Used house prices rising too fast
By tovarichpeter Follow Tue, 22 Jan 2013, 9:31am 1,434 views 42 comments
In South San Francisco CA 94080
Watch (1) Share
Quote
Permalink Like Dislike « First « Previous Viewing Comments 3-42 of 42 Last » See most liked comments
|
Premium member tovarichpeter is moderator of this thread. |
Follow
Befriend
229 threads
2,766 comments
Must.reinflate.the.bubble.at.all.costs.
Follow
Befriend (3)
28 threads
747 comments
Tarzana, CA
Peter P says
I learned a new word, thanks.
As I mentioned once before, the cash investor house flippers are out in full force here in Southern California, all the way to Fontana!
Locally, in the San Fernando Valley and Los Angeles the same, flip, flip, flip, and people are buying. Go figure.
Follow
Befriend
19 threads
1,534 comments
Los Angeles, CA
David9 says
Yep its as designed. In investing it sometimes seems like there is no free will , rhe feds push a button, rates go down again, flippers and landlords buy and first time buyers get scared and buy if they can outbid the others. Its planned central economy forevermore.
Follow
Befriend
485 comments
Los Angeles, CA
David9 says
We're done with it. The last three houses we looked at were flips. In various states of good, bad, worse "improvement". They all had recorded sales within the last 9 months, and now relisted for 30-40% higher.
That is all the LA market (south of valley, north of I-10) seems to be right now--or total dumps in need of a gut and remodel. No in between.
Follow
Befriend (3)
28 threads
747 comments
Tarzana, CA
Philistine says
Same here in all respects. I have looked at 3 properties in the last two weeks. The only reason to buy would be to bet the price will go up, which it very well may! Doesn't fit my life right now. How many properties could 'really' have sold if 1.) they were bought for cash at the court house steps 2.) Someone did buy for less in the last two years and is flipping now ??
Follow
Befriend
34 threads
2,098 comments
I was on a plane a few weeks ago and the people behind me were real estate investors coming from LA to the Bay Area to look at "Investment" properties. Somehow people seem to have totally forgot the mess we're still getting our of and how it was driven by way too many people viewing houses as mere investments and not simply as a place to live.
I remember when we were looking this spring: As soon as I walked into a house that obviously had big box home improvement store furnishings, cabinets, and so on, I walked out. Most had clearly been bought, slapped back together, and put back on the market. Honestly it would have been better if some of these had simply been left alone and re-sold instead.
Follow
Befriend (28)
170 threads
4,173 comments
Premium
A house is not worth living in unless it has been flipped 100x before you moved in and therefore you can be safe in the knowledge there will always be another asshole who will take it off your hands for 100x what it is actually worth.
Follow
Befriend (3)
28 threads
747 comments
Tarzana, CA
edvard2 says
Not one of the properties I saw, but one advertised as a 'standard investment flip', The owner on Property Shark was from New Jersey !
Follow
Befriend
34 threads
2,098 comments
When we bought things were pretty bad and there wasn't a whole lot for sale then. That was in the summer. I don't really pay a huge amount of attention but it seems like there's even less for sale around here now. Makes me curious if the Spring will be better.
Follow
Befriend
9 threads
405 comments
Asking me to buy a $400k house for $500k because it's a cheap time to borrow money is kind of like asking a 16 year old for her virginity with the rationality that you can stitch the hymen back together and make her whole again.
I apologize for offending both those with 16yr old daughters and $400k houses masquerading as $500k great deals.
Follow
Befriend (3)
28 threads
747 comments
Tarzana, CA
Not singing the praises of Texas, but the State did avoid the first housing bubble and no evidence of the second housing bubble most are seeing here in CA:
"In 1998, following the Savings & Loan debacle, Texas enacted a law—under none other than George Dubya Bush—limiting mortgage borrowing to 80 percent of the appraised value of a home. My awesome powers of deduction tell me this means that you can’t buy a house in Texas without putting 20 percent down. This shielded the Lone Star State somewhat from a housing bubble."
And
"But a major difference between Texas and other states during the boom was that Texas required any homeowner seeking to refinance a mortgage or take out a home equity loan to have at least 20 percent equity after taking out the new loan. Moreover, no one could refinance a home mortgage more often than once a year."
I am very happy the California budget is balanced now (So I hear) But is it in the best interest of Californians to have investors flying in from as far away as New Jersey ?
Follow
Befriend
46 comments
male
Redondo Beach, CA
Philistine says
A friend of mine has been going through the same thing. He's frustrated because these flippers aren't doing their own pre-sale inspections, and he's finding a lot of them have some time-related issues that aren't visible to the naked eye.
He tries to get them down on price, they refuse, and the cycle starts anew. I suggested finding a neighborhood he likes, researching every home on a particular street and sending out letters in the hopes that a well sorted and upgraded place may turn up on his radar, pre listing contract.
It's just a nasty time to be looking for a sub 700k home in SoCal.
Follow
Befriend (23)
55 threads
3,780 comments
Scottsdale, AZ
robertoaribas's website
David9 says
Your awesome powers are incorrect. that texas law applies to refinances, you do not and never needed 20% down to buy in Texas.
Follow
Befriend (9)
161 threads
1,543 comments
Premium
David9 says
Funny isn't it-regualtions saved the Texans!!! I will be moving back finally next month-just in time for a massive bubble . I mentioned before, my colleague here in the mid-west just bought a 50k house(it is a foreclosure) and it is an individual house that rents for 900 bucks a month. About 5-10k of maintainance needed-but otherwise good to go.
Of course today morning was in the negative F with a minus 15-25 wind chill in some places. Minneapolis has a -5F as the high temperature of the day-and Lord only knows what the wind chill is. That I won't miss!!
Follow
Befriend (3)
28 threads
747 comments
Tarzana, CA
robertoaribas says
Um, I think you do need 20% down, according to ehow:
http://www.ehow.com/list_6793167_texas-mortgage-laws.html
And my first paragraph was from this article:
http://reason.com/blog/2011/08/15/dont-mess-with-the-texas-housi
Possibly changed in 2012? (Wouldn't be bad for me he he)
Follow
Befriend (3)
28 threads
747 comments
Tarzana, CA
lostand confused says
Well, welcome back to California ! New bubble n All. Yes, here in El Ay, we have had some of those awesome California sunny, bright, mid 70's days, just perfect, it is.
Follow
Befriend
9 threads
405 comments
Please don't forget the meat of the issue when it comes to home prices in Texas.
Texas is a no income tax state. That means that property tax has to make up for the revenue generated via income tax. Because of this, it behooves everyone involved to keep property prices low.
It is very difficult to make heads or tails of what the actual tax is. I can deduce that in one example it is 2.5%
They also have provisions for those over 65 so grannies don't get thrown out on the street or pay for education
Tax description Assessed value Exemption Taxable value Tax rate Tax amount
Johnson County $242,216 - $15,000 = $227,216 * 0.3332% = $757.15
City Of Joshua $242,216 - $25,000 = $217,216 * 0.6853% = $1,488.52
Joshua Isd $242,216 - $25,000 = $217,216 * 1.4900% = $3,236.52
Hill College Jos $242,216 - $15,000 = $227,216 * 0.0409% = $92.86
Lateral Road $242,216 - $15,000 = $227,216 * 0.0490% = $111.34
Johnson Co Esd#1 $242,216 - $15,000 = $227,216 * 0.0600% = $136.33
Current tax = $5,822.71
Property tax $242,216 * 2.6584% = $6,438.99
Follow
Befriend
4 comments
San Jose, CA
This reminds me of a shithole I saw in San Jose this weekend. It was posted for $360k for a 3/2 at about 1300 square feet. However, after you get there they tell you it has $80k I liens, has. 1% short sale fee attached, and oh yeah.. The current residents are chain smoking hoarders and the house needs about $50 in repairs. I even heard the realtor say that the bank, a German one, was expecting offers in the low $400's at least. I just couldn't believe it.
Follow
Befriend
9 threads
405 comments
List of things that no longer matter (California addition).
1. Location, Location, Location. No longer matters. If you have $500k, you have a job and a car and 30 minutes a day to drive each way. Perhaps you telecommute!
2. HOA fees. Just because they are $350 a month, doesn't get you a $100k premium for those developments without such fees.
3. House is 30/40/50 years old? So what? Market price, regardless of how many critters have called it home, how much the foundation has settled, plumbing to the street, or if the electrical needs to be upgraded. You should be happy to get this place! It cost $500 sq/ft for new construction! (oh yea, that seismically protected new construction)
4. Needs work? Blah, we call it "investor ready!". If you are a primary owner, it's called pick your own remodeling designs. We charge full price, fixed or not, because it's a bonus to be able to DIY or pick your renovations.
5. 1/3rd of an acres or 3 acres? Who CARES. 5 feet between you and your neighbor is all you need. If you have more land, it costs the same. Imagine trying to get permits to subdivide or build on it! Hope you are in the right county/town!
6. Energy efficient? HUH? You want solar? You pay. You want adequate insulation and windows? Forget those, it's never too cold or too hot for that long anyway.
7. It's a tear down? Well, you won't mind paying us full price, because perhaps someone can still live in it. If not the house that can be built on it is worth millions!
8. In a flood zone, Liquifaction zone, next to High Tension wires, backyard boarders the railroad tracks? LOL! I doubt you will notice until you actually purchase the place, so don't worry about that, we have multiple bids!
9. Appraisal not enough to cover the purchase price? That's crazy talk! It's a free market! A homes value lies in the eyes of the beholder!
10. And the final thing that does not matter. The U.S. dollar. They can't print these things fast enough! No wonder why I need so many to buy something that's backed by something more than a promise!
Follow
Befriend (3)
28 threads
747 comments
Tarzana, CA
Gragorin says
Gragorin says
Yeah, it's hard to accept the banks are running the show, in all regards as stated by PockyClipsNow below:
PockyClipsNow says
Heck, I was looking at lower end properties than you were.
For 159.9k, a one bedroom one bath, 660 square feet, apartment conversion with wall air. Dirty, Dirty, Dirty, every cabinet, every closet, the shower door was broken, the balcony was literally turning into pebbles, and nothing was upgraded. It did have a peek a boo mountain view as it was on the 3rd floor which is why I wanted to see it. It sold right after the weekend, guess someone else didn't mind the thought of 30 years of payments plus money up front to make it nice.
Follow
Befriend (23)
55 threads
3,780 comments
Scottsdale, AZ
robertoaribas's website
David9 says
simply not true. Any nitwit can write on ehow, so how about doing 10 minutes of research?
call a mortgage lender in texas. Not only are normal FHA rules in place for buyers, there is a fair amount of local "down payment assistance" money and programs out there.
or, instead of edontknowhow.com, maybe the new york times might reference things a bit better?
http://www.nytimes.com/2012/05/26/business/texas-lending-law-shielded-many-homeowners-from-housing-bust.html?_r=0
about paragraph 3 or 4, they mention zero limit on how much can be loaned to a buyer, as opposed to a refinance.
Follow
Befriend (3)
28 threads
747 comments
Tarzana, CA
robertoaribas says
I'll ask some people I know in Texas who help me with my property there.. tbc
Follow
Befriend (3)
28 threads
747 comments
Tarzana, CA
robertoaribas says
Yes, you're right ! Learned something else today. There is *Much* Sh*t on the internet.
Those two articles I posted contain incorrect information as I have found since that there are downpayments lower than 20% in Texas as well as down payment assistance programs.
Follow
Befriend (7)
29 threads
1,204 comments
31 male
Premium
Texas house prices remain more sensible because they don't suffer from the kind of nimbya ism that the left coast goof balls do, so they build to meet demand. Their more sane property taxes in place of stupid state income taxes allow for a healthier economy, and their education system is leap years ahead, so their people aren't so easily duped by whatever the next gold rush flim flam is
Follow
Befriend (9)
161 threads
1,543 comments
Premium
errc says
Were you being sarcastic?
Follow
Befriend (4)
328 threads
913 comments
"Used house",that's great.
This house was owned by a little old lady who took excellent care of it.
It's just like a new one. You couldn't find a better deal. lmao
Follow
Befriend (7)
29 threads
1,204 comments
31 male
Premium
HEY YOU says
Or how about used house price appreciation. Try explaining that to someone that has been brainwashed to buy into the idea that a house increases in value over time, even as it decays away over time. In the year 2113, this shitbox will be worth a bajillion dollars
Follow
Befriend (23)
55 threads
3,780 comments
Scottsdale, AZ
robertoaribas's website
errc says
really? My home that I'm sitting in right now, was built in 1968. It sold then for under $30K.
Today, it is worth over $300K and climbing...
your tinfoil hats are on too tight!
Follow
Befriend (7)
29 threads
1,204 comments
31 male
Premium
robertoaribas says
You misunderstood my post. I was quoting hey you making a joke about used house as if a used car salesman were hocking it.
I know prices always go up,,,,I said good luck explaining why to somebody. Most things depreciate due to time decay, and houses are no different, but where real estate differs, is you get the land rights under the house as well, and governments that run perpetual growth ponzi pyramids are reliant on land values increasing into perpetuity as they are basal to the value of the currency
Follow
Befriend (23)
55 threads
3,780 comments
Scottsdale, AZ
robertoaribas's website
errc says
Fair enough. However, in my world travels I had some severe shocks: homes similar to my home in nice parts of Bangkok, or Manila are much more valuable than they are here... Despite in the case of the philippines, a nearly 15 fold difference in average wages to US.
IF the US population keeps growing, and urban areas keep growing, there comes a point where a home with a yard becomes extremely valuable. they can build condos and apartments upwards forever, but there is truly only so much land in close in a major city.
even a 2 or 3% population growth over the years makes a huge change.
Follow
Befriend (5)
53 threads
1,300 comments
Premium
robertoaribas says
I think this has less to do with populations growth or land shortage (there is plenty of land in the US) but also with the attitude towards houseownership which has been and still is the 'American Dream' (also thanks to mucho lobbying). There are countries with much denser population for example in Europe where house prices are mostly flat over time and stay affordable - likely because houseownership is not that valued, not peddled by a lobby (agents make far less) and because the people may have less appetite for risk.
Follow
Befriend
2 threads
2,497 comments
robertoaribas says
In 1968 the price of gas was 20 cents a gallon and you could buy a brand new mustang for $2500.
Follow
Befriend
2 threads
2,497 comments
robertoaribas says
I was willing to believe you were a real estate investor until this post. There is no way to compare Bangkok and Manilla to Phoenix. They are both major port cities and capital cities. Both cities are their respective countries center for commerce, industry, government, education, tourism, culture, and transportation. Both are to some degree land locked. Phoenix is endless suburban sprawl in the middle of nowhere with limitless desert for expansion in every direction. SF or NY would be a valid comparison but Phoenix, no way.
Follow
Befriend
1 comments
Where are all the foreclosed homes??? Why are the lenders NOT releasing these into the market??? Because they are manipulating the current housing market. Get ready for a flood of REOs to hit the market. If you are a buyer, sit on the side lines, this market value increase is FABRICATED. Prices rising too fast, low inventory, high unemployment....all these are not the recipe for a healthy market. The banks are manipulating this market. A healthy market has a healthy inventory level. Investors are taking their cash from a bank that pays them nothing and then they move it into housing where rents fetch a better return. We need the banks to come clean and report on the backlog of REOs they are holding. Oh my neighbor has not paid his house payment or prop taxes for 18 months. He is just waiting for the sheriff to ring the door bell. BofA hasnt even forclosed yet, he simply is getting free rent which sould cost him 5,500 per month in Encinitas calif. The upper end market is soon to take a big dive out here.
Follow
Befriend (5)
24 threads
1,302 comments
Premium
lancedalton says
More anecdotal evidence of shadow inventory that is yet to see the light of day.
Why would a sane person continue to pay when their house is only worth a fraction of their loan?
Follow
Befriend (23)
55 threads
3,780 comments
Scottsdale, AZ
robertoaribas's website
lancedalton says
yawn... I heard that in 2009, 2010,2011, 2012... SO GLAD I didn't listen starting in 2010... all the properties I bought then are up 50% or more since then!
We Just had 2400 Notice of Trust Deed filings in Maricopa County for the month of January, five months in a row under 3000, when at the peak there were 12,000 a month...
No data whatsoever that supports the foreclosure tsunami premise, and plenty that refutes it!
Follow
Befriend (3)
13 threads
2,201 comments
San Jose, CA
Premium
The Professor says
Because of the greater fool of course!
Follow
Befriend
4 threads
266 comments
Fremont, CA
Robertoribas,
You are mistaken. Your house has not appreciated. Rather the dollar buys less today. Send your thank you to Ben Bernanke and the Fed.
Follow
Befriend (23)
55 threads
3,780 comments
Scottsdale, AZ
robertoaribas's website
inflection point says
good thing I spent all my cash on houses then... instead of leaving it in the bank!
Follow
Befriend (5)
24 threads
1,302 comments
Premium
robertoaribas says
Now you're talking.
Cash is worth less than it was because there is more of it. I think the little mini bubble in housing we're experiencing is because those with money (more money) know that they had better trade their paper in for something real before their paper is worth less.
Gold, silver, property, anything will be worth more than paper when they print more and people lose faith. Property will probably be the best investment as you can't sleep on or collect rent from precious metal.
In addition what are the people that save metal going to buy when paper becomes worthless? Property.