then there are people who are currently unemployed who (hopefully) will be employed in the near future. So, I see a potential to have a lot more buyer (more than your natural family formation and immigration).
On the supply side, we are currently see 2 type of inventories. Beat up homes that are selling at deep discount but are being scooped up by cash investor. This is the bulk of the inventory. Then there are the flipped houses from said cash investors. These houses are selling for at market price. I don’t see too many equity sale.
The big question is, is the pent up demand will be enough to clear out the pent up supply. Only time will tell. I would say the next 3 years will be quite interesting to watch.
sdrealtor
April 16, 2012 @
10:53 AM
AN
Agree with all that also. AN
Agree with all that also. You brought up something I havent heard discussed before also. Alot fo people lost homes and had their credit trashed. The first wave of them are now able to qualify for loans. There could be a buyer tsunami crashing into the foreclosure tsunami;) Wouldnt that be fun to watch!!
an
April 16, 2012 @
10:55 AM
sdrealtor wrote:AN
Agree with [quote=sdrealtor]AN
Agree with all that also. You brought up something I havent heard discussed before also. Alot fo people lost homes and had their credit trashed. The first wave of them are now able to qualify for loans. There could be a buyer tsunami crashing into the foreclosure tsunami;) Wouldnt that be fun to watch!![/quote]
Yes, that’d be fun to watch!!! I have my popcorn out, let the game begin :-D.
ltsddd
April 16, 2012 @
1:23 PM
AN wrote:One factor that push [quote=AN]One factor that push people to buy is natural family formation. When you get married and have kids, you tend to buy your 1st home (if you didn’t already buy one). Most people don’t wait. Most people don’t do the math and say, oh, this place should rent for this much, so I’ll only offer that much. They’ll see what available and offer below or at asking price. If they get out bid a few times, they’ll start to increase their bid (over asking), until they get the house they want. On top of the natural family formation, you have the people who walked 3-5 years ago. They’ll have their credit cleared in a couple of years. Some of them will be back in the market. Then there are people who have been waiting (I assume this group of people are small). Then there are people who are currently unemployed who (hopefully) will be employed in the near future. So, I see a potential to have a lot more buyer (more than your natural family formation and immigration).
On the supply side, we are currently see 2 type of inventories. Beat up homes that are selling at deep discount but are being scooped up by cash investor. This is the bulk of the inventory. Then there are the flipped houses from said cash investors. These houses are selling for at market price. I don’t see too many equity sale.
The big question is, is the pent up demand will be enough to clear out the pent up supply. Only time will tell. I would say the next 3 years will be quite interesting to watch.[/quote]
The question is if someone is unable (not qualify) to buy a house in this market (low interest rate, depressed prices, etc…) then what makes you think that it will be any different in 3 years down the road. If anything, I expect the interest rates to be higher by then and if the economy improves so will the housing prices. Those factors alone would probably priced quite a few potential buyers out of the market by then.
I found it interesting that with the current market conditions, it’s not so much where’s the inventory, but rather where are the buyers? Both prices and interest rates are at a very buyer-friendly levels and one would expect they would come out in droves and bid up the prices. But that’s not happening. My guess is that there is very little demand (and no pent-up demands). The few buyers we have are either flippers or investors and even a smaller percentage are due to relocation reasons.
The-Shoveler
April 16, 2012 @
1:35 PM
“I found it interesting that “I found it interesting that with the current market conditions, it’s not so much where’s the inventory, but rather where are the buyers? Both prices and interest rates are at a very buyer-friendly levels and one would expect they would come out in droves and bid up the prices.”
Where are the bidding up buyers ?
Go out and try to qualify for a loan on a home that is more than the foreclosure down the street sold for last month and you will find out.
sdrealtor
April 16, 2012 @
1:52 PM
The buyers are out in droves The buyers are out in droves and the lenders/appraisers are doing a better job keeping prices in check.
Reality
April 16, 2012 @
9:05 PM
sdrealtor wrote:The buyers [quote=sdrealtor]The buyers are out in droves and the lenders/appraisers are doing a better job keeping prices in check.[/quote]
Wow, actually requiring borrowers to qualify. What a concept!
sdrealtor
April 16, 2012 @
9:19 PM
JohnAlt91941 wrote:sdrealtor [quote=JohnAlt91941][quote=sdrealtor]The buyers are out in droves and the lenders/appraisers are doing a better job keeping prices in check.[/quote]
Wow, actually requiring borrowers to qualify. What a concept![/quote]
Nice comment but wholey inaccurate. It has nothing to do with buyers qualifying. It has to do with lenders/appraiser putting a cap on appraised values.
One of my best friends is in ecrow on a house and the appraisal came in close to $100K low. He’s putting about 50% down and shrugged it off. The comps were not comparable to this house. The appraiser told both me and the loan officer he couldnt appraise it any higher based upon the available comps. Then he said he had seen the available comps, they werent close and that in 25 years of doing appraisals he had never seen such a good ocean view, unobstructed, big flat all usable lot, one story, room to expand, no roof tops, no HOA, no CCR’s, no MR’s and no freeway noise. He said while he couldnt appraise it at the sales price he understood the value and would pay it himself. There are 5 back up offers at the same price. Three of which are all cash. If my friend didnt buy this one the next one would be based upon this comp for price and would almost certainly have been inferior. Appraisals dont always tell the real story.
bearishgurl
April 16, 2012 @
11:29 PM
sdrealtor wrote:One of my [quote=sdrealtor]One of my best friends is in ecrow on a house and the appraisal came in close to $100K low. He’s putting about 50% down and shrugged it off. The comps were not comparable to this house. The appraiser told both me and the loan officer he couldnt appraise it any higher based upon the available comps. Then he said he had seen the available comps, they werent close and that in 25 years of doing appraisals he had never seen such a good ocean view, unobstructed, big flat all usable lot, one story, room to expand, no roof tops, no HOA, no CCR’s, no MR’s and no freeway noise. He said while he couldnt appraise it at the sales price he understood the value and would pay it himself. There are 5 back up offers at the same price. Three of which are all cash. If my friend didnt buy this one the next one would be based upon this comp for price and would almost certainly have been inferior. Appraisals dont always tell the real story.[/quote]
It is unfortunate that appraisers and lenders are using the nearby beater SS and REO closed sales to value an equity listing in good shape and especially one in a superior location. That’s why I posted here that it is a good time to buy if the buyer has 30% down – to allow them 10% for “wiggle room” in case they want to buy an equity listing where their lender will only loan them 80% of the most recent nearby “outlier” (distressed) sale.
[quote=bearishgurl]I’m not yet a “potential buyer” but I think if a buyer has a 30% downpayment saved (for “wiggle room”), can qualify for a sub 4% mortgage, find a property they really want and its seller will accept their offer then they should buy it.
It should be a property that is well-located and that they are willing to own at least ten years (whether or not they live there the entire time)….[/quote]
It seems in your friend’s case that 30% would have not been enough. I don’t blame him for putting 50% down and shrugging his shoulders. The other 50% will likely be mortgaged at the lowest rates in history and he managed to get his offer accepted over two apparent all-cash buyers which is no small feat.
Sometimes when or if we see what we have wanted to own our entire lives (like this buyer probably did) and it is located exactly where we wanted it, that, regardless of condition, we have to take that opportunity to make a serious offer and follow through with negotiations. If we initially play games and lowball the seller, we’ll be rejected outright (won’t even get a counter-offer) and, in a market like this, we might come across dozens more properties by years-end and none would match that listing we lost a bid on because we wanted to lowball it in line with recent nearby distress sales.
[quote=bearishgurl][quote=outtamojo]What if you feel like there will be less selection later on?[/quote]Sorry to “butt in” here again, but a buyer doesn’t NEED “selection.” A buyer only NEEDS one property he/she would like to own, can afford and where the seller will accept his offering price and terms.
Why don’t you ask the young Silicon Valley buyers of today if they are worried about “selection?”[/quote]
[quote=sdrealtor]Fvck the stats! You want to be the outlier. You dotn buy stats. You buy one house. Buy the right one at the right price and that doesnt necessarily relate to asking price.[/quote]
This is correct. You only buy one house. It will presumably be what you want or close to it, given your qualifications. Every house varies in value from neighboring houses, especially if they are not on tract or the tract is so old that there are little to no original floor plans left.
You can’t see “value” in black and white stats. For instance, one side of the street was built on fill and has a few cracked slabs (which have had recent distress sales). The other side of the street has all cut lots. Are they on the same tract? Yes. You can only see the “value” when you tour the property yourself and follow your inspector around in escrow.
In this day and age, if you don’t know exactly what you want, where you want it and that you are qualified to buy it, you shouldn’t be wasting agents’ time. As a buyer on a tract, you need to study your micro-areas with tenacity and over time to understand the differences between models and lot size and location. These are REAL TANGIBLE properties and there can be a BIG difference between the same model on a tract, depending on location, lot size, elevation and what was done to it by previous owners. They are NOT paper stats.
If you are shopping custom, if the property has exactly what you want where you want it and you can afford it, make a deal and BUY IT NOW!
I have never seen fixed rates this low in my life and have had fixed mortgages at 10.5%, 9.5%, 7.5%, 6.75% plus T-Bill and COFI ARMS.
Good L@rd!! I’m finding myself actually agreeing with sdr tonite and I’m only drinking seltzer water :-0
sdduuuude
April 17, 2012 @
1:05 PM
bearishgurl wrote:Good L@rd!! [quote=bearishgurl]Good L@rd!! I’m finding myself actually agreeing with sdr tonite and I’m only drinking seltzer water :-0[/quote]
I’m tearing-up over this special moment.
bearishgurl
April 17, 2012 @
1:44 PM
sdduuuude wrote:bearishgurl [quote=sdduuuude][quote=bearishgurl]Good L@rd!! I’m finding myself actually agreeing with sdr tonite and I’m only drinking seltzer water :-0[/quote]
I’m tearing-up over this special moment.[/quote]
sdduuuuude, I think it’s time for you to refill the keg, roll down your garage tarp and invite some of your neighbors over to play pool …. :=}
sdrealtor
April 17, 2012 @
2:46 PM
I am concerned over both of I am concerned over both of your well being at this time. The Dalai Lama is in town and I shall seek spiritual guidance for both of you.
Reality
April 16, 2012 @
11:31 PM
sdrealtor wrote:
Nice comment [quote=sdrealtor]
Nice comment but wholey inaccurate. It has nothing to do with buyers qualifying. It has to do with lenders/appraiser putting a cap on appraised values.
[/quote]
What reason would the banks have to want to keep appraised values low (or realistic)? Maybe to minimize risk?
Minimizing risk should always have been a priority. Just because insanity prevailed from 2001-2005 doesn’t make sane business practices obsolete.
sdrealtor
April 17, 2012 @
12:33 AM
JohnAlt91941 wrote:sdrealtor [quote=JohnAlt91941][quote=sdrealtor]
Nice comment but wholey inaccurate. It has nothing to do with buyers qualifying. It has to do with lenders/appraiser putting a cap on appraised values.
[/quote]
What reason would the banks have to want to keep appraised values low (or realistic)? Maybe to minimize risk?
Minimizing risk should always have been a priority. Just because insanity prevailed from 2001-2005 doesn’t make sane business practices obsolete.[/quote]
Again your comment exposes ignorance. If I have $160K in the bank and a $200K W-2 income I can easily qualify for a $640K loan to buy a property for $800K. Hell I could qualify for an $800K loan.
If it appraises for $700K and I dont have $240K to put down I am SOL not matter what I qualify for.
bearishgurl
April 17, 2012 @
11:47 AM
sdrealtor wrote: . . . If I [quote=sdrealtor] . . . If I have $160K in the bank and a $200K W-2 income I can easily qualify for a $640K loan to buy a property for $800K. Hell I could qualify for an $800K loan.
If it appraises for $700K and I dont have $240K to put down I am SOL not matter what I qualify for.[/quote]
Exactly. A buyer would be SOL because he/she didn’t have enough cash for “wiggle room” to purchase an “equity sale” property where its owners may have purchased the premium location and the improvements he desires at a lesser price than they cost today and so are willing to make a deal under the current market conditions.
[quote=sdrealtor] . . .It has nothing to do with buyers qualifying. It has to do with lenders/appraiser putting a cap on appraised values.
One of my best friends is in ecrow on a house and the appraisal came in close to $100K low. He’s putting about 50% down and shrugged it off. The comps were not comparable to this house.The appraiser told both me and the loan officer he couldnt appraise it any higher based upon the available comps. Then he said he had seen the available comps, they werent close and that in 25 years of doing appraisals he had never seen such a good ocean view, unobstructed, big flat all usable lot, one story, room to expand, no roof tops, no HOA, no CCR’s, no MR’s and no freeway noise. He said while he couldnt appraise it at the sales price he understood the value and would pay it himself. There are 5 back up offers at the same price. Three of which are all cash. If my friend didnt buy this one the next one would be based upon this comp for price and would almost certainly have been inferior. Appraisals dont always tell the real story.[/quote]
Good scenario for discussion purposes. This likely happens everywhere in the county (except those enclaves where there is little to zero “distress”). It is unfortunate that this appraiser’s hands were tied and due to the proliferation of recent distress-sale comps and not much else, those sales reflect the current “value” of the properties in the area …. that is, until a buyer with a large cash position comes in and closes on a new, higher sold comp based not upon a distant lender’s appraised value but what someone was actually willing to pay. And this *new* sold comp could have the effect of getting more “discretionary” equity sellers to come out of the woodwork and list! Hopefully, the high cash-position buyers will lead some areas full of longtime equity owners out of this “undervaluation phase” caused by distressed sold comps.
The way I see it, that’s the only way out of this distress-forced undervaluation of county areas full of high-equity sellers, IMHO. The “high-cash purchase” buying will leave them with higher valuations in the areas cash-rich buyers purchase in (which are usually the same areas as equity sellers can be found). The newer inland tracts on less-desirable land (which were all originally sold during the “millenium boom”) will remain conventional 80/20 sales, PMI sales or possibly even govm’t program sales.
As is always has been and should be.
ltsddd
April 16, 2012 @
1:53 PM
The-Shoveler wrote:”I found [quote=The-Shoveler]”I found it interesting that with the current market conditions, it’s not so much where’s the inventory, but rather where are the buyers? Both prices and interest rates are at a very buyer-friendly levels and one would expect they would come out in droves and bid up the prices.”
Where are the bidding up buyers ?
Go out and try to qualify for a loan on a home that is more than the foreclosure down the street sold for last month and you will find out.[/quote]
I don’t need to try. I am in it and I know it – at least in and around central SD. You’re not doing your homework if you pay at or than than the initial listing prices. Have you try to get a loan and looking at home sales down the street lately?
sdrealtor
April 16, 2012 @
4:02 PM
There is absolutely no truth There is absolutely no truth to the statement that you arent doing your homework if you pay initial lisitng prices. They are set arbitrarily buy sellers and their agents. Some are too high, some are just right and some are too low. The trick is understanding which one it is.
ltsddd
April 16, 2012 @
4:57 PM
sdrealtor wrote:There is [quote=sdrealtor]There is absolutely no truth to the statement that you arent doing your homework if you pay initial lisitng prices. They are set arbitrarily buy sellers and their agents. Some are too high, some are just right and some are too low. The trick is understanding which one it is.[/quote]
I understand. However, the chances are that the “beat up” homes that are listed too low you’re not going to have a chance against the cash buyers. And if you’re not a cash buyer (trying to get a loan) then you might as well remove those “too low” listings from your wish list. I am no expert, but I believe the tract homes in MM built in the 70s that’s been put on the market that need some TLC are mostly priced right or even lower than what I think the fair price is and yet I haven’t seen a single transaction that I tracked sold at or above listing. You’re more likely to lose out on a bid because your low-ball offer is lower than the next guy’s and not because your full-price offer is not as high as some others.
sdrealtor
April 16, 2012 @
5:02 PM
ltsdd wrote:sdrealtor [quote=ltsdd][quote=sdrealtor]There is absolutely no truth to the statement that you arent doing your homework if you pay initial lisitng prices. They are set arbitrarily buy sellers and their agents. Some are too high, some are just right and some are too low. The trick is understanding which one it is.[/quote]
I understand. However, the chances are that the “beat up” homes that are listed too low you’re not going to have a chance against the cash buyers. And if you’re not a cash buyer (trying to get a loan) then you might as well remove those “too low” listings from your wish list. I am no expert, but I believe the tract homes in MM built in the 70s that’s been put on the market that need some TLC are mostly priced right or even lower than what I think the fair price is and yet I haven’t seen a single transaction that I tracked sold at or above listing. You’re more likely to lose out on a bid because your low-ball offer is lower than the next guy’s and not because your full-price offer is not as high as some others.[/quote]
Things vary community by community. I do know of at least one 70’s tract house in MM that is closing above asking price on Wednesday.
ltsddd
April 16, 2012 @
5:14 PM
sdrealtor wrote:ltsdd [quote=sdrealtor][quote=ltsdd][quote=sdrealtor]There is absolutely no truth to the statement that you arent doing your homework if you pay initial lisitng prices. They are set arbitrarily buy sellers and their agents. Some are too high, some are just right and some are too low. The trick is understanding which one it is.[/quote]
I understand. However, the chances are that the “beat up” homes that are listed too low you’re not going to have a chance against the cash buyers. And if you’re not a cash buyer (trying to get a loan) then you might as well remove those “too low” listings from your wish list. I am no expert, but I believe the tract homes in MM built in the 70s that’s been put on the market that need some TLC are mostly priced right or even lower than what I think the fair price is and yet I haven’t seen a single transaction that I tracked sold at or above listing. You’re more likely to lose out on a bid because your low-ball offer is lower than the next guy’s and not because your full-price offer is not as high as some others.[/quote]
Things vary community by community. I do know of at least one 70’s tract house in MM that is closing above asking price on Wednesday.[/quote]
So there’s always that one exception. One of those that didn’t do their homework.
Run the numbers, and see for yourself how many MM’s 70s tract homes sold at or above initial asking vs below asking within the last 6 mos. The truth in in the data.
an
April 16, 2012 @
5:51 PM
ltsdd wrote:So there’s always [quote=ltsdd]So there’s always that one exception. One of those that didn’t do their homework.
Run the numbers, and see for yourself how many MM’s 70s tract homes sold at or above initial asking vs below asking within the last 6 mos. The truth in in the data.[/quote]
Talking about data, here’s the sales data for the last 100 sales: http://www.sdlookup.com/Closings-92126-Mira_Mesa
There are 51 sold below listing, 14 at listing, and 30 above listings. I don’t think 30 above listings and 14 at listings would be considered an exception.
ltsddd
April 16, 2012 @
6:32 PM
AN wrote:ltsdd wrote:So [quote=AN][quote=ltsdd]So there’s always that one exception. One of those that didn’t do their homework.
Run the numbers, and see for yourself how many MM’s 70s tract homes sold at or above initial asking vs below asking within the last 6 mos. The truth in in the data.[/quote]
Talking about data, here’s the sales data for the last 100 sales: http://www.sdlookup.com/Closings-92126-Mira_Mesa
There are 51 sold below listing, 14 at listing, and 30 above listings. I don’t think 30 above listings and 14 at listings would be considered an exception.[/quote]
Nope. Wrong stats.
How many of those 44 you mentioned actually sold at or above the initial listing price? I only checked the first few on your list that showed sold prices at or above asking and most of those are sold for below the INITIAL ASKING price.
How many of those 44 you mentioned actually sold at or above the initial listing price? I only checked the first few on your list that showed sold prices at or above asking and most of those are sold for below the INITIAL ASKING price.[/quote]
If it’s the wrong stats, then why don’t you look up the data for your question. I don’t have time to track down every single sold listings. But I guarantee you it’s not 1 or 2. Why don’t you bring data since you’re asking for it.
You claimed I was wrong and that you checked the first few? I just looked at the list and the 2nd and 3rd most recent sold listing above asking price are above the INITIAL ASKING price. So, what are you talking about exactly?
ltsddd
April 16, 2012 @
7:21 PM
AN wrote:ltsdd wrote:Nope. [quote=AN][quote=ltsdd]Nope. Wrong stats.
How many of those 44 you mentioned actually sold at or above the initial listing price? I only checked the first few on your list that showed sold prices at or above asking and most of those are sold for below the INITIAL ASKING price.[/quote]
If it’s the wrong stats, then why don’t you look up the data for your question. I don’t have time to track down every single sold listings. But I guarantee you it’s not 1 or 2. Why don’t you bring data since you’re asking for it.
You claimed I was wrong and that you checked the first few? I just looked at the list and the 2nd and 3rd most recent sold listing above asking price are above the INITIAL ASKING price. So, what are you talking about exactly?[/quote]
Wrong again. Third on your list (8624 Bennington St) showed sold price at the “asking” price which is actually sold for 29K below the initial asking price. And yes, you are wrong again because just based on the first few samples of the listing it showed that by the time you tally them all up it will show that the number of homes sold at or above initial listing price will be lower than 44.
All that being said, I think it is really besides the point. Someone implied that there are “up bidders” that are bidding up the few houses that are on the market. My point simply is based on my observation in MM with the 70s tract homes ( not condos and not townhomes – I have 0 interest in those). I have yet to see any stats that support the “up bidders” theory. Don’t you think that if the “up bidders” are of any significance numbers wouldn’t that have affected the home prices around MM by now?
Now, if you are one of those people who’s going to take a statement like “It’s always sunny in san diego” and then pointed out that that’s there’s no truth to that statement because it was cloudy and rainy a few days ago, then I will push the reject button and remove myself from this discussion.
an
April 16, 2012 @
8:56 PM
ltsdd wrote:Wrong again. [quote=ltsdd]Wrong again. Third on your list (8624 Bennington St) showed sold price at the “asking” price which is actually sold for 29K below the initial asking price. And yes, you are wrong again because just based on the first few samples of the listing it showed that by the time you tally them all up it will show that the number of homes sold at or above initial listing price will be lower than 44.
All that being said, I think it is really besides the point. Someone implied that there are “up bidders” that are bidding up the few houses that are on the market. My point simply is based on my observation in MM with the 70s tract homes ( not condos and not townhomes – I have 0 interest in those). I have yet to see any stats that support the “up bidders” theory. Don’t you think that if the “up bidders” are of any significance numbers wouldn’t that have affected the home prices around MM by now?
Now, if you are one of those people who’s going to take a statement like “It’s always sunny in san diego” and then pointed out that that’s there’s no truth to that statement because it was cloudy and rainy a few days ago, then I will push the reject button and remove myself from this discussion.[/quote]
Wrong again. I wasn’t referring to Bennington St.
Now, lets take a look at what your original statement:
[quote=ltsdd]So there’s always that one exception. One of those that didn’t do their homework.
Run the numbers, and see for yourself how many MM’s 70s tract homes sold at or above initial asking vs below asking within the last 6 mos. The truth in in the data.[/quote]
So, is 3 an exception? Where are your data? It’s easy to make others back up their claim. But where are your data to back up your claim.
I never said prices in MM are rising. But that doesn’t mean there aren’t a lot of buyers out there. Selling over listing just mean the list price was too low. Selling under listing just mean the listing was too high. It does not say anything about the demand. You counter an “up bidders” statement from someone by saying look, this subset of the market is not being bid up, so “up bidders” must not exist. That sounds awefully like you’re the one who are taking a statement like “It’s always sunny in san diego” and then pointed out that that’s there’s no truth to that statement because it was cloudy and rainy a few days ago.
You know what else sounds a lot like your “It’s always sunny in San Diego” statement? I made a point that 30 sold above listing and 14 at listing. So, it’s probably not an exception. Then you go and say you looked at the first few, and since it’s not at or above listing, my entire statement is false. So, are you pushing the rejecting your own argument when you’re pushing that reject button?
Rereading your post, it almost sound like you’re trying to get people to do the leg work for you wrt to the exact type of properties you’re looking to buy. Not, about MM as a whole or even the entire San Diego market. Which is my original point when I posted this poll. It wasn’t about the 70s beater house in MM or MM as a whole. It’s about San Diego housing market.
sdrealtor
April 16, 2012 @
9:10 PM
Good post AN. The sold price Good post AN. The sold price vs listing price is meaningless for a single home. It only represents how well agents as a whole set price on aggregate. The problem is people buy a single home not the aggregate. ltsdd switched his argument midstream. Let him continue to think he can out think the invisible hand. There is no short cut to patience, research and good help.
ltsddd
April 16, 2012 @
9:43 PM
sdrealtor wrote:Good post AN. [quote=sdrealtor]Good post AN. The sold price vs listing price is meaningless for a single home. It only represents how well agents as a whole set price on aggregate. The problem is people buy a single home not the aggregate. ltsdd switched his argument midstream. Let him continue to think he can out think the invisible hand. There is no short cut to patience, research and good help.[/quote]
The stats that AN cited show that collectively (at least for the small sample that he cited) more people bought properties for below the initial asking price then those who didn’t. If I am going to buy a house I would like to see that at the end of the deal my stats will align the former rather than the latter. Yes, the invisible hand demonstrated that individually the buyers are striving to low-ball the sellers as much as they can. And collectively it’s shown that that’s the case. Because prices hasn’t gone up and there are more buyers able to get them for less than what the sellers wanted. You can argue however you want, the fact is that those homes in MM are listed at what already a depressed price and yet more homes are sold for less than what was asked. And if as a buyer and you choose to be a stat that align with the minority (paying more than initial listing) then more power to you.
sdrealtor
April 16, 2012 @
10:10 PM
Fvck the stats! You want to Fvck the stats! You want to be the outlier. You dotn buy stats. You buy one house. Buy the right one at the right price and that doesnt necessarily relate to asking price.
ltsddd
April 16, 2012 @
10:21 PM
sdrealtor wrote:Fvck the [quote=sdrealtor]Fvck the stats! You want to be the outlier. You dotn buy stats. You buy one house. Buy the right one at the right price and that doesnt necessarily relate to asking price.[/quote]
So more than 60% of the transactions that were below the initial asking price is considered as outliers?
bearishgurl
April 16, 2012 @
10:42 PM
ltsdd wrote:sdrealtor [quote=ltsdd][quote=sdrealtor]Fvck the stats! You want to be the outlier. You dotn buy stats. You buy one house. Buy the right one at the right price and that doesnt necessarily relate to asking price.[/quote]
So more than 60% of the transactions that were below the initial asking price is considered as outliers?[/quote]
Yes. I’ve been saying this here for a few months now. They are SS’s and REO’s. Those “outliers” are the most common sale now, esp SS’s.
A buyer can’t expect an equity seller of a well-maintained and even substantially rehabbed/remodeled property who is not behind in their mortgage or owns free and clear to sell at these deep discounts. If you want a property that is not a beater and/or gets stripped and/or left trashed before closing by scumbag SS “sellers” or foreclosed-on “trustors,” then you will have to have a “meeting of the minds” with the “equity-seller” who owns it, because, if someone else doesn’t give them what they want or need to convey title now, they will simply remove the listing from the market. Why? Because, unlike the “60%,” they CAN!
Expect to get your lowball offers (in line with closing price of the “60%” of recent nearby sales) rejected by these equity sellers in short order. If the property is good enough in a good enough area, they will get their price (within reason).
You pay for exactly what you get in this life. If you insist on buying at the price-point of the “60%”, I hope you’re handy, you have your weekend-time freed up for the next year-plus, have a pickup (preferably a little beat up with side rails), have googled the way to the dump and have a stash of working power tools at the ready :=]
ltsddd
April 17, 2012 @
12:07 AM
bearishgurl wrote:
If you [quote=bearishgurl]
If you want a property that is not a beater and/or gets stripped and/or left trashed before closing by scumbag SS “sellers” or foreclosed-on “trustors,”
[/quote]
You assume too much. Scumbag SS “sellers”? That’s a bit harsh isn’t it? I supposed you know each and every short seller’s situation?
[quote=bearishgurl] If you insist on buying at the price-point of the “60%”, I hope you’re handy, you have your weekend-time freed up for the next year-plus, have a pickup (preferably a little beat up with side rails), have googled the way to the dump and have a stash of working power tools at the ready :=][/quote]
Again, completely baseless assumptions.
Not all SS or REOs are in the kind of conditions you are describing.
bearishgurl
April 17, 2012 @
10:46 AM
ltsdd wrote:bearishgurl [quote=ltsdd][quote=bearishgurl]
If you want a property that is not a beater and/or gets stripped and/or left trashed before closing by scumbag SS “sellers” or foreclosed-on “trustors,”
[/quote]
You assume too much. Scumbag SS “sellers”? That’s a bit harsh isn’t it? I supposed you know each and every short seller’s situation?
[quote=bearishgurl] If you insist on buying at the price-point of the “60%”, I hope you’re handy, you have your weekend-time freed up for the next year-plus, have a pickup (preferably a little beat up with side rails), have googled the way to the dump and have a stash of working power tools at the ready :=][/quote]
Again, completely baseless assumptions.
Not all SS or REOs are in the kind of conditions you are describing.[/quote]
Actually, the REO’s acquired by FNMA have had an average of $5700 spent on them in recent years to clean them up and ready them for sale. FNMA provides these cleanup/minor rehab funds to local contractors in order to obtain as much as they can upon sale. They’re not the worst culprit which is currently undervaluing the entire RE market. It is actually the SS’s, some of which seem to miraculously sell to friends and relatives of the listing agent for 45%+ below market.
From my experience, I have seen that both SS “sellers” and the defaulting trustors who are losing or lost their properties to foreclosure usually let them go to waste as soon as they are unable to make payments anymore, if not sooner. Neither of these types of “owners” are usually solvent enough to pay the rest of their bills and survive, much less maintain their underwater properties. This means they may have squatted in the property for up to three years with the sprinkler system turned off, broken glass, broken doors and locks, broken appls, broken furnace, leaky roof, never had carpets cleaned, couldn’t afford to make trip(s) to the dump before they vacated, and too lazy to pull 4’+ high weeds in the backyard (where it doesn’t show to the street). They figure, we’re losing this home, so why bother?
The REO’s you are seeing on the market, for the most part, have had minor (under $500) obvious broken items fixed, the copious junk left behind has been hauled out, their interior has been sprayed over with white paint, the carpet(if any) has been cleaned, the weeds have been mowed down, the locks changed and the pool emptied. This DOESN’T MEAN the roof doesn’t leak and all systems work properly and by law, the lender-owner is exempt from warranty on the condition of an REO.
The SS’s vary wildly in condition, from unsanitary to the point of condemnation to reasonably clean and good condition (requiring little haul-out and clean up to move in). As a buyer, when commencing escrow on an approved SS, you REALLY ARE trusting that seller not to strip anything that wasn’t in their listing agreement or counter offer and to leave the property reasonably habitable for you. Many SS “sellers” no doubt have no where to go and vacate at the last minute, because they often don’t have a firm closing date until it is upon them. They could be disgruntled at closing because the terms of the final sale (that they had no control over) left them with worse credit than they imagined would happen. A SS is by nature an adversarial transaction because both parties are in opposition to each other (never really reached an “agreement”) because neither has control over the terms of that “agreement.” The control is held by the third-party aggrieved lender who is looking out for their interests only (and may also be distant and ignorant, relying on the local listing agent for valuation). Because of these factors, a nearly-consummated SS is ripe for “seller” stalling their occupancy and stripping.
IMO, you aren’t likely going to get the following “goodies” buying “distressed” property unless you are a 40%+ down or all-cash buyer (as they are usually found only in “equity sales” unless the SS “seller” actually got into that position by “remodeling”), lol. For example:
-Anderson wood windows
-30-yr slate roof
-recently stamped concrete
-pool that doesn’t need work
-landscaping that doesn’t need work or
complete tear-out/redo
-“Low e” windows
-tankless water heater
-new stucco (on older homes)
-new trim paint (older homes)
-builder’s premium lot
-REAL original wood slat floors in good condition
-gourmet appls
-waterless-tank toilets
-and most importantly, <1.5 mi from ocean or bay
with a possible waterview or cityview
More likely, your "distressed property" is going to be in an inland tract situated in a sea of other "distressed properties." It will have the bare-minimum builder appointments in it which will vary in condition. It may have never been landscaped properly and its windows may have never been covered properly. It is likely encumbered by MR/HOA.
So, for a buyer of an inland "distressed" tract home, it wouldn't be worth it to put those expensive improvements in themselves (yes, even after paying a heavily discounted price) because the cost to do so would render the new buyer immediately "underwater" since they very well may have to spend money on landscape and window coverings upon move-in.
Lot of buyers seem to "think" distressed properties are the ONLY type out there where one can obtain a "good deal" but nothing could be further from the truth. It depends on what you consider a "good deal."
Again, you get what you pay for.
sdrealtor
April 17, 2012 @
11:23 AM
ltsdd wrote:sdrealtor [quote=ltsdd][quote=sdrealtor]Fvck the stats! You want to be the outlier. You dotn buy stats. You buy one house. Buy the right one at the right price and that doesnt necessarily relate to asking price.[/quote]
So more than 60% of the transactions that were below the initial asking price is considered as outliers?[/quote]
You are blinded by stats and missing the point. The stats dont matter you want to get the one house that is right for you. It doesnt matter whether it is over or underpriced as long as the final price you agree to is fair market value. In the case I cited, it is a home tucked away in a quiet part of MM on a cul de sac with a big lot and an incredible view over the Penasquitos Canyon. It had quite a bit of deferred maintenance but bones were fine and the floor plan was very good. For $20 to 30K you could take care of everything. It had a well done addition in back and is perfectly set up to add a fantastic master suite in the existing flow/footprint when/if they want to. The plumbing is exactly where it needs to be to access easily for the new master bath. The master suite will enjoy lie down in bed views of hot air ballons rising over the canyon. The views are nothing short spectacular. We had been looking in MM for a couple months and losing at on several of the nicer properties writing full price all cash offers. This one was worth fightling for. It was in a word…..the outlier.
bearishgurl
April 17, 2012 @
11:59 AM
sdrealtor wrote:You are [quote=sdrealtor]You are blinded by stats and missing the point. The stats dont matter you want to get the one house that is right for you. It doesnt matter whether it is over or underpriced as long as the final price you agree to is fair market value. In the case I cited, it is a home tucked away in a quiet part of MM on a cul de sac with a big lot and an incredible view over the Penasquitos Canyon. It had quite a bit of deferred maintenance but bones were fine and the floor plan was very good. For $20 to 30K you could take care of everything. It had a well done addition in back and is perfectly set up to add a fantastic master suite in the existing flow/footprint when/if they want to. The plumbing is exactly where it needs to be to access easily for the new master bath. The master suite will enjoy lie down in bed views of hot air ballons rising over the canyon. The views are nothing short spectacular. We had been looking in MM for a couple months and losing at on several of the nicer properties writing full price all cash offers. This one was worth fightling for. It was in a word…..the outlier.[/quote]
LOL! I think I actually toured this subdivision (in abt ’90-91?) when it was only a few model homes and a couple of streets. It was dusk and balloons were still bobbing between what is now Penasquitos Reserve and Sorrento Mesa.
Were the original homes light pink and light peach? I seem to recall the name “Porcelain Collection” or something like that.
As I recall, it was incredible view due to the slant and elevation of these streets (probably even better now due to all the improvements to the reserve).
ltsddd
April 16, 2012 @
9:21 PM
AN wrote:
So, is 3 an [quote=AN]
So, is 3 an exception? Where are your data? It’s easy to make others back up their claim. But where are your data to back up your claim.
[/quote]
Like I said in my earlier post. I have been and I am in the market as a buyer. I know what I am seeing. As for the data, look at the numbers you cited. By the time you could figure out how to correctly tally them up you will see that the ratio is more likely to be 6 to 4 or 7 to 3 if you take into consideration those that priced way too low. Do you think a 3/2 SFR priced at $275K and sold at $280K is truly and “up bid”? How about this, the fact that it’s priced so low and yet the “up bid” wasn’t that significantly higher than the original listing tells you a lot about the leverage buyers have.
[quote]
I never said prices in MM are rising. But that doesn’t mean there aren’t a lot of buyers out there.
[/quote]
You have to decide what argument you’re trying to make. There are a lot of buyers (what is a lot?), which means there’s a demand. You put a lot of buyers together with the “trickle trickle trickle” housing supply and yet that hasn’t driven price upwards? Do you have a clue the what basics of demand and supply is?
[quote]
Selling over listing just mean the list price was too low. Selling under listing just mean the listing was too high. It does not say anything about the demand.
[/quote]
huh?
[quote]
You counter an “up bidders” statement from someone by saying look, this subset of the market is not being bid up, so “up bidders” must not exist. That sounds awefully like you’re the one who are taking a statement like “It’s always sunny in san diego” and then pointed out that that’s there’s no truth to that statement because it was cloudy and rainy a few days ago.
[/quote]
Of course I could only make my point based on facts that know and observe and in communities that I am familiar with. I have not looked for something in, say Oceanside, so I neither have the qualification nor first-hand experience to speak of Oceanside. So I don’t think there’s anything wrong with me making the statement that if you’re paying the full initial listing price in MM then you’re not doing your homework. BTW., thanks for the stats, it more or less proved what I said is correct. If there are more people bought there homes for below the initial asking than those who didn’t then. If you experience with home buying in MM recently is different than mine than do please share your experience.
[quote]
Rereading your post, it almost sound like you’re trying to get people to do the leg work for you wrt to the exact type of properties you’re looking to buy.
[/quote]
Huh? Really? I am relying on people on this forum to do the leg work for me to help me buy properties? How did you come to that conclusion? Please enlighten me if you would.
an
April 17, 2012 @
12:10 AM
ltsdd, let me ask you one ltsdd, let me ask you one thing. Where’s your data? You want to talk anecdotal? Here’s mine. I submit an offer 5% above asking price on a SS in MM that’s truly under market. The seller only have 1 hour viewing window and there were at least 5-6 families there w/in that window. The house went pending and I didn’t hear a single thing from the seller agent (i.e. I didn’t get it).
Anyways, I’ll just back away from this run around now and just say I whole heartily agree with what sdduuuude said.
[quote=sdduuuude]Above or below asking means nothing.
Above or below comps means everything.[/quote]
sdduuuude
April 16, 2012 @
9:17 PM
ltsdd wrote:Run the numbers, [quote=ltsdd]Run the numbers, and see for yourself how many MM’s 70s tract homes sold at or above initial asking vs below asking within the last 6 mos. The truth in in the data.[/quote]
Above or below asking means nothing.
Above or below comps means everything.
sdrealtor
April 16, 2012 @
10:50 AM
Dude
I agree with everything Dude
I agree with everything you said with one caveat. The factors you dont seeing pushing buyers can change very quickly.
ltsddd
April 16, 2012 @
1:07 PM
sdrealtor wrote:Dude
I agree [quote=sdrealtor]Dude
I agree with everything you said with one caveat. The factors you dont seeing pushing buyers can change very quickly.[/quote]
As a wise man once said, there are known unknowns and then there are unknown unknowns 🙂
sdduuuude
April 16, 2012 @
4:13 PM
sdrealtor wrote:Dude
I agree [quote=sdrealtor]Dude
I agree with everything you said with one caveat. The factors you dont seeing pushing buyers can change very quickly.[/quote]
In either direction …
sdrealtor
April 16, 2012 @
5:00 PM
sdduuuude wrote:sdrealtor [quote=sdduuuude][quote=sdrealtor]Dude
I agree with everything you said with one caveat. The factors you dont seeing pushing buyers can change very quickly.[/quote]
In either direction …[/quote]
Much stickier on the way down ;P
sdduuuude
April 16, 2012 @
12:50 PM
Good poll / question, Good poll / question, AN.
Seems we have more housing-related posts lately. Must be an interesting market or something.
April 11, 2012 @ 11:50 PM
We all are aware of the
We all are aware of the extreme low inventory right now. Yet, prices haven’t really move up (if at all), which cause owners (who have equity) to hold off from listing their house. So, who will win the stand off? Will buyers win and supply will increase again due to sellers giving in. Or will the seller win and price shoot up. Which will increase listings, but selling price will also be higher.
April 12, 2012 @ 8:28 AM
I would suggest that sellers
I would suggest that sellers need to be divided into two camps. Those that need to sell (financial or relocation reasons) vs folks who have no need to sell but *want* to sell… to downsize or move up… whatever.
The folks who need to sell will lose out. Buyers will win.
The folks who don’t need to sell but just want to sell can hold out – and will win in the end.
Example – house on my street… owners are long term with high equity. List price was about $150k off peak price, but about $100k above zillow price. Listing was active for about 8 months when they gave up. Lots of showings, no offers. After they delisted a party that had seen it when it was active approached and made an offer. It’s now pending. Apparently (won’t know for sure till it closes) the offer was close to the list price.
In this case the sellers won. They didn’t need to accept a lower price, so they didn’t. But now they can downsize and simplify their lives.
April 12, 2012 @ 8:29 AM
Sellers with substantial
Sellers with substantial equity have more staying power than they are given credit for. If they also have unfettered access to retirement funds (over age 59.5), then their choices as to how to dispose of a property they don’t want to live in anymore increase.
I think there will be more rental SFR’s available if the “shadow inventory” continues to trickle in for years along with SS’s being the predominant listing. Both hold appraisals down, making it difficult for a buyer to get financing to pay the price a seller needs/desires, even if they thought the property was worth what the seller would accept and was willing to pay it.
Otherwise, buyers will have to come up with more downpayment and waive the appraisal contingency. This is only doable for a fraction of them.
April 12, 2012 @ 9:14 AM
Neither it will be the
Neither it will be the Builders !!
When the builders start to build again, they will set the price for the area they build in what will truly be the new normal market (whenever it is we ever get there which may be a while yet).
NOTE: NOW IS NOT NORMAL (just in case you were wondering).
Essentially the move-up market is completely dead until one day in the (maybe far) future the builders start to really build again.
April 12, 2012 @ 9:16 AM
Wow, so far 90% favor sellers
Wow, so far 90% favor sellers – which leads me to another poll….
April 12, 2012 @ 9:21 AM
The-Shoveler wrote:Neither it
[quote=The-Shoveler]Neither it will be the Builders !!
When the builders start to build again, they will set the price for the area they build in what will truly be the new normal market (whenever it is we ever get there which may be a while yet).
NOTE: NOW IS NOT NORMAL (just in case you were wondering).
Essentially the move-up market is completely dead until one day in the (maybe far) future the builders start to really build again.[/quote]
Why does it have to be neither when the builders win? If builder set price high, then sellers win too. If builders set price low, then buyers win. If builder doesn’t build, you see the stand off lasting forever? You see buyers renting forever in the stand off and seller stuck in their house till they die?
April 12, 2012 @ 9:22 AM
go ahead and have your “war”.
go ahead and have your “war”. I’m gonna sit this one out til year end
🙂
April 12, 2012 @ 9:24 AM
Wah-Wah wrote:go ahead and
[quote=Wah-Wah]go ahead and have your “war”. I’m gonna sit this one out til year end
:)[/quote]
You can’t sit this one out. If you’re not buying, then you’re part of the war. If you are buying, you’re also part of the war 🙂
April 12, 2012 @ 10:27 AM
AN wrote:Wah-Wah wrote:go
[quote=AN][quote=Wah-Wah]go ahead and have your “war”. I’m gonna sit this one out til year end
:)[/quote]
You can’t sit this one out. If you’re not buying, then you’re part of the war. If you are buying, you’re also part of the war :-)[/quote]
what? this game is rigged 🙂
kidding aside, let me ask “potential” buyers out there. Why buy now unless you think price AND/OR interest rate will go up drastically by year end.
April 12, 2012 @ 11:00 AM
Wah-Wah wrote:AN
[quote=Wah-Wah][quote=AN][quote=Wah-Wah]go ahead and have your “war”. I’m gonna sit this one out til year end
:)[/quote]
You can’t sit this one out. If you’re not buying, then you’re part of the war. If you are buying, you’re also part of the war :-)[/quote]
what? this game is rigged 🙂
kidding aside, let me ask “potential” buyers out there. Why buy now unless you think price AND/OR interest rate will go up drastically by year end.[/quote]
I’m not yet a “potential buyer” but I think if a buyer has a 30% downpayment saved (for “wiggle room”), can qualify for a sub 4% mortgage, find a property they really want and its seller will accept their offer then they should buy it.
It should be a property that is well-located and that they are willing to own at least ten years (whether or not they live there the entire time).
If the buyers have to depend on FHA/VA financing (due to lack of sufficient downpayment), then it’s not worth it to buy now, IMO. The fees and closing costs on these programs have skyrocketed in recent months and years and a buyer depending on them isn’t likely to find any sellers willing to make them a deal and also go along with the pesky “requirements” of these programs or help them with closing costs.
April 12, 2012 @ 11:01 AM
Wah-Wah wrote:AN
[quote=Wah-Wah][quote=AN][quote=Wah-Wah]go ahead and have your “war”. I’m gonna sit this one out til year end
:)[/quote]
You can’t sit this one out. If you’re not buying, then you’re part of the war. If you are buying, you’re also part of the war :-)[/quote]
what? this game is rigged 🙂
kidding aside, let me ask “potential” buyers out there. Why buy now unless you think price AND/OR interest rate will go up drastically by year end.[/quote]
What if you feel like there will be less selection later on?
April 12, 2012 @ 11:07 AM
outtamojo wrote:Wah-Wah
[quote=outtamojo][quote=Wah-Wah][quote=AN][quote=Wah-Wah]go ahead and have your “war”. I’m gonna sit this one out til year end
:)[/quote]
You can’t sit this one out. If you’re not buying, then you’re part of the war. If you are buying, you’re also part of the war :-)[/quote]
what? this game is rigged 🙂
kidding aside, let me ask “potential” buyers out there. Why buy now unless you think price AND/OR interest rate will go up drastically by year end.[/quote]
What if you feel like there will be less selection later on?[/quote]
Sorry to “butt in” here again, but a buyer doesn’t NEED “selection.” A buyer only NEEDS one property he/she would like to own, can afford and where the seller will accept his offering price and terms.
Why don’t you ask the young Silicon Valley buyers of today if they are worried about “selection?”
April 12, 2012 @ 12:24 PM
bearishgurl wrote:outtamojo
[quote=bearishgurl][quote=outtamojo][quote=Wah-Wah][quote=AN][quote=Wah-Wah]go ahead and have your “war”. I’m gonna sit this one out til year end
:)[/quote]
You can’t sit this one out. If you’re not buying, then you’re part of the war. If you are buying, you’re also part of the war :-)[/quote]
what? this game is rigged 🙂
kidding aside, let me ask “potential” buyers out there. Why buy now unless you think price AND/OR interest rate will go up drastically by year end.[/quote]
What if you feel like there will be less selection later on?[/quote]
Sorry to “butt in” here again, but a buyer doesn’t NEED “selection.” A buyer only NEEDS one property he/she would like to own, can afford and where the seller will accept his offering price and terms.
Why don’t you ask the young Silicon Valley buyers of today if they are worried about “selection?”[/quote]
Well, that’s new one- “buyers don’t need selection” lol.
April 12, 2012 @ 1:50 PM
outtamojo wrote:bearishgurl
[quote=outtamojo][quote=bearishgurl][quote=outtamojo]What if you feel like there will be less selection later on?[/quote]
Sorry to “butt in” here again, but a buyer doesn’t NEED “selection.” A buyer only NEEDS one property he/she would like to own, can afford and where the seller will accept his offering price and terms.
Why don’t you ask the young Silicon Valley buyers of today if they are worried about “selection?”[/quote]
Well, that’s new one- “buyers don’t need selection” lol.[/quote]
What I’m trying to say here, outtamojo, is that too many properties to look at is just confusing. If a buyer REALLY knows what they want and exactly where they want it (and possibly has a second micro-area in mind to shop in, also), all they have to do is wait until something comes on the market that they can afford and make a good offer on it. If they need to fix it a little after moving in or eventually remodel it room-by-room to their liking, then so be it!
In other words, if one needs a lot of properties to look at in multiple zip codes before making a buying decision, he/she does not really know what and where they want to buy in and they are too confused to buy until they figure all this out.
As an aside, I just perused 92106, 92116, 92115, 91941 and 92109 on SDL looking for representative “mid-century” ranch-style listings and if there is actually a shortage of SFR’s for sale in those zip codes, I didn’t notice it.
April 12, 2012 @ 9:32 AM
AN wrote:The-Shoveler
[quote=AN][quote=The-Shoveler]Neither it will be the Builders !!
When the builders start to build again, they will set the price for the area they build in what will truly be the new normal market (whenever it is we ever get there which may be a while yet).
NOTE: NOW IS NOT NORMAL (just in case you were wondering).
Essentially the move-up market is completely dead until one day in the (maybe far) future the builders start to really build again.[/quote]
Why does it have to be neither when the builders win? If builder set price high, then sellers win too. If builders set price low, then buyers win. If builder doesn’t build, you see the stand off lasting forever? You see buyers renting forever in the stand off and seller stuck in their house till they die?[/quote]
Well until they are forced, or feel there is something worth moving to. I say the builders because they will be the price setter when there is more than just distressed home sales.
April 12, 2012 @ 9:38 AM
The-Shoveler wrote:AN
[quote=The-Shoveler][quote=AN][quote=The-Shoveler]Neither it will be the Builders !!
When the builders start to build again, they will set the price for the area they build in what will truly be the new normal market (whenever it is we ever get there which may be a while yet).
NOTE: NOW IS NOT NORMAL (just in case you were wondering).
Essentially the move-up market is completely dead until one day in the (maybe far) future the builders start to really build again.[/quote]
Why does it have to be neither when the builders win? If builder set price high, then sellers win too. If builders set price low, then buyers win. If builder doesn’t build, you see the stand off lasting forever? You see buyers renting forever in the stand off and seller stuck in their house till they die?[/quote]
Well until they are forced, or feel there is something worth moving to. I say the builders because they will be the price setter when there is more than just distressed home sales.[/quote]builders are sellers. Sellers do not set prices, buyers do.
April 12, 2012 @ 9:47 AM
So why do you thing they
So why do you thing they STOPPED building ?
April 12, 2012 @ 9:49 AM
The-Shoveler wrote:So why do
[quote=The-Shoveler]So why do you thing they STOPPED building ?[/quote]
Because buyers STOPPED buying.
April 12, 2012 @ 10:00 AM
AN wrote:The-Shoveler
[quote=AN][quote=The-Shoveler]So why do you thing they STOPPED building ?[/quote]
Because buyers STOPPED buying.[/quote]
Exactly
They stopped buying at the price the builders could make a profit, there are plenty of buyers out there right now! it’s just they only want a steal of a deal.
Like I said, now is NOT normal.
And SD is blessed, there is still quite a bit of really desirable land to build on compared to someplace like L.A.
April 12, 2012 @ 10:13 AM
The-Shoveler wrote:AN
[quote=The-Shoveler][quote=AN][quote=The-Shoveler]So why do you thing they STOPPED building ?[/quote]
Because buyers STOPPED buying.[/quote]
Exactly
They stopped buying at the price the builders could make a profit, there are plenty of buyers out there right now! it’s just they only want a steal of a deal.
Like I said, now is NOT normal.
And SD is blessed, there is still quite a bit of really desirable land to build on compared to someplace like L.A.[/quote]
Shoveler, you said yourself in a recent thread that this “really desirable land” is situated in the far reaches of North County, i.e. NE Esco, Fallbrook, Bonsall.
Land in the far reaches is not necessarily “really desirable” to those who have to commute daily to work centers and those who wish to live close to amenities, airports and good medical care.
April 12, 2012 @ 10:08 AM
AN wrote:The-Shoveler
[quote=AN][quote=The-Shoveler]So why do you thing they STOPPED building ?[/quote]
Because buyers STOPPED buying.[/quote]
I think they stopped building because they couldn’t make a profit anymore. They had to charge more per unit than the current market would bear and since about 2000, saddle all those units with exorbitant MR, while drastically reducing lot size. The cost of infrastructure (demanded by new-homebuyers) was higher than the up-front bond money the builders rec’d from the CFD agencies. The prices they charged from 2003 to 2008 in new subdivisions were so high (ESP in conjunction with high MR) that it left these areas decimated with distressed properties.
Except for maybe the subdivisions where the home size exceeds about 3500 sf, most of the new homes in recent SD County subdivisions appear to have been sold to first-time buyers and young families which may or may not be one and the same.
Older repeat buyers with money do NOT usually gravitate to new construction in the stix where the units are situated six feet apart and they do not need builder assistance with financing. They have many more choices in life.
April 12, 2012 @ 10:09 AM
You forgot a category for
You forgot a category for winners:
Wall Street/Institutional Investors.
April 12, 2012 @ 9:57 AM
The-Shoveler wrote:Neither it
[quote=The-Shoveler]Neither it will be the Builders !!
When the builders start to build again, they will set the price for the area they build in what will truly be the new normal market (whenever it is we ever get there which may be a while yet).
NOTE: NOW IS NOT NORMAL (just in case you were wondering).
Essentially the move-up market is completely dead until one day in the (maybe far) future the builders start to really build again.[/quote]
I don’t agree that builders set pricing. As you know, builders, IF they decide to build, are now left with the least-desirable land and will have to form CFD’s and issue MR bonds in order to obtain $$ for the infrastructure to service that land. WHY is this (remaining) land the least-desirable? Because the more-desirable land has already been built on. There are no sold comps nearby that “least-desirable” land with which to use to justify or set pricing. They will have to price the units in accordance with what their particular buying market will pay.
For this reason, I don’t believe the move-up market is dead. Not EVERYONE “moving up” wants *new* or *newer.* Some want sit-down ocean views and/or walking distance to well-known amenities. You can’t get these perks with new construction unless you are buying an infill spec home.
April 12, 2012 @ 11:31 AM
No one?
You’ve got sellers
No one?
You’ve got sellers stuck in properties they can’t get away from. You’ve got buyers who want to take advantage of low interest rates and move from renter to owner status who can’t find a property at a price they can afford.
I don’t see anyone “winning” until the overall economy improves more.
April 12, 2012 @ 12:22 PM
I voted sellers, but… I
I voted sellers, but… I would qualify my vote as: sellers with substantial equity who acquired their properties at non-peak prices.
Sellers who bought or cashed-out refinanced near the peak are screwed anyway.
April 12, 2012 @ 1:03 PM
poorgradstudent wrote:No
[quote=poorgradstudent]No one?
You’ve got sellers stuck in properties they can’t get away from. You’ve got buyers who want to take advantage of low interest rates and move from renter to owner status who can’t find a property at a price they can afford.
I don’t see anyone “winning” until the overall economy improves more.[/quote]
I didn’t specify time frame. So, unless you think we’ll stay at a stand off indefinitely, someone will win.
April 12, 2012 @ 3:45 PM
AN wrote:I didn’t specify
[quote=AN]I didn’t specify time frame. So, unless you think we’ll stay at a stand off indefinitely, someone will win.[/quote]
I think the standoff will last until the economy improves enough for buyers to be willing to meet sellers at their psychological sell point/acceptable loss point, coupled with inflation helping to dilute the real dollar cost a bit (i.e. 500K in 2012 is worth less than 500K in 2009 was).
I suppose if I had to pick, I’d say buyers will “win”. Motivated sellers will lose, unmotivated sellers will stay put. Motivated buyers are a nearly extinct species, and unmotivated buyers like myself and investors will continue sitting on the sidelines and only swooping in on the best deals. Realtors will continue suffering.
April 12, 2012 @ 4:43 PM
poorgradstudent wrote:I think
[quote=poorgradstudent]I think the standoff will last until the economy improves enough for buyers to be willing to meet sellers at their psychological sell point/acceptable loss point, coupled with inflation helping to dilute the real dollar cost a bit (i.e. 500K in 2012 is worth less than 500K in 2009 was).
I suppose if I had to pick, I’d say buyers will “win”. Motivated sellers will lose, unmotivated sellers will stay put. Motivated buyers are a nearly extinct species, and unmotivated buyers like myself and investors will continue sitting on the sidelines and only swooping in on the best deals. Realtors will continue suffering.[/quote]
Your two paragraphs contradicts each other. If buyers will eventually come up to meet the sellers’ desired price, then the seller win. But then you say you’d pick buyers will win. In order for buyers to win, those sellers who would like to sell would have to eventually come down to meet the buyers’ desired price.
Yes, motivated sellers will lose. That’s a given. I’m more interested in the RE market as a whole vs a specific group with the market. Motivated buyers are not a nearly extinct species. If they are, then we won’t see flipped houses AND fixer flying off the market. Price are not moving up because there’s not enough motivated buyers above the current market price. Which, in essence is what I’m trying to gauge with this poll. Right now, there are a pool of buyers who don’t have houses to buy (looking at the multiple offers that we’re starting to hear about). The question is, will they sit tight at the current price or will they give in to the lack of supply and increase their bids on the next time around? If they sit tight or even reduce their bid price (this require the entire buyer pool to participate), then buyer will win, because price will drop. However, if they start to increase their bid price, then seller win.
April 12, 2012 @ 5:38 PM
AN wrote:…Yes, motivated
[quote=AN]…Yes, motivated sellers will lose. That’s a given. I’m more interested in the RE market as a whole vs a specific group with the market. Motivated buyers are not a nearly extinct species. If they are, then we won’t see flipped houses AND fixer flying off the market. Price are not moving up because there’s not enough motivated buyers above the current market price. Which, in essence is what I’m trying to gauge with this poll. Right now, there are a pool of buyers who don’t have houses to buy (looking at the multiple offers that we’re starting to hear about). The question is, will they sit tight at the current price or will they give in to the lack of supply and increase their bids on the next time around? If they sit tight or even reduce their bid price (this require the entire buyer pool to participate), then buyer will win, because price will drop. However, if they start to increase their bid price, then seller win.[/quote]
This is quite a conundrum, AN, and it is interesting that you are soliciting opinions on it here.
I feel that when semi-motivated buyers (who are currently renting or recently sold and ARE qualified to buy but currently don’t want to pay anywhere near market value) decide seriously that they want and need a family home, they will begin to look more carefully at resales comparing those in the same area with each other as to improvements completed, noise levels, position on street, views, etc. This is a little harder to do with an area is not on tract or on a tract which is so old that there are almost no original floor plans remaining. These buyers will then make realistic bids based only upon nearby “equity” resales, always keeping in mind location and flexibility of seller. Maybe some will be able to stretch to get into an area they only dreamed about by asking the seller to carry some or all of the paper.
The hard-core “bargain hunters” will keep playing the SS game until they land one or tire of it and turn into “semi-motivated buyers” :=0
The dearth of building in the near future will help with the “serious consideration of resales” as these buyers won’t have their typical “out” to flock to distant new home projects (after quickly viewing 2-3 *used* homes) and succumbing to the developer’s salespeople who will figure everything out for them.
Unmotivated buyers (who likely never owned anything here, thus will never be satisfied with what they can purchase in SD Co for a particular price, even if they can afford it) will continue renting or move away and buy elsewhere. That’s the way its always been.
Equity sellers hold the cards here. The aged or ill sellers who MUST move (to assisted living or children’s homes and their children don’t want the parent’s home) likely WILL meet bargain-hunting buyers halfway, ESP if they are moving out of county/out of state. Sellers not yet ready to retire/downsize or ready-but-flexible with the date will hold fast to their price because selling now is a want but not a need and they CAN!
April 13, 2012 @ 7:26 PM
It depends on the
It depends on the timeframe.
I believe inventory is so low because with the artificially low interest rates…
1. PITI payments are close to rents which makes it easier for “distressed” sellers to refi and/or rent out their underwater homes (especially with the effective elimination of LTV ratios on refis) instead of having to sell/foreclose/short sale.
2. It makes it easier/more tempting for renters to buy IF they are financing the majority of the purchase and the PITI payments are close to rent.
3. It makes it more tempting for investors (or buyers of primary residences with a lot of cash earning close to 0%) who are having a very difficult time earning anything on more “traditional” investments — that’s why we’re hearing so much about the all-cash offers.
If interest rates rise, the game changes in every one of those scenarios.
Until/unless interest rates rise, this game can go on for a long, long time. The game changer is interest rates, IMHO.
If I were a potential seller, I would be listing our house TODAY.
Short term, sellers win. Long term, buyers win.
April 13, 2012 @ 11:24 PM
+1 to CA Renter’s post
+1 to CA Renter’s post immediately above.
April 14, 2012 @ 7:47 AM
But the game doesn’t change
But the game doesn’t change for all of them if interest rates rise. People who refied both with and without equity now have historically low rates locked for 30 years. Renters who buy have fixed rates and housing costs. If interest rates rise that will likely be due to inflation which will make their home an even better investment. Investors would also reap the benefit of higher rents.
What changes is the situation for future buyers that don’t benefit from current environmental conditions. The low rates buy everyone time. Over time the next big thing will eventually pop up and wash this all away. That’s the way the real world works in contrast to economic theories. Lather….rinse….repeat
If I am a non distressed seller I don’t definitely see a reason to list now. I see a reason to watch and wait. The worst has passed. Locals who have witnessed RE cycles have seen how quickly and by how much prices can rise. Not predicting that here but I would be a wait and watcher myself.
April 14, 2012 @ 6:12 PM
sdrealtor wrote:But the game
[quote=sdrealtor]But the game doesn’t change for all of them if interest rates rise. People who refied both with and without equity now have historically low rates locked for 30 years. Renters who buy have fixed rates and housing costs. If interest rates rise that will likely be due to inflation which will make their home an even better investment. Investors would also reap the benefit of higher rents.
What changes is the situation for future buyers that don’t benefit from current environmental conditions. The low rates buy everyone time. Over time the next big thing will eventually pop up and wash this all away. That’s the way the real world works in contrast to economic theories. Lather….rinse….repeat
If I am a non distressed seller I don’t definitely see a reason to list now. I see a reason to watch and wait. The worst has passed. Locals who have witnessed RE cycles have seen how quickly and by how much prices can rise. Not predicting that here but I would be a wait and watcher myself.[/quote]
Yes, the people who can refi into a permanently lower rate/payment will be safe until/unless they “need” to sell at some point. I think short sales will be with us for a long, long time.
I’m referring more to how today’s interest rates are affecting today’s potential buyers and sellers. The low rates both increase demand and suppress new supply today. As a result of today’s rates, some “distressed” inventory can be kept off the market in the future, but I don’t see this stalled market continuing in perpetuity.
As far as the catalyst for higher rates…I’m not as sure as you are that the “inflation” conditions will be beneficial for wages or rents. IMHO, it will be a currency problem that causes the higher rates. Rents and wages **may** increase if there’s a currency crisis, but that’s not at all a given. What we might see is more bartering and black market transactions, not necessarily a more “robust” economy.
Again, whoever gets this right can do very well for him/herself. Nobody knows until it happens, though.
April 12, 2012 @ 2:11 PM
poorgradstudent wrote:No
[quote=poorgradstudent]No one?
You’ve got sellers stuck in properties they can’t get away from. You’ve got buyers who want to take advantage of low interest rates and move from renter to owner status who can’t find a property at a price they can afford.
I don’t see anyone “winning” until the overall economy improves more.[/quote]
poorgradstudent, I’ll bet there’s plenty of active listings out there that buyers can afford. They just don’t want them. Or they don’t want them unless they can get them for 20-45% under market (priced in line with the recent surrounding SS sold comps). They don’t want them even if they can afford the asking price (or near it) and the “equity” seller(s) made tens of thousands of dollars of recent good and usable improvements on the property.
I feel today’s buyers (ESP FT buyers), for the most part, just don’t want to pay for someone else’s improvements (but will overpay for new construction). The reality is that they don’t realize the cost of materials and labor on a replacement project unless they have actually gotten a contractor bid themselves in the past or gone into Lowes/HD, priced it all for themselves and had their contractors install it.
So after their lowball offer is rejected by a seller, these buyers are free to lowball a neighbor’s listing (with the original LR wall heater and 60 yo leaky windows) where their “lowball offer” may be more successful :=]
Even an 80+ yo seller knows exactly what his/her property is worth on both a sunny day and a cloudy day!
That’s how longtime equity-sellers feel about it.
It’s a free country.
April 14, 2012 @ 4:50 PM
I am surprised that almost no
I am surprised that almost no one mentions the tsunami (or to a lesser degree) of shadow inventory (foreclosure/short sale), of homeowners who live there rent free. Do people think it isn’t substantial anymore? If so, there is NO WAY that the buyer would win. Buyer could win only when there is massive distressed properties in the market.
April 14, 2012 @ 5:02 PM
Buyers! Always the buyers,
Buyers! Always the buyers, because they have all the power.
April 15, 2012 @ 3:07 PM
Everyone has discussed the
Everyone has discussed the inventory side and distressed sellers, but what about the buy side?
Seems to me there is nothing compelling buyers to overpay for houses or bid them up like the pre-bubble years.
The fact that prices are holding with very little inventory suggests that buyers can simply wait.
I guess in some cases, there is some compelling deadline – i.e. you want to buy into a new school district or you need more space with a baby on the way. Perhaps some would like put money into equity instead of rent.
But, what else is there? I don’t think anyone is expecting to be priced out of the market anymore.
Plus, even these “pressured” buyers have options that “distressed” sellers don’t. They can rent, add-on to their current home or just live in a cramped space a bit longer and save a bigger down payment.
It really is a standoff. On both sides you have a small group that is “distressed” – i.e. they need to buy or sell soon – and a larger group that would like to buy/sell but isn’t in a hurry and isn’t willing to do a deal at an unreasonable price.
There is sure to be a Spring bounce, but I still see the buyers holding out longer. Of course, I’m looking down the road a couple years at the effects of the European disaster on the world economy.
If I see the government pull out all the bailout/stimulus/support packages and the market still holds strong, then the true recovery is at hand. As long as they are supporting the market, it means the market just doesn’t have its legs underneath it yet to push those prices up.
April 15, 2012 @ 3:49 PM
It isnt really a stand off
It isnt really a stand off that one can put a finger on. With that said, buyers have been programmed over the last few years to want ever lower prices. When they finally get out there they bid low and lose several houses before realizing going home shopping isnt the walk in the park they expected or the buyers market they expected. Prices are creeping up a little but it takes time for them to realize that. By the time they do they have already lost in a rising price scenario. I’m not ready to declare that yet but when it comes alot of buyers will get blindsided.
Dude, the RE market does not operate in laboratory. Lots of unexpected moving parts that are impossible to gauge.
April 15, 2012 @ 9:21 PM
It also seems that investors
It also seems that investors have a strong influence on the market right now. Investors have a bottom line to meet and an important part of meeting that bottom line is buying at the right price. In other words, there is a natural cap on prices defined by real fundamentals such as rent, cash-flow, and ROI.
When I see words like “standoff” and when I see prices hold steady with low and shrinking inventory, I think that prices are about where they should be and won’t be moving much, except for seasonal impacts, for a while.
Again – I don’t see many factors pushing many people to sell below market. I don’t see many factors pushing buyers to buy above market.
I don’t operate in a laboratory, either.
April 15, 2012 @ 9:38 PM
One factor that push people
One factor that push people to buy is natural family formation. When you get married and have kids, you tend to buy your 1st home (if you didn’t already buy one). Most people don’t wait. Most people don’t do the math and say, oh, this place should rent for this much, so I’ll only offer that much. They’ll see what available and offer below or at asking price. If they get out bid a few times, they’ll start to increase their bid (over asking), until they get the house they want. On top of the natural family formation, you have the people who walked 3-5 years ago. They’ll have their credit cleared in a couple of years. Some of them will be back in the market. Then there are people who have been waiting (I assume this group of people are small). Then there are people who are currently unemployed who (hopefully) will be employed in the near future. So, I see a potential to have a lot more buyer (more than your natural family formation and immigration).
On the supply side, we are currently see 2 type of inventories. Beat up homes that are selling at deep discount but are being scooped up by cash investor. This is the bulk of the inventory. Then there are the flipped houses from said cash investors. These houses are selling for at market price. I don’t see too many equity sale.
The big question is, is the pent up demand will be enough to clear out the pent up supply. Only time will tell. I would say the next 3 years will be quite interesting to watch.
April 16, 2012 @ 10:53 AM
AN
Agree with all that also.
AN
Agree with all that also. You brought up something I havent heard discussed before also. Alot fo people lost homes and had their credit trashed. The first wave of them are now able to qualify for loans. There could be a buyer tsunami crashing into the foreclosure tsunami;) Wouldnt that be fun to watch!!
April 16, 2012 @ 10:55 AM
sdrealtor wrote:AN
Agree with
[quote=sdrealtor]AN
Agree with all that also. You brought up something I havent heard discussed before also. Alot fo people lost homes and had their credit trashed. The first wave of them are now able to qualify for loans. There could be a buyer tsunami crashing into the foreclosure tsunami;) Wouldnt that be fun to watch!![/quote]
Yes, that’d be fun to watch!!! I have my popcorn out, let the game begin :-D.
April 16, 2012 @ 1:23 PM
AN wrote:One factor that push
[quote=AN]One factor that push people to buy is natural family formation. When you get married and have kids, you tend to buy your 1st home (if you didn’t already buy one). Most people don’t wait. Most people don’t do the math and say, oh, this place should rent for this much, so I’ll only offer that much. They’ll see what available and offer below or at asking price. If they get out bid a few times, they’ll start to increase their bid (over asking), until they get the house they want. On top of the natural family formation, you have the people who walked 3-5 years ago. They’ll have their credit cleared in a couple of years. Some of them will be back in the market. Then there are people who have been waiting (I assume this group of people are small). Then there are people who are currently unemployed who (hopefully) will be employed in the near future. So, I see a potential to have a lot more buyer (more than your natural family formation and immigration).
On the supply side, we are currently see 2 type of inventories. Beat up homes that are selling at deep discount but are being scooped up by cash investor. This is the bulk of the inventory. Then there are the flipped houses from said cash investors. These houses are selling for at market price. I don’t see too many equity sale.
The big question is, is the pent up demand will be enough to clear out the pent up supply. Only time will tell. I would say the next 3 years will be quite interesting to watch.[/quote]
The question is if someone is unable (not qualify) to buy a house in this market (low interest rate, depressed prices, etc…) then what makes you think that it will be any different in 3 years down the road. If anything, I expect the interest rates to be higher by then and if the economy improves so will the housing prices. Those factors alone would probably priced quite a few potential buyers out of the market by then.
I found it interesting that with the current market conditions, it’s not so much where’s the inventory, but rather where are the buyers? Both prices and interest rates are at a very buyer-friendly levels and one would expect they would come out in droves and bid up the prices. But that’s not happening. My guess is that there is very little demand (and no pent-up demands). The few buyers we have are either flippers or investors and even a smaller percentage are due to relocation reasons.
April 16, 2012 @ 1:35 PM
“I found it interesting that
“I found it interesting that with the current market conditions, it’s not so much where’s the inventory, but rather where are the buyers? Both prices and interest rates are at a very buyer-friendly levels and one would expect they would come out in droves and bid up the prices.”
Where are the bidding up buyers ?
Go out and try to qualify for a loan on a home that is more than the foreclosure down the street sold for last month and you will find out.
April 16, 2012 @ 1:52 PM
The buyers are out in droves
The buyers are out in droves and the lenders/appraisers are doing a better job keeping prices in check.
April 16, 2012 @ 9:05 PM
sdrealtor wrote:The buyers
[quote=sdrealtor]The buyers are out in droves and the lenders/appraisers are doing a better job keeping prices in check.[/quote]
Wow, actually requiring borrowers to qualify. What a concept!
April 16, 2012 @ 9:19 PM
JohnAlt91941 wrote:sdrealtor
[quote=JohnAlt91941][quote=sdrealtor]The buyers are out in droves and the lenders/appraisers are doing a better job keeping prices in check.[/quote]
Wow, actually requiring borrowers to qualify. What a concept![/quote]
Nice comment but wholey inaccurate. It has nothing to do with buyers qualifying. It has to do with lenders/appraiser putting a cap on appraised values.
One of my best friends is in ecrow on a house and the appraisal came in close to $100K low. He’s putting about 50% down and shrugged it off. The comps were not comparable to this house. The appraiser told both me and the loan officer he couldnt appraise it any higher based upon the available comps. Then he said he had seen the available comps, they werent close and that in 25 years of doing appraisals he had never seen such a good ocean view, unobstructed, big flat all usable lot, one story, room to expand, no roof tops, no HOA, no CCR’s, no MR’s and no freeway noise. He said while he couldnt appraise it at the sales price he understood the value and would pay it himself. There are 5 back up offers at the same price. Three of which are all cash. If my friend didnt buy this one the next one would be based upon this comp for price and would almost certainly have been inferior. Appraisals dont always tell the real story.
April 16, 2012 @ 11:29 PM
sdrealtor wrote:One of my
[quote=sdrealtor]One of my best friends is in ecrow on a house and the appraisal came in close to $100K low. He’s putting about 50% down and shrugged it off. The comps were not comparable to this house. The appraiser told both me and the loan officer he couldnt appraise it any higher based upon the available comps. Then he said he had seen the available comps, they werent close and that in 25 years of doing appraisals he had never seen such a good ocean view, unobstructed, big flat all usable lot, one story, room to expand, no roof tops, no HOA, no CCR’s, no MR’s and no freeway noise. He said while he couldnt appraise it at the sales price he understood the value and would pay it himself. There are 5 back up offers at the same price. Three of which are all cash. If my friend didnt buy this one the next one would be based upon this comp for price and would almost certainly have been inferior. Appraisals dont always tell the real story.[/quote]
It is unfortunate that appraisers and lenders are using the nearby beater SS and REO closed sales to value an equity listing in good shape and especially one in a superior location. That’s why I posted here that it is a good time to buy if the buyer has 30% down – to allow them 10% for “wiggle room” in case they want to buy an equity listing where their lender will only loan them 80% of the most recent nearby “outlier” (distressed) sale.
[quote=bearishgurl]I’m not yet a “potential buyer” but I think if a buyer has a 30% downpayment saved (for “wiggle room”), can qualify for a sub 4% mortgage, find a property they really want and its seller will accept their offer then they should buy it.
It should be a property that is well-located and that they are willing to own at least ten years (whether or not they live there the entire time)….[/quote]
It seems in your friend’s case that 30% would have not been enough. I don’t blame him for putting 50% down and shrugging his shoulders. The other 50% will likely be mortgaged at the lowest rates in history and he managed to get his offer accepted over two apparent all-cash buyers which is no small feat.
Sometimes when or if we see what we have wanted to own our entire lives (like this buyer probably did) and it is located exactly where we wanted it, that, regardless of condition, we have to take that opportunity to make a serious offer and follow through with negotiations. If we initially play games and lowball the seller, we’ll be rejected outright (won’t even get a counter-offer) and, in a market like this, we might come across dozens more properties by years-end and none would match that listing we lost a bid on because we wanted to lowball it in line with recent nearby distress sales.
[quote=bearishgurl][quote=outtamojo]What if you feel like there will be less selection later on?[/quote]Sorry to “butt in” here again, but a buyer doesn’t NEED “selection.” A buyer only NEEDS one property he/she would like to own, can afford and where the seller will accept his offering price and terms.
Why don’t you ask the young Silicon Valley buyers of today if they are worried about “selection?”[/quote]
[quote=sdrealtor]Fvck the stats! You want to be the outlier. You dotn buy stats. You buy one house. Buy the right one at the right price and that doesnt necessarily relate to asking price.[/quote]
This is correct. You only buy one house. It will presumably be what you want or close to it, given your qualifications. Every house varies in value from neighboring houses, especially if they are not on tract or the tract is so old that there are little to no original floor plans left.
You can’t see “value” in black and white stats. For instance, one side of the street was built on fill and has a few cracked slabs (which have had recent distress sales). The other side of the street has all cut lots. Are they on the same tract? Yes. You can only see the “value” when you tour the property yourself and follow your inspector around in escrow.
In this day and age, if you don’t know exactly what you want, where you want it and that you are qualified to buy it, you shouldn’t be wasting agents’ time. As a buyer on a tract, you need to study your micro-areas with tenacity and over time to understand the differences between models and lot size and location. These are REAL TANGIBLE properties and there can be a BIG difference between the same model on a tract, depending on location, lot size, elevation and what was done to it by previous owners. They are NOT paper stats.
If you are shopping custom, if the property has exactly what you want where you want it and you can afford it, make a deal and BUY IT NOW!
I have never seen fixed rates this low in my life and have had fixed mortgages at 10.5%, 9.5%, 7.5%, 6.75% plus T-Bill and COFI ARMS.
Good L@rd!! I’m finding myself actually agreeing with sdr tonite and I’m only drinking seltzer water :-0
April 17, 2012 @ 1:05 PM
bearishgurl wrote:Good L@rd!!
[quote=bearishgurl]Good L@rd!! I’m finding myself actually agreeing with sdr tonite and I’m only drinking seltzer water :-0[/quote]
I’m tearing-up over this special moment.
April 17, 2012 @ 1:44 PM
sdduuuude wrote:bearishgurl
[quote=sdduuuude][quote=bearishgurl]Good L@rd!! I’m finding myself actually agreeing with sdr tonite and I’m only drinking seltzer water :-0[/quote]
I’m tearing-up over this special moment.[/quote]
sdduuuuude, I think it’s time for you to refill the keg, roll down your garage tarp and invite some of your neighbors over to play pool …. :=}
April 17, 2012 @ 2:46 PM
I am concerned over both of
I am concerned over both of your well being at this time. The Dalai Lama is in town and I shall seek spiritual guidance for both of you.
April 16, 2012 @ 11:31 PM
sdrealtor wrote:
Nice comment
[quote=sdrealtor]
Nice comment but wholey inaccurate. It has nothing to do with buyers qualifying. It has to do with lenders/appraiser putting a cap on appraised values.
[/quote]
What reason would the banks have to want to keep appraised values low (or realistic)? Maybe to minimize risk?
Minimizing risk should always have been a priority. Just because insanity prevailed from 2001-2005 doesn’t make sane business practices obsolete.
April 17, 2012 @ 12:33 AM
JohnAlt91941 wrote:sdrealtor
[quote=JohnAlt91941][quote=sdrealtor]
Nice comment but wholey inaccurate. It has nothing to do with buyers qualifying. It has to do with lenders/appraiser putting a cap on appraised values.
[/quote]
What reason would the banks have to want to keep appraised values low (or realistic)? Maybe to minimize risk?
Minimizing risk should always have been a priority. Just because insanity prevailed from 2001-2005 doesn’t make sane business practices obsolete.[/quote]
Again your comment exposes ignorance. If I have $160K in the bank and a $200K W-2 income I can easily qualify for a $640K loan to buy a property for $800K. Hell I could qualify for an $800K loan.
If it appraises for $700K and I dont have $240K to put down I am SOL not matter what I qualify for.
April 17, 2012 @ 11:47 AM
sdrealtor wrote: . . . If I
[quote=sdrealtor] . . . If I have $160K in the bank and a $200K W-2 income I can easily qualify for a $640K loan to buy a property for $800K. Hell I could qualify for an $800K loan.
If it appraises for $700K and I dont have $240K to put down I am SOL not matter what I qualify for.[/quote]
Exactly. A buyer would be SOL because he/she didn’t have enough cash for “wiggle room” to purchase an “equity sale” property where its owners may have purchased the premium location and the improvements he desires at a lesser price than they cost today and so are willing to make a deal under the current market conditions.
[quote=sdrealtor] . . .It has nothing to do with buyers qualifying. It has to do with lenders/appraiser putting a cap on appraised values.
One of my best friends is in ecrow on a house and the appraisal came in close to $100K low. He’s putting about 50% down and shrugged it off. The comps were not comparable to this house. The appraiser told both me and the loan officer he couldnt appraise it any higher based upon the available comps. Then he said he had seen the available comps, they werent close and that in 25 years of doing appraisals he had never seen such a good ocean view, unobstructed, big flat all usable lot, one story, room to expand, no roof tops, no HOA, no CCR’s, no MR’s and no freeway noise. He said while he couldnt appraise it at the sales price he understood the value and would pay it himself. There are 5 back up offers at the same price. Three of which are all cash. If my friend didnt buy this one the next one would be based upon this comp for price and would almost certainly have been inferior. Appraisals dont always tell the real story.[/quote]
Good scenario for discussion purposes. This likely happens everywhere in the county (except those enclaves where there is little to zero “distress”). It is unfortunate that this appraiser’s hands were tied and due to the proliferation of recent distress-sale comps and not much else, those sales reflect the current “value” of the properties in the area …. that is, until a buyer with a large cash position comes in and closes on a new, higher sold comp based not upon a distant lender’s appraised value but what someone was actually willing to pay. And this *new* sold comp could have the effect of getting more “discretionary” equity sellers to come out of the woodwork and list! Hopefully, the high cash-position buyers will lead some areas full of longtime equity owners out of this “undervaluation phase” caused by distressed sold comps.
The way I see it, that’s the only way out of this distress-forced undervaluation of county areas full of high-equity sellers, IMHO. The “high-cash purchase” buying will leave them with higher valuations in the areas cash-rich buyers purchase in (which are usually the same areas as equity sellers can be found). The newer inland tracts on less-desirable land (which were all originally sold during the “millenium boom”) will remain conventional 80/20 sales, PMI sales or possibly even govm’t program sales.
As is always has been and should be.
April 16, 2012 @ 1:53 PM
The-Shoveler wrote:”I found
[quote=The-Shoveler]”I found it interesting that with the current market conditions, it’s not so much where’s the inventory, but rather where are the buyers? Both prices and interest rates are at a very buyer-friendly levels and one would expect they would come out in droves and bid up the prices.”
Where are the bidding up buyers ?
Go out and try to qualify for a loan on a home that is more than the foreclosure down the street sold for last month and you will find out.[/quote]
I don’t need to try. I am in it and I know it – at least in and around central SD. You’re not doing your homework if you pay at or than than the initial listing prices. Have you try to get a loan and looking at home sales down the street lately?
April 16, 2012 @ 4:02 PM
There is absolutely no truth
There is absolutely no truth to the statement that you arent doing your homework if you pay initial lisitng prices. They are set arbitrarily buy sellers and their agents. Some are too high, some are just right and some are too low. The trick is understanding which one it is.
April 16, 2012 @ 4:57 PM
sdrealtor wrote:There is
[quote=sdrealtor]There is absolutely no truth to the statement that you arent doing your homework if you pay initial lisitng prices. They are set arbitrarily buy sellers and their agents. Some are too high, some are just right and some are too low. The trick is understanding which one it is.[/quote]
I understand. However, the chances are that the “beat up” homes that are listed too low you’re not going to have a chance against the cash buyers. And if you’re not a cash buyer (trying to get a loan) then you might as well remove those “too low” listings from your wish list. I am no expert, but I believe the tract homes in MM built in the 70s that’s been put on the market that need some TLC are mostly priced right or even lower than what I think the fair price is and yet I haven’t seen a single transaction that I tracked sold at or above listing. You’re more likely to lose out on a bid because your low-ball offer is lower than the next guy’s and not because your full-price offer is not as high as some others.
April 16, 2012 @ 5:02 PM
ltsdd wrote:sdrealtor
[quote=ltsdd][quote=sdrealtor]There is absolutely no truth to the statement that you arent doing your homework if you pay initial lisitng prices. They are set arbitrarily buy sellers and their agents. Some are too high, some are just right and some are too low. The trick is understanding which one it is.[/quote]
I understand. However, the chances are that the “beat up” homes that are listed too low you’re not going to have a chance against the cash buyers. And if you’re not a cash buyer (trying to get a loan) then you might as well remove those “too low” listings from your wish list. I am no expert, but I believe the tract homes in MM built in the 70s that’s been put on the market that need some TLC are mostly priced right or even lower than what I think the fair price is and yet I haven’t seen a single transaction that I tracked sold at or above listing. You’re more likely to lose out on a bid because your low-ball offer is lower than the next guy’s and not because your full-price offer is not as high as some others.[/quote]
Things vary community by community. I do know of at least one 70’s tract house in MM that is closing above asking price on Wednesday.
April 16, 2012 @ 5:14 PM
sdrealtor wrote:ltsdd
[quote=sdrealtor][quote=ltsdd][quote=sdrealtor]There is absolutely no truth to the statement that you arent doing your homework if you pay initial lisitng prices. They are set arbitrarily buy sellers and their agents. Some are too high, some are just right and some are too low. The trick is understanding which one it is.[/quote]
I understand. However, the chances are that the “beat up” homes that are listed too low you’re not going to have a chance against the cash buyers. And if you’re not a cash buyer (trying to get a loan) then you might as well remove those “too low” listings from your wish list. I am no expert, but I believe the tract homes in MM built in the 70s that’s been put on the market that need some TLC are mostly priced right or even lower than what I think the fair price is and yet I haven’t seen a single transaction that I tracked sold at or above listing. You’re more likely to lose out on a bid because your low-ball offer is lower than the next guy’s and not because your full-price offer is not as high as some others.[/quote]
Things vary community by community. I do know of at least one 70’s tract house in MM that is closing above asking price on Wednesday.[/quote]
So there’s always that one exception. One of those that didn’t do their homework.
Run the numbers, and see for yourself how many MM’s 70s tract homes sold at or above initial asking vs below asking within the last 6 mos. The truth in in the data.
April 16, 2012 @ 5:51 PM
ltsdd wrote:So there’s always
[quote=ltsdd]So there’s always that one exception. One of those that didn’t do their homework.
Run the numbers, and see for yourself how many MM’s 70s tract homes sold at or above initial asking vs below asking within the last 6 mos. The truth in in the data.[/quote]
Talking about data, here’s the sales data for the last 100 sales: http://www.sdlookup.com/Closings-92126-Mira_Mesa
There are 51 sold below listing, 14 at listing, and 30 above listings. I don’t think 30 above listings and 14 at listings would be considered an exception.
April 16, 2012 @ 6:32 PM
AN wrote:ltsdd wrote:So
[quote=AN][quote=ltsdd]So there’s always that one exception. One of those that didn’t do their homework.
Run the numbers, and see for yourself how many MM’s 70s tract homes sold at or above initial asking vs below asking within the last 6 mos. The truth in in the data.[/quote]
Talking about data, here’s the sales data for the last 100 sales: http://www.sdlookup.com/Closings-92126-Mira_Mesa
There are 51 sold below listing, 14 at listing, and 30 above listings. I don’t think 30 above listings and 14 at listings would be considered an exception.[/quote]
Nope. Wrong stats.
How many of those 44 you mentioned actually sold at or above the initial listing price? I only checked the first few on your list that showed sold prices at or above asking and most of those are sold for below the INITIAL ASKING price.
April 16, 2012 @ 6:56 PM
ltsdd wrote:Nope. Wrong
[quote=ltsdd]Nope. Wrong stats.
How many of those 44 you mentioned actually sold at or above the initial listing price? I only checked the first few on your list that showed sold prices at or above asking and most of those are sold for below the INITIAL ASKING price.[/quote]
If it’s the wrong stats, then why don’t you look up the data for your question. I don’t have time to track down every single sold listings. But I guarantee you it’s not 1 or 2. Why don’t you bring data since you’re asking for it.
You claimed I was wrong and that you checked the first few? I just looked at the list and the 2nd and 3rd most recent sold listing above asking price are above the INITIAL ASKING price. So, what are you talking about exactly?
April 16, 2012 @ 7:21 PM
AN wrote:ltsdd wrote:Nope.
[quote=AN][quote=ltsdd]Nope. Wrong stats.
How many of those 44 you mentioned actually sold at or above the initial listing price? I only checked the first few on your list that showed sold prices at or above asking and most of those are sold for below the INITIAL ASKING price.[/quote]
If it’s the wrong stats, then why don’t you look up the data for your question. I don’t have time to track down every single sold listings. But I guarantee you it’s not 1 or 2. Why don’t you bring data since you’re asking for it.
You claimed I was wrong and that you checked the first few? I just looked at the list and the 2nd and 3rd most recent sold listing above asking price are above the INITIAL ASKING price. So, what are you talking about exactly?[/quote]
Wrong again. Third on your list (8624 Bennington St) showed sold price at the “asking” price which is actually sold for 29K below the initial asking price. And yes, you are wrong again because just based on the first few samples of the listing it showed that by the time you tally them all up it will show that the number of homes sold at or above initial listing price will be lower than 44.
All that being said, I think it is really besides the point. Someone implied that there are “up bidders” that are bidding up the few houses that are on the market. My point simply is based on my observation in MM with the 70s tract homes ( not condos and not townhomes – I have 0 interest in those). I have yet to see any stats that support the “up bidders” theory. Don’t you think that if the “up bidders” are of any significance numbers wouldn’t that have affected the home prices around MM by now?
Now, if you are one of those people who’s going to take a statement like “It’s always sunny in san diego” and then pointed out that that’s there’s no truth to that statement because it was cloudy and rainy a few days ago, then I will push the reject button and remove myself from this discussion.
April 16, 2012 @ 8:56 PM
ltsdd wrote:Wrong again.
[quote=ltsdd]Wrong again. Third on your list (8624 Bennington St) showed sold price at the “asking” price which is actually sold for 29K below the initial asking price. And yes, you are wrong again because just based on the first few samples of the listing it showed that by the time you tally them all up it will show that the number of homes sold at or above initial listing price will be lower than 44.
All that being said, I think it is really besides the point. Someone implied that there are “up bidders” that are bidding up the few houses that are on the market. My point simply is based on my observation in MM with the 70s tract homes ( not condos and not townhomes – I have 0 interest in those). I have yet to see any stats that support the “up bidders” theory. Don’t you think that if the “up bidders” are of any significance numbers wouldn’t that have affected the home prices around MM by now?
Now, if you are one of those people who’s going to take a statement like “It’s always sunny in san diego” and then pointed out that that’s there’s no truth to that statement because it was cloudy and rainy a few days ago, then I will push the reject button and remove myself from this discussion.[/quote]
Wrong again. I wasn’t referring to Bennington St.
Let me provide you 3, since I said not one or two:
http://www.sdlookup.com/MLS-120000740-11148_Adriatic_Pl_San_Diego_CA_92126
http://www.sdlookup.com/MLS-120011857-10881_Deering_St_San_Diego_CA_92126
http://www.sdlookup.com/MLS-120008372-8511_Ivory_Coast_Dr_San_Diego_CA_92126
Now, lets take a look at what your original statement:
[quote=ltsdd]So there’s always that one exception. One of those that didn’t do their homework.
Run the numbers, and see for yourself how many MM’s 70s tract homes sold at or above initial asking vs below asking within the last 6 mos. The truth in in the data.[/quote]
So, is 3 an exception? Where are your data? It’s easy to make others back up their claim. But where are your data to back up your claim.
I never said prices in MM are rising. But that doesn’t mean there aren’t a lot of buyers out there. Selling over listing just mean the list price was too low. Selling under listing just mean the listing was too high. It does not say anything about the demand. You counter an “up bidders” statement from someone by saying look, this subset of the market is not being bid up, so “up bidders” must not exist. That sounds awefully like you’re the one who are taking a statement like “It’s always sunny in san diego” and then pointed out that that’s there’s no truth to that statement because it was cloudy and rainy a few days ago.
You know what else sounds a lot like your “It’s always sunny in San Diego” statement? I made a point that 30 sold above listing and 14 at listing. So, it’s probably not an exception. Then you go and say you looked at the first few, and since it’s not at or above listing, my entire statement is false. So, are you pushing the rejecting your own argument when you’re pushing that reject button?
Rereading your post, it almost sound like you’re trying to get people to do the leg work for you wrt to the exact type of properties you’re looking to buy. Not, about MM as a whole or even the entire San Diego market. Which is my original point when I posted this poll. It wasn’t about the 70s beater house in MM or MM as a whole. It’s about San Diego housing market.
April 16, 2012 @ 9:10 PM
Good post AN. The sold price
Good post AN. The sold price vs listing price is meaningless for a single home. It only represents how well agents as a whole set price on aggregate. The problem is people buy a single home not the aggregate. ltsdd switched his argument midstream. Let him continue to think he can out think the invisible hand. There is no short cut to patience, research and good help.
April 16, 2012 @ 9:43 PM
sdrealtor wrote:Good post AN.
[quote=sdrealtor]Good post AN. The sold price vs listing price is meaningless for a single home. It only represents how well agents as a whole set price on aggregate. The problem is people buy a single home not the aggregate. ltsdd switched his argument midstream. Let him continue to think he can out think the invisible hand. There is no short cut to patience, research and good help.[/quote]
The stats that AN cited show that collectively (at least for the small sample that he cited) more people bought properties for below the initial asking price then those who didn’t. If I am going to buy a house I would like to see that at the end of the deal my stats will align the former rather than the latter. Yes, the invisible hand demonstrated that individually the buyers are striving to low-ball the sellers as much as they can. And collectively it’s shown that that’s the case. Because prices hasn’t gone up and there are more buyers able to get them for less than what the sellers wanted. You can argue however you want, the fact is that those homes in MM are listed at what already a depressed price and yet more homes are sold for less than what was asked. And if as a buyer and you choose to be a stat that align with the minority (paying more than initial listing) then more power to you.
April 16, 2012 @ 10:10 PM
Fvck the stats! You want to
Fvck the stats! You want to be the outlier. You dotn buy stats. You buy one house. Buy the right one at the right price and that doesnt necessarily relate to asking price.
April 16, 2012 @ 10:21 PM
sdrealtor wrote:Fvck the
[quote=sdrealtor]Fvck the stats! You want to be the outlier. You dotn buy stats. You buy one house. Buy the right one at the right price and that doesnt necessarily relate to asking price.[/quote]
So more than 60% of the transactions that were below the initial asking price is considered as outliers?
April 16, 2012 @ 10:42 PM
ltsdd wrote:sdrealtor
[quote=ltsdd][quote=sdrealtor]Fvck the stats! You want to be the outlier. You dotn buy stats. You buy one house. Buy the right one at the right price and that doesnt necessarily relate to asking price.[/quote]
So more than 60% of the transactions that were below the initial asking price is considered as outliers?[/quote]
Yes. I’ve been saying this here for a few months now. They are SS’s and REO’s. Those “outliers” are the most common sale now, esp SS’s.
A buyer can’t expect an equity seller of a well-maintained and even substantially rehabbed/remodeled property who is not behind in their mortgage or owns free and clear to sell at these deep discounts. If you want a property that is not a beater and/or gets stripped and/or left trashed before closing by scumbag SS “sellers” or foreclosed-on “trustors,” then you will have to have a “meeting of the minds” with the “equity-seller” who owns it, because, if someone else doesn’t give them what they want or need to convey title now, they will simply remove the listing from the market. Why? Because, unlike the “60%,” they CAN!
Expect to get your lowball offers (in line with closing price of the “60%” of recent nearby sales) rejected by these equity sellers in short order. If the property is good enough in a good enough area, they will get their price (within reason).
You pay for exactly what you get in this life. If you insist on buying at the price-point of the “60%”, I hope you’re handy, you have your weekend-time freed up for the next year-plus, have a pickup (preferably a little beat up with side rails), have googled the way to the dump and have a stash of working power tools at the ready :=]
April 17, 2012 @ 12:07 AM
bearishgurl wrote:
If you
[quote=bearishgurl]
If you want a property that is not a beater and/or gets stripped and/or left trashed before closing by scumbag SS “sellers” or foreclosed-on “trustors,”
[/quote]
You assume too much. Scumbag SS “sellers”? That’s a bit harsh isn’t it? I supposed you know each and every short seller’s situation?
[quote=bearishgurl] If you insist on buying at the price-point of the “60%”, I hope you’re handy, you have your weekend-time freed up for the next year-plus, have a pickup (preferably a little beat up with side rails), have googled the way to the dump and have a stash of working power tools at the ready :=][/quote]
Again, completely baseless assumptions.
Not all SS or REOs are in the kind of conditions you are describing.
April 17, 2012 @ 10:46 AM
ltsdd wrote:bearishgurl
[quote=ltsdd][quote=bearishgurl]
If you want a property that is not a beater and/or gets stripped and/or left trashed before closing by scumbag SS “sellers” or foreclosed-on “trustors,”
[/quote]
You assume too much. Scumbag SS “sellers”? That’s a bit harsh isn’t it? I supposed you know each and every short seller’s situation?
[quote=bearishgurl] If you insist on buying at the price-point of the “60%”, I hope you’re handy, you have your weekend-time freed up for the next year-plus, have a pickup (preferably a little beat up with side rails), have googled the way to the dump and have a stash of working power tools at the ready :=][/quote]
Again, completely baseless assumptions.
Not all SS or REOs are in the kind of conditions you are describing.[/quote]
Actually, the REO’s acquired by FNMA have had an average of $5700 spent on them in recent years to clean them up and ready them for sale. FNMA provides these cleanup/minor rehab funds to local contractors in order to obtain as much as they can upon sale. They’re not the worst culprit which is currently undervaluing the entire RE market. It is actually the SS’s, some of which seem to miraculously sell to friends and relatives of the listing agent for 45%+ below market.
From my experience, I have seen that both SS “sellers” and the defaulting trustors who are losing or lost their properties to foreclosure usually let them go to waste as soon as they are unable to make payments anymore, if not sooner. Neither of these types of “owners” are usually solvent enough to pay the rest of their bills and survive, much less maintain their underwater properties. This means they may have squatted in the property for up to three years with the sprinkler system turned off, broken glass, broken doors and locks, broken appls, broken furnace, leaky roof, never had carpets cleaned, couldn’t afford to make trip(s) to the dump before they vacated, and too lazy to pull 4’+ high weeds in the backyard (where it doesn’t show to the street). They figure, we’re losing this home, so why bother?
The REO’s you are seeing on the market, for the most part, have had minor (under $500) obvious broken items fixed, the copious junk left behind has been hauled out, their interior has been sprayed over with white paint, the carpet(if any) has been cleaned, the weeds have been mowed down, the locks changed and the pool emptied. This DOESN’T MEAN the roof doesn’t leak and all systems work properly and by law, the lender-owner is exempt from warranty on the condition of an REO.
The SS’s vary wildly in condition, from unsanitary to the point of condemnation to reasonably clean and good condition (requiring little haul-out and clean up to move in). As a buyer, when commencing escrow on an approved SS, you REALLY ARE trusting that seller not to strip anything that wasn’t in their listing agreement or counter offer and to leave the property reasonably habitable for you. Many SS “sellers” no doubt have no where to go and vacate at the last minute, because they often don’t have a firm closing date until it is upon them. They could be disgruntled at closing because the terms of the final sale (that they had no control over) left them with worse credit than they imagined would happen. A SS is by nature an adversarial transaction because both parties are in opposition to each other (never really reached an “agreement”) because neither has control over the terms of that “agreement.” The control is held by the third-party aggrieved lender who is looking out for their interests only (and may also be distant and ignorant, relying on the local listing agent for valuation). Because of these factors, a nearly-consummated SS is ripe for “seller” stalling their occupancy and stripping.
IMO, you aren’t likely going to get the following “goodies” buying “distressed” property unless you are a 40%+ down or all-cash buyer (as they are usually found only in “equity sales” unless the SS “seller” actually got into that position by “remodeling”), lol. For example:
-Anderson wood windows
-30-yr slate roof
-recently stamped concrete
-pool that doesn’t need work
-landscaping that doesn’t need work or
complete tear-out/redo
-“Low e” windows
-tankless water heater
-new stucco (on older homes)
-new trim paint (older homes)
-builder’s premium lot
-REAL original wood slat floors in good condition
-gourmet appls
-waterless-tank toilets
-and most importantly, <1.5 mi from ocean or bay
with a possible waterview or cityview
More likely, your "distressed property" is going to be in an inland tract situated in a sea of other "distressed properties." It will have the bare-minimum builder appointments in it which will vary in condition. It may have never been landscaped properly and its windows may have never been covered properly. It is likely encumbered by MR/HOA.
So, for a buyer of an inland "distressed" tract home, it wouldn't be worth it to put those expensive improvements in themselves (yes, even after paying a heavily discounted price) because the cost to do so would render the new buyer immediately "underwater" since they very well may have to spend money on landscape and window coverings upon move-in.
Lot of buyers seem to "think" distressed properties are the ONLY type out there where one can obtain a "good deal" but nothing could be further from the truth. It depends on what you consider a "good deal."
Again, you get what you pay for.
April 17, 2012 @ 11:23 AM
ltsdd wrote:sdrealtor
[quote=ltsdd][quote=sdrealtor]Fvck the stats! You want to be the outlier. You dotn buy stats. You buy one house. Buy the right one at the right price and that doesnt necessarily relate to asking price.[/quote]
So more than 60% of the transactions that were below the initial asking price is considered as outliers?[/quote]
You are blinded by stats and missing the point. The stats dont matter you want to get the one house that is right for you. It doesnt matter whether it is over or underpriced as long as the final price you agree to is fair market value. In the case I cited, it is a home tucked away in a quiet part of MM on a cul de sac with a big lot and an incredible view over the Penasquitos Canyon. It had quite a bit of deferred maintenance but bones were fine and the floor plan was very good. For $20 to 30K you could take care of everything. It had a well done addition in back and is perfectly set up to add a fantastic master suite in the existing flow/footprint when/if they want to. The plumbing is exactly where it needs to be to access easily for the new master bath. The master suite will enjoy lie down in bed views of hot air ballons rising over the canyon. The views are nothing short spectacular. We had been looking in MM for a couple months and losing at on several of the nicer properties writing full price all cash offers. This one was worth fightling for. It was in a word…..the outlier.
April 17, 2012 @ 11:59 AM
sdrealtor wrote:You are
[quote=sdrealtor]You are blinded by stats and missing the point. The stats dont matter you want to get the one house that is right for you. It doesnt matter whether it is over or underpriced as long as the final price you agree to is fair market value. In the case I cited, it is a home tucked away in a quiet part of MM on a cul de sac with a big lot and an incredible view over the Penasquitos Canyon. It had quite a bit of deferred maintenance but bones were fine and the floor plan was very good. For $20 to 30K you could take care of everything. It had a well done addition in back and is perfectly set up to add a fantastic master suite in the existing flow/footprint when/if they want to. The plumbing is exactly where it needs to be to access easily for the new master bath. The master suite will enjoy lie down in bed views of hot air ballons rising over the canyon. The views are nothing short spectacular. We had been looking in MM for a couple months and losing at on several of the nicer properties writing full price all cash offers. This one was worth fightling for. It was in a word…..the outlier.[/quote]
LOL! I think I actually toured this subdivision (in abt ’90-91?) when it was only a few model homes and a couple of streets. It was dusk and balloons were still bobbing between what is now Penasquitos Reserve and Sorrento Mesa.
Were the original homes light pink and light peach? I seem to recall the name “Porcelain Collection” or something like that.
As I recall, it was incredible view due to the slant and elevation of these streets (probably even better now due to all the improvements to the reserve).
April 16, 2012 @ 9:21 PM
AN wrote:
So, is 3 an
[quote=AN]
So, is 3 an exception? Where are your data? It’s easy to make others back up their claim. But where are your data to back up your claim.
[/quote]
Like I said in my earlier post. I have been and I am in the market as a buyer. I know what I am seeing. As for the data, look at the numbers you cited. By the time you could figure out how to correctly tally them up you will see that the ratio is more likely to be 6 to 4 or 7 to 3 if you take into consideration those that priced way too low. Do you think a 3/2 SFR priced at $275K and sold at $280K is truly and “up bid”? How about this, the fact that it’s priced so low and yet the “up bid” wasn’t that significantly higher than the original listing tells you a lot about the leverage buyers have.
[quote]
I never said prices in MM are rising. But that doesn’t mean there aren’t a lot of buyers out there.
[/quote]
You have to decide what argument you’re trying to make. There are a lot of buyers (what is a lot?), which means there’s a demand. You put a lot of buyers together with the “trickle trickle trickle” housing supply and yet that hasn’t driven price upwards? Do you have a clue the what basics of demand and supply is?
[quote]
Selling over listing just mean the list price was too low. Selling under listing just mean the listing was too high. It does not say anything about the demand.
[/quote]
huh?
[quote]
You counter an “up bidders” statement from someone by saying look, this subset of the market is not being bid up, so “up bidders” must not exist. That sounds awefully like you’re the one who are taking a statement like “It’s always sunny in san diego” and then pointed out that that’s there’s no truth to that statement because it was cloudy and rainy a few days ago.
[/quote]
Of course I could only make my point based on facts that know and observe and in communities that I am familiar with. I have not looked for something in, say Oceanside, so I neither have the qualification nor first-hand experience to speak of Oceanside. So I don’t think there’s anything wrong with me making the statement that if you’re paying the full initial listing price in MM then you’re not doing your homework. BTW., thanks for the stats, it more or less proved what I said is correct. If there are more people bought there homes for below the initial asking than those who didn’t then. If you experience with home buying in MM recently is different than mine than do please share your experience.
[quote]
Rereading your post, it almost sound like you’re trying to get people to do the leg work for you wrt to the exact type of properties you’re looking to buy.
[/quote]
Huh? Really? I am relying on people on this forum to do the leg work for me to help me buy properties? How did you come to that conclusion? Please enlighten me if you would.
April 17, 2012 @ 12:10 AM
ltsdd, let me ask you one
ltsdd, let me ask you one thing. Where’s your data? You want to talk anecdotal? Here’s mine. I submit an offer 5% above asking price on a SS in MM that’s truly under market. The seller only have 1 hour viewing window and there were at least 5-6 families there w/in that window. The house went pending and I didn’t hear a single thing from the seller agent (i.e. I didn’t get it).
Anyways, I’ll just back away from this run around now and just say I whole heartily agree with what sdduuuude said.
[quote=sdduuuude]Above or below asking means nothing.
Above or below comps means everything.[/quote]
April 16, 2012 @ 9:17 PM
ltsdd wrote:Run the numbers,
[quote=ltsdd]Run the numbers, and see for yourself how many MM’s 70s tract homes sold at or above initial asking vs below asking within the last 6 mos. The truth in in the data.[/quote]
Above or below asking means nothing.
Above or below comps means everything.
April 16, 2012 @ 10:50 AM
Dude
I agree with everything
Dude
I agree with everything you said with one caveat. The factors you dont seeing pushing buyers can change very quickly.
April 16, 2012 @ 1:07 PM
sdrealtor wrote:Dude
I agree
[quote=sdrealtor]Dude
I agree with everything you said with one caveat. The factors you dont seeing pushing buyers can change very quickly.[/quote]
As a wise man once said, there are known unknowns and then there are unknown unknowns 🙂
April 16, 2012 @ 4:13 PM
sdrealtor wrote:Dude
I agree
[quote=sdrealtor]Dude
I agree with everything you said with one caveat. The factors you dont seeing pushing buyers can change very quickly.[/quote]
In either direction …
April 16, 2012 @ 5:00 PM
sdduuuude wrote:sdrealtor
[quote=sdduuuude][quote=sdrealtor]Dude
I agree with everything you said with one caveat. The factors you dont seeing pushing buyers can change very quickly.[/quote]
In either direction …[/quote]
Much stickier on the way down ;P
April 16, 2012 @ 12:50 PM
Good poll / question,
Good poll / question, AN.
Seems we have more housing-related posts lately. Must be an interesting market or something.