patrick.net

1. house prices fell
2. loan owners are in denial that they overpaid.
3. they convince themselves prices only go up (even though they've been falling for 5 years)
4. they hold onto the house hoping to sell at a higher price which will be far in the future
5. result: little housing inventory

you see the same thing with stock investors - people have a hard time dumping losers and hold them.

it's even harder to admit you were a dumbass when you put most of your life savings into a down payment which realtor's assured was a "sure thing".
except now that prices have dropped the equity in the house is much lower than when you initially bought.

That's how I see it too. There's a lot of denial in the market, and I think for some reason it's coming to a head here in 2012. 38% decrease in inventory for OC has made this market anemic if you're looking to buy. I have the cash to buy, but the choices were so limited during the Winter.

Hopefully Spring and Summer bring more choices.

millions of federal loan mods mean millions of homes that 'will never be for sale' - its like a prop 13 freebie giveaway only to liars only (either lied to get loan mod or lied to get original loan they cant afford)

Only one word - DENIAL. In the hope of selling at higher prices in the future,and you know when is that future.

Has this lack of inventory kept any of you on the sidelines? I can say for sure it has for me.

It could be that buyers have dried up in this market to the extent that sellers have pulled their listings off. How many of you see it that way?

I've seen the same thing as you, Goran, and, yes, I'm taking the same approach. Maybe 2012 is just not the year to buy in OC.

Hey Carl! Good to see another OC sideliner just like me on here.

I've been looking since 2008! Almost 4 years and the housing market down here is still psychotic.

Carl Pham says

I've seen the same thing as you, Goran, and, yes, I'm taking the same approach. Maybe 2012 is just not the year to buy in OC.

I went to a few open houses this weekend in the south bay are and inventory is down alot. Realtors claim they are all getting asking price and perhaps a little over but I take that with a grain of salt.

Houses are still just too expensive.

Scott says

I went to a few open houses this weekend in the south bay are and inventory is down alot. Realtors claim they are all getting asking price and perhaps a little over but I take that with a grain of salt.

Houses are still just too expensive.

Looking on Redfin for the cheaper Coastal OC cities I noticed that virtually every reasonably priced (2002-2003 levels) home under a Million was already in escrow, while what's still left is overpriced, often significantly.

I think it's pretty obvious that buyers haven't dried up given that you'll find half as many active homes as you will find homes in escrow... Very few of those "Pending" homes have very unreasonable prices, and often the actual sale price is below the "pending" asking price.

Yup, denial is my view as well. In the stock market when you have decreasing price with low volume that is NOT a good sign. It normally means there is no floor. Think about it from the sellers side. In order to make transactions happen they are floating lower and lower. However, to their surprise as they open each door at the lower prices and expect a room full of people with party hats and blowers going off, they see a room with a few couples playing a quiet game of bridge. Next floor, the same things, etc. etc. The buyers have left the station and who knows what floor they actually live on anymore. My guess is about 15-20% down is the mass. ;)

Scott says

I went to a few open houses this weekend in the south bay are and inventory is down alot. Realtors claim they are all getting asking price and perhaps a little over but I take that with a grain of salt.

Houses are still just too expensive.

They can claim all they want. Don't look for any truth in realtor claims. They are just puppets for NAR and have no real formal education on economics in most cases. Listen to people who study this stuff without chips in the game.

Asking a realtor for insight into the real estate market is like asking you to write your own work review. It can only go one way. UP!

RentingForHalfTheCost says

Don't look for any truth in realtor claims.

Two main things that control the price in today's market. Realtors are just the show pieces to collect 6% allowed by the system.

1) Is the buyer with most cash willing to pay that price?
2) Is there a lender ready to bet on the price the buyer is willing to pay?

These comments are all speculation. If you look at the auction results, significantly more 38% (according to foreclosure radar) are being sold to cash buyers at auction. These homes are rehabbed and resold or rented out. When they are sold they sell for more than the bank owned ones do because the condition is much better. Individual "in denial" sellers are not a significant driver of prices since they represent a very small percentage of the homes for sale. When I started reading Patrick.net (around 2006) it was the voice of reason. Now it has become a very negative group of people who would not buy a house at any price (because they want something for nothing). I consider this reverse greed. There is also alot of nonsense discussed which is not the way the real estate transactions really work. Well priced properties ARE receiving multiple offers, they always do since everyone wants a deal.
All real estate agents are not unethical, in fact most are not. It is actually very difficult to be successful selling homes, alot of agents average about $20,000 per year. The 6% that you people are always lamenting on about is split between two agents, then split again with the office broker. The agents may see 1-2% of a deal. They pay for everything else out of what they gross. Office supplies, advertising, gas, insurance, health insurance, cell phone, etc. The banks are the real villans here.

For the record I am not a real estate agent. I am a general contractor who works with agents to make repairs to homes that are for sale. Especially bank owned houses.
I own four rentals, all of which are cash flow positive. 1 bought at auction last year for $33k rents for $950.
2 in Texas bought in 2004, with the proceeds ($100K) of a house I owned in Arizona for 9 months, thankfully no bubble in Texas. I do have one unfortunate condo which has significantly devalued although still cash flow positive. I just mention all that because I know first hand that all this sour grapes stuff is nonsense. I would buy as many houses as I could right now, rates are low, prices are cheap.

I sold my princial residence in Oct 2006, and rented for 2 years. Bought a fixer twice the size in a premium neighborhood for same price as sold first house.

By the way "rentingforhalfthe cost" rents are much higher than the payment on a house is right now. Stop kidding yourself. Look at Craigslist.

Just wait untill the 26 billon dollar bribe to the state AG's makes it thru the python and they are "clean" again. What do you think will happen to inventory once they are absolved of wrong doing?

I read an article online this last week saying how deal-a-turds(R) are afraid of what will happen if prices rise a little... massive inventory.

So go ahead and buy 'em all up now. Saves me from more taxpayer bailouts in the future. PLEASE BUY NOW so I can wait for the huge shadow inverntory coming and I won't have to compete with blowhards.

Where I live in the central valley almost 50% of homes are underwater. You cant put your home up for sale unless you can pay the bank the difference between what you owe on the mortgage and the sale price. In my opinion most people can't do this. In some instances this amount exceeds a $100,000.00. This to me is the real reason that inventory is down.

darkpassage says

Where I live in the central valley almost 50% of homes are underwater.

And according to certain Weather Channel documentaries, that could be more than just a figure of speech at some point in the near future.

carolinefpf says

Now it has become a very negative group of people who would not buy a house at any price (because they want something for nothing).

Something for nothing? Wow. That is a new take on over inflated housing prices.

So, I am willing to pay 800K for a livable 3 bedroom, 2 bath home about 1500-1700 sqft that is in a safe neighborhood and gives my children the ability to go to decent schools. I guess I am looking to get something for nothing. Wow. 800K! Have you seen that amount of money in bills? Do you even know how long it takes the average family in the BA (yah, in the BA) to save that amount of money? It is not nothing, never was nothing, and never will be nothing.

You, my friend, are clouded with the free money market that has been created to protect the dream world we drifted into in 2007. The one where everyone was a millionaire on paper. The gig is up, and property owners are losing now. Get used to it.

carolinefpf says

By the way "rentingforhalfthe cost" rents are much higher than the payment on a house is right now. Stop kidding yourself. Look at Craigslist.

My rental home would cost me 1.3 million to buy. I know because the owner would love to sell, so is just renting until his prediction of the market returning comes true. That would put my monthly cost at around 5-6K to own this home. Instead, I rent it for 3K. I check craigslist and it just confirms what I already know.

Come live in the BA before you make claims that are untrue.

Goran_K says

Has this lack of inventory kept any of you on the sidelines? I can say for sure it has for me.

We are actively looking. Most weeks there is nothing to see. The open houses we have seen have been packed.

I KNOW there are vacant REOs out there, in the neighborhoods I am interested in buying. I see them go up for auction, not get bought, and then property shark has the homeowner's address listed as the bank's address.

Banks AND homeowners are holding out.

If that is accurate then yes, it would make sense for you to continue to rent. Owning for me is a lifestyle choice in addition to a financial one. I felt very unsettled for the two years we rented. We rented a house that had sold for $950k but it had green carpet and felt like someone else's home (because it was). It felt temporary. I like to be in control and not have to ask if I can have pets or paint or change the disguting carpet or countertops. The landlord took a while to make repairs and choose the cheapest option. The windows were drafty and our utility bills were high. We would have simply replaced the windows if it were our home.
What if your landlord decides to move back in or sell or default, then where will you be? I couldn't live like that.
I do live in the bay area. North bay to be exact. I have never ever had "free money". I put 20% down or more on all of my homes. The 32k one is obviously without financing. I do not have any debt either and live modestly. In 10 years my rentals will be paid off and I will live off the ever increasing rents that my renters will pay. You renters will have to go live in a trailer park since you will find yourself old and still paying rent. I just think all of you housing haters should consider how things have changed since 2005 rather than being locked into a way of thinking out of habit.

carolinefpf says

It felt temporary... I felt very unsettled for the two years we rented.

I'm totally with you on that. In fact now that I've been out of the market for 6 years (bought house in 2000 sold in 2006) I would like to find a place where I can call home where I can raise my two kids. The problem I see is that both my wife and I work very hard but we cannot afford a 1700sqft house in a decent part of San Jose. For the time being I'll pay rent which is the equivelant of what my mortgage would be in Monte Sereno. Like you, there is a lifestyle choice that bears importance here too, especially if you have children.

Caroline I don't think anyone wants to be a perma-renter, and I do agree there are people who make off hand comments that housing is going to crash 60% in places like Cupertino or Manhattan. But it's not a stretch to say housing is over priced in some areas, and that's why YOY prices continue to drop.

Many of us want to own a home, and have cash for a strong 20% or more down payment, but we're not desperate enough to over pay for something that could lose 5% to 10% of its value in a year or so.

This isn't 2005 anymore, that era went, and will be gone forever (or at least until the next housing bubble in 2025).

http://www.youtube.com/embed/Hnj3TkxUefk

carolinefpf says

Individual "in denial" sellers are not a significant driver of prices since they represent a very small percentage of the homes for sale. When I started reading Patrick.net (around 2006) it was the voice of reason. Now it has become a very negative group of people who would not buy a house at any price (because they want something for nothing). I consider this reverse greed.

For every action there is a reaction. Greed of the sellers & real estate agents has now turned against them.

carolinefpf says

I will live off the ever increasing rents that my renters will pay.

Before it was that homes will always go up. Now the mantra is rent will always go up. You sheeple are so foolish it's comedy.

Rental markets will also crash in time.

carolinefpf says

By the way "rentingforhalfthe cost" rents are much higher than the payment on a house is right now. Stop kidding yourself. Look at Craigslist.

Rents are only high because of the infinite number of retards who bought how much the realtard & mortgage broketard told them. They then were foreclosed upon like a retard.

And now they are the rentards who have driven up the cost of renting.

But another extremely significant factor of rents going up is because of PROPERTY TAXES. They have gone up more in pretty much every place in the US than what they were in 2005.

But even if renting maybe more than a mortgage - it is still smarter to rent and have no debt on a depreciating asset with ever increasing property taxes, utilities and maintenance.

Not to mention the changing conditions within the job market which requires people to move around very frequently in current times.

I think YOU should stop kidding yourself.

Not to mention how many retards are renting an illegal portion of their homes because they can't afford the property taxes, mortgage & utilities on their home.

carolinefpf says

rates are low

It well known in the mortgage industry that when rates are low, the prices are high and it is NOT the time to buy.

But regardless your logic is extremely uneducated, uninformed & repetitive of what a realtard would tell you.

Why? Because rates were also low in 2004-2007. Therefore, your reasoning is completely false and extremely dangerous advice.

carolinefpf says

Now it has become a very negative group of people who would not buy a house at any price (because they want something for nothing).

No. The people who bought with no down-payment (even no closing costs) wanted something for nothing.

carolinefpf says

Well priced properties ARE receiving multiple offers, they always do since everyone wants a deal.

Which ends up making it a horrible deal.

But again, your logic that just because the prices currently asked are the true prices is well again incredibly foolish.

In 2005, properties received multiple offers as well. Were those well-priced too since they received multiple offers?

Your advice and thinking is very much faulted but also dangerous.

carolinefpf says

All real estate agents are not unethical, in fact most are not.

Intention has nothing to do with it. As long as you are in the mafia - you are a scumbag period.

The National Association of Realtors forces you to be a parasite.

carolinefpf says

The banks are the real villans here.

And the banks could have never been the villains without the infiltration & cooperation of the realtard profession along with it's National Association of Realtards organization.

carolinefpf says

It is actually very difficult to be successful selling homes

And it is incredibly easy to began selling homes with no barriers which prevent incompetent people from advising people financially and/or handling big financial decisions/transactions.

Realtards do not have a proper regulation requiring them to be trained. The competence standards are EXTREMELY low.

Therefore I have no sympathy that it's hard to sell homes. Of course it will be hard.

But regardless most people are crappy salespeople and do not understand marketing, advertising along with influencing people. Only few people have the skill. You need to be trained well and I mean WELL. Very few people will be naturally talented at it. And even those who are well-trained or possess natural talent will find that they still have to work at it.

Being a salesmen or saleswoman is not a get-rich quick loophole. Trust, reputation and credibility is key. That does not come for free, you must work persistently to gain these qualities.

carolinefpf says

For the record I am not a real estate agent. I am a general contractor who works with agents to make repairs to homes that are for sale.

Does not matter if you are a realtard. You still have a motive as a general contractor. It's like saying I'm not a lawyer but I'm a judge. A judge will still have the same motives.

carolinefpf says

I would buy as many houses as I could right now

And it would be the same as buying as many cars as possible. Homes are a CONSUMABLE good. It is shelter. When will you sheeple understand this?

If you are looking for a buying real estate as an investment. Consider buying COMMERCIAL real estate NOT residential real estate for god sakes.

Consider buying rental BUILDINGS not homes. Hotels, Motels, commercial building for business, office buildings etc etc...

Investing in homes is dead. The game is over in this.

carolinefpf says

They pay for everything else out of what they gross. Office supplies, advertising, gas, insurance, health insurance, cell phone, etc.

So do business owners. Realtards want freedom of being almost self-employed than they have to pay the price of it.

If realtards want to make more money they should consider being real estate brokers and mortgage brokers. They should own their own brokerage firm for real estate. That's what the smart ones do. Brokerage firms are a solid business.

Nothing is for free. Any career requiring no hard work will give little in return.

glass.torch says

Just wait untill the 26 billon dollar bribe to the state AG's makes it thru the python and they are "clean" again. What do you think will happen to inventory once they are absolved of wrong doing?

I read an article online this last week saying how deal-a-turds(R) are afraid of what will happen if prices rise a little... massive inventory.

So go ahead and buy 'em all up now. Saves me from more taxpayer bailouts in the future. PLEASE BUY NOW so I can wait for the huge shadow inverntory coming and I won't have to compete with blowhards.

Finally we have someone who can actually THINK. +1

RentingForHalfTheCost says

My rental home would cost me 1.3 million to buy. I know because the owner would love to sell, so is just renting until his prediction of the market returning comes true. That would put my monthly cost at around 5-6K to own this home. Instead, I rent it for 3K. I check craigslist and it just confirms what I already know.

Come live in the BA before you make claims that are untrue

RentingForHalfTheCost says

Something for nothing? Wow. That is a new take on over inflated housing prices.

So, I am willing to pay 800K for a livable 3 bedroom, 2 bath home about 1500-1700 sqft that is in a safe neighborhood and gives my children the ability to go to decent schools. I guess I am looking to get something for nothing. Wow. 800K! Have you seen that amount of money in bills? Do you even know how long it takes the average family in the BA (yah, in the BA) to save that amount of money? It is not nothing, never was nothing, and never will be nothing.

You, my friend, are clouded with the free money market that has been created to protect the dream world we drifted into in 2007. The one where everyone was a millionaire on paper. The gig is up, and property owners are losing now. Get used to it.

I love it when sheep get put in their place like Rothschild Slaves. +1

carolinefpf says

You renters will have to go live in a trailer park since you will find yourself old and still paying rent.

Even a homeowner is still a renter because of property taxes that keep increasing. Property rights were waived a long time ago. Maintaining a property is not cheap either and not mention many old people do not want to deal with it.

When the true crash comes & property tax supporters get put in their place, renting will be so cheap it will be much more financially smart to rent.

And there is nothing wrong with living in a trailer.

carolinefpf says

I like to be in control and not have to ask if I can have pets or paint or change the disguting carpet or countertops. The landlord took a while to make repairs and choose the cheapest option. The windows were drafty and our utility bills were high. We would have simply replaced the windows if it were our home.

Very poor justification to advise people why they should make the biggest financial mistake in their life.

Renting by the way is not for only poor people. Only sheep with no brain think that.

carolinefpf says

What if your landlord decides to move back in or sell or default, then where will you be? I couldn't live like that.

What if the village and school union decides they want suck the blood out of you because they want to pay their useless staff more money to be useless in the form of property taxes on your home? Many people couldn't live like that.

What if a natural disaster in the form a turd hits your home - destroying everything? Many people couldn't live like that. Insurance is just another expense. Not many people losing a shit load of money if you don't have insurance could live like that.

What if I lose my job and my credit becomes shot because I can't pay the bankers, how will that reflect my chances of getting a job with a credit like that? Many people couldn't live like that.

What If I pay more than what the asset is worth? Many people couldn't live like that.

Your justifications are for wussies when it comes to buying. Owning has far far far more worries than renting ever will.

If owning is right for you than GREAT but it's wrong and extremely irresponsible not to mention dangerous to assert that buying is smarter.

Buying has become more like rent plus the liabilities of an owner. It has become for a lot of people a lose-lose proposition.

carolinefpf says

our utility bills were high.

And that wouldn't make a difference if you owned the place, either.

carolinefpf says

I have never ever had "free money". I put 20% down or more on all of my homes.

Low interest rates is very close to free money.

carolinefpf says

I do not have any debt either.

Most people who own will not be debt free and an outlier is not the rule.

carolinefpf says

I just think all of you housing haters should consider how things have changed since 2005 rather than being locked into a way of thinking out of habit.

Nothing has changed since 2005 except idiots trying to fight the consequences of their actions in 2005.

The bubble mentality has not fully died. It is being defended until these morons get slaughtered by reality which will eventually come to pass whether they like it or not.

Blood in the streets will first have to come before this housing market becomes sane.

@carolinefpf

In my area Spring is the season or Realtor and Sellers to get boners and have open houses. Lots of over priced homes turn up on the MLS. Some that have been sitting for almost a year even dare to raise prices.

It's also the season buyers ignore the market. Same has happened past three years. See you guys in October. I wonder what the elections will do. Maybe see you in February 2013. By then I will have about 60% down payt. ready. Take your time with your denial.

Icabod says

In my area Spring is the season or Realtor and Sellers to get boners and have open houses. Lots of over priced homes turn up on the MLS. Some that have been sitting for almost a year even dare to raise prices.

It's also the season buyers ignore the market. Same has happened past three years. See you guys in October. I wonder what the elections will do. Maybe see you in February 2013. By then I will have about 60% down payt. ready. Take your time with your denial.

Yeah, I think patience is a virtue in this case. I had 30% down in 2008, and thought I might jump in then. Then 2009 came and the tax credit caused a frenzy. Now it's 2012, and I'm considering not even trying to finance (even with the free money).