Buyers Frustrated by Low Inventory, Rising Prices
By golfplan18 Follow Tue, 5 Jun 2012, 7:59am 3,308 views 42 comments
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Banks riggin the market by withholding reo. Drive up prices, then whip bamm boom, wait till the fall there will be more at end of year. Realtor told me that.
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edvard2 says
I agree--maybe people don't realize that inventory is so tight right now?
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They are too underwater.
it's hard to sell a sinking boat. (insert sinking boat pic below)
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Boulder Creek, CA
You rang?
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Housing Patrolman says
That's the result of Realtor forced illusion - make them believe prices are going up although prices are going down.
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Housing Patrolman says
Sounds good. Could you show me where I can buy one of those 25MM empty houses?
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Laguna Beach, CA
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KILLERJANE says
Doesn't this strategy seem sort of like shooting yourself in the foot?
You withhold inventory on toxic assets that won't perform unless the market goes crazy again (nearly 0% chance). You get a small bump in median price, but at the cost of having to hold those toxic assets for a much longer time because you're trickling them out, the whole time they are not performing, flat, or even depreciating.
In the mean time, real performing assets like 20% down home loans for people with REAL income, unlike the liar loans they currently hold, are artificially stifled because the inventory is low.
This doesn't make any sense. Banks aren't in the business of holding homes, they make money by lending money. I don't get it, maybe because I'm not a bank getting free gov't welfare money to run my business for eternity.
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Danville, CA
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bubblesitter says
In other parts of the country that either don't have bubble economies or positive demographic trends...sure, prices are static or declining.
In my neighborhood, they ARE going up. It's not an illusion. People who work in Silicon Valley and who don't want their kids to grow up in the United Colors of Benetton are pushing prices through the roof. The house we bought would likely appraise for at least $100K more than we paid for it in February. Will it last, given all the problems in Europe? Probably not...but the numbers are what they are at least right now.
I'm gonna put my ham antennas up this weekend, relax and enjoy life.
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Danville, CA
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Housing Patrolman says
First, I don't owe you anything.
Second, I have no reason to lie. My house is not for sale and won't be anytime soon. I'm not looking to borrow on it. I'm not in the RE business and I'm not in the loan business.
I'm not a contractor or tradesman. I don't even play one on TV, and no...I didn't stay in a Holiday Inn Express last night.
We bought a fixer that was a borderline distressed property, and we got it CHEAP. The folks down the street just did the same thing. No, it's not on the Peninsula. No, it wasn't a million dollars. It wasn't even close. I don't buy things I can't afford.
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Laguna Beach, CA
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Prices may be going up a bit because of low inventory, but has anyone looked a "pending sales" in their area? I know in Orange County, they have absolutely tanked!
Basically people are proving they aren't dumb enough to buy at bubble prices, or they simply can't get a loan for a $500,000 with a $40,000 income. Either way, if the bank's strategy is to withhold inventory to create a false bottom, it's not working. Can't have a bottom if no one is buying.
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Danville, CA
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Housing Patrolman says
You don't know where the hell I bought and you don't know what the comps look like around me.
You also don't know that I'm paying less than what I was paying in rent because of where it is and what it is and what it's close to.
I'm very happy with my decision, frankly damn grateful to all the people who helped us get it (it was a team effort) and then the people who helped us get it into shape so we could move in.
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Scottsdale, AZ
robertoaribas's website
Housing pissbrain is correct. Every home in the entire world is going to drop 165% in value very soon. Ignore the dropping inventory, bidding wars in many markets, ALL markets are actually the same!
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Housing Patrolman says
I understand.
Where are those 25MM empty houses again?
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Housing Patrolman says
Can you post the zillow graphs of prices in Palo Alto, MV, Sunnyvale and Cupertino, so we can all see how much those areas are plummeting?
Add in Saratoga and Los Altos too.
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Danville, CA
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Housing Patrolman says
You're going divergent on all three axes here. I see a ton of that in this forum. It's like everyone's on some sort of drug.
Where I live (read that closely), prices are going up. Demand from people who work in the tech sector is driving it. Read the Contra Costa Times. Drive around on the weekends and go talk to the people bidding on them. It's there.
My wife and I both make six figures. We rented for about eight years and our tax situation made it almost impossible to continue doing that. We like Danville and we found something we could afford in a nice area. We met the neighbors. We liked them and they liked us. That's all there is to say.
It seems to me most people's issues here derive from attempting to live where the overall cost is out of one's range. Being chronically angry about it is stupid and possibly hazardous to one's health. My God, life is short.
If I'm facing a problem, I fix it. I don't worry about the other guy's "feelings". I don't care whether or not we "relate". I don't give a shit. I will never give a shit. The Depression era old people who helped raise us back in the midwest didn't give a shit. The people I spent so much time around near my father's family in rural Pennsylvania didn't give a shit.
You fix the problem, either by moving somewhere you can afford or deciding you don't want to do that and so you remain in your artificially induced emotional funk and complain (and worry) about what comes next. I can't do that. I'm not made that way. We didn't used to be a nation in which most people were made that way but here in California, I see SO much of it. One would think that's why the political culture is so different here with so many folks having simply resigned long ago to have the government take care of them and provide for every need.
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Boca Raton, FL
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robertoaribas says
Houses do not drop or rise in value. They drop and rise in market price, i.e., the price the market is willing to bear at the moment.
Prices <> Value
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Housing Patrolman says
The "truth" is that we spent months looking and there was a very pronounced decline in inventory. This wasn't from listening to Realtors. It was from actual observation. There was simply less inventory to look at. Period. Now- this is in the ever-so-bubbly Bay Area. Is it the same situation in places like Cleveland Ohio? Dunno. But its certainly the case here.
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Emeryville, CA
tiny tina says
See if this works:
Cupertino Zillow Home Value Index
Cupertino real estate info
My question is, why has Cupertino defied gravity?
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Mountain View, CA
We bought in Mountain View in 2005. In the process of a refi right now. The appraisal came in at just $10,000 lower than we paid. Not too bad. I really didn't expect it to go up. We knew there was a bubble, but we both can bike to work from our house. That is way more important to us than the book value of our abode.
The listed homes in my neighborhood have sold really quick lately. Some of them went into contract after the first open house.
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CL says
Don't know.
The point is that y-o-y the price has increased in every one of those cities according to zillow. Far different from what the liar housing patrolman would have you believe.
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rootvg says
What figures do you have to verify that claim?
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It is amazing that people who bought recently come here and claim prices are going up where I live but all other statistics and graph proves otherwise.
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San Mateo, CA
I'm new to the forum but have been reading these threads with great interest as I'm one of those "frustrated" buyers in the Bay Area region at this time. I've been monitoring the real estate market here since January and I have only seen it get tougher for the buyer over the months. I've thrown out offers above asking (for distressed or underpriced homes with good value), all cash, and still.... no cigar! It's "multiple bids" everywhere.
It may be a blip or a mini-bubble, who knows. It may be completely local too, but what this does is dispute the arguments of a certain troll that has been loitering in this thread.
I would suggest that you don't feed the troll and instead, ignore it. It does not deserve your attention, given that it only regurgitates the same old "prices are falling" point over and over, without anything to back it up.
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Mountain View, CA
I don't know where you guys who claim prices are going down everywhere get your information. I'm in the market as a buyer, I want prices to go down, and I think that over a long time period, they will, but right now, the amount of housing available where I am looking is decreasing, and prices are flat to increasing (Peninsula + little bit south of it). I think sellers are holding out to sell for various reasons, which makes the buyers frenzy, since there is a lot of money here. Single family rental homes are also damn near non-existent, so the whole rent vs buy argument is somewhat moot.
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Danville, CA
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bubblesitter says
How is it that so many people here think they are owed something by simple virtue of their existence?
The house down the street (that smelled like mold) was on the market and sold within a week. People from Tracy bought it, he's a contractor and is doing the remodel himself. I don't know what they paid but when I find out, I'll let you know.
The realtor who helped us find this house (and sat a restaurant in Brentwood with us one night and got drunk as a skunk) and whose interior designer friend made recommendations for carpet and paint (and didn't charge us a dime) said everything around us is in a bubble and that we should refinance before the year is out. I don't know if I want to get involved in that but she said, sure as I'm sitting here, that Danville and Alamo are shooting up because they're seen as refuge areas from the yellow horde that's enveloping the South Bay. You can't bid against people with corruption money from China if you work for a living...but then again, some of us have known that since forever.
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Danville, CA
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Yes, and the lack of affordability is supporting prices in nicer areas of the East Bay. That's precisely what everyone we know is telling us.
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Danville, CA
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Housing Patrolman says
That's why you don't buy more house than you can afford and you don't buy cars or airplanes you can't afford or for which you can't afford the maintenance. Lots of newbie pilots buy used Bonanzas and find out Beechcraft made certain wear items out of magnesium. That's ugly.
Yes, your data is correct. I paid right around six for this and I'm STILL okay because my monthly outlay is less than rent and I have exactly the house I want with the neighborhood and square footage I wanted.
I'm happier than a pig in shit. Does that bother you?
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Mountain View, CA
Realtors may be lying about it, but I recently tried to buy a home in Sunnyvale. It was listed at $1.2M, went for $1.425, there were 28 offers, 12 of them with no contingencies, not even financing contingencies! So, as a buyer who needs to borrow money to buy a home here, I'm basically out of luck, and gave up for now. I've got no agent trying to sell me on a house, I'm just relaying personal information from the bidding process. Houses for sale in my neighborhood (Cuesta park area of Mountain View) are few and far between, and are snapped up with many offers within days of going on the market, irrespective of condition. I know this, because I talk to the sellers, they have no reason to lie once they've sold, and I've got enough data points to stand by my assertion.
The median price gives you an idea what's going on in an extended area, it combines the worst housing (facing a highway, strange lots, next to something loud) with desirable housing. If you're in my boat, renting a small place and needing a bigger one because your family is growing, and you want someplace nice, the state of the market right now is depressing. It's damn near impossible to rent a nice 3 bedroom house, housing availability is low in the market, and the future is very uncertain. The crappy housing is certainly depreciating, but that seems to drive buyers towards what they (foolishly) consider "sure bets", these being better houses in better neighborhoods. I'm sure if you break down the median into a per-neighborhood distribution, you will see prices rising in, for example, west sunnyvale, while it's dropping north of El Camino.
So, short version: the bubble is still strong, it is focuses on better neighborhoods which creates a self fulfilling prophecy due to higher demand here, and if you want to buy a nice house on a quiet street in a good school zone, you're screwed.
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Danville, CA
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Housing Patrolman says
Yes, for less than half the original price. This house was $1.2M at the peak. The guy who built it, built all the houses in the neighborhood AND the kids still live here on the same street. There was an old TV and furnishings that I didn't want so we simply put them around the side and the son picked them up. It's a very unique situation, like being part of a family.
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Danville, CA
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Housing Patrolman says
They're not losses if I was spending more in rent and the utilities were artificially high because the place wasn't insulated AND I didn't have the tax advantages I have as an owner. In my bracket, that's a big deal.
And I didn't pay $1.2M!! I paid half that, which is at least a hundred grand less than anything else in the neighborhood because no one here wants to do anything! No one wants to work. They just want to move in and pay for the other guy's time and trouble with borrowed money.
Let's be frank. NOTHING in California is worth what they want for it: houses, cars, airplanes...nothing. A thirty year old Cessna here that sells in the fifties would be in the thirties in Ohio. Yes, the A/C that spent its whole life here won't have a corrosion problem but that's still a lot of difference in money, too much. The story of modern day California is all about funny money but we live here and we can't leave and my skills have value so that's it. You live here, work here and keep the old values. Do that and you'll have nothing to worry about.
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Danville, CA
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Housing Patrolman says
You don't know who you're talking to. You don't have any idea.
Why did the appraiser we talked to at the Candace Andersen fundraiser the other night tell us we're a hundred grand ahead (because of what we paid and the current market bubble), and we've only been here for three months? He's been appraising property since I was in college, in the eighties.
Why do you think we bought a fixer? Why do you think I hand picked the contractors? Why do you think I hand picked the guys who installed my appliances? Why do you think I beat the lady who sold us the appliances like a rented mule for the right deal?
If I thought there was a chance of being underwater, I wouldn't have bought the fucking house!
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What I summarized from this thread is that a hectic activity at the bottom(bottom feeding) is seen as a turn around in the market - complete ly false.
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Mountain View, CA
Housing prices are set by demand, so there's always a chance of being underwater, depending on local economic conditions. Detroit is a fine example of what can happen to a city. This is just a risk that one has to price into their finances.
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Danville, CA
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Housing Patrolman says
You're just spouting. You haven't listened to a thing I've said.
Are you spouting because you want to own and can't? Or, are you living in one of the so called "fortress" areas and you're running into the whole yellow horde covered up in dollars thing and you're flailing in protest?
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Danville, CA
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Housing Patrolman says
Recover is what I'd be looking to do if I continued renting and paying the tax man every year.
Why was my tax guy's advice 180 degrees opposed to yours? He got his MBA at Johns Hopkins. Where did you get yours?
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Danville, CA
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Housing Patrolman says
The guy I told you about screamed at me for not having a house, every year. Finally I bought one and it was what I wanted for the same monthly layout as rent.
Where did you get your MBA?
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Danville, CA
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Housing Patrolman says
The guy who told me I made a great deal on my house (to add to the others who said the same thing) got his MBA at Johns Hopkins and has done my taxes for a decade. He's never steered me wrong.
Where did you get your MBA?
Either tell us or shut up and mind your own business.
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Danville, CA
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Housing Patrolman says
I bought a place to live because I wanted to.
Quit acting like a child or I'll REALLY start abusing you...and I know how to do that. Trust me.
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Danville, CA
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Housing Patrolman says
You're right. I'm not being completely honest with you.
I bought where I bought so I didn't have to live next to gooks and Third World filth and faggots and freaks and trash. It was the right house at the right price in the whitest neighborhood I could find. I also needed to shelter some income so the IRS wouldn't take it away and give it to the niggers in West Oakland. That's another thing my buddy with the fancy MBA was so happy about because he feels the same way.
There! Is that what you wanted to hear?
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"That property" was on foreclosure a month ago for $525k, today I learned that it was purchased for 10% less at $475k by someone.
Realtors were telling us that all houses have multiple offer situations. They didn't want to spend their 'valuable time' with low ball offers. Lenders told us that we are qualified "border line" and made me feel like I should almost apply for food stamps despite two steady incomes and a stellar credit score.We didn't put an offer at all because I don't think it's the time to do it but I follow a few properties and I'm waiting how much they really sold for in this market. Escrows should close soon and honestly I'm expecting this same result as with "That property". Despite low inventory, people are not stupid they either not buy or they offer much less
I also thought that prices are going up but when I look at that recent sale I wonder if it is true or wishful thinking of all involved in Real Estate business.
It also gives me hope that we might not have a "horde" in here, maybe there is only a few of them and they buy but they won't skew the whole market. Maybe that low inventory is only temporary, crazy situation which would resolve itself soon enough. It is still a disfunctional market, so something or someone must give in soon.