patrick.net

I'm not here to challenge Nathaniel Welch's journalistic integrity but IMHO this picture is totally staged.

1. Beer can resting on subject's left forearm should have open end facing away (not towards) individual.

2. Subject still has 7-11 purchased necklace on his person.

3. Absence of drool on self.

4. Neither hand is in crotch area.

5. Sand directly beneath subject's said crotch area is dry.

IMHO

ocrenter,

He was only pursuing the American Dream (TM)!

It'll be hard for the IRS (or any other agency) to enforce squat as the S.O.P (standard operational procedure) has been to high tail it back to Romania, Uganda or wherever to live the life with free money!

What I find shocking is just how late in the game this "cute" little stunt was pulled.

Houses on the Virginia Peninsula in the $250k - $350k price range seem to be holding. This may be due to extensive military in the area with their quarters allowances.

Homes priced over $550k are very slow selling, with steep price cuts on new construction.

HARM,
From the last thread - you win the award for "most uses of Troll aliases in one post." I salute you - most impressive.

Homes in the areas I track in San Francisco are holding steady: in Noe Valley it is still $1.2M for a 3/2 with a garage and in fact sales volume has picked up this spring. In the $1-1.5M range west of Twin Peaks, in places like Ingleside Terrace and Forrest Hill, prices are steady as well.

In the nicer neighborhoods of Berkeley and Oakland, prices are starting to come down, especially in Oakland. Elmwood and Claremont homes in Berkeley are down probably 10% and Rockridge homes are down 20% from their peaks. I am not sure what sales volume in those areas look like, but I am not really seeing a bunch more homes on the market.

OT, but IIRC some Google employees frequent this site.

So I'll just point out here that Blogger, for whatever reason, just doesn't work from the PC I use (a Public Access machine in a club, with a LOT of functionality switched off, but it shouldn't affect simple text).

I just tried to create an account, so I could post some replies on another blog. All went fine, I thought. Create account; set up dummy blog (which I was thinking I might actually try using later to post about the local RE market); sign out; cross to the thread where I want to post and type in a reply.

"Username and password do not match". WTF? Go back to the dummy blog, yes it's there. Try to sign in; same error message.

When this happened with my old account last year, I thought I had simply misremembered my password and wrote it off to experience.

Not this time; we are literally talking 60 seconds between typing a password in (twice) when creating the account, and having that password rejected.

Where the PNW is concerned I was a little surprised that we fared so well in the CME Housing Futures? WE'RE a "bright spot" for residential RE?

Wow. What's amazing is that no matter where I go, no matter who I talk to virtually NO ONE is talking about RE! The only thing I *haven't seen in our market (Portland metro) has been "cash back" deals. Other than that from a marketing perspective it's all fair game. One builder in Happy Valley was offering 1 year no payments on "high end" homes.

We've continued to see an influx of equity locusts although distant markets like Ashland, Medford and Bend are seeing price decreses already. The wild card in all of this is if NAR-style data can be challenged in the rest of the nation (you can basically toss it out the window here). OR's are the original DIY crowd and you've got to imagine our FSBO/CL listings dwarf just about every other mkt. on a percentage basis.

Bidding wars are gone and flipping is petering out. It's weird b/c over the last 5 years if we're not talking about RE, we're not talking. Right now, nobody is talking.

OMG you guys, I love this role reversal. This isn't a realtor quote but the last sentence to me marks a turning point.

"As a potential 'victim' in the fall of 2005 I was amazed that the mortgage brokers and banks were trying to sell me insane loans in hope of making a sale," writes Ed Dergosits of Mill Valley. "Now they want relief funds. I say let the banks and the homeowners (like they really own the home) take the loss. They took the gamble. Why should taxpayers bail them out? I am still a second-class 'renter' but I do not have to ask for public assistance to pay for my rent."

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/04/24/BUGC8PE0FC1.DTL&ref=patrick.net Article reference

There is a small tract going in across the street here. They finished about 5 houses, and a few more are in process. Then a bunch have not even been started. Days go by when I don't see any activity. I think they are running out of money because the progress is painfully slow. With some experience in this, I would guess that they are stretching their construction loan to cover normal daily costs, but doing the bare minimum to demonstrate to their lenders that someone is swinging a hammer. I'm telling you I think I could finish some of those houses by myself faster than the couple of guys that come out every few days and walk around the properties with their little hard hats.

BTW, the sign in front of that tract still says, coming in 2006.....new luxury homes!

RoweMoore,

If your true intent was to BUY then I suppose that is something you should have done 18 months ago?

The fact that you're aware such a "silly blog" even exists tends to indicate that you question prices as well.

New homes sales are out... the east bounced back a little from their horrendous Feb weather, but it's still weak weak weak, and below forecasts.

Foreclosures are up again...

Talk about a sticky situation! I'm revising my 'projected buy time' from 2008 to 2009. Shh... don't tell my wife!

Malcom,

Sounds like LV last year. My retired friend went shooting south of town nearly everyday and as he passed south on I-15 there were HUGE condo complexes that never seemed to get beyond the framing stage. There was like 2 guys on the entire job site. (Must be very productive workers?)

I actually agree with RoweMoore, there is a huge demand to buy, unquestionably. I believe if you could still fabricate a scheme where you could buy a million dollar home for 2500/mo you would have a line of people. I also believe that the drop will not be a straight line because of the price skimming phenomenon where different people have a different value in mind and will call the bottom differently.

HOWEVER, with that said, it all becomes irrelevant because the final straw is the tightening of credit which returns everyone back to 2002 whether they like it or not.

Where's LV? Is that towards Riverside?

Or is it OR? I keep forgetting you are up there.

Malcom,

Las Vegas.

Construction lenders are going to have to really watch out for these guys. Next thing you know your borrower runs out of money because his management salary for running the construction site drains the budget. As soon as someone realizes that they won't make a profit selling the houses they do this.

We've been reading about some Vegas whoppers. Did Trump's ex back out of that project she was going to do?

Malcom,

Absolutely true! Sure, they'd rather have outrageous fortunes but "until the market gets turned around" this will do. It's the ugly side of construction lending. Builders live off of borrowed money so they're comfortable with this arrangement.

Trump's ex,

Michael Jordan,

George Clooney

to name a few. It sure was good to see Steve "The Shill" Bottfeld finally admit that just "maybe" something could be wrong in Vegas!

They need hotel rooms, not condos.

On some of the deals I invested in, the broker would maintain 'fund control' and literally would write the checks to the subs as the project proceeded.

That is a nightmare scenario for a lender because not only did you lend on a project that is not worth as much as you thought, to run out of money and not have it finished, and to then end up with the property is a disaster.

My scavenger instinct is really watching this project closely as I believe there will be an opportunity there. The thing that sucks is it is a typical bubble construction where a strip of homes literally have their front door 10 feet from a busy street with the parking in back. There are of course no amenities, but the houses are cute. They look like doll houses, almost like the SF painted ladies.

"My scavenger instinct"

This is what's left at the end of the cycle. Timing your entry point to where everyone else has exhausted their resources and you get to pose with the slain dragon! (Is this my good side?) :)

God that guy is a jerk. So typical. He could sell the good ones to cover the bad ones, but his sleezy atitude is that the good ones are his lifeline, and the bad ones should be someone else's problems. Sure, he should get a bail out. It is actually fun to watch people like him squirm.

Ha DinOR, that is funny. Yup, I'll get Patrick to post a picture of me smuggly standing next to the half finished project with the auctioned deed in my hand. ha ha ha

I do think that I would have an interest bidding in its current state and finishing it. Obviously I would calculate the homes in the 300K selling range not the 600K currently advertised.

Bail Out,

What kind of investment property makes sense when it loses $1,000/mo when it IS rented? We just had a thread about wealth disparity and starving Americans. I can't understand how this guy and people like him don't starve to death. The safety net should have holes just big enough for him to fall through.

The safety net should have holes just big enough for him to fall through.

LOL :lol:

Malcolm,

I bet his 'good' properties are losing money while they rent, too, just not as much. And his little eyes go 'kaching kaching' when he reads the zillow estimates of the appreciating properties.

Appreciation investors are just like dot-com investors. When the bubble popped, I lost some dot com money, but the majority of my investment was still in companies with P/E ratios closer to 30 than to 300. And I sold a half of my dot coms whenever they doubled, so I only really lost on the last few I bought that never hit the double mark. Live and learn.

If any of these 'investors' would do a P/E before buying the houses, they'd know how risky a property was. A slightly negative income property in a place growing jobs in a strong economy might not be a bad long term investment, but you need to figure how you'll carry it. HELOCing your primary residence for carrying costs means you're a damn idiot.

In my hood (San Ramon) the lawns are littered with real estate signs. It's dizzying the number of brightly colored "I'm gorgeous inside" signs. I lost count driving at 25 mph....I need a passenger to count 'em all. This last weekend is when the frenzy began. And the sign twirlers are out in force (still).

We can all go with anecdotes about RE signs, listings on MLS for your local neighborhood and what not, which are fine. However, the real crux is in the true numbers, and looking at the listings numbers at a site like housingtracker.net, the inventory in the SF and San Jose areas continue to go up every week, and they are significantly higher than they were at this time last year. Asking prices remain stable, declining slightly, but are significantly lower than this time last year.

Anecdotally speaking, I will say though, the Peninsula seems stable. There's no dearth of available properties, but on the flip side some places do seem to linger, while some seem to go quickly.

Check i tout - one of my favorite sites now shows data for the Bay Area:

http://www.propertyshark.com/mason/ca_santa_clara/index.html

The amount of detail they reveal is awesome.

"with the auctioned deed in my hand"

Back a few years some golf course developers tired to build south of Oregon City (county seat and end of the historic Oregon Trail). First two guys went belly up. Used to drive by and the rubber tires were literally rotting off the earthmovers. 3rd guy (actually "the city") picked up from there and was able to make it a success! I think about it every time I drive by.

Check it out, the Chronicle has an article just out about the statewide home sales numbers:

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/04/25/BUGAOPELMV35.DTL

The article is a lot less RE rah-rah than I would have predicted. They even have a nice quote from Thornberg (stating what we here have known all along):

Christopher Thornberg, a principal with Beacon Economics in San Francisco, put it bluntly.

"The median price is a bunch of hogwash," he said. "You can have prices looking like they're up when they're down, because it is incredibly subject to where slowdowns are occurring. If there is more slowdown in a (lower-priced market), then you could show the median price going up just because there is a shift in the type of product being sold."

skibum,

Sorry about the anecdotes. (I thought this was a "Spring Time, Feel Good" thread).

Sorry about the anecdotes. (I thought this was a “Spring Time, Feel Good” thread).

Hey, I'm not dissing them. They have their place, and I'm not trying to be a wet towel on the "Good Spring Times" vibe. Hey, let's break out the PBR, sit back, and watch the FBs go at it!

The safety net should have holes just big enough for him to fall through.

Malcolm,

Keep posting gems like this one, and you might just make a "convert" out of me. ;-)

Actually, I wouldn't want "SDCIA Jeff" to starve to death, but I DO think he should be prohibited from: (a) breeding, (b) ever buying another "investment" property again.

Rowemoore,

Funny, a couple little birdies who keep sharing their agency's sales sheets with me -- on in SF one in Mill Valley -- clearly show that more and more homes are going *UNDER* asking. In Feb., they weren't going under by much; just token amounts. But last month had quite a few going for more than $100K under.

Under is the opposite of _over_.

Just wanted to clear that up for you.

Interestingly, both of my informants have told me that their management have indicated they are to reassure everyone that "the market is red hot again". And the SF guys apparently told everyone there they'd be shot on sight if they so much as peeped a word about under-asking deals. They were told to blatantly lie, and talk about multiple bids and over-asking deals.

Oh yea, they were told to hit the blogs and local papers too.

"let's break out the PBR"

I got NO problem w/ that! Oh other than it's only Wednesday? :(

Kieth over at Housing Panic had Thornberg's presentation on a video link and all I could think about was "peak to trough" decimation. Just calculating the loss of "equity" in this country from say Oct. 2005 to Dec. 2009 is going to be mind bending!

Anyone notice the complete 180 degree change in SDCIA Jeff's attitude about his "investments" from a few short months ago? Back then, he was King of the World, top senior SDCIA member, confidently handing out sage advice to the "younglings". He would politely tolerate comments from us JBRs at arm's length, but it was obvious by his tone always that he was only feeling pity and disdain --for us.

Oh what a difference a few months (and hungry "alligators") makes. Here are the highlights:

"I own three terrible houses in Cape Coral..."
"a series of misjudgments and being taken advantage of (and lied to)..."
"I am losing ~$1000 on month on each of these houses... "
"I am just sick about them and often cannot sleep..."
"Anyway, what should I do?"
"I am too embarrassed..."
"I think about "walking away," but then I think about the credit score hit..."
"I am dizzy thinking of it."
"Please help me! What should I do!?"